497 for ING Series Fund



                                                                        ADVISER
                                                            ING Investments, LLC

                                                                     SUB-ADVISER
                                                         BlackRock Advisors, LLC

ING GLOBAL SCIENCE AND TECHNOLOGY FUND
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INVESTMENT OBJECTIVE

The Fund seeks long-term capital appreciation. The Fund's invsetment objective
is not fundamental and may be changed without a shareholder vote.

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PRINCIPAL  INVESTMENT STRATEGIES

The Fund normally invests 80% of its net assets plus borrowings for investment
purposes, if any, in equity securities issued by science and technology
companies in all market capitalization ranges. The Fund will provide
shareholders with at least 60 days' prior notice of any change in this
investment policy.

The Fund will invest primarily in equity securities of U.S. and non-U.S.
companies selected for their rapid and sustainable growth potential from the
development, advancement and use of science and/or technology. The Sub-Adviser
considers science and technology companies to be companies defined as such by
the Global Industrial Classification ("GIC") Standards. The Fund may, from time
to time, invest more than 25% of its net assets in securities whose issuers are
located in a single foreign country. The Fund may invest up to 25% of its net
assets in stocks of issuers in countries with emerging securities markets.

The Fund primarily buys common stock but also can invest in preferred stock and
securities convertible into common and preferred stock, initial public
offerings, and Rule 144A Securities. The Sub-Adviser will invest in U.S. and
non-U.S. companies (including companies located in countries with emerging
securities markets) that are expected to offer the best opportunities for growth
and high investment returns. The Sub-Adviser uses a multi-factor screen to
identify stocks that have above-average return potential. The factors and the
weight assigned to a factor may change depending on market conditions. The most
influential factors over time have been revenue and earnings growth, estimate
revisions, profitability and relative value.

The Sub-Adviser will invest in a number of different countries, including the
United States. Some of the industries that are likely to be represented in the
Fund's portfolio holdings include: Application Software, IT Consulting &
Services, Internet Software and Services, Networking Equipment, Telecom
Equipment, Computer Hardware, Computer Storage & Peripherals, Electronic
Equipment and Instruments, Semiconductor Equipment, Semiconductors, Aerospace &
Defense, Electrical Components & Equipment, Biotechnology, Pharmaceuticals,
Healthcare Equipment & Supplies, Healthcare Distribution & Services, Healthcare
Facilities, Industrial Gases, Specialty Chemicals, Advanced Materials,
Integrated Telecom Services, Alternative Carriers and Wireless Telecommunication
Services.

The Fund generally will sell a stock when, in the Sub-Adviser's opinion, there
is a deterioration in the company's fundamentals, a change in macroeconomic
outlook, technical deterioration, valuation issues, a need to rebalance the
portfolio or a better opportunity elsewhere. The Sub-Adviser uses a broad set of
technical tools to enhance the timing of purchase or sell decisions.

The Fund may invest excess cash in short-term U.S. government securities and
other high-quality money market securities for temporary and defensive purposes.
However, when the Fund is engaged in the temporary defensive position, it may
not achieve its investment objective.

The Fund may invest in derivative instruments including, among other things,
foreign currency contracts.

The Fund may lend portfolio securities on a short-term or long-term basis, up to
33 1/3% of its total assets.

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RISKS
You could lose money on an investment in the Fund. The Fund may be affected by
the following risks, among others:

CONVERTIBLE SECURITIES - the value of convertible securities may fall when
interest rates rise. Convertible securities with longer maturities tend to be
more sensitive to changes in interest rates usually making them more volatile
than convertible securities with shorter maturities. The Fund could also lose
money if the issuer of a convertible security is unable to meet its financial
obligations or goes bankrupt.

DERIVATIVES - derivatives are subject to the risk of changes in the market
price of the underlying securities, credit risk with respect to the
counterparty to the derivative instruments and the risk of loss due to changes
in interest rates. The use of certain derivatives may also have a leveraging
effect which may increase the volatility of the Fund and may reduce its
returns.

FOREIGN INVESTING - foreign investments may be riskier than U.S. investments for
many reasons including: changes in currency exchange rates; unstable political,
social and economic conditions; a lack of adequate or accurate company
information; differences in the way securities markets operate; less secure
foreign banks or securities depositories than those in the United States; less
standardization of accounting standards and market regulations in certain
foreign countries; and varying foreign controls on investments. Foreign
investments may also be affected by administrative difficulties such as delays
in clearing and settling transactions. Additionally, securities of foreign
companies may be denominated in foreign currencies. Exchange rate fluctuations
may reduce or eliminate gains or create losses. Hedging strategies intended to
reduce exchange risk may not perform as expected. These factors may make foreign
investments more volatile and potentially less liquid than U.S. investments. To
the extent the Fund invests in countries with emerging securities markets, the
risks of foreign investing may be greater as these countries may be less
politically and economically stable than other countries. It also may be more
difficult to buy and sell securities in countries with emerging securities
markets. If the Fund invests more than 25% of its assets in securities whose
issuers are located in a single foreign country, the Fund would be more
dependent upon the political and economic circumstances of that country than a
mutual fund that owns stock of companies in many countries.

INITIAL PUBLIC OFFERINGS ("IPOS") - IPOs and companies that have recently gone
public have the potential to produce substantial gains for the Fund. However,
there is no assurance that the Fund will have access to profitable IPOs.
Furthermore, stocks of newly-public companies may decline shortly after the
initial public offering. When the Fund's asset base is small, the impact of such
investments on the Fund's return will be magnified. As the Fund's assets grow,
it is likely that the effect of the Fund's investment in IPOs on the Fund's
return will decline.

MARKET TRENDS - from time to time, the stock market may not favor the
growth-oriented securities in which the Fund invests. Rather, the market could
favor value- oriented securities or may not favor equities at all.

PRICE VOLATILITY - the value of the Fund changes as the prices of its
investments go up or down. Equity securities face market, issuer and other
risks, and their values may fluctuate, sometimes rapidly and unpredictably.
Market risk is the risk that securities may decline in value due to factors
affecting securities markets generally or particular industries. Issuer risk is
the risk that the value of a security may decline for reasons relating to the
issuer such as changes in the financial condition of the issuer. While equities
may offer the potential for greater long-term growth than most debt securities,
they generally have higher volatility.

The Fund invests in securities of larger companies which sometimes have more
stable prices than smaller companies. However, the Fund may also invest in
securities of small- and mid-sized companies which may be more susceptible to
price volatility than larger companies because they typically have fewer
financial resources, more limited product and market diversification, and may be
dependent on a few key managers.

RULE 144A SECURITIES - Rule 144A securities are securities that are not
registered but are bought and sold solely by institutional investors. The Fund
considers Rule 144A securities to be "liquid" although the market for such
securities typically is less active than public securities markets and may lead
to a decreased ability to sell these securities.

SCIENCE AND TECHNOLOGY - the Fund's focus on stocks in the science and
technology sectors makes it more susceptible to factors affecting those sectors
and more volatile than funds that invest in many different sectors. Therefore, a
downturn in the science and/or technology sectors could hurt the Fund's
performance to a greater extent than a fund that invests in many sectors.

In addition, investing in science and technology companies exposes the Fund to
special risks. For example, rapid advances in science and technology might cause
existing products to become obsolete and the Fund's returns could suffer to the
extent it holds an affected company's shares. Companies in a number of science
and technology sectors are subject to more government regulations and approval
processes than many other industries. This fact may affect a company's overall
profitability and cause its stock price to be more volatile. Additionally,
science and technology companies are dependent upon consumer and business
acceptance as new technologies evolve.

SECURITIES LENDING - there is the risk that when lending portfolio securities,
the securities may not be available to the Fund on a timely basis and it may
lose the opportunity to sell the securities at a desirable price. Engaging in
securities lending could have a leveraging effect which may intensify the market
risk, credit risk and other risks associated with investments in the Fund.

A more detailed discussion of the risks associated with investing in the Fund is
available in the "More Information About Risks" section.

2    ING Global Science and Technology Fund



                                          ING GLOBAL SCIENCE AND TECHNOLOGY FUND
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HOW THE FUND HAS
PERFORMED

                The following information is intended to help you understand
                the risks of investing in the Fund. The value of your shares in
                the Fund will fluctuate depending on the Fund's investment
                performance. The bar chart and table below show the changes in
                the Fund's performance from year to year, and the table
                compares the Fund's performance to the performance of two broad
                measures of market performance for the same period. The Fund's
                past performance (before and after income taxes) is no
                guarantee of future results.

The bar chart below provides some indication of the risks of investing in the
Fund by showing changes in the performance of the Fund's Class A shares from
year to year. These figures do not reflect sales charges and would be lower if
they did.

                    YEAR-BY-YEAR TOTAL RETURNS (%)/(1)(2)(3)/
                (FOR THE PERIODS ENDED DECEMBER 31 OF EACH YEAR)

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1998   1999   2000    2001     2002   2003     2004   2005    2006   2007
                    (24.92)  (42.64)  46.74   (1.13)  10.85   6.68   18.12

            Best and worst quarterly performance during this period:

                         Best: 4th quarter 2001: 39.14%

                        Worst: 3rd quarter 2001: (34.86)%

                     AVERAGE ANNUAL TOTAL RETURNS/(1)(2)(3)/
                   (FOR THE PERIODS ENDED DECEMBER 31, 2007)

The table below provides some indication of the risks of investing in the Fund
by comparing the Fund's Class A, Class B and Class C shares' performance to that
of two broad measures of market performance - the Standard & Poor's 500(Reg. TM)
Composite Stock Price Index ("S&P 500(Reg. TM) Index") and the NYSE Arca Tech
100 Index(Reg. TM). It is not possible to invest directly in the indices. The
table also shows returns on a before-tax and after-tax basis. After-tax returns
are calculated using the historical highest individual federal marginal income
tax rates and do not reflect the impact of state and local taxes.

Actual after-tax returns depend on an investor's tax situation and may differ
from those shown, and after-tax returns shown are not relevant to investors who
hold their Fund shares through tax-deferred arrangements, such as 401(k) plans
or individual retirement accounts.

In some cases the after-tax returns may exceed the return before taxes due to
an assumed tax benefit from any losses on a sale of Fund shares at the end of
the measurement period.

After-tax returns are shown for Class A only. After-tax returns for other
classes will vary.

                                                                                              10 YEARS
                                                                      1 YEAR   5 YEARS   (OR LIFE OF CLASS)
CLASS A RETURN BEFORE TAXES/(4)/                              %        11.39    13.76         (8.52)/(2)/
Class A Return After Taxes on Distributions/(4)/              %        11.39    13.76         (8.52)/(2)/
Class A Return After Taxes on Distributions and Sale of       %         7.41    12.09         (6.86)/(2)/
 Fund Shares/(4)/
S&P 500(Reg. TM) Index (reflects no deductions for fees,      %         5.49    12.83          2.62/(6)/
 expenses or taxes)/(5)/
NYSE Arca Tech 100 Index(Reg. TM) (reflects no deduction      %         7.77    15.89         (2.42)/(6)/
 for fees, expenses or taxes)/(7)/
CLASS B RETURN BEFORE TAXES/(8)/                              %        12.45    14.08         (8.51)/(2)/
S&P 500(Reg. TM) Index (reflects no deductions for fees,      %         5.49    12.83          2.62/(6)/
 expenses or taxes)/(5)/
NYSE Arca Tech 100 Index(Reg. TM) (reflects no deduction      %         7.77    15.89         (2.42)/(6)/
 for fees, expenses or taxes)/(7)/
CLASS C RETURN BEFORE TAXES/(9)/                              %        16.30    14.27         (8.58)/(2)/
S&P 500(Reg. TM) Index (reflects no deductions for fees,      %         5.49    12.83          2.62/(6)/
 expenses or taxes)/(5)/
NYSE Arca Tech 100 Index(Reg. TM) (reflects no deduction      %         7.77    15.89         (2.42)/(6)/
 for fees, expenses or taxes)/(7)/

(1)  Effective March 1, 2002, ING Investments, LLC began serving as investment
     adviser to the Fund. Formerly, ING Investment Management Co. served as the
     investment adviser. Effective September 30, 2006, BlackRock Advisors, LLC
     began serving as sub-adviser to the Fund. On September 29, 2006, BlackRock,
     Inc. consummated a transaction with Merrill Lynch & Co., Inc. whereby
     Merrill Lynch & Co., Inc.'s investment management businesses combined with
     that of BlackRock, Inc. to create a new independent company and on
     September 29, 2006 BlackRock Advisors, Inc. reorganized into BlackRock
     Advisors, LLC. Prior to September 30, 2006, BlackRock Advisors, Inc. served
     as sub-adviser to the Fund. Prior to January 2, 2004, AIC Asset Management,
     LLC served as the sub-adviser to the Fund.

(2)  Class A, Class B and Class C shares commenced operations on March 1, 2000.

(3)  Effective February 17, 2004, the Fund changed its name from ING Technology
     Fund to ING Global Science and Technology Fund.

(4)  Reflects deduction of the maximum Class A sales charge of 5.75%.

(5)  The S&P 500(Reg. TM) Index is an unmanaged index that measures the
     performance of securities of approximately 500 of the largest companies in
     the United States.

(6)  The index returns for Class A, Class B and Class C shares are for the
     period beginning March 1, 2000.

(7)  The NYSE Arca Tech 100 Index(Reg. TM) is a multi-industry technology index
     measuring the performance of companies using technology innovation across a
     broad spectrum of industries. It is comprised of 100 listed and
     over-the-counter stocks from 14 different sub-sectors including computer
     hardware, software, semiconductors, telecommunications, data storage and
     processing, electronics and biotechnology.

(8)  Reflects deduction of the deferred sales charge of 5% and 2% for the 1 Year
     and 5 Year returns, respectively.

(9)  Reflects deduction of the deferred sales charge of 1% for the 1 Year
     return.

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                          If you have any questions, please call 1-800-992-0180.

                                     ING Global Science and Technology Fund    3



WHAT YOU PAY TO INVEST
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     There are two types of fees and expenses when you invest in mutual funds:
     fees, including sales charges, you pay directly when you buy or sell
     shares, and operating expenses paid each year by the Fund. The tables that
     follow show the fees and estimated operating expenses for the Fund. The
     estimated expenses are based on the expenses paid by the Fund in the fiscal
     year ended October 31, 2007. Actual expenses paid by the Fund may vary from
     year to year.

FEES YOU PAY DIRECTLY

                                                             CLASS A/(1)/    CLASS B      CLASS C
                                                             ------------   ---------   ----------
MAXIMUM SALES CHARGE ON YOUR INVESTMENT (AS A % OF            5.75/(2)/       none         none
 OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (AS A % OF PURCHASE OR SALES    none/(3)/     5.00/(4)/    1.00/(5)/
 PRICE, WHICHEVER IS LESS)

(1)  The Fund does not impose any front-end sales charge (load) on reinvested
     dividends or distributions.

(2)  Reduced for purchases of $50,000 and over. Please see the discussion of
     sales charges in the "Shareholder Guide" section of this Prospectus.

(3)  A contingent deferred sales charge ("CDSC") of no more than 1% may be
     assessed on redemptions of Class A shares that were purchased without an
     initial sales charge as part of an investment of $1 million or more. Please
     see the discussion of sales charges in the "Shareholder Guide" section of
     this Prospectus.

(4)  A CDSC is imposed upon redemptions within 6 years from purchase. The fee
     has scheduled reductions after the first year. Please see "Sales Charge
     Reductions and Waivers."

(5)  A CDSC is imposed upon redemptions within 1 year from purchase. Please see
     the discussion of sales charges in the "Shareholder Guide" section of this
     Prospectus.

OPERATING EXPENSES PAID EACH YEAR BY THE FUND/(1)/
(as a % of average net assets)

CLASS A

                          DISTRIBUTION                   ACQUIRED      TOTAL                            NET
                           AND SERVICE                     FUND         FUND          WAIVERS,         FUND
             MANAGEMENT      (12B-1)        OTHER        FEES AND    OPERATING     REIMBURSEMENTS   OPERATING
FUND             FEE          FEES      EXPENSES/(2)/ EXPENSES/(3)/   EXPENSES  AND RECOUPMENT/(4)/  EXPENSES
------      ------------ -------------- ------------- ------------- ----------- ------------------- ----------
        %         1.05          0.25           0.79        N/A            2.09          (0.34)           1.75

CLASS B

                          DISTRIBUTION                   ACQUIRED      TOTAL                            NET
                           AND SERVICE                     FUND         FUND          WAIVERS,         FUND
             MANAGEMENT      (12B-1)        OTHER        FEES AND    OPERATING     REIMBURSEMENTS   OPERATING
FUND             FEE          FEES      EXPENSES/(2)/ EXPENSES/(3)/  EXPENSES   AND RECOUPMENT/(4)/  EXPENSES
------      ------------ -------------- ------------- ------------- ----------- ------------------- ----------
        %         1.05          1.00           0.79        N/A            2.84          (0.34)           2.50

CLASS C

                          DISTRIBUTION                   ACQUIRED      TOTAL                            NET
                           AND SERVICE                     FUND         FUND          WAIVERS,         FUND
             MANAGEMENT      (12B-1)        OTHER        FEES AND    OPERATING     REIMBURSEMENTS   OPERATING
FUND             FEE          FEES      EXPENSES/(2)/ EXPENSES/(3)/  EXPENSES   AND RECOUPMENT/(4)/  EXPENSES
------      ------------ -------------- ------------- ------------- ----------- ------------------- ----------
        %         1.05          1.00           0.79        N/A            2.84          (0.34)           2.50

(1)  These tables show the estimated operating expenses for the Fund by class as
     a ratio of expenses to average daily net assets. These estimated expenses
     are based on the Fund's actual operating expenses for its most recently
     completed fiscal year, as adjusted for contractual changes, if any, and fee
     waivers to which ING Investments, LLC, the investment adviser to the Fund,
     has agreed.

(2)  ING Funds Services, LLC receives an annual administration fee equal to
     0.08% of the Fund's average daily net assets which is reflected in "Other
     Expenses."

(3)  The Acquired Fund Fees and Expenses are not fees or expenses incurred by
     the Funds directly. These fees and expenses include each Fund's pro rata
     share of the cumulative expenses charged by the Acquired Funds in which the
     Funds invest. The fees and expenses will vary based on the Fund's
     allocation of assets to, and the annualized net expenses of, the particular
     Acquired Funds. The impact of these fees and expenses is shown in "Net Fund
     Operating Expenses."

(4)  ING Investments, LLC, has entered into a written expense limitation
     agreement with the Fund, under which it will limit expenses of the Fund,
     excluding interest, taxes, brokerage and extraordinary expenses, and
     Acquired Fund Fees and Expenses subject to possible recoupment by ING
     Investments, LLC within three years. The amount of the Fund's expenses
     waived, reimbursed or recouped during the last fiscal year by ING
     Investments, LLC is shown under the heading "Waivers, Reimbursements and
     Recoupment." The expense limits will continue through at least March 1,
     2009. The expense limitation agreement is contractual and shall renew
     automatically for one-year terms unless ING Investments, LLC provides
     written notice of a termination of the expense limitation agreement within
     90 days of the end of the then current term or upon termination of the
     investment management agreement. In addition, the expense limitation
     agreement may be terminated by ING Series Fund Inc. upon at least 90 days'
     prior written notice to ING Investments, LLC. For more information
     regarding the expense limitation agreement, please see the Statement of
     Additional Information.

4    What You Pay to Invest



SHAREHOLDER GUIDE                                         CHOOSING A SHARE CLASS
--------------------------------------------------------------------------------

ING PURCHASE OPTIONS

You may select from up to five separate classes of shares. Class A, Class B,
Class C, Class I and Class O shares. Class I and Class O shares are not offered
in this Prospectus.

CLASS A

.    Front-end sales charge as described later in this section.

.   Distribution and service (12b-1) fees of 0.25%.

CLASS B

.    No front-end sales charge; all your money goes to work for you right away.

.    Distribution and service (12b-1) fees of 1%.

.    A contingent deferred sales charge ("CDSC") as described later in this
     section.

.    Automatic conversion to Class A shares after eight years thus reducing
     future annual expenses.

CLASS C

.    No front-end sales charge; all your money goes to work for you right away.

.    Distribution and service (12b-1) fees of 1%.

.    A 1% CDSC on shares sold within one year of purchase.

.    No automatic conversion to Class A shares so annual expenses continue at
     the Class C level throughout the life of your investment.

When choosing between classes, you should carefully consider:

.    How long you plan to hold shares of the Fund;

.    The amount of your investment;

.    The expenses you'll pay for each class including ongoing annual expenses
     along with the initial sales charge or the CDSC; and

.    Whether you qualify for any sales charge discounts.

The relative impact of the initial sales charge and ongoing annual expenses will
depend on the length of time a share is held. Higher distribution fees mean a
higher expense ratio, so Class B shares and Class C shares pay correspondingly
lower dividends and may have a lower net asset value ("NAV") than Class A
shares.

Class B shares and Class C shares are not intended for purchase in excess of
$100,000 and $1,000,000, respectively. Purchase orders from an individual
investor for Class B shares in excess of $100,000 and for Class C shares in
excess of $1,000,000 will be declined.

Because the Fund may not be able to identify an individual investor's trading
activities when investing through omnibus account arrangements, you and/or your
investment professional are responsible for ensuring that your investment in
Class B shares does not exceed the maximum of $100,000 and your investment in
Class C shares does not exceed $1,000,000. The Fund cannot ensure that the Fund
will identify purchase orders that would cause your investment in Class B shares
or Class C shares to exceed the maximum allowed amount. When investing through
such arrangements, you and/or your investment professional should be diligent in
determining that you have selected the appropriate share class for you.

You and/or your investment professional also should take care to assure that
you are receiving any sales charge reductions or other benefits to which you
may be entitled. As an example, as is discussed below, you may be able to
reduce a Class A sales charge payable by aggregating purchases to achieve
breakpoint discounts. The Fund uses the net amount invested when determining
whether a shareholder has reached the required investment amount in order to be
eligible for a breakpoint discount. In order to ensure that you are receiving
any applicable sales charge reduction, it may be necessary for you to inform
the Fund or your financial intermediary of the existence of other accounts that
may be eligible to be aggregated. The SAI discusses specific classes of
investors who may be eligible for a reduced sales charge. In addition, more
information regarding sales charges and applicable breakpoints may be found on
the Fund's website by going to www.ingfunds.com, clicking on the "Forms &
Literature" link, and then using the "Shareholder Guides" link found under the
"Prospectuses & Reports" section and selecting the appropriate Fund link.
Finally, there are classes that are not available in this Prospectus that may
be more appropriate for you. Please review the disclosure about all of the
available Fund classes carefully. Before investing, you should discuss which
share class may be right for you with your investment professional and review
the prospectus for that share class.

DISTRIBUTION AND SHAREHOLDER SERVICE FEES

To pay for the cost of promoting the Fund and servicing your shareholder
account, Class A, Class B and Class C shares of the Fund have adopted a Rule
12b-1 plan which requires distribution and shareholder service fees to be paid
out of the assets of each class. Because these fees are paid on an on-going
basis, over time these fees will increase the cost of your investment and cost
you more than paying other types of sales charges.

HOW WE COMPENSATE INTERMEDIARIES FOR SELLING ING MUTUAL FUNDS

ING mutual funds are distributed by ING Funds Distributor, LLC ("Distributor").
The Distributor is a broker-dealer that is licensed to sell securities. The
Distributor generally does not sell directly to the public but sells and markets
its products through intermediaries such as other broker-dealers. Each ING
mutual fund also has an investment adviser ("Adviser") which is responsible for
managing the money invested in each of the mutual funds. Both of these entities
(collectively, "ING") may compensate an intermediary for selling ING mutual
funds.

Only persons licensed with the Financial Industry Regulatory Authority ("FINRA")
as a registered representative (often referred to as a broker or financial
advisor) and associated with a

6    Shareholder Guide



CHOOSING A SHARE CLASS                                         SHAREHOLDER GUIDE
--------------------------------------------------------------------------------

specific broker-dealer may sell an ING mutual fund to you. The Distributor has
agreements in place with each of these broker-dealers defining specifically what
those broker-dealers will be paid for the sale of a particular ING mutual fund.
Those broker-dealers then pay the registered representative who sold you the
mutual fund some or all of what they receive from ING. They may receive a
payment when the sale is made and can, in some cases, continue to receive
payments while you are invested in the mutual fund.

The Fund's Adviser or Distributor, out of its own resources and without
additional cost to the Fund or its shareholders, may provide additional cash or
non-cash compensation to intermediaries selling shares of the Fund including
affiliates of the Adviser and the Distributor. These amounts would be in
addition to the distribution payments made by the Fund under the distribution
agreements. The payments made under these arrangements are paid by the Adviser
or the Distributor. Additionally, if a fund is not sub-advised or is sub-advised
by an ING entity, ING may retain more revenue than on those funds it must pay to
have sub-advised by non-affiliated entities. Management personnel of ING may
receive additional compensation if the overall amount of investments in funds
advised by ING meets certain target levels or increases over time.

The Distributor may pay, from its own resources, additional fees to these
broker-dealers or other financial institutions including affiliated entities.
These additional fees paid to intermediaries may take the following forms: (1) a
percentage of that entity's customer assets invested in ING mutual funds; (2) as
a percentage of that entity's gross sales; or (3) some combination of these
payments. These payments may, depending on the broker-dealer's satisfaction of
the required conditions, be periodic and may be up to: (1) 0.30% per annum of
the value of the Fund's shares held by the broker-dealer's customers; or (2)
0.20% of the value of the Fund's shares sold by the broker-dealer during a
particular period. In accordance with these practices, if that initial
investment averages a value of $10,000 over the year, the Distributor could pay
a maximum of $30 on those assets. If you invested $10,000, the Distributor could
pay a maximum of $20 for that sale.

The Fund's Adviser or Distributor may provide additional cash or non-cash
compensation to third parties selling our mutual funds including affiliated
companies. This may take the form of cash incentives and non-cash compensation
and may include, but is not limited to: cash; merchandise; trips; occasional
entertainment; meals or tickets to a sporting event; client appreciation events;
payment for travel expenses (including meals and lodging) to pre-approved
training and education seminars; and payment for advertising and sales
campaigns. The Distributor may also pay concessions in addition to those
described above to broker-dealers so that ING mutual funds are made available by
those broker-dealers for their customers. The Sub-Adviser of the Fund may
contribute to non-cash compensation arrangements.

Not all mutual funds pay the same amount to the broker-dealers who sell their
mutual funds. Broker-dealers can receive different payments based on the mutual
funds they offer, the companies with whom they are doing business, and how much
they sell. What these broker-dealers are paid also varies depending on the class
of mutual fund you purchase.

The top 25 firms we paid to sell our mutual funds, as of the end of the last
calendar year are: A.G. Edwards & Sons, Inc.; Bear Stearns Securities Corp;
Charles Schwab & Co; Citigroup Global Markets; Directed Services LLC; Financial
Network Investment; First Clearing, LLC; H&R Block Financial Advisors; ING
DIRECT Securities, Inc.; ING Financial Advisors; ING Life Insurance and Annuity
Company; Linsco Private Ledger Financial; Merrill Lynch; MS & Co. ("Morgan
Stanley"); Multi Financial Securities; National Financial Services Corp;
Oppenheimer & Co.; Pershing, LLC; Primevest Financial Services, Inc.; Prudential
Investment Management Services; Raymond James Financial Services; RBC Dain
Rauscher, Inc.; UBS Financial Services, Inc.; Wachovia Securities; and Wells
Fargo Investments.

Your registered representative or broker-dealer could have a financial interest
in selling you a particular mutual fund, or the mutual funds of a particular
company, to increase the compensation they receive. Please make sure you read
fully each mutual fund prospectus and discuss any questions you have with your
registered representative.

SALES CHARGE CALCULATION

CLASS A/(1)(2)/

Class A shares of the Fund are sold subject to the following sales charge:

                                AS A % OF             AS A % OF NET
YOUR INVESTMENT             OFFERING PRICE/(3)/      AMOUNT INVESTED
Less than $50,000                 5.75%                   6.10%
$50,000 - $99,999                 4.50%                   4.71%
$100,000 - $249,999               3.50%                   3.63%
$250,000 - $499,999               2.50%                   2.56%
$500,000 - $1,000,000             2.00%                   2.04%
$1,000,000 and over                                  See below

(1)  Shareholders that purchased funds that were a part of the Lexington family
     of funds at the time of purchase are not subject to sales charges for the
     life of their account.

(2)  Shareholders that purchased funds that were part of the Aetna family of
     funds prior to February 2, 1998 at the time of purchase are not subject to
     sales charges for the life of their account.

(3)  The term "offering price" includes the front-end sales charge.

INVESTMENTS OF $1 MILLION OR MORE. There is no front-end sales charge if you
purchase Class A shares in an amount of $1 million or more. However, except as
described below, the shares will be subject to a CDSC if they are redeemed
within one or two years of purchase, depending on the amount of the purchase, as
follows:

[GRAPHIC APPEARS HERE]

                          If you have any questions, please call 1-800-992-0180.

                                                           Shareholder Guide   7



SHAREHOLDER GUIDE                                         CHOOSING A SHARE CLASS
--------------------------------------------------------------------------------

                                               PERIOD DURING WHICH
YOUR INVESTMENT                   CDSC            CDSC APPLIES
$1,000,000 - $2,499,999           1.00%              2 years
$2,500,000 - $4,999,999           0.50%               1 year
$5,000,000 and over               0.25%               1 year

CLASS B AND CLASS C

Class B and Class C shares are offered at their NAV per share without any
initial sales charge. However, you may be charged a CDSC on shares that you sell
within a certain period of time after you bought them. The amount of the CDSC is
based on the lesser of the NAV of the shares at the time of purchase or
redemption. The CDSCs are as follows:

CLASS B DEFERRED SALES CHARGE

                                  CDSC ON SHARES
YEARS AFTER PURCHASE                BEING SOLD
1st year                               5.00%
2nd year                               4.00%
3rd year                               3.00%
4th year                               3.00%
5th year                               2.00%
6th year                               1.00%
After 6th year                         none

CLASS C DEFERRED SALES CHARGE

                                  CDSC ON SHARES
YEARS AFTER PURCHASE                BEING SOLD
1st year                               1.00%
After 1st year                         none

To keep your CDSC as low as possible, each time you place a request to redeem
shares the Fund will first redeem shares in your account that are not subject to
a CDSC and then will sell shares that have the lowest CDSC.

There is no CDSC on shares acquired through the reinvestment of dividends and
capital gains distributions.

SALES CHARGE REDUCTIONS AND WAIVERS

REDUCED OR WAIVED FRONT-END SALES CHARGES. You may reduce the initial sales
charge on a purchase of Class A shares of the Fund by combining multiple
purchases to take advantage of the breakpoints in the sales charge schedules.
You may do this by:

.    LETTER OF INTENT - lets you purchase shares over a 13-month period and pay
     the same sales charge as if the shares had all been purchased at once.

.    RIGHTS OF ACCUMULATION - lets you add the value of shares of any open-end
     ING Fund (excluding ING Money Market Fund and ING Classic Money Market
     Fund) you already own to the amount of your next purchase for purposes of
     calculating the sales charge.

.    COMBINATION PRIVILEGE - shares held by investors in the ING Funds which
     impose a CDSC may be combined with Class A shares for a reduced sales
     charge.

In addition, certain investors may be eligible for special purchases of Class A
shares at NAV. This may be done by:

.    REINSTATEMENT PRIVILEGE - If you sell Class A shares of the Fund (or shares
     of other ING Funds managed by ING Investments, LLC) and reinvest any of the
     proceeds in Class A shares of another ING Fund within 90 days. For
     additional information regarding the reinstatement privilege, contact a
     Shareholder Services Representative, or see the SAI; or

.    PURCHASES BY CERTAIN ACCOUNTS - Class A shares may be purchased at NAV by
     certain fee-based programs offered through selected registered investment
     advisers, broker dealers and other financial intermediaries.

See the Account Application or the SAI for details, or contact your investment
professional or a Shareholder Services Representative for more information.

CDSC WAIVERS. If you notify the Transfer Agent at the time of redemption, the
CDSC for each class will be waived in the following cases:

.    Redemptions following the death or permanent disability of a shareholder if
     made within one year of death or the initial determination of permanent
     disability. The waiver is available only for shares held at the time of
     death or initial determination of permanent disability.

.    For Class B and Class C shares, redemptions pursuant to a Systematic
     Withdrawal Plan, up to a maximum of 12% per year of a shareholder's account
     value based on the value of the account at the time the plan is established
     and annually thereafter, provided all dividends and distributions are
     reinvested and the total redemptions do not exceed 12% annually.

.    Reinvestment of dividends and capital gains distributions.

If you think you may be eligible for a CDSC waiver, contact your investment
professional or a Shareholder Services Representative.

REINSTATEMENT PRIVILEGE. If you sell Class A, Class B or Class C shares of the
Fund, you may be eligible for a full or prorated credit of the CDSC paid on the
sale when you make an investment up to the amount redeemed in the same share
class within 90 days of the eligible sale. Reinstated Class B and Class C shares
will retain their original cost and purchase date for purposes of the CDSC. This
privilege can be used only once per calendar year. If you want to use the
Reinstatement Privilege, contact your investment professional or a Shareholder
Services Representative, or see the SAI for more information.

8    Shareholder Guide



HOW TO PURCHASE SHARES                                         SHAREHOLDER GUIDE
--------------------------------------------------------------------------------

PURCHASE OF SHARES
The minimum initial investment amounts for the Fund are as follows:

.    Non-retirement accounts: $1,000.

.    Retirement accounts: $250.

.    Pre-Authorized Investment Plan: $1,000 to open; you must invest at least
     $100 a month.

.    Certain omnibus accounts (accounts of investors who purchase fund shares
     through certain financial intermediaries where the share holdings are held
     in the name of the financial intermediary): $250.

.    There are no investment minimums for any subsequent purchases.

Make your investment using the methods outlined in the table on the right.

The Fund and the Distributor reserve the right to reject any purchase order.
Please note that cash, travelers checks, third-party checks, money orders and
checks drawn on non-U.S. banks (even if payment may be effected through a U.S.
bank) generally will not be accepted. The Fund and the Distributor reserve the
right to waive minimum investment amounts. Waiver of the minimum investment
amount can increase operating expenses of the Fund. The Fund and the Distributor
reserve the right to liquidate sufficient shares to recover annual transfer
agent fees or to close your account and redeem your shares should you fail to
maintain your account value at a minimum of $1,000 ($250 for IRAs).

CUSTOMER IDENTIFICATION

To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify
and record information that identifies each person that opens an account, and to
determine whether such person's name appears on government lists of known or
suspected terrorists and terrorist organizations.

What this means for you: The Fund, the Distributor, or a third-party selling you
the Fund must obtain the following information for each person that opens an
account:

.    Name;

.    Date of birth (for individuals);

.    Physical residential address (although post office boxes are still
     permitted for mailing); and

.    Social security number, taxpayer identification number, or other
     identifying number.

You may also be asked to show your driver's license, passport or other
identifying documents in order to verify your identity. In addition, it may be
necessary to verify your identity by cross-referencing your identification
information with a consumer report or other electronic database. Additional
information may be required to open accounts for corporations and other
non-natural persons.

FEDERAL LAW PROHIBITS THE FUND, THE DISTRIBUTOR AND OTHER FINANCIAL INSTITUTIONS
FROM OPENING ACCOUNTS UNLESS THEY RECEIVE THE MINIMUM IDENTIFYING INFORMATION
LISTED ABOVE. THEY ALSO MAY BE REQUIRED TO CLOSE YOUR ACCOUNT IF THEY ARE UNABLE
TO VERIFY YOUR IDENTITY WITHIN A REASONABLE TIME.

                           Initial                   Additional
    Method               Investment                  Investment

BY CONTACTING        An investment               Visit or consult an
YOUR               professional with an        investment
INVESTMENT         authorized firm can         professional.
PROFESSIONAL       help you establish and
                   maintain your account.

BY MAIL              Visit or consult an         Fill out the Account
                   investment                  Additions form
                   professional. Make          included on the bottom
                   your check payable to       of your account
                   the ING Funds and mail      statement along with
                   it, along with a            your check payable to
                   completed Account           ING Funds and mail
                   Application. Please         them to the address on
                   indicate your               the account statement.
                   investment                  Remember to write
                   professional on the         your account number
                   New Account                 on the check.
                   Application.

BY WIRE              Call the ING                Wire the funds in the
                   Operations                  same manner described
                   Department at               under "Initial
                   (800) 922-0180              Investment."
                   and select Option 4 to
                   obtain an account
                   number and indicate
                   your investment
                   professional on the
                   account.
                   Instruct your bank to
                   wire funds to the Fund
                   in the care of:
                   State Street Bank
                   and Trust Company
                   ABA # 011000028
                   Boston, MA
                   credit to:
                   __________
                   (the Fund)
                   A/C #75000216; for
                   further credit to
                   Shareholder
                   A/C #
                   __________
                   (A/C # you received
                   over the telephone)
                   Shareholder Name:

                   __________
                   (Your Name Here)
                   After wiring funds
                   you must complete
                   the Account
                   Application and send
                   it to:
                   ING Funds
                   P.O. Box 219368
                   Kansas City, MO
                   64121-9368

[GRAPHIC APPEARS HERE]

                          If you have any questions, please call 1-800-992-0180.

                                                           Shareholder Guide   9



SHAREHOLDER GUIDE                                         HOW TO PURCHASE SHARES
--------------------------------------------------------------------------------

FREQUENT TRADING - MARKET TIMING

The Fund is intended for long-term investment and not as a short-term trading
vehicle. Accordingly, organizations or individuals that use market timing
investment strategies should not purchase shares of the Fund. The Fund reserves
the right, in its sole discretion and without prior notice, to reject, restrict
or refuse purchase orders whether directly or by exchange, including purchase
orders that have been accepted by a shareholder's or retirement plan
participant's intermediary, that the Fund determines not to be in the best
interest of the Fund.

The Fund believes that market timing or frequent, short-term trading in any
account, including a retirement plan account, is not in the best interest of the
Fund or its shareholders. Due to the disruptive nature of this activity, it can
adversely affect the ability of the Adviser or Sub-Adviser to invest assets in
an orderly, long-term manner. Frequent trading can raise Fund expenses through:
increased trading and transaction costs; increased administrative costs; and
lost opportunity costs. This in turn can have an adverse effect on Fund
performance.

Because the Fund invests in foreign securities, it may present greater
opportunities for market timers and thus be at a greater risk for excessive
trading. If an event occurring after the close of a foreign market but before
the time the Fund computes its current NAV causes a change in the price of the
foreign security and such price is not reflected in the Fund's current NAV,
investors may attempt to take advantage of anticipated price movements in
securities held by the Fund based on such pricing discrepancies. This is often
referred to as "price arbitrage." Such price arbitrage opportunities may also
occur in funds which do not invest in foreign securities. For example, if
trading in a security held by the Fund is halted and does not resume prior to
the time the Fund calculates its NAV such "stale pricing" presents an
opportunity for investors to take advantage of the pricing discrepancy.
Similarly, when the Fund holds thinly-traded securities, such as certain
small-capitalization securities, it may be exposed to varying levels of pricing
arbitrage. The Fund has adopted fair valuation policies and procedures intended
to reduce the Fund's exposure to price arbitrage, stale pricing and other
potential pricing discrepancies. However, to the extent that the Fund's NAV does
not immediately reflect these changes in market conditions, short-term trading
may dilute the value of Fund shares which negatively affects long-term
shareholders.

The Fund's Board of Directors ("Board") has adopted policies and procedures
designed to deter frequent, short-term trading in shares of the Fund. Consistent
with this policy, the Fund monitors trading activity. Shareholders may make
exchanges among their accounts with ING Funds four (4) times each year. All
exchanges occurring on the same day for all accounts (individual, IRA, 401(k),
etc.) beneficially owned by the same shareholder will be treated as a single
transaction for these purposes. Subsequent transactions may not be effected
within 30 days of the last transaction. In addition, purchase and sale
transactions that are the functional equivalent of exchanges will be included in
these limits. On January 1 of each year, the limit restriction will be reset for
all shareholders and any trade restrictions that were placed on an account due
to a violation of the policy in the prior year will be removed. The Fund
reserves the right to specifically address any trading that might otherwise
appear to comply with the restrictions described above if, after consultation
with appropriate compliance personnel, it is determined that such trading is
nevertheless abusive or adverse to the interests of long-term shareholders. The
Fund also reserves the right to modify the frequent trading - market timing
policy at any time without prior notice depending on the needs of the Fund
and/or state or federal regulatory requirements.

If an activity is identified as problematic after further investigation, the
Fund reserves the right to take any necessary action to deter such activity.
Such action may include, but not be limited to: rejecting additional purchase
orders, whether directly or by exchange; extending settlement of a redemption up
to seven days; rejecting all purchase orders from broker-dealers or their
registered representatives suspected of violating the Fund's frequent trading
policy; or termination of the selling group agreement or other agreement with
broker-dealers or other financial intermediaries associated with frequent
trading.

Although the restrictions described above are designed to discourage frequent,
short-term trading, none of them alone, nor all of them taken together, can
eliminate the possibility that frequent, short-term trading activity in the Fund
will occur. Moreover, in enforcing such restrictions, the Fund is often required
to make decisions that are inherently subjective. The Fund strives to make these
decisions to the best of its ability in a manner that it believes is in the best
interest of shareholders.

Shareholders may invest in the Fund through omnibus account arrangements with
financial intermediaries. Omnibus accounts permit intermediaries to aggregate
transactions. Such intermediaries include broker-dealers, banks, investment
advisers, recordkeepers, retirement plans, and fee-based accounts such as wrap
fee programs. Omnibus accounts generally do not identify customers' trading
activity on an individual basis. The Fund's administrator has agreements which
require such intermediaries to provide detailed account information, including
trading history, upon request of the Fund.

In some cases, the Fund will rely on the intermediaries' excessive trading
policies and such policies shall define the trading activity in which the
shareholders may engage. This shall be the case where the Fund is used in
certain retirement plans offered by affiliates. With trading information
received as a result of agreements, the Fund may make a determination that
certain trading activity is harmful to the Fund and its shareholders even if
such activity is not strictly prohibited by the intermediaries' excessive
trading policy. As a result, a shareholder investing directly or indirectly in
the Fund may have their trading privileges suspended without violating the
stated excessive trading policy of the intermediary.

10   Shareholder Guide



SHAREHOLDER GUIDE                                           HOW TO REDEEM SHARES
--------------------------------------------------------------------------------

You may redeem shares by using the methods outlined in the table on the right.

Under unusual circumstances, the Fund may suspend the right of redemption as
allowed by federal securities laws.

SYSTEMATIC WITHDRAWAL PLAN

You may elect to make periodic withdrawals from your account on a regular basis.

.    Your account must have a current value of at least $10,000.

.    Minimum withdrawal amount is $100.

.    You may choose from monthly, quarterly, semi-annual or annual payments.

For additional information, contact a Shareholder Services Representative, or
refer to the Account Application or the SAI.

PAYMENTS

Normally, payment for shares redeemed will be made within three days after
receipt by the Transfer Agent of a written request in good order. The Fund has
the right to take up to seven days to pay your redemption proceeds, and may
postpone payment longer in the event of an economic emergency as determined by
the SEC. When you place a request to redeem shares for which the purchase money
has not yet been collected, the request will be executed at the next determined
NAV but the Fund will not release the proceeds until your purchase payment
clears. This may take up to 15 days or more. To reduce such delay, purchases
should be made by bank wire or federal funds.

The Fund normally intends to pay in cash for all shares redeemed but under
abnormal conditions that make payment in cash unwise, the Fund may make payment
wholly or partly in securities at its then current market value equal to the
redemption price. In such case, the Fund could elect to make payment in
securities for redemptions in excess of $250,000 or 1% of its net assets during
any 90-day period for any one shareholder. An investor may incur brokerage
costs in converting such securities to cash.

       Method                                 Procedures

BY CONTACTING YOUR             You may redeem shares by contacting your
INVESTMENT PROFESSIONAL      investment professional. Investment
                             professionals may charge for their services
                             in connection with your redemption
                             request but neither the Fund nor the
                             Distributor imposes any such charge.

BY MAIL                        Send a written request specifying the Fund
                             name and share class, your account
                             number, the name(s) in which the account
                             is registered, and the dollar value or
                             number of shares you wish to redeem to:
                             ING Funds
                             P.O. Box 219368
                             Kansas City, MO 64121-9368
                             If certificated shares have been issued, the
                             certificate must accompany the written
                             request. Corporate investors and other
                             associations must have an appropriate
                             certification on file authorizing
                             redemptions. A suggested form of such
                             certification is provided on the Account
                             Application. A signature guarantee may be
                             required.

BY TELEPHONE -                 You may redeem shares by telephone on
EXPEDITED REDEMPTION         all accounts other than retirement
                             accounts unless you check the box on the
                             Account Application which signifies that
                             you do not wish to use telephone
                             redemptions. To redeem by telephone, call
                             the Shareholder Services Representative at
                             (800) 992-0180.
                             RECEIVING PROCEEDS BY CHECK:
                             You may have redemption proceeds (up to
                             a maximum of $100,000) mailed to an
                             address which has been on record with ING
                             Funds for at least 30 days.
                             RECEIVING PROCEEDS BY WIRE:
                             You may have redemption proceeds
                             (subject to a minimum of $5,000) wired to
                             your pre-designated bank account. You will
                             not be able to receive redemption
                             proceeds by wire unless you check the box
                             on the Account Application which signifies
                             that you wish to receive redemption
                             proceeds by wire and attach a voided
                             check. Under normal circumstances,
                             proceeds will be transmitted to your bank
                             on the business day following receipt of
                             your instructions provided redemptions
                             may be made. In the event that share
                             certificates have been issued, you may not
                             request a wire redemption by telephone.

12   Shareholder Guide



TRANSACTION POLICIES                                           SHAREHOLDER GUIDE
--------------------------------------------------------------------------------

NET ASSET VALUE

The NAV per share for each class of the Fund is determined each business day as
of the close of regular trading ("Market Close") on the New York Stock Exchange
("NYSE") (normally 4:00 p.m. Eastern time unless otherwise designated by the
NYSE). The Fund is open for business every day the NYSE is open. The NYSE is
closed on all weekends and on all national holidays and Good Friday. Fund shares
will not be priced on those days. The NAV per share of each class of the Fund is
calculated by taking the value of the Fund's assets attributable to that class,
subtracting the Fund's liabilities attributable to that class, and dividing by
the number of shares of that class that are outstanding.

In general, assets are valued based on actual or estimated market value, with
special provisions for assets not having readily available market quotations and
short-term debt securities, and for situations where market quotations are
deemed unreliable. Investments in securities maturing in 60 days or less are
valued at amortized cost, which, when combined with accrued interest,
approximates market value. Securities prices may be obtained from automated
pricing services. Shares of investment companies held by the Fund will generally
be valued at the latest NAV reported by that investment company. The
prospectuses for those investment companies explain the circumstances under
which they will use fair value pricing and the effects of using fair value
pricing.

Trading of foreign securities may not take place every day the NYSE is open.
Also, trading in some foreign markets and on some electronic trading networks
may occur on weekends or holidays when the Fund's NAV is not calculated. As a
result, the NAV of the Fund may change on days when shareholders will not be
able to purchase or redeem the Fund's shares.

When market quotations are not available or are deemed unreliable, the Fund will
use a fair value for the security that is determined in accordance with
procedures adopted by the Fund's Board. The types of securities for which such
fair value pricing might be required include, but are not limited to:

.    Foreign securities, where a foreign security whose value at the close of
     the foreign market on which it principally trades likely would have changed
     by the time of the close of the NYSE, or the closing value is otherwise
     deemed unreliable;

.    Securities of an issuer that has entered into a restructuring;

.    Securities whose trading has been halted or suspended;

.    Fixed-income securities that have gone into default and for which there are
     no current market value quotations; and

.    Securities that are restricted as to transfer or resale.

The Fund or the Adviser may rely on the recommendations of a fair value pricing
service approved by the Fund's Board in valuing foreign securities. Valuing
securities at fair value involves greater reliance on judgment than valuing
securities that have readily available market quotations. The Adviser makes such
determinations in good faith in accordance with procedures adopted by the Fund's
Board. Fair value determinations can also involve reliance on quantitative
models employed by a fair value pricing service. There can be no assurance that
the Fund could obtain the fair value assigned to a security if it were to sell
the security at approximately the time at which the Fund determines its NAV per
share.

PRICE OF SHARES

When you buy shares, you pay the NAV plus any applicable sales charge. When you
sell shares, you receive the NAV minus any applicable CDSC. Exchange orders are
effected at NAV.

EXECUTION OF REQUESTS

Purchase and sale requests are executed at the next NAV determined after the
order is received in proper form by the Transfer Agent or the Distributor. A
purchase order will be deemed to be in proper form when all of the required
steps set forth above under "How to Purchase Shares" have been completed. If you
purchase by wire, however, the order will be deemed to be in proper form after
the telephone notification and the federal funds wire have been received. If you
purchase by wire, you must submit an application form in a timely fashion. If an
order or payment by wire is received after Market Close, the shares will not be
credited until the next business day. For your transaction to be counted on the
day you place your order with your broker-dealer or other financial institution,
they must receive your order before Market Close and promptly transmit the order
to the Transfer Agent or the Distributor.

You will receive a confirmation of each new transaction in your account, which
also will show you the number of Fund shares you own including the number of
shares being held in safekeeping by the Transfer Agent for your account. You may
rely on these confirmations in lieu of certificates as evidence of your
ownership.

TELEPHONE ORDERS

The Fund and its Transfer Agent will not be responsible for the authenticity of
phone instructions or losses, if any, resulting from unauthorized shareholder
transactions if they reasonably believe that such instructions were genuine. The
Fund and its Transfer Agent have established reasonable procedures to confirm
that instructions communicated by telephone are genuine. These procedures
include recording telephone instructions for exchanges and expedited
redemptions, requiring the caller to give certain specific identifying
information, and providing written confirmation to shareholders of record not
later than five days following any such telephone transactions. If the Fund and
its Transfer Agent do not employ these procedures, they may be liable for any
losses due to unauthorized or fraudulent telephone instructions.

EXCHANGES

You may exchange shares of the Fund for shares of the same class of any other
ING Fund, except for ING Corporate Leaders Trust Fund, without paying any
additional sales charge. However, for Class A shares of ING Money Market Fund
and ING Classic Money

[GRAPHIC APPEARS HERE]

                          If you have any questions, please call 1-800-992-0180.

                                                           Shareholder Guide  13



SHAREHOLDER GUIDE                                           TRANSACTION POLICIES
--------------------------------------------------------------------------------

Market Fund, for which no sales charge was paid, you must pay the applicable
sales load on an exchange into Class A shares of another Fund. Shares subject to
a CDSC will continue to age from the date that the original shares were
purchased.

The total value of shares being exchanged must at least equal the minimum
investment requirement of the ING Fund into which they are being exchanged.
Exchanges of shares are sales and may result in a gain or loss for federal and
state income tax purposes.

If you exchange into ING Senior Income Fund, your ability to sell or liquidate
your investment will be limited. ING Senior Income Fund is a closed-end interval
fund and does not redeem its shares on a daily basis. It is not expected that a
secondary market for ING Senior Income Fund's shares will develop, so you will
not be able to sell them through a broker or other investment professional. To
provide a measure of liquidity, the ING Senior Income Fund will normally make
monthly repurchase offers for not less than 5% of its outstanding common shares.
If more than 5% of ING Senior Income Fund's common shares are tendered, you may
not be able to completely liquidate your holdings in any one month. You also
would not have liquidity between these monthly repurchase dates. Investors
exercising the exchange privilege into ING Senior Income Fund should carefully
review the prospectus of that fund. Investors may obtain a copy of the ING
Senior Income Fund prospectus or any other ING Fund prospectus by calling (800)
992-0180 or by going to www.ingfunds.com.

In addition to the Fund available in this Prospectus, the Distributor offers
many other funds. Shareholders exercising the exchange privilege with any other
ING Fund should carefully review the prospectus of that fund before exchanging
their shares. For a list of the other funds offered by the Distributor, please
see the inside back cover of this Prospectus. Investors may obtain a copy of a
prospectus of any ING Fund not discussed in this Prospectus by calling (800)
992-0180 or by going to www.ingfunds.com.

You will automatically have the ability to request an exchange by calling a
Shareholder Services Representative unless you mark the box on the Account
Application that indicates that you do not wish to have the telephone exchange
privilege. The Fund may change or cancel its exchange policies at any time, upon
60 days' prior written notice to shareholders.

CDSC ON EXCHANGE INTO ING SENIOR INCOME FUND

You are not required to pay an applicable CDSC upon an exchange from the Fund
described in this Prospectus into ING Senior Income Fund. However, if you
exchange into ING Senior Income Fund and subsequently offer your common shares
for repurchase by that Fund, the Fund's CDSC will apply. After an exchange into
ING Senior Income Fund, the time period for application of the CDSC will be
calculated based on the first date you acquired your shares in the ING Fund.

SYSTEMATIC EXCHANGE PRIVILEGE

With an initial account balance of at least $5,000 and subject to the
information and limitations outlined above, you may elect to have a specified
dollar amount of shares systematically exchanged, monthly, quarterly,
semi-annually or annually (on or about the 10th of the applicable month), from
your account to an identically registered account in the same class of any other
open-end ING Fund, except for ING Corporate Leaders Trust Fund. This exchange
privilege may be modified at any time or terminated upon 60 days' prior written
notice to shareholders.

SMALL ACCOUNTS

Due to the relatively high cost of handling small investments, the Fund reserves
the right upon 30 days' prior written notice to redeem, at NAV (less any
applicable deferred sales charge), the shares of any shareholder whose account
(except for IRAs) has a total value that is less than the Fund minimum. Before
the Fund redeems such shares and sends the proceeds to the shareholder, it will
notify the shareholder that the value of the shares in the account is less than
the minimum amount allowed and will allow the shareholder 30 days to make an
additional investment in an amount that will increase the value of the account
to the minimum before the redemption is processed. Your account will not be
closed if its drop in value is due to Fund performance.

ACCOUNT ACCESS

Unless your Fund shares are held through a third-party fiduciary or in an
omnibus registration at your bank or brokerage firm, you may be able to access
your account information over the internet at www.ingfunds.com, or via a touch
tone telephone by calling (800) 992-0180 and selecting Option 1. Should you wish
to speak with a Shareholder Services Representative, you may call the toll-free
number listed above and select Option 2.

PRIVACY POLICY

The Fund has adopted a policy concerning investor privacy. To review the
privacy policy, contact a Shareholder Services Representative at (800) 992-0180
and select Option 1, obtain a policy over the internet at www.ingfunds.com, or
see the privacy promise that accompanies this Prospectus.

HOUSEHOLDING

To reduce expenses, we may mail only one copy of the Fund's prospectus and each
annual and semi-annual shareholder report to those addresses shared by two or
more accounts. If you wish to receive individual copies of these documents,
please call us at (800) 992-0180 or speak to your investment professional. We
will begin sending you individual copies thirty days after receiving your
request.

PORTFOLIO HOLDINGS DISCLOSURE POLICY

A description of the policies and procedures with respect to the disclosure of
the Fund's portfolio securities is available in the SAI. The Fund posts its
portfolio holdings schedule on its website on a

14   Shareholder Guide



MANAGEMENT OF THE FUND                                   ADVISER AND SUB-ADVISER
--------------------------------------------------------------------------------

ADVISER
ING INVESTMENTS, LLC ("ING INVESTMENTS" OR "ADVISER"), an Arizona limited
liability company, serves as the investment adviser to the Fund. ING Investments
has overall responsibility for the management of the Fund. ING Investments
oversees all investment advisory and portfolio management services for the Fund.

ING Investments is registered with the SEC as an investment adviser. ING
Investments is an indirect, wholly-owned subsidiary of ING Groep N.V. ("ING
Groep"). ING Groep is one of the largest financial services organizations in the
world with approximately 120,000 employees. Based in Amsterdam, ING Groep offers
an array of banking, insurance and asset management services to both individual
and institutional investors. ING Investments became an investment management
firm in April, 1995.

As of December 31, 2007 ING Investments managed approximately $54 billion in
assets.

The principal address of ING Investments is 7337 East Doubletree Ranch Road,
Scottsdale, Arizona 85258.

ING Investments receives a monthly fee for its services based on the average
daily net assets of the Fund.

The following table shows the aggregate annual management fee paid by the Fund
for the most recent fiscal year as a percentage of the Fund's average daily net
assets.

            MANAGEMENT
FUND            FEE
               1.05%

For information regarding the basis for the Board's approval of the investment
advisory and investment sub-advisory relationships, please refer to the Fund's
annual shareholder report that will be dated April 30, 2008.

SUB-ADVISER

ING Investments has engaged a sub-adviser to provide the day-to-day management
of the Fund's portfolio. The sub-adviser is not an affiliate of ING Investments.

ING Investments acts as a "manager-of-managers" for the Fund. ING Investments
delegates to the sub-adviser of the Fund the responsibility for investment
management, subject to ING Investment's oversight. ING Investments is
responsible for monitoring the investment program and performance of the
sub-adviser of the Fund.

From time to time, ING Investments may also recommend the appointment of
additional sub-advisers or replacement of non-affiliated sub-advisers to the
Fund's Board. It is not expected that ING Investments would normally recommend
replacement of affiliated sub-advisers as part of its oversight
responsibilities. The Fund and ING Investments have received exemptive relief
from the SEC to permit ING Investments, with the approval of the Fund's Board,
to appoint additional non-affiliated sub-advisers or to replace an existing
sub-adviser with a non-affiliated sub-adviser as well as change the terms of a
contract with a non-affiliated sub-adviser, without submitting the contract to a
vote of the Fund's shareholders. The Fund will notify shareholders of any change
in the identity of the sub-adviser of the Fund. In this event, the name of the
Fund and its principal investment strategies may also change.

Under the terms of the sub-advisory agreement, the agreement can be terminated
by either ING Investments or the Fund's Board. In the event the sub-advisory
agreement is terminated, the sub-adviser may be replaced subject to any
regulatory requirements or ING Investments may assume day-to-day investment
management of the Fund.

BLACKROCK ADVISORS, LLC

BlackRock Advisors, LLC ("BlackRock Advisors" or "Sub-Adviser"), a Delaware
limited liability company, serves as the Sub-Adviser to the Fund and is a
wholly-owned subsidiary of BlackRock, Inc., ("BlackRock"). BlackRock Advisors
and its affiliates offer a full range of equity, fixed-income, cash management
and alternative investment products with strong representation in both retail
and institutional channels in U.S. and in non-U.S. markets. The company has over
5,600 employees in 20 countries and a major presence in most key markets
including the United States, the United Kingdom, Asia, Australia, the Middle
East and Europe.

The principal address of BlackRock is 100 Bellevue Parkway, Wilmington, Delaware
19809.

As of December 31, 2007 BlackRock Advisors and its affiliates had over $1.357
trillion in investment company and other portfolio assets under management.

The following individuals jointly share responsibility for the day-to-day
management of the Fund.

Thomas P. Callan, CFA, Managing Director and Senior Portfolio Manager, is the
head of the BlackRock Advisors' Global Opportunities Team and is the strategist
for all the team's portfolios. Mr. Callan has co-managed the Fund since 2004.
Before becoming part of BlackRock Advisors, Mr. Callan had been with the PNC
Asset Management Group which he joined in 1994. Mr. Callan began his career at
PNC Bank as a personal trust portfolio manager in 1988 and became a research
analyst in 1992.

Jean M. Rosenbaum, CFA, Managing Director and Portfolio Manager, is a senior
member of BlackRock Advisors' Global Opportunities Team and is responsible for
coverage of stocks in the technology sector for all of the team's portfolios.
Ms. Rosenbaum has co-managed the Fund since 2005. Prior to joining BlackRock
Advisors in 1998, Ms. Rosenbaum was a healthcare analyst with the PNC Asset
Management Group.

Erin Xie, Ph.D., Managing Director and Portfolio Manager, is a senior member of
BlackRock Advisors' Global Opportunities Team and is responsible for coverage
of stocks in the healthcare sector. Dr. Xie has co-managed the Fund since 2005.
Before becoming

16   Management of the Fund



MORE INFORMATION ABOUT RISKS
--------------------------------------------------------------------------------

All mutual funds involve risk - some more than others - and there is always the
chance that you could lose money or not earn as much as you hope. The Fund's
risk profile is largely a factor of the principal securities in which it invests
and investment techniques that it uses. The following pages discuss the risks
associated with certain of the types of securities in which the Fund may invest
and certain of the investment practices that the Fund may use. For more
information about these and other types of securities and investment techniques
that may be used by the Fund, see the SAI.

Many of the investment techniques and strategies discussed in this Prospectus
and in the SAI are discretionary which means that the Adviser or Sub-Adviser can
decide whether to use them or not. The Fund may invest in these securities or
use these techniques as part of the Fund's principal investment strategies.
However, the Adviser or Sub-Adviser may also use these investment techniques or
make investments in securities that are not a part of the Fund's principal
investment strategies.

PRINCIPAL RISKS

The discussions below describe the Fund's principal risks. Please see the SAI
for a further discussion of the principal and other investment strategies
employed by the Fund.

CONVERTIBLE SECURITIES. The price of a convertible security will normally
fluctuate in some proportion to changes in the price of the underlying equity
security and as such, is subject to risks relating to the activities of the
issuer and general market and economic conditions. The income component of
convertible securities causes fluctuations based upon changes in interest rates
and the credit quality of the issuer. Convertible securities are often lower
rated securities. A Fund may be required to redeem or convert a convertible
security before the holder would otherwise choose.

DERIVATIVES. Generally, derivatives can be characterized as financial
instruments whose performance is derived, at least in part, from the performance
of an underlying asset or assets. Some derivatives are sophisticated instruments
that typically involve a small investment of cash relative to the magnitude of
risks assumed. These may include swap agreements, options, forwards and futures.
Derivative securities are subject to market risk which could be significant for
those that have a leveraging effect. Derivatives are also subject to credit
risks related to the counterparty's ability to perform and any deterioration in
the counterparty's creditworthiness could adversely affect the instrument. In
addition, derivatives and their underlying securities may experience periods of
illiquidity which could cause the Fund to hold a security it might otherwise
sell or could force the sale of a security at inopportune times or for prices
that do not reflect current market value. A risk of using derivatives is that
the Adviser or Sub-Adviser might imperfectly judge the market's direction. For
instance, if a derivative is used as a hedge to offset investment risk in
another security, the hedge might not correlate to the market's movements and
may have unexpected or undesired results such as a loss or a reduction in gains.

EMERGING MARKETS INVESTMENTS. Because of less developed markets and economies
and, in some countries, less mature governments and governmental institutions,
the risks of investing in foreign securities can be intensified in the case of
investments in issuers domiciled or doing substantial business in countries with
an emerging securities market. These risks include: high concentration of market
capitalization and trading volume in a small number of issuers representing a
limited number of industries, as well as a high concentration of investors and
financial intermediaries; political and social uncertainties; over-dependence on
exports, especially with respect to primary commodities, making these economies
vulnerable to changes in commodity prices; overburdened infrastructure and
obsolete or unseasoned financial systems; environmental problems; less developed
legal systems; and less reliable custodial services and settlement practices.

FOREIGN SECURITIES. There are certain risks in owning foreign securities
including those resulting from: fluctuations in currency exchange rates;
devaluation of currencies; political or economic developments and the possible
imposition of currency exchange blockages or other foreign governmental laws or
restrictions; reduced availability of public information concerning issuers;
accounting, auditing and financial reporting standard or other regulatory
practices and requirements that are not uniform when compared to those
applicable to domestic companies; settlement and clearance procedures in some
countries that may not be reliable and can result in delays in settlement;
higher transaction and custody expenses than for domestic securities; and
limitations on foreign ownership of equity securities. Also, securities of many
foreign companies may be less liquid and the prices are more volatile that those
of domestic companies. With certain foreign countries, there is the possibility
of expropriation, nationalization, confiscatory taxation and limitations on the
use or removal of portfolios or other assets of the Fund including the
withholding of dividends.

The Fund may enter into foreign currency transactions either on a spot or cash
basis at prevailing rates or through forward foreign currency exchange contracts
in order to have the necessary currencies to settle transactions, to help
protect Fund assets against adverse changes in foreign currency exchange rates,
or to provide exposure to a foreign currency commensurate with the exposure to
securities from that country. Such efforts could limit potential gains that
might result from a relative increase in the value of such currencies and might,
in certain cases, result in losses to the Fund.

INITIAL PUBLIC OFFERINGS ("IPO'S"). IPOs and offerings by companies that have
recently gone public have the potential to produce substantial gains for the
Fund. However, there is no assurance that the Fund will have access to
profitable IPOs. Stocks of some newly-public companies may decline shortly after
the initial public offerings.

18   More Information About Risks



MORE INFORMATION ABOUT RISKS
--------------------------------------------------------------------------------

RULE 144A SECURITIES. Rule 144A securities are securities that are not
registered but which are bought and sold solely by institutional investors. The
Fund considers Rule 144A securities to be "liquid" although the market for such
securities typically is less active than public securities markets.

SECTOR FOCUS. The Fund focuses its assets in securities in the science and
technology sectors. As a result, the Fund may be subject to greater risks and
market fluctuation than a fund which has securities representing a broader range
of investment alternatives.

SMALL- AND MID-CAPITALIZATION COMPANIES. Investments in small- and
mid-capitalization companies involve greater risk than is customarily associated
with larger, more established companies due to the greater business risks of
small size, limited markets and financial resources, narrow product lines and
the frequent lack of depth of management. The securities of smaller companies
are often traded over-the-counter and may not be traded in volumes typical on a
national securities exchange. Consequently, the securities of smaller companies
may have limited market stability and may be subject to more abrupt or erratic
market movements than securities of larger, more established companies or the
market averages in general.

INABILITY TO SELL SECURITIES. Certain securities generally trade in lower volume
and may be less liquid than securities of large established companies. These
less liquid securities could include securities of small and mid-size U.S.
companies, high-yield securities, convertible securities, unrated debt and
convertible securities, securities that originate from small offerings and
foreign securities, particularly those from companies in countries with an
emerging securities market. The Fund could lose money if it cannot sell a
security at the time and price that would be most beneficial to the Fund.

LENDING PORTFOLIO SECURITIES. In order to generate additional income, the Fund
may lend portfolio securities in an amount up to 33 1/3% of total Fund assets to
broker-dealers, major banks, or other recognized domestic institutional
borrowers of securities. When the Fund lends its securities, it is responsible
for investing the cash collateral it receives from the borrower of the
securities, and the Fund could incur losses in connection with the investment of
such cash collateral. As with other extensions of credit, there are risks of
delay in recovery or even loss of rights in the collateral should the borrower
default or fail financially.

OTHER RISKS

BORROWING. Borrowing may exaggerate the affect of any increase or decrease in
the value of portfolio securities or the NAV of the Fund and money borrowed will
be subject to interest costs. Interest costs on borrowings may fluctuate with
changing market rates of interest and may partially offset or exceed the return
earned on borrowed funds. Under adverse market conditions, the Fund might have
to sell portfolio securities to meet interest or principal payments at a time
when fundamental investment considerations would not favor such sales.

CORPORATE DEBT SECURITIES. Corporate debt securities are subject to the risk of
the issuer's inability to meet principal and interest payments on the obligation
and may also be subject to price volatility due to such factors as interest rate
sensitivity, market perception of the credit-worthiness of the issuer and
general market liquidity. When interest rates decline, the value of the Fund's
debt securities can be expected to rise and when interest rates rise, the value
of those securities can be expected to decline. Debt securities with longer
maturities tend to be more sensitive to interest rate movements than those with
shorter maturities.

One measure of risk for fixed-income securities is duration. Duration is one of
the tools used by a portfolio manager in selection of fixed-income securities.
Historically, the maturity of a bond was used as a proxy for the sensitivity of
a bond's price to changes in interest rates, otherwise known as a bond's
"interest rate risk" or "volatility". According to this measure, the longer the
maturity of a bond, the more its price will change for a given change in market
interest rates. However, this method ignores the amount and timing of all cash
flows from the bond prior to final maturity. Duration is a measure of average
life of a bond on a present value basis which was developed to incorporate a
bond's yield, coupons, final maturity and call features into one measure. For
point of reference, the duration of a noncallable 7% coupon bond with a
remaining maturity of 5 years is approximately 4.5 years and the duration of a
noncallable 7% coupon bond with a remaining maturity of 10 years is
approximately 8 years. Material changes in interest rates may impact the
duration calculation.

INTERESTS IN LOANS. The Fund may invest in participation interests or
assignments in secured variable or floating rate loans which include
participation interests in lease financings. Loans are subject to the credit
risk of nonpayment of principal or interest. Substantial increases in interest
rates may cause an increase in loan defaults. Although the loans will generally
be fully collateralized at the time of acquisition, the collateral may decline
in value, be relatively illiquid, or lose all or substantially all of its value
subsequent to the Fund's investment. Many loans are relatively illiquid and may
be difficult to value.

MANAGEMENT. The Fund is subject to management risk because it is an actively
managed investment portfolio. The Adviser, the Sub-Adviser or each individual
portfolio manager will apply investment techniques and risk analyses in making
investment decisions for the Fund, but there can be no guarantee that these will
produce the desired results. Many sub-advisers of equity funds employ styles
that are characterized as "value" or "growth." However, these terms can have
different application by different managers. One sub-adviser's value approach
may be different from another, and one sub-adviser's growth approach may
different from another. For example, some value managers employ a style in which
they seek to identify companies that they believe are valued at a more
substantial or "deeper discount" to a company's net worth than other value
managers. Therefore,

[GRAPHIC APPEARS HERE]

                          If you have any questions, please call 1-800-992-0180.

                                                More Information About Risks  19



MORE INFORMATION ABOUT RISKS
--------------------------------------------------------------------------------

some funds that are characterized as growth or value can have greater volatility
than other funds managed by other managers in a growth or value style.

PAIRING-OFF TRANSACTIONS. A pairing-off transaction occurs when the Fund commits
to purchase a security at a future date and then the Fund pairs-off the purchase
with a sale of the same security prior to or on the original settlement date.
Whether a pairing-off transaction on a debt security produces a gain depends on
the movement of interest rates. If interest rates increase, then the money
received upon the sale of the same security will be less than the anticipated
amount needed at the time the commitment to purchase the security at the future
date was entered and the Fund will experience a loss.

REPURCHASE AGREEMENTS. Repurchase agreements involve the purchase by the Fund of
a security that the seller has agreed to repurchase at an agreed-upon date and
price. If the seller defaults and the collateral value declines, the Fund might
incur a loss. If the seller declares bankruptcy, the Fund may not be able to
sell the collateral at the desired time.

RESTRICTED AND ILLIQUID SECURITIES. If a security is illiquid, the Fund might be
unable to sell the security at a time when the Adviser or Sub-Adviser might wish
to sell and the security could have the effect of decreasing the overall level
of the Fund's liquidity. Further, the lack of an established secondary market
may make it more difficult to value illiquid securities which could vary from
the amount the Fund could realize upon disposition. Restricted securities, i.e.,
securities subject to legal or contractual restrictions on resale, may be
illiquid. However, some restricted securities may be treated as liquid although
they may be less liquid than registered securities traded on established
secondary markets.

REVERSE REPURCHASE AGREEMENTS AND DOLLAR ROLLS. A reverse repurchase agreement
or dollar roll involves the sale of a security with an agreement to repurchase
the same or substantially similar securities at an agreed upon price and date.
Whether such a transaction produces a gain for the Fund depends upon the costs
of the agreements and the income and gains of the securities purchased with the
proceeds received from the sale of the security. If the income and gains on the
securities purchased fail to exceed the costs, the Fund's NAV will decline
faster than otherwise would be the case. Reverse repurchase agreements and
dollar rolls, as leveraging techniques, may increase the Fund's yield; however,
such transactions also increase the Fund's risk to capital and may result in a
shareholder's loss of principal.

SHORT SALES. A short sale is the sale by the Fund of a security which has been
borrowed from a third party on the expectation that the market price will drop.
If the price of the security rises, the Fund may have to cover its short
position at a higher price than the short sale price, resulting in a loss.

U.S. GOVERNMENT SECURITIES AND OBLIGATIONS. Obligations issued by some U.S.
government agencies, authorities, instrumentalities or sponsored enterprises,
such as the Government National Mortgage Association, are backed by the full
faith and credit of the U.S. Treasury while obligations issued by others, such
as the Federal National Mortgage Association, Federal Home Loan Mortgage
Corporation and Federal Home Loan Banks, are backed solely by the entity's own
resources or by the ability of the entity to borrow from the U.S. Treasury. No
assurance can be given that the U.S. government will provide financial support
to U.S. government agencies, authorities, instrumentalities or sponsored
enterprises if it is not obliged to do so by law.

TEMPORARY DEFENSIVE STRATEGIES. When the Adviser or the Sub-Adviser to the Fund
anticipates unusual market or other conditions, the Fund may temporarily depart
from its principal investment strategies as a defensive measure. To the extent
that the Fund invests defensively, it likely will not achieve capital
appreciation.

PERCENTAGE AND RATING LIMITATIONS. Unless otherwise stated, the percentage and
rating limitations in this Prospectus apply at the time of investment.

20   More Information About Risks



DIVIDENDS, DISTRIBUTIONS AND TAXES
--------------------------------------------------------------------------------

DIVIDENDS AND DISTRIBUTIONS

The Fund generally distributes most or all of its net earnings in the form of
dividends and capital gain distributions. Distributions are normally expected to
consist primarily of capital gains.

The Fund pays dividends and capital gains, if any, annually.

DIVIDEND REINVESTMENT

Unless you instruct the Fund to pay you dividends in cash, dividends and
distributions paid by the Fund will be reinvested in additional shares of the
Fund. You may, upon written request or by completing the appropriate section of
the Account Application, elect to have all dividends and other distributions
paid on Class A, Class B or Class C shares of the Fund invested in another ING
Fund that offers the same class of shares. If you are a shareholder of ING Prime
Rate Trust, whose shares are not held in a broker or nominee account, you may,
upon written request, elect to have all dividends invested into a pre-existing
Class A Shares account of any open-end ING Fund.

TAXES

The following information is meant as a general summary for U.S. shareholders.
Please see the SAI for additional information. You should rely on your own tax
adviser for advice about the particular federal, state and local tax
consequences to you of investing in the Fund.

The Fund will distribute all, or substantially all, of its net investment income
and net capital gains to its shareholders each year. Although the Fund will not
be taxed on amounts it distributes, most shareholders will be taxed on amounts
they receive. A particular distribution generally will be taxable as either
ordinary income or long-term capital gains. Except as described below, it
generally does not matter how long you have held your Fund shares or whether you
elect to receive your distributions in cash or reinvest them in additional Fund
shares. For example, if the Fund designates a particular distribution as a
long-term capital gains distribution, it will be taxable to you at your
long-term capital gains rate. Most dividends from the Fund are attributable to
interest and, therefore, do not qualify for the reduced rate of tax that may
apply to certain qualifying dividends on corporate stock, as described below.

Current tax law (which is currently scheduled to apply through 2010) generally
provides for a maximum tax rate for individual taxpayers of 15% on long-term
gains from sales and from certain qualifying dividends on corporate stock.
Although these rate reductions do not apply to corporate taxpayers, such
taxpayers may be entitled to a corporate dividends received deduction with
respect to their share of eligible domestic corporate dividends received by the
Fund. The following are guidelines for how certain distributions by the Fund are
generally taxed to individual taxpayers:

.    Distributions of earnings from qualifying dividends and qualifying
     long-term capital gains will be taxed at a maximum rate of 15%.

.    Note that distributions of earnings from dividends paid by certain
     "qualified foreign corporations" can also qualify for the lower tax rates
     on qualifying dividends.

.    A shareholder will also have to satisfy a more than 60-day holding period
     with respect to any distributions of qualifying dividends in order to
     obtain the benefit of the lower tax rate.

.    Distributions of earnings from non-qualifying dividends, interest income,
     other types of ordinary income and short-term capital gains will be taxed
     at the ordinary income tax rate applicable to the taxpayer.

.    The maximum 15% tax rate for individual taxpayers on long-term capital
     gains and qualifying dividends is currently scheduled to apply through
     2010. In the absence of further Congressional action, for the calendar
     years after 2010, the maximum rate on long-term capital gains for
     individual taxpayers would increase 20% and income from dividends would be
     taxed at the rates applicable to ordinary income.

.    Dividends declared by the Fund in October, November or December and paid
     during the following January may be treated as having been received by
     shareholders in the year the distributions were declared.

.    You will receive an annual statement summarizing your dividend and capital
     gains distributions.

.    If you buy shares of the Fund before it makes a distribution, the
     distribution will be taxable to you even though it may actually be a return
     of a portion of your investment. This is known as "buying a dividend."

.    If you invest through a tax-deferred account, such as a retirement plan,
     you generally will not have to pay tax on dividends until they are
     distributed from the account. These accounts are subject to complex tax
     rules, and you should consult your tax adviser about investment through a
     tax-deferred account.

There may be tax consequences to you if you sell or redeem Fund shares. You will
generally have a capital gain or loss, which will be long-term or short-term,
generally depending on how long you hold those shares. If you exchange shares,
you may be treated as if you sold them. If your tax basis in your shares exceeds
the amount of proceeds you receive from a sale, exchange or redemption of
shares, you will recognize a taxable loss on the sale of shares of the Fund. Any
loss recognized on shares held for six months or less will be treated as
long-term capital loss to the extent of any long-term capital gain distributions
that were received with respect to the shares. Additionally, any loss realized
on a sale, redemption or exchange of shares of the Fund may be disallowed under
"wash sale" rules to the extent the shares disposed of are replaced with other
shares of the Fund within a period of 61 days beginning 30 days before and
ending 30 days after shares are disposed of, such as pursuant to a dividend
reinvestment in shares of the Fund. If disallowed, the loss will be reflected in
an adjustment to the tax basis of the shares acquired. You are responsible for
any tax liabilities generated by your transactions.

[GRAPHIC APPEARS HERE]

                          If you have any questions, please call 1-800-992-0180.

                                          Dividends, Distributions and Taxes  21



ING GLOBAL SCIENCE AND TECHNOLOGY FUND                     FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

The information in the table below has been derived from the Fund's financial
statements which have been audited by KPMG LLP, an independent registered public
accounting firm.

                                                                              CLASS A                           CLASS A
                                                                ----------------------------------- -------------------------------
                                                                            YEAR ENDED               FIVE MONTHS     YEAR ENDED
                                                                            OCTOBER 31,                 ENDED         MAY 31,
                                                                -----------------------------------  OCTOBER 31, ------------------
                                                                    2007        2006        2005       2004/(1)/     2004     2003
                                                                ----------- ----------- ----------- ------------ ----------- ------

PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period                        $       4.38        3.83        3.47        3.61         3.07     3.82
Income (loss) from investment operations:
Net investment loss                                         $      (0.05)      (0.04)      (0.04)      (0.02)       (0.06)   (0.02
Net realized and unrealized gain (loss) on investments and  $       1.25        0.59        0.40       (0.12)        0.60    (0.73
 foreign currency related transactions
Total from investment operations                            $       1.20        0.55        0.36       (0.14)        0.54    (0.75
Net asset value, end of period                              $       5.58        4.38        3.83        3.47         3.61     3.07
TOTAL RETURN/(2)/                                           %      27.40       14.36       10.37       (3.88)       17.59   (19.63
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's)                           $     38,934      34,249      32,146      32,782       35,601   29,539
Ratios to average net assets:
Gross expenses prior to expense reimbursement/(3)/          %       2.09        2.09        2.10        2.04         2.25     3.03
Net expenses after expense reimbursement/(3)(4)/            %       1.75        1.75        1.75        1.75         1.82     1.75
Net investment loss after expense reimbursement/(3)(4)/     %      (0.96)      (0.89)      (1.03)      (1.53)       (1.63)   (1.48
Portfolio turnover rate                                     %         87         140         128          48          121       28

                                                                              CLASS B                           CLASS B
                                                                ------------------------------------ ------------------------------
                                                                            YEAR ENDED               FIVE MONTHS      YEAR ENDED
                                                                            OCTOBER 31,                 ENDED          MAY 31,
                                                                ------------------------------------ OCTOBER 31, ------------------
                                                                    2007         2006        2005      2004/(1)/    2004      2003
                                                                ----------- ------------- ---------- ----------- ----------- ------

PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period                        $       4.16         3.67        3.34        3.50        3.00     3.75
Income (loss) from investment operations:
Net investment loss                                         $      (0.08)*      (0.07)*     (0.07)     (0.03)       (0.09)   (0.01
Net realized and unrealized gain (loss) on investments and  $       1.19         0.56        0.40      (0.13)        0.59    (0.74
 foreign currency related transactions
Total from investment operations                            $       1.11         0.49        0.33      (0.16)        0.50    (0.75
Net asset value, end of period                              $       5.27         4.16        3.67       3.34         3.50     3.00
TOTAL RETURN/(2)/                                           %      26.68        13.35        9.88      (4.57)       16.67   (20.00
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's)                           $     10,888       10,851      11,740     13,632       15,452   14,311
Ratios to average net assets:
Gross expenses prior to expense reimbursement/(3)/          %       2.84         2.84        2.85       2.79         3.00     3.78
Net expenses after expense reimbursement/(3)(4)/            %       2.50         2.50        2.50       2.50         2.57     2.50
Net investment loss after expense reimbursement/(3)(4)/     %      (1.71)       (1.65)      (1.77)     (2.27)       (2.38)   (2.19
Portfolio turnover rate                                     %         87          140         128         48          121       28

24   ING Global Science and Technology Fund



FINANCIAL HIGHLIGHTS ING GLOBAL SCIENCE AND TECHNOLOGY FUND - (CONTINUED)
--------------------------------------------------------------------------------


                                                                            CLASS C                          CLASS C
                                                                --------------------------------- ------------------------------
                                                                          YEAR ENDED               FIVE MONTHS    YEAR ENDED
                                                                          OCTOBER 31,                 ENDED         MAY 31,
                                                                ---------------------------------  OCTOBER 31, -----------------
                                                                   2007        2006       2005       2004/(1)/    2004     2003
                                                                ----------- ---------- ---------- ------------ ---------- ------

PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period                        $      4.14        3.65       3.33         3.48        2.97    3.76
Income (loss) from investment operations:
Net investment loss                                         $     (0.08)*     (0.07)     (0.07)       (0.03)      (0.09)  (0.01
Net realized and unrealized gain (loss) on investments and  $      1.17        0.56       0.39        (0.12)       0.60   (0.78
 foreign currency related transactions
Total from investment operations                            $      1.09        0.49       0.32        (0.15)       0.51   (0.79
Net asset value, end of period                              $      5.23        4.14       3.65         3.33        3.48    2.97
TOTAL RETURN/(2)/                                           %     26.33       13.42       9.61        (4.31)      17.17  (21.01
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's)                           $     3,253       3,576      3,611        3,924       4,656   4,641
Ratios to average net assets:
Gross expenses prior to expense reimbursement/(3)/          %      2.84        2.84       2.85         2.79        3.00    3.78
Net expenses after expense reimbursement/(3)(4)/            %      2.50        2.50       2.50         2.50        2.57    2.50
Net investment loss after expense reimbursement/(3)(4)/     %     (1.75)      (1.65)     (1.77)       (2.27)      (2.38)  (2.22
Portfolio turnover rate                                     %        87         140        128           48         121      28

--------------------------------------------------------------------------------

(1)  The Fund changed its fiscal year end to October 31.

(2)  Total return is calculated assuming reinvestment of all dividends and
     capital gain distributions at net asset value and excluding the deduction
     of sales charges. Total returns for periods less than one year are not
     annualized.

(3)  Annualized for periods less than one year.

(4)  The Adviser has agreed to limit expenses, (excluding interest, taxes,
     brokerage and extraordinary expenses) subject to possible recoupment by ING
     Investments, LLC within three years of being incurred.

*    Calculated using average number of shares outstanding throughout the
     period.

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                          If you have any questions, please call 1-800-992-0180.

                                      ING Global Science and Technology Fund  25



In addition to the Fund offered in this prospectus, the Distributor also offers
the funds listed below. Before investing in a fund, shareholders should
carefully review the fund's prospectus. Investors may obtain a copy of a
prospectus of any ING Fund not discussed in this Prospectus by calling (800)
992-0180 or by going to www.ingfunds.com.

Domestic Equity and Income Funds
ING Balanced Fund
ING Equity Dividend Fund
ING Fundamental Research Fund
ING Growth and Income Fund
ING Real Estate Fund

Domestic Equity Growth Funds
ING 130/30 Fundamental Research Fund
ING LargeCap Growth Fund
ING MidCap Opportunities Fund
ING Opportunistic LargeCap Fund
ING Small Company Fund
ING SmallCap Opportunities Fund

Domestic Equity Index Funds
ING Index Plus LargeCap Fund
ING Index Plus MidCap Fund
ING Index Plus SmallCap Fund

Domestic Equity Value Funds
ING Financial Services Fund
ING LargeCap Value Fund
ING SmallCap Value Multi-Manager Fund
ING Value Choice Fund

Fixed-Income Funds
ING GNMA Income Fund
ING High Yield Bond Fund
ING Intermediate Bond Fund
ING National Tax-Exempt Bond Fund

Global Equity Funds
ING Global Equity Dividend Fund
ING Global Natural Resources Fund
ING Global Real Estate Fund
ING Global Value Choice Fund

International Equity Funds
ING Asia-Pacific Real Estate Fund
ING Disciplined International Small Cap Fund
ING Emerging Countries Fund
ING European Real Estate Fund
ING Foreign Fund
ING Greater China Fund
ING Index Plus International Equity Fund
ING International Capital Appreciation Fund
ING International Equity Dividend Fund
ING International Growth Opportunities Fund
ING International Real Estate Fund
ING International SmallCap Multi-Manager Fund
ING International Value Choice Fund
ING International Value Opportunities Fund
ING Russia Fund

Global and International Fixed-Income Funds
ING Emerging Markets Fixed Income Fund
ING Global Bond Fund

International Fund-of-Funds
ING Diversified International Fund

Loan Participation Fund
ING Senior Income Fund

Money Market Funds
ING Classic Money Market Fund
ING Money Market Fund

Strategic Allocation Funds
ING Strategic Allocation Conservative Fund
ING Strategic Allocation Growth Fund
ING Strategic Allocation Moderate Fund



                                                                        ADVISER
                                                            ING Investments, LLC

                                                                     SUB-ADVISER
                                                         BlackRock Advisors, LLC
ING GLOBAL SCIENCE AND TECHNOLOGY FUND
--------------------------------------------------------------------------------

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INVESTMENT OBJECTIVE

The Fund seeks long-term capital appreciation. The Fund's invsetment objective
is not fundamental and may be changed without a shareholder vote.

[GRAPHIC APPEARS HERE]

PRINCIPAL  INVESTMENT STRATEGIES
The Fund normally invests 80% of its net assets plus borrowings for investment
purposes, if any, in equity securities issued by science and technology
companies in all market capitalization ranges. The Fund will provide
shareholders with at least 60 days' prior notice of any change in this
investment policy.

The Fund will invest primarily in equity securities of U.S. and non-U.S.
companies selected for their rapid and sustainable growth potential from the
development, advancement and use of science and/or technology. The Sub-Adviser
considers science and technology companies to be companies defined as such by
the Global Industrial Classification ("GIC") Standards. The Fund may, from time
to time, invest more than 25% of its net assets in securities whose issuers are
located in a single foreign country. The Fund may invest up to 25% of its net
assets in stocks of issuers in countries with emerging securities markets.

The Fund primarily buys common stock but also can invest in preferred stock and
securities convertible into common and preferred stock, initial public
offerings, and Rule 144A Securities. The Sub-Adviser will invest in U.S. and
non-U.S. companies (including companies located in countries with emerging
securities markets) that are expected to offer the best opportunities for
growth and high investment returns. The Sub-Adviser uses a multi-factor screen
to identify stocks that have above-average return potential. The factors and
the weight assigned to a factor may change depending on market conditions. The
most influential factors over time have been revenue and earnings growth,
estimate revisions, profitability and relative value.

The Sub-Adviser will invest in a number of different countries, including the
United States. Some of the industries that are likely to be represented in the
Fund's portfolio holdings include: Application Software, IT Consulting &
Services, Internet Software and Services, Networking Equipment, Telecom
Equipment, Computer Hardware, Computer Storage & Peripherals, Electronic
Equipment and Instruments, Semiconductor Equipment, Semiconductors, Aerospace &
Defense, Electrical Components & Equipment, Biotechnology, Pharmaceuticals,
Healthcare Equipment & Supplies, Healthcare Distribution & Services, Healthcare
Facilities, Industrial Gases, Specialty Chemicals, Advanced Materials,
Integrated Telecom Services, Alternative Carriers and Wireless
Telecommunication Services.

The Fund generally will sell a stock when, in the Sub-Adviser's opinion, there
is a deterioration in the company's fundamentals, a change in macroeconomic
outlook, technical deterioration, valuation issues, a need to rebalance the
portfolio or a better opportunity elsewhere. The Sub-Adviser uses a broad set
of technical tools to enhance the timing of purchase or sell decisions.

The Fund may invest excess cash in short-term U.S. government securities and
other high-quality money market securities for temporary and defensive
purposes. However, when the Fund is engaged in the temporary defensive
position, it may not achieve its investment objective.

The Fund may invest in derivative instruments including, among other things,
foreign currency contracts.

The Fund may lend portfolio securities on a short-term or long-term basis, up
to 33 1/3% of its total assets.

--------------------------------------------------------------------------------

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RISKS
You could lose money on an
investment in the Fund. The Fund may be affected by the following risks, among
others:

CONVERTIBLE SECURITIES -
the value of convertible securities may fall when interest rates rise.
Convertible securities with longer maturities tend to be more sensitive to
changes in interest rates usually making them more volatile than convertible
securities with shorter maturities. The Fund could lose money if the issuer of
a convertible security is unable to meet its financial obligations or goes
bankrupt.

DERIVATIVES - derivatives are subject to the risk of changes in the market
price of the underlying securities, credit risk with respect to the
counterparty to the derivative instruments and the risk of loss due to changes
in interest rates. The use of certain derivatives may also have a leveraging
effect which may increase the volatility of the Fund and may reduce its
returns.

FOREIGN INVESTING - foreign investments may be riskier than U.S. investments
for many reasons including: changes in currency exchange rates; unstable
political, social and economic conditions; a lack of adequate or accurate
company information; differences in the way securities markets operate; less
secure foreign banks or securities depositories than those in the United
States; less standardization of accounting standards and market regulations in
certain foreign countries; and varying foreign controls on investments. Foreign
investments may also be affected by administrative difficulties such as delays
in clearing and settling transactions. Additionally, securities of foreign
companies may be denominated in foreign currencies. Exchange rate fluctuations
may reduce or eliminate gains or create losses. Hedging strategies intended to
reduce exchange risk may not perform as expected. These factors may make
foreign investments more volatile and potentially less liquid than U.S.
investments. To the extent the Fund invests in countries with emerging
securities markets, the risks of foreign investing may be greater as these
countries may be less politically and economically stable than other countries.
It also may be more difficult to buy and sell securities in countries with
emerging securities markets. If the Fund invests more than 25% of its assets in
securities whose issuers are located in a single foreign country, the Fund
would be more dependent upon the political and economic circumstances of that
country than a mutual fund that owns stock of companies in many countries.

INITIAL PUBLIC OFFERINGS ("IPOS") -
IPOs and companies that have recently gone public have the potential to produce
substantial gains for the Fund. However, there is no assurance that the Fund
will have access to profitable IPOs or that IPOs in which the Fund invests will
rise in value. Furthermore, stocks of newly public companies may decline
shortly after the initial public offering. When the Fund's asset base is small,
the impact of such investments on the Fund's return will be magnified. As the
Fund's assets grow, it is likely that the effect of the Fund's investment in
IPOs on the Fund's return will decline.

MARKET TRENDS - from time to time, the stock market may not favor the
growth-oriented securities in which the Fund invests. Rather, the market could
favor value- oriented securities or may not favor equities at all.

PRICE VOLATILITY - the value of the Fund changes as the prices of its
investments go up or down. Equity securities face market, issuer and other
risks, and their values may fluctuate, sometimes rapidly and unpredictably.
Market risk is the risk that securities may decline in value due to factors
affecting securities markets generally or particular industries. Issuer risk is
the risk that the value of a security may decline for reasons relating to the
issuer such as changes in the financial condition of the issuer. While equities
may offer the potential for greater long-term growth than most debt securities,
they generally have higher volatility.

The Fund invests in securities of larger companies which sometimes have more
stable prices than smaller companies. However, the Fund may also invest in
securities of small- and mid-sized companies which may be more susceptible to
price volatility than larger companies because they typically have fewer
financial resources, more limited product and market diversification, and may
be dependent on a few key managers.

RULE 144A SECURITIES - Rule 144A securities are securities that are not
registered but are bought and sold solely by institutional investors. The Fund
considers Rule 144A securities to be "liquid" although the market for such
securities typically is less active than public securities markets and may lead
to a decreased ability to sell these securities.

SCIENCE AND TECHNOLOGY -
the Fund's focus on stocks in the science and technology sectors makes it more
susceptible to factors affecting those sectors and more volatile than funds
that invest in many different sectors. Therefore, a downturn in the science
and/or technology sectors could hurt the Fund's performance to a greater extent
than a fund that invests in many sectors.

In addition, investing in science and technology companies exposes the Fund to
special risks. For example, rapid advances in science and technology might
cause existing products to become obsolete and the Fund's returns could suffer
to the extent it holds an affected company's shares. Companies in a number of
science and technology sectors are subject to more government regulations and
approval processes than many other industries. This fact may affect a company's
overall profitability and cause its stock price to be more volatile.
Additionally, science and technology companies are dependent upon consumer and
business acceptance as new technologies evolve.

SECURITIES LENDING - there is the risk that when lending portfolio securities,
the securities may not be available to the Fund on a timely basis and it may
lose the opportunity to sell the securities at a desirable price. Engaging in
securities lending could have a leveraging effect which may intensify the
market risk, credit risk and other risks associated with investments in the
Fund.

A more detailed discussion of the risks associated with investing in the Fund
is available in the "More Information About Risks" section.

2  ING Global Science and Technology Fund



                                         ING GLOBAL SCIENCE AND TECHNOLOGY FUND
--------------------------------------------------------------------------------

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HOW THE FUND HAS
PERFORMED

                The following information is intended to help you understand
                the risks of investing in the Fund. The value of your shares in
                the Fund will fluctuate depending on the Fund's investment
                performance. The bar chart and table below show the changes in
                the Fund's performance from year to year, and the table
                compares the Fund's performance to the performance of two broad
                measures of market performance for the same period. The Fund's
                past performance (before and after income taxes) is no
                guarantee of future results.

The bar chart below provides some indication of the risks of investing in the
Fund by showing changes in the performance of the Fund's Class I shares from
year to year.

                    YEAR-BY-YEAR TOTAL RETURNS (%)(1)(2)(3)
                (FOR THE PERIODS ENDED DECEMBER 31 OF EACH YEAR)

[GRAPHIC APPEARS HERE]

1998   1999   2000     2001        2002      2003        2004      2005       2006      2007
                     (24.67)     (42.58)     47.15      (1.03)     11.23      6.81      18.46

            Best and worst quarterly performance during this period:

                         Best: 4th quarter 2001: 39.63%
                       Worst: 3rd quarter 2001: (34.92)%

                     AVERAGE ANNUAL TOTAL RETURNS(1)(2)(3)
                   (FOR THE PERIODS ENDED DECEMBER 31, 2007)

The table below provides some indication of the risks of investing in the Fund
by comparing the Fund's Class I shares' performance to that of two broad
measures of market performance - the Standard & Poor's 500(Reg. TM) Composite
Stock Price Index ("S&P 500(Reg. TM) Index") and the NYSE Arca Tech 100(Reg.
TM) Index. It is not possible to invest directly in the indices. The table also
shows returns on a before-tax and after-tax basis. After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.

Actual after-tax returns depend on an investor's tax situation and may differ
from those shown and after-tax returns shown are not relevant to investors who
hold their Fund shares through tax-deferred arrangements such as 401(k) plans
or individual retirement accounts.

In some cases the after-tax returns may exceed the return before taxes due to
an assumed tax benefit from any losses on a sale of Fund shares at the end of
the measurement period.

                                                                                                            10 YEARS
                                                                         1 YEAR          5 YEARS       (OR LIFE OF CLASS)
 CLASS I RETURN BEFORE TAXES                                   %        18.46           15.42               (7.58)(3)
 Class I Return After Taxes on Distributions                   %        18.46           15.42               (7.58)(3)
 Class I Return After Taxes on Distributions and Sale of       %        12.00           13.59               (6.15)(3)
  Fund Shares
 S&P 500(Reg. TM) Index (reflects no deductions for fees,      %         5.49           12.83                2.62(5)
  expenses or taxes)(4)
 NYSE Arca Tech 100 Index(Reg. TM) (reflects no deduction      %         7.77           15.89               (2.42)(5)
  for fees, expenses or taxes)(6)

(1)   Effective March 1, 2002 ING Investments, LLC began serving as investment
      adviser. Formerly, ING Investment Management Co. served as the investment
      adviser to the Fund. Effective September 29, 2006 BlackRock Advisors, LLC
      began serving as sub-adviser to the Fund. On September 29, 2006
      BlackRock, Inc. consummated a transaction with Merrill Lynch & Co., Inc.
      whereby Merrill Lynch & Co., Inc.'s investment management businesses
      combined with that of BlackRock, Inc. to create a new independent company
      and on September 29, 2006 BlackRock Advisors, Inc. reorganized into
      BlackRock Advisors, LLC. Prior to September 30, 2006 BlackRock Advisors,
      Inc. served as sub-adviser to the Fund. Prior to January 2, 2004 AIC
      Asset Management, LLC served as sub-adviser to the Fund.

(2)   Effective February 17, 2004 the Fund changed its name from ING Technology
      Fund to ING Global Science and Technology Fund.

(3)   Class I shares commenced operations on March 1, 2000.

(4)   The S&P 500(Reg. TM) Index is a widely recognized, unmanaged index that
      measures the performance of securities of approximately 500 of the
      largest companies in the United States.

(5)   The index returns for Class I shares are for the period beginning March
      1, 2000.

(6)   The NYSE Arca Tech 100 Index(Reg. TM) is a multi-industry technology
      index measuring the performance of companies using technology innovation
      across a broad spectrum of industries. It is comprised of 100 listed and
      over-the-counter stocks from 14 different sub-sectors including computer
      hardware, software, semiconductors, telecommunications, data storage and
      processing, electronics and biotechnology.

[GRAPHIC APPEARS HERE]

                          If you have any questions, please call 1-800-992-0180.

                                     ING Global Science and Technology Fund    3



WHAT YOU PAY TO INVEST
--------------------------------------------------------------------------------

[GRAPHIC APPEARS HERE]

      There are two types of fees and expenses when you invest in mutual funds:
      fees, including sales charges, you pay directly when you buy or sell
      shares, and operating expenses paid each year by the Fund. The tables
      that follow show the fees and estimated
      operating expenses for the Fund. The estimated expenses are based on the
      expenses paid by the Fund in the fiscal year ended October 31, 2007.
      Actual expenses paid by the Fund may vary from year to year.

FEES YOU PAY DIRECTLY

                                                                   CLASS I
                                                                ------------
 MAXIMUM SALES CHARGE ON YOUR INVESTMENT (AS A % OF                    none
  OFFERING PRICE)
 MAXIMUM DEFERRED SALES CHARGE (AS A % OF PURCHASE OR SALES            none
  PRICE, WHICHEVER IS LESS)

OPERATING EXPENSES PAID EACH YEAR BY THE FUND(1)
(as a % of average net assets)

CLASS I

                                                        DISTRIBUTION
                                                         AND SERVICE
                                           MANAGEMENT      (12B-1)        OTHER
FUND                                           FEE          FEES       EXPENSES(2)
------------------------------------      ------------ -------------- -------------
 ING Global Science and Technology    %         1.05          -              0.79

                                        ACQUIRED
                                          FUND        TOTAL                            NET
                                          FEES         FUND                           FUND
                                          AND       OPERATING        WAIVERS,       OPERATING
FUND                                  EXPENSES(3)    EXPENSES     REIMBURSEMENTS    EXPENSES
------------------------------------ ------------- -----------  AND RECOUPMENT(4)  ----------
 ING Global Science and Technology        N/A            1.84          (0.34)           1.50

(1)      This table shows the estimated operating expenses for Class I shares
         of the Fund as a ratio of expenses to average daily net assets. These
         estimated expenses are based on the Fund's actual operating expenses
         for its most recently completed fiscal year as adjusted for
         contractual changes, if any, and fee waivers to which ING Investments,
         LLC, the investment adviser to the Fund, has agreed.

(2)      ING Funds Services, LLC receives an annual administration fee equal to
         0.08% of the Fund's average daily net assets which is reflected in
         "Other Expenses."

(3)      The Acquired Fund Fees and Expenses are not fees or expenses incurred
         by the Funds directly. These fees and expenses include each Fund's pro
         rata share of the cumulative expenses charged by the Acquired Funds in
         which the Funds invest. The fees and expenses will vary based on the
         Fund's allocation of assets to, and the annualized net expenses of,
         the particular Acquired Funds. The impact of these fees and expenses
         is shown in "Net Fund Operating Expenses."

(4)      ING Investments, LLC has entered into a written expense limitation
         agreement with the Fund under which it will limit expenses of the
         Fund, excluding interest, taxes, brokerage and extraordinary expenses,
         and Acquired Fund Fees and Expenses, subject to possible recoupment by
         ING Investments, LLC within three years. The amount of the Fund's
         expenses waived, reimbursed or recouped during the last fiscal year by
         ING Investments, LLC, is shown under the heading "Waivers,
         Reimbursements and Recoupment." The expense limit will continue
         through at least March 1, 2009. The expense limitation agreement is
         contractual and shall renew automatically for one-year terms unless
         ING Investments, LLC provides written notice of a termination of the
         expense limitation agreement within 90 days of the end of the then
         current terms or upon termination of the investment management
         agreement. In addition, the expense limitation agreement may be
         terminated by ING Series Fund Inc. upon at least 90 days' prior
         written notice to ING Investments, LLC. For more information regarding
         the expense limitation agreement, please see the Statement of
         Additional Information.

4  What You Pay to Invest



SHAREHOLDER GUIDE                    HOW TO PURCHASE SHARES
--------------------------------------------------------------------------------

PURCHASE OF SHARES
The minimum initial investment for Class I shares is $250,000. Class I shares
are available only to (i) qualified retirement plans such as 401(a), 401(k) or
other defined contribution plans and defined benefit plans; (ii) insurance
companies and foundations investing for their own account; (iii) wrap programs
offered by broker-dealers and financial institutions; (iv) accounts of or
managed by trust departments; (v) retirement plans affiliated with ING Groep
N.V.; (vi) ING Groep N.V. affiliates for purposes of corporate cash management;
and (vii) by other ING Funds in the ING Family of Funds.

                               Initial                   Additional
      Method               Investment                  Investment
 BY CONTACTING        An investment               Visit or consult an
 YOUR               professional with an        investment
 INVESTMENT         authorized firm can         professional.
 PROFESSIONAL       help you establish and
                    maintain your account.
 BY MAIL              Visit or consult an         Fill out the Account
                    investment                  Additions form
                    professional. Make          included on the bottom
                    your check payable to       of your account
                    the ING Funds and mail      statement along with
                    it, along with a            your check payable to
                    completed Account           ING Funds and mail
                    Application. Please         them to the address on
                    indicate your               the account statement.
                    investment                  Remember to write
                    professional on the         your account number
                    New Account                 on the check.
                    Application.
 BY WIRE              Call the ING                Wire the funds in the
                    Operations                  same manner described
                    Department at               under "Initial
                    (800) 922-0180              Investment."
                    and select Option 4 to
                    obtain an account
                    number and indicate
                    your investment
                    professional on the
                    account.
                    Instruct your bank to
                    wire funds to the Fund
                    in the care of:
                    State Street Bank
                    and Trust Company
                    ABA # 011000028
                    Boston, MA
                    credit to:
                    __________
                    (the Fund)
                    A/C #75000216; for
                    further credit to
                    Shareholder
                    A/C #
                    __________
                    (A/C # you received
                    over the telephone)
                    Shareholder Name:

                    __________
                    (Your Name Here)
                    After wiring funds
                    you must complete
                    the Account
                    Application and send
                    it to:
                    ING Funds
                    P.O. Box 219368
                    Kansas City, MO
                    64121-9368

6    Shareholder Guide



HOW TO PURCHASE SHARES                                        SHAREHOLDER GUIDE
--------------------------------------------------------------------------------

CUSTOMER IDENTIFICATION
To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify
and record information that identifies each person that opens an account, and
to determine whether such person's name appears on government lists of known or
suspected terrorists and terrorist organizations.

What this means for you: The Fund, the Distributor, or a third-party selling
you the Fund must obtain the following information for each person that opens
an account:

o  Name;

o  Date of birth (for individuals);

o  Physical residential address (although post office boxes are still permitted
   for mailing); and

o  Social security number, taxpayer identification number, or other identifying
   number.

You may also be asked to show your driver's license, passport or other
identifying documents in order to verify your identity. In addition, it may be
necessary to verify your identity by cross-referencing your identification
information with a consumer report or other electronic database. Additional
information may be required to open accounts for corporations and other
non-natural persons.

FEDERAL LAW PROHIBITS THE FUND, THE DISTRIBUTOR AND OTHER FINANCIAL
INSTITUTIONS FROM OPENING ACCOUNTS UNLESS THEY RECEIVE THE MINIMUM IDENTIFYING
INFORMATION LISTED ABOVE. THEY ALSO MAY BE REQUIRED TO CLOSE YOUR ACCOUNT IF
THEY ARE UNABLE TO VERIFY YOUR IDENTITY WITHIN A REASONABLE TIME.

FREQUENT TRADING - MARKET TIMING

The Fund is intended for long-term investment and not as a short-term trading
vehicle. Accordingly, organizations or individuals that use market timing
investment strategies should not purchase shares of the Fund. The Fund reserves
the right, in its sole discretion and without prior notice, to reject, restrict
or refuse purchase orders whether directly or by exchange, including purchase
orders that have been accepted by a shareholder's or retirement plan
participant's intermediary, that the Fund determines not to be in the best
interest of the Fund.

The Fund believes that market timing or frequent, short-term trading in any
account, including a retirement plan account, is not in the best interest of
the Fund or its shareholders. Due to the disruptive nature of this activity, it
can adversely affect the ability of the Adviser or Sub-Adviser to invest assets
in an orderly, long-term manner. Frequent trading can raise Fund expenses
through: increased trading and transaction costs; increased administrative
costs; and lost opportunity costs. This in turn can have an adverse effect on
Fund performance.

Because the Fund invests in foreign securities, it may present greater
opportunities for market timers and thus be at a greater risk for excessive
trading. If an event occurring after the close of a foreign market but before
the time the Fund computes its current NAV causes a change in the price of the
foreign security and such price is not reflected in the Fund's current NAV,
investors may attempt to take advantage of anticipated price movements in
securities held by the Fund based on such pricing discrepancies. This is often
referred to as "price arbitrage." Such price arbitrage opportunities may also
occur in funds which do not invest in foreign securities. For example, if
trading in a security held by the Fund is halted and does not resume prior to
the time the Fund calculates its NAV such "stale pricing" presents an
opportunity for investors to take advantage of the pricing discrepancy.
Similarly, when the Fund holds thinly-traded securities, such as certain
small-capitalization securities, it may be exposed to varying levels of pricing
arbitrage. The Fund has adopted fair valuation policies and procedures intended
to reduce the Fund's exposure to price arbitrage, stale pricing and other
potential pricing discrepancies. However, to the extent that the Fund's NAV
does not immediately reflect these changes in market conditions, short-term
trading may dilute the value of Fund shares which negatively affects long-term
shareholders.

The Fund's Board of Directors ("Board") has adopted policies and procedures
designed to deter frequent, short-term trading in shares of the Fund.
Consistent with this policy, the Fund monitors trading activity. Shareholders
may make exchanges among their accounts with ING Funds four (4) times each
year. All exchanges occurring on the same day for all accounts (individual,
IRA, 401(k), etc.) beneficially owned by the same shareholder will be treated
as a single transaction for these purposes. Subsequent transactions may not be
effected within 30 days of the last transaction. In addition, purchase and sale
transactions that are the functional equivalent of exchanges will be included
in these limits. On January 1 of each year, the limit restriction will be reset
for all shareholders and any trade restrictions that were placed on an account
due to a violation of the policy in the prior year will be removed. The Fund
reserves the right to specifically address any trading that might otherwise
appear to comply with the restrictions described above if, after consultation
with appropriate compliance personnel, it is determined that such trading is
nevertheless abusive or adverse to the interests of long-term shareholders. The
Fund also reserves the right to modify the frequent trading - market timing
policy at any time without prior notice depending on the needs of the Fund
and/or state or federal regulatory requirements.

If an activity is identified as problematic after further investigation, the
Fund reserves the right to take any necessary action to deter such activity.
Such action may include, but not be limited to: rejecting additional purchase
orders, whether directly or by exchange; extending settlement of a redemption
up to seven days; rejecting all purchase orders from broker-dealers or their
registered representatives suspected of violating the Fund's frequent trading
policy; or termination of the selling group agreement or other agreement with
broker-dealers or other financial intermediaries associated with frequent
trading.

Although the restrictions described above are designed to discourage frequent,
short-term trading, none of them alone, nor all of them taken together, can
eliminate the possibility that frequent, short-term trading activity in the
Fund will occur. Moreover, in enforcing such restrictions, the Fund is often

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                          If you have any questions, please call 1-800-992-0180.

                                                          Shareholder Guide    7



SHAREHOLDER GUIDE                    HOW TO PURCHASE SHARES
--------------------------------------------------------------------------------

required to make decisions that are inherently subjective. The Fund strives to
make these decisions to the best of its ability in a manner that it believes is
in the best interest of shareholders.

Shareholders may invest in the Fund through omnibus account arrangements with
financial intermediaries. Omnibus accounts permit intermediaries to aggregate
transactions. Such intermediaries include broker-dealers, banks, investment
advisers, recordkeepers, retirement plans, and fee-based accounts such as wrap
fee programs. Omnibus accounts generally do not identify customers' trading
activity on an individual basis. The Fund's administrator has agreements which
require such intermediaries to provide detailed account information, including
trading history, upon request of the Fund.

In some cases, the Fund will rely on the intermediaries' excessive trading
policies and such policies shall define the trading activity in which the
shareholders may engage. This shall be the case where the Fund is used in
certain retirement plans offered by affiliates. With trading information
received as a result of agreements, the Fund may make a determination that
certain trading activity is harmful to the Fund and its shareholders even if
such activity is not strictly prohibited by the intermediaries' excessive
trading policy. As a result, a shareholder investing directly or indirectly in
the Fund may have their trading privileges suspended without violating the
stated excessive trading policy of the intermediary.

RETIREMENT PLANS - CLASS I SHARES

The Fund has available prototype qualified retirement plans for both
corporations and for self-employed individuals. It also has available prototype
IRA, Roth IRA and Simple IRA plans (for both individuals and employers),
Simplified Employee Pension Plans, Pension and Profit Sharing Plans and Tax
Sheltered Retirement Plans for employees of public educational institutions and
certain non-profit, tax-exempt organizations. State Street Bank and Trust
Company ("SSB") acts as the custodian under these plans. For further
information, contact a Shareholder Services Representative at (800) 992-0180.
SSB currently receives a $12 custodial fee annually for the maintenance of such
accounts.

8    Shareholder Guide



HOW TO REDEEM SHARES                                          SHAREHOLDER GUIDE
--------------------------------------------------------------------------------

You may redeem shares by using the methods outlined in the table on the right.

Under unusual circumstances, the Fund may suspend the right of redemption as
allowed by federal securities laws.

SYSTEMATIC WITHDRAWAL PLAN

You may elect to make periodic withdrawals from your account on a regular
basis.

o  Your account must have a current value of at least $250,000.

o  Minimum withdrawal amount is $1,000.

o  You may choose from monthly, quarterly, semi-annual or annual payments.

For additional information, contact a Shareholder Services Representative,
refer to the Account Application or the SAI.

PAYMENTS

Normally, payment for shares redeemed will be made within three days after
receipt by the Transfer Agent of a written request in good order. The Fund has
the right to take up to seven days to pay your redemption proceeds, and may
postpone payment longer in the event of an economic emergency as determined by
the SEC. When you place a request to redeem shares for which the purchase money
has not yet been collected, the request will be executed at the next determined
NAV but the Fund will not release the proceeds until your purchase payment
clears. This may take up to 15 days or more. To reduce such delay, purchases
should be made by bank wire or federal funds.

The Fund normally intends to pay in cash for all shares redeemed but under
abnormal conditions that make payment in cash unwise, the Fund may make payment
wholly or partly in securities at its then current market value equal to the
redemption price. In such case, the Fund could elect to make payment in
securities for redemptions in excess of $250,000 or 1% of its net assets during
any 90-day period for any one shareholder. An investor may incur brokerage
costs in converting such securities to cash.

             Method                                 Procedures
 BY CONTACTING YOUR            You may redeem shares by contacting your
 INVESTMENT PROFESSIONAL      investment professional. Investment
                              professionals may charge for their services
                              in connection with your redemption
                              request but neither the Fund nor the
                              Distributor imposes any such charge.
 BY MAIL                       Send a written request specifying the Fund
                              name and share class, your account
                              number, the name(s) in which the account
                              is registered, and the dollar value or
                              number of shares you wish to redeem to:
                              ING Funds
                              P.O. Box 219368
                              Kansas City, MO 64121-9368
                              If certificated shares have been issued, the
                              certificate must accompany the written
                              request. Corporate investors and other
                              associations must have an appropriate
                              certification on file authorizing
                              redemptions. A suggested form of such
                              certification is provided on the Account
                              Application. A signature guarantee may be
                              required.
 BY TELEPHONE -                You may redeem shares by telephone on
 EXPEDITED REDEMPTION         all accounts other than retirement
                              accounts unless you check the box on the
                              Account Application which signifies that
                              you do not wish to use telephone
                              redemptions. To redeem by telephone, call
                              the Shareholder Services Representative at
                              (800) 992-0180.
                              RECEIVING PROCEEDS BY CHECK:
                              You may have redemption proceeds (up to
                              a maximum of $100,000) mailed to an
                              address which has been on record with ING
                              Funds for at least 30 days.
                              RECEIVING PROCEEDS BY WIRE:
                              You may have redemption proceeds
                              (subject to a minimum of $5,000) wired to
                              your pre-designated bank account. You will
                              not be able to receive redemption
                              proceeds by wire unless you check the box
                              on the Account Application which signifies
                              that you wish to receive redemption
                              proceeds by wire and attach a voided
                              check. Under normal circumstances,
                              proceeds will be transmitted to your bank
                              on the business day following receipt of
                              your instructions provided redemptions
                              may be made. In the event that share
                              certificates have been issued, you may not
                              request a wire redemption by telephone.

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                          If you have any questions, please call 1-800-992-0180.

                                                          Shareholder Guide    9



SHAREHOLDER GUIDE                                TRANSACTION POLICIES
--------------------------------------------------------------------------------

HOW WE COMPENSATE INTERMEDIARIES FOR SELLING ING MUTUAL FUNDS

ING mutual funds are distributed by ING Funds Distributor, LLC ("Distributor").
The Distributor is a broker-dealer that is licensed to sell securities. The
Distributor generally does not sell directly to the public but sells and
markets its products through intermediaries such as other broker-dealers. Each
ING mutual fund also has an investment adviser ("Adviser") which is responsible
for managing the money invested in each of the mutual funds. Both of these
entities (collectively, "ING") may compensate an intermediary for selling ING
mutual funds.

Only persons licensed with the Financial Industry Regulatory Authority
("FINRA") as a registered representative (often referred to as a broker or
financial advisor) and associated with a specific broker-dealer may sell an ING
mutual fund to you. The Distributor has agreements in place with each of these
broker-dealers defining specifically what those broker-dealers will be paid for
the sale of a particular ING mutual fund. Those broker-dealers then pay the
registered representative who sold you the mutual fund some or all of what they
receive from ING. They may receive a payment when the sale is made and can, in
some cases, continue to receive payments while you are invested in the mutual
fund.

The Fund's Adviser or the Distributor, out of its own resources and without
additional cost to the Fund or its shareholders, may provide additional cash or
non-cash compensation to intermediaries selling shares of the Fund including
affiliates of the Adviser and the Distributor. These amounts would be in
addition to the distribution payments made by the Fund under the distribution
agreements. The payments made under these arrangements are paid by the Adviser
or the Distributor. Additionally, if a fund is not sub-advised or is
sub-advised by an ING entity, ING may retain more revenue than on those funds
it must pay to have sub-advised by non-affiliated entities. Management
personnel of ING may receive additional compensation if the overall amount of
investments in funds advised by ING meets certain target levels or increases
over time.

The Distributor may pay, from its own resources, additional fees to these
broker-dealers or other financial institutions including affiliated entities.
These additional fees paid to intermediaries may take the following forms: (1)
a percentage of that entity's customer assets invested in ING mutual funds; (2)
a percentage of that entity's gross sales; or (3) some combination of these
payments. These payments may, depending on the broker-dealer's satisfaction of
the required conditions, be periodic and may be up to: (1) 0.30% per annum of
the value of the Fund's shares held by the broker-dealer's customers; or (2)
0.20% of the value of the Fund's shares sold by the broker-dealer during a
particular period. In accordance with these practices, if that initial
investment averages a value of $10,000 over the year, the Distributor could pay
a maximum of $30 on those assets. If you invested $10,000, the Distributor
could pay a maximum of $20 for that sale.

The Fund's Adviser or the Distributor may provide additional cash or non-cash
compensation to third parties selling our mutual funds including affiliated
companies. This may take the form of cash incentives and non-cash compensation
and may include, but is not limited to: cash; merchandise; trips; occasional
entertainment; meals or tickets to a sporting event; client appreciation
events; payment for travel expenses (including meals and lodging) to
pre-approved training and education seminars; and payment for advertising and
sales campaigns. The Distributor may also pay concessions in addition to those
described above to broker-dealers so that ING mutual funds are made available
by those broker-dealers for their customers. The Sub-Adviser of the Fund may
contribute to non-cash compensation arrangements.

Not all mutual funds pay the same amount to the broker-dealers who sell their
mutual funds. Broker-dealers can receive different payments based on the mutual
funds they offer, the companies with whom they are doing business, and how much
they sell. What these broker-dealers are paid also varies depending on the
class of mutual fund you purchase.

The top 25 firms we paid to sell our mutual funds as of the end of the last
calendar year are: A.G. Edwards & Sons, Inc.; Bear Stearns Securities Corp;
Charles Schwab & Co; Citigroup Global Markets; Directed Services LLC; Financial
Network Investment; First Clearing, LLC; H&R Block Financial Advisors; ING
DIRECT Securities, Inc.; ING Financial Advisors; ING Life Insurance and Annuity
Company; Linsco Private Ledger Financial; Merrill Lynch; MS & Co. ("Morgan
Stanley"); Multi Financial Securities; National Financial Services Corp;
Oppenheimer & Co.; Pershing, LLC; Primevest Financial Services, Inc.;
Prudential Investment Management Services; Raymond James Financial Services;
RBC Dain Rauscher, Inc.; UBS Financial Services, Inc.; Wachovia Securities; and
Wells Fargo Investments.

Your registered representative or broker-dealer could have a financial interest
in selling you a particular mutual fund, or the mutual funds of a particular
company, to increase the compensation they receive. Please make sure you read
fully each mutual fund prospectus and discuss any questions you have with
your registered representative.

NET ASSET VALUE

The NAV per share for each class of the Fund is determined each business day as
of the close of regular trading ("Market Close") on the New York Stock Exchange
("NYSE") (normally 4:00 p.m. Eastern time unless otherwise designated by the
NYSE). The Fund is open for business every day the NYSE is open. The NYSE is
closed on all weekends and on all national holidays and Good Friday. Fund
shares will not be priced on those days. The NAV per share of each class of the
Fund is calculated by taking the value of the Fund's assets attributable to
that class, subtracting the Fund's liabilities attributable to that class, and
dividing by the number of shares of that class that are outstanding.

10    Shareholder Guide



TRANSACTION POLICIES                                          SHAREHOLDER GUIDE
--------------------------------------------------------------------------------

In general, assets are valued based on actual or estimated market value, with
special provisions for assets not having readily available market quotations
and short-term debt securities, and for situations where market quotations are
deemed unreliable. Investments in securities maturing in 60 days or less are
valued at amortized cost, which, when combined with accrued interest,
approximates market value. Securities prices may be obtained from automated
pricing services. Shares of investment companies held by the Fund will
generally be valued at the latest NAV reported by that investment company. The
prospectuses for those investment companies explain the circumstances under
which they will use fair value pricing and the effects of using fair value
pricing.

Trading of foreign securities may not take place every day the NYSE is open.
Also, trading in some foreign markets and on some electronic trading networks
may occur on weekends or holidays when the Fund's NAV is not calculated. As a
result, the NAV of the Fund may change on days when shareholders will not be
able to purchase or redeem the Fund's shares.

When market quotations are not available or are deemed unreliable, the Fund
will use a fair value for the security that is determined in accordance with
procedures adopted by the Fund's Board. The types of securities for which such
fair value pricing might be required include, but are not limited to:

o  Foreign securities, where a foreign security whose value at the close of the
   foreign market on which it principally trades likely would have changed by
   the time of the close of the NYSE, or the closing value is otherwise deemed
   unreliable;

o  Securities of an issuer that has entered into a restructuring;

o  Securities whose trading has been halted or suspended;

o  Fixed-income securities that have gone into default and for which there are
   no current market value quotations; and

o  Securities that are restricted as to transfer or resale.

The Fund or the Adviser may rely on the recommendations of a fair value pricing
service approved by the Fund's Board in valuing foreign securities. Valuing
securities at fair value involves greater reliance on judgment than valuing
securities that have readily available market quotations. The Adviser makes
such determinations in good faith in accordance with procedures adopted by the
Fund's Board. Fair value determinations can also involve reliance on
quantitative models employed by a fair value pricing service. There can be no
assurance that the Fund could obtain the fair value assigned to a security if
it were to sell the security at approximately the time at which the Fund
determines its NAV per share.

PRICE OF SHARES

When you buy shares, you pay the NAV plus any applicable sales charge. When you
sell shares, you receive the NAV minus any applicable CDSC. Exchange orders are
effected at NAV.

EXECUTION OF REQUESTS

Purchase and sale requests are executed at the next NAV determined after the
order is received in proper form by the Transfer Agent or the Distributor. A
purchase order will be deemed to be in proper form when all of the required
steps set forth above under "How to Purchase Shares" have been completed. If
you purchase by wire, however, the order will be deemed to be in proper form
after the telephone notification and the federal funds wire have been received.
If you purchase by wire, you must submit an application form in a timely
fashion. If an order or payment by wire is received after Market Close, the
shares will not be credited until the next business day. For your transaction
to be counted on the day you place your order with your broker-dealer or other
financial institution, they must receive your order before Market Close and
promptly transmit the order to the Transfer Agent or the Distributor.

You will receive a confirmation of each new transaction in your account, which
also will show you the number of Fund shares you own including the number of
shares being held in safekeeping by the Transfer Agent for your account. You
may rely on these confirmations in lieu of certificates as evidence of your
ownership.

TELEPHONE ORDERS

The Fund and its Transfer Agent will not be responsible for the authenticity of
phone instructions or losses, if any, resulting from unauthorized shareholder
transactions if they reasonably believe that such instructions were genuine.
The Fund and its Transfer Agent have established reasonable procedures to
confirm that instructions communicated by telephone are genuine. These
procedures include recording telephone instructions for exchanges and expedited
redemptions, requiring the caller to give certain specific identifying
information, and providing written confirmation to shareholders of record not
later than five days following any such telephone transactions. If the Fund and
its Transfer Agent do not employ these procedures, they may be liable for any
losses due to unauthorized or fraudulent telephone instructions.

EXCHANGES

You may exchange Class I shares of the Fund for Class I shares of any other ING
Fund. You should review the prospectus of the ING Fund you intend to exchange
into before exchanging your shares.

The total value of shares being exchanged must at least equal the minimum
investment requirement of the ING Fund into which they is being exchanged.
Exchanges of shares are sales and may result in a gain or loss for federal and
state income tax purposes.

In addition to the Fund available in this Prospectus, the Distributor offers
many other funds. Shareholders exercising the exchange privilege with any ING
Fund should carefully review the prospectus of that fund before exchanging
their shares. For a list of the other ING Funds offered by the Distributor,
please see the

[GRAPHIC APPEARS HERE]

                          If you have any questions, please call 1-800-992-0180.

                                                         Shareholder Guide    11



SHAREHOLDER GUIDE                                TRANSACTION POLICIES
--------------------------------------------------------------------------------

inside back cover of this Prospectus. Investors may obtain a copy of a
prospectus of any ING Fund not discussed in this Prospectus by calling (800)
992-0180 or by going to www.ingfunds.com.

You will automatically have the ability to request an exchange by calling a
Shareholder Services Representative unless you mark the box on the Account
Application that indicates that you do not wish to have the telephone exchange
privilege. The Fund may change or cancel its exchange policies at any time,
upon 60 days' prior written notice to shareholders.

SMALL ACCOUNTS

Due to the relatively high cost of handling small investments, the Fund
reserves the right upon 30 days' prior written notice to redeem, at NAV, the
shares of any shareholder whose account (except for IRAs) has a total value
that is less than the Fund minimum. Before the Fund redeems such shares and
sends the proceeds to the shareholder, it will notify the shareholder that the
value of the shares in the account is less than the minimum amount allowed and
will allow the shareholder 30 days to make an additional investment in an
amount that will increase the value of the account to the minimum before the
redemption is processed. Your account will not be closed if its drop in value
is due to Fund performance.

ACCOUNT ACCESS

Unless your Fund shares are held through a third-party fiduciary or in an
omnibus registration at your bank or brokerage firm, you may be able to access
your account information over the internet at www.ingfunds.com, or via a touch
tone telephone by calling (800) 992-0180 and selecting Option 1. Should you
wish to speak with a Shareholder Services Representative, you may call the
toll-free number listed above and select Option 2.

PRIVACY POLICY

The Fund has adopted a policy concerning investor privacy. To review the
privacy policy, contact a Shareholder Services Representative at (800) 992-0180
and select Option 1, obtain a policy over the internet at www.ingfunds.com, or
see the privacy promise that accompanies this Prospectus.

HOUSEHOLDING

To reduce expenses, we may mail only one copy of the Fund's prospectus and each
annual and semi-annual shareholder report to those addresses shared by two or
more accounts. If you wish to receive individual copies of these documents,
please call us at (800) 992-0180 or speak to your investment professional. We
will begin sending you individual copies thirty days after receiving your
request.

PORTFOLIO HOLDINGS DISCLOSURE POLICY

A description of the policies and procedures with respect to the disclosure of
the Fund's portfolio securities is available in the SAI. The Fund posts its
portfolio holdings schedule on its website on a calendar-quarter basis and
makes it available on the first day of the second month in the next quarter.
The portfolio holdings schedule is as of the last day of the month preceding
the quarter-end (e.g., the Fund will post the quarter ending June 30 holdings
on August 1). The Fund's portfolio holdings schedule will, at a minimum, remain
available on the Fund's website until the Fund files a Form N-CSR or Form N-Q
with the SEC for the period that includes the date as of which the website
information is current. The Fund's website is located at www.ingfunds.com.

12    Shareholder Guide



ADVISER AND SUB-ADVISER                       MANAGEMENT OF THE FUND
--------------------------------------------------------------------------------

ADVISER
ING INVESTMENTS, LLC ("ING INVESTMENTS" OR "ADVISER"), an Arizona limited
liability company, serves as the investment adviser to the Fund. ING
Investments has overall responsibility for the management of the Fund. ING
Investments oversees all investment advisory and portfolio management services
for the Fund.

ING Investments is registered with the SEC as an investment adviser. ING
Investments is an indirect, wholly-owned subsidiary of ING Groep N.V. ("ING
Groep"). ING Groep is one of the largest financial services organizations in
the world with approximately 120,000 employees. Based in Amsterdam, ING Groep
offers an array of banking, insurance and asset management services to both
individual and institutional investors. ING Investments became an investment
management firm in April, 1995.

As of December 31, 2007 ING Investments managed approximately $54 billion in
assets.

The principal address of ING Investments is 7337 East Doubletree Ranch Road,
Scottsdale, Arizona 85258.

ING Investments receives a monthly fee for its services based on the average
daily net assets of the Fund.

The following table shows the aggregate annual management fee paid by the Fund
for the most recent fiscal year as a percentage of the Fund's average daily net
assets.

            MANAGEMENT
FUND            FEE
                1.05%

For information regarding the basis for the Board's approval of the investment
advisory and investment sub-advisory relationships, please refer to the Fund's
semi-annual shareholder report that will be dated April 30, 2008.

SUB-ADVISER

ING Investments has engaged a sub-adviser to provide the day-to-day management
of the Fund's portfolio. The sub-adviser is not an affiliate of ING
Investments.

ING Investments acts as a "manager-of-managers" for the Fund. ING Investments
delegates to the sub-adviser of the Fund the responsibility for investment
management, subject to ING Investment's oversight. ING Investments is
responsible for monitoring the investment program and performance of the
sub-adviser of the Fund.

From time to time, ING Investments may also recommend the appointment of
additional sub-advisers or replacement of non-affiliated sub-advisers to the
Fund's Board. It is not expected that ING Investments would normally recommend
replacement of affiliated sub-advisers as part of its oversight
responsibilities. The Fund and ING Investments have received exemptive relief
from the SEC to permit ING Investments, with the approval of the Fund's Board,
to appoint additional non-affiliated sub-advisers or to replace an existing
sub-adviser with a non-affiliated sub-adviser as well as change the terms of a
contract with a non-affiliated sub-adviser, without submitting the contract to
a vote of the Fund's shareholders. The Fund will notify shareholders of any
change in the identity of the sub-adviser of the Fund. In this event, the name
of the Fund and its principal investment strategies may also change.

Under the terms of the sub-advisory agreement, the agreement can be terminated
by either ING Investments or the Fund's Board. In the event the sub-advisory
agreement is terminated, the sub-adviser may be replaced subject to any
regulatory requirements or ING Investments may assume day-to-day investment
management of the Fund.

BLACKROCK ADVISORS, LLC

BlackRock Advisors, LLC ("BlackRock Advisors" or "Sub-Adviser"), a Delaware
limited liability company, serves as the Sub-Adviser to the Fund and is a
wholly-owned subsidiary of BlackRock, Inc., ("BlackRock"). BlackRock Advisors
and its affiliates offer a full range of equity, fixed-income, cash management
and alternative investment products with strong representation in both retail
and institutional channels in U.S. and in non-U.S. markets. The company has
over 5,600 employees in 20 countries and a major presence in most key markets
including the United States, the United Kingdom, Asia, Australia, the Middle
East and Europe.

The principal address of BlackRock is 100 Bellevue Parkway, Wilmington,
Delaware 19809.

As of December 31, 2007 BlackRock Advisors and its affiliates had over $1.357
trillion in investment company and other portfolio assets under management.

The following individuals jointly share responsibility for the day-to-day
management of the Fund.

Thomas P. Callan, CFA, Managing Director and Senior Portfolio Manager, is the
head of the BlackRock Advisors' Global Opportunities Team and is the strategist
for all the team's portfolios. Mr. Callan has co-managed the Fund since 2004.
Before becoming part of BlackRock Advisors, Mr. Callan had been with the PNC
Asset Management Group which he joined in 1994. Mr. Callan began his career at
PNC Bank as a personal trust portfolio manager in 1988 and became a research
analyst in 1992.

Jean M. Rosenbaum, CFA, Managing Director and Portfolio Manager, is a senior
member of BlackRock Advisors' Global Opportunities Team and is responsible for
coverage of stocks in the technology sector for all of the team's portfolios.
Ms. Rosenbaum has co-managed the Fund since 2005. Prior to joining BlackRock
Advisors in 1998, Ms. Rosenbaum was a healthcare analyst with the PNC Asset
Management Group.

Erin Xie, Ph.D., Managing Director and Portfolio Manager, is a senior member of
BlackRock Advisors' Global Opportunities Team and is responsible for coverage
of stocks in the healthcare sector. Dr. Xie has co-managed the Fund since 2005.
Before becoming part of BlackRock Advisors in 2005, Dr. Xie was with State
Street Research & Management since 2001. She began her investment career as a
pharmaceutical analyst for Sanford Bernstein in 1999.

[GRAPHIC APPEARS HERE]

                          If you have any questions, please call 1-800-992-0180.

                                                    Management of the Fund    13



MORE                                         INFORMATION ABOUT RISKS
--------------------------------------------------------------------------------

All mutual funds involve risk - some more than others - and there is always the
chance that you could lose money or not earn as much as you hope. The Fund's
risk profile is largely a factor of the principal securities in which it
invests and investment techniques that it uses. The following pages discuss the
risks associated with certain of the types of securities in which the Fund may
invest and certain of the investment practices that the Fund may use. For more
information about these and other types of securities and investment techniques
that may be used by the Fund, see the SAI.

Many of the investment techniques and strategies discussed in this Prospectus
and in the SAI are discretionary which means that the Adviser or Sub-Adviser
can decide whether to use them or not. The Fund may invest in these securities
or use these techniques as part of the Fund's principal investment strategies.
However, the Adviser or Sub-Adviser may also use these investment techniques or
make investments in securities that are not a part of the Fund's principal
investment strategies.

PRINCIPAL RISKS

The discussions below describe the Fund's principal risks. Please see the SAI
for a further discussion of the principal and other investment strategies
employed by the Fund.

CONVERTIBLE SECURITIES. The price of a convertible security will normally
fluctuate in some proportion to changes in the price of the underlying equity
security and as such, is subject to risks relating to the activities of the
issuer and general market and economic conditions. The income component of
convertible securities causes fluctuations based upon changes in interest rates
and the credit quality of the issuer. Convertible securities are often lower
rated securities. A Fund may be required to redeem or convert a convertible
security before the holder would otherwise choose.

DERIVATIVES. Generally, derivatives can be characterized as financial
instruments whose performance is derived, at least in part, from the
performance of an underlying asset or assets. Some derivatives are
sophisticated instruments that typically involve a small investment of cash
relative to the magnitude of risks assumed. These may include swap agreements,
options, forwards and futures. Derivative securities are subject to market risk
which could be significant for those that have a leveraging effect. Derivatives
are also subject to credit risks related to the counterparty's ability to
perform and any deterioration in the counterparty's creditworthiness could
adversely affect the instrument. In addition, derivatives and their underlying
securities may experience periods of illiquidity which could cause the Fund to
hold a security it might otherwise sell or could force the sale of a security
at inopportune times or for prices that do not reflect current market value. A
risk of using derivatives is that the Adviser or Sub-Adviser might imperfectly
judge the market's direction. For instance, if a derivative is used as a hedge
to offset investment risk in another security, the hedge might not correlate to
the market's movements and may have unexpected or undesired results such as a
loss or a reduction in gains.

EMERGING MARKETS INVESTMENTS. Because of less developed markets and economies
and, in some countries, less mature governments and governmental institutions,
the risks of investing in foreign securities can be intensified in the case of
investments in issuers domiciled or doing substantial business in countries
with an emerging securities market. These risks include: high concentration of
market capitalization and trading volume in a small number of issuers
representing a limited number of industries, as well as a high concentration of
investors and financial intermediaries; political and social uncertainties;
over-dependence on exports, especially with respect to primary commodities,
making these economies vulnerable to changes in commodity prices; overburdened
infrastructure and obsolete or unseasoned financial systems; environmental
problems; less developed legal systems; and less reliable custodial services
and settlement practices.

FOREIGN SECURITIES. There are certain risks in owning foreign securities
including those resulting from: fluctuations in currency exchange rates;
devaluation of currencies; political or economic developments and the possible
imposition of currency exchange blockages or other foreign governmental laws or
restrictions; reduced availability of public information concerning issuers;
accounting, auditing and financial reporting standard or other regulatory
practices and requirements that are not uniform when compared to those
applicable to domestic companies; settlement and clearance procedures in some
countries that may not be reliable and can result in delays in settlement;
higher transaction and custody expenses than for domestic securities; and
limitations on foreign ownership of equity securities. Also, securities of many
foreign companies may be less liquid and the prices are more volatile that
those of domestic companies. With certain foreign countries, there is the
possibility of expropriation, nationalization, confiscatory taxation and
limitations on the use or removal of portfolios or other assets of the Fund
including the withholding of dividends.

The Fund may enter into foreign currency transactions either on a spot or cash
basis at prevailing rates or through forward foreign currency exchange
contracts in order to have the necessary currencies to settle transactions, to
help protect Fund assets against adverse changes in foreign currency exchange
rates, or to provide exposure to a foreign currency commensurate with the
exposure to securities from that country. Such efforts could limit potential
gains that might result from a relative increase in the value of such
currencies and might, in certain cases, result in losses to the Fund.

INITIAL PUBLIC OFFERINGS ("IPO'S"). IPOs and offerings by companies that have
recently gone public have the potential to produce substantial gains for the
Fund. However, there is no assurance that the Fund will have access to
profitable IPOs. Stocks of some newly-public companies may decline shortly
after the initial public offerings.

[GRAPHIC APPEARS HERE]

                          If you have any questions, please call 1-800-992-0180.

                                              More Information About Risks    15



MORE INFORMATION ABOUT RISKS
--------------------------------------------------------------------------------

RULE 144A SECURITIES. Rule 144A securities are securities that are not
registered but which are bought and sold solely by institutional investors. The
Fund considers Rule 144A securities to be "liquid" although the market for such
securities typically is less active than public securities markets.

SECTOR FOCUS. The Fund focuses its assets in securities in the science and
technology sectors. As a result, the Fund may be subject to greater risks and
market fluctuation than a fund which has securities representing a broader
range of investment alternatives.

SMALL- AND MID-CAPITALIZATION COMPANIES. Investments in small- and
mid-capitalization companies involve greater risk than is customarily
associated with larger, more established companies due to the greater business
risks of small size, limited markets and financial resources, narrow product
lines and the frequent lack of depth of management. The securities of smaller
companies are often traded over-the-counter and may not be traded in volumes
typical on a national securities exchange. Consequently, the securities of
smaller companies may have limited market stability and may be subject to more
abrupt or erratic market movements than securities of larger, more established
companies or the market averages in general.

INABILITY TO SELL SECURITIES. Certain securities generally trade in lower
volume and may be less liquid than securities of large established companies.
These less liquid securities could include securities of small and mid-size
U.S. companies, high-yield securities, convertible securities, unrated debt and
convertible securities, securities that originate from small offerings and
foreign securities, particularly those from companies in countries with an
emerging securities market. The Fund could lose money if it cannot sell a
security at the time and price that would be most beneficial to the Fund.

LENDING PORTFOLIO SECURITIES. In order to generate additional income, the Fund
may lend portfolio securities in an amount up to 33 1/3% of total Fund assets
to broker-dealers, major banks, or other recognized domestic institutional
borrowers of securities. When the Fund lends its securities, it is responsible
for investing the cash collateral it receives from the borrower of the
securities, and the Fund could incur losses in connection with the investment
of such cash collateral. As with other extensions of credit, there are risks of
delay in recovery or even loss of rights in the collateral should the borrower
default or fail financially.

OTHER RISKS

BORROWING. Borrowing may exaggerate the affect of any increase or decrease in
the value of portfolio securities or the NAV of the Fund and money borrowed
will be subject to interest costs. Interest costs on borrowings may fluctuate
with changing market rates of interest and may partially offset or exceed the
return earned on borrowed funds. Under adverse market conditions, the Fund
might have to sell portfolio securities to meet interest or principal payments
at a time when fundamental investment considerations would not favor such
sales.

CORPORATE DEBT SECURITIES. Corporate debt securities are subject to the risk of
the issuer's inability to meet principal and interest payments on the
obligation and may also be subject to price volatility due to such factors as
interest rate sensitivity, market perception of the credit-worthiness of the
issuer and general market liquidity. When interest rates decline, the value of
the Fund's debt securities can be expected to rise and when interest rates
rise, the value of those securities can be expected to decline. Debt securities
with longer maturities tend to be more sensitive to interest rate movements
than those with shorter maturities.

One measure of risk for fixed-income securities is duration. Duration is one of
the tools used by a portfolio manager in selection of fixed-income securities.
Historically, the maturity of a bond was used as a proxy for the sensitivity of
a bond's price to changes in interest rates, otherwise known as a bond's
"interest rate risk" or "volatility". According to this measure, the longer the
maturity of a bond, the more its price will change for a given change in market
interest rates. However, this method ignores the amount and timing of all cash
flows from the bond prior to final maturity. Duration is a measure of average
life of a bond on a present value basis which was developed to incorporate a
bond's yield, coupons, final maturity and call features into one measure. For
point of reference, the duration of a noncallable 7% coupon bond with a
remaining maturity of 5 years is approximately 4.5 years and the duration of a
noncallable 7% coupon bond with a remaining maturity of 10 years is
approximately 8 years. Material changes in interest rates may impact the
duration calculation.

INTERESTS IN LOANS. The Fund may invest in participation interests or
assignments in secured variable or floating rate loans which include
participation interests in lease financings. Loans are subject to the credit
risk of nonpayment of principal or interest. Substantial increases in interest
rates may cause an increase in loan defaults. Although the loans will generally
be fully collateralized at the time of acquisition, the collateral may decline
in value, be relatively illiquid, or lose all or substantially all of its value
subsequent to the Fund's investment. Many loans are relatively illiquid and may
be difficult to value.

MANAGEMENT. The Fund is subject to management risk because it is an actively
managed investment portfolio. The Adviser, the Sub-Adviser or each individual
portfolio manager will apply investment techniques and risk analyses in making
investment decisions for the Fund, but there can be no guarantee that these
will produce the desired results. Many sub-advisers of equity funds employ
styles that are characterized as "value" or "growth." However, these terms can
have different application by different managers. One sub-adviser's value
approach may be different from another, and one sub-adviser's growth approach
may different from another. For example, some value managers employ a style in
which they seek to identify companies that they believe are valued at a more
substantial or "deeper discount" to a company's net worth than other value
managers. Therefore, some funds that are characterized as growth or value can
have greater volatility than other funds managed by other managers in a growth
or value style.

16    More Information About Risks



                            MORE INFORMATION ABOUT RISKS
--------------------------------------------------------------------------------

PAIRING-OFF TRANSACTIONS. A pairing-off transaction occurs when the Fund
commits to purchase a security at a future date and then the Fund pairs-off the
purchase with a sale of the same security prior to or on the original
settlement date. Whether a pairing-off transaction on a debt security produces
a gain depends on the movement of interest rates. If interest rates increase,
then the money received upon the sale of the same security will be less than
the anticipated amount needed at the time the commitment to purchase the
security at the future date was entered and the Fund will experience a loss.

REPURCHASE AGREEMENTS. Repurchase agreements involve the purchase by the Fund
of a security that the seller has agreed to repurchase at an agreed-upon date
and price. If the seller defaults and the collateral value declines, the Fund
might incur a loss. If the seller declares bankruptcy, the Fund may not be able
to sell the collateral at the desired time.

RESTRICTED AND ILLIQUID SECURITIES. If a security is illiquid, the Fund might
be unable to sell the security at a time when the Adviser or Sub-Adviser might
wish to sell and the security could have the effect of decreasing the overall
level of the Fund's liquidity. Further, the lack of an established secondary
market may make it more difficult to value illiquid securities which could vary
from the amount the Fund could realize upon disposition. Restricted securities,
i.e., securities subject to legal or contractual restrictions on resale, may be
illiquid. However, some restricted securities may be treated as liquid although
they may be less liquid than registered securities traded on established
secondary markets.

REVERSE REPURCHASE AGREEMENTS AND DOLLAR ROLLS. A reverse repurchase agreement
or dollar roll involves the sale of a security with an agreement to repurchase
the same or substantially similar securities at an agreed upon price and date.
Whether such a transaction produces a gain for the Fund depends upon the costs
of the agreements and the income and gains of the securities purchased with the
proceeds received from the sale of the security. If the income and gains on the
securities purchased fail to exceed the costs, the Fund's NAV will decline
faster than otherwise would be the case. Reverse repurchase agreements and
dollar rolls, as leveraging techniques, may increase the Fund's yield; however,
such transactions also increase the Fund's risk to capital and may result in a
shareholder's loss of principal.

SHORT SALES. A short sale is the sale by the Fund of a security which has been
borrowed from a third party on the expectation that the market price will drop.
If the price of the security rises, the Fund may have to cover its short
position at a higher price than the short sale price, resulting in a loss.

U.S. GOVERNMENT SECURITIES AND OBLIGATIONS. Obligations issued by some U.S.
government agencies, authorities, instrumentalities or sponsored enterprises,
such as the Government National Mortgage Association, are backed by the full
faith and credit of the U.S. Treasury while obligations issued by others, such
as the Federal National Mortgage Association, Federal Home Loan Mortgage
Corporation and Federal Home Loan Banks, are backed solely by the entity's own
resources or by the ability of the entity to borrow from the U.S. Treasury. No
assurance can be given that the U.S. government will provide financial support
to U.S. government agencies, authorities, instrumentalities or sponsored
enterprises if it is not obliged to do so by law.

TEMPORARY DEFENSIVE STRATEGIES. When the Adviser or the Sub-Adviser to the Fund
anticipates unusual market or other conditions, the Fund may temporarily depart
from its principal investment strategies as a defensive measure. To the extent
that the Fund invests defensively, it likely will not achieve capital
appreciation.

PERCENTAGE AND RATING LIMITATIONS. Unless otherwise stated, the percentage and
rating limitations in this Prospectus apply at the time of investment.

[GRAPHIC APPEARS HERE]

                          If you have any questions, please call 1-800-992-0180.

                                              More Information About Risks    17



DIVIDENDS, DISTRIBUTIONS AND TAXES
--------------------------------------------------------------------------------

DIVIDENDS AND DISTRIBUTIONS
The Fund generally distributes most or all of its net earnings in the form of
dividends and capital gain distributions. Distributions are normally expected
to consist primarily of capital gains.

The Fund pays dividends and capital gains, if any, annually.

DIVIDEND REINVESTMENT

Unless you instruct the Fund to pay you dividends in cash, dividends and
distributions paid by the Fund will be reinvested in additional shares of the
Fund. You may, upon written request or by completing the appropriate section of
the Account Application, elect to have all dividends and other distributions
paid on Class I shares of the Fund invested in another ING Fund that offers
Class I shares.

TAXES

The following information is meant as a general summary for U.S. shareholders.
Please see the SAI for additional information. You should rely on your own tax
adviser for advice about the particular federal, state and local tax
consequences to you of investing in the Fund.

The Fund will distribute all, or substantially all, of its net investment
income and net capital gains to its shareholders each year. Although the Fund
will not be taxed on amounts it distributes, most shareholders will be taxed on
amounts they receive. A particular distribution generally will be taxable as
either ordinary income or long-term capital gains. Except as described below,
it generally does not matter how long you have held your Fund shares or whether
you elect to receive your distributions in cash or reinvest them in additional
Fund shares. For example, if the Fund designates a particular distribution as a
long-term capital gains distribution, it will be taxable to you at your
long-term capital gains rate. Most dividends from the Fund are attributable to
interest and, therefore, do not qualify for the reduced rate of tax that may
apply to certain qualifying dividends on corporate stock, as described below.

Current tax law (which is currently scheduled to apply through 2010) generally
provides for a maximum tax rate for individual taxpayers of 15% on long-term
gains from sales and from certain qualifying dividends on corporate stock.
Although these rate reductions do not apply to corporate taxpayers, such
taxpayers may be entitled to a corporate dividends received deduction with
respect to their share of eligible domestic corporate dividends received by the
Fund. The following are guidelines for how certain distributions by the Fund
are generally taxed to individual taxpayers:

o  Distributions of earnings from qualifying dividends and qualifying long-term
   capital gains will be taxed at a maximum rate of 15%.

o  Note that distributions of earnings from dividends paid by certain
   "qualified foreign corporations" can also qualify for the lower tax rates
   on qualifying dividends.

o  A shareholder will also have to satisfy a more than 60-day holding period
   with respect to any distributions of qualifying dividends in order to
   obtain the benefit of the lower tax rate.

o  Distributions of earnings from non-qualifying dividends, interest income,
   other types of ordinary income and short-term capital gains will be taxed
   at the ordinary income tax rate applicable to the taxpayer.

o  The maximum 15% tax rate for individual taxpayers on long-term capital gains
   and qualifying dividends is currently scheduled to apply through 2010. In
   the absence of further Congressional action, for the calendar years after
   2010, the maximum rate on long-term capital gains for individual taxpayers
   would increase 20% and income from dividends would be taxed at the rates
   applicable to ordinary income.

o  Dividends declared by the Fund in October, November or December and paid
   during the following January may be treated as having been received by
   shareholders in the year the distributions were declared.

o  You will receive an annual statement summarizing your dividend and capital
   gains distributions.

o  If you buy shares of the Fund before it makes a distribution, the
   distribution will be taxable to you even though it may actually be a return
   of a portion of your investment. This is known as "buying a dividend."

o  If you invest through a tax-deferred account, such as a retirement plan, you
   generally will not have to pay tax on dividends until they are distributed
   from the account. These accounts are subject to complex tax rules, and you
   should consult your tax adviser about investment through a tax-deferred
   account.

There may be tax consequences to you if you sell or redeem Fund shares. You
will generally have a capital gain or loss, which will be long-term or
short-term, generally depending on how long you hold those shares. If you
exchange shares, you may be treated as if you sold them. If your tax basis in
your shares exceeds the amount of proceeds you receive from a sale, exchange or
redemption of shares, you will recognize a taxable loss on the sale of shares
of the Fund. Any loss recognized on shares held for six months or less will be
treated as long-term capital loss to the extent of any long-term capital gain
distributions that were received with respect to the shares. Additionally, any
loss realized on a sale, redemption or exchange of shares of the Fund may be
disallowed under "wash sale" rules to the extent the shares disposed of are
replaced with other shares of the Fund within a period of 61 days beginning 30
days before and ending 30 days after shares are disposed of, such as pursuant
to a dividend reinvestment in shares of the Fund. If disallowed, the loss will
be reflected in an adjustment to the tax basis of the shares acquired. You are
responsible for any tax liabilities generated by your transactions.

As with all mutual funds, the Fund may be required to withhold U.S. federal
income tax at the current rate of 28% of all taxable distributions payable to
you if you fail to provide the Fund with

18    Dividends, Distributions and Taxes



FINANCIAL HIGHLIGHTSING GLOBAL SCIENCE AND TECHNOLOGY FUND
--------------------------------------------------------------------------------

The information in the table below has been derived from the Fund's financial
statements which have been audited by KPMG LLP, an independent registered
public accounting firm.

                                                                                 CLASS I
                                                                   ------------------------------------
                                                                                YEAR ENDED
                                                                               OCTOBER 31,
                                                                   ------------------------------------
                                                                      2007         2006         2005
                                                                   ---------- ------------- -----------

 PER SHARE OPERATING PERFORMANCE:
 Net asset value, beginning of period                         $         4.46         3.89         3.51
 Income (loss) from investment operations:
 Net investment loss                                          $        (0.03)       (0.03)*      (0.03)
 Net realized and unrealized gain (loss) on investments and   $         1.26         0.60         0.41
  foreign currency related transactions
 Total from investment operations                             $         1.23         0.57         0.38
 Net asset value, end of period                               $         5.69         4.46         3.89
 TOTAL RETURN(2)                                              %        27.58        14.65        10.83
 RATIOS AND SUPPLEMENTAL DATA:
 Net assets, end of period (000's)                            $        5,645        2,316       10,096
 Ratios to average net assets:
 Gross expenses prior to expense reimbursement(3)             %         1.84         1.84         1.85
 Net expenses after expense reimbursement(3)(4)               %         1.50         1.50         1.50
 Net investment loss after expense reimbursement(3)(4)        %        (0.65)       (0.75)       (0.78)
 Portfolio turnover rate                                      %           87          140          128

                                                                        CLASS I
                                                             ------------------------------
                                                              FIVE MONTHS    YEAR ENDED
                                                                 ENDED         MAY 31,
                                                              OCTOBER 31, -----------------
                                                                2004(1)      2004     2003
                                                             ------------ ---------- -----

 PER SHARE OPERATING PERFORMANCE:
 Net asset value, beginning of period                              3.65        3.09    3.84
 Income (loss) from investment operations:
 Net investment loss                                              (0.02)      (0.05)  (0.01
 Net realized and unrealized gain (loss) on investments and       (0.12)       0.61   (0.74
  foreign currency related transactions
 Total from investment operations                                 (0.14)       0.56   (0.75
 Net asset value, end of period                                    3.51        3.65    3.09
 TOTAL RETURN(2)                                                  (3.84)      18.12  (19.53
 RATIOS AND SUPPLEMENTAL DATA:
 Net assets, end of period (000's)                                8,911       9,463   5,215
 Ratios to average net assets:
 Gross expenses prior to expense reimbursement(3)                  1.79        2.00    2.78
 Net expenses after expense reimbursement(3)(4)                    1.50        1.57    1.50
 Net investment loss after expense reimbursement(3)(4)            (1.28)      (1.38)  (1.22
 Portfolio turnover rate                                             48         121      28

--------------------------------------------------------------------------------

(1)   The Fund changed its fiscal year end to October 31.

(2)   Total return is calculated assuming reinvestment of all dividends and
      capital gain distributions at net asset value. Total returns for periods
      less than one year are not annualized.

(3)   Annualized for periods less than one year.

(4)   The Adviser has agreed to limit expenses (excluding interest, taxes,
      brokerage and extraordinary expenses) subject to possible recoupment by
      ING Investments, LLC within three years of being incurred.

*     Calculated using average number of shares outstanding throughout the
      period.

[GRAPHIC APPEARS HERE]

                          If you have any questions, please call 1-800-992-0180.

                                      ING Global Science and Technology Fund  21



In addition to the Fund offered in this prospectus, the Distributor also offers
the funds listed below. Before investing in a fund, shareholders should
carefully review the fund's prospectus. Investors may obtain a copy of a
prospectus of any ING Fund not discussed in this Prospectus by calling (800)
992-0180 or by going to www.ingfunds.com.

Domestic Equity and Income Funds
ING Balanced Fund
ING Equity Dividend Fund
ING Fundamental Research Fund
ING Growth and Income Fund
ING Real Estate Fund

Domestic Equity Growth Funds
ING 130/30 Fundamental Research Fund
ING LargeCap Growth Fund
ING MidCap Opportunities Fund
ING Opportunistic LargeCap Fund
ING Small Company Fund
ING SmallCap Opportunities Fund

Domestic Equity Index Funds
ING Index Plus LargeCap Fund
ING Index Plus MidCap Fund
ING Index Plus SmallCap Fund

Domestic Equity Value Funds
ING LargeCap Value Fund
ING SmallCap Value Multi-Manager Fund
ING Value Choice Fund

Fixed-Income Funds
ING GNMA Income Fund
ING Intermediate Bond Fund

Global Equity Funds
ING Global Equity Dividend Fund
ING Global Natural Resources Fund
ING Global Real Estate Fund
ING Global Value Choice Fund

International Equity Funds
ING Asia-Pacific Real Estate Fund
ING Disciplined International Small Cap Fund
ING Emerging Countries Fund
ING European Real Estate Fund
ING Foreign Fund
ING Greater China Fund
ING Index Plus International Equity Fund
ING International Capital Appreciation Fund
ING International Equity Dividend Fund
ING International Growth Opportunities Fund
ING International Real Estate Fund
ING International SmallCap Multi-Manager Fund
ING International Value Choice Fund
ING International Value Opportunities Fund

Global and International Fixed-Income Funds
ING Emerging Markets Fixed Income Fund
ING Global Bond Fund

International Fund-of-Funds
ING Diversified International Fund

Loan Participation Fund
ING Senior Income Fund

Money Market Funds
ING Money Market Fund

Strategic Allocation Funds
ING Strategic Allocation Conservative Fund
ING Strategic Allocation Growth Fund
ING Strategic Allocation Moderate Fund



ING DIRECT FUNDS

PROSPECTUS
CLASS O SHARES

July 31, 2007

MONEY MARKET FUND

ING Money Market Fund ("ING Direct Money Market Fund," "Money Market Fund," or
the "Fund") (formerly ING Aeltus Money Market Fund)

DOMESTIC EQUITY AND VALUE FUND

ING Balanced Fund ("ING Direct Balanced Fund," "Balanced Fund," or the "Fund")

STRATEGIC ALLOCATION FUNDS

ING Strategic Allocation Conservative Fund ("ING Direct Strategic Allocation
Conservative Fund," "Strategic Allocation Conservative Fund," or the "Fund")

ING Strategic Allocation Growth Fund ("ING Direct Strategic Allocation Growth
Fund," "Strategic Allocation Growth Fund," or the "Fund")

ING Strategic Allocation Moderate Fund ("ING Direct Strategic Allocation
Moderate Fund," "Strategic Allocation Moderate Fund," or the "Fund")

February 29, 2008

GLOBAL EQUITY FUND

ING Global Science and Technology Fund ("ING Direct Global Science and
Technology Fund," "Global Science and Technology Fund," or the "Fund")

September 28, 2007

INDEX PLUS FUNDS

ING Index Plus LargeCap Fund ("ING Direct Index Plus LargeCap Fund," "Index
Plus LargeCap Fund," or the "Fund")

ING Index Plus MidCap Fund ("ING Direct Index Plus MidCap Fund," "Index Plus
MidCap Fund," or the "Fund")

ING Index Plus SmallCap Fund ("ING Direct Index Plus SmallCap Fund," "Index
Plus SmallCap Fund," or the "Fund")

This Prospectus contains important information about investing in Class O
shares of certain ING Funds. You should read it carefully before you invest,
and keep it for future reference. Please note that your investment: is not a
bank deposit, is not insured or guaranteed by the Federal Deposit Insurance
Corporation ("FDIC"), the Federal Reserve Board or any other government agency
and is affected by market fluctuations. There is no guarantee that the Funds
will achieve their respective investment objectives. As with all mutual funds,
the U.S. Securities and Exchange Commission ("SEC") has not approved or
disapproved these securities nor has the SEC judged whether the information in
this Prospectus is accurate or adequate. Any representation to the contrary is
a criminal offense.
-------------------------------------------------------------------------------

Each of the Funds listed above is a series of ING Series Fund, Inc.
 ("Company").

This Prospectus is for investors purchasing or considering a purchase of Class
O shares of one or more of the Funds. Only certain investors are eligible to
purchase Class O shares.

o SHARES OF THE FUNDS WILL RISE AND FALL IN VALUE AND YOU COULD LOSE MONEY BY
   INVESTING IN THEM.
o THERE IS NO GUARANTEE THE FUNDS WILL ACHIEVE THEIR INVESTMENT OBJECTIVES.



THE FUNDS' INVESTMENTS

INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES, RISKS AND PERFORMANCE

The following pages contain a description of each Fund's investment objective,
principal investment strategies employed on behalf of each Fund, and the risks
associated with investing in each Fund.

--------------------------------------------------------------------------------
A performance bar chart is provided for each Fund. The bar chart shows changes
in each Fund's performance from year to year. The fluctuation in returns
illustrates each Fund's performance volatility. The bar chart is accompanied by
each Fund's best and worst quarterly returns throughout the years presented in
the bar chart.

--------------------------------------------------------------------------------
A table for each Fund shows its average annual total return before and after
income taxes. The table also compares the Fund's performance to the performance
of one or more broad-based securities market indices. Each index is a widely
recognized, unmanaged index of securities. A Fund's past performance is no
guarantee of future results.

--------------------------------------------------------------------------------
Additional information about the Funds' investment strategies and risks is
included in the section entitled "Other Considerations."

--------------------------------------------------------------------------------
ING Investments, LLC ("ING Investments" or "Adviser") serves as investment
adviser to the Funds.

--------------------------------------------------------------------------------
ING Investment Management Co., ("ING IM" or "Sub-Adviser") serves as
Sub-Adviser to each Fund, except Global Science and Technology Fund.

--------------------------------------------------------------------------------
BlackRock Advisors, Inc. ("BlackRock Advisors" or "Sub-Adviser") serves as
Sub-Adviser to Global Science and Technology Fund.

--------------------------------------------------------------------------------

                                       3



MONEY MARKET FUND
--------------------------------------------------------------------------------

INVESTMENT OBJECTIVE

The Fund seeks to provide investors with a high level of current income,
consistent with preservation of capital and liquidity and the maintenance of a
stable $1.00 net asset value per share.

PRINCIPAL INVESTMENT STRATEGIES

The Fund operates as a diversified fund and invests in a portfolio of
high-quality, U.S. dollar denominated short-term debt securities that are
determined by the Sub-Adviser to present minimal credit risks. The Fund may
maintain a rating from one or more rating agencies that provide ratings on
money market funds. There can be no assurance that the Fund will maintain any
particular rating or maintain it with a particular rating agency. To maintain a
rating, the Sub-Adviser may manage the Fund more conservatively than if it was
not rated.

Portfolio investments of the Fund are valued based on the amortized cost
valuation method pursuant to Rule 2a-7 under the Investment Company Act of 1940
("Rule 2a-7"). Obligations in which the Fund invests generally have remaining
maturities of 397 days or less, although upon satisfying certain conditions of
Rule 2a-7, the Fund may, to the extent otherwise permissible, invest in
instruments subject to repurchase agreements and certain variable and floating
rate obligations that bear longer final maturities. The dollar-weighted average
portfolio maturity of the Fund will not exceed 90 days.

The Fund will invest in obligations permitted to be purchased under Rule 2a-7
including, but not limited to, (i) U.S. government securities and obligations
of its agencies or instrumentalities; (ii) commercial paper, mortgage- and
asset-backed securities, repurchase agreements, guaranteed investment
contracts, municipal securities, loan participation interests, and medium-term
notes; (iii) other money market mutual funds; and (iv) the following domestic,
Yankee-dollar and Euro-dollar obligations; certificates of deposit, time
deposits, bankers acceptances, and other promissory notes, including floating
and variable rate obligations issued by U.S. or foreign bank holding companies,
and their bank subsidiaries, branches and agencies. The Fund may invest more
than 25% of its total assets in instruments issued by domestic banks. The Fund
may significantly invest in securities issued by financial services companies
including, among other entities, banks and bank holding companies, investment
banks, trust companies, insurance companies, finance companies, and
broker-dealers.

The Fund may purchase securities on a when-issued basis and purchase or sell
them on a forward commitment basis. The Fund may also invest in variable rate
master demand obligations, which are unsecured demand notes that permit the
underlying indebtedness to vary, and provide for periodic adjustments in the
interest rate.

In choosing investments for the Fund, the Sub-Adviser employs a highly
disciplined, four step investment process designed to ensure preservation of
capital and liquidity, as well as adherence to regulatory requirements. The
four steps are:

o  First, a formal list of high-quality issuers is actively maintained;
o  Second, securities of issuers on the approved list that meet maturity
   guidelines and are rated first tier (i.e., they are given the highest
   short-term rating by at least two nationally recognized statistical rating
   organizations, or by a single rating organization if a security is rated
   only by that organization, or are determined to be of comparable quality by
   the Sub-Adviser pursuant to guidelines approved by the Fund's Board of
   Directors), are selected for investment;
o  Third, diversification is continuously monitored to ensure that regulatory
   limits are not exceeded; and
o  Finally, portfolio maturity decisions are made based upon expected cash
   flows, income opportunities available in the market and expectations of
   future interest rates.

Risks

The Fund is subject to the risks associated with investing in debt securities.

An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency.

Although the Fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the Fund.

CREDIT AND INTEREST RATE - money market funds, like the Fund, are subject to
less credit and interest rate risk than other income funds because they invest
in short-term debt securities of the highest quality. Nevertheless, the value
of the Fund's investments may fall when interest rates rise and the Fund could
lose money if the issuer of a debt security is unable to meet its financial
obligations or goes bankrupt.

PREPAYMENT - the Fund may invest in mortgage-related securities, which can be
paid off early if the borrowers on the underlying mortgages pay off their
mortgages sooner than scheduled. If interest rates are falling, the Fund will
be forced to reinvest this money at lower yields.

CONCENTRATION IN THE FINANCIAL SERVICES SECTOR - the risks of concentrating in
investments in the financial services sector include, but are not limited to
the following: credit risk, interest rate risks, and regulatory risk (the
impact of state or federal legislation and regulations). In addition, to the
extent that the Fund further concentrates in the banking industry, the risks
described above may be greater.

                                       4



FOREIGN INVESTING - Euro- and Yankee-dollar investments involve certain risks
that are different from investments in domestic obligations of U.S. banks.
These risks may include unfavorable political and economic developments,
possible withholding taxes, seizure of foreign deposits, currency controls or
other governmental restrictions that might affect payment of principal or
interest. In addition, foreign banks are not regulated by U.S. banking
authorities and are generally not bound by financial reporting standards
comparable to U.S. banks.

REPURCHASE AGREEMENTS - repurchase agreements involve the purchase by the Fund
of a security that the seller has agreed to buy back. If the seller defaults
and the collateral value declines, the Fund might incur a loss. If the seller
declares bankruptcy, the Fund may not be able to sell the collateral at the
desired time.

MORTGAGE-RELATED SECURITIES - the prices of mortgage-related securities are
sensitive to changes in interest rates and changes in the prepayment patterns
on the underlying instruments. If the principal on the underlying mortgage
notes is repaid faster than anticipated, the price of the mortgage-related
security may fall.

U.S. GOVERNMENT SECURITIES - some U.S. government securities are backed by the
full faith and credit of the U.S. government and are guaranteed as to both
principal and interest by the U.S. Treasury. These include direct obligations
of the U.S. Treasury such as U.S. Treasury notes, bills and bonds, as well as
indirect obligations including Government National Mortgage Association
("GNMA"), the Small Business Administration and the Farmers Home
Administration, among others. Other U.S. government securities are not direct
obligations of the U.S. Treasury, but rather are backed by the ability to
borrow directly from the U.S. Treasury, including the Federal Financing Bank,
the Federal Home Loan Bank and the U.S. Postal Service. Still other agencies
and instrumentalities are supported solely by the credit of the agency or
instrumentality itself and are neither guaranteed nor insured by the U.S.
government. These include the Federal Home Loan Bank, the Federal Home Loan
Mortgage Corporation and the Federal Farm Credit Bank, among others.
Consequently, the investor must look principally to the agency issuing or
guaranteeing the obligation for ultimate repayment. No assurance can be given
that the U.S. government would provide financial support to such agencies if
needed. U.S. government securities may be subject to varying degrees of credit
risk and all U.S. government securities may be subject to price declines due to
changing interest rates. Securities directly supported by the full faith and
credit of the U.S. government have less credit risk.

OTHER INVESTMENT COMPANIES - the main risk of investing in other investment
companies is the risk that the value of the underlying securities might
decrease. Because the Fund invests in other investment companies, you will pay
a proportionate share of the expenses of that other investment company
(including management fees, administration fees and custodial fees) in addition
to the expenses of the Fund.

A more detailed discussion of the risks associated with investing in the Fund
is available in the "Other Considerations" section.

                                       5



MONEY MARKET FUND
--------------------------------------------------------------------------------

[GRAPHIC APPEARS HERE]

     HOW THE FUND HAS PERFORMED

The following information is intended to help you understand the risks of
investing in the Fund. The value of your shares in the Fund will fluctuate
depending on the Fund's investment performance. The bar chart and table below
show the changes in the Fund's performance from year to year, and the table
compares the Fund's performance to the performance of a broad measure of market
performance for the period. The Fund's past performance (before and after
income taxes) is no guarantee of future results.  Because Class O shares did
not have a full calendar year of operations as of December 31, 2006, the bar
chart below provides some indication of the risks of investing in the Fund by
showing changes in the performance of the Fund's Class A shares from year to
year.

                    YEAR-BY-YEAR TOTAL RETURNS (%)(1)(2)(3)

                (For the periods ended December 31 of each year)

[GRAPHIC APPEARS HERE]

1997   1998      1999      2000      2001      2002      2003      2004      2005      2006
5.45   5.32      4.98      6.07      3.85      1.27      0.52      0.79      2.80      4.61

            Best and worst quarterly performance during this period:

     Best: 4th quarter 2000:   1.56%
    Worst: 3rd quarter 2003:   0.11%

              The Fund's Class A shares' year-to-date total return
                           as of June 30, 2007: 2.37%

The following performance table discloses the Fund's average annual total
                      returns for Class A shares.

                     AVERAGE ANNUAL TOTAL RETURNS(1)(2)(3)

                    (For the period ended December 31, 2006)

                                                            10 YEARS
                             1 YEAR       5 YEARS      (OR LIFE OF CLASS)
 CLASS A RETURN     %       4.61          1.99            3.97(3)

(1)   Class A shares are not offered in this Prospectus. Class A shares would
      have substantially similar annual returns as the Class O shares because
      the classes are invested in the same portfolio of securities. Annual
      returns would differ only to the extent that Class O and Class A shares
      have different expenses.

(2)   Effective March 1, 2002, ING Investments, LLC serves as investment
      adviser and ING Investment Management Co., the former investment adviser,
      serves as sub-adviser.

(3)   On February 2, 1998, the Fund redesignated Adviser Class shares as Class
      A shares.

For the Fund's current 7 day yield and current 7 day effective yield, please
   call the Fund at 1-800-992-0180.

                                       6



BALANCED FUND
--------------------------------------------------------------------------------

INVESTMENT OBJECTIVE

The Fund seeks to maximize total return consistent with reasonable safety of
principal by investing in a diversified portfolio of stocks, bonds and money
market instruments.

PRINCIPAL INVESTMENT STRATEGIES

The Fund seeks total return consisting of capital appreciation and current
income.

Under normal market conditions, the Fund allocates its assets between the
following asset classes:

o  Equities, such as common and preferred stocks;
o  Debt, such as bonds, mortgage-related and other asset-backed securities;
o  U.S. government securities; and
o  Money market instruments.

The Fund normally invests up to 75% of its total assets in equity securities
and at least 25% of its total assets in debt (including money market
instruments). In making asset allocation decisions, the Sub-Adviser uses
current market statistics and economic indicators to attempt to forecast
returns for the equity and debt sectors of the securities market. Within each
asset class, the Sub-Adviser uses quantitative computer models to evaluate
financial criteria in an attempt to identify those issuers whose perceived
value is not reflected in their equity or debt securities. The Sub-Adviser
generally does not attempt to respond to short-term swings in the market by
quickly changing the characteristics of the Fund's portfolio.

In managing the equity component of the Fund, the Sub-Adviser invests primarily
in securities of large capitalization companies. The Sub-Adviser defines
large-capitalization companies as companies that are included in the Standard &
Poor's 500(Reg. TM) Composite Stock Price Index ("S&P 500(Reg. TM) Index" or
"Index") at the time of purchase and that have a market capitalization of at
least $3 billion. The Sub-Adviser attempts to achieve the Fund's investment
objective by overweighting those stocks in the Index that it believes will
outperform the Index, and underweighting (or avoiding altogether) those stocks
that it believes will underperform the Index. As of June 30, 2007, the smallest
company in the Index had a market capitalization of $1.6 billion, the largest
company had a market capitalization of $472.5 billion and the average
capitalization of all companies in the Index was $26.7 billion.

In managing the debt component, the Sub-Adviser focuses on buying bonds at a
discount to their intrinsic value. The Sub-Adviser utilizes proprietary
quantitative techniques to identify bonds or sectors that are cheap relative to
other bonds or sectors based on their historical price relationships. Teams of
asset specialists use this relative value analysis to guide the security
selection process. Although the Fund may invest a portion of its assets in
high-yield (high risk) debt securities, commonly referred to as "junk bonds,"
rated below BBB- by Standard & Poor's ("S&P") or Baa3 by Moody's Investors
Services, Inc, ("Moody's"), the Fund will seek to maintain a minimum average
portfolio quality rating of at least investment grade. The dollar-weighted
average maturity of the Fund will generally range between three and ten years.

The Fund may also invest in convertible securities, foreign debt securities and
derivatives.

The Fund may invest in other investment companies to the extent permitted under
the Investment Company Act of 1940, as amended, and the rules and regulations
thereunder.

The Sub-Adviser may sell securities for a variety of reasons, such as to secure
gains, limit losses, or redeploy assets into opportunities believed to be more
promising, among others.

The Fund may lend portfolio securities on a short-term or long-term basis, up
to 33 1/3% of its total assets.

The Fund may engage in frequent and active trading of portfolio securities to
achieve its investment objective.

RISKS

You could lose money on an investment in the Fund. The Fund may be affected by
the following risks, among others:

ALLOCATION - the success of the Fund's strategy depends on the Sub-Adviser's
skill in allocating Fund assets between equities and debt and in choosing
investments within those categories. Because the Fund's assets are allocated
between equity and fixed-income securities, the Fund may underperform stock
funds when stocks are in favor and underperform bond funds when bonds are in
favor.

PRICE VOLATILITY - the value of the Fund changes as the prices of its
investments go up or down. Equity securities face market, issuer and other
risks, and their values may fluctuate, sometimes rapidly and unpredictably.
Market risk is the risk that securities may decline in value due to factors
affecting the securities markets generally or particular industries. Issuer
risk is the risk that the value of a security may decline for reasons relating
to the issuer such as changes in the financial condition of the issuer. While
equities may offer the potential for greater long-term growth  than most debt
securities, they generally have higher volatility.The Fund invests primarily in
securities of larger companies, which sometimes have more stable prices than
smaller companies.

INTEREST RATE - fixed-income securities are subject to the risk that interest
rates will rise, which generally causes bond prices to fall. Economic and
market conditions may cause issuers to

                                       7



default or go bankrupt. High-yield instruments are even more sensitive to
economic and market conditions than other fixed-income instruments.

FOREIGN INVESTING - foreign investments may be riskier than U.S. investments
for many reasons, including: changes in currency exchange rates; unstable
political, social and economic conditions; a lack of adequate or accurate
company information; differences in the way securities markets operate; less
secure foreign banks or securities depositories than those in the U.S.; less
standardization of accounting standards and market regulations in certain
foreign countries; and varying foreign controls on investment. Foreign
investments may also be affected by administrative difficulties, such as delays
in clearing and settling transactions. Additionally, securities of foreign
companies may be denominated in foreign currencies. Exchange rate fluctuations
may reduce or eliminate gains or create losses. Hedging strategies intended to
reduce this risk may not perform as expected. These factors may make foreign
investments more volatile and potentially less liquid than U.S. investments.

CONVERTIBLE AND DEBT SECURITIES - the value of convertible and debt securities
may fall when interest rates rise. Convertible and debt securities with longer
maturities tend to be more sensitive to changes in interest rates, usually
making them more volatile than convertible and debt securities with shorter
maturities. The Fund could lose money if the issuer of a convertible or debt
security is unable to meet its financial obligations or goes bankrupt.

MORTGAGE-RELATED SECURITIES - the prices of mortgage-related securities are
sensitive to changes in interest rates and changes in the prepayment patterns
on the underlying instruments. If the principal on the underlying mortgage
notes is repaid faster than anticipated, which typically occurs in times of low
or declining interest rates, the price of the mortgage-related security may
fall.

U.S. GOVERNMENT SECURITIES AND OBLIGATIONS - some U.S. government securities
are backed by the full faith and credit of the U.S. government and are
guaranteed as to both principal and interest by the U.S. Treasury. These
include direct obligations such as U.S. Treasury notes, bills and bonds, as
well as indirect obligations such as the Government National Mortgage
Association ("GNMA"). Other U.S. government securities are not direct
obligations of the U.S. Treasury, but rather are backed by the ability to
borrow directly from the U.S. Treasury. Still others are supported solely by
the credit of the agency or instrumentality itself and are neither guaranteed
nor insured by the U.S. government. No assurance can be given that the U.S.
government would provide financial support to such agencies if needed. U.S.
government securities may be subject to varying degrees of credit risk and all
U.S. government securities may be subject to price declines due to changing
interest rates. Securities directly supported by the full faith and credit of
the U.S. government have less credit risk.

DERIVATIVES - derivatives are subject to the risk of changes in the market
price of the underlying securities, credit risk with respect to the
counterparty to the derivative instruments, and the risk of loss due to changes
in interest rates. The use of certain derivatives may also have a leveraging
effect which may increase the volatility of the Fund and may reduce its
returns.

HIGH-YIELD, LOWER-GRADE DEBT SECURITIES - when the Fund invests in debt
securities rated below investment grade, its credit risk is greater than that
of funds that buy only investment-grade debt securities. Lower-grade debt
securities may be subject to greater market fluctuations and greater risks of
loss of income and principal than investment-grade debt securities. Debt
securities that are (or have fallen) below investment grade are exposed to a
greater risk that their issuers might not meet their debt obligations. The
market for these debt securities may be less liquid, making it difficult for
the Fund to sell them quickly at an acceptable price. These risks can reduce
the Fund's share price and the income it earns.

OTHER INVESTMENT COMPANIES - the main risk of investing in other investment
companies is the risk that the value of the underlying securities might
decrease. Because the Fund invests in other investment companies, you will pay
a proportionate share of the expenses of that other investment company
(including management fees, administration fees and custodial fees) in addition
to the expenses of the Fund.

SECURITIES LENDING - there is the risk that when lending portfolio securities,
the securities may not be available to the Fund on a timely basis and it may
lose the opportunity to sell the securities at a desirable price. Engaging in
securities lending could have a leveraging effect, which may intensify the
market risk, credit risk and other risks associated with investments in the
Fund.

PORTFOLIO TURNOVER - a high portfolio turnover rate involves greater expenses
to the Fund, including brokerage commissions and other transaction costs, which
may have an adverse impact on performance, and is likely to generate more
taxable short-term gains for shareholders.

A more detailed discussion of the risks associated with investing in the Fund
is available in the "Other Considerations" section.

                                       8



BALANCED FUND
--------------------------------------------------------------------------------

[GRAPHIC APPEARS HERE]

     HOW THE FUND HAS PERFORMED

The following information is intended to help you understand the risks of
investing in the Fund. The value of your shares in the Fund will fluctuate
depending on the Fund's investment performance. The bar chart and table below
show the changes in the Fund's performance from year to year, and the table
compares the Fund's performance to the performance of two broad measures of
market performance and a composite index for the same period. The Fund's past
performance (before and after income taxes) is no guarantee of future results.

The bar chart below provides some indication of the risks of investing in the
Fund by showing changes in the performance of the Fund's Class A shares
(1997-2004) and Class O shares (2005 - 2006) from year to year. These figures
do not reflect sales charges for Class A shares and would be lower for Class A
shares if they did.

                      YEAR-BY-YEAR TOTAL RETURNS (%)(1)(2)

                (For the periods ended December 31 of each year)

[GRAPHIC APPEARS HERE]

1997    1998       1999        2000       2001        2002      2003       2004      2005      2006
20.09   16.26      12.05      (1.34)     (4.83)     (11.11)     18.01      8.44      3.40       9.12

            Best and worst quarterly performance during this period:

     Best: 4th quarter 1998:    12.73%
    Worst: 3rd quarter 2002:    (9.46)%

              The Fund's Class O shares' year-to-date total return
                           as of June 29, 2007: 4.44%

The table below provides some indication of the risks of investing in the Fund
by comparing the Fund's Class A and Class O shares' performance to those of two
broad measures of market performance - the S&P 500(Reg. TM) Index and the
Lehman Brothers(Reg. TM) Aggregate Bond Index ("LBAB Index") and a composite
index - consisting of 60% S&P 500(Reg. TM) Index and 40% LBAB Index ("Composite
Index"). It is not possible to invest directly in the indices. The table also
shows returns on a before-tax and after-tax basis. After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.

Actual after-tax returns depend on an investor's tax situation and may differ
from those shown, and after-tax returns shown are not relevant to investors who
hold their Fund shares through tax-deferred arrangements, such as 401(k) plans
or individual retirement accounts.

In some cases the after-tax returns may exceed the return before taxes due to
an assumed tax benefit from any losses on a sale of Fund shares at the end of
the measurement period.

After-tax returns are shown for Class O only. After-tax returns for other
classes will vary.

                       AVERAGE ANNUAL TOTAL RETURNS(1)(2)

                   (For the periods ended December 31, 2006)

                                                                         5 YEARS
                                                       1 YEAR      (OR LIFE OF CLASS)      10 YEARS
 CLASS O RETURN BEFORE TAXES                  %        9.12               8.28(1)            N/A
 Class O Return After Taxes on                %        8.51               7.07(1)            N/A
  Distributions
 Class O Return After Taxes on                %        6.27               6.71(1)            N/A
  Distributions and Sale of Fund Shares
 S&P 500(Reg. TM) Index (reflects no          %       15.79              13.40(4)            N/A
deductions for fees, expenses or
  taxes)(3)
 LBAB Index (reflects no deductions for       %        4.33               3.43(4)            N/A
  fees, expenses or taxes)(5)
 Composite Index (reflects no deductions      %       11.12               9.38(4)            N/A
  for fees, expenses or taxes)
 CLASS A RETURN BEFORE TAXES(6)               %        2.90               3.91              5.92
 S&P 500(Reg. TM) Index (reflects no          %       15.79               6.19              8.42
deductions for fees, expenses or
  taxes)(3)
 LBAB Index (reflects no deductions for       %        4.33               5.06              6.24
  fees, expenses or taxes)(5)
 Composite Index (reflects no deductions      %       11.12               5.98              7.88
  for fees, expenses or taxes)

(1)   Class O shares commenced operations on September 15, 2004. The figures
      shown for 2005-2006 provide performance for Class O shares of the Fund.
      The figures shown for prior years provide performance for Class A shares
      of the Fund. Class A shares are not offered in this Prospectus. Class A
      shares would have substantially similar annual returns as the Class O
      shares because the classes are invested in the same portfolio of
      securities. Annual returns would differ only to the extent Class O and
      Class A shares have different expenses.

(2)   Effective March 1, 2002, ING Investments, LLC began serving as investment
      adviser and ING Investment Management Co., the former investment adviser,
      began serving as sub-adviser.

(3)   The S&P 500(Reg. TM) Index is an unmanaged index that measures the
      performance of securities of approximately 500 of the largest companies
      in the United States.

(4)   The index returns for Class O shares are for the period beginning October
      1, 2004.

                                       9



GLOBAL EQUITY FUNDS
--------------------------------------------------------------------------------

GLOBAL SCIENCE AND TECHNOLOGY FUND

INVESTMENT OBJECTIVE

The Fund seeks long-term capital appreciation. The Fund's investment objective
is not fundamental and may be changed without a shareholder vote.

PRINCIPAL INVESTMENT STRATEGIES

The Fund normally invests at least 80% of its net assets plus borrowings for
investment purposes, if any, in equity securities issued by science and
technology companies in all market capitalization ranges. The Fund will provide
shareholders with at least 60 days' prior notice of any change in this
investment policy.

The Fund will invest primarily in equity securities of U.S. and non-U.S.
companies selected for their rapid and sustainable growth potential from the
development, advancement and use of science and/or technology. The Sub-Adviser
considers science and technology companies to be companies defined as such by
the Global Industrial Classification ("GIC") Standards. The Fund may, from time
to time, invest more than 25% of its net assets in securities whose issuers are
located in a single foreign country. The Fund may invest up to 25% of its net
assets in stocks of issuers in countries with emerging securities markets.

The Fund primarily buys common stock but also can invest in preferred stock and
securities convertible into common and preferred stock, initial public
offerings, and Rule 144A securities. The Sub-Adviser will invest in U.S. and
non-U.S. companies (including companies located in countries with emerging
securities markets) that are expected to offer the best opportunities for
growth and high investment returns. The Sub-Adviser uses a multi-factor screen
to identify stocks that have above-average return potential. The factors and
the weight assigned to a factor may change depending on market conditions. The
most influential factors over time have been revenue and earnings growth,
estimate revisions, profitability and relative value.

The Sub-Adviser will invest in a number of different countries, including the
United States. Some of the industries that are likely to be represented in the
Fund's portfolio holdings include: Application Software, IT Consulting &
Services, Internet Software and Services, Networking Equipment, Telecom
Equipment, Computer Hardware, Computer Storage & Peripherals, Electronic
Equipment and Instruments, Semiconductor Equipment, Semiconductors, Aerospace &
Defense, Electrical Components & Equipment, Biotechnology, Pharmaceuticals,
Healthcare Equipment & Supplies, Healthcare Distribution & Services, Healthcare
Facilities, Industrial Gases, Specialty Chemicals, Advanced Materials,
Integrated Telecom Services, Alternative Carriers and Wireless
Telecommunication Services.

The Fund generally will sell a stock when, in the Sub-Adviser's opinion, there
is a deterioration in the company's fundamentals, a change in macroeconomic
outlook, technical deterioration, valuation issues, a need to rebalance the
portfolio or a better opportunity elsewhere. The Sub-Adviser uses a broad set
of technical tools to enhance the timing of purchase or sell decisions.

The Fund may invest excess cash in short-term U.S. government securities and
other high-quality money market securities for temporary and defensive
purposes. However, when the Fund is engaged in the temporary defensive
position, it may not achieve its investment objective.

The Fund may invest in derivative instruments including, among other things,
foreign currency contracts.

The Fund may lend portfolio securities on a short-term or long-term basis, up
to 331/3% of its total assets.

RISKS

You could lose money on an investment in the Fund. The Fund may be affected by
the following risks, among others:

CONVERTIBLE SECURITIES - the value of convertible securities may fall when
interest rates rise. Convertible securities with longer maturities tend to be
more sensitive to changes in interest rates usually making them more volatile
than convertible securities with shorter maturities. The Fund could lose money
if the issuer of a convertible security is unable to meet its financial
obligations or goes bankrupt.

DERIVATIVES - derivatives are subject to the risk of changes in the market
price of the underlying securities, credit risk with respect to the
counterparty to the derivative instruments, and the risk of loss due to changes
in interest rates. The use of certain derivatives may also have a leveraging
effect which may increase the volatility of the Fund and may reduce its
returns.

FOREIGN INVESTING - foreign investments may be riskier than U.S. investments
for many reasons including: changes in currency exchange rates; unstable
political, social and economic conditions; a lack of adequate or accurate
company information; differences in the way securities markets operate; less
secure foreign banks or securities depositories than those in the United
States; less standardization of accounting standards and market regulations in
certain foreign countries; and varying foreign controls on investments. Foreign
investments may also be affected by administrative difficulties such as delays
in clearing and settling transactions. Additionally, securities of foreign
companies

                                       11



may be denominated in foreign currencies. Exchange rate fluctuations may reduce
or eliminate gains or create losses. Hedging strategies intended to reduce
exchange risk may not perform as expected. These factors may make foreign
investments more volatile and potentially less liquid than U.S. investments. To
the extent the Fund invests in countries with emerging securities markets, the
risks of foreign investing may be greater as these countries may be less
politically and economically stable than other countries. It also may be more
difficult to buy and sell securities in countries with emerging securities
markets. If the Fund invests more than 25% of its assets in securities whose
issuers are located in a single foreign country, the Fund would be more
dependent upon the political and economic circumstances of that country than a
mutual fund that owns stock of companies in many countries.

INITIAL PUBLIC OFFERINGS ("IPOS") - IPOs and companies that have recently gone
public have the potential to produce substantial gains for the Fund. However,
there is no assurance that the Fund will have access to profitable IPOs.
Furthermore, stocks of newly-public companies may decline shortly after the
initial public offering. When the Fund's asset base is small, the impact of
such investments on the Fund's return will be magnified. As the Fund's assets
grow, it is likely that the effect of the Fund's investment in IPOs on the
Fund's return will decline.

MARKET TRENDS - from time to time, the stock market may not favor the
growth-oriented securities in which the Fund invests. Rather, the market could
favor value-oriented securities or may not favor equities at all.

PRICE VOLATILITY - the value of the Fund changes as the prices of its
investments go up or down. Equity securities face market, issuer and other
risks, and their values may fluctuate, sometimes rapidly and unpredictably.
Market risk is the risk that securities may decline in value due to factors
affecting the securities markets generally or particular industries. Issuer
risk is the risk that the value of a security may decline for reasons relating
to the issuer such as changes in the financial condition of the issuer. While
equities may offer the potential for greater long-term growth  than most debt
securities, they generally have higher volatility. The Fund invests in
securities of larger companies which sometimes have more stable prices than
smaller companies. However, the Fund may also invest in securities of small-
and mid-sized companies, which may be more susceptible to price volatility than
larger companies because they typically have fewer financial resources, more
limited product and market diversification, and may be dependent on a few key
managers.

RULE 144A SECURITIES - Rule 144A securities are securities that are not
registered but which are bought and sold solely by institutional investors. The
Fund considers Rule 144A securities to be "liquid," although the market for
such securities typically is less active than public securities markets and may
lead to less ability to sell these securities.

SCIENCE AND TECHNOLOGY - the Fund's focus on stocks in the science and
technology sectors makes it more susceptible to factors affecting those sectors
and more volatile than funds that invest in many different sectors. Therefore,
a downturn in the science and/or technology sectors could hurt the Fund's
performance to a greater extent than a fund that invests in many sectors.

In addition, investing in science and technology companies exposes the Fund to
special risks. For example, rapid advances in science and technology might
cause existing products to become obsolete and the Fund's returns could suffer
to the extent it holds an affected company's shares. Companies in a number of
science and technology sectors are subject to more government regulations and
approval processes than many other industries. This fact may affect a company's
overall profitability and cause its stock price to be more volatile.
Additionally, science and technology companies are dependent upon consumer and
business acceptance as new technologies evolve.

SECURITIES LENDING - there is the risk that when lending portfolio securities,
the securities may not be available to the Fund on a timely basis and it may
lose the opportunity to sell the securities at a desirable price. Engaging in
securities lending could have a leveraging effect, which may intensify the
market risk, credit risk and other risks associated with investments in the
Fund.

A more detailed discussion of the risks associated with investing in the Fund
is available in the "Other Considerations" section.

                                       12



GLOBAL SCIENCE AND TECHNOLOGY FUND
--------------------------------------------------------------------------------

[GRAPHIC APPEARS HERE]

     HOW THE FUND HAS PERFORMED

The following information is intended to help you understand the risks of
investing in the Fund. The value of your shares in the Fund will fluctuate
depending on the Fund's investment performance. The bar chart and table below
show the changes in the Fund's performance from year to year and the table
compares the Fund's performance to the performance of two broad measures of
market performance for the same period. The Fund's past performance (before and
after income taxes) is no guarantee of future results.

The bar chart below provides some indication of the risks of investing in the
Fund by showing changes in the performance of the Fund's Class I shares (2001)
and Class O shares (2002-2007). Class I shares' performance has been revised to
reflect the higher expenses of Class O shares.

                   YEAR-BY-YEAR TOTAL RETURNS (%)(1)(2)(3)(4)

[GRAPHIC APPEARS HERE]

1998   1999   2000     2001        2002      2003        2004      2005       2006      2007
                     (24.87)     (43.01)     47.13      (1.30)     10.82      6.43      18.34

            Best and worst quarterly performance during this period:

    Best: 4th quarter 2001:     39.54%
    Worst:3rd quarter 2001:    (34.97)%

                     AVERAGE ANNUAL TOTAL RETURNS(1)(2)(3)

                   (For the periods ended December 31, 2007)

The table below provides some indication of the risks of investing in the Fund
by comparing the Fund's Class I and Class O shares' performance to that of two
broad measures of market performance - the Standard & Poor's 500(Reg. TM)
Composite Stock Price Index ("S&P 500(Reg. TM) Index") and the NYSE Arca Tech
100 Index(Reg. TM). It is not possible to invest directly in the indices. The
table also shows returns on a before-tax and after-tax basis. After-tax returns
are calculated using the historical highest individual federal marginal income
tax rates and do not reflect the impact of state and local taxes.

Actual after-tax returns depend on an investor's tax situation and may differ
from those shown and after-tax returns shown are not relevant to investors who
hold their Fund shares through tax-deferred arrangements such as 401(k) plans
or individual retirement accounts.

In some cases the after-tax returns may exceed the return before taxes due to
an assumed tax benefit from any losses on a sale of Fund shares at the end of
the measurement period.

After-tax returns are shown for Class O only. After-tax returns for other
classes will vary.

                                                                                           10 YEARS
                                                         1 YEAR         5 YEARS       (OR LIFE OF CLASS)
 CLASS O RETURN BEFORE TAXES                   %        18.34           15.17               1.11(1)
 Class O Return After Taxes on                 %        18.34           15.17               1.11(1)
  Distributions
 Class O Return After Taxes on                 %        11.92           13.36               0.94(1)
  Distributions and Sale of Fund Shares
 S&P 500(Reg. TM) Index (reflects no           %         5.49           12.83               4.89(5)
deductions for fees, expenses or
  taxes)(4)
 NYSE Arca Tech 100 Index(Reg. TM)             %         7.77           15.89               5.36(5)
(reflects no deduction for fees, expenses
  or taxes)(6)
 CLASS I RETURN BEFORE TAXES (ADJUSTED)        %        18.18           15.13              (7.82)(1)
 S&P 500(Reg. TM) Index (reflects no           %         5.49           12.83               2.62(7)
deductions for fees, expenses or
  taxes)(4)
 NYSE Arca Tech 100 Index(Reg. TM)             %         7.77           15.89              (2.42)(7)
(reflects no deduction for fees, expenses
  or taxes)(6)

(1)   Class O shares commenced operations on August 6, 2001. Class I shares
      commenced operations on March 1, 2000. Class I shares are not offered in
      this Prospectus. Class I shares would have substantially similar annual
      returns as the Class O shares because the classes are invested in the
      same portfolio of securities. Annual returns would differ only to the
      extent Class O and Class I shares have different expenses.

(2)   Effective March 1, 2002 ING Investments, LLC began serving as investment
      adviser. Formerly, ING Investment Management Co. served as the investment
      adviser. Effective September 30, 2006, BlackRock Advisors, LLC began
      serving as the sub-adviser to the Fund. On September 29, 2006 BlackRock,
      Inc. consummated a transaction with Merrill Lynch & Co., Inc. whereby
      Merrill Lynch & Co., Inc.'s investment management businesses combined
      with that of BlackRock, Inc. to create a new independent company and on
      September 29, 2006 BlackRock Advisors, Inc. reorganized into BlackRock
      Advisors, LLC. Prior to September 30, 2006 BlackRock Advisors, Inc.
      served as the sub-adviser to the Fund. Prior to January 2, 2004 AIC Asset
      Management, LLC served as the sub-adviser to the Fund.

(3)   Effective February 17, 2004 the Fund changed its name from ING Technology
      Fund to ING Global Science and Technology Fund.

(4)   The S&P 500(Reg. TM) Index is a widely recognized, unmanaged index that
      measures the performance of securities of approximately 500 of the
      largest companies in the United States.

(5)   The index returns for Class O shares are for the period beginning August
      1, 2001.

(6)   The NYSE Arca Tech 100 Index(Reg. TM) is a multi-industry technology
      index measuring the performance of companies using technology innovation
      across a broad spectrum of industries. It is comprised of 100 listed and

                                       13



INDEX PLUS FUNDS
--------------------------------------------------------------------------------

INDEX PLUS LARGECAP FUND
INVESTMENT OBJECTIVE

The Fund seeks to outperform the total return performance of the Standard &
Poor's 500(Reg. TM) Composite Stock Price Index ("S&P 500(Reg. TM) Index" or
"Index"), while maintaining a market level of risk.

PRINCIPAL INVESTMENT STRATEGIES

The Fund invests at least 80% of its assets in securities of large
capitalization companies included in the S&P 500(Reg. TM) Index. The Fund will
provide shareholders with at least 60 days' prior notice of any change in this
investment policy.

The S&P 500(Reg. TM) Index is a stock market index comprised of common stocks
of 500 of the largest companies traded in the U.S. and selected by Standard &
Poor's Corporation. The Sub-Adviser defines large-capitalization companies as
companies that are included in the Index at the time of purchase and that have
a market capitalization of at least $3 billion. The minimum market
capitalization level is reset periodically and will change with market
conditions as the market capitalization range of the companies in the Index
changes. As of June 30, 2007, the smallest company in the Index had a market
capitalization of $1.6 billion and the largest company had a market
capitalization of $472.5 billion. The average capitalization of all companies
in the Index was $26.7 billion.

In managing the Fund, the Sub-Adviser attempts to achieve the Fund's objective
by overweighting those stocks in the Index that the Sub-Adviser believes will
outperform the Index, and underweighting (or avoiding altogether) those stocks
in the Index that the Sub-Adviser believes will underperform the Index. Stocks
that the Sub-Adviser believes are likely to match the performance of the Index
are generally invested in proportion to their representation in the Index. In
determining stock weightings, the Sub-Adviser uses internally developed
quantitative computer models to evaluate various criteria, such as the
financial strength of each company and its potential for strong, sustained
earnings growth. Although the Fund will not hold all the stocks in the Index,
the Sub-Adviser expects that there will be a close correlation between the
performance of the Fund and that of the Index in both rising and falling
markets, as the Fund is designed to have risk characteristics (e.g.,
price-to-earnings ratio, dividend yield, volatility) that approximate those of
the Index.

The Fund may invest in derivative instruments.

The Fund may invest in other investment companies to the extent permitted under
the Investment Company Act of 1940, as amended, and the rules and regulations
thereunder.

The Sub-Adviser may sell securities for a variety of reasons, such as to secure
gains, limit losses, or redeploy assets into opportunities believed to be more
promising, among others.

The Fund may lend portfolio securities on a short-term or long-term basis, up
to 33 1/3% of its total assets.

RISKS

You could lose money on an investment in the Fund. The Fund may be affected by
the following risks, among others:

PRICE VOLATILITY - the value of the Fund changes as the prices of its
investments go up or down. Equity securities face market, issuer and other
risks, and their values may fluctuate, sometimes rapidly and unpredictably.
Market risk is the risk that securities may decline in value due to factors
affecting the securities markets generally or particular industries. Issuer
risk is the risk that the value of a security may decline for reasons relating
to the issuer such as changes in the financial condition of the issuer. While
equities may offer the potential for greater long-term growth  than most debt
securities, they generally have higher volatility.The Fund invests primarily in
securities of larger companies, which sometimes have more stable prices than
smaller companies.

MANAGER - the success of the Fund's strategy depends significantly on the
Sub-Adviser's skill in determining which securities to overweight, underweight
or avoid altogether.

DERIVATIVES - derivatives are subject to the risk of changes in the market
price of the underlying securities, credit risk with respect to the
counterparty to the derivative instruments, and the risk of loss due to changes
in interest rates. The use of certain derivatives may also have a leveraging
effect which may increase the volatility of the Fund and may reduce its
returns.

SECURITIES LENDING - there is the risk that when lending portfolio securities,
the securities may not be available to the Fund on a timely basis and it may
lose the opportunity to sell the securities at a desirable price. Engaging in
securities lending could have a leveraging effect, which may intensify the
market risk, credit risk and other risks associated with investments in the
Fund.

OTHER INVESTMENT COMPANIES - the main risk of investing in other investment
companies is the risk that the value of the underlying securities might
decrease. Because the Fund invests in other investment companies, you will pay
a proportionate share of the expenses of that other investment company
(including management fees, administration fees and custodial fees) in addition
to the expenses of the Fund.

A more detailed discussion of the risks associated with investing in the Fund
is available in the "Other Considerations" section.

                                       15



INDEX PLUS LARGECAP FUND
--------------------------------------------------------------------------------

[GRAPHIC APPEARS HERE]

     HOW THE FUND HAS PERFORMED

The following information is intended to help you understand the risks of
investing in the Fund. The value of your shares in the Fund will fluctuate
depending on the Fund's investment performance. The bar chart and table below
show the changes in the Fund's performance from year to year, and the table
compares the Fund's performance to the performance of a broad measure of market
performance for the period. The Fund's past performance (before and after
income taxes) is no guarantee of future results.  The bar chart below provides
some indication of the risks of investing in the Fund by showing changes in the
performance of the Fund's Class I shares (1997-2001) and Class O shares
(2002-2006) from year to year. Class I shares' performance has been adjusted to
reflect the higher expenses of the Class O shares.

                      YEAR-BY-YEAR TOTAL RETURNS (%)(1)(2)

                (For the periods ended December 31 of each year)

[GRAPHIC APPEARS HERE]

1997    1998       1999        2000        2001        2002      2003       2004      2005      2006
33.61   32.15      24.20      (9.69)     (14.20)     (22.02)     25.21      9.92      4.98      14.01

            Best and worst quarterly performance during this period:

     Best: 4th quarter 1998:     22.42%
    Worst: 3rd quarter 2002:    (17.35)%

              The Fund's Class O shares' year-to-date total return
                           as of June 29, 2007: 6.26%

The table below provides some indication of the risks of investing in the Fund
by comparing the Fund's Class I and Class O shares' performance to that of a
broad measure of market performance - S&P 500(Reg. TM) Index. Class I shares'
performance has been adjusted to reflect the higher expenses of Class O shares.
It is not possible to invest directly in the index. The table also shows
returns on a before-tax and after-tax basis. After-tax returns are calculated
using the historical highest individual federal marginal income tax rates and
do not reflect the impact of state and local taxes.

Actual after-tax returns depend on an investor's tax situation and may differ
from those shown, and after-tax returns shown are not relevant to investors who
hold their Fund shares through tax-deferred arrangements, such as 401(k) plans
or individual retirement accounts.

In some cases the after-tax returns may exceed the return before taxes due to
an assumed tax benefit from any losses on a sale of Fund shares at the end of
the measurement period.

After-tax returns are shown for Class O only. After-tax returns for other
classes will vary.

                       AVERAGE ANNUAL TOTAL RETURNS(1)(2)

                   (For the periods ended December 31, 2006)

                                                                                        10 YEARS
                                                       1 YEAR         5 YEARS      (OR LIFE OF CLASS)
 CLASS O RETURN BEFORE TAXES                  %       14.01           5.13              3.70(1)
 Class O Return After Taxes on                %       13.85           4.94              3.46(1)
  Distributions
 Class O Return After Taxes on                %        9.32           4.35              3.07(1)
  Distributions and Sale of Fund Shares
 S&P 500(Reg. TM) Index (reflects no          %       15.79           6.19              4.78(4)
deduction for fees, expenses or
  taxes)(3)
 CLASS I RETURN BEFORE TAXES (ADJUSTED)       %       14.03           5.13              8.11
 S&P 500(Reg. TM) Index (reflects no          %       15.79           6.19              8.42
deduction for fees, expenses or
  taxes)(3)

(1)   Class O shares commenced operations on August 1, 2001. Class I shares are
      not offered in this Prospectus. Class I shares would have substantially
      similar annual returns as the Class O shares because the classes are
      invested in the same portfolio of securities. Annual returns would differ
      only to the extent Class O and Class I shares have different expenses.

(2)   Effective March 1, 2002, ING Investments, LLC began serving as investment
      adviser and ING Investment Management Co., the former investment adviser,
      began serving as sub-adviser.

(3)   The S&P 500(Reg. TM) Index is an unmanaged index that measures the
      performance of securities of approximately 500 of the largest companies
      in the United States.

(4)   The index return for Class O shares is for the period beginning August 1,
      2001.

                                       16



INDEX PLUS MIDCAP FUND

INVESTMENT OBJECTIVE

The Fund seeks to outperform the total return performance of the Standard &
Poor's MidCap 400 Index ("S&P MidCap 400 Index" Or "Index"), while maintaining
a market level of risk.

PRINCIPAL INVESTMENT STRATEGIES

The Fund invests at least 80% of its assets in securities of mid-
capitalization companies included in the S&P MidCap 400 Index. The Fund will
provide shareholders with at least 60 days' prior notice of any change in this
investment policy.

The S&P MidCap 400 Index is a stock market index comprised of common stocks of
400 mid-capitalization companies traded in the U.S. and selected by Standard &
Poor's Corporation. The Sub-Adviser defines mid-capitalization companies as
companies that are included in the Index at the time of purchase. The market
capitalization range is reset monthly and will change with market conditions as
the range of the companies in the Index changes. As of June 30, 2007, the
smallest company in the Index had a market capitalization of $510 million and
the largest company had a market capitalization of $10.7 billion.

In managing the Fund, the Sub-Adviser attempts to achieve the Fund's objective
by overweighting those stocks in the Index that the Sub-Adviser believes will
outperform the Index, and underweighting (or avoiding altogether) those stocks
in the Index that the Sub-Adviser believes will underperform the Index. Stocks
that the Sub-Adviser believes are likely to match the performance of the Index
are generally invested in proportion to their representation in the Index. In
determining stock weightings, the Sub-Adviser uses internally developed
quantitative computer models to evaluate various criteria, such as the
financial strength of each issuer and its potential for strong, sustained
earnings growth. Although the Fund will not hold all of the stocks in the
Index, the Sub-Adviser expects that there will be a close correlation between
the performance of the Fund and that of the Index in both rising and falling
markets, as the Fund is designed to have risk characteristics (e.g.,
price-to-earnings ratio, dividend yield, volatility) which approximate those of
the Index.

The Fund may invest in derivative instruments.

The Fund may invest in other investment companies to the extent permitted under
the Investment Company Act of 1940, as amended, and the rules and regulations
thereunder.

The Sub-Adviser may sell securities for a variety of reasons, such as to secure
gains, limit losses, or redeploy assets into opportunities believed to be more
promising, among others.

The Fund may lend portfolio securities on a short-term or long-term basis, up
to 33 1/3% of its total assets.

RISKS

You could lose money on an investment in the Fund. The Fund may be affected by
the following risks, among others:

PRICE VOLATILITY - the value of the Fund changes as the prices of its
investments go up or down. Equity securities face market, issuer and other
risks, and their values may fluctuate, sometimes rapidly and unpredictably.
Market risk is the risk that securities may decline in value due to factors
affecting the securities markets generally or particular industries. Issuer
risk is the risk that the value of a security may decline for reasons relating
to the issuer such as changes in the financial condition of the issuer. While
equities may offer the potential for greater long-term growth than most debt
securities, they generally have higher volatility.

MID-SIZED COMPANIES - the stocks of mid-sized companies may be more susceptible
to greater price volatility than those of larger companies because they
typically have fewer financial resources, more limited product and market
diversification, and may be dependent on a few key managers. They tend to be
more volatile and less liquid than stocks of larger companies.

MANAGER - the success of the Fund's strategy depends significantly on the
Sub-Adviser's skill in determining which securities to overweight, underweight
or avoid altogether.

DERIVATIVES - derivatives are subject to the risk of changes in the market
price of the underlying securities, credit risk with respect to the
counterparty to the derivative instruments and the risk of loss due to changes
in interest rates. The use of certain derivatives may also have a leveraging
effect which may increase the volatility of the Fund. The use of derivatives
may reduce returns for the Fund.

OTHER INVESTMENT COMPANIES - the main risk of investing in other investment
companies is the risk that the value of the underlying securities might
decrease. Because the Fund invests in other investment companies, you will pay
a proportionate share of the expenses of that other investment company
(including management fees, administration fees and custodial fees) in addition
to the expenses of the Fund.

SECURITIES LENDING - there is the risk that when lending portfolio securities,
the securities may not be available to the Fund on a timely basis and it may
lose the opportunity to sell the securities at a desirable price. Engaging in
securities lending could have a leveraging effect, which may intensify the
market risk, credit risk and other risks associated with investments in the
Fund.

A more detailed discussion of the risks associated with investing in the Fund
is available in the "Other Considerations" section.

                                       17

INDEX PLUS MIDCAP FUND
--------------------------------------------------------------------------------

[GRAPHIC APPEARS HERE]

HOW THE FUND HAS PERFORMED

The following information is intended to help you understand the risks of
investing in the Fund. The value of your shares in the Fund will fluctuate
depending on the Fund's investment performance. The bar chart and table below
show the changes in the Fund's performance from year to year, and the table
compares the Fund's performance to the performance of a broad measure of market
performance for the period. The Fund's past performance (before and after
income taxes) is no guarantee of future results. The bar chart below provides
some indication of the risks of investing in the Fund by showing changes in the
performance of the Fund's Class I shares (1999-2001) and Class O shares
(2002-2006) from year to year. Class I shares' performance has been adjusted to
reflect the higher expenses of the Class O shares.

YEAR-BY-YEAR TOTAL RETURNS (%)(1)(2)

(For the periods ended December 31 of each year)

[GRAPHIC APPEARS HERE]

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
15.31 19.69 (1.83) (12.66) 31.70 16.05 10.64 8.89

Best and worst quarterly performance during this period:

Best: 4th quarter 1999: 18.72%
Worst: 3rd quarter 2002: (15.36)%

The Fund's Class O shares' year-to-date total return
as of June 29, 2007: 11.78%

The table below provides some indication of the risks of investing in the Fund
by comparing the Fund's Class I and Class O shares' performance to that of a
broad measure of market performance - S&P MidCap 400 Index. Class I shares'
performance has been adjusted to reflect the higher expenses of Class O shares.
It is not possible to invest directly in the index. The table also shows
returns on a before-tax and after-tax basis. After-tax returns are calculated
using the historical highest individual federal marginal income tax rates and
do not reflect the impact of state and local taxes.

Actual after-tax returns depend on an investor's tax situation and may differ
from those shown, and after-tax returns shown are not relevant to investors who
hold their Fund shares through tax-deferred arrangements, such as 401(k) plans
or individual retirement accounts.

In some cases the after-tax returns may exceed the return before taxes due to
an assumed tax benefit from any losses on a sale of Fund shares at the end of
the measurement period.

After-tax returns are shown for Class O only. After-tax returns for other share
classes will vary.

AVERAGE ANNUAL TOTAL RETURNS(1)(2)

(For the periods ended December 31, 2006)

10 YEARS
1 YEAR 5 YEARS (OR LIFE OF CLASS)
CLASS O RETURN BEFORE TAXES % 8.89 9.96 9.01(1)
Class O Return After Taxes on % 7.30 9.43 8.49(1)
Distributions
Class O Return After Taxes on % 7.17 8.58 7.73(1)
Distributions and Sale of Fund Shares
S&P MidCap 400 Index (reflects no % 10.32 10.89 10.00(4)
deduction for fees, expenses or
taxes)(3)
CLASS I RETURN BEFORE TAXES (ADJUSTED) % 8.89 9.95 11.73(1)
S&P MidCap 400 Index (reflects no % 10.32 10.89 11.91(5)
deduction for fees, expenses or
taxes)(3)

(1) Class O shares commenced operations on August 1, 2001. Class I shares
commenced operations on February 3, 1998. Class I shares are not offered
in this Prospectus. Class I shares would have substantially similar
annual returns as the Class O shares because the classes are invested in
the same portfolio of securities. Annual returns would differ only to the
extent Class O and Class I shares have different expenses.

(2) Effective March 1, 2002, ING Investments, LLC began serving as investment
adviser and ING Investment Management Co., the former investment adviser,
began serving as sub-adviser.

(3) The S&P MidCap 400 Index is an unmanaged index that measures the
performance of the mid-size company segment of the U.S. market.

(4) The index return for Class O shares is for the period beginning August 1,
2001.

(5) The index return for Class I shares is for the period beginning February
1, 1998.



INDEX PLUS SMALLCAP FUND

INVESTMENT OBJECTIVE

The Fund seeks to outperform the total return performance of the Standard &
Poor's SmallCap 600 Index ("S&P SmallCap 600 Index" or "Index"), while
maintaining a market level of risk.

PRINCIPAL INVESTMENT STRATEGIES

The Fund invests at least 80% of its assets in securities of small-
capitalization companies included in the S&P SmallCap 600 Index. The Fund will
provide shareholders with at least 60 days' prior notice of any change in this
investment policy.

The S&P SmallCap 600 Index is a stock market index comprised of common stocks
of 600 small-capitalization companies traded in the U.S. and selected by
Standard & Poor's Corporation. The Sub-Adviser defines small-capitalization
companies as companies that are included in the Index at the time of purchase.
The market capitalization range is reset monthly and will change with market
conditions as the range of the companies in the Index changes. As of June 30,
2007, the smallest company in the Index had a market capitalization of $70
million and the largest company had a market capitalization of $5 billion.

In managing the Fund, the Sub-Adviser attempts to achieve the Fund's objective
by overweighting those stocks in the Index that the Sub-Adviser believes will
outperform the Index, and underweighting (or avoiding altogether) those stocks
in the Index that the Sub-Adviser believes will underperform the Index. Stocks
that the Sub-Adviser believes are likely to match the performance of the Index
are generally invested in proportion to their representation in the Index. In
determining stock weightings, the Sub-Adviser uses internally developed
quantitative computer models to evaluate various criteria, such as the
financial strength of each issuer and its potential for strong, sustained
earnings growth. Although the Fund will not hold all of the stocks in the
Index, the Sub-Adviser expects that there will be a close correlation between
the performance of the Fund and that of the Index in both rising and falling
markets, as the Fund is designed to have risk characteristics (e.g.,
price-to-earnings ratio, dividend yield, volatility) which approximate those of
the Index.

The Sub-Adviser may sell securities for a variety of reasons, such as to secure
gains, limit losses, or redeploy assets into opportunities believed to be more
promising, among others.

The Fund may invest in derivative instruments.

The Fund may invest in other investment companies to the extent permitted under
the Investment Company Act of 1940, as amended, and the rules and regulations
thereunder.

The Fund may lend portfolio securities on a short-term or long-term basis, up
to 33 1/3% of its total assets.

RISKS

You could lose money on an investment in the Fund. The Fund may be affected by
the following risks, among others:

PRICE VOLATILITY - the value of the Fund changes as the prices of its
investments go up or down. Equity securities face market, issuer and other
risks, and their values may fluctuate, sometimes rapidly and unpredictably.
Market risk is the risk that securities may decline in value due to factors
affecting the securities markets generally or particular industries. Issuer
risk is the risk that the value of a security may decline for reasons relating
to the issuer such as changes in the financial condition of the issuer. While
equities may offer the potential for greater long-term growth than most debt
securities, they generally have higher volatility.

SMALL-SIZED COMPANIES - stocks of smaller companies carry higher risks than
stocks of larger companies.

o  Smaller companies may lack the management experience, financial resources,
   product diversification and competitive strengths of larger companies.
o  In many instances, the frequency and volume of trading in small
   capitalization stocks are substantially less than stocks of larger
   companies. As a result, the stocks of smaller companies may be subject to
   wider price fluctuations.
o  When selling a large quantity of a particular stock, the Fund may have to
   sell at a discount from quoted prices or may have to make a series of small
   sales over an extended period of time due to the more limited trading
   volume of smaller company stocks.
o  Stocks of smaller companies tend to be more volatile than stocks of larger
   companies and can be particularly sensitive to unexpected changes in
   interest rates, borrowing costs and earnings.

MANAGER - the success of the Fund's strategy depends significantly on the
Sub-Adviser's skill in determining which securities to overweight, underweight
or avoid altogether.

DERIVATIVES - derivatives are subject to the risk of changes in the market
price of the underlying securities, credit risk with respect to the
counterparty to the derivative instruments and the risk of loss due to changes
in interest rates. The use of certain derivatives may also have a leveraging
effect which may increase the volatility of the Fund. The use of derivatives
may reduce returns for the Fund.

OTHER INVESTMENT COMPANIES - the main risk of investing in other investment
companies is the risk that the value of the underlying securities might
decrease. Because the Fund invests in other investment companies, you will pay
a proportionate share of the expenses of that other investment company
(including management fees, administration fees and custodial fees) in addition
to the expenses of the Fund.

SECURITIES LENDING - there is the risk that when lending portfolio securities,
the securities may not be available to the Fund on a timely basis and it may
lose the opportunity to sell the securities at a desirable price. Engaging in
securities lending could have a leveraging effect, which may intensify the
market risk, credit risk and other risks associated with investments in the
Fund.

A more detailed discussion of the risks associated with investing in the Fund
is available in the "Other Considerations" section.

                                       19

INDEX PLUS SMALLCAP FUND
--------------------------------------------------------------------------------

[GRAPHIC APPEARS HERE]

HOW THE FUND HAS PERFORMED

The following information is intended to help you understand the risks of
investing in the Fund. The value of your shares in the Fund will fluctuate
depending on the Fund's investment performance. The bar chart and table below
show the changes in the Fund's performance from year to year, and the table
compares the Fund's performance to the performance of a broad measure of market
performance for the period. The Fund's past performance (before and after
income taxes) is no guarantee of future results. The bar chart below provides
some indication of the risks of investing in the Fund by showing changes in the
performance of the Fund's Class I shares (1999-2002) and Class O shares
(2002-2006) from year to year. Class I shares' performance has been adjusted to
reflect the higher expenses of the Class O shares.

YEAR-BY-YEAR TOTAL RETURNS (%)(1)(2)

(For the periods ended December 31 of each year)

[GRAPHIC APPEARS HERE]

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
10.02 7.57 2.97 (12.72) 35.71 21.54 6.97 13.44

Best and worst quarterly performance during this period:

Best: 2nd quarter 2003: 18.17%
Worst: 3rd quarter 2002: (17.09)%

The Fund's Class O shares' year-to-date total return
as of June 29, 2007: 6.16%

The table below provides some indication of the risks of investing in the Fund
by comparing the Fund's Class I and Class O shares' performance to that of a
broad measure of market performance - S&P SmallCap 600 Index. Class I shares'
performance has been adjusted to reflect the higher expenses of Class O shares.
It is not possible to invest directly in the index. The table also shows
returns on a before-tax and after-tax basis. After-tax returns are calculated
using the historical highest individual federal marginal income tax rates and
do not reflect the impact of state and local taxes.

In some cases the after-tax returns may exceed the return before taxes due to
an assumed tax benefit from any losses on a sale of Fund shares at the end of
the measurement period.

After-tax returns are shown for Class O only. After-tax returns for other share
classes will vary.

AVERAGE ANNUAL TOTAL RETURNS(1)(2)

(For the periods ended December 31, 2006)

10 YEARS
1 YEAR 5 YEARS (OR LIFE OF CLASS)
CLASS O RETURN BEFORE TAXES % 13.44 11.80 11.15(1)
Class O Return After Taxes on % 11.42 11.11 10.51(1)
Distributions
Class O Return After Taxes on % 10.03 10.09 9.54(1)
Distributions and Sale of Fund Shares
S&P SmallCap 600 Index (reflects no % 15.12 12.49 11.89(4)
deduction for fees, expenses or
taxes)(3)
CLASS I RETURN BEFORE TAXES (ADJUSTED) % 13.47 11.82 8.82(1)
S&P SmallCap 600 Index (reflects no % 15.12 12.49 10.46(5)
deduction for fees, expenses or
taxes)(3)

(2) Effective March 1, 2002, ING Investments, LLC began serving as investment
adviser and ING Investment Management Co., the former investment adviser,
began serving as sub-adviser.

(3) The S&P SmallCap 600 Index is an unmanaged index that measures the
performance of the small-size company segment of the U.S. market.

(4) The index return for Class O shares is for the period beginning August 1,
2001.

(5) The index return for Class I shares is for the period beginning February
1, 1998.



ING STRATEGIC ALLOCATION FUNDS
--------------------------------------------------------------------------------

ING STRATEGIC ALLOCATION CONSERVATIVE FUND

ING STRATEGIC ALLOCATION GROWTH FUND

ING STRATEGIC ALLOCATION MODERATE FUND

INVESTMENT OBJECTIVES

ING Strategic Allocation Conservative Fund seeks to provide total return
consistent with preservation of capital.

ING Strategic Allocation Growth Fund seeks to provide capital appreciation.

ING Strategic Allocation Moderate Fund seeks to provide total return (i.e.,
income and capital appreciation, both realized and unrealized).

ALLOCATION OPTIONS

The ING Strategic Allocation Funds are asset allocation funds that have been
designed for investors with different investment goals:

o  Strategic Allocation Conservative is managed for investors primarily seeking
   total return consistent with capital preservation who generally have an
   investment horizon exceeding 5 years and who have a low level of risk
   tolerance.

o  Strategic Allocation Growth is managed for investors seeking capital
   appreciation who generally have an investment horizon exceeding 15 years
   and who have a high level of risk tolerance.

o  Strategic Allocation Moderate is managed for investors seeking a balance
   between income and capital appreciation who generally have an investment
   horizon exceeding 10 years and who have a moderate level of risk tolerance.

Investors should consult with their investment professional to determine
whether an ING Strategic Allocation Fund is suited to their financial needs,
investment time horizon and risk tolerance level.

ALLOCATION STRATEGIES

Under normal market conditions, the Sub-Adviser allocates the assets of each
Fund, in varying degrees, among several classes of equities, fixed-income
securities and money market instruments. The percentage weights of each Fund's
assets allocated to each such asset class are described in the chart below. The
asset allocation limits apply at the time of purchase of a particular security.

                                    ING                  ING               ING
                                 STRATEGIC         STRATEGIC         STRATEGIC
                                ALLOCATION         ALLOCATION        ALLOCATION
                               CONSERVATIVE          GROWTH           MODERATE
 ASSET CLASS                      FUND(1)             FUND            FUND(2)
 EQUITIES
 DOMESTIC STOCKS
 Range                                 0-70%           10-100%             0-75%
 INTERNATIONAL STOCKS
 Range                                 0-20%             0-30%             0-20%
 FIXED-INCOME
 Range                                0-100%             0-40%             0-70%
 MONEY MARKET INSTRUMENTS
 Range                                 0-30%             0-30%             0-30%

(1)   ING Strategic Allocation Conservative Fund will invest no more than 35%
      of its assets in any combination of the following asset sub-classes:
      small-/mid-capitalization stocks, high-yield bonds, international stocks
      and international fixed-income securities.

(2)   ING Strategic Allocation Moderate Fund will invest no more than 60% of
      its assets in any combination of the following asset sub-classes:
      small-/mid-capitalization stocks, high-yield bonds, international stocks
      and international fixed-income securities.

The Sub-Adviser uses a Composite Index as the benchmark index to which it
compares the performance of each ING Strategic Allocation Fund. Each Composite
Index is a blended index that is derived from the asset class comparative
indices set out in the chart below. The chart shows the weightings for each
asset class comparative index represented in each benchmark Composite Index, as
a percentage of the Composite Index. Each asset class comparative index that is
blended into the benchmark Composite Index is described immediately following
the performance presentations for the ING Strategic Allocation Funds in this
Prospectus.

                                       21

RUSSELL 3000(Reg. TM)
COMPOSITE INDEX INDEX
Strategic Allocation Conservative 35%
Composite
Strategic Allocation Growth Composite 70%
Strategic Allocation Moderate Composite 55%

MORGAN STANLEY
CAPITAL INTERNATIONAL LEHMAN BROTHERS(Reg. TM) 91-DAY
EUROPE, AUSTRALASIA AND AGGREGATE U.S. TREASURY
COMPOSITE INDEX FAR EAST(Reg. TM) INDEX BOND INDEX BILL RATE
Strategic Allocation Conservative 0% 55% 10%
Composite
Strategic Allocation Growth Composite 10% 20% 0%
Strategic Allocation Moderate Composite 5% 35% 5%

To remain consistent with each Fund's investment objective and intended level
of risk tolerance, the Sub-Adviser has instituted both a benchmark percentage
allocation and a Fund-level range allocation for each asset class set out
above. The benchmark percentage for each asset class assumes neutral market and
economic conditions. The Fund-level range allows the Sub-Adviser to vary the
weightings of each asset class in each Fund to take advantage of opportunities
as market and economic conditions change.

Each Fund's asset allocation may vary from the benchmark allocation (within the
permissible range) based on the Sub-Adviser's ongoing evaluation of the
expected returns and risks of each asset class relative to other classes. The
Sub-Adviser may vary each Fund's asset allocation within a given asset class to
the full extent of the permissible range. Among the criteria the Sub-Adviser
evaluates to determine allocations are economic and market conditions,
including changes in circumstances with respect to particular asset classes,
geographic regions, industries or issuers and interest rate movements.

PRINCIPAL INVESTMENT STRATEGIES

Set out below are the strategies employed by the Sub-Adviser in selecting
investments for the ING Strategic Allocation Funds' equity, fixed-income, and
money market securities asset classes. The segment of a Fund's assets that may
be invested in each asset class are subject to the allocation ranges set out in
the chart above.

EQUITY SECURITIES - DOMESTIC STOCKS

LARGE-CAPITALIZATION STOCKS - Each Fund may invest a segment of its assets in
stocks included in the Standard & Poor's 500(Reg. TM) Composite Stock Price
Index ("S&P 500(Reg. TM) Index"). The S&P 500(Reg. TM) Index is an unmanaged
index that measures the performance of securities of approximately 500
large-capitalization companies traded in the U.S. and selected by Standard &
Poor's Corporation. As of June 30, 2007, the smallest company in the S&P
500(Reg. TM) Index had a market capitalization of $1.6 billion, the largest
company had a market capitalization of $472.5 billion and the average
capitalization of all companies in the S&P 500(Reg. TM) Index was $26.7
billion. In selecting large-capitalization stocks for each Fund, the
Sub-Adviser attempts to overweight those stocks in the S&P 500(Reg. TM) Index
that it believes will outperform the Index, and underweight (or avoid
altogether) those stocks that it believes will underperform the index.

SMALL-/MID-CAPITALIZATION STOCKS - the Funds may invest a segment of their
assets in small- and mid-capitalization stocks (typically stocks included in
the Standard & Poor's MidCap 400 Composite Stock Price Index ("S&P MidCap 400
Index"), the Standard & Poor's SmallCap 600 Composite Stock Price Index ("S&P
SmallCap 600 Index"), and the Russell 2500(Reg. TM) Index). The S&P MidCap 400
Index and the S&P SmallCap 600 Index measure the performance of the 400
mid-capitalization and 600 small-capitalization companies, respectively, traded
in the U.S., as selected by Standard & Poor's Corporation. The Russell
2500(Reg. TM) Index measures the performance of the 2,500 smallest companies in
the Russell 3000(Reg. TM) Index. The market capitalization range of each index
is reset monthly and will change with market/conditions as the range of the
companies in each index changes. As of June 30, 2007, the market capitalization
of the smallest company in the S&P MidCap 400 Index was $510 million and the
largest company had a market capitalization of $10.7 billion. As of June 30,
2007, the market capitalization of the smallest company in the S&P SmallCap 600
Index was $70 million and the largest company had a market capitalization of $5
billion. As of June 30, 2007 the market capitalization of the smallest company
in the Russell 2500(Reg. TM) Index was $125 million and the largest company had
a market capitalization of $8.5 billion.

To evaluate which large-, mid- and small-capitalization stocks in which to
invest, the Sub-Adviser uses various methods, including, but not limited to
internally developed quantitative computer models to evaluate various criteria,
such as the financial strength of each portfolio company and its potential for
strong, sustained earnings growth.

EQUITY SECURITIES - INTERNATIONAL STOCKS

The Sub-Adviser may invest a segment of each Fund's assets in international
stocks. These securities may include common stocks as well as securities
convertible into common stocks.

FIXED-INCOME SECURITIES

The Sub-Adviser will invest the segment of each Fund's assets allocated to
fixed-income securities in a diversified portfolio of domestic and foreign
fixed-income securities, including, but not limited to corporate, government
and mortgage bonds, which, at the time of purchase, are rated at least BBB- by
Standard & Poor's or Baa3 by Moody's or have an equivalent rating from another
nationally recognized statistical rating organization, or, if unrated, are of
comparable quality. Each Fund may also invest in international fixed-income
securities and may invest up to 15% of the value of its total assets in
high-yield (high risk) debt securities, commonly referred to as "junk bonds,"
rated below investment grade. The dollar-weighted average maturity of the



fixed-income segment of the Fund's portfolio will generally range between three
and ten years.

MONEY MARKET INSTRUMENTS; OTHER INVESTMENTS

MONEY MARKET INSTRUMENTS - each Fund may invest in high quality money market
instruments that the Sub-Adviser believes are appropriate in light of the
Fund's investment objective. Such instruments may include high quality
fixed-income securities denominated in U.S. dollars, with short remaining
maturities, repurchase agreements, U.S. government securities (such as U.S.
Treasury bills and securities issued or sponsored by U.S. government agencies),
corporate debt securities, commercial paper, asset-backed securities,
mortgage-related securities and certain obligations of U.S. and foreign banks,
each of which must be highly rated by independent rating agencies or, if
unrated, considered by the Sub-Adviser to be of comparable quality.

OTHER INVESTMENTS - each Fund may, consistent with its investment objective and
allocation strategy, invest in convertible securities, securities of foreign
governments and supranational organizations, and municipal bonds, may purchase
structured debt obligations and may engage in dollar roll transactions and swap
agreements. The Funds may use options and futures contracts involving
securities, securities indices and interest rates. Each Fund may also invest in
other investment companies, including exchange-traded funds ("ETFs"), HOLDRs
and SPDRs to the extend permitted by the Investment Company Act of 1940, as
amended ("1940 Act").

Each Fund may lend portfolio securities on a short-term or long-term basis, up
to 33 1/3% of its total assets.

The Sub-Adviser may sell securities for a variety of reasons, such as to secure
gains, limit losses, or redeploy assets into opportunities believed to be more
promising.

Each Fund may engage in frequent and active trading of portfolio securities to
achieve its investment objective.

RISKS

You could lose money on an investment in the Funds. The Funds maybe affected by
the following risks, among others:

ALLOCATION - the success of each Fund's strategy depends on the Sub-Adviser's
skill in allocating Fund assets between equities and debt and in choosing
investments within these categories. Because each Fund's assets are allocated
between equities, fixed-income securities and money market instruments, a Fund
may underperform stock funds when stocks are in favor and underperform bond
funds when bonds are in favor. In addition, each asset type has risks that are
somewhat unique and the performance of each Fund will vary to a greater or
lesser extent depending on the size of the allocation.

PRICE VOLATILITY - the value of each Fund changes as the prices of its
investments go up or down. Equity and debt securities face market, issuer and
other risks, and their values may fluctuate, sometimes rapidly and
unpredictably. Market risk is the risk that securities may decline in value due
to factors affecting the securities markets generally or particular industries.
Issuer risk is the risk that the value of a security may decline for reasons
relating to the issuer, such as changes in the financial condition of the
issuer. While equities may offer the potential for greater long-term growth
than most debt securities, they generally have higher volatility. Each Fund
invests in securities of larger companies, which sometimes have more stable
prices than small companies. However, each Fund may also invest in small- and
mid-sized companies, which may be more susceptible to greater price volatility
than larger companies because they typically have fewer financial resources,
more limited product and market diversification and may be dependent on a few
key managers.

INTEREST RATE - fixed-income securities are subject to the risk that interest
rates will rise, which generally causes bond prices to fall. Economic and
market conditions may cause issuers to default or go bankrupt.

CREDIT - each Fund could lose money if the issuer of a security is unable to
meet its financial obligations or goes bankrupt. This is especially true during
periods of economic uncertainty or economic downturns. Each Fund may be subject
to more credit risk than other funds because they may invest in high-yield debt
securities, which are considered predominantly speculative with respect to the
issuer's continuing ability to meet interest and principal payments.

MORTGAGE-RELATED SECURITIES - the prices of mortgage-related securities, in
addition to being sensitive to changes in interest rates, are also sensitive to
changes in the prepayment patterns on the underlying instruments. If the
principal on the underlying mortgage notes is repaid faster than anticipated,
which typically occurs in times of low or declining interest rates, the price
of the mortgage-related security may fall.

FOREIGN INVESTING - foreign investments may be riskier than U.S. investments
for many reasons, including: changes in currency exchange rates; unstable
political, social and economic conditions; a lack of adequate or accurate
company information; differences in the way securities markets operate; less
secure foreign banks or securities depositories than those in the U.S.; less
standardization of accounting standards and market regulations in certain
foreign countries; and varying foreign controls on investment. Foreign
investments may also be affected by administrative difficulties, such as delays
in clearing and settling transactions. Additionally, securities of foreign
companies may be denominated in foreign currencies. Exchange rate fluctuations
may reduce or eliminate gains or create losses. Hedging strategies intended to
reduce this risk may not perform as expected. These factors may make foreign
investments more volatile and potentially less liquid than U.S. investments.

HIGH-YIELD, LOWER-GRADE DEBT SECURITIES - when a Fund invests in debt
securities rated below investment grade, its credit risks are greater than that
of funds that buy only investment-grade debt securities. Lower-grade debt
securities may be subject to greater market fluctuations and greater risks of
loss of income

                                       23



and principal than investment-grade debt securities. Debt securities that are
(or have fallen) below investment grade are exposed to a greater risk that
their issuers might not meet their debt obligations. The market for these debt
securities may be less liquid, making it difficult for a Fund to sell them
quickly at an acceptable price. These risks can reduce a Fund's share price and
the income it earns.

REPURCHASE AGREEMENTS - repurchase agreements involve the purchase of a
security that the seller has agreed to repurchase at a specified date and
price. If the seller defaults and the collateral value declines the Fund may
incur a loss. If the seller declares bankruptcy, the Fund may not be able to
sell the collateral at the desired time.

CONVERTIBLE SECURITIES - the value of convertible securities may fall when
interest rates rise. Convertible securities with longer maturities tend to be
more sensitive to changes in interest rates, usually making them more volatile
than convertible securities with shorter maturities. The Funds could lose money
if the issuer of a convertible security is unable to meet its financial
obligations or goes bankrupt.

DERIVATIVES - derivatives are subject to the risk of changes in the market
price of the underlying securities, credit risk with respect to the
counterparty to the derivative instruments, and the risk of loss due to changes
in interest rates. The use of certain derivatives may also have a leveraging
effect which may increase the volatility of the Fund and may reduce its
returns.

U.S. GOVERNMENT SECURITIES - some U.S. government securities are backed by the
full faith and credit of the U.S. government and are guaranteed as to both
principal and interest by the U.S. Treasury. These include direct obligations
of the U.S. Treasury such as U.S. Treasury notes, bills and bonds, as well as
indirect obligations including Government National Mortgage Association
("GNMA"), the Small Business Administration and the Farmers Home
Administration, among others. Other U.S. government securities are not direct
obligations of the U.S. Treasury, but rather are backed by the ability to
borrow directly from the U.S. Treasury, including the Federal Financing Bank,
the Federal Home Loan Bank and the U.S. Postal Service. Still other agencies
and instrumentalities are supported solely by the credit of the agency or
instrumentality itself and are neither guaranteed nor insured by the U.S.
government. These include the Federal Home Loan Bank, the Federal Home Loan
Mortgage Corporation and the Federal Farm Credit Bank, among others.
Consequently, the investor must look principally to the agency issuing or
guaranteeing the obligation for ultimate repayment. No assurance can be given
that the U.S. government would provide financial support to such agencies if
needed. U.S. government securities may be subject to varying degrees of credit
risk and all U.S. government securities may be subject to price declines due to
changing interest rates. Securities directly supported by the full faith and
credit of the U.S. government have less credit risk.

OTHER INVESTMENT COMPANIES - the main risk of investing in other investment
companies is the risk that the value of the underlying securities might
decrease. Because the Funds may invest in other investment companies, you will
pay a proportionate share of the expenses of that other investment company
(including management fees, administration fees and custodial fees) in addition
to the expenses of the Funds.

SECURITIES LENDING - there is the risk that when lending portfolio securities,
the securities may not be available to a Fund on a timely basis and it may lose
the opportunity to sell the securities at a desirable price. Engaging in
securities lending could have a leveraging effect which may intensify the
market risk, credit risk and other risks associated with investments in a Fund.

PORTFOLIO TURNOVER - a high portfolio turnover rate involves greater expenses
to a Fund, including brokerage commissions and other transaction costs, which
may have an adverse impact on performance, and is likely to generate more
taxable short-term gains for shareholders.

A more detailed discussion of the risks associated with investing in the Fund
is available in the "Other Considerations" section.

                                       24

ING STRATEGIC ALLOCATION CONSERVATIVE FUND
--------------------------------------------------------------------------------

[GRAPHIC APPEARS HERE]

HOW THE FUND HAS PERFORMED

Because Class O shares had not commenced operations as of December 31, 2006,
the bar chart below provides some indication of the risks of investing in the
Fund by showing the performance of the Fund's Class A shares for the first
calendar year of operations. The figure does not reflect sales charges and
would be lower if it did.

YEAR-BY-YEAR TOTAL RETURNS (%)(1)(2)(3)

(For the periods ended December 31 of each year)

[GRAPHIC APPEARS HERE]

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
6.12 7.16 3.45 (3.02) (5.36) 12.93 7.58 3.31 7.85

Best and worst quarterly performance during this period:

Best: 2nd quarter 2003: 6.59%
Worst: 3rd quarter 2002: (6.81)%

The Fund's Class A shares' year-to-date total return
as of June 29, 2007: 3.48%

The table below provides some indication of the risks of investing in the Fund
by comparing the Fund's Class A shares' performance to that of a broad measure
of market performance - the Lehman Brothers(Reg. TM) Aggregate Bond Index
("LBAB Index") and the Strategic Allocation Conservative Composite Index. It is
not possible to invest directly in the indices. The table also shows returns on
a before-tax and after-tax basis. After-tax returns are calculated using the
historical highest individual federal marginal income tax rates and do not
reflect the impact of state and local taxes.

In some cases the after-tax returns may exceed the return before taxes due to
an assumed tax benefit from any losses on a sale of Fund shares at the end of
the measurement period.

AVERAGE ANNUAL TOTAL RETURNS(1)(2)(3)

(For the periods ended December 31, 2006)

10 YEARS
1 YEAR 5 YEARS (OR LIFE OF CLASS)
CLASS A RETURN BEFORE TAXES(4) % 1.68 3.84 4.38(1)
Class A Return After Taxes on % 0.42 3.09 2.76(1)
Distributions(4)
Class A Return After Taxes on % 1.66 2.97 2.84(1)
Distributions and Sale of Fund Shares(4)
LBAB Index (reflects no deduction for % 4.33 5.06 6.26(6)
fees, expenses, or taxes)(5)
Strategic Allocation Conservative % 8.29 6.01 6.67(6)
Composite Index (reflects no deduction
for fees, expenses, or taxes)(7)

(1) Class A shares commenced operations on January 20, 1997. Class A shares
are not offered in this Prospectus. Class A shares would have
substantially similar annual returns as the Class O shares because the
classes are invested in the same portfolio of securities. Annual returns
would differ only to the extent Class O and Class A shares have different
expenses.

(2) Effective March 1, 2002, ING Investments, LLC began serving as investment
adviser and ING Investment Management Co., the former investment adviser,
began serving as sub-adviser.

(3) Effective April 28, 2006, the Fund changed its name from ING Strategic
Allocation Income Fund to ING Strategic Allocation Conservative Fund.
Effective October 1, 2002, the Fund changed its name from ING Legacy Fund
to ING Strategic Allocation Income Fund.

(4) Reflects deduction of the maximum Class A sales charge of 5.75%

(5) The LBAB Index is a widely recognized, unmanaged index of publicly issued
fixed-rate U.S. government, investment grade, mortgage-backed and
corporate debt securities.

(6) The index returns for Class A shares are for the period beginning
February 1, 1997.

(7) The Strategic Allocation Conservative Composite Index is comprised of 35%
Russell 3000(Reg. TM) Index, 55% LBAB Index and 10% 91-Day U.S. T-Bill.
The Russell 3000(Reg. TM) Index is an unmanaged index that measures the
performance of 3000 U.S. Companies based on total market capitalization.
The LBAB Index is a widely recognized, unmanaged index of publicly issued
fixed rate U.S. governmnet, investment grade, mortgage-backed and
corporate debt securities. The 91-Day U.S. T-Bill is a U.S. government
issued short-term debt sold at a discount and then redeemed at maturity
at the full face value.



ING STRATEGIC ALLOCATION GROWTH FUND
--------------------------------------------------------------------------------

[GRAPHIC APPEARS HERE]

     HOW THE FUND HAS PERFORMED

The following information is intended to help you understand the risks of
investing in the Fund. The value of your shares in the Fund will fluctuate
depending on the Fund's investment performance. The bar chart and table below
show the changes in the Fund's performance from year to year and the table
compares the Fund's performance to the performance of two broad measures of
market performance for the same period. The Fund's past performance (before and
after income taxes) is no guarantee of future results.

Because Class O shares had not commenced operations as of December 31, 2006,
the bar chart below provides some indication of the risks of investing in the
Fund by showing the performance of the Fund's Class A shares for the first
calendar year of operations. The figure does not reflect sales charges and
would be lower if it did.

                    YEAR-BY-YEAR TOTAL RETURNS (%)(1)(2)(3)

                (For the periods ended December 31 of each year)

[GRAPHIC APPEARS HERE]

1997    1998      1999        2000        2001        2002      2003       2004       2005      2006
        4.28      14.55      (2.56)     (12.31)     (15.11)     23.33      11.70      5.57      12.64

            Best and worst quarterly performance during this period:

     Best: 2nd quarter 2003:     13.33%
    Worst: 3rd quarter 2002:    (15.35)%

The Fund's Class A shares' year-to-date total return as of June 29, 2007: 6.07%

The table below provides some indication of the risks of investing in the Fund
by comparing the Fund's Class A shares' performance to that of a broad measure
of market performance - the Russell 3000(Reg. TM) Index and the Strategic
Allocation Growth Composite Index. It is not possible to invest directly in the
indices. The table also shows returns on a before-tax and after-tax basis.
After-tax returns are calculated using the historical highest individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes.

Actual after-tax returns depend on an investor's tax situation and may differ
from those shown, and after-tax returns shown are not relevant to investors who
hold their Fund shares through tax-deferred arrangements, such as 401(k) plans
or individual retirement accounts.

In some cases the after-tax returns may exceed the return before taxes due to
an assumed tax benefit from any losses on a sale of Fund shares at the end of
the measurement period.

                     AVERAGE ANNUAL TOTAL RETURNS(1)(2)(3)

                   (For the periods ended December 31, 2006)

                                                                                        10 YEARS
                                                        1 YEAR        5 YEARS      (OR LIFE OF CLASS)
 CLASS A RETURN BEFORE TAXES(4)                %        6.20          5.56              4.61(1)
 Class A Return After Taxes on                 %        5.30          5.28              3.19(1)
  Distributions(4)
 Class A Return After Taxes on                 %        5.11          4.76              3.18(1)
  Distributions and Sale of Fund Shares(4)
 Russell 3000(Reg. TM) Index (reflects no      %       15.72          7.17              8.13(6)
deduction for fees, expenses, or
  taxes)(5)
 Strategic Allocation Growth Composite         %       14.45          8.54              8.11(6)
  Index (reflects no deduction for
fees, expenses, or taxes)(7)

(1)   Class A shares commenced operations on January 20, 1997. Class A shares
      are not offered in this Prospectus. Class A shares would have
      substantially similar annual returns as the Class O shares because the
      classes are invested in the same portfolio of securities. Annual returns
      would differ only to the extent Class O and Class A shares have different
      expenses.

(2)   Effective March 1, 2002, ING Investments, LLC began serving as investment
      adviser and ING Investment Management Co., the former investment adviser,
      began serving as sub-adviser.

(3)   Effective October 1, 2002, the Fund changed its name from ING Ascent Fund
      to ING Strategic Allocation Growth Fund.

(4)   Reflects deduction of the maximum Class A sales charge of 5.75%.

(5)   The Russell 3000(Reg. TM) Index is an unmanaged index that measures the
      performance of 3000 U.S. companies based on total market capitalization.

(6)   The index returns for Class A shares are for the period beginning
      February 1, 1997.

(7)   The Strategic Allocation Growth Composite Index is comprised of 70%
      Russell 3000(Reg. TM) Index, 10% Morgan Stanley Capital International
      Europe, Australasia, Far East(Reg. TM) Index ("MSCI EAFE(Reg. TM) Index")
      and 20% Lehman Brothers(Reg. TM) Aggregate Bond Index ("LBAB Index"). The
      Russell 3000(Reg. TM) Index is an unmanaged index that measures the
      performance of 3000 U.S. Companies based on total market capitalization.
      MSCI EAFE(Reg. TM) Index is an unmanaged index that measures the
      performance of securities listed on exchanges in markets in Europe,
      Australia and the Far East. The LBAB

                                       26



ING STRATEGIC ALLOCATION MODERATE FUND
--------------------------------------------------------------------------------

[GRAPHIC APPEARS HERE]

     HOW THE FUND HAS PERFORMED

The following information is intended to help you understand the risks of
investing in the Fund. The value of your shares in the Fund will fluctuate
depending on the Fund's investment performance. The bar chart and table below
show the changes in the Fund's performance from year to year and the table
compares the Fund's performance to the performance of two broad measures of
market performance for the same period. The Fund's past performance (before and
after income taxes) is no guarantee of future results.

Because Class O shares had not commenced operations as of December 31, 2006,
the bar chart below provides some indication of the risks of investing in the
Fund by showing the performance of the Fund's Class A shares for the first
calendar year of operations. The figure does not reflect sales charges and
would be lower if it did.

                    YEAR-BY-YEAR TOTAL RETURNS (%)(1)(2)(3)

                (For the periods ended December 31 of each year)

[GRAPHIC APPEARS HERE]

1997    1998      1999        2000       2001        2002      2003       2004      2005      2006
        3.87      10.14      (1.00)     (7.71)     (10.48)     18.56      9.60      4.22      10.55

            Best and worst quarterly performance during this period:

     Best: 2nd quarter 2003:     10.41%
    Worst: 3rd quarter 2002:    (11.59)%

              The Fund's Class A shares' year-to-date total return
                           as of June 29, 2007: 5.17%

The table below provides some indication of the risks of investing in the Fund
by comparing the Fund's Class A shares' performance to that of a broad measure
of market performance - the Russell 3000(Reg. TM) Index and the Strategic
Allocation Moderate Composite Index. It is not possible to invest directly in
the indices. The table also shows returns on a before-tax and after-tax basis.
After-tax returns are calculated using the historical highest individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes.

Actual after-tax returns depend on an investor's tax situation and may differ
from those shown, and after-tax returns shown are not relevant to investors who
hold their Fund shares through tax-deferred arrangements, such as 401(k) plans
or individual retirement accounts.

In some cases the after-tax returns may exceed the return before taxes due to
an assumed tax benefit from any losses on a sale of Fund shares at the end of
the measurement period.

                     AVERAGE ANNUAL TOTAL RETURNS(1)(2)(3)

                   (For the periods ended December 31, 2006)

                                                                                        10 YEARS
                                                        1 YEAR        5 YEARS      (OR LIFE OF CLASS)
 CLASS A RETURN BEFORE TAXES(4)                %        4.17          4.79              4.30(1)
 Class A Return After Taxes on                 %        3.28          4.36              3.09(1)
  Distributions(4)
 Class A Return After Taxes on                 %        3.57          3.98              3.05(1)
  Distributions and Sale of Fund Shares(4)
 Russell 3000(Reg. TM) Index (reflects no      %       15.72          7.17              8.13(6)
deduction for fees, expenses, or
  taxes)(5)
 Strategic Allocation Moderate Composite       %       11.63          7.58              7.57(6)
  Index (reflects no deduction for
fees, expenses, or taxes)(7)

(1)   Class A shares commenced operations on January 20, 1997. Class A shares
      are not offered in this Prospectus. Class A shares would have
      substantially similar annual returns as the Class O shares because the
      classes are invested in the same portfolio of securities. Annual returns
      would differ only to the extent Class O and Class A shares have different
      expenses.

(2)   Effective March 1, 2002, ING Investments, LLC began serving as investment
      adviser and ING Investment Management Co., the former investment adviser,
      began serving as sub-adviser.

(3)   Effective April 28, 2006, ING Strategic Allocation Balanced Fund changed
      its name to ING Strategic Allocation Moderate Fund. Effective October 1,
      2002, the Fund changed its name from ING Crossroad Fund to ING Strategic
      Allocation Balanced Fund.

(4)   Reflects deduction of the maximum Class A sales charge of 5.75%.

(5)   The Russell 3000(Reg. TM) Index is an unmanaged index that measures the
      performance of 3000 U.S. companies based on total market capitalization.

(6)   The index returns for Class A shares are for the period beginning
      February 1, 1997.

(7)   The Strategic Allocation Moderate Composite Index is comprised of 55%
      Russell 3000(Reg. TM) Index, 5% Morgan Stanley Capital International
      Europe, Australasia, Far East(Reg. TM) Index ("MSCI EAFE(Reg. TM)
      Index"), 35% Lehman Brothers(Reg. TM) Aggregate Bond Index ("LBAB Index")
      and 5% 91-Day U.S. T-Bill. The Russell 3000(Reg. TM) Index is an
      unmanaged index that measures the performance of 3000 U.S. companies
      based on total market capitalization. MSCI EAFE(Reg. TM) Index is an
      unmanaged index that measures the performance of securities listed on
      exchanges in markets in Europre, Australia and the Far East. The LBAB
      Index is a widely recognized, unmanaged index of publicly issued fixed
      rate U.S. government, investment grade, mortgage-backed and corporate
      debt securities. The 91-day U.S. T-Bill is a U.S. government issued
      short-term debt sold at a discount and then redeemed at maturity at the
      full face value.

                                       28



FUND EXPENSES
The following table describes the Funds' fees and estimated expenses for Class O
shares of the Funds. These expenses are based on the expenses paid by the Funds
in the most recent fiscal year.. Annual Fund Operating Expenses are deducted
from Fund assets every year and are thus paid indirectly by all shareholders.
Actual expenses paid by the Funds may vary from year to year.

CLASS O SHAREHOLDER FEES

There are no sales charges deducted on initial purchases of Class O shares, no
deferred sales charges applied on redemptions, no sales charges applied to
dividend reinvestments, and no exchange fees. Each Fund has adopted a
Shareholder Services Plan that allows payment of a service fee. The service fee
is used primarily to pay selling dealers and their agents for servicing and
maintaining shareholder accounts. Because the fees are paid out on an ongoing
basis, over time these fees will increase the cost of your investment and may
cost you more than paying other types of sales charges.

                                    CLASS O SHARES
                           ANNUAL FUND OPERATING EXPENSES(1)
                     (as a percentage of average daily net assets)
                                                              Service
                                             Management       (12b-1)          Other
                                                Fees           Fees        Expenses(2)
                                           _____________ ________________ _____________
 Money Market Fund                          0.40%           0.25%(5)       0.22%

___________________________________________
 Balanced Fund                              0.75%           0.25%          0.35%

___________________________________________
 Global Science and Technology Fund         1.05%           0.25%          0.79%

___________________________________________
 Index Plus LargeCap Fund                   0.45%           0.25%          0.28%
 Index Plus MidCap Fund                     0.45%           0.25%          0.32%
 Index Plus SmallCap Fund                   0.45%           0.25%          0.38%

___________________________________________
 Strategic Allocation Conservative Fund     0.80%           0.25%          0.42%
 Strategic Allocation Growth Fund           0.80%           0.25%          0.28%
 Strategic Allocation Moderate Fund         0.80%           0.25%          0.29%

                                                                                                     Net
                                                Acquired           Total            Waivers         Fund
                                            Fund Operating   Fund Operating     Reimbursements    Operating
                                              Expenses(3)       Expenses      and Recoupment(4)   Expenses
                                           ________________ ________________ ___________________ __________
 Money Market Fund                               -            0.87%              (0.25)%(5)       0.62%

___________________________________________
 Balanced Fund                                   -            1.35%              (0.12)%          1.23%

___________________________________________
 Global Science and Technology Fund            N/A            2.09%              (0.34)%          1.75%

___________________________________________
 Index Plus LargeCap Fund                     0.00(6)         0.98%              (0.03)%          0.95%
 Index Plus MidCap Fund                       0.00(6)         1.02%              (0.02)%          1.00%
 Index Plus SmallCap Fund                     0.00(6)         1.08%              (0.08)%          1.00%

___________________________________________
 Strategic Allocation Conservative Fund       0.00(6)         1.47%              (0.32)%          1.15%
 Strategic Allocation Growth Fund             0.00(6)         1.33%              (0.08)%          1.25%
 Strategic Allocation Moderate Fund           0.00(6)         1.34%              (0.14)%          1.20%

(1)   This table shows the estimated operating expenses for Class O shares of
      each Fund as a ratio of expenses to average daily net assets. These
      estimated expenses, unless otherwise noted, are based on each Fund's
      actual operating expenses for its most recently completed fiscal year, as
      adjusted for contractual changes, if any, and fee waivers to which ING
      Investments LLC, the investment adviser to each Fund, has agreed.

(2)   ING Funds Services, LLC receives an annual administration fee equal to
      0.08% of each Fund's average daily net assets which is reflected in
      "Other Expenses."

(3)   The Acquired Fund Fees and Expenses are not fees or expenses incurred by
      the Funds directly. These fees and expenses include each Fund's pro rata
      share of the cumulative expenses charged by the Acquired Funds in which
      the Funds invest. The fees and expenses will vary based on the Fund's
      allocation of assets to, and the annualized net expenses of, the
      particular Acquired Funds. The impact of these fees and expenses is shown
      in "Net Fund Operating Expenses."

(4)   ING Investments, LLC has entered into a written expense limitation
      agreement with each Fund (except Money Market Fund) under which it will
      limit expenses of the Funds, excluding interest, brokerage and
      extraordinary expenses (and Acquired Fund Fees and Expenses), subject to
      possible recoupment by ING Investments, LLC within three years. The
      amount of each Fund's expenses waived, reimbursed or recouped during the
      last fiscal year by ING Investments LLC is shown under the heading
      "Waivers, Reimbursements and Recoupment." The expense limits will
      continue through at least March 1, 2009 for Global Science and Technology
      Fund and October 1, 2008 for all other Funds. The expense limitation
      agreements are contractual and shall renew automatically for one-year
      terms unless ING provides written notice of the termination of the
      expense limitation agreement within 90 days of the end of the then
      current terms or upon termination of the investment management agreement.
      In addition, the expense limitation agreement may be terminated by the
      Company upon at least 90 days' prior written notice to ING Investments,
      LLC. For more information regarding the expense limitation agreement,
      please see the respective Fund's Statement of Additional Information.

(5)   ING Funds Distributor, LLC has contractually agreed to waive the Service
      Fee for Class O shares of Money Market Fund. The fee waiver will continue
      through at least August 1, 2008. There is no guarantee that this waiver
      will continue after that date.

(6)   Amount represents less than 0.01% and is included in Other Expenses.

                                       30



OTHER CONSIDERATIONS

All mutual funds involve risk - some more than others -
and there is always the chance that you could lose money or not earn as much as
you hope. A Fund's risk profile is largely a factor of the principal securities
in which it invests and investment techniques that it uses. The following pages
discuss the risks associated with certain of the types of securities in which
the Funds may invest and certain of the investment practices that the Funds may
use. For more information about these and other types of securities and
investment techniques that may be used by the Funds, see the SAI.

Many of the investment techniques and strategies discussed in this Prospectus
and in the SAI are discretionary, which means that the Adviser or Sub-Adviser
can decide whether to use them or not. The Funds named below may invest in
these securities or use these techniques as part of a Fund's principal
investment strategies. However, the Adviser or Sub-Adviser of any Fund may also
use these investment techniques or make investments in securities that are not
a part of the Fund's principal investment strategy.

PRINCIPAL RISKS

The discussions below identify the Funds that engage in the described strategy
as a principal strategy. For these Funds, the risk associated with the strategy
is a principal risk. Other Funds may engage, to a lesser extent, in these
strategies, and when so engaged are subject to the attendant risks. Please see
the SAI for a further discussion of the principal and other investment
strategies employed by each Fund.

CONVERTIBLE AND DEBT SECURITIES (ALL FUNDS EXCEPT MONEY MARKET FUND, INDEX PLUS
LARGECAP FUND, INDEX PLUS MIDCAP FUND AND INDEX PLUS SMALLCAP FUND). The price
of a convertible and debt security will normally fluctuate in some proportion
to changes in the price of the underlying equity security and as such, is
subject to risks relating to the activities of the issuer and general market
and economic conditions. The income component of convertible and debt
securities causes fluctuations based upon changes in interest rates and the
credit quality of the issuer. Convertible and debt securities are often lower
rated securities. A Fund may be required to redeem or convert a convertible and
debt security before the holder would otherwise choose.

DERIVATIVES (ALL FUNDS EXCEPT MONEY MARKET FUND). Generally, derivatives can be
characterized as financial instruments whose performance is derived, at least
in part, from the performance of an underlying asset or assets. Some
derivatives are sophisticated instruments that typically involve a small
investment of cash relative to the magnitude of risks assumed. These may
include swap agreements, options, forwards and futures. Derivative securities
are subject to market risk which could be significant for those that have a
leveraging effect. Derivatives are also subject to credit risks related to the
counterparty's ability to perform and any deterioration in the counterparty's
creditworthiness could adversely affect the instrument. In addition,
derivatives and their underlying securities may experience periods of
illiquidity which could cause a Fund to hold a security it might otherwise sell
or could force the sale of a security at inopportune times or for prices that
do not reflect current market value. A risk of using derivatives is that the
Adviser or a Sub-Adviser might imperfectly judge the market's direction. For
instance, if a derivative is used as a hedge to offset investment risk in
another security, the hedge might not correlate to the market's movements and
may have unexpected or undesired results such as a loss or a reduction in
gains.

EMERGING MARKETS INVESTMENTS (GLOBAL SCIENCE AND TECHNOLOGY FUND). Because of
less developed markets and economies and, in some countries, less mature
governments and governmental institutions, the risks of investing in foreign
securities can be intensified in the case of investments in issuers domiciled
or doing substantial business in countries with an emerging securities market.
These risks include: high concentration of market capitalization and trading
volume in a small number of issuers representing a limited number of
industries, as well as a high concentration of investors and financial
intermediaries; political and social uncertainties; over-dependence on exports,
especially with respect to primary commodities, making these economies
vulnerable to changes in commodity prices; overburdened infrastructure and
obsolete or unseasoned financial systems; environmental problems; less
developed legal systems; and less reliable custodial services and settlement
practices.

FOREIGN SECURITIES (ALL FUNDS EXCEPT INDEX PLUS LARGECAP FUND, INDEX PLUS
MIDCAP FUND AND INDEX PLUS SMALLCAP FUND). There are certain risks in owning
foreign securities, including those resulting from: fluctuations in currency
exchange rates; devaluation of currencies; political or economic developments
and the possible imposition of currency exchange blockages or other foreign
governmental laws or restrictions; reduced availability of public information
concerning issuers; accounting, auditing and financial reporting standard or
other regulatory practices and requirements that are not uniform when compared
to those applicable to domestic companies; settlement and clearance procedures
in some countries that may not be reliable and can result in delays in
settlement; higher transaction and custody expenses than for domestic
securities; and limitations on foreign ownership of equity securities. Also,
securities of many foreign companies may be less liquid and the prices are more
volatile that those of domestic companies. With certain foreign countries,
there is the possibility of expropriation, nationalization, confiscatory
taxation and limitations on the use or removal

                                       32



of portfolios or other assets of a Funds, including the withholding of
dividends.

Each Fund may enter into foreign currency transactions either on a spot or cash
basis at prevailing rates or through forward foreign currency exchange
contracts in order to have the necessary currencies to settle transactions, or
to help protect Fund assets against adverse changes in foreign currency
exchange rates, or to provide exposure to a foreign currency commensurate with
the exposure to securities from that country. Such efforts could limit
potential gains that might result from a relative increase in the value of such
currencies, and might, in certain cases, result in losses to a Fund.

HIGH-YIELD, LOWER-GRADE DEBT SECURITIES (BALANCED FUND, STRATEGIC ALLOCATION
CONSERVATIVE FUND, STRATEGIC ALLOCATION GROWTH FUND, STRATEGIC ALLOCATION
MODERATE FUND). Investments in high-yield debt securities generally provide
greater income and increased opportunity for capital appreciation than
investments in higher quality debt securities, but they also typically entail
greater potential price volatility and principal and income risk. High-yield
debt securities are not considered investment grade, and are regarded as
predominantly speculative with respect to the issuing company's continuing
ability to meet principal and interest payments. The prices of high-yield debt
securities have been found to be less sensitive to interest rate changes than
higher-rated investments, but more sensitive to adverse economic downturns or
individual corporate developments. High-yield debt securities structured as
zero coupon or pay-in-kind securities tend to be more volatile. The secondary
market in which high-yield debt securities are traded is generally less liquid
than the market for higher grade bonds. At times of less liquidity, it may be
more difficult to value high-yield debt securities.

INITIAL PUBLIC OFFERINGS ("IPO'S") (GLOBAL SCIENCE AND TECHNOLOGY FUND). IPOs
and offerings by companies that have recently gone public have the potential to
produce substantial gains for a Fund. However, there is no assurance that a
Fund will have access to profitable IPOs. Stocks of some newly-public companies
may decline shortly after the initial public offerings.

MORTGAGE-RELATED SECURITIES (MONEY MARKET FUND, BALANCED FUND, STRATEGIC
ALLOCATION CONSERVATIVE FUND, STRATEGIC ALLOCATION GROWTH FUND AND STRATEGIC
ALLOCATION MODERATE FUND). Although mortgage loans underlying a mortgage-backed
security may have maturities of up to 30 years, the actual average life of a
mortgage-backed security typically will be substantially less because the
mortgages will be subject to normal principal amortization, and may be prepaid
prior to maturity. Like other fixed-income securities, when interest rates
rise, the value of a mortgage-backed security generally will decline; however,
when interest rates are declining, the value of mortgage-backed securities with
prepayment features may not increase as much as other fixed-income securities.
The rate of prepayments on underlying mortgages will affect the price and
volatility of a mortgage-related security, and may have the effect of
shortening or extending the effective maturity of the security beyond what was
anticipated at the time of the purchase. Unanticipated rates of prepayment on
underlying mortgages can be expected to increase the volatility of such
securities. In addition, the value of these securities may fluctuate in
response to the market's perception of the creditworthiness of the issuers of
mortgage-related securities owned by a Fund. Additionally, although mortgages
and mortgage-related securities are generally supported by some form of
government or private guarantee and/or insurance, there is no assurance that
private guarantors or insurers will be able to meet their obligations, and
thus, are subject to risk of default.

OTHER INVESTMENT COMPANIES (MONEY MARKET FUND, BALANCED FUND, INTERNATIONAL
EQUITY FUND, INDEX PLUS LARGECAP FUND, INDEX PLUS MIDCAP FUND, INDEX PLUS
SMALLCAP FUND, STRATEGIC ALLOCATION CONSERVATIVE FUND, STRATEGIC ALLOCATION
GROWTH FUND AND STRATEGIC ALLOCATION MODERATE FUND). Each Fund may invest in
other investment companies to the extent permitted by the 1940 Act and the rules
thereunder. These may include exchange-traded funds ("ETFs") and Holding Company
Depositary Receipts ("HOLDRs"), among others. ETFs are exchange-traded
investment companies that are designed to provide investment results
corresponding to an equity index and include, among others, Standard & Poor's
Depository Receipts ("SPDRs"), PowerShares QQQTM("QQQQ"), Dow Jones Industrial
Average Tracking Stocks ("Diamonds") and iShares exchange-traded funds
("iShares"). The main risk of investing in other investment companies (including
ETFs) is that the value of the underlying securities held by the investment
company might decrease. The value of the underlying securities can fluctuate in
response to activities of individual companies or in response to general market
and/or economic conditions. Because each Fund may invest in other investment
companies, you will pay a proportionate share of the expenses of that other
investment company (including management fees, administration fees and custodial
fees.) Additional risks of investments in ETFs include: (i) an active trading
market for an ETF's shares may not develop or be maintained or (ii) trading may
be halted if the listing exchange's officials deem such action appropriate, the
shares are delisted from the exchange, or the activation of market-wide "circuit
breakers" (which are tied to large decreases in stock prices) halts trading
generally. Because HOLDRs concentrate in the stocks of a particular industry,
trends in that industry may have a dramatic impact on their value.

To seek to achieve a return on uninvested cash or for other reasons, a Fund may
invest its assets in ING Institutional Prime Money Market Fund and/or one or
more other money market funds advised by ING affiliates ("ING Money Market
Funds"). A Fund's purchase of shares of an ING Money Market Fund will

                                       33



result in the Fund paying a proportionate share of the expenses of the ING
Money Market Fund. The Fund's Adviser will waive its fee in an amount equal to
the advisory fee received by the adviser of the ING Money Market Fund in which
the Fund invests resulting from the Fund's investment into the ING Money Market
Fund.

REPURCHASE AGREEMENTS (MONEY MARKET FUND, STRATEGIC ALLOCATION CONSERVATIVE
FUND, STRATEGIC ALLOCATION GROWTH FUND, AND STRATEGIC ALLOCATION MODERATE
FUND). Repurchase agreements involve the purchase by a Fund of a security that
the seller has agreed to repurchase at an agreed-upon date and price. If the
seller defaults and the collateral value declines, the Fund might incur a loss.
If the seller declares bankruptcy, a Fund may not be able to sell the
collateral at the desired time.

SECTOR FOCUS (GLOBAL SCIENCE AND TECHNOLOGY FUND).  The Fund focuses its assets
in securities in the science and technology sectors. As a result, the Fund may
be subject to greater risks and market fluctuation than a fund which has
securities representing a broader range of investment alternatives.

RULE 144A SECURITIES (GLOBAL SCIENCE AND TECHNOLOGY FUND). Rule 144A securities
are securities that are not registered but which are bought and sold solely by
institutional investors. The Fund considers Rule 144A securities to be "liquid"
although the market for such securities typically is less active than public
securities markets.

SMALL- AND MID-CAPITALIZATION COMPANIES (ALL FUNDS EXCEPT MONEY MARKET FUND AND
INDEX PLUS LARGECAP FUND). Investments in small- and mid-capitalization
companies involve greater risk than is customarily associated with larger, more
established companies due to the greater business risks of small size, limited
markets and financial resources, narrow product lines and the frequent lack of
depth of management. The securities of smaller companies are often traded
over-the-counter and may not be traded in volumes typical on a national
securities exchange. Consequently, the securities of smaller companies may have
limited market stability and may be subject to more abrupt or erratic market
movements than securities of larger, more established companies or the market
averages in general.

U.S. GOVERNMENT SECURITIES AND OBLIGATIONS (MONEY MARKET FUND, BALANCED FUND,
STRATEGIC ALLOCATION CONSERVATIVE FUND, STRATEGIC ALLOCATION GROWTH FUND AND
STRATEGIC ALLOCATION MODERATE FUND). Obligations issued by some U.S. government
agencies, authorities, instrumentalities or sponsored enterprises, such as the
Government National Mortgage Association, are backed by the full faith and
credit of the U.S. Treasury, while obligations issued by others, such as
Federal National Mortgage Association, Federal Home Loan Mortgage Corporation
and Federal Home Loan Banks, are backed solely by the entity's own resources or
by the ability of the entity to borrow from the U.S. Treasury. No assurance can
be given that the U.S. government will provide financial support to U.S.
government agencies, authorities, instrumentalities or sponsored enterprises if
it is not obliged to do so by law.

LENDING PORTFOLIO SECURITIES (ALL FUNDS EXCEPT MONEY MARKET FUND). In order to
generate additional income, a Fund may lend portfolio securities in an amount
up to 331/3% of total Fund assets to broker-dealers, major banks, or other
recognized domestic institutional borrowers of securities. When a Fund lends
its securities, it is responsible for investing the cash collateral it receives
from the borrower of the securities and a Fund could incur losses in connection
with the investment of such cash collateral. As with other extensions of
credit, there are risks of delay in recovery or even loss of rights in the
collateral should the borrower default or fail financially.

PORTFOLIO TURNOVER (ALL FUNDS EXCEPT MONEY MARKET FUND, INTERNATIONAL EQUITY
FUND, INDEX PLUS LARGECAP FUND, INDEX PLUS MIDCAP FUND, AND INDEX PLUS SMALLCAP
FUND). Each Fund is generally expected to engage in frequent and active trading
of portfolio securities to achieve its investment objective. A high portfolio
turnover rate involves greater expenses to a Fund, including brokerage
commissions and other transaction costs, which may have an adverse effect on
the performance of a Fund, and is likely to generate more taxable short-term
gains for shareholders.

OTHER RISKS

BORROWING. Borrowing may exaggerate the affect of any increase or decrease in
the value of securities or the NAV of a Fund and money borrowed will be subject
to interest costs. Interest costs on borrowings may fluctuate with changing
market rates of interest and may partially offset or exceed the return earned
on borrowed funds. Under adverse market conditions, a Fund might have to sell
portfolio securities to meet interest or principal payments at a time when
fundamental investment considerations would not favor such sales.

CORPORATE DEBT SECURITIES. Corporate debt securities are subject to the risk of
the issuer's inability to meet principal and interest payments on the
obligation and may also be subject to price volatility due to such factors as
interest rate sensitivity, market perception of the credit-worthiness of the
issuer and general market liquidity. When interest rates decline, the value of
a Fund's debt securities can be expected to rise and when interest rates rise,
the value of those securities can be expected to decline. Debt securities with
longer maturities tend to be more sensitive to interest rate movements than
those with shorter maturities.

One measure of risk for fixed-income securities is duration. Duration is one of
the tools used by a portfolio manager in selection

                                       34



of fixed-income securities. Historically, the maturity of a bond was used as a
proxy for the sensitivity of a bond's price to changes in interest rates,
otherwise known as a bond's "interest rate risk" or "volatility". According to
this measure, the longer the maturity of a bond, the more its price will change
for a given change in market interest rates. However, this method ignores the
amount and timing of all cash flows from the bond prior to final maturity.
Duration is a measure of average life of a bond on a present value basis, which
was developed to incorporate a bond's yield, coupons, final maturity and call
features into one measure. For point of reference, the duration of a
noncallable 7% coupon bond with a remaining maturity of 5 years is
approximately 4.5 years, and the duration of a noncallable 7% coupon bond with
a remaining maturity of 10 years is approximately 8 years. Material changes in
interest rates may impact the duration calculation.

INABILITY TO SELL SECURITIES. Certain securities generally trade in lower
volume and may be less liquid than securities of large established companies.
These less liquid securities could include securities of small- and mid-sized
U.S. companies, high-yield securities, convertible securities, unrated debt and
convertible securities, securities that originate from small offerings, and
foreign securities, particularly those from companies in countries with an
emerging securities market. A Fund could lose money if it cannot sell a
security at the time and price that would be most beneficial to the Fund.

INDEX STRATEGY. A Fund may use an indexing strategy that does not attempt to
manage market volatility, use defensive strategies or reduce the effects of any
long-term periods of poor stock performance. The correlation between a Fund and
index performance may be affected by a Fund's expenses, and the timing of
purchases and redemptions of a Fund's shares.

INTERESTS IN LOANS. A Fund may invest in participation interests or assignments
in secured variable or floating rate loans, which include participation
interests in lease financings. Loans are subject to the credit risk of
nonpayment of principal or interest. Substantial increases in interest rates
may cause an increase in loan defaults. Although the loans will generally be
fully collateralized at the time of acquisition, the collateral may decline in
value, be relatively illiquid, or lose all or substantially all of its value
subsequent to a Fund's investment. Many loans are relatively illiquid, and may
be difficult to value.

MANAGEMENT. Each Fund is subject to management risk because it is an actively
managed investment portfolio. The Adviser, the Sub-Adviser or each individual
portfolio manager will apply investment techniques and risk analyses in making
investment decisions for the Funds but there can be no guarantee that these
will produce the desired results.

Many sub-advisers of equity funds employ styles that are characterized as
"value" or "growth." However, these terms can have different application by
different managers. One sub-adviser's value approach may be different from
another, and one sub-adviser's growth approach may be different from another.
For example, some value managers employ a style in which they seek to identify
companies that they believe are valued at a more substantial or "deeper
discount" to a company's net worth than other value managers. Therefore, some
funds that are characterized as growth or value can have greater volatility
than other funds managed by other managers in a growth or value style.

PAIRING-OFF TRANSACTIONS. A pairing-off transaction occurs when a Fund commits
to purchase a security at a future date and then the Fund pairs-off the
purchase with a sale of the same security prior to or on the original
settlement date. Whether a pairing-off transaction on a debt security produces
a gain depends on the movement of interest rates. If interest rates increase,
then the money received upon the sale of the same security will be less than
the anticipated amount needed at the time the commitment to purchase the
security at the future date was entered and a Fund will experience a loss.

REPURCHASE AGREEMENT. Repurchase agreements involve the purchase by a Fund of a
security that the seller has agreed to repurchase at an agreed-upon date and
price. If the seller defaults and the collateral value declines, a Fund might
incur a loss. If the seller declares bankruptcy, a Fund may not be able to sell
the collateral at the desired time.

RESTRICTED AND ILLIQUID SECURITIES. If a security is illiquid, a Fund might be
unable to sell the security at a time when the Adviser or a Sub-Adviser might
wish to sell and the security could have the effect of decreasing the overall
level of a Fund's liquidity. Further, the lack of an established secondary
market may make it more difficult to value illiquid securities which could vary
from the amount a Fund could realize upon disposition. Restricted securities,
i.e. securities subject to legal or contractual restrictions on resale, may be
illiquid. However, some restricted securities may be treated as liquid although
they may be less liquid than registered securities traded on established
secondary markets.

REVERSE REPURCHASE AGREEMENTS AND DOLLAR ROLLS. A reverse repurchase agreement
or dollar roll involves the sale of a security with an agreement to repurchase
the same or substantially similar securities at an agreed upon price and date.
Whether such a transaction produces a gain for a Fund depends upon the costs of
the agreements and the income and gains of the securities purchased with the
proceeds received from the sale of the security. If the income and gains on the
securities purchased fail to exceed the costs, a Fund's NAV will decline faster
than otherwise would be the case. Reverse repurchase agreements and dollar
rolls, as leveraging techniques, may increase a Fund's

                                       35



MANAGEMENT OF THE FUNDS  ADVISER

ING INVESTMENTS, LLC ("ING INVESTMENTS" OR "ADVISER"), an Arizona limited
liability company, serves as the investment adviser to each of the Funds. ING
Investments has overall responsibility for the management of the Funds. ING
Investments provides or oversees all investment advisory and portfolio
management services for the Funds.

ING Investments is registered with the SEC as an investment adviser. ING
Investments is an indirect, wholly-owned subsidiary of ING Groep N.V. ("ING
Groep") (NYSE: ING). ING Groep is one of the largest financial services
organizations in the world with approximately 120,000 employees. Based in
Amsterdam, ING Groep offers an array of banking, insurance and asset management
services to both individual and institutional investors. ING Investments became
an investment management firm in April, 1995.

As of December 31, 2007, ING Investments managed approximately $54 billion in
assets.

The principal address of ING Investments is 7337 East Doubletree Ranch Road,
Scottsdale, Arizona 85258.

ING Investments receives a monthly fee for its services based on the average
daily net assets of each of the Funds.

ING Investments receives a monthly fee for its services based on the average
daily net assets of each of the Funds.

The following table shows the aggregate annual management fees paid by each
Fund for its most recent fiscal year as a percentage of that Fund's average
daily net assets:

                                        MANAGEMENT
FUND                                       FEES
 Money Market                                 0.40%
 Balanced                                     0.75%
 Global Science and Technology                1.05%
 Index Plus LargeCap                          0.45%
 Index Plus MidCap                            0.45%
 Index Plus SmallCap                          0.45%
 Strategic Allocation Conservative            0.80%
 Strategic Allocation Growth                  0.80%
 Strategic Allocation Moderate                0.80%

For information regarding the basis for the Board approval of the investment
advisory and investment sub-advisory relationships, please refer to Aeltus
Money Market Fund's annual shareholder report each dated March 31, 2007,
Balanced Fund's, Index Plus Funds' and Strategic Allocation Funds' annual
shareholder report each dated May 31, 2007; and Global Science and Technology
Fund's semi-annual shareholder report that will be dated April 30, 2008.

SUB-ADVISERS

ING Investments has engaged one or more sub-advisers to provide the day-to-day
management of each Fund's portfolio. Some of these sub-advisers are affiliates
of ING Investments, and some are independent.

ING Investments acts as a "manager-of-managers" for ING Global Science and
Technology Fund ("Manager-of-Managers Fund"). ING Investments delegates to the
sub-adviser of the Manager-of-Managers Fund the responsibility for investment
management, subject to ING Investment's oversight. ING Investments is
responsible for monitoring the investment program and performance of the sub-
adviser of the Manager-of-Managers Fund.

From time to time, ING Investments may also recommend the appointment of
additional sub-advisers or replacement of non-affiliated sub-advisers to the
Fund's Board. It is not expected that ING Investments would normally recommend
replacement of affiliated sub-advisers as part of its oversight responsiblities.
ING Investments and the Manager-of-Managers Fund have received exemptive relief
from the SEC to permit ING Investments, with the approval of the Fund's Board,
to appoint an additional non-affiliated sub-adviser or replace a non-affiliated
sub-adviser as well as change the terms of a contract with a non-affiliated sub-
adviser, without shareholder approval. The Manager-of-Managers Fund will notify
shareholders of any change in the identity of a sub-adviser of the Manager-of-
Managers Fund. In this event, the name of the Manager-of-Managers Fund and its
principal investment strategies may also change.

Under the terms of the sub-advisory agreement, the agreement can be terminated
by either ING Investments or the Fund's Board. In the event the sub-advisory
agreement is terminated, the sub-adviser may be replaced subject to any
regulatory requirements or ING Investments may assume day-to-day investment
management of the Manager-of-Managers Fund.

MONEY MARKET FUND, BALANCED FUND, INTERNATIONAL EQUITY FUND, INDEX PLUS FUNDS
AND STRATEGIC ALLOCATION FUNDS

ING INVESTMENT MANAGEMENT CO.

ING Investment Management Co. ("ING IM" or "Sub-Adviser"), a Connecticut
corporation, serves as the Sub-Adviser to each Fund (other than Global Science
and Technology Fund). ING IM

                                       37



is responsible for managing the assets of each Fund in accordance with the
Fund's investment objective and policies, subject to oversight by ING
Investments and the Funds' Board.

Founded in 1972, ING IM is registered with the SEC as an investment adviser.
ING IM is an indirect, wholly-owned subsidiary of ING Groep and is an affiliate
of ING Investments. ING IM has acted as adviser or sub-adviser to mutual funds
since 1994 and has managed institutional accounts since 1972.

As of June 30, 2007, ING IM managed approximately $71.4 billion in assets.

The principal office of ING IM is 230 Park Avenue New York, NY 10169.

MONEY MARKET FUND

The following individual is responsible for the day-to-day management of the
Fund:

David S. Yealy, Portfolio Manager, has managed the Fund since November 2004.
Mr. Yealy joined ING IM in November 2004 and has over 19 years of investment
experience. Prior to joining ING IM, he was a Managing Director with Trusco
Capital Management, where he was employed since 1991.

BALANCED FUND

The following individuals share responsibility for the day-to-day management of
Balanced Fund:

Paul Zemsky, Portfolio Manager, has co-managed the Fund since April 2007. Mr.
Zemsky is the head of ING's Multi-Asset Strategies & Solutions Group. He joined
ING IM in 2005 as Head of Derivative Strategies. Prior to assuming his role at
ING, Mr. Zemsky spent 18 years at J.P. Morgan Investment Management, where he
held a number of key positions, including having responsibility for asset
allocation for the firm's fixed income business and handling option trading in
both the exchange-traded and over-the-counter markets. Paul Zemsky has 21 years
of investment experience.

Omar Aguilar, Ph.D., has managed the equity portion of the Fund since December
2005. Dr. Aguilar has been with ING IM since July 2004 and is Head of
Quantitative Equity Research. He previously served as head of Lehman Brothers'
quantitative research for their alternative investment management business
since 2002. Prior to that, Dr. Aguilar was director of quantitative research
and a portfolio manager with Merrill Lynch Investment Management since 1999.

James B. Kauffmann, Portfolio Manager, has managed the fixed-income portion of
the Fund since 2002. Mr. Kauffmann joined ING Groep in 1996 and has over 20
years of investment experience. Prior to joining ING Groep, he spent four years
at Alfa Investments, Inc. where he was the senior fixed-income portfolio
manager. Additionally, he has worked as an analyst with a venture capital fund.

INDEX PLUS FUNDS

INDEX PLUS LARGECAP, INDEX PLUS MIDCAP, INDEX PLUS SMALLCAP FUNDS

The following individuals jointly share responsibility for the day-to-day
management of the ING Index Plus Funds:

Omar Aguilar, Ph.D., Portfolio Manager, has co-managed the ING Index Plus Funds
since December 2005. Dr. Aguilar has been with ING IM since July 2004 and is
Head of Quantitative Equity Research. Dr Aguilar previously served as head of
Lehman Brothers' quantitative research for their alternative investment
management business since 2002. Prior to that, Dr. Aguilar was director of
quantitative research and a portfolio manager with Merrill Lynch Investment
Managers since 1999.

Vincent Costa, Portfolio Manager, has co-managed the ING Index Plus Funds since
May 2006. He joined ING IM in April 2006 as Senior Quantitative Portfolio
Manager from Merrill Lynch Investment Managers where he had been employed since
1999, most recently as Managing Director and Chief Investment Officer for that
firm's Quantitative Investment strategies.

STRATEGIC ALLOCATION FUNDS

STRATEGIC ALLOCATION CONSERVATIVE, STRATEGIC ALLOCATION GROWTH AND STRATEGIC
ALLOCATION MODERATE FUNDS

The following individuals share responsibility for the day-to-day management of
the Strategic Allocation Funds:

Paul Zemsky, Portfolio Manager, has co-managed the ING Strategic Allocation
Funds since April 2007. Mr. Zemsky is the head of ING's Multi-Asset Strategies
& Solutions Group. He joined ING IM in 2005 as Head of Derivative Strategies.
Prior to assuming his role at ING, Mr. Zemsky spent 18 years at J.P. Morgan
Investment Management, where he held a number of key positions, including
having responsibility for asset allocation for the firm's fixed income business
and handling option trading in both the exchange-traded and over-the-counter
markets. Paul Zemsky has 22 years of investment experience.

Brian Gendreau, Ph.D., Portfolio Manager, has co-managed the Strategic
Allocation Funds since May 2006. Dr. Gendreau joined ING IM as an Investment
Strategist in September 2004 from Heckman Global Advisors, where he managed
their Emerging

                                       38



Market Equity Allocation products since October 2002. Prior to that, Dr.
Gendreau was a Director and Market Strategist within Salomon Smith Barney's
Institutional Investor-ranked Asset Allocation team, where he had been employed
since 1997. Earlier he worked at JPMorgan as Vice President in the Economic
Research Department. He also served as an Economist for the Federal Reserve
Bank of Philadelphia and the Board of Governors of the Federal Reserve System.

Omar Aguilar, Ph.D., has managed the equity portion of the ING Strategic
Allocation Funds since December 2005. Dr. Aguilar has been with ING IM since
July 2004 and is Head of Quantitative Equity Research. He previously served as
head of Lehman Brothers' quantitative research for their alternative investment
management business since 2002. Prior to that, Dr. Aguilar was director of
quantitative research and a portfolio manager with Merrill Lynch Investment
Managers since 1999.

James B. Kauffmann, Portfolio Manager, has managed the fixed-income portion of
the ING Strategic Allocation Funds since December 2005. Mr. Kauffmann joined
ING Groep in 1996 and has over 20 years of investment experience. Prior to
joining ING Groep, he spent four years at Alfa Investments, Inc. where he was
the senior fixed-income portfolio manager. Additionally, he has worked in the
capital markets group of a major Wall Street dealer and served as an analyst
with a venture capital fund.

GLOBAL SCIENCE AND TECHNOLOGY FUND

BLACKROCK ADVISORS, INC.

BlackRock Advisors, LLC ("BlackRock Advisors" or "Sub-Adviser"), a Delaware
limited liability company serves as Sub-Adviser to Global Science and
Technology Fund and is a wholly-owned subsidiary of BlackRock, Inc.
("BlackRock"). BlackRock Advisors and its affiliates offer a full range of
equity, fixed-income, cash management and alternative investment products with
strong representation in both retail and institutional channels in U.S. and in
non-U.S. markets. The company has over 5,600 employees in 20 countries and a
major presence in most key markets including the United States, the United
Kingdom, Asia, Australia, the Middle East and Europe.

As of December 31, 2007, BlackRock Advisors and its affiliates had $1.357
trillion in assets under management. The principal address of BlackRock
Advisors is 100 Bellvue Parkway, Wilmington, Delaware 19809.

The following individuals jointly share responsibility for the day-to-day
management of the Fund.

Thomas P. Callan, CFA, Managing Director and Senior Portfolio Manager, is head
of BlackRock Advisors' Global Opportunities Team and is the strategist for all
of the team's portfolios. Mr. Callan has co-managed the Fund since 2004. Before
becoming part of BlackRock Advisors, Mr. Callan had been with the PNC Asset
Management Group, which he joined in 1994. Mr. Callan began his career at PNC
Bank as a personal trust portfolio manager in 1988 and became a research
analyst in 1992.

Jean M. Rosenbaum, CFA, Managing Director and Portfolio Manager, is a senior
member of BlackRock Advisors' Global Opportunities Team and is responsible for
coverage of stocks in the technology sector for all of the team's portfolios.
Ms. Rosenbaum has co-managed the Fund since 2005. Prior to joining BlackRock
Advisors in 1998, Ms. Rosenbaum was a healthcare analyst with the PNC Asset
Management Group.

Erin Xie, Ph.D., Managing Director and Portfolio Manager, is a senior member of
BlackRock Advisors' Global Opportunities Team and is responsible for coverage
of stocks in the healthcare sector. Dr. Xie has co-managed the Fund since 2005.
Before becoming part of BlackRock Advisors in 2005, Ms. Xie was with State
Street Research & Management since 2001. She began her investment career as a
pharmaceutical analyst for Sanford Bernstein in 1999.

ADDITIONAL INFORMATION REGARDING PORTFOLIO MANAGERS

The SAI provides additional information about each portfolio manager's
compensation, other accounts managed by each portfolio manager and each
portfolio manager's ownership of securities in the Funds.

                                       39

HOW TO SELL SHARES

To redeem all or a portion of the shares in your account, you should submit a
redemption request as described below.

Redemption requests may be made in writing, online, or, in amounts up to
$100,000, by telephone. A medallion signature guarantee is required if the
amount of the redemption request is over $100,000. A medallion signature
guarantee may be obtained from a domestic bank or trust company, broker,
dealer, clearing agency, savings association, or other financial institution,
which participates in a medallion program recognized by the Securities Transfer
Association. Signature guarantees from financial institutions which are not
participating in such a medallion program will not be accepted. Please note
that a notary public cannot provide signature guarantees.

Once your redemption request is received in good order as described below, a
Fund normally will send the proceeds of such redemption within one or two
business days. However, if making immediate payment could adversely affect a
Fund, the Fund may defer distribution for up to seven days or a longer period
if permitted. If you redeem shares of a Fund shortly after purchasing them, the
Fund will hold payment of redemption proceeds until a purchase check or
systematic investment clears, which may take up to 12 calendar days. A
redemption request made within 15 calendar days after submission of a change of
address is permitted only if the request is in writing and is accompanied by a
medallion signature guarantee.

The Funds normally intend to pay in cash for all shares redeemed, but under
abnormal conditions that make payments in cash unwise, the Funds may make
payments wholly or partly in securities at their then current market value
equal to the redemption price. In such case, the Funds could elect to make
payment in securities for redemptions in excess of $250,000 or 1.00% of their
net assets during any 90-day period for any one shareholder. An investor may
incur brokerage costs in converting such securities to cash.

REDEMPTIONS BY MAIL You may redeem shares you own in any Fund by sending written instructions to:
ING DIRECT SECURITIES, INC.
P.O. Box 15647
Wilmington, DE 19885-5647
Your instructions should identify:
o The Fund's name.
o The number of shares or dollar amount to be redeemed.
o Your name and account number.
Your instructions must be signed by all person(s) required to sign for the Fund
account, exactly as the shares are registered, and, if necessary, accompanied by a
medallion signature guarantee(s).

______________________ _____________________________________________________________________________________
REDEMPTIONS BY Call 1-866-BUY-FUND (866-289-3863). Please be prepared to provide your account
TELEPHONE number, account name and the amount of the redemption, which must be no more
than $100,000.

______________________ _____________________________________________________________________________________
ONLINE Log into your account at www.ingdirect.com and click the "Sell" button.
For IRA accounts, please submit a Redemption Form by fax to 1-866-327-4592
before 2 p.m. EST. The form may also be mailed to the address above. It is available
for download at www.ingdirect.com.



TIMING OF REQUESTS

Orders that are received by the Funds' Transfer Agent, or as otherwise provided
below, before the close of regular trading ("Market Close") on the New York
Stock Exchange ("NYSE") (normally 4:00 p.m. Eastern time unless otherwise
designated by the NYSE) will be processed at net asset value ("NAV") per share
calculated that business day. Orders received after the close of regular
trading on the NYSE will be processed at the "NAV" calculated on the following
business day.

Investors purchasing through ING DIRECT Securities, Inc. should refer to its
materials for a discussion of any specific instructions on the timing of or
restrictions relating to the purchase or redemption of shares.

OTHER INFORMATION ABOUT SHAREHOLDER ACCOUNTS AND SERVICES

Class O shares are only offered through ING DIRECT Securities, Inc. More
information may be found on the firm's website by going to www.ingdirect.com.
The Funds offer additional classes that are not available in this Prospectus
that may be more appropriate for you. Please review the disclosure about all of
the available Fund classes carefully. Before investing, you should discuss
which share class may be right for you with your investment professional and
review the prospectus for those funds.

BUSINESS HOURS Fund representatives are available from 9:00 a.m. to 4:00 p.m.
Eastern time Monday through Friday.

NET ASSET VALUE The NAV per share for each class of each Fund is determined
each business day as of Market Close. The Funds are open for business every day
the NYSE is open. The NYSE is closed on all weekends and on all national
holidays and Good Friday. Fund shares will not be priced on those days. The NAV
per share of each class of each Fund is calculated by taking the value of the
Fund's assets attributable to that class, subtracting the Fund's liabilities
attributable to that class, and dividing by the number of shares of that class
that are outstanding.

In general, assets are valued based on actual or estimated market value, with
special provisions for assets not having readily available market quotations
and short-term debt securities, and for situations where market quotations are
deemed unreliable. Investments in securities maturing in 60 days or less are
valued at amortized cost, which, when combined with accrued interest,
approximates market value. Securities prices may be obtained from automated
pricing services. Shares of investment companies held by the Funds will
generally be valued at the latest NAV reported by that investment company. The
prospectuses for those investment companies explain the circumstances under
which they will use fair value pricing and the effects of using fair value
pricing.

Trading of foreign securities may not take place every day the NYSE is open.
Also, trading in some foreign markets and on some electronic trading networks
may occur on weekends or holidays when a Fund's NAV is not calculated. As a
result, the NAV of a Fund may change on days when shareholders will not be able
to purchase or redeem a Fund's shares.

When market quotations are not available or are deemed unreliable, a Fund will
use a fair value for the security that is determined in accordance with
procedures adopted by the Funds' Board. The types of securities for which such
fair value pricing might be required include, but are not limited to:

o  Foreign securities, where a foreign security whose value at the close of the
   foreign market on which it principally trades likely would have changed by
   the time of close of the NYSE, or the closing value is otherwise deemed
   unreliable;

o  Securities of an issuer that has entered into a restructuring;

o  Securities whose trading has been halted or suspended;

o  Fixed-income securities that have gone into default and for which there are
   no current market value quotations; and

o  Securities that are restricted as to transfer or resale.

The Funds or the Adviser may rely on recommendations of a fair value pricing
service approved by the Funds' Board in valuing foreign securities. Valuing
securities at fair value involves greater reliance on judgment than valuing
securities that have readily available market quotations. The Adviser makes
such determinations in good faith in accordance with procedures adopted by the
Funds' Board. Fair value determinations can also involve reliance on
quantitative models employed by a fair value pricing service. There can be no
assurance that a Fund could obtain the fair value assigned to a security if it
were to sell the security at approximately the time at which the Funds
determines their NAV per share.

                                       44



Money Market Fund uses the amortized cost method to value its portfolio
securities and seeks to maintain a constant NAV of $1.00 per share, although
there may be circumstances under which this goal cannot be achieved. The
amortized cost method involves valuing a security at its cost and amortizing
any discount or premium over the period until maturity, regardless of the
impact of fluctuating interest rates or the market value of the security.
Although the Board has established procedures designed to stabilize, to the
extent reasonably possible, the share price of the Fund, there can be no
assurance that the Fund's NAV can be maintained at $1.00 per share. To the
extent the Fund invests in other registered investment companies, the Fund's
NAV is calculated based on the current NAV of the registered investment company
in which the Fund invests.

CUSTOMER IDENTIFICATION

To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify
and record information that identifies each person that opens an account, and
to determine whether such person's name appears on government lists of known or
suspected terrorists and terrorist organizations.

What this means for you: The Funds, the ING Funds Distributor, or a third-party
selling you the Funds must obtain the following information for each person
that opens an account:

o  Name;

o  Date of birth (for individuals);

o  Physical residential address (although post office boxes are still permitted
   for mailing); and

o  Social security number, taxpayer identification number, or other identifying
   number.

You may also be asked to show your driver's license, passport or other
identifying documents in order to verify your identity. In addition, it may be
necessary to verify your identity by cross-referencing your identification
information with a consumer report or other electronic database. Additional
information may be required to open accounts for corporations and other
non-natural persons.

FEDERAL LAW PROHIBITS THE FUNDS, THE DISTRIBUTOR AND OTHER FINANCIAL
INSTITUTIONS FROM OPENING ACCOUNTS UNLESS THEY RECEIVE THE MINIMUM IDENTIFYING
INFORMATION LISTED ABOVE. THEY ALSO MAY BE REQUIRED TO CLOSE YOUR ACCOUNT IF
THEY ARE UNABLE TO VERIFY YOUR IDENTITY WITHIN A REASONABLE TIME.

EXCHANGE PRIVILEGES There is no fee to exchange shares from one Fund to another
Fund offering the same share class. When you exchange shares, your new Fund
shares will be in the same class as your current shares.

FREQUENT TRADING - MARKET TIMING (ALL FUNDS EXCEPT MONEY MARKET FUND)

The Funds are intended for long-term investment and not as short-term trading
vehicles. Accordingly, organizations or individuals that use market timing
investment strategies should not purchase shares of the Funds. The Funds
reserve the right, in their sole discretion and without prior notice, to
reject, restrict or refuse purchase orders whether directly or by exchange,
including purchase orders that have been accepted by a shareholder's or
retirement plan participant's intermediary, that the Funds determine not to be
in the best interest of the Funds.

The Funds believe that market timing or frequent, short-term trading in any
account, including a retirement plan account, is not in the best interest of
the Funds or their shareholders. Due to the disruptive nature of this activity,
it can adversely affect the ability of the Adviser or Sub-Adviser to invest
assets in an orderly, long-term manner. Frequent trading can raise Fund
expenses through: increased trading and transaction costs; increased
administrative costs; and lost opportunity costs. This in turn can have an
adverse effect on Fund performance.

Funds that invest in foreign securities may present greater opportunities for
market timers and thus be at a greater risk for excessive trading. If an event
occurring after the close of a foreign market but before the time a Fund
computes its current NAV causes a change in the price of the foreign security
and such price is not reflected in the Fund's current NAV, investors may
attempt to take advantage of anticipated price movements in securities held by
the Funds based on such pricing discrepancies. This is often referred to as
"price arbitrage." Such price arbitrage opportunities may also occur in funds
which do not invest in foreign securities. For example, if trading in a
security held by a Fund is halted and does not resume prior to the time the
Fund calculates its NAV, such "stale pricing" presents an opportunity for
investors to take advantage of the pricing discrepancy. Similarly, a Fund that
holds thinly-traded securities, such as certain small-capitalization
securities, may be exposed to varying levels of pricing arbitrage. The Funds
have adopted fair valuation policies and procedures intended to reduce the
Funds' exposure to price arbitrage, stale pricing and other potential pricing
discrepancies. However, to the extent that a Fund's NAV does not immediately
reflect these changes in market conditions, short-term trading may dilute the
value of Fund shares, which negatively affects long-term shareholders.

The Funds' Board has adopted policies and procedures designed to deter
frequent, short-term trading in shares of the Funds. Consistent with this
policy, the Funds monitor trading activity.

                                       45



Shareholders may make exchanges among their accounts with ING Funds 4 times
each year. All exchanges occurring on the same day for all accounts
(individual, IRA, 401(k), etc.) beneficially owned by the same shareholder will
be treated as a single transaction for these purposes. Subsequent transactions
may not be effected within 30 days of the last transaction. In addition,
purchase and sale transactions that are the functional equivalent of exchanges
will be subject to these limits. On January 1 of each year, the limit
restriction will be reset for all shareholders and any trade restrictions that
were placed on an account due to a violation of the policy in the prior year
will be removed. The Funds reserve the right to specifically address any
trading that might otherwise appear to comply with the restrictions described
above if, after consultation with appropriate compliance personnel it is
determined that such trading is nevertheless abusive or adverse to the
interests of long-term shareholders. The Funds also reserve the right to modify
the frequent trading - market timing policy at any time without prior notice,
depending on the needs of the Funds and/or state or federal regulatory
requirements.

If an activity is identified as problematic after further investigation, the
Funds reserve the right to take any necessary action to deter such activity.
Such action may include, but not be limited to: rejecting additional purchase
orders, whether directly or by exchange; extending settlement of a redemption
up to seven days; rejecting all purchase orders from broker-dealers or their
registered representatives suspected of violating the Funds' frequent trading
policy; or termination of the selling group agreement or other agreement with
broker-dealers or other financial intermediaries associated with frequent
trading.

Although the restrictions described above are designed to discourage frequent,
short-term trading, none of them alone, nor all of them taken together, can
eliminate the possibility that frequent, short-term trading activity in the
Funds will occur. Moreover, in enforcing such restrictions, the Funds are often
required to make decisions that are inherently subjective. The Funds strive to
make these decisions to the best of their abilities in a manner that they
believe is in the best interest of shareholders.

Shareholders may invest in the Funds through omnibus account arrangements with
financial intermediaries. Omnibus accounts permit intermediaries to aggregate
transactions. Such intermediaries include broker-dealers, banks, investment
advisers, record keepers, retirement plans and fee-based accounts such as wrap
fee programs. Omnibus accounts generally do not identify customer's trading
activity on an individual basis. The Funds' administrator now has agreements
which require such intermediaries to provide detailed account information,
including trading history, upon request of the Funds.

In some cases, the Funds will rely on the intermediaries' excessive trading
policies and such policies shall define the trading activity in which the
shareholder may engage. This shall be the case where the Funds are used in
certain retirement plans offered by affiliates. With trading information
received as a result of agreements, the Funds may make a determination that
certain trading activity is harmful to the Funds and their shareholders even if
such activity is not strictly prohibited by the intermediaries' excessive
trading policy. As a result, a shareholder investing directly or indirectly in
one of the Funds may have their trading privileges suspended without violating
the stated excessive trading policy of the intermediary.

FREQUENT TRADING - MARKET TIMING (MONEY MARKET FUND)

Because the Fund is organized and operated pursuant to Rule 2a-7 under the 9140
Act as a "money market" fund, frequent purchases and redemptions of Fund shares
present a minimal risk to other shareholders of the Fund.

Nevertheless, the Fund's Board of Trustees ("Board") has adopted policies and
procedures designed to deter frequent, short-term trading in shares of the
open-end mutual funds in the ING Complex of Funds ("ING Funds"). Consistent
with this policy, the ING Funds monitor trading activity. The ING Funds are
intended for long-term investment and not as short-term trading vehicles.
Accordingly, organizations or individuals that use market timing investment
strategies should not purchase shares of the ING Funds. The ING Funds reserve
the right, in their sole discretion and without prior notice, to reject,
restrict or refuse purchase order whether directly or by exchange, including
purchase orders that have been accepted by a shareholder's or retirement plan
participant's intermediary, that are determined not to be in the best interest
of the ING Funds, including instances in which the ING Institutional Prime
Money Market Fund is used as an intermediary "stop" between transactions in
other ING Funds.

Shareholders may invest in the ING Funds through omnibus account arrangements
with financial intermediaries. Such intermediaries include broker-dealers,
banks, investment advisers, record-keepers, retirement plans, variable
insurance products, trusts, and fee-based program accounts. Omnibus accounts
generally do not identify customers' trading activity on an individual basis.
The ability of the ING Funds to monitor exchanges made by the underlying
shareholders in omnibus accounts maintained by financial intermediaries
therefore is severely limited. Consequently, the ING Funds to monitor exchanges
made by the underlying shareholders in omnibus accounts maintained by financial
intermediary's customers. The ING Funds seek assurances from the financial
intermediary that it has procedures adequate to monitor and address frequent,
short-term trading. There is, however, no guarantee that the ING Funds will be
able to identify individual shareholders who may be making frequent, short-term
trades or curtail their trading activity. The ING Funds seek

                                       46



to implement the policies and procedures described above through instructions
to the ING Funds' administrator, ING Funds Services, LLC.

ONLINE AND TELEPHONE EXCHANGE AND/OR REDEMPTION PRIVILEGES You automatically
receive online and telephone exchange and redemption privileges when you
establish your account. If you do not want these privileges, you may call
1-866-BUY-FUND (866-289-3863) to have them removed. All telephone transactions
may be recorded, and you will be asked for certain identifying information.

Online and telephone redemption requests will be accepted for amounts less than
$100,000. Online and telephone redemption requests may not be accepted if you:

o  Have submitted a change of address within the preceding 15 calendar days.

o  Are selling shares in a retirement plan account held in a trust.

You may make account inquiry requests, purchases, or redemptions online at:
www.ingdirect.com.

The Funds reserve the right to amend online and telephone exchange and
redemption privileges at any time upon notice to shareholders and may refuse a
telephone exchange or redemption if the Funds believe it is advisable to do so.

ADDITIONAL SERVICES The Funds offer the following additional investor services.
Each Fund reserves the right to terminate or amend these services at any time.
For all of the services, certain terms and conditions apply. See the SAI or
call 1-866-BUY-FUND (866-289-3863) for additional details.

o  AUTOMATIC INVESTMENT You can make automatic monthly investments in any Fund.

o  TDD SERVICE Telecommunication Device for the Deaf ("TDD") services are
   offered for hearing impaired investors. The dedicated number for this
   service is 1-800-688-4889.

o  TAX-DEFERRED RETIREMENT PLANS Each Fund may be used for investment by
   individual retirement accounts ("IRAs"), including Roth IRAs. Purchases
   made in connection with IRA accounts may be subject to an annual custodial
   fee of $10 for each account registered under the same taxpayer
   identification number. This fee will be deducted directly from your
   account(s). The custodial fee will be waived for individual retirement
   accounts registered under the same taxpayer identification number having an
   aggregate balance over $30,000 at the time such fee is scheduled to be
   deducted.

HOW WE COMPENSATE INTERMEDIARIES FOR SELLING ING MUTUAL FUNDS

ING mutual funds are distributed by ING Funds Distributor LLC ("Distributor").
The Distributor is a broker-dealer that is licensed to sell securities. The
Distributor generally does not sell directly to the public but sells and
markets its products through intermediaries such as other broker-dealers. Each
ING mutual fund also has an investment adviser ("Adviser") which is responsible
for managing the money invested in each of the mutual funds. Both of these
entities (collectively, "ING") may compensate an intermediary for selling ING
mutual funds.

Only persons licensed with the Financial Industry Regulatory Authority
("FINRA") as a registered representative (often referred to as a broker or
financial advisor) and associated with a specific broker-dealer may sell an ING
mutual fund to you. The Distributor has agreements in place with each of these
broker-dealers defining specifically what those broker-dealers will be paid for
the sale of a particular ING mutual fund. Those broker-dealers then pay the
registered representative who sold you the mutual fund some or all of what they
receive from ING. They may receive a payment when the sale is made and can, in
some cases, continue to receive payments while you are invested in the mutual
fund.

The Funds' Adviser or the Distributor, out of its own resources and without
additional cost to a Fund or its shareholders, may provide additional cash or
non-cash compensation to intermediaries selling shares of a Fund, including
affiliates of the Adviser and the Distributor. These amounts would be in
addition to the Shareholder Servicing Payments made by a Fund under the
Shareholder Servicing (12b-1) agreement. The payments made under this
arrangement are paid by the Adviser or the Distributor. Additionally, if a fund
is not sub-advised or is sub-advised by an ING entity, ING may retain more
revenue than on those funds it must pay to have sub-advised by non-affiliated
entities. Management personnel of ING may receive additional compensation if
the overall amount of investments in Funds advised by ING meets certain target
levels or increases over time.

The Distributor may pay, from its own resources, additional fees to these
broker-dealers or other financial institutions, including affiliated entities.
These additional fees paid to intermediaries may take the following forms: (1)
a percentage of that entity's customer assets invested in ING mutual funds; or
(2) a percentage of that entity's gross sales; or (3) some combination of these
payments. These payments may, depending on the broker-dealer's satisfaction of
the required conditions, be periodic and may be up to (1) 0.30% per annum of
the value of a Fund's shares held by the broker-dealer's customers or (2) 0.20%
of the value of a Fund's shares sold by the broker-dealer during a particular
period.

                                       47



In accordance with these practices, if that initial investment averages a value
of $10,000 over the year, the Distributor could pay a maximum of $30 on those
assets. If you invested $10,000, the Distributor could pay a maximum of $20 for
that sale.

The Adviser or the Distributor may provide additional cash or non-cash
compensation to third parties selling our mutual funds, including affiliated
companies. This may take the form of cash incentives and non-cash compensation,
and may include but is not limited to: cash; merchandise; trips; occasional
entertainment; meals or tickets to a sporting event; client appreciation
events; payment for travel expenses (including meals and lodging) to
pre-approved training and education seminars; and payment for advertising and
sales campaigns. The Distributor may also pay concessions in addition to those
described above to broker-dealers so that ING mutual funds are made available
by those broker-dealers for their customers. Sub-advisers of a Fund may
contribute to non-cash compensation arrangements.

Not all mutual funds pay the same amount to the broker-dealers who sell their
mutual funds. Broker-dealers can receive different payments based on the mutual
funds they offer, the companies with whom they are doing business, and how much
they sell. What these broker-dealers are paid also varies depending on the
class of mutual fund you purchase.

The top 25 firms we paid to sell our mutual funds, as of the end of the last
calendar year are: A.G. Edwards & Sons, Inc.; Bear Stearns Securities Corp;
Charles Schwab & Co; Citigroup Global Markets; Directed Services LLC; Financial
Network Investment; First Clearing, LLC; H&R Block Financial Advisors; ING
DIRECT Securities, Inc.; ING Financial Advisors; ING Life Insurance and Annuity
Company; Linsco Private Ledger Financial; Merrill Lynch; MS & Co. ("Morgan
Stanley"); Multi Financial Securities; National Financial Services Corp;
Oppenheimer & Co.; Pershing, LLC; Primevest Financial Services, Inc.;
Prudential Investment Management Services; Raymond James Financial Services;
RBC Dain Rauscher, Inc.; UBS Financial Services, Inc.; Wachovia Securities; and
Wells Fargo Investments.

Your registered representative or broker-dealer could have a financial interest
in selling you a particular mutual fund, or the mutual funds of a particular
company, to increase the compensation they receive. Please make sure you read
fully each mutual fund prospectus and discuss any questions you have with your
registered representative.

DIVIDENDS AND DISTRIBUTIONS

Dividends Dividends are declared and paid annually for all Funds except
Balanced Fund which pays semi-annually and Aeltus Money Market Fund which
declares daily and pays monthly. Dividends are normally expected to consist of
ordinary income.

CAPITAL GAINS DISTRIBUTIONS Capital gains distributions, if any, are paid on an
annual basis. To comply with federal tax regulations, each Fund may also pay an
additional capital gains distribution, usually in June.

Distributions are normally expected to consist primarily of capital gains.

Both income dividends and capital gains distributions are paid by each Fund on
a per share basis. As a result, at the time of this payment, the share price of
a Fund will be reduced by the amount of the payment.

DISTRIBUTION OPTIONS When completing your application, you must select one of
the following three options for dividends and capital gains distributions:

o  FULL REINVESTMENT Both dividends and capital gains distributions from a Fund
   will be reinvested in additional shares of the same class of shares of that
   Fund. This option will be selected automatically unless one of the other
   options is specified.

o  CAPITAL GAINS REINVESTMENT Capital gains distributions from a Fund will be
   reinvested in additional shares of the same class of shares of that Fund
   and all net income from dividends will be distributed in cash.

o  ALL CASH Dividends and capital gains distributions will be paid in cash. If
   you select a cash distribution option, you can elect to have distributions
   automatically invested in shares of another Fund.

Distributions paid in shares will be credited to your account at the next
determined NAV per share.

HOUSEHOLDING

To reduce expenses, we may mail only one copy of a Fund's prospectus and each
annual and semi-annual shareholder report to those addresses shared by two or
more accounts. If you wish to receive individual copies of these documents,
please call us at 1-866-BUY-FUND (866-289-3863) or speak to your investment
professional. We will begin sending you individual copies thirty (30) days
after receiving your request.

PORTFOLIO HOLDINGS DISCLOSURE POLICY

A description of the policies and procedures with respect to the disclosure of
each Fund's portfolio securities is available in the SAI. Each Fund posts its
portfolio holdings schedule on its website on a calendar-quarter basis and
makes it available on the first day of the second month in the next quarter.
The portfolio holdings schedule is as of the last day of the month preceding
the

                                       48



quarter-end (e.g., each Fund will post the quarter ending June 30 holdings on
August 1). Each Fund's portfolio holdings schedule will, at a minimum, remain
available on the Funds' website until a fund files a Form N-CSR or Form N-Q
with the SEC for the period that includes the date as of which the website
information is current. The Funds' website is located at www.ingfunds.com.

TAX INFORMATION

The following information is meant as a general summary for U.S. shareholders.
Please see the SAI for additional information. You should rely on your own tax
adviser for advice about the particular federal, state and local tax
consequences to you of investing in the Funds.

Each Fund will distribute all, or substantially all, of its net investment
income and net capital gains to its shareholders each year. Although the Fund
will not be taxed on amounts it distributes, most shareholders will be taxed on
amounts they receive. A particular distribution generally will be taxable as
either ordinary income or long-term capital gains. Except as described below,
it generally does not matter how long you have held your Fund shares or whether
you elect to receive your distributions in cash or reinvest them in additional
Fund shares. For example, if a Fund designates a particular distribution as a
long-term capital gains distribution, it will be taxable to you at your
long-term capital gains rate.

Current tax law (which is currently scheduled to apply through 2010) generally
provides for a maximum tax rate for individual taxpayers of 15% on long-term
gains from sales and from certain qualifying dividends on corporate stock.
Although these rate reductions do not apply to corporate taxpayers, such
taxpayers may be entitled to a corporate dividends received deduction with
respect to their share of eligible domestic corporate dividends received by a
Fund. The following are guidelines for how certain distributions by the Funds
are generally taxed to individual taxpayers:

o  Distributions of earnings from qualifying dividends and qualifying long-term
   capital gains will be taxed at a maximum rate of 15%.

o  Note that distributions of earnings from dividends paid by certain
   "qualified foreign corporations" can also qualify for the lower tax rates
   on qualifying dividends.

o  A shareholder will also have to satisfy a more than 60-day holding period
   with respect to any distributions of qualifying dividends in order to
   obtain the benefit of the lower tax rate.

o  Distributions of earnings from non-qualifying dividends, interest income,
   other types of ordinary income and short-term capital gains will be taxed
   at the ordinary income tax rate applicable to the taxpayer.

o  The maximum 15% tax rate for individual taxpayers on long-term capital gains
   and qualifying dividends is currently scheduled to apply through 2010. In
   the absence of further Congressional action, for the calendar years after
   2010, the maximum rate on long-term capital gains for individual taxpayers
   would increase to 20% and income from dividends would be taxed at the rates
   applicable to ordinary income.

Dividends declared by a Fund in October, November or December and paid during
the following January may be treated as having been received by shareholders in
the year the distributions were declared.

You will receive an annual statement summarizing your dividend and capital
gains distributions.

If you buy shares of a Fund before it makes a distribution, the distribution
will be taxable to you even though it may actually be a return of a portion of
your investment. This is known as "buying a dividend."

If you invest through a tax-deferred account, such as a retirement plan, you
generally will not have to pay tax on dividends until they are distributed from
the account. These accounts are subject to complex tax rules, and you should
consult your tax adviser about investment through a tax-deferred account.

There may be tax consequences to you if you sell or redeem Fund shares (except
Money Market Fund). Provided Money Market Fund maintains, as is anticipated, a
stable $1.00 per share NAV, an exchange or redemption of Fund shares generally
will not result in a taxable gain or loss. You will generally have a capital
gain or loss, which will be long-term or short-term, generally depending on how
long you hold those shares. If you exchange shares, you may be treated as if
you sold them. If your tax basis in your shares exceeds the amount of proceeds
you receive from a sale, exchange or redemption of shares, you will recognize a
taxable loss on the sale of shares of a Fund. Any loss recognized on shares
held for six months or less will be treated as long-term capital loss to the
extent of any long-term capital gain distributions that were received with
respect to the shares. Additionally, any loss realized on a sale, redemption or
exchange of shares of a Fund may be disallowed under "wash sale" rules to the
extent the shares disposed of are replaced with other shares of that Fund
within a period of 61 days beginning 30 days before and ending 30 days after
shares are disposed of, such as pursuant to a dividend reinvestment in shares
of that Fund. If disallowed, the loss will be reflected in an adjustment

                                       49



FINANCIAL HIGHLIGHTS                                              BALANCED FUND
--------------------------------------------------------------------------------

The information in the table below has been derived from the Fund's financial
statements. The financial statements have been audited by KPMG LLP, an
independent registered public accounting firm.

                                                                             CLASS O
                                                       ____________________________________________________
                                                                   YEAR ENDED                 SEPTEMBER 15,
                                                                     MAY 31,                   2004(1) TO
                                                       ___________________________________       MAY 31,
                                                               2007               2006            2005
                                                       ___________________   _____________   ______________
 PER SHARE OPERATING PERFORMANCE:
 Net asset value, beginning of period        $                  11.78              12.31             11.83
 Income from investment operations:
 Net investment income                       $                   0.24*              0.18*             0.17
 Net realized and unrealized gain on         $                   1.49               0.29              0.57
  investments
 Total from investment operations            $                   1.73               0.47              0.74
 Less distributions from:
 Net investment income                       $                   0.23               0.17              0.14
 Net realized gains on investments           $                   0.09               0.83              0.12
 Total distributions                         $                   0.32               1.00              0.26
 Net asset value, end of period              $                  13.19              11.78             12.31
 TOTAL RETURN(2)                             %                  14.92               3.94              6.71
 RATIOS AND SUPPLEMENTAL DATA:
 Net assets, end of period (000's)           $                 36,595             24,009            10,379
 Ratios to average net assets:
 Gross expenses prior to expense waiver(3)   %                   1.35               1.40              1.33
 Net expenses after expense waiver(3)(4)     %                   1.29 (5)           1.40              1.33
 Net investment income after expense         %                   1.96 (5)           1.45              1.44
  waiver(3)(4)
 Portfolio turnover rate                     %                    268                309               289

(1)   Commencement of operations.

(2)   Total return is calculated assuming reinvestment of all dividends and
      capital gain distributions at net asset value. Total returns for periods
      less than one year are not annualized.

(3)   Annualized for periods less than one year.

(4)   The Adviser has agreed to limit expenses, (excluding interest, taxes,
      brokerage and extraordinary expenses) subject to possible recoupment by
      ING Investments, LLC within three years of being incurred.

(5)   Impact of waiving the advisory fee for the ING Institutional Prime Money
      Market Fund holding has less than 0.01% impact on the expense ratio.

*     Per share numbers have been calculated using average number of shares
      outstanding throughout the period.

                                       53



GLOBAL SCIENCE AND TECHNOLOGY FUND                         FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

The information in the table below has been derived from the Fund's financial
statements. The financial statements have been audited by KPMG LLP, an
independent registered public accounting firm.

                                                                                  CLASS O
                                                  ________________________________________________________________________
                                                                YEAR ENDED                FIVE MONTHS      YEAR ENDED
                                                               OCTOBER 31,                   ENDED           MAY 31,
                                                  ______________________________________  OCTOBER 31,  ___________________
                                                      2007         2006         2005        2004(1)        2004      2003
                                                  ____________ ____________ ____________ _____________ ____________ _____
 PER SHARE OPERATING PERFORMANCE:
 Net asset value, beginning of period      $            4.39         3.84         3.48           3.62        3.08        3.
 Income (loss) from investment operations:
 Net investment loss                       $           (0.04)       (0.03)       (0.03)         (0.02)      (0.04)      (0.
 Net realized and unrealized gain (loss)   $            1.24         0.58         0.39          (0.12)       0.58       (0.
  on
 investments and foreign currency related
 transactions
 Total from investment operations          $            1.20         0.55         0.36          (0.14)       0.54       (0.
 Net asset value, end of period            $            5.59         4.39         3.84           3.48        3.62        3.
 TOTAL RETURN(2)                           %           27.33        14.32        10.34          (3.87)      17.53      (19.
 RATIOS AND SUPPLEMENTAL DATA:
 Net assets, end of period (000's)         $          44,503       27,049       15,702         11,808      11,509      1,93
 Ratios to average net assets:
 Gross expenses prior to expense           %            2.09         2.09         2.10           2.04        2.23        3.
 reimbursement(3)
 Net expenses after expense                %            1.75         1.75         1.75           1.75        1.80        1.
 reimbursement(3)(4)
 Net investment loss after expense         %           (0.93)       (0.87)       (1.04)         (1.53)      (1.61)      (1.
 reimbursement(3)(4)
 Portfolio turnover rate                   %              87          140          128             48         121        28

(1)   The Fund changed its fiscal year end to October 31.

(2)   Total return is calculated assuming reinvestment of all dividends and
      capital gain distributions at NAV and excluding the deduction of sales
      charges. Total returns for periods less than one year are not annualized.

(3)   Annualized for periods less than one year.

(4)   The Adviser has agreed to limit expenses (excluding interest, taxes,
      brokerage and extraordinary expenses) subject to possible recoupment by
      ING Investments, LLC within three years of being incurred.

                                       54



FINANCIAL HIGHLIGHTS                 INDEX PLUS LARGECAP FUND
--------------------------------------------------------------------------------

The information in the table below has been derived from the Fund's financial
statements. The financial statements have been audited by KPMG LLP, an
independent registered public accounting firm.

                                                                                CLASS O
                                                  ____________________________________________________________________
                                                                               YEAR ENDED
                                                                                MAY 31,
                                                  ____________________________________________________________________
                                                        2007           2006         2005         2004         2003
                                                  ________________ ____________ ____________ ____________ ____________
 PER SHARE OPERATING PERFORMANCE:
 Net asset value beginning of year         $              16.22         15.27        14.26        12.33         13.76
 Income (loss) from investment operations:
 Net investment income                     $               0.15          0.13         0.15         0.09          0.09
 Net realized and unrealized gain (loss)   $               3.38          0.96         1.03         1.94         (1.40)
  on investments and
 futures
 Total from investment operations          $               3.53          1.09         1.18         2.03         (1.31)
 Less distributions from:
 Net investment income                     $               0.17          0.14         0.17         0.10          0.12
 Total distributions                       $               0.17          0.14         0.17         0.10          0.12
 Net asset value, end of year              $              19.58         16.22        15.27        14.26         12.33
 TOTAL RETURN(1)                           %              21.84          7.11         8.27        16.50         (9.46)
 RATIOS AND SUPPLEMENTAL DATA:
 Net assets, end of year (000's)           $             90,279        59,536       37,242       20,068         4,854
 Ratios to average net assets:
 Gross expenses prior to expense           %               0.98          0.95         0.93         0.93          0.97
  reimbursement/recoupment
 Net expenses after expense                %               0.95(3)       0.95         0.93         0.94          0.95
  reimbursement/recoupment(2)
 Net investment income after expense       %               0.95(3)       0.89         1.06         0.75          0.91
  reimbursement/
 recoupment(2)
 Portfolio turnover rate                   %               109           133           78           79           112

(1)   Total return is calculated assuming reinvestment of all dividends, and
      capital gain distributions at net asset value.

(2)   The Adviser has agreed to limit expenses, (excluding interest, taxes,
      brokerage and extraordinary expenses) subject to possible recoupment by
      ING Investments, LLC within three years of being incurred.

(3)   Impact of waiving the advisory fee for the ING Institutional Prime Money
      Market Fund holding has less than 0.01% impact on the expense ratio.

                                       55



INDEX PLUS MIDCAP FUND                                     FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

The information in the table below has been derived from the Fund's financial
statements. The financial statements have been audited by KPMG LLP, an
independent registered public accounting firm.

                                                                                CLASS O
                                                  ____________________________________________________________________
                                                                               YEAR ENDED
                                                                                MAY 31,
                                                  ____________________________________________________________________
                                                        2007           2006         2005         2004         2003
                                                  ________________ ____________ ____________ ____________ ____________
 PER SHARE OPERATING PERFORMANCE:
 Net asset value, beginning of year        $              17.75         16.31        14.52        11.69         12.97
 Income (loss) from investment operations:
 Net investment income                     $               0.10          0.04         0.04         0.02          0.02
 Net realized and unrealized gain (loss)   $               3.16          2.19         1.83         2.83         (1.20)
  on investments
 Total from investment operations          $               3.26          2.23         1.87         2.85         (1.18)
 Less distributions from:
 Net investment income                     $               0.05          0.04         0.02         0.02            -
 Net realized gains on investments         $               1.41          0.75         0.06           -           0.10
 Total distributions                       $               1.46          0.79         0.08         0.02          0.10
 Net asset value, end of year              $              19.55         17.75        16.31        14.52         11.69
 TOTAL RETURN(1)                           %              19.37         13.85        12.91        24.38         (9.06)
 RATIOS AND SUPPLEMENTAL DATA:
 Net assets, end of year (000's)           $             67,607        51,251       32,350       20,705         4,658
 Ratios to average net assets:
 Gross expenses prior to expense           %               1.02          0.99         0.99         1.11          1.38
  reimbursement/recoupment
 Net expenses after expense                %               1.00(3)       1.00         1.00         1.00          0.99
  reimbursement/recoupment(2)
 Net investment income after               %               0.59(3)       0.29         0.29         0.33          0.29
  reimbursement/recoupment(2)
 Portfolio turnover rate                   %                 92           111           93          112           128

(1)   Total return is calculated assuming reinvestment of all dividends and
      capital gain distributions at net asset value.

(2)   The Adviser has agreed to limit expenses, (excluding interest, taxes,
      brokerage and extraordinary expenses) subject to possible recoupment by
      ING Investments, LLC within three years of being incurred.

(3)   Impact of waiving the advisory fee for the ING Institutional Prime Money
      Market Fund holding has less than 0.01% impact on the expense ratio.

                                       56



FINANCIAL HIGHLIGHTS                 INDEX PLUS SMALLCAP FUND
--------------------------------------------------------------------------------

The information in the table below has been derived from the Fund's financial
statements. The financial statements have been audited by KPMG LLP, an
independent registered public accounting firm.

                                                                                CLASS O
                                                  ____________________________________________________________________
                                                                               YEAR ENDED
                                                                                MAY 31,
                                                  ____________________________________________________________________
                                                        2007           2006         2005         2004         2003
                                                  ________________ ____________ ____________ ____________ ____________
 PER SHARE OPERATING PERFORMANCE:
 Net asset value, beginning of year        $              18.91         16.58        14.82       11.47         12.85
 Income (loss) from investment operations:
 Net investment income                     $               0.02          0.02         0.02        0.00*         0.00*
 Net realized and unrealized gain (loss)   $               2.63          2.68         2.27        3.35         (1.25)
  on investments
 Total from investment operations          $               2.65          2.70         2.29        3.35         (1.25)
 Less distributions from:
 Net realized gain from investments        $               1.67          0.37         0.53           -          0.13
 Total distributions                       $               1.67          0.37         0.53           -          0.13
 Net asset value, end of year              $              19.89         18.91        16.58       14.82         11.47
 TOTAL RETURN(1)                           %              14.71         16.39        15.52       29.21         (9.67)
 RATIOS AND SUPPLEMENTAL DATA:
 Net assets, end of year (000's)           $             45,242        40,479       28,992      17,369         2,333
 Ratios to average net assets:
 Gross expenses prior to expense           %               1.08          1.07         1.12        1.39          2.37
  reimbursement
 Net expenses after expense                %               1.00(3)       1.00         1.00        0.99          0.98
  reimbursement(2)
 Net investment income (loss) after        %               0.09(3)       0.10         0.13       (0.04)        (0.01)
  reimbursement(2)
 Portfolio turnover rate                   %                 93           109           83         126           129

(1)   Total return is calculated assuming reinvestment of all dividends and
      capital gain distributions at net asset value.

(2)   The Adviser has agreed to limit expenses, (excluding interest, taxes,
      brokerage and extraordinary expenses) subject to possible recoupment by
      ING Investments, LLC within three years of being incurred.

(3)   Impact of waiving the advisory fee for the ING Institutional Prime Money
      Market Fund holding has less than 0.01% impact on the expense ratio.

*     Amount is less than $0.005.

                                       57



WHERE TO GO FOR MORE INFORMATION

YOU'LL FIND MORE INFORMATION ABOUT THE FUNDS IN OUR:

ANNUAL/SEMI-ANNUAL SHAREHOLDER REPORTS

In the Funds' annual/semi-annual shareholder report, you will find a discussion
of the recent market conditions and principal investment strategies that
significantly affected the Funds' performance during their last fiscal year,
the financial statements and the independent registered public accounting
firm's reports (in annual shareholder report only).

STATEMENT OF ADDITIONAL INFORMATION ("SAI")

The SAI contains more detailed information about the Funds. The SAI is legally
part of this Prospectus (it is incorporated by reference). A copy has been
filed with the SEC.

Please write, call or visit our website for a free copy of the current annual/
semi-annual shareholder reports, the SAI, or other Fund information about the
Funds.

To make shareholder inquiries contact:

ING DIRECT SECURITIES, INC.
P.O. Box 15647
Wilmington, DE 19885-5647

1-866-BUY-FUND (866-289-3863)

Or visit the Distributor's website for a free copy of the Funds' Prospectus or
SAI at www.ingdirect.com

Or visit the Funds' website for a free copy of the Funds' annual/semi-annual
shareholder reports at www.ingfunds.com

This information may also be reviewed or obtained from the SEC. In order to
review the information in person, you will need to visit the SEC's Public
Reference Room in Washington, D.C. or call 202-551-8090 for information on the
operation of the Public Reference Room. Otherwise, you may obtain the
information for a fee by contacting the SEC at:

SECURITIES AND EXCHANGE COMMISSION
Public Reference Section
100 F Street, N.E.
Washington, D.C. 20549

or at the e-mail address: PUBLICINFO@SEC.GOV

Or obtain the information at no cost by visiting the SEC's Internet website at
WWW.SEC.GOV.

When contacting the SEC, you will want to refer to the Funds' SEC file numbers.
The file numbers are as follows:
ING Series Fund, Inc. 811-6352
     ING Money Market Fund
     ING Balanced Fund
     ING Global Science and Technology Fund
     ING Index Plus LargeCap Fund
     ING Index Plus MidCap Fund
     ING Index Plus SmallCap Fund
     ING Strategic Allocation Conservative Fund
     ING Strategic Allocation Conservative Fund
     ING Strategic Allocation Moderate Fund

                                       61



                                TABLE OF CONTENTS

<R>
HISTORY OF THE COMPANY.....................................................    3
SUPPLEMENTAL DESCRIPTION OF FUND INVESTMENTS AND RISKS.....................    4
INVESTMENT RESTRICTIONS....................................................   44
PORTFOLIO TURNOVER.........................................................   44
DISCLOSURE OF THE FUND'S PORTFOLIO SECURITIES..............................   46
MANAGEMENT OF THE COMPANY..................................................   49
CODE OF ETHICS.............................................................   57
PROXY VOTING PROCEDURES....................................................   57
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS.................................   57
ADVISER....................................................................   58
EXPENSE LIMITATION AGREEMENT...............................................   59
SUB-ADVISER................................................................   60
RULE 12B-1 PLANS...........................................................   64
ADMINISTRATOR..............................................................   66
CUSTODIAN..................................................................   66
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM..............................   67
TRANSFER AGENT.............................................................   67
BROKERAGE ALLOCATION AND TRADING POLICIES..................................   67
PURCHASE AND REDEMPTION OF SHARES..........................................   71
NET ASSET VALUE............................................................   75
FEDERAL INCOME TAX CONSIDERATIONS..........................................   75
DISTRIBUTOR................................................................   83
CALCULATION OF PERFORMANCE DATA............................................   86
PERFORMANCE COMPARISONS....................................................   87
FINANCIAL STATEMENTS.......................................................   88
APPENDIX A - PROXY VOTING PROCEDURES AND GUIDELINES........................  A-1
</R>

                                        2



                             HISTORY OF THE COMPANY

The Company is a Maryland corporation registered as a diversified, open-end
management investment company. The Company was organized in June 1991 and
currently consists of 15 separately managed series.

This SAI pertains only to Class A, Class B, Class C, Class I and Class O shares
of ING Global Science and Technology Fund.

Incorporation. The Company was incorporated under the laws of the state of
Maryland on June 17, 1991.

Series and Classes. The Company currently offers multiple series. Only ING
Global Science and Technology Fund is offered through this SAI and the
corresponding Prospectuses.

The Board of Directors ("Board") has the authority to subdivide the series into
classes of shares having different attributes so long as each share of each
Class represents a proportionate interest in the series equal to each other
share in that series. Shares of the Fund currently are classified into multiple
Classes.

Each Class of shares has the same rights, privileges and preferences except with
respect to: (a) the effect of sales charges, if any, for each Class; (b) the
distribution fees borne by each Class; (c) the expenses allocable exclusively to
each Class; (d) voting rights on matters exclusively affecting a single Class;
and (e) the exchange privilege of each Class.

Capital Stock. Fund shares are fully paid and non-assessable when issued. Fund
shares have no preemptive or conversion rights except that the Fund's Class B
shares automatically convert to Class A shares after eight (8) years. A
shareholder's Class B shares will automatically convert to Class A shares in the
Fund on the second calendar day of the following month in which the eighth
anniversary of the issuance of the Class B shares occurs, together with the pro
rata portion of all Class B shares representing dividends and other
distributions paid in additional Class B shares except that Class B shares
acquired initially through funds that were apart of the Nicholas-Applegate
Mutual Funds at the time of purchase will convert after seven years from the
date of the original purchase. Each share of the Fund has the same rights to
share in dividends declared by the Fund for that share Class. Upon liquidation
of the Fund, shareholders in the Fund are entitled to share pro rata in the net
assets of the Fund available for distribution to shareholders.

Voting Rights. Shareholders of each Class are entitled to one vote for each full
share held (and fractional votes for fractional shares held) and will vote on
the election of Directors and on other matters submitted to the vote of
shareholders. Generally, all shareholders have voting rights on all matters
except matters affecting only the interests of one Class of shares. Voting
rights are not cumulative so that the holders of more than 50% of the shares
voting in the election of Directors can, if they choose to do so, elect all the
Directors. In such an event, the holders of the remaining shares will be unable
to elect any person as a Director.

Shareholder Meetings. The Company is not required and does not intend to hold
annual shareholder meetings. The Articles of Incorporation provide for meetings
of shareholders to elect Directors at such times as may be determined by the
Directors or as required by the Investment Company Act of 1940, as amended
("1940 Act"). If requested by the holders of at least 10% of the Company's
outstanding shares, the Company will hold a shareholder meeting for the purpose
of voting on the removal of one or more Directors and will assist with
communication concerning that shareholder meeting.

1940 Act Classification. The Company is a diversified, open-end management
investment company as those terms are defined under the 1940 Act. The 1940 Act
generally requires, among other things, that with respect to 75% of its total
assets, a diversified company may not invest more than 5% of its total assets in
the securities of any one issuer.

                                        3



             SUPPLEMENTAL DESCRIPTION OF FUND INVESTMENTS AND RISKS

Diversification

The Fund is diversified within the meaning of the 1940 Act. In order to qualify
as diversified, the Fund must diversify its holdings so that at all times at
least 75% of the value of its total assets is represented by cash and cash items
(including receivables), securities issued or guaranteed as to principal or
interest by the United States or its agencies or instrumentalities, securities
of other investment companies and other securities (for this purpose, other
securities of any one issuer are limited to an amount not greater than 5% of the
value of the total assets of the Fund and to not more than 10% of the
outstanding voting securities of the issuer).

Investments, Investment Strategies and Risks

The table on the following pages identifies various securities and investment
techniques used by the adviser or sub-adviser in managing the Fund described in
this SAI. The table has been marked to indicate those securities and investment
techniques that the adviser or sub-adviser may use to manage the Fund. The Fund
may use any or all of these techniques at any one time and the fact that the
Fund may use a technique does not mean that the technique will be used. The
Fund's transactions in a particular type of security or use of a particular
technique is subject to limitations imposed by the Fund's investment objective,
policies and restrictions described in the Fund's Prospectuses and/or this SAI,
as well as the federal securities laws. There can be no assurance that the Fund
will achieve its investment objective. The Fund's policies, investment
strategies and practices are non-fundamental unless otherwise indicated. A more
detailed description of the securities and investment techniques as well as the
risks associated with those securities and investment techniques that the Fund
utilizes follows the table. The descriptions of the securities and investment
techniques in this section supplement the discussion of principal investment
strategies contained in the Fund's Prospectuses. Where a particular type of
security or investment technique is not discussed in the Fund's Prospectuses,
that security or investment technique is not a principal investment strategy.
See the Fund's fundamental investment restrictions for further information.

                                        4



                                                              ING Global Science
                       Investments                           and Technology Fund
----------------------------------------------------------   -------------------
Equity Investments
     Common Stock                                                     X
     Convertible Securities                                           X
     Preferred Stock                                                  X
     Synthetic Convertible Securities/1/                              X
     IPOs                                                             X
     Unseasoned Companies                                             X
Foreign and Emerging Market Investments
     Securities of Foreign Issuers                                    X
     ADRs / EDRs / GDRs                                               X
     Eurodollar/Yankee Dollar Instruments/2/                          X
     Eurodollar Convertible Securities/2/                             X
     Foreign Bank Obligations/2/                                      X
     Foreign Currency Exchange Transactions/3/                        X
     Foreign Mortgage-Related Securities/2/                           X
     International Debt Securities                                    X
     Sovereign Debt Securities                                        X
     Supranational Agencies/2,4/                                      X
Fixed-Income Investments
     Debt Securities                                                  X
     ARMs                                                             X
     Asset-Backed Securities (non-Mortgage)/2/                        X
     Banking Industry Obligations/
     Short-Term Investments/2/                                        X
     Corporate Debt Securities                                        X
     Credit-Linked Notes/2/                                           X
     Floating or Variable Rate Instruments/2/                         X
     GICs/2/                                                          X
     Government Trust Certificates/2/                                 X
     GNMA Certificates/2/                                             X
     High-Yield Securities/5/                                         X
     Mortgage-Related Securities/2/                                   X
     Municipal Securities/2/                                          X
     Municipal Lease Obligations/2/                                   X
     Savings Association Obligations/2,6/                             X
     Tax Exempt Industrial Development Bonds
     and Pollution Control Bonds                                      X
     Subordinated Mortgage Securities                                 X
     Interest/Principal Only Stripped Mortgage-Backed                 X
     Securities/2/
     U.S. Government Securities/2,6/                                  X
     Zero-Coupon and Pay-In-Kind/2/                                   X
Other Investments
     Derivatives/7/                                                   X
     Financial Futures Contracts and Related Options/8/               X
     Foreign Currency Options                                         X
     Forward Currency Contracts/8/                                    X
     Foreign Future Contracts and Foreign Options/3/                  X
     Forward Foreign Currency Contracts/3/                            X
     Index-, Currency-, and Equity-Linked Securities/8/               X
     Options on Futures/8/                                            X
     Over-the-Counter Options/8/                                      X
     Put and Call Options/8,9/                                        X
     Stock Index Options/8/                                           X
     Straddles/8/                                                     X
     Warrants                                                         X
     Other Investment Companies/7/                                    X
     Private Funds                                                    X
     Real Estate Securities                                           X
     Restricted and Illiquid Securities                               X
     TBA Sale Commitments                                             X
     Trust-Preferred Securities                                       X
Investment Techniques
     Borrowing                                                        X
     Lending of Fund Securities                                       X
     Repurchase Agreements

                                        5



                                                              ING Global Science
                       Investments                           and Technology Fund
----------------------------------------------------------   -------------------
     Reverse Repurchase Agreements and Dollar Rolls                   X
     Securities, Interest Rate and Currency Swaps/10/                 X
     Short Sales                                                      X
     Temporary Defensive and Short-Term Positions                     X
     When-Issued Securities and Delayed
     Delivery Transactions                                            X

/1/  The Fund may only invest in synthetic convertibles with respect to
     companies whose corporate debt securities are rated "A" or higher by
     Moody's Investors Service, Inc. ("Moody's") or "A" or higher by Standard &
     Poor's Rating Corporation ("S&P") and will not invest more than 15% of its
     net assets in such synthetic securities and other illiquid securities.

/2/  The Fund may only invest in such instruments (which must be of high quality
     and short duration) for temporary and defensive or cash management
     purposes.

/3/  The Fund may only invest in such instruments for the purposes of hedging.

/4/  Other than for temporary and defensive or cash management purposes, the
     Fund may invest up to 10% of its net assets in securities of supranational
     agencies. These securities are not considered government securities and are
     not supported directly or indirectly by the U.S. government.

/5/  The Fund will not invest more than 15% of the total value of its assets in
     high-yield bonds (securities rated below BBB- by S&P or Baa3 by Moody's or
     if unrated, considered by the adviser or sub-adviser to be of comparable
     quality).

/6/  The certificates of deposit (interest-bearing time deposits) in which the
     Fund may invest are issued by savings banks or savings and loan
     associations that have capital surplus and undivided profits in excess of
     $100 million based on latest published reports or less than $100 million if
     the principal amount of such obligations is fully insured by the U.S.
     government.

/7/  The Fund may invest in other investment companies to the extent permitted
     under the 1940 Act and the rules and regulations thereunder.

/8/  For purposes other than hedging, the Fund will invest no more than 5% of
     its assets in such instruments. With respect to futures, the 5% limit is
     calculated with reference to the notional value of the futures contracts.

/9/  The Fund is prohibited from having written put and call options outstanding
     at any one time on more than 30% of its total assets. The Fund will not
     write a put if it will require more than 50% of the Fund's net assets to be
     designated to cover all put obligations. The Fund may not buy options if
     more than 3% of its assets immediately following such purchase would
     consist of put options. The Fund may purchase and sell put and call options
     on equity securities only to close out positions previously opened. The
     Fund will not write a call option on a security unless the call is
     "covered" (i.e. it already owns the underlying security). The Fund may
     purchase put options when the adviser or sub-adviser believes that a
     temporary defensive position is desirable in light of market conditions but
     does not desire to sell a portfolio security.

/10/ The Fund will not enter into a swap agreement with any single party if the
     net amount owed or to be received under existing contracts with that party
     would exceed 5% of the Fund's total assets.

                                        6



EQUITY INVESTMENTS

Common Stock, Preferred Stock, Convertible Securities and Other Equity
Securities

Common stocks represent an equity (ownership) interest in a company. This
ownership interest generally gives the Fund the right to vote on issues
affecting the company's organization and operations and such investments may be
diversified over a cross-section of industries and individual companies. Some of
these companies will be organizations with market capitalizations of $500
million or less or companies that have limited product lines, markets and
financial resources and are dependent upon a limited management group. Examples
of possible investments include emerging growth companies employing new
technology, cyclical companies, initial public offerings of companies offering
high growth potential, or other corporations offering good potential for high
growth in market value. The securities of such companies may be subject to more
abrupt or erratic market movements than larger, more established companies both
because the securities typically are traded in lower volume and because the
issuers typically are subject to a greater degree to changes in earnings and
prospects. The Fund may also concentrate its investments in science and
technology sectors.

Other types of equity securities may also be purchased such as preferred stock,
convertible securities, or other securities that are exchangeable for shares of
common stock. Preferred stock, unlike common stock, offers a stated dividend
rate payable from a corporation's earnings. Such preferred stock dividends may
be cumulative or non-cumulative, participating, or auction rate. If interest
rates rise, the fixed dividend on preferred stocks may be less attractive
causing the price of preferred stocks to decline. Preferred stock may have
mandatory sinking fund provisions as well as call/redemption provisions prior to
maturity, a negative feature when interest rates decline. Dividends on some
preferred stock may be "cumulative" requiring all or a portion of prior unpaid
dividends to be paid before dividends are paid on the issuer's common stock.
Preferred stock also generally has a preference over common stock on the
distribution of a corporation's assets in the event of liquidation of the
corporation and may be "participating" which means that it may be entitled to a
dividend exceeding the stated dividend in certain cases. The rights of preferred
stocks on the distribution of a corporation's assets in the event of a
liquidation are generally subordinate to the rights associated with a
corporation's debt securities.

A convertible security is a security that may be converted either at a stated
price or rate within a specified period of time into a specified number of
shares of common stock. By investing in convertible securities, the Fund seeks
the opportunity, through the conversion feature, to participate in the capital
appreciation of the common stock into which the securities are convertible while
investing at a better price than may be available on the common stock or
obtaining a higher fixed rate of return than is available on common stocks. The
value of a convertible security is a function of its "investment value"
(determined by its yield in comparison with the yields of other securities of
comparable maturity and quality that do not have a conversion privilege) and its
"conversion value" (the security's worth at market value if converted into the
underlying common stock). The credit standing of the issuer and other factors
may also affect the investment value of a convertible security. The conversion
value of a convertible security is determined by the market price of the
underlying common stock. If the conversion value is low relative to the
investment value, the price of the convertible security is governed principally
by its investment value. To the extent the market price of the underlying common
stock approaches or exceeds the conversion price, the price of the convertible
security will be increasingly influenced by its conversion value.

The market value of convertible debt securities tends to vary inversely with the
level of interest rates. The value of the security declines as interest rates
increase and increases as interest rates decline. Although under normal market
conditions longer term debt securities have greater yields than do shorter-term
debt securities of similar quality, they are subject to greater price
fluctuations. A convertible security may be subject to redemption at the option
of the issuer at a price established in the instrument governing the convertible
security. If a convertible security held by the Fund is called for redemption,
the Fund must permit the issuer to redeem the security, convert it into the
underlying common stock or sell it to a third party. Rating requirements do not
apply to convertible debt securities purchased by the Fund because the Fund
purchases

                                        7



such securities for its equity characteristics.

"Synthetic" convertible securities are derivative positions composed of two or
more different securities whose investment characteristics taken together,
resemble those of convertible securities. For example, the Fund may purchase a
non-convertible debt security and a warrant or option which enables the Fund to
have a convertible-like position with respect to a company, group of companies
or stock index. Synthetic convertible securities are typically offered by
financial institutions and investment banks in private placement transactions.
Upon conversion, the Fund generally receives an amount in cash equal to the
difference between the conversion price and the then current value of the
underlying security. Unlike a true convertible security, a synthetic convertible
comprises two or more separate securities each with its own market value.
Therefore, the market value of a synthetic convertible is the sum of the values
of its fixed-income component and its convertible component. For this reason the
values of a synthetic convertible and a true convertible security may respond
differently to market fluctuations. The Fund may only invest in synthetic
convertibles with respect to companies whose corporate debt securities are rated
"A" or higher by a nationally recognized statistical rating organization
("NRSRO").

Initial Public Offerings

Initial Public Offerings ("IPOs") occur when a company first offers its
securities to the public. Although companies can be any age or size at the time
of their IPO, they are often smaller and have a limited operating history which
involves a greater potential for the value of their securities to be impaired
following the IPO. Investors in IPOs can be adversely affected by substantial
dilution in the value of their shares, by sales of additional shares and by
concentration of control in existing management and principal shareholders. In
addition, all of the factors that affect stock market performance may have a
greater impact on the shares of IPO companies.

The price of a company's securities may be highly unstable at the time of its
IPO and for a period thereafter due to market psychology prevailing at the time
of the IPO, the absence of a prior public market, the small number of shares
available and limited availability of investor information. As a result of this
or other factors, the Fund's adviser or sub-adviser might decide to sell an IPO
security more quickly than it would otherwise which may result in a significant
gain or loss and greater transaction costs to the Fund. Any gains from shares
held for 12 months or less will be treated as short-term gains, taxable as
ordinary income to the Fund's shareholders. In addition, IPO securities may be
subject to varying patterns of trading volume and may, at times, be difficult to
sell without an unfavorable impact on prevailing prices.

The effect of an IPO investment can have a magnified impact on the Fund's
performance when the Fund's asset bases are small. Consequently, IPOs may
constitute a significant portion of the Fund's returns particularly when the
Fund is small. Since the number of securities issued in an IPO is limited, it is
likely that IPO securities will represent a smaller component of the Fund's
assets as it increases in size and therefore, have a more limited effect on the
Fund's performance.

There can be no assurance that IPOs will continue to be available for the Fund
to purchase. The number or quality of IPOs available for purchase by the Fund
may vary, decrease or entirely disappear. In some cases the Fund may not be able
to purchase IPOs at the offering price but may have to purchase the shares in
the aftermarket at a price greatly exceeding the offering price making it more
difficult for the Fund to realize a profit.

Unseasoned Companies

The Fund considers securities of companies with limited operating histories to
be securities of companies with a record of less than three (3) years'
continuous operation including the operations of any predecessors and parents
(these are sometimes referred to as "unseasoned issuers.") These companies, by
their nature, have only a limited operating history that can be used for
evaluating the company's growth prospects. As a result,

                                        8



investment decisions for these securities may place a greater emphasis on
fundamental valuation factors than would be the case for more mature companies.

FOREIGN AND EMERGING MARKET INVESTMENTS

Securities of Foreign Issuers

Securities of foreign issuers have certain common characteristics and risks.
Foreign financial markets, while growing in volume have, for the most part,
substantially less volume than U.S. markets, and securities of many foreign
companies are less liquid and their prices more volatile than securities of
comparable domestic companies. The foreign markets also have different clearance
and settlement procedures and, in certain markets, there have been times when
settlements have been unable to keep pace with the volume of securities
transactions making it difficult to conduct such transactions. Delivery of
securities may not occur at the same time as payment in some foreign markets.
Delays in settlement could result in temporary periods when a portion of the
assets of the Fund is uninvested and no return is earned thereon. The inability
of the Fund to make intended security purchases due to settlement problems could
cause the Fund to miss attractive investment opportunities. Inability to dispose
of portfolio securities due to settlement problems could result either in losses
to the Fund due to subsequent declines in value of the portfolio security or, if
the Fund has entered into a contract to sell the security, could result in
possible liability to the purchaser.

As foreign companies are not generally subject to uniform accounting, auditing
and financial reporting standards and practices comparable to those applicable
to domestic companies, there may be less publicly available information about
certain foreign companies than about domestic companies. There is generally less
government supervision and regulation of exchanges, financial institutions and
issuers in foreign countries than there is in the United States. A foreign
government may impose exchange control regulations that may have an impact on
currency exchange rates and there is the possibility of expropriation or
confiscatory taxation, political or social instability or diplomatic
developments that could affect U.S. investments in those countries.

Changes in foreign currency exchange rates will affect the value of securities
denominated or quoted in currencies other than the U.S. dollar and the
unrealized appreciation or depreciation of investments so far as U.S. investors
are concerned. Transactional costs in non-U.S. securities markets are generally
higher than in U.S. securities markets. In addition, transactions in foreign
securities may involve greater time from the trade date until settlement than
domestic securities transactions and involve the risk of possible losses through
the holding of securities by custodians and securities depositories in foreign
countries.

Although the Fund will use reasonable efforts to obtain the best available price
and the most favorable execution with respect to all transactions and the
adviser or sub-adviser will consider the full range and quality of services
offered by the executing broker or dealer when making these determinations,
fixed commissions on many foreign stock exchanges are generally higher than
negotiated commissions on U.S. exchanges. Certain foreign governments levy
withholding taxes against dividend and interest income or may impose other
taxes. Although in some countries a portion of these taxes are recoverable, the
non-recovered portion of foreign withholding taxes will reduce the income
received by the Fund on these investments.

The risks of investing in foreign securities may be intensified for investments
in issuers domiciled or doing substantial business in emerging markets or
countries with limited or developing capital markets. Security prices in
emerging markets can be significantly more volatile than in the more developed
nations of the world reflecting the greater uncertainties of investing in
less-established markets and economies. In particular, countries with emerging
markets may have relatively unstable governments, present the risk of sudden
adverse government action and even nationalization of businesses, restrictions
on foreign ownership, or prohibitions of repatriation of assets and may have
less protection of property rights than more developed countries. The economies
of countries with emerging markets may be predominantly based on only a few
industries, may be highly vulnerable to changes in local or global trade
conditions and may suffer from extreme and volatile debt burdens or inflation
rates. Local securities markets may trade a small number of securities and may
be unable

                                        9



to respond effectively to increases in trading volume potentially making prompt
liquidation of substantial holdings difficult or impossible at times.
Transaction settlement and dividend collection procedures may be less reliable
in emerging markets than in developed markets. Securities of issuers located in
countries with emerging markets may have limited marketability and may be
subject to more abrupt or erratic price movements.

American Depositary Receipts, Global Depositary Receipts and European Depositary
Receipts

American Depositary Receipts ("ADRs"), Global Depositary Receipts ("GDRs") and
European Depositary Receipts ("EDRs") or other similar securities represent
securities of foreign issuers. These securities are typically dollar denominated
although their market price is subject to fluctuations of the foreign currency
in which the underlying securities are denominated. Depositary receipts include
the following. ADRs which are receipts typically issued by a U.S. bank or trust
company evidencing ownership of the underlying foreign securities, are typically
designed for U.S. investors and held either in physical form or in book entry
form. EDRs are similar to ADRs but may be listed and traded on a European
exchange as well as in the United States (typically these securities are traded
on the Luxembourg exchange in Europe). Generally, ADRs, in registered form, are
designed for use in the U.S. securities markets and EDRs, in bearer form, are
designed for use in the European securities markets. GDRs are similar to EDRs
although they may be held through foreign clearing agents such as Euroclear and
other foreign depositories. Depositary receipts denominated in U.S. dollars will
not be considered foreign securities for purposes of the investment limitation
concerning investment in foreign securities.

Eurodollar and Yankee Dollar Instruments

Eurodollar instruments are bonds that pay interest and principal in U.S. dollars
held in banks outside the United States, primarily in Europe. Eurodollar
instruments are usually issued on behalf of multinational companies and foreign
governments by large underwriting groups composed of banks and issuing houses
from many countries. Yankee Dollar instruments are U.S. dollar denominated bonds
issued in the United States by foreign banks and corporations. These investments
involve risks that are different from investments in securities issued by U.S.
issuers and may carry the same risks as investing in foreign securities.

Eurodollar Convertible Securities

Eurodollar convertible securities are fixed-income securities of a U.S. issuer
or a foreign issuer that are issued outside the United States and are
convertible into equity securities of the same or a different issuer. Interest
and dividends on Eurodollar securities are payable in U.S. dollars outside of
the United States. The Fund may invest without limitation in Eurodollar
convertible securities that are convertible into foreign equity securities
listed or represented by ADRs listed on the New York Stock Exchange or the
American Stock Exchange or that are convertible into publicly traded common
stock of U.S. companies. The Fund may also invest up to 15% of its total assets
invested in convertible securities, taken at market value, in Eurodollar
convertible securities that are convertible into foreign equity securities which
are not listed or represented by ADRs listed on such exchanges.

Foreign Bank Obligations

Obligations of foreign banks and foreign branches of U.S. banks involve somewhat
different investment risks from those affecting obligations of U.S. banks
including the possibilities that liquidity could be impaired because of future
political and economic developments; the obligations may be less marketable than
comparable obligations of U.S. banks; a foreign jurisdiction might impose
withholding taxes on interest income payable on those obligations; foreign
deposits may be seized or nationalized; foreign governmental restrictions (such
as foreign exchange controls) may be adopted which might adversely affect the
payment of principal and interest on those obligations; and the selection of
those obligations may be more difficult because there may be less publicly
available information concerning foreign banks. In addition, the accounting,

                                       10



auditing and financial reporting standards, practices and requirements
applicable to foreign banks may differ from those applicable to U.S. banks. In
that connection, foreign banks are not subject to examination by any U.S.
government agency or instrumentality.

Foreign Currency Exchange Transactions

The Fund may buy and sell securities denominated in currencies other than the
U.S. dollar and receive interest, dividends and sale proceeds in currencies
other than the U.S. dollar and therefore, may enter into foreign currency
exchange transactions to convert to and from different foreign currencies and to
convert foreign currencies to and from the U.S. dollar. The Fund may either
enter into these transactions on a spot (i.e., cash) basis at the spot rate
prevailing in the foreign currency exchange market or use forward foreign
currency contracts to purchase or sell foreign currencies. A forward foreign
currency exchange contract is an agreement to exchange one currency for another
(for exampe, to exchange a certain amount of U.S. dollars for a certain amount
of Korean Won) at a future date. Forward foreign currency contracts are included
in the group of instruments that can be characterized as derivatives. Neither
spot transactions nor forward foreign currency exchange contracts eliminate
fluctuations in the prices of the Fund's portfolio securities or in foreign
exchange rates or prevent loss if the prices of these securities should decline.

Although these transactions tend to minimize the risk of loss due to a decline
in the value of the hedged currency, at the same time they tend to limit any
potential gain that might be realized should the value of the hedged currency
increase. The precise matching of the forward contract amounts and the value of
the securities involved will not generally be possible because the future value
of these securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date the forward contract
is entered into and the date it matures. The projection of currency market
movements is extremely difficult and the successful execution of a hedging
strategy is highly uncertain. Use of currency hedging techniques may also be
limited by management's need to protect the status of the Fund as a regulated
investment company ("RIC") under the Internal Revenue Code of 1986, as amended
("Code").

Foreign Mortgage-Related Securities

Foreign mortgage-related securities are interests in pools of mortgage loans
made to residential home buyers domiciled in a foreign country. These include
mortgage loans made by trust and mortgage loan companies, credit unions,
chartered banks and others. Pools of mortgage loans are assembled as securities
for sale to investors by various governmental, government-related and private
organizations such as Canada Mortgage and Housing Corporation and First
Australian National Mortgage Acceptance Corporation Limited. The mechanics of
these mortgage-related securities are generally the same as those issued in the
United States. However, foreign mortgage markets may differ materially from the
U.S. mortgage market with respect to matters such as the sizes of loan pools,
pre-payment experience and maturities of loans.

International Debt Securities

International debt securities represent debt obligations (which may be
denominated in U.S. dollar or in non-U.S. currencies) of any rating issued or
guaranteed by foreign corporations, certain supranational entities (such as the
World Bank) and foreign governments (including political subdivisions having
taxing authority) or their agencies or instrumentalities including ADRs. These
debt obligations may be bonds (including sinking fund and callable bonds),
debentures and notes, together with preferred stocks and pay-in-kind securities
or zero-coupon securities.

In determining whether to invest in debt obligations of foreign issuers, the
Fund will consider the relative yields of foreign and domestic debt securities,
the economies of foreign countries, the condition of such countries' financial
markets, the interest rate climate of such countries and the relationship of
such countries' currency to the U.S. dollar. These factors are judged on the
basis of fundamental economic criteria (e.g., relative inflation levels and
trends, growth rate forecasts, balance of payments status and economic policies)
as

                                       11



well as technical and political data. Subsequent foreign currency losses may
result in the Fund having previously distributed more income in a particular
period than was available from investment income which could result in a return
of capital to shareholders. The Fund's portfolio of foreign securities may
include those of a number of foreign countries or, depending upon market
conditions, those of a single country. Investments in securities of issuers in
non-industrialized countries generally involve more risk and may be considered
highly speculative. Although a portion of the Fund's investment income may be
received or realized in foreign currencies, the Fund would be required to
compute and distribute its income in U.S. dollars and absorb the cost of
currency fluctuations and the cost of currency conversions. Investment in
foreign securities involves considerations and risks not associated with
investment in securities of U.S. issuers. For example, foreign issuers are not
required to use generally accepted accounting principles. If foreign securities
are not registered under the Securities Exchange Act of 1933, as amended, ("1933
Act") the issuer generally does not have to comply with the disclosure
requirements of the Securities Exchange Act of 1934, as amended ("1934 Act").
The values of foreign securities investments will be affected by incomplete or
inaccurate information available to the adviser or sub-adviser as to foreign
issuers, changes in currency rates, exchange control regulations or currency
blockage, expropriation or nationalization of assets, application of foreign tax
laws (including withholding taxes), changes in governmental administration or
economic or monetary policy. In addition, it is generally more difficult to
obtain court judgments outside the United States.

Restrictions on Foreign Investments. Some developing countries prohibit or
impose substantial restrictions on investments in their capital markets,
particularly their equity markets, by foreign entities such as the Fund. For
example, certain countries may require governmental approval prior to
investments by foreign persons, limit the amount of investment by foreign
persons in a particular company or limit the investment by foreign persons to
only a specific class of securities of a company that may have less advantageous
terms (including price) than securities of the company available for purchase by
nationals. Certain countries may restrict investment opportunities in issuers or
industries deemed important to national interests.

The manner in which foreign investors may invest in companies in certain
developing countries, as well as limitations on such investments, also may have
an adverse impact on the operations of the Fund if it invests in such countries.
For example, the Fund may be required in certain of such countries to invest
initially through a local broker or other entity and then have the shares
purchased and re-registered in the name of the Fund. Re-registration may, in
some instances, not be able to occur on timely basis resulting in a delay during
which the Fund may be denied certain of its rights as an investor including
rights as to dividends or to be made aware of certain corporate actions. There
also may be instances where the Fund places a purchase order but is subsequently
informed, at the time of re-registration, that the permissible allocation of the
investment to foreign investors has been filled depriving the Fund of the
ability to make its desired investment at that time.

Substantial limitations may exist in certain countries with respect to the
Fund's ability to repatriate investment income, capital or the proceeds of sales
of securities by foreign investors. The Fund could be adversely affected by
delays in, or a refusal to grant, any required governmental approval for
repatriation of capital as well as by the application to the Fund of any
restrictions on investments. No more than 15% of the Fund's net assets may be
comprised, in the aggregate, of assets that are (i) subject to material legal
restrictions on repatriation or (ii) invested in illiquid securities. Even where
there is no outright restriction on repatriation of capital, the mechanics of
repatriation may affect certain aspects of the operations of the Fund. For
example, funds may be withdrawn from the People's Republic of China only in U.S.
or Hong Kong dollars and only at an exchange rate established by the government
once each week.

In certain countries, banks or other financial institutions may be among the
leading companies which have actively traded securities. The 1940 Act restricts
the Fund's investments in any equity securities of an issuer that, in its most
recent fiscal year, derived more than 15% of its revenues from "securities
related activities" as defined by the rules thereunder. The provisions may
restrict the Fund's investments in certain foreign banks and other financial
institutions.

                                       12



Foreign Currency Risks. Currency risk is the risk that changes in foreign
exchange rates will affect, favorably or unfavorably, the U.S. dollar value of
foreign securities. In a period when the U.S. dollar generally rises against
foreign currencies, the returns on foreign stocks for a U.S. investor will be
diminished. By contrast, in a period when the U.S. dollar generally declines,
the returns on foreign securities will be enhanced. Therefore, unfavorable
changes in the relationship between the U.S. dollar and the relevant foreign
currencies will adversely affect the value of the Fund's shares.

Risks of Investing in Foreign Securities. Investments in foreign securities
involve certain inherent risks including the following:

Market Characteristics. Settlement practices for transactions in foreign markets
may differ from those in U.S. markets and may include delays beyond periods
customary in the United States. Foreign security trading practices including
those involving securities settlement where Fund assets may be released prior to
receipt of payment or securities, may expose the Fund to increased risk in the
event of a failed trade or insolvency of a foreign broker-dealer. Transactions
in options on securities, futures contracts, futures options and currency
contracts may not be regulated as effectively on foreign exchanges as similar
transactions in the United States and may not involve clearing mechanisms and
related guarantees. The value of such positions also could be adversely affected
by the imposition of different exercise terms and procedures and margin
requirements than in the United States. The value of the Fund's positions may
also be adversely impacted by delays in its ability to act upon economic events
occurring in foreign markets during non-business hours in the United States.

Legal and Regulatory Matters. In addition to nationalization, foreign
governments may take other actions that could have a significant effect on
market prices of securities and payment of interest including restrictions on
foreign investment, expropriation of goods and imposition of taxes, currency
restrictions and exchange control regulations.

Taxes. The interest payable on certain of the Fund's foreign portfolio
securities may be subject to foreign withholding taxes thus reducing the net
amount of income available for distribution to the Fund's shareholders. A
shareholder otherwise subject to U.S. federal income taxes may, subject to
certain limitations, be entitled to claim a credit or deduction of U.S. federal
income tax purposes for his or her proportionate share of such foreign taxes
paid by the Fund.

Costs. The expense ratios of a fund that invests in foreign securities is likely
to be higher than those of investment companies investing in domestic securities
since the cost of maintaining the custody of foreign securities is higher. In
considering whether to invest in the securities of a foreign company, the
adviser or sub-adviser considers such factors as the characteristics of the
particular company, differences between economic trends and the performance of
securities markets within the United States and those within other countries and
factors relating to the general economic, governmental and social conditions of
the country or countries where the company is located. The extent to which the
Fund will invest in foreign companies and countries and depositary receipts will
fluctuate from time to time within the limitations described in the Prospectuses
depending on the adviser's or sub-adviser's assessment of prevailing market,
economic and other conditions.

Sovereign Debt Securities

Sovereign debt securities are issued by governments of foreign countries. The
sovereign debt securities in which the Fund may invest may be rated below
investment grade. These securities usually offer higher yields than higher-rated
securities but are also subject to greater risk than higher-rated securities.
Brady Bonds represent a type of sovereign debt. These obligations were created
under a debt restructuring plan introduced by former U.S. Secretary of the
Treasury, Nicholas F. Brady, in which foreign entities issued these obligations
in exchange for their existing commercial bank loans. Brady Bonds have been
issued by Argentina, Brazil, Bulgaria, Costa Rica, Dominican Republic, Ecuador,
Mexico, Morocco, Nigeria, Philippines, Poland and Uruguay and may be issued by
other emerging countries.

                                       13



Supranational Agencies

Supranational agencies are not considered government securities and are not
supported directly or indirectly by the U.S. government. Examples of
supranational agencies include, but are not limited to, the International Bank
for Reconstruction and Development (commonly referred to as the World Bank)
which was chartered to finance development projects in developing member
countries; the European Union which is a 27-nation organization engaged in
cooperative economic activities; and the Asian Development Bank which is an
international development bank established to lend funds, promote investment and
provide technical assistance to member nations in the Asian and Pacific regions.

FIXED-INCOME SECURITIES

Debt Securities

The Fund may invest in debt securities. The value of fixed income or debt
securities may be affected by changes in general interest rates and in the
creditworthiness of the issuer. Debt securities with longer maturities (for
example, over ten years) are more affected by changes in interest rates and
provide less price stability than securities with short-term maturities (for
example, one to ten years). Also, for each debt security, there is a risk of
principal and interest default, which will be greater with higher-yielding,
lower-grade securities.

Adjustable Rate Mortgage Securities

Adjustable rate mortgage securities ("ARMS") are pass-through mortgage
securities collateralized by mortgages with adjustable rather than fixed rates.
Generally, ARMS have a specified maturity date and amortize principal over their
life. In periods of declining interest rates, there is a reasonable likelihood
that ARMS will experience increased rates of prepayment of principal. However,
the major difference between ARMS and fixed-rate mortgage securities is that the
interest rate and the rate of amortization of principal of ARMS can and do
change in accordance with movements in a particular, pre-specified, published
interest rate index. The amount of interest on an ARM is calculated by adding a
specified amount, the "margin," to the index subject to limitations on the
maximum and minimum interest that can be charged to the mortgagor during the
life of the mortgage or to maximum and minimum changes to that interest rate
during a given period. Because the interest rates on ARMS generally move in the
same direction as market interest rates, the market value of ARMS tends to be
more stable than that of long-term fixed-rate securities.

There are two main categories of indices which serve as benchmarks for periodic
adjustments to coupon rates on ARMS: those based on U.S. Treasury securities and
those derived from a calculated measure such as a cost of funds index or a
moving average of mortgage rates. Commonly utilized indices include the one-year
and five-year constant maturity Treasury Note rates, the three-month Treasury
Bill rate, the 180-day Treasury Bill rate, rates on longer-term Treasury
securities, the 11th District Federal Home Loan Bank Cost of Funds, the National
Median Cost of Funds, the one-month or three-month London Interbank Offered Rate
("LIBOR"), the prime rate of a specific bank or commercial paper rates. Some
indices, such as the one-year constant maturity Treasury Note rate, closely
mirror changes in market interest rate levels. Others, such as the 11th District
Home Loan Bank Cost of Funds index (often related to ARMS issued by the Federal
National Mortgage Association ("FNMA")) tend to lag changes in market rate
levels and tend to be somewhat less volatile.

Asset-Backed Securities (non-Mortgage)

Asset-backed securities represent individual interests in pools of consumer
loans, home equity loans, trade receivables, credit card receivables and other
debt and are similar in structure to mortgage-backed securities. The assets are
securitized either in a pass-through structure (similar to a mortgage
pass-through structure) or in a pay-through structure (similar to a
collateralized mortgage obligation ("CMO") structure). Asset-backed securities
may be subject to more rapid repayment than their stated maturity date would
indicate as a result of

                                       14



the pass-through of prepayments of principal on the underlying loans. During
periods of declining interest rates, prepayment of certain types of loans
underlying asset-backed securities can be expected to accelerate. Accordingly,
the Fund's ability to maintain positions in these securities will be affected by
reductions in the principal amount of the securities resulting from prepayments
and the Fund must reinvest the returned principal at prevailing interest rates
which may be lower. Asset-backed securities may also be subject to extension
risk during periods of rising interest rates.

Asset-backed securities entail certain risks not presented by mortgage-backed
securities. The collateral underlying asset-backed securities may be less
effective as security for payments than real estate collateral. Debtors may have
the right to set off certain amounts owed on the credit cards or other
obligations underlying the asset-backed security or the debt holder may not have
a first (or proper) security interest in all of the obligations backing the
receivable because of the nature of the receivable or state or federal laws
protecting the debtor. Certain collateral may be difficult to locate in the
event of default and recoveries on depreciated or damaged collateral may not
fully cover payments due on these securities.

The Fund may invest in any type of asset-backed security if the portfolio
manager determines that the security is consistent with the Fund's investment
objective and policies. It is expected that governmental, government-related or
private entities may create mortgage loan pools and other mortgage-backed
securities offering mortgage pass-through and mortgage-collateralized
investments in addition to those described above. As new types of
mortgage-backed securities are developed and offered to investors, investments
in such new types of mortgage-backed securities may be considered for the Fund.

The collateral behind certain asset-backed securities tend to have prepayment
rates that do not vary with interest rates and the short-term nature of the
loans may also tend to reduce the impact of any change in prepayment level.
Other asset-backed securities, such as home equity asset-backed securities, have
prepayment rates that are sensitive to interest rates. Faster prepayments will
shorten the average life and slower prepayments will lengthen it. Asset-backed
securities may be pass-through representing actual equity ownership of the
underlying assets, or pay-through representing debt instruments supported by
cash flows from the underlying assets.

The coupon rate of interest on mortgage-related and asset-backed securities is
lower than the interest rates paid on the mortgages included in the underlying
pool by the amount of the fees paid to the mortgage pooler, issuer and/or
guarantor. Actual yield may vary from the coupon rate. However, if such
securities are purchased at a premium or discount, traded in the secondary
market at a premium or discount, or to the extent that the underlying assets are
prepaid as noted above.

Banking Industry Obligations/Short-Term Investments

Bank Certificates of Deposit, Bankers' Acceptances and Time Deposits - banking
industry obligations include certificates of deposit, bankers' acceptances and
fixed-time deposits. Certificates of deposit are negotiable certificates issued
against funds deposited in a commercial bank for a definite period of time and
earning a specified return. Bankers' acceptances are negotiable drafts or bills
of exchange, normally drawn by an importer or exporter to pay for specific
merchandise, which are "accepted" by a bank meaning, in effect, that the bank
unconditionally agrees to pay the face value of the instrument on maturity.
Certificates of deposit and bankers' acceptances acquired by the Fund will be
dollar-denominated obligations of domestic or foreign banks or financial
institutions which at the time of purchase have capital, surplus and undivided
profits in excess of $100 million (including assets of both domestic and foreign
branches) based on latest published reports or less than $100 million if the
principal amount of such bank obligations are fully insured by the U.S.
government.

A fund holding instruments of foreign banks or financial institutions may be
subject to additional investment risks that are different in some respects from
those incurred by a fund which invests only in debt obligations of U.S. domestic
issuers. Domestic banks and foreign banks are subject to different governmental
regulations

                                       15



with respect to the amount and types of loans which may be made and interest
rates which may be charged. In addition, the profitability of the banking
industry depends largely upon the availability and cost of funds for the purpose
of financing lending operations under prevailing money market conditions.
General economic conditions as well as exposure to credit losses arising from
possible financial difficulties of borrowers plays an important part in the
operations of the banking industry. Federal and state laws and regulations
require domestic banks to maintain specified levels of reserves, are limited in
the amount which they can loan to a single borrower and are subject to other
regulations designed to promote financial soundness. However, such laws and
regulations do not necessarily apply to foreign bank obligations that the Fund
may acquire.

For foreign banks there is a possibility that liquidity could be impaired
because of future political and economic developments; the obligations may be
less marketable than comparable obligations of U.S. banks; a foreign
jurisdiction might impose withholding taxes on interest income payable on those
obligations; foreign deposits may be seized or nationalized; foreign
governmental restrictions (such as foreign exchange controls) may be adopted
which might adversely affect the payment of principal and interest on those
obligations; and the selection of those obligations may be more difficult
because there may be less publicly available information concerning foreign
banks. In addition, the accounting, auditing and financial reporting standards,
practices and requirements applicable to foreign banks may differ from those
applicable to U.S. banks. In that connection, foreign banks are not subject to
examination by any U.S. government agency or instrumentality.

In addition to purchasing certificates of deposit and bankers' acceptances, to
the extent permitted under its investment objectives and policies stated above
and in its Prospectuses, the Fund may make interest-bearing time or other
interest-bearing deposits in commercial or savings banks. Time deposits are
non-negotiable deposits maintained at a banking institution for a specified
period of time at a specified interest rate.

Savings Association Obligations - the Fund may invest in certificates of deposit
(interest-bearing time deposits) issued by savings banks or savings and loan
associations that have capital, surplus and undivided profits in excess of $100
million, based on latest published reports, or less than $100 million if the
principal amount of such obligations is fully insured by the U.S. government.

Commercial Paper, Short-Term Notes and Other Corporate Obligations - the Fund
may invest a portion of its assets in commercial paper and short-term notes.
Commercial paper consists of unsecured promissory notes issued by corporations.
Issues of commercial paper and short-term notes will normally have maturities of
less than nine months and fixed rates of return, although such instruments may
have maturities of up to one year.

Corporate obligations include bonds and notes issued by corporations to finance
longer-term credit needs than supported by commercial paper. While such
obligations generally have maturities of ten years or more, the Funds may
purchase corporate obligations which have remaining maturities of one year or
less from the date of purchase and which are rated "AA" or higher by S&P or "Aa"
or higher by Moody's.

Corporate Debt Securities

Corporate debt securities include corporate bonds, debentures, notes and other
similar corporate debt instruments including convertible securities. The
investment return on a corporate debt security reflects interest earnings and
changes in the market value of the security. The market value of a corporate
debt security will generally increase when interest rates decline and decrease
when interest rates rise. There is also the risk that the issuer of a debt
security will be unable to pay interest or principal at the time called for by
the instrument. Investments in corporate debt securities that are rated below
investment grade are described in "High-Yield Securities" below.

Debt obligations that are deemed investment grade carry a rating of at least
Baa3 from Moody's, BBB- from S&P or a comparable rating from another rating
agency or, if not rated by an agency, are determined by the adviser or
sub-adviser to be of comparable quality. Bonds rated Baa3 or BBB- have
speculative characteristics

                                       16



and changes in economic circumstances that are more likely to lead to a weakened
capacity to make interest and principal payments than higher rated bonds.

Credit-Linked Notes

A credit-linked note ("CLN") is generally issued by one party with a credit
option or risk linked to a second party. The embedded credit option allows the
first party to shift a specific credit risk to the CLN holder or the Fund in
this case. The CLN is issued by a trust, a special purpose vehicle,
collateralized by AAA-rated securities. Because of its high ratings, a CLN may
be purchased by the Fund in accordance with the Fund's investment objective. The
CLN's price or coupon is linked to the performance of the reference asset of the
second party. Generally, the CLN holder receives either fixed or floating coupon
rate during the life of the CLN and par at maturity. The cash flows are
dependent on specified credit-related events. Should the second party default or
declare bankruptcy, the CLN holder will receive an amount equivalent to the
recovery rate. The CLN holder bears the risk of default by the second party and
any unforeseen movements in the reference asset which could lead to loss of
principal and receipt of interest payments. In return for these risks, the CLN
holder receives a higher yield. As with most derivative investments, valuation
of a CLN is difficult due to the complexity of the security (i.e., the embedded
option is not easily priced). The Fund cannot assure that it can implement a
successful strategy regarding this type of investment.

Floating or Variable Rate Instruments

Variable rate demand instruments held by the Fund may have maturities of more
than one year provided: (i) the Fund is entitled to the payment of principal at
any time, or during specified intervals not exceeding one year, upon giving the
prescribed notice (which may not exceed 30 days) and (ii) the rate of interest
on such instruments is adjusted at periodic intervals not to exceed one year. In
determining whether a variable rate demand instrument has a remaining maturity
of one year or less, each instrument will be deemed to have a maturity equal to
the longer of the period remaining until its next interest rate adjustment or
the period remaining until the principal amount can be recovered through demand.
The Fund will be able (at any time or during specified periods not exceeding one
year depending upon the note involved) to demand payment of the principal of a
note. If an issuer of a variable rate demand note defaulted on its payment
obligation, the Fund might be unable to dispose of the note and a loss would be
incurred to the extent of the default. The Fund may invest in variable rate
demand notes only when the investment is deemed to involve minimal credit risk.
The continuing creditworthiness of issuers of variable rate demand notes held by
the Fund will also be monitored to determine whether such notes should continue
to be held. Variable and floating rate instruments with demand periods in excess
of seven days which cannot be disposed of promptly within seven business days in
the usual course of business without taking a reduced price will be treated as
illiquid securities.

Guaranteed Investment Contracts

Guaranteed Investment Contracts ("GICs") are issued by insurance companies.
Pursuant to such contracts, the Fund makes cash contributions to a deposit fund
of the insurance company's general account. The insurance company then credits
to the Fund, on a monthly basis, guaranteed interest which is based on an index.
The GICs provide that this guaranteed interest will not be less than a certain
minimum rate. The insurance company may assess periodic charges against a GIC
for expense and service costs allocable to it and the charges will be deducted
from the value of the deposit fund. In addition, because the Fund may not
receive the principal amount of a GIC from the insurance company on seven days'
notice or less, the GIC is considered an illiquid investment and, together with
other instruments invested in by the Fund which are not readily marketable, will
not exceed 15% of the Fund's net assets. The term of a GIC will be one year or
less. In determining average weighted portfolio maturity, a GIC will be deemed
to have a maturity equal to the period of time remaining until the next
readjustment of the guaranteed interest rate.

                                       17



Government Trust Certificates

Government Trust Certificates represent an interest in a government trust, the
property of which consists of (i) a promissory note of a foreign government no
less than 90% of which is backed by the full faith and credit guaranty issued by
the federal government of the United States (issued pursuant to Title III of the
Foreign Operations, Export, Financing and Related Borrowers Programs
Appropriations Act of 1998) and (ii) a security interest in obligations of the
U.S. Treasury backed by the full faith and credit of the United States
sufficient to support the remaining balance (no more than 10%) of all payments
of principal and interest on such promissory note provided that such obligations
shall not be rated less than AAA or less than Aaa by a NRSRO.

Government National Mortgage Association Certificates

Government National Mortgage Association ("GNMA") Certificates are
mortgage-backed securities representing part ownership of a pool of mortgage
loans. GNMA is a U.S. government corporation within the Department of Housing
and Urban Development. Such loans are initially made by lenders such as mortgage
bankers, commercial banks and savings and loan associations and are either
insured by the Federal Housing Administration ("FHA") or Farmers' Home
Administration ("FMHA") or guaranteed by the Veterans Administration ("VA"). A
GNMA Certificate represents an interest in a specific pool of such mortgages
which, after being approved by GNMA, is offered to investors through securities
dealers. Once approved by GNMA, the timely payment of interest and principal on
each certificate is guaranteed by the full faith and credit of the U.S.
government.

GNMA Certificates differ from bonds in that principal is scheduled to be paid
back by the borrower over the length of the loan rather than returned in a lump
sum at maturity. "Modified pass through" type GNMA Certificates entitle the
holder to receive all interest and principal payments owed on the mortgages in
the pool (net of issuers' and GNMA fees) whether or not the mortgagor has made
such payment.

GNMA Certificates are created by an "issuer" which is an FHA approved mortgage
banker who also meets criteria imposed by GNMA. The issuer assembles a pool of
FHA, FMHA or VA insured or guaranteed mortgages with the same interest rate,
maturity and type of dwelling. Upon application by the issuer and after approval
by GNMA of the pool, GNMA provides its commitment to guarantee timely payment of
principal and interest on the GNMA Certificates backed by the mortgages included
in the pool. The GNMA Certificates, endorsed by GNMA, are then sold by the
issuer through securities dealers.

GNMA is authorized under the Federal National Housing Act to guarantee timely
payment of principal and interest on GNMA Certificates. This guarantee is backed
by the full faith and credit of the United States. GNMA may borrow U.S. Treasury
funds to the extent needed to make payments under its guarantee. When mortgages
in the pool underlying GNMA Certificates are prepaid by mortgagors or by result
of foreclosure, such principal payments are passed through to the certificate
holders. Accordingly, the life of the GNMA Certificate is likely to be
substantially shorter than the stated maturity of the mortgages in the
underlying pool. Because of such variation in prepayment rates, it is not
possible to predict the life of a particular GNMA Certificate but FHA statistics
indicate that 25 to 30 year single family dwelling mortgages have an average
life of approximately 12 years. The majority of GNMA Certificates are backed by
mortgages of this type and accordingly, the generally accepted practice has
developed to treat GNMA Certificates as 30-year securities which prepay fully in
the 12th year.

GNMA Certificates bear a nominal "coupon rate" which represents the effective
FHA-VA mortgage rate at the time of issuance less 0.5%, which constitutes the
GNMA and issuer's fees. For providing its guarantees, GNMA receives an annual
fee of 0.06% of the outstanding principal on certificates backed by single
family dwelling mortgages and the issuer receives an annual fee of 0.44% for
assembling the pool and for passing through monthly payments of interest and
principal.

                                       18



Payments to holders of GNMA Certificates consist of the monthly distributions of
interest and principal less the GNMA and issuer's fees. The actual yield to be
earned by a holder of a GNMA Certificate is calculated by dividing such payments
by the purchase price paid for the GNMA Certificate (which may be at a premium
or a discount from the face value of the certificate). Monthly distributions of
interest, as contrasted to semi-annual distributions which are common for other
fixed interest investments, have the effect of compounding and thereby raising
the effective annual yield earned on GNMA Certificates. Because of the variation
in the life of the pools of mortgages which back various GNMA Certificates and
because it is impossible to anticipate the rate of interest at which future
principal payments may be reinvested, the actual yield earned from a portfolio
of GNMA certificates, such as that in which a fund is invested, will differ
significantly from the yield estimated by using an assumption of a 12 year life
for each GNMA Certificate included in such a portfolio as described.

The actual rate of prepayment for any GNMA Certificate does not lend itself to
advance determination, although regional and other characteristics of a given
mortgage pool may provide some guidance for investment analysis. Also,
secondary-market trading of outstanding GNMA Certificates tends to be
concentrated in issues bearing the current coupon rate.

Construction loan securities are issued to finance building costs. The funds are
disbursed as needed or in accordance with a prearranged plan. The securities
provide for the timely payment to the registered holder of interest at the
specified rate plus scheduled installments of principal. Upon completion of the
construction phase, the construction loan securities are terminated and project
loan securities are issued. It is the Fund's policy to record these GNMA
Certificates on trade date and to segregate assets to cover its commitments on
trade date as well.

GNMA Certificates -- When-Issued And Delayed Delivery Transactions

GNMA Certificates may at times be purchased or sold on a delayed-delivery basis
or on a when-issued basis. These transactions arise when GNMA Certificates are
purchased or sold by the Fund with payment and delivery taking place in the
future in order to secure what is considered to be an advantageous price and
yield to the Fund. No payment is made until delivery is due, often a month or
more after the purchase. The settlement date on such transactions will take
place no more than 120 days from the trade date. When the Fund engages in
when-issued and delayed-delivery transactions, the Fund relies on the buyer or
seller, as the case may be, to consummate the sale. Failure of the buyer or
seller to do so may result in the Fund missing the opportunity of obtaining a
price considered to be advantageous. While when-issued GNMA Certificates may be
sold prior to the settlement date, the Fund intends to purchase such securities
with the purpose of actually acquiring them unless a sale appears desirable for
investment reasons. At the time the Fund makes the commitment to purchase a GNMA
Certificate on a when-issued basis, it will record the transaction and reflect
the value of the security in determining its net asset value ("NAV"). The
adviser or sub-adviser each does not believe that the Fund's NAV or income will
be adversely affected by the purchase of GNMA Certificates on a when-issued
basis. The Fund may invest in when-issued securities without other conditions.
Such securities either will mature or be sold on or about the settlement date.
The Fund may earn interest on such account or securities for the benefit of
shareholders.

High-Yield Securities

High-yield securities are debt securities that are rated lower than "Baa3" by
Moody's, "BBB-" by S&P or of comparable quality if unrated.

High-yield securities often are referred to as "junk bonds" and include certain
corporate debt obligations, higher yielding preferred stock and mortgage-related
securities and securities convertible into the foregoing. Investments in
high-yield securities generally provide greater income and increased opportunity
for capital appreciation than investments in higher quality debt securities but
they also typically entail greater potential price volatility and principal and
income risk.

                                       19



High-yield securities are not considered to be investment grade. They are
regarded as predominantly speculative with respect to the issuing company's
continuing ability to meet principal and interest payments. Also, their yields
and market values tend to fluctuate more than higher-rated securities.
Fluctuations in value do not affect the cash income from the securities but are
reflected in the Fund's NAV. The greater risks and fluctuations in yield and
value occur, in part, because investors generally perceive issuers of
lower-rated and unrated securities to be less creditworthy.

The yields earned on high-yield securities generally are related to the quality
ratings assigned by recognized rating agencies. The following are excerpts from
Moody's description of its bond ratings: Ba - judged to have speculative
elements; their future cannot be considered as well assured. B - generally lack
characteristics of a desirable investment. Caa - 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 - speculative in a high degree; often in default. C
- lowest rate class of bonds; regarded as having extremely poor prospects.
Moody's also applies numerical indicators 1, 2 and 3 to rating categories. The
modifier 1 indicates that the security is in the higher end of its rating
category; 2 indicates a mid-range ranking; and 3 indicates a ranking towards the
lower end of the category. The following are excerpts from S&P's description of
its bond ratings: BB, B, CCC, CC, C - predominantly speculative with respect to
capacity to pay interest and repay principal in accordance with terms of the
obligation; BB indicates the lowest degree of speculation and C the highest. D -
in payment default. S&P applies indicators "+," no character and "-" to its
rating categories. The indicators show relative standing within the major rating
categories.

Certain securities held by the Fund may permit the issuer, at its option, to
call or redeem its securities. If an issuer were to redeem securities held by
the Fund during a time of declining interest rates, the Fund may not be able to
reinvest the proceeds in securities providing the same investment return as the
securities redeemed.

Risks Associated with High-Yield Securities. The medium- to lower-rated and
unrated securities in which the Fund invests tend to offer higher yields than
those of other securities with the same maturities because of the additional
risks associated with them. These risks include:

High-Yield Bond Market. A severe economic downturn or increase in interest rates
might increase defaults in high-yield securities issued by highly leveraged
companies. An increase in the number of defaults could adversely affect the
value of all outstanding high-yield securities thus disrupting the market for
such securities.

Sensitivity to Interest Rate and Economic Changes. High-yield securities are
more sensitive to adverse economic changes or individual corporate developments
but generally less sensitive to interest rate changes than are Treasury or
investment grade bonds. As a result, when interest rates rise causing bond
prices to fall, the value of high-yield securities may not fall as much as
Treasury or investment grade corporate bonds. Conversely, when interest rates
fall these securities may underperform investment grade corporate bonds because
high-yield bond prices tend not to rise as much as the prices of these bonds.

The financial stress resulting from an economic downturn or adverse corporate
developments could have a greater negative effect on the ability of issuers of
high-yield securities to service their principal and interest payments, to meet
projected business goals and to obtain additional financing than on more
creditworthy issuers. Holders of high-yield securities could also be at greater
risk because high-yield securities are generally unsecured and subordinate to
senior debt holders and secured creditors. If the issuer of a high-yield
security owned by the Fund defaults, the Fund may incur additional expenses to
seek recovery. In addition, periods of economic uncertainty and changes can be
expected to result in increased volatility of market prices of high-yield
securities and the Fund's NAV. Furthermore, in the case of high-yield securities
structured as zero-coupon or pay-in-kind securities, their market prices are
affected to a greater extent by interest rate changes and thereby tend to be
more speculative and volatile than securities which pay interest periodically
and in cash.

                                       20



Payment Expectations. High-yield securities present risks based on payment
expectations. For example, high-yield securities may contain redemption or call
provisions. If an issuer exercises these provisions in a declining interest rate
market, the Fund may have to replace the security with a lower yielding security
resulting in a decreased return for investors. Also, the value of high-yield
securities may decrease in a rising interest rate market. In addition, there is
a higher risk of non-payment of interest and/or principal by issuers of
high-yield securities than in the case of investment-grade bonds.

Liquidity and Valuation Risks. Lower rated bonds are typically traded among a
smaller number of broker-dealers rather than in a broad secondary market.
Purchasers of high-yield securities tend to be institutions rather than
individuals, a factor that further limits the secondary market. To the extent
that no established retail secondary market exists, many high-yield securities
may not be as liquid as Treasury and investment grade bonds. The ability of the
Fund's Board to value or sell high-yield securities will be adversely affected
to the extent that such securities are thinly traded or illiquid. Adverse
publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of high-yield securities more
than other securities, especially in a thinly-traded market. To the extent the
Fund owns illiquid or restricted high-yield securities, these securities may
involve special registration responsibilities, liabilities and costs, and
liquidity and valuation difficulties. At times of less liquidity, it may be more
difficult to value high-yield securities because this valuation may require more
research and elements of judgment may play a greater role in the valuation since
there is less reliable, objective data available.

Taxation. Special tax considerations are associated with investing in high-yield
securities structured as zero- coupon or pay-in-kind securities. The Fund
reports the interest on these securities as income even though it receives no
cash interest until the security's maturity or payment date.

Limitations of Credit Ratings. The credit ratings assigned to high-yield
securities may not accurately reflect the true risks of an investment. Credit
ratings typically evaluate the safety of principal and interest payments rather
than the market value risk of high-yield securities. In addition, credit
agencies may fail to adjust credit ratings to reflect rapid changes in economic
or company conditions that affect a security's market value. Although the
ratings of recognized rating services such as Moody's and S&P are considered,
the adviser or sub-adviser primarily relies on its own credit analysis which
includes a study of existing debt, capital structure, ability to service debts
and to pay dividends, the issuer's sensitivity to economic conditions, its
operating history and the current trend of earnings. Thus, the achievement of
the Fund's investment objective may be more dependent on the adviser's or
sub-adviser's own credit analysis than might be the case for a fund which
invests in higher quality bonds. The adviser or sub-adviser continually monitors
the investments in the Fund's portfolio and carefully evaluates whether to
dispose of or retain high-yield securities whose credit ratings have changed.
The Fund may retain a security whose rating has been changed.

Mortgage-Related Securities

The Fund may invest in mortgage-related debt securities, CMOs and real estate
mortgage investment conduits ("REMICs"). Federal mortgage-related securities
include obligations issued or guaranteed by GNMA, FNMA and the Federal Home Loan
Mortgage Corporation ("FHLMC"). GNMA is a wholly-owned corporate instrumentality
of the United States, the securities and guarantees of which are backed by the
full faith and credit of the U.S. government. FNMA, a federally chartered and
privately owned corporation and FHLMC, a federal corporation, are
instrumentalities of the United States with President appointed board members.
The obligations of FNMA and FHLMC are not explicitly guaranteed by the full
faith and credit of the federal government. See "U.S. Government Securities."

Pass-through mortgage-related securities are characterized by monthly payments
to the holder reflecting the monthly payments made by the borrowers who received
the underlying mortgage loans. The payments to the security holders, like the
payments on the underlying loans, represent both principal and interest.
Although the underlying mortgage loans are for specified periods of time, often
twenty or thirty years, the borrowers can, and typically do, repay such loans
sooner. Thus, the security holders frequently receive repayments of

                                       21



principal in addition to the principal that is part of the regular monthly
payment. A borrower is more likely to repay a mortgage bearing a relatively high
rate of interest. This means that in times of declining interest rates, some
higher yielding securities held by the Fund might be converted to cash and the
Fund could be expected to reinvest such cash at the then prevailing lower rates.
The increased likelihood of prepayment when interest rates decline also limits
market price appreciation of mortgage-related securities. If the Fund buys
mortgage-related securities at a premium, mortgage foreclosures or mortgage
prepayments may result in losses of up to the amount of the premium paid since
only timely payment of principal and interest is guaranteed.

CMOs and REMICs are securities which are collateralized by mortgage pass-through
securities. Cash flows from underlying mortgages are allocated to various
classes or tranches in a predetermined, specified order. Each sequential tranche
has a "stated maturity," the latest date by which the tranche can be completely
repaid assuming no repayments and has an "average life," the average time to
receipt of a principal payment weighted by the size of the principal payment.
The average life is typically used as a proxy for maturity because the debt is
amortized rather than being paid off entirely at maturity as would be the case
in a straight debt instrument.

CMOs and REMICs are typically structured as "pass-through" securities. In these
arrangements, the underlying mortgages are held by the issuer which then issues
debt collateralized by the underlying mortgage assets. The security holder thus
owns an obligation of the issuer and payment of interest and principal on such
obligations is made from payments generated by the underlying mortgage assets.
The underlying mortgages may or may not be guaranteed as to payment of principal
and interest by an agency or instrumentality of the U.S. government, such as
GNMA, or otherwise backed by FNMA or FHLMC. Alternatively, such securities may
be backed by mortgage insurance, letters of credit or other credit enhancing
features. Both CMOs and REMICs are issued by private entities. They are not
directly guaranteed by any government agency and are secured by the collateral
held by the issuer. CMOs and REMICs are subject to the type of prepayment risk
described above due to the possibility that prepayments on the underlying assets
will alter their cash flows.

Risks of Mortgage-Related Investment. Investments in mortgage-related securities
involve certain risks. In periods of declining interest rates prices of
fixed-income securities tend to rise. However, during such periods the rate of
prepayment of mortgages tends to increase with the result that such prepayments
must be reinvested by the issuer at lower rates. The rate of prepayments on
underlying mortgages will affect the price and volatility of a mortgage-related
security and may have the effect of shortening or extending the effective
maturity of the security beyond what was anticipated at the time of the
purchase. Unanticipated rates of prepayment on underlying mortgages can be
expected to increase the volatility of such securities. In addition, the value
of these securities may fluctuate in response to the market's perception of the
creditworthiness of the issuers of mortgage-related securities owned by the
Fund. Because investments in mortgage-related securities are interest rate
sensitive, the ability of the issuer to reinvest favorably in underlying
mortgages may be limited by government regulation or tax policy. For example,
action by the Board of Governors of the Federal Reserve System to limit the
growth of the nation's money supply may cause interest rates to rise and thereby
reduce the volume of new residential mortgages. Additionally, although mortgages
and mortgage-related securities are generally supported by some form of
government or private guarantees and/or insurance, there is no assurance that
private guarantors or insurers will be able to meet their obligations. Further,
stripped mortgage-backed securities are likely to experience greater price
volatility than other types of mortgage securities. The yield to maturity on the
interest only class is extremely sensitive, both to changes in prevailing
interest rates and to the rate of principal payments (including prepayments) on
the underlying mortgage assets. Similarly, the yield to maturity on CMO
residuals is extremely sensitive to prepayments on the related underlying
mortgage assets. In addition, if a series of a CMO includes a class that bears
interest at an adjustable rate, the yield to maturity on the related CMO
residual will also be extremely sensitive to changes in the level of the index
upon which interest rate adjustments are made. The Fund could fail to fully
recover its initial investment in a CMO residual or a stripped mortgage-backed
security.

Municipal Securities

                                       22



Municipal securities are debt obligations issued by state and local governments,
territories and possessions of the United States, regional government
authorities and their agencies and instrumentalities ("municipal securities").
Municipal securities include both notes (which have maturities of less than one
year) and bonds (which have maturities of one year or more) that bear fixed or
variable rates of interest.

In general, municipal securities debt obligations are issued to obtain funds for
a variety of public purposes such as the construction, repair, or improvement of
public facilities including airports, bridges, housing, hospitals, mass
transportation, schools, streets, water and sewer works. Municipal securities
may be issued to refinance outstanding obligations as well as to raise funds for
general operating expenses and lending to other public institutions and
facilities.

The two principal classifications of municipal securities are "general
obligation" securities and "revenue" securities. General obligation securities
are secured by the issuer's pledge of its full faith, credit, and taxing power
for the payment of principal and interest. Characteristics and methods of
enforcement of general obligation bonds vary according to the law applicable to
a particular issuer and the taxes that can be levied for the payment of debt
securities may be limited or unlimited as to rates or amounts of special
assessments. Revenue securities are payable only from the revenues derived from
a particular facility, a class of facilities or, in some cases, from the
proceeds of a special excise tax. Revenue bonds are issued to finance a wide
variety of capital projects including electric, gas, water and sewer systems;
highways, bridges, and tunnels; port and airport facilities; colleges and
universities; and hospitals. Although the principal security behind these bonds
may vary, many provide additional security in the form of a debt service reserve
fund, the assets of which may be used to make principal and interest payments on
the issuer's obligations. Housing finance authorities have a wide range of
security including partially or fully insured mortgages, rent subsidized and
collateralized mortgages and the net revenues from housing or other public
projects. Some authorities are provided further security in the form of a
state's assistance (although without obligation) to make up deficiencies in the
debt service reserve fund.

Insured municipal debt may also be purchased in which scheduled payments of
interest and principal guaranteed by a private, non-governmental or governmental
insurance company. The insurance does not guarantee the market value of the
municipal debt or the value of the shares of the Fund.

Securities of issuers of municipal obligations are subject to the provisions of
bankruptcy, insolvency and other laws affecting the rights and remedies of
creditors such as the Bankruptcy Reform Act of 1978. In addition, the
obligations of such issuers may become subject to laws enacted in the future by
Congress, state legislatures or referenda extending the time for payment of
principal or interest or imposing other constraints upon enforcement of such
obligations or upon the ability of municipalities to levy taxes. Furthermore, as
a result of legislation or other conditions, the power or ability of any issuer
to pay, when due, the principal of and interest on its municipal obligations may
be materially affected.

Moral Obligation Securities. Municipal securities may include "moral obligation"
securities which are usually issued by special purpose public authorities. If
the issuer of moral obligation bonds cannot fulfill its financial
responsibilities from current revenues, it may draw upon a reserve fund, the
restoration of which is a moral commitment but not a legal obligation of the
state or municipality which created the issuer.

Tax Exempt Industrial Development and Pollution Control Bonds. These are revenue
bonds and generally are not payable from the unrestricted revenues of an issuer.
They are issued by or on behalf of public authorities to raise money to finance
privately operated facilities for business, manufacturing, housing, sport
complexes and pollution control. Consequently, the credit quality of these
securities is dependent upon the ability of the user of the facilities financed
by the bonds and any guarantor to meet its financial obligations.

Municipal Lease Obligations and Certificates of Participation

                                       23



Municipal lease obligations are lease obligations or installment purchase
contract obligations of municipal authorities or entities. Although lease
obligations do not constitute general obligations of the municipality for which
its taxing power is pledged, a lease obligation is ordinarily backed by the
municipality's covenant to budget for, appropriate and make the payment due
under the lease obligation. The Fund may also purchase certificates of
participation which are securities issued by a particular municipality or
municipal authority to evidence a proportionate interest in base rental or lease
payments relating to a specific project to be made by the municipality, agency
or authority. However, certain lease obligations contain "non-appropriation"
clauses which provide that the municipality has no obligation to make lease or
installment purchase payments in any year unless money is appropriated for such
purpose for such year. Although "non-appropriation" lease obligations are
secured by the leased property, disposition of the property in the event of
default and foreclosure might prove difficult. In addition, these securities
represent a relatively new type of financing and certain lease obligations may
therefore be considered to be illiquid securities.

The Fund will attempt to minimize the special risks inherent in municipal lease
obligations and certificates of participation by purchasing only lease
obligations which meet the following criteria: (1) rated A or better by at least
one NRSRO; (2) secured by payments from a governmental lessee which has actively
traded debt obligations; (3) determined by the adviser or sub-adviser to be
critical to the lessee's ability to deliver essential services; and (4) contain
legal features which the adviser or sub-adviser deems appropriate such as
covenants to make lease payments without the right of offset or counterclaim,
requirements for insurance policies and adequate debt service reserve funds.

Short-Term Municipal Obligations. These securities include the following:

Tax Anticipation Notes are used to finance working capital needs of
municipalities and are issued in anticipation of various seasonal tax revenues
to be payable from these specific future taxes. They are usually general
obligations of the issuer and secured by the taxing power of the municipality
for the payment of principal and interest when due.

Revenue Anticipation Notes are issued in expectation of receipt of other kinds
of revenue such as federal revenues available under the Federal Revenue Sharing
Program. They also are usually general obligations of the issuer.

Bond Anticipation Notes normally are issued to provide interim financing until
long-term financing can be arranged. The long-term bonds then provide the money
for the repayment of the notes.

Construction Loan Notes are sold to provide construction financing for specific
projects. After successful completion and acceptance, many projects receive
permanent financing through the FNMA or GNMA.

Short-Term Discount Notes (tax-exempt commercial paper) are short-term (365 days
or less) promissory notes issued by municipalities to supplement their cash
flow.

Savings Association Obligations

The certificates of deposit (interest-bearing time deposits) in which the Fund
may invest are issued by savings banks or savings and loan associations that
have capital, surplus and undivided profits in excess of $100 million based on
latest published reports or less than $100 million if the principal amount of
such obligations is fully insured by the U.S. government.

Tax Exempt Industrial Development Bonds and Pollution Control Bonds

Tax Exempt Industrial Development Bond and Pollution Control Bonds are revenue
bonds and generally are not payable from the unrestricted revenues of an issuer.
They are issued by or on behalf of public authorities

                                       24



to raise money to finance privately operated facilities for business,
manufacturing, housing, sport complexes and pollution control. Consequently, the
credit quality of these securities is dependent upon the ability of the user of
the facilities financed by the bonds and any guarantor to meet its financial
obligations.

Subordinated Mortgage Securities

Subordinated mortgage securities have certain characteristics and certain
associated risks. In general, the subordinated mortgage securities in which the
Fund may invest consist of a series of certificates issued in multiple classes
with a stated maturity or final distribution date. One or more classes of the
series may be entitled to receive distributions allocable only to principal,
principal pre-payments, interest (or any combination thereof to one or more
other classes), or only after the occurrence of certain events and may be
subordinated in the right to receive such distributions on such certificates to
one or more senior classes of certificates. The rights associated with each
class of certificates are set forth in the applicable pooling and servicing
agreement, form of certificate and offering documents for the certificates.

The subordination terms are usually designed to decrease the likelihood that the
holders of senior certificates will experience losses or delays in the receipt
of their distributions and to increase the likelihood that the senior
certificate holders will receive aggregate distributions of principal and
interest in the amounts anticipated. Generally, pursuant to such subordination
terms, distributions arising out of scheduled principal, principal prepayments,
interest (or any combination thereof) that otherwise would be payable to one or
more other classes of certificates of such series (i.e., the subordinated
certificates) are paid instead to holders of the senior certificates. Delays in
receipt of scheduled payments on mortgage loans and losses on defaulted mortgage
loans are typically borne first by the various classes of subordinated
certificates and then by the holders of senior certificates.

In some cases, the aggregate losses in respect of defaulted mortgage loans that
must be borne by the subordinated certificates and the amount of the
distributions otherwise distributable on the subordinated certificates that
would, under certain circumstances, be distributable to senior certificate
holders may be limited to a specified amount. All or any portion of
distributions otherwise payable to holders of subordinated certificates may, in
certain circumstances, be deposited into one or more reserve accounts for the
benefit of the senior certificate holders. Since a greater risk of loss is borne
by the subordinated certificate holders such certificates generally have a
higher stated yield than the senior certificates.

A series of certificates may consist of one or more classes as to which
distributions allocable to principal will be allocated. The method by which the
amount of principal to be distributed on the certificates on each distribution
date is calculated and the manner in which such amount could be allocated among
classes varies and could be affected, pursuant to a fixed schedule, in relation
to the occurrence of certain events or otherwise. Special distributions are also
possible if distributions are received with respect to the mortgage assets such
as is the case when underlying mortgage loans are prepaid.

A mortgage-related security that is senior to a subordinated residential
mortgage security will not bear a loss resulting from the occurrence of a
default on an underlying mortgage until all credit enhancements protecting such
senior holder is exhausted. For example, the senior holder will only suffer a
credit loss after all subordinated interests have been exhausted pursuant to the
terms of the subordinated residential mortgage security. The primary credit risk
of investing in subordinated residential mortgage securities is potential losses
resulting from defaults by the borrowers under the underlying mortgages. The
Fund would generally realize such a loss in connection with a subordinated
residential mortgage security only if the subsequent foreclosure sale of the
property securing a mortgage loan does not produce an amount at least equal to
the sum of the unpaid principal balance of the loan as of the date the borrower
went into default, the interest that was not paid during the foreclosure period
and all foreclosure expenses.

The adviser or sub-adviser will seek to limit the risks presented by
subordinated residential mortgage securities

                                       25



by reviewing and analyzing the characteristics of the mortgage loans that
underlie the pool of mortgages securing both the senior and subordinated
residential mortgage securities. The adviser or sub-adviser has developed a set
of guidelines to assist in the analysis of the mortgage loans underlying
subordinated residential mortgage securities. Each pool purchase is reviewed
against the guidelines. The Fund seeks opportunities to acquire subordinated
residential mortgage securities when, in the view of the adviser or sub-adviser,
the potential for a higher yield on such instruments outweighs any additional
risk presented by the instruments. The adviser or sub-adviser will seek to
increase yield to shareholders by taking advantage of perceived inefficiencies
in the market for subordinated residential mortgage securities.

Interest/Principal Only Stripped Mortgage-Backed Securities ("SMBS")

The Fund may invest in SMBS. SMBS are created by the Federal Reserve Bank by
separating the interest and principal components of an outstanding U.S. Treasury
or agency bond and selling them as individual securities. The market prices of
SMBS are generally more volatile than the market prices of securities with
similar maturities that pay interest periodically and are likely to respond to
changes in interest rates to a greater degree than do non-zero-coupon securities
having similar maturities and credit quality.

U.S. Government Securities

Investments in U.S. government securities include instruments issued by the U.S.
Treasury such as bills, notes and bonds. These instruments are direct
obligations of the U.S. government and, as such, are backed by the full faith
and credit of the United States. They differ primarily in their interest rates,
the lengths of their maturities and the dates of their issuances. In addition,
U.S. government securities include securities issued by instrumentalities of the
U.S. government such as GNMA which are also backed by the full faith and credit
of the United States. Also included in the category of U.S. government
securities are instruments issued by instrumentalities established or sponsored
by the U.S. government such as the Student Loan Marketing Association, the FNMA
and the FHLMC. While these securities are issued, in general, under the
authority of an Act of Congress, the U.S. government is not obligated to provide
financial support to the issuing instrumentalities although under certain
conditions certain of these authorities may borrow from the U.S. Treasury. In
the case of securities not backed by the full faith and credit of the United
States, the investor must look principally to the agency or instrumentality
issuing or guaranteeing the obligation for ultimate repayment and may not be
able to assert a claim against the United States itself in the event the agency
or instrumentality does not meet its commitment. The Fund will invest in
securities of such agencies or instrumentalities only when the adviser or
sub-adviser is satisfied that the credit risk with respect to any
instrumentality is comparable to the credit risk of U.S. government securities
backed by the full faith and credit of the United States.

Zero-Coupon and Pay-In-Kind Securities

Zero-coupon and deferred interest securities are debt obligations that do not
entitle the holder to any periodic payment of interest prior to maturity or a
specified date when the securities begin paying current interest ("cash payment
date") and therefore are issued and traded at a discount from their face amounts
or par value. The discount varies depending on the time remaining until maturity
or cash payment date, prevailing interest rates, liquidity of the security and
the perceived credit quality of the issuer. The discount, in the absence of
financial difficulties of the issuer, decreases as the final maturity or cash
payment date of the security approaches. A pay-in-kind bond pays interest during
the initial few years in additional bonds rather than in cash. Later the bond
may pay cash interest. Pay-in-kind bonds are typically callable at about the
time they begin paying cash interest. The market prices of zero-coupon and
deferred interest securities generally are more volatile than the market prices
of securities with similar maturities that pay interest periodically and are
likely to respond to changes in interest rates to a greater degree than do
non-zero-coupon securities having similar maturities and credit quality.

The risks associated with lower-rated debt securities apply to these securities.
Zero-coupon and pay-in-kind

                                       26



securities are also subject to the risk that in the event of a default, the Fund
may realize no return on its investment because these securities do not pay cash
interest.

OTHER INVESTMENTS

Derivatives

Generally, derivatives can be characterized as financial instruments whose
performance is derived, at least in part, from the performance of an underlying
asset or assets. Types of derivatives include options, futures contracts,
options on futures and forward contracts. Derivative instruments may be used for
a variety of reasons including to enhance return, hedge certain market risks, or
to provide a substitute for purchasing or selling particular securities.
Derivatives may provide a cheaper, quicker or more specifically focused way for
a fund to invest than "traditional" securities would.

Derivatives can be volatile and involve various types and degrees of risk
depending upon the characteristics of the particular derivative and the
portfolio as a whole. Derivatives permit the Fund to increase or decrease the
level of risk or change the character of the risk to which its portfolio is
exposed in much the same way as the Fund can increase or decrease the level of
risk or change the character of the risk of its portfolio by making investments
in specific securities.

Derivatives may be purchased on established exchanges or through privately
negotiated transactions referred to as over-the-counter derivatives.
Exchange-traded derivatives generally are guaranteed by the clearing agency
which is the issuer or counterparty to such derivatives. This guarantee usually
is supported by a daily payment system (i.e., margin requirements) operated by
the clearing agency in order to reduce overall credit risk. As a result, unless
the clearing agency defaults, there is relatively little counterparty credit
risk associated with derivatives purchased on an exchange. By contrast, no
clearing agency guarantees over-the-counter derivatives. Therefore, each party
to an over-the-counter derivative bears the risk that the counterparty will
default. Accordingly, the Fund will consider the creditworthiness of
counterparties to over-the-counter derivatives in the same manner as they would
review the credit quality of a security to be purchased by the Fund.
Over-the-counter derivatives are less liquid than exchange-traded derivatives
since the other party to the transaction may be the only investor with
sufficient understanding of the derivative to be interested in bidding for it.

The value of some derivative instruments in which the Fund invests may be
particularly sensitive to changes in prevailing interest rates and, like the
other investments of the Fund, the ability of the Fund to successfully utilize
these instruments may depend in part upon the ability of the adviser or
sub-adviser to forecast interest rates and other economic factors correctly. If
the adviser or sub-adviser incorrectly forecasts such factors and has taken
positions in derivative instruments contrary to prevailing market trends, the
Fund could be exposed to the risk of loss.

The Fund might not employ any of the strategies described below and no assurance
can be given that any strategy used will succeed. If the adviser or sub-adviser
incorrectly forecasts interest rates, market values or other economic factors in
utilizing a derivatives strategy for the Fund, the Fund might have been in a
better position if it had not entered into the transaction at all. Also,
suitable derivative transactions may not be available in all circumstances. The
use of these strategies involves certain special risks including a possible
imperfect correlation or even no correlation between price movements of
derivative instruments and price movements of related investments. While some
strategies involving derivative instruments can reduce the risk of loss, they
can also reduce the opportunity for gain or even result in losses such as by
offsetting favorable price movements in related investments or otherwise due to
the possible inability of the Fund to purchase or sell a portfolio security at a
time that otherwise would be favorable; the possible need to sell a portfolio
security at a disadvantageous time because the Fund is required to maintain
asset coverage; offsetting positions in connection with transactions in
derivative instruments; and the possible inability of the Fund to close out or
to liquidate its derivatives positions. In addition, the Fund's use of such
instruments may cause the Fund to realize higher amounts of short-term capital
gains (generally taxed at ordinary income tax rates) than if it had

                                       27



not used such instruments.

Financial Futures Contracts and Related Options

The Fund may enter into futures contracts or options thereon that are traded on
national futures exchanges and are standardized as to maturity date and
underlying financial instrument. The futures exchanges and trading in the United
States are regulated under the Commodity Exchange Act by the Commodity Futures
Trading Commission ("CFTC").

A futures contract provides for the future sale by one party and purchase by
another party of a specified amount of a financial instrument or a specific
stock market index for a specified price at a designated date, time and place.
Brokerage fees are incurred when a futures contract is bought or sold, at
expiration and margin deposits must be maintained.

Although interest rate futures contracts typically require actual future
delivery of and payment for the underlying instruments, those contracts are
usually closed out before the delivery date. Stock index futures contracts do
not contemplate actual future delivery and will be settled in cash at expiration
or closed out prior to expiration. Closing out an open futures contract sale or
purchase is effected by entering into an offsetting futures contract purchase or
sale, respectively, for the same aggregate amount of the identical type of
underlying instrument and the same delivery date. However, there can be no
assurance that the Fund will be able to enter into an offsetting transaction
with respect to a particular contract at a particular time. If the Fund is not
able to enter into an offsetting transaction, it will continue to be required to
maintain the margin deposits on the contract.

The prices of futures contracts are volatile and are influenced by, among other
things, actual and anticipated changes in interest rates and equity prices which
in turn are affected by fiscal and monetary policies and national and
international political and economic events. Small price movements in futures
contracts may result in immediate and potentially unlimited loss or gain to the
Fund relative to the size of the margin commitment. A purchase or sale of a
futures contract may result in losses in excess of the amount initially invested
in the futures contract.

When using futures contracts as a hedging technique, at best, the correlation
between changes in prices of futures contracts and of the securities being
hedged can be only approximate. The degree of imperfection of correlation
depends upon circumstances such as: variations in speculative market demand for
futures and for securities including technical influences in futures trading;
and differences between the financial instruments being hedged and the
instruments underlying the standard futures contracts available for trading.
Even a well-conceived hedge may be unsuccessful to some degree because of
unexpected market behavior or stock market or interest rate trends (as well as
expenses associated with creating the hedge). If the values of the assets being
hedged do not move in the same amount or direction as the underlying security or
index, the hedging strategy for the Fund may not be successful and the Fund
could sustain losses on its hedging transactions which would not be offset by
gains on its portfolio. It is also possible that there may be a negative
correlation between the security underlying a futures or option contract and the
portfolio securities being hedged which could result in losses both on the
hedging transaction and the portfolio securities. In such instances, the Fund's
overall return could be less than if the hedging transactions had not been
undertaken.

Investments in futures contracts on fixed-income securities involve the risk
that if the adviser's or sub-adviser's judgment concerning the general direction
of interest rates is incorrect, the Fund's overall performance may be poorer
than if it had not entered into any such contract. For example, if the Fund has
been hedged against the possibility of an increase in interest rates which would
adversely affect the price of bonds held in its portfolio and interest rates
decrease instead, the Fund will lose part or all of the benefit of the increased
value of its bonds which have been hedged because it will have offsetting losses
in its futures positions. In addition, in such situations, if the Fund has
insufficient cash it may have to sell bonds from its portfolio to meet daily
variation margin requirements possibly at a time when it may be disadvantageous
to do

                                       28



so. Such sale of bonds may be, but will not necessarily be, at increased prices
which reflect the rising market.

Most U.S. futures exchanges limit the amount of fluctuation permitted in
interest rate futures contract prices during a single trading day and temporary
regulations limiting price fluctuations for stock index futures contracts are
also now in effect. The daily limit establishes the maximum amount that the
price of a futures contract may vary either up or down from the previous day's
settlement price at the end of a trading session. Once the daily limit has been
reached in a particular type of contract, no trades may be made on that day at a
price beyond that limit. The daily limit governs only price movement during a
particular trading day and therefore does not limit potential losses because the
limit may prevent the liquidation of unfavorable positions. Futures contract
prices have occasionally moved to the daily limit for several consecutive
trading days with little or no trading thereby preventing prompt liquidation of
futures positions and subjecting some persons engaging in futures transactions
to substantial losses.

Sales of futures contracts which are intended to hedge against a change in the
value of securities held by the Fund may affect the holding period of such
securities and, consequently, the nature of the gain or loss on such securities
upon disposition.

"Margin" is the amount of funds that must be deposited by the Fund with a
commodities broker in a custodian account in order to initiate futures trading
and to maintain open positions in the Fund's futures contracts. A margin deposit
is intended to assure the Fund's performance of the futures contract. The margin
required for a particular futures contract is set by the exchange on which the
contract is traded and may be significantly modified from time to time by the
exchange during the term of the contract.

If the price of an open futures contract changes (by increase in the case of a
sale or by decrease in the case of a purchase) so that the loss on the futures
contract reaches a point at which the margin on deposit does not satisfy the
margin requirement, the broker will require an increase in the margin. However,
if the value of a position increases because of favorable price changes in the
futures contract so that the margin deposit exceeds the required margin, the
broker will promptly pay the excess to the Fund. These daily payments to and
from the Fund are called variation margin. At times of extreme price volatility,
intra-day variation margin payments may be required. In computing daily NAVs,
the Fund will mark-to-market the current value of its open futures contracts.
The Fund expects to earn interest income on its initial margin deposits.

When the Fund buys or sells a futures contract, unless it already owns an
offsetting position, it will designate cash and/or liquid securities having an
aggregate value at least equal to the full "notional" value of the futures
contract thereby insuring that the leveraging effect of such futures contract is
minimized in accordance with regulatory requirements.

The Fund can buy and write (sell) options on futures contracts.

Potential Lack of a Liquid Secondary Market. Prior to exercise or expiration, a
futures or option position may be terminated only by entering into a closing
purchase or sale transaction which requires a secondary market on the exchange
on which the position was originally established. While the Fund will establish
a futures or option position only if there appears to be a liquid secondary
market, there can be no assurance that such a market will exist for any
particular futures or option contract at any specific time. In such event, it
may not be possible to close out a position held by the Fund which could require
the Fund to purchase or sell the instrument underlying the position, make or
receive a cash settlement or meet ongoing variation margin requirements. The
inability to close out futures or option positions also could have an adverse
impact on the Fund's ability to effectively hedge its portfolio or the relevant
portion thereof.

The trading of futures and options contracts is also subject to the risk of
trading halts, suspensions, exchange or clearing house equipment failures,
government intervention, insolvency of the brokerage firm or clearing house or
other disruptions of normal trading activity which could at times make it
difficult or impossible to liquidate existing positions or to recover excess
variation margin payments.

                                       29



Forward Currency Contracts

The Fund may purchase and write puts and calls on foreign currencies that are
traded on a securities or commodities exchange or quoted by major recognized
dealers in such options for the purpose of protecting against declines in the
dollar value of foreign securities and against increases in the dollar cost of
foreign securities to be acquired. If a rise is anticipated in the dollar value
of a foreign currency in which securities to be acquired are denominated, the
increased cost of such securities may be partially offset by purchasing calls or
writing puts on that foreign currency. If a decline in the dollar value of a
foreign currency is anticipated, the decline in value of portfolio securities
denominated in that currency may be partially offset by writing calls or
purchasing puts on that foreign currency. In such circumstances, the Fund
collateralizes the position by designating cash and/or liquid securities in an
amount not less than the value of the underlying foreign currency in U.S.
dollars marked-to-market daily. In the event of rate fluctuations adverse to the
Fund's position, it would lose the premium it paid and transactions costs. A
call written on a foreign currency by the Fund is covered if the Fund owns the
underlying foreign currency covered by the call or has an absolute and immediate
right to acquire that foreign currency without additional cash consideration (or
for additional cash consideration specially designated) upon conversion or
exchange of other foreign currency held in its portfolio.

Foreign Futures Contracts and Foreign Options

Participation in foreign futures contracts and foreign options transactions
involves the execution and clearing of trades on, or subject to, the rules of a
foreign board of trade. Neither the CFTC, the National Futures Association
("NFA") nor any domestic exchange regulates activities of any foreign boards of
trade including the execution, delivery and clearing of transactions, nor has
the power to compel enforcement of the rules of a foreign board of trade or any
applicable foreign laws. Generally, the foreign transaction will be governed by
applicable foreign law. This is true even if the exchange is formally linked to
a domestic market so that a position taken on the market may be liquidated by a
transaction on another market. Moreover, such laws or regulations will vary
depending on the foreign country in which the foreign futures contracts or
foreign options transaction occurs. Investors that trade foreign futures
contracts or foreign options contracts may not be afforded certain of the
protective measures provided by domestic exchanges including the right to use
reparations proceedings before the CFTC and arbitration proceedings provided by
the NFA. In particular, funds received from customers for foreign futures
contracts or foreign options transactions may not be provided the same
protections as funds received for transactions on a U.S. futures exchange. The
price of any foreign futures contracts or foreign options contract and therefore
the potential profit and loss thereon, may be affected by any variance in the
foreign exchange rate between the time an order is placed and the time it is
liquidated, offset or exercised.

Additional Restrictions on the Use of Futures and Option Contracts. CFTC
regulations require that to prevent the Fund from being a commodity pool, the
Fund enters into all short futures for the purpose of hedging the value of
securities held, that all long futures positions either constitute bona fide
hedging transactions as defined in such regulations or have a total value not in
excess of an amount determined by reference to certain cash and securities
positions maintained and accrue profits on such positions. As evidence of its
hedging intent, the Fund expects that at least 75% of futures contract purchases
will be completed meaning that upon the sale of these long contracts, equivalent
amounts of related securities will have been or are then being purchased by the
Fund in the cash market. With respect to futures contracts or related options
that are entered into for purposes that may be considered speculative, the
aggregate initial margin for futures contracts and premiums for options will not
exceed 5% of the Fund's net assets after taking into account realized profits
and unrealized losses on such futures contracts.

Forward exchange contracts may be used to protect against uncertainty in the
level of future exchange rates. The use of forward exchange contracts does not
eliminate fluctuations in the prices of the underlying securities the Fund owns
or intends to acquire but it does fix a rate of exchange in advance. In
addition, although forward exchange contracts limit the risk of loss due to a
decline in the value of the hedged currencies, at the

                                       30



same time they limit any potential gain that might result should the value of
the currencies increase.

The precise matching of the forward contract amounts and the value of the
securities involved will not generally be possible because the future value of
such securities in foreign currencies will change as a consequence of market
movements in the value of these securities between the date the forward contract
is entered into and the date it is sold. Accordingly, it may be necessary for
the Fund to purchase additional foreign currency on the spot (i.e., cash) market
(and bear the expense of such purchase) if the market value of the security is
less than the amount of foreign currency the Fund is obligated to deliver and if
a decision is made to sell the security and make delivery of the foreign
currency. Conversely, it may be necessary to sell on the spot market some of the
foreign currency received upon the sale of the portfolio security if its market
value exceeds the amount of foreign currency the Fund is obligated to deliver.
The projection of short-term currency market movements is extremely difficult
and the successful execution of a short-term hedging strategy is highly
uncertain. Forward contracts involve the risk that anticipated currency
movements will not be accurately predicted causing the Fund to sustain losses on
these contracts and transactions costs.

At or before the maturity of a forward exchange contract requiring the Fund to
sell a currency, the Fund may either sell a portfolio security and use the sale
proceeds to make delivery of the currency or, retain the security and offset its
contractual obligation to deliver the currency by purchasing a second contract
pursuant to which the Fund will obtain, on the same maturity date, the same
amount of the currency that it is obligated to deliver. Similarly, the Fund may
close out a forward contract requiring it to purchase a specified currency by
entering into a second contract entitling it to sell the same amount of the same
currency on the maturity date of the first contract. The Fund would realize a
gain or loss as a result of entering into such an offsetting forward contract
under either circumstance to the extent the exchange rate(s) between the
currencies involved moved between the execution dates of the first contract and
the offsetting contract.

The cost of engaging in forward exchange contracts varies with factors such as
the currencies involved, the length of the contract period and the market
conditions then prevailing. Because forward contracts are usually entered into
on a principal basis, no fees or commissions are involved. Because such
contracts are not traded on an exchange, the adviser or sub-adviser must
evaluate the credit and performance risk of each counterparty under a forward
contract.

Although the Fund values its assets daily in terms of U.S. dollars, it does not
intend to convert its holdings of foreign currencies into U.S. dollars on a
daily basis. The Fund may convert foreign currency from time to time. Foreign
exchange dealers do not charge a fee for conversion but they do seek to realize
a profit based on the difference between the prices at which they buy and sell
various currencies. Thus, a dealer may offer to sell a foreign currency to the
Fund at one rate while offering a lesser rate of exchange should the Fund desire
to resell that currency to the dealer.

Foreign Currency Options

The Fund may buy or sell put and call options on foreign currencies either on
exchanges or in the over-the-counter market. A put and call option on a foreign
currency gives the purchaser of the option the right to purchase the currency at
the exercise price until the option expires. Currency options traded on U.S. or
other exchanges may be subject to position limits which may limit the ability of
the Fund to reduce foreign currency risk using such options. Over-the-counter
options differ from traded options in that they are two-party contracts with
price and other terms negotiated between buyer and seller and generally do not
have as much market liquidity as exchange-traded options.

Swap Transactions

The interest rate swaps, currency swaps and other types of swap agreements
including swaps on securities and indices in which the Fund may invest are
described in the Prospectuses. The Fund will enter into swap transactions with
appropriate counterparties pursuant to master netting agreements. A master
netting

                                       31



agreement provides that all swaps done between the Fund and that counterparty
under that master agreement shall be regarded as parts of an integral agreement.
If on any date amounts are payable in the same currency in respect to one or
more swap transactions, the net amount payable on that date in that currency
shall be paid. In addition, the master netting agreement may provide that if one
party defaults generally or on one swap, the counterparty may terminate the
swaps with that party. Under such agreements, if there is a default resulting in
a loss to one party, the measure of that party's damages is calculated by
reference to the average cost of a replacement swap with respect to each swap
(i.e., the mark-to-market value at the time of the termination of each swap).
The gains and losses on all swaps are then netted and the result is the
counterparty's gain or loss on termination. The termination of all swaps and the
netting of gains and losses on termination are generally referred to as
"aggregation."

Risks of Investing in Options. There are several risks associated with
transactions in options on securities and indices. Options may be more volatile
than the underlying instruments and therefore, on a percentage basis, an
investment in options may be subject to greater fluctuation than an investment
in the underlying instruments themselves. There are also significant differences
between the securities and options markets that could result in an imperfect
correlation between these markets causing a given transaction not to achieve its
objective. In addition, a liquid secondary market for particular options may be
absent for reasons which include the following: there may be insufficient
trading interest in certain options; restrictions may be imposed by an exchange
on opening transactions or closing transactions or both; trading halts,
suspensions or other restrictions may be imposed with respect to particular
classes or series of option of underlying securities; unusual or unforeseen
circumstances may interrupt normal operations on an exchange; the facilities of
an exchange or clearing corporation may not at all times be adequate to handle
current trading volume; or 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 that had been issued by a clearing
corporation as a result of trades on that exchange would continue to be
exercisable in accordance with their terms.

A decision as to whether, when and how to use options involves the exercise of
skill and judgment and even a well-conceived transaction may be unsuccessful to
some degree because of market behavior or unexpected events. The extent to which
the Fund may enter into options transactions may be limited by the Code
requirements for qualification of the Fund as a RIC. See "Dividends,
Distributions and Taxes."

In addition, foreign option exchanges do not afford participants many of the
protections available in U.S. option exchanges. For example, there may be no
daily price fluctuation limits in such exchanges or markets and adverse market
movements could therefore continue to an unlimited extent over a period of time.
Although the purchaser of an option cannot lose more than the amount of the
premium plus related transaction costs, this entire amount could be lost.
Moreover, the Fund as an option writer could lose amounts substantially in
excess of its initial investment due to the margin and collateral requirements
typically associated with such option writing. See "OTC Options."

Forward Foreign Currency Contracts

Forward contracts for foreign currency (forward exchange contracts) obligate the
seller to deliver and the purchaser to take a specific amount of a specified
foreign currency at a future date at a price set at the time of the contract.
These contracts are generally traded in the interbank market conducted directly
between currency traders and their customers. The Fund may enter into a forward
exchange contract in order to "lock in" the U.S. dollar price of a security
denominated in a foreign currency which it has purchased or sold but which has
not yet settled (a transaction hedge); to lock in the value of an existing
portfolio security (a position hedge); or to protect against a possible loss
resulting from an adverse change in the relationship between the U.S. dollar and
a foreign currency. Forward exchange contracts include standardized foreign
currency futures contracts which are traded on exchanges and are subject to
procedures and regulations applicable to futures. The Fund may also enter into a
forward exchange contract to sell a foreign currency that differs from the
currency in

                                       32



which the underlying security is denominated. This is done in the expectation
that there is a greater correlation between the foreign currency of the forward
exchange contract and the foreign currency of the underlying investment than
between the U.S. dollar and the foreign currency of the underlying investment.
This technique is referred to as "cross hedging." The success of cross hedging
is dependent on many factors including the ability of the adviser or sub-adviser
to correctly identify and monitor the correlation between foreign currencies and
the U.S. dollar. To the extent that the correlation is not identical, the Fund
may experience losses or gains on both the underlying security and the cross
currency hedge.

Forward exchange contracts may be used to protect against uncertainty in the
level of future exchange rates. The use of forward exchange contracts does not
eliminate fluctuations in the prices of the underlying securities the Fund owns
or intends to acquire but it does fix a rate of exchange in advance. In
addition, although forward exchange contracts limit the risk of loss due to a
decline in the value of the hedged currencies, at the same time they limit any
potential gain that might result should the value of the currencies increase.

The precise matching of the forward contract amounts and the value of the
securities involved will not generally be possible because the future value of
such securities in foreign currencies will change as a consequence of market
movements in the value of these securities between the date the forward contract
is entered into and the date it is sold. Accordingly, it may be necessary for
the Fund to purchase additional foreign currency on the spot (i.e., cash) market
(and bear the expense of such purchase) if the market value of the security is
less than the amount of foreign currency the Fund is obligated to deliver and if
a decision is made to sell the security and make delivery of the foreign
currency. Conversely, it may be necessary to sell on the spot market some of the
foreign currency received upon the sale of the portfolio security if its market
value exceeds the amount of foreign currency the Fund is obligated to deliver.
The projection of short-term currency market movements is extremely difficult
and the successful execution of a short-term hedging strategy is highly
uncertain. Forward contracts involve the risk that anticipated currency
movements will not be accurately predicted causing the Fund to sustain losses on
these contracts and transactions costs.

At or before the maturity of a forward exchange contract requiring the Fund to
sell a currency, the Fund may either sell a portfolio security and use the sale
proceeds to make delivery of the currency or retain the security and offset its
contractual obligation to deliver the currency by purchasing a second contract
pursuant to which the Fund will obtain, on the same maturity date, the same
amount of the currency that it is obligated to deliver. Similarly, the Fund may
close out a forward contract requiring it to purchase a specified currency by
entering into a second contract entitling it to sell the same amount of the same
currency on the maturity date of the first contract. The Fund would realize a
gain or loss as a result of entering into such an offsetting forward contract
under either circumstance to the extent the exchange rate(s) between the
currencies involved moved between the execution dates of the first contract and
the offsetting contract.

The cost of engaging in forward exchange contracts varies with factors such as
the currencies involved, the length of the contract period and the market
conditions then prevailing. Because forward contracts are usually entered into
on a principal basis, no fees or commissions are involved. Because such
contracts are not traded on an exchange, the adviser or sub-adviser must
evaluate the credit and performance risk of each counterparty under a forward
contract.

Although the Fund values its assets daily in terms of U.S. dollars, it does not
intend to convert their holdings of foreign currencies into U.S. dollars on a
daily basis. The Fund may convert foreign currency from time to time. Foreign
exchange dealers do not charge a fee for conversion, but it does seek to realize
a profit based on the difference between the prices at which they buy and sell
various currencies. Thus, a dealer may offer to sell a foreign currency to the
Fund at one rate, while offering a lesser rate of exchange should the Fund
desire to resell that currency to the dealer.

Index-, Currency- and Equity-Linked Securities

Index-linked notes are debt securities of companies that call for interest
payments and/or payment at maturity

                                       33



in different terms than the typical note where the borrower agrees to make fixed
interest payments and to pay a fixed sum at maturity. Principal and/or interest
payments on an index-linked note depend on the performance of one or more market
indices such as the Standard & Poor's 500(R) Composite Stock Price Index ("S&P
500(R) Index"). At maturity, the principal amount of an equity-linked debt
security is exchanged for common stock of the issuer or is payable in an amount
based on the issuer's common stock price at the time of maturity.
Currency-linked debt securities are short-term or intermediate-term instruments
having a value at maturity and/or an interest rate determined by reference to
one or more foreign currencies. Payment of principal or periodic interest may be
calculated as a multiple of the movement of one currency against another
currency or against an index.

Index- and currency-linked securities are derivative instruments that may entail
substantial risks. Such instruments may be subject to significant price
volatility. The company issuing the instrument may fail to pay the amount due on
maturity. The underlying investment or security may not perform as expected by
the adviser or sub-adviser. Markets, underlying securities and indices may move
in a direction that was not anticipated by the adviser or sub-adviser.
Performance of the derivatives may be influenced by interest rate and other
market changes in the United States and abroad. Certain derivative instruments
may be illiquid.

Options on Futures

A futures option gives the purchaser the right but not the obligation, in return
for the premium paid, to assume a long position (in the case of a call) or short
position (in the case of a put) in a futures contract at a specified exercise
price prior to the expiration of the option. Upon exercise of a call option, the
purchaser acquires a long position in the futures contract and the writer of the
option is assigned the opposite short position. In the case of a put option, the
converse is true. A futures option may be closed out (before exercise or
expiration) by an offsetting purchase or sale of a futures option by the Fund.

Over-the-Counter Options

The staff of the SEC has taken the position that purchased over-the-counter
options ("OTC Options") and the assets used as cover for written OTC Options are
illiquid securities. In connection with these special arrangements, the Fund
intends to establish standards for the creditworthiness of the dealers with
which it may enter into OTC Option contracts and those standards, as modified
from time to time, will be implemented and monitored by the adviser or
sub-adviser. Under these special arrangements, the Fund will enter into
contracts with dealers that provide that the Fund has the absolute right to
repurchase an option it writes at any time at a repurchase price which
represents the fair market value, as determined in good faith through
negotiation between the parties, but that in no event will exceed a price
determined pursuant to a formula contained in the contract. Although the
specific details of the formula may vary between contracts with different
dealers, the formula will generally be based on a multiple of the premium
received by the Fund for writing the option plus the amount, if any, by which
the option is "in-the-money." The formula will also include a factor to account
for the difference between the price of the security and the strike price of the
option if the option is written "out-of-the-money." Strike price refers to the
price at which an option will be exercised. Cover assets refers to the amount of
cash or liquid assets that must be segregated to collateralize the value of the
futures contracts written by the Fund. Under such circumstances, the Fund will
treat as illiquid that amount of the cover assets equal to the amount by which
the formula price for the repurchase of the option is greater than the amount by
which the market value of the security subject to the option exceeds the
exercise price of the option (the amount by which the option is "in-the-money").
Although each agreement will provide that the Fund's repurchase price shall be
determined in good faith (and that it shall not exceed the maximum determined
pursuant to the formula), the formula price will not necessarily reflect the
market value of the option written. Therefore, the Fund might pay more to
repurchase the OTC Option contract than the Fund would pay to close out a
similar exchange traded option.

Put and Call Options

A call option gives the holder (buyer) the right to buy and to obligate the
writer (seller) to sell a security or

                                       34



financial instrument at a stated price (strike price) at any time until a
designated future date when the option expires (expiration date). A put option
gives the holder the right to sell and to obligate the writer to purchase a
security or financial instrument at a stated price at any time until the
expiration date. The Fund may write or purchase put or call options listed on
national securities exchanges in standard contracts or may write or purchase put
or call options with, or directly from, investment dealers meeting the
creditworthiness criteria of the adviser or sub-adviser.

The Fund will not write call options on when-issued securities. The Fund
purchases call options primarily as a temporary substitute for taking positions
in certain securities or in the securities that comprise a relevant index. The
Fund may also purchase call options on an index to protect against increases in
the price of securities underlying that index that the Fund intends to purchase
pending its ability to invest in such securities in an orderly manner.

So long as the obligation of the writer of a call option continues, the writer
may be assigned an exercise notice by the broker-dealer through which such
option was settled, requiring the writer to deliver the underlying security
against payment of the exercise price. This obligation terminates upon the
expiration of the call option, by the exercise of the call option or by entering
into an offsetting transaction.

When writing a call option, in return for the premium the writer gives up the
opportunity to profit from the price increase in the underlying security above
the exercise price but conversely retains the risk of loss should the price of
the security decline. If a call option expires unexercised, the writer will
realize a gain in the amount of the premium. However, such gain may be offset by
a decline in the market value of the underlying security during the option
period. If the call option is exercised, the writer would realize a gain or loss
from the transaction depending on what it received from the call and what it
paid for the underlying security.

An option on an index (or a particular security) is a contract that gives the
purchaser of the option, in return for the premium paid, the right to receive
from the writer of the option cash equal to the difference between the closing
price of the index (or security) and the exercise price of the option, expressed
in dollars, times a specified multiple (the multiplier).

The Fund may write calls on futures contracts provided that it enters into an
appropriate offsetting position or that it designates liquid assets in an amount
sufficient to cover the underlying obligation in accordance with regulatory
requirements. The risk involved in writing call options on futures contracts or
market indices is that the Fund would not benefit from any increase in value
above the exercise price. Usually, this risk can be eliminated by entering into
an offsetting transaction. However, the cost to do an offsetting transaction and
terminate the Fund's obligation might be more or less than the premium received
when it originally wrote the option. Further, the Fund might occasionally not be
able to close the option because of insufficient activity in the options market.

In the case of a put option, as long as the obligation of the put writer
continues, it may be assigned an exercise notice by the broker-dealer through
which such option was sold requiring the writer to take delivery of the
underlying security against payment of the exercise price. A writer has no
control over when it may be required to purchase the underlying security since
it may be assigned an exercise notice at any time prior to the expiration date.
This obligation terminates earlier if the writer effects a closing purchase
transaction by purchasing a put of the same series as that previously sold.

If a put option is sold by the Fund, the Fund will designate liquid securities
with a value equal to the exercise price or will hold an offsetting position in
accordance with regulatory requirements. In writing puts, there is the risk that
a writer may be required to buy the underlying security at a disadvantageous
price. The premium the writer receives from writing a put option represents a
profit as long as the price of the underlying instrument remains above the
exercise price. However, if the put is exercised, the writer is obligated during
the option period to buy the underlying instrument from the buyer of the put at
the exercise price even though the value of the investment may have fallen below
the exercise price. If the put lapses unexercised, the writer

                                       35



realizes a gain in the amount of the premium. If the put is exercised, the
writer may incur a loss equal to the difference between the exercise price and
the current market value of the underlying instrument.

The purchase of put options may be used to protect the Fund's holdings in an
underlying security against a substantial decline in market value. Such
protection is, of course, only provided during the life of the put option when
the Fund, as the holder of the put option, is able to sell the underlying
security at the put exercise price regardless of any decline in the underlying
security's market price. By using put options in this manner, the Fund will
reduce any profit it might otherwise have realized in its underlying security by
the premium paid for the put option and by transaction costs. The purchase of
put options may also be used by the Fund when it does not hold the underlying
security.

The premium received from writing a call or put option or paid for purchasing a
call or put option will reflect, among other things, the current market price of
the underlying security, the relationship of the exercise price to such market
price, the historical price volatility of the underlying security, the length of
the option period and the general interest rate environment. The premium
received by the Fund for writing call options will be recorded as a liability in
the statement of assets and liabilities of the Fund. This liability will be
adjusted daily to the option's current market value. The liability will be
extinguished upon expiration of the option, by the exercise of the option or by
entering into an offsetting transaction. Similarly, the premium paid by the Fund
when purchasing a put option will be recorded as an asset in the statement of
assets and liabilities of the Fund. This asset will be adjusted daily to the
option's current market value. The asset will be extinguished upon expiration of
the option, by selling an identical option in a closing transaction or by
exercising the option.

Closing transactions will be affected in order to realize a profit on an
outstanding call or put option to prevent an underlying security from being
called or put or to permit the exchange or tender of the underlying security.
Furthermore, affecting a closing transaction will permit the Fund to write
another call option or purchase another put option on the underlying security
with either a different exercise price or expiration date or both. If the Fund
desires to sell a particular security from its portfolio on which it has written
a call option or purchased a put option, it will seek to effect a closing
transaction prior to or concurrently with, the sale of the security. There is,
of course, no assurance that the Fund will be able to affect a closing
transaction at a favorable price. If the Fund cannot enter into such a
transaction, it may be required to hold a security that it might otherwise have
sold in which case it would continue to be at market risk on the security. The
Fund will pay brokerage commissions in connection with the sale or purchase of
options to close out previously established option positions. These brokerage
commissions are normally higher as a percentage of underlying asset values than
those applicable to purchases and sales of portfolio securities.

Stock Index Options

Stock index options include put and call options with respect to the S&P 500(R)
Index and other stock indices. These may be purchased as a hedge against changes
in the values of portfolio securities or securities which the Fund intends to
purchase or sell, or to reduce risks inherent in the ongoing management of the
Fund.

The distinctive characteristics of options on stock indices create certain risks
not found in stock options generally. Because the value of an index option
depends upon movements in the level of the index rather than the price of a
particular stock, whether the Fund will realize a gain or loss on the purchase
or sale of an option on an index depends upon movements in the level of stock
prices in the stock market generally rather than movements in the price of a
particular stock. Accordingly, successful use by the Fund of options on a stock
index depends on the adviser or sub-adviser's ability to predict correctly
movements in the direction of the stock market generally. This requires
different skills and techniques than predicting changes in the price of
individual stocks.

Index prices may be distorted if circumstances disrupt trading of certain stocks
included in the index, such as if trading were halted in a substantial number of
stocks included in the index. If this happens, the Fund could be unable to close
out options which it had purchased and, if restrictions on exercise were
imposed, the Fund

                                       36



might be unable to exercise an option it holds which could result in substantial
losses to the Fund. The Fund purchases put or call options only with respect to
an index which the adviser or sub-adviser believes includes a sufficient number
of stocks to minimize the likelihood of a trading halt in the index.

Straddles

A straddle, which may be used for hedging purposes, is a combination of put and
call options on the same underlying security used for hedging purposes to adjust
the risk and return characteristics of the Fund's overall position. A possible
combined position would involve writing a covered call option at one strike
price and buying a call option at a lower price in order to reduce the risk of
the written covered call option in the event of a substantial price increase.
Because combined options positions involve multiple trades, they result in
higher transaction costs and may be more difficult to open and close out.

Warrants

A warrant gives the holder a right to purchase at any time during a specified
period a predetermined number of shares of common stock at a fixed price. Unlike
convertible debt securities or preferred stock, warrants do not pay a fixed
dividend. Investments in warrants involve certain risks including the possible
lack of a liquid market for resale of the warrants, potential price fluctuations
as a result of speculation or other factors, and failure of the price of the
underlying security to reach or have reasonable prospects of reaching a level at
which the warrant can be prudently exercised (in which event the warrant may
expire without being exercised resulting in a loss of the Fund's entire
investment therein).

Other Investment Companies

An investment company is a company engaged in the business of pooling investors'
money and trading in securities for them. Examples include face-amount
certificate companies, unit investment trusts and management companies. When the
Fund invests in other investment companies, shareholders of the Fund bear their
proportionate share of the underlying investment companies' fees and expenses.

Exchange-Traded Funds ("ETFs")

An ETF is an investment company whose goal is to track or replicate a desired
index such as a sector, market or global segment. ETFs are traded on exchanges
and are traded similar to a publicly traded company. Similarly, the risks and
costs are similar to that of a publicly traded company. The goal of an ETF is to
correspond generally to the price and yield performance before fees and expenses
of its underlying index. The risk of not correlating to the index is an
additional risk to the investors of ETFs. Because ETFs trade on an exchange,
they may not trade at NAV. Sometimes the prices of ETFs may vary significantly
from the NAVs of the ETFs' underlying securities. Additionally, if the Fund
elects to redeem its ETF shares rather than selling them on the secondary
market, the Fund may receive the underlying securities which it must then sell
in order to obtain cash. Additionally, when the Fund invests in ETFs,
shareholders of the Fund bear their proportionate share of the underlying ETFs'
fees and expenses.

Holding Company Depositary Receipts ("HOLDRs")

HOLDRs are trust-issued receipts that represent the Fund's beneficial ownership
of a specific group of stocks. HOLDRs involve risks similar to the risks of
investing in common stock. For example, the Fund's investments will decline in
value if the underlying stocks decline in value. Because HOLDRs are not subject
to concentration limits, the relative weight of an individual stock may increase
substantially causing the HOLDRs to be less diverse and creating more risk.

Private Funds

U.S. or foreign private limited partnerships or other investment funds are
referred to as Private Funds.

                                       37



Investments in Private Funds may be highly speculative and volatile. Because
Private Funds generally are investment companies for purposes of the 1940 Act,
or would be but for the exemptions provided in sections 3(c)(1) or 3(c)(7) of
the 1940 Act, the Fund's ability to invest in them will be limited. In addition,
the Fund's shareholders will remain subject to the Fund's expenses while also
bearing their pro rata share of the operating expenses of the Private Funds. The
ability of the Fund to dispose of interests in Private Funds is very limited and
involves risks including loss of the Fund's entire investment in the Private
Fund.

Private investment funds include a variety of pooled investments. Generally,
these pooled investments are structured as a trust, a special purpose vehicle,
and are exempted from registration under the 1940 Act. As an investor, the Fund
owns a proportionate share of the trust. Typically, the trust does not employ a
professional investment manager. Instead, the pooled investment tracks some
index by investing in the issuers or securities that comprise the index. The
Fund receives a stream of cash flows in the form of interest payments from the
underlying assets or the proceeds from the sale of the underlying assets in the
event those underlying assets are sold. However, some pooled investments may not
dispose of the underlying securities regardless of the adverse events affecting
the issuers depending on the investment strategy utilized. In this type of
strategy, the pooled investment continues to hold the underlying securities as
long as the issuers or securities remain members of the tracked index.

The pooled investments allow the Fund to synchronize the receipt of interest and
principal payments and also, diversify some of the risks involved with investing
in fixed-income securities. Because the trust holds securities of many issuers,
the default of a few issuers would not impact the Fund significantly. However,
the Fund bears any expenses incurred by the trust. In addition, the Fund assumes
the liquidity risks generally associated the privately offered pooled
investments.

Pooled investments that are structured as a trust contain many similarities to
Private Funds that are structured as limited partnerships. The primary
difference between the trust and the limited partnership structure is the
redemption of the ownership interests. Typically, the ownership interests in a
typical Private Fund are redeemable only by the general partners and thus, are
restricted from transferring from one party to another. Conversely, the
ownership interests in the trust are generally not redeemable by the trust
except under certain circumstances and are transferable among the general public
for publicly offered securities and "qualified purchasers" or "qualified
institutional buyers" for privately offered securities.

The Fund cannot assure that it can achieve better results by investing in a
pooled investment versus investing directly in the individual underlying assets.

Private investment funds also include investments in certain structured
securities. Structured securities include notes, bonds or debentures that
provide for the payment of principal of, and/or interest in, amounts determined
by reference to changes in the value of specific currencies, interest rates,
commodities, indices or other financial indicators (the "Reference") or the
relative change in two or more References. The interest rate or the principal
amount payable upon maturity or redemption may be increased or decreased
depending upon changes in the applicable Reference. The terms of structured
securities may provide that, under certain circumstances, no principal is due at
maturity and therefore may result in the loss of the Fund's investment.
Structured securities may be positively or negatively indexed so that
appreciation of the Reference may produce an increase or decrease in the
interest rate or value of the security at maturity. In addition, the change in
interest rate or the value of the security at maturity may be a multiple of the
change in the value of the Reference. Consequently, leveraged structured
securities entail a greater degree of market risk than other types of debt
obligations. Structured securities may also be more volatile, less liquid, and
more difficult to accurately price than less complex fixed-income investments.

Real Estate Securities

Investments in real estate securities include interests in real estate
investment trusts ("REITs"), real estate

                                       38



development, real estate operating companies ("REOCs") and companies engaged in
other real estate related businesses. REITs are trusts that sell securities to
investors and use the proceeds to invest in real estate or interests in real
estate. A REIT may focus on a particular project such as apartment complexes, or
geographic region such as the Northeastern U.S., or both. A REOC is a company
that derives at least 50% of its gross revenues or net profits from either: (1)
the ownership, development, construction, financing, management or sale of
commercial, industrial or residential real estate; or (2) products or services
related to the real estate industry such as building supplies or mortgage
servicing.

Risks of real estate securities include those risks that are more closely
associated with investing in real estate directly than with investing in the
stock market generally. Those risks include: periodic declines in the value of
real estate generally, or in the rents and other income generated by real
estate; periodic over-building which creates gluts in the market; changes in
laws (such as zoning laws) that impair the property rights of real estate
owners; and adverse developments in the real estate industry.

Restricted and Illiquid Securities

The Fund may invest in a restricted security or an illiquid security if the
adviser or sub-adviser believes that it presents an attractive investment
opportunity. Generally, a security is considered illiquid if it cannot be
disposed of within seven days. Its illiquidity might prevent the sale of such a
security at a time when the adviser or sub-adviser might wish to sell and these
securities could have the affect of decreasing the overall level of the Fund's
liquidity. Further, the lack of an established secondary market may make it more
difficult to value illiquid securities requiring the Fund to rely on judgments
that may be somewhat subjective in determining value which could vary from the
amount that the Fund could realize upon disposition.

Because of the nature of these securities, a considerable period of time may
elapse between the Fund's decision to dispose of these securities and the time
when the Fund is able to dispose of them during which time the value of the
securities could decline. The expenses of registering restricted securities
(excluding securities that may be resold by pursuant to Rule 144A under the 1933
Act) may be negotiated at the time such securities are purchased by the Fund.
When registration is required before the securities may be resold, a
considerable period may elapse between the decision to sell the securities and
the time when the Fund would be permitted to sell them. Thus, the Fund may not
be able to obtain as favorable a price as that prevailing at the time of the
decision to sell. The Fund may also acquire securities through private
placements. Such securities may have contractual restrictions on their resale
which might prevent their resale by the Fund at a time when such resale would be
desirable. Securities that are not readily marketable will be valued by the Fund
in good faith pursuant to procedures adopted by the Board.

Restricted securities, including private placements, are subject to legal or
contractual restrictions on resale. They can be eligible for purchase without
SEC registration by certain institutional investors known as "qualified
institutional buyers" and, under the Fund's procedures, restricted securities
could be treated as liquid. However, some restricted securities may be illiquid
and restricted securities that are treated as liquid could be less liquid than
registered securities traded on established secondary markets.

To Be Announced Sale Commitments

The Fund may enter into To Be Announced ("TBA") sale commitments wherein the
unit price and the estimated principal amount are established upon entering into
the contract with the actual principal amount being within a specified range of
the estimate. The Fund will enter into TBA sale commitments to hedge its
portfolio positions or to sell mortgage-backed securities it owns under delayed
delivery arrangements. Proceeds of TBA sale commitments are not received until
the contractual settlement date. During the time a TBA sale commitment is
outstanding, the Fund will maintain in a segregated account, cash or marketable
securities in an amount sufficient to meet the purchase price. Unsettled TBA
sale commitments are valued at current market value of the underlying
securities. If the TBA sale commitment is closed through the acquisition of an
offsetting purchase commitment, the Fund realizes a gain or loss on the
commitment without

                                       39



regard to any unrealized gain or loss on the underlying security. If the Fund
delivers securities under the commitment, the Fund realizes a gain or loss from
the sale of the securities based upon the unit price established at the date the
commitment was entered into.

Trust-Preferred Securities

Trust-preferred securities, also known as trust-issued securities, are those
that have the characteristics of both debt and equity instruments. Generally,
trust-preferred securities are cumulative preferred stock issued by a trust that
is wholly-owned by a financial institution, usually a bank holding company. The
financial institution creates the trust and will subsequently own the trust's
common securities, which represents 3.00% of the trust's assets.

The remaining 97% consists of subordinated debts, which are then sold to
investors. The trust uses the sale proceeds to purchase a subordinated debt
issued by the financial institution. The financial institution uses the proceeds
from the subordinated debt sale to increase its capital while the trust receives
periodic interest payments from the financial institution for holding the
subordinated debt. The trust will use the funds received to make dividend
payments to the holders of the trust-preferred securities. The primary advantage
for this particular structure is that the trust-preferred securities are treated
by the financial institution as debt securities for tax purposes and as equity
for the purpose of calculation capital requirements.

In certain instances, this structure involves more than one financial
institution and accordingly, more than one trust. In this pooled offering, a
separate trust is created that issues securities to investors and uses the
proceeds to purchase the trust-preferred securities issued by the
special-purpose trust subsidiaries of the participating financial institutions.
Therefore, the trust-preferred securities held by investors are backed by the
trust-preferred securities issued by the trust subsidiaries.

In identifying the risks of the trust-preferred securities, the adviser or
sub-adviser evaluates the financial condition of the financial institution as
the trust typically has no business operations other than to issue the
trust-preferred securities. If the financial institution is unsound and defaults
on interest payments to the trust, the trust will not be able to make dividend
payments to the Fund.

INVESTMENT TECHNIQUES

Borrowing

The Fund may borrow from banks. If the Fund borrows money, its share price may
be subject to greater fluctuation until the borrowing is paid off. If the Fund
makes additional investments while borrowings are outstanding, this may be
considered a form of leverage. Under the 1940 Act, the Fund is required to
maintain continuous asset coverage of 300% with respect to such borrowings and
to sell (within three days) sufficient portfolio holdings to restore such
coverage if it should decline to less than 300% due to market fluctuations or
otherwise even if such liquidations of the Fund's holdings may be
disadvantageous from an investment standpoint.

Leveraging by means of borrowing may exaggerate the effect of any increase or
decrease in the value of portfolio securities or the Fund's NAV and money
borrowed will be subject to interest and other costs (which may include
commitment fees and/or the cost of maintaining minimum average balances) which
may or may not exceed the income received from the securities purchased with
borrowed funds.

Lending of Fund Securities

In order to generate additional income, the Fund may lend portfolio securities
to broker-dealers, major banks,

                                       40



or other recognized domestic institutional borrowers of securities provided that
the value of the loaned securities does not exceed 33 1/3% of the Fund's total
assets. No lending may be made to any companies affiliated with the adviser.
These loans earn income for the Fund and are collateralized by cash, securities
or letters of credit. The Fund might experience a loss if the financial
institution defaults on the loan. The Fund seeks to mitigate this risk through
contracted indemnification upon default.

The borrower, at all times during the loan, must maintain with the Fund cash or
cash equivalent collateral or provide to the Fund an irrevocable letter of
credit equal in value to at least 100% of the value of the securities loaned.
During the time portfolio securities are on loan, the borrower pays the Fund any
interest paid on such securities and the Fund may invest the cash collateral and
earn additional income or it may receive an agreed-upon amount of interest
income from the borrower who has delivered equivalent collateral or a letter of
credit. Loans are subject to termination at the option of the Fund or the
borrower at any time. The Fund may pay reasonable administrative and custodial
fees in connection with a loan and may pay a negotiated portion of the income
earned on the cash to the borrower or placing broker. As with other extensions
of credit, there are risks of delay in recovery or even loss of rights in the
collateral should the borrower fail financially. There is the risk that when
lending portfolio securities, the securities may not be available to the Fund on
a timely basis and the Fund may therefore lose the opportunity to sell the
securities at a desirable price. Engaging in securities lending could have a
leveraging effect which may intensify the market risk, credit risk and other
risks associated with investments in the Fund. When the Fund lends its
securities, it is responsible for investing the cash collateral it receives from
the borrower of the securities. The Fund could incur losses in connection with
the investment of such cash collateral.

Repurchase Agreements

Repurchase agreements may be considered to be loans by the Fund for purposes of
the 1940 Act. Each repurchase agreement must be collateraltized fully in
accordance with the provisions of Rule 5b-3 under the 1940 Act at all times.
Pursuant to such repurchase agreements, the Fund acquires securities from
financial institutions such as brokers, dealers and banks subject to the
seller's agreement to repurchase and the Fund's agreement to resell such
securities at a mutually agreed upon date and price. The term of such an
agreement is generally quite short, possibly overnight or for a few days
although it may extend over a number of months (up to one year) from the date of
delivery. The repurchase price generally equals the price paid by the Fund plus
interest negotiated on the basis of current short-term rates (which may be more
or less than the rate on the underlying portfolio security). The securities
underlying a repurchase agreement will be marked-to-market every business day so
that the value of the collateral is at least equal to the value of the loan
including the accrued interest thereon and the adviser or sub-adviser will
monitor the value of the collateral. Securities subject to repurchase agreements
will be held by the custodian or in the Federal Reserve/Treasury Book-Entry
System or an equivalent foreign system. If the seller defaults on its repurchase
obligation, the Fund holding the repurchase agreement will suffer a loss to the
extent that the proceeds from a sale of the underlying securities is less than
the repurchase price under the agreement. Bankruptcy or insolvency of such a
defaulting seller may cause the Fund's rights with respect to such securities to
be delayed or limited. Repurchase agreements maturing in more than seven days
will not exceed 10% of the total assets of the Fund.

Reverse Repurchase Agreements and Dollar Roll Transactions

Reverse repurchase agreement transactions involve the sale of U.S. government
securities held by the Fund with an agreement that the Fund will repurchase such
securities at an agreed-upon price and date. The Fund will employ reverse
repurchase agreements when necessary to meet unanticipated net redemptions so as
to avoid liquidating other portfolio investments during unfavorable market
conditions. At the time it enters into a reverse repurchase agreement, the Fund
will place in a segregated custodial account cash and/or liquid assets having a
dollar value equal to the repurchase price. Reverse repurchase agreements are
considered to be borrowings under the 1940 Act. Reverse repurchase agreements,
together with other permitted borrowings, may constitute up to 33 1/3% of the
Fund's total assets. Under the 1940 Act, the Fund is required to maintain
continuous asset coverage of 300% with respect to borrowings and to sell (within
three days) sufficient

                                       41



portfolio holdings to restore such coverage if it should decline to less than
300% due to market fluctuations or otherwise even if such liquidations of the
Fund's holdings may be disadvantageous from an investment standpoint. Leveraging
by means of borrowing may exaggerate the affect of any increase or decrease in
the value of portfolio securities or the Fund's NAV, and money borrowed will be
subject to interest and other costs (which may include commitment fees and/or
the cost of maintaining minimum average balances) which may or may not exceed
the income received from the securities purchased with borrowed funds.

In order to enhance portfolio returns and manage prepayment risks, the Fund may
engage in dollar roll transactions. In a dollar roll transaction, the Fund sells
a mortgage security held in the portfolio to a financial institutional such as a
bank or broker-dealer and simultaneously agrees to repurchase a substantially
similar security (same type, coupon and maturity) from the institution at a
later date at an agreed upon price. The mortgage securities that are repurchased
will bear the same interest rate as those sold but generally will be
collateralized by different pools of mortgages with different prepayment
histories. During the period between the sale and repurchase, the Fund will not
be entitled to receive interest and principal payments on the securities sold.
Proceeds of the sale will be invested in short-term instruments and the income
from these investments, together with any additional fee income received on the
sale, could generate income for the Fund exceeding the yield on the sold
security. When the Fund enters into a dollar roll transaction cash and/or liquid
assets of the Fund in a dollar amount sufficient to make payment for the
obligations to be repurchased are segregated with its custodian at the trade
date. These securities are marked daily and are maintained until the transaction
is settled.

Whether a reverse repurchase agreement or dollar roll transaction produces a
gain for the Fund depends upon the "costs of the agreements" (e.g., a function
of the difference between the amount received upon the sale of its securities
and the amount to be spent upon the purchase of the same or "substantially the
same" security) and the income and gains of the securities purchased with the
proceeds received from the sale of the mortgage security. If the income and
gains on the securities purchased with the proceeds of the agreements exceed the
costs of the agreements, then the Fund's NAV will increase faster than otherwise
would be the case. Conversely, if the income and gains on such securities
purchased fail to exceed the costs of the structure, the NAV will decline faster
than otherwise would be the case. Reverse repurchase agreements and dollar roll
transactions, as leveraging techniques, may increase the Fund's yield in the
manner described above. However, such transactions also increase the Fund's risk
to capital and may result in a shareholder's loss of principal.

Securities, Interest Rate and Currency Swaps

Interest rate swaps, currency swaps and other types of swap agreements including
swaps on securities and indices in which the Fund may invest are described in
the Prospectuses. The Fund will enter into swap transactions with appropriate
counterparties pursuant to master netting agreements. A master netting agreement
provides that all swaps done between the Fund and that counterparty under that
master agreement shall be regarded as parts of an integral agreement. If on any
date amounts are payable in the same currency in respect of one or more swap
transactions, the net amount payable on that date in that currency shall be
paid. In addition, the master netting agreement may provide that if one party
defaults generally or on one swap, the counterparty may terminate the swaps with
that party. Under such agreements, if there is a default resulting in a loss to
one party, the measure of that party's damages is calculated by reference to the
average cost of a replacement swap with respect to each swap (i.e., the
marked-to-market value at the time of the termination of each swap). The gains
and losses on all swaps are then netted and the result is the counterparty's
gain or loss on termination. The termination of all swaps and the netting of
gains and losses on termination is generally referred to as "aggregation."

Short Sales

The Fund may make a short sale of securities it already owns. In a short sale,
the Fund sells a security which it

                                       42



does not own in anticipation of a decline in the market value of the security.
To complete the sale, the Fund must borrow the security generally from the
broker through which the short sale is made in order to make delivery to the
buyer. The Fund must replace the security borrowed by purchasing it at the
market price at the time of replacement. The Fund is said to have a "short
position" in the securities sold until it delivers them to the broker. The
period during which the Fund has a short position can range from one day to more
than a year. Until the Fund replaces the security, the proceeds of the short
sale are retained by the broker and the Fund must pay to the broker a negotiated
portion of any dividends or interest which accrues during the period of the
loan. To meet current margin requirements, the Fund must deposit with the broker
additional cash or securities so that it maintains with the broker a total
deposit equal to 150% of the current market value of the securities sold short
(100% of the current market value if a security is held in the account that is
convertible or exchangeable into the security sold short within ninety (90) days
without restriction other than the payment of money).

Short sales by the Fund create opportunities to increase the Fund's return but,
at the same time, involve specific risk considerations and may be considered a
speculative technique. Since the Fund in effect profits from a decline in the
price of the securities sold short without the need to invest the full purchase
price of the securities on the date of the short sale, the Fund's NAV per share
tends to increase more when the securities it has sold short decrease in value
and to decrease more when the securities it has sold short increase in value
than would otherwise be the case if it had not engaged in such short sales. The
amount of any gain will be decreased and the amount of any loss increased by the
amount of any premium, dividends or interest the Fund may be required to pay in
connection with the short sale. Short sales theoretically involve unlimited loss
potential as the market price of securities sold short may continually increase
although the Fund may mitigate such losses by replacing the securities sold
short before the market price has increased significantly. Under adverse market
conditions the Fund might have difficulty purchasing securities to meet its
short sale delivery obligations and might have to sell portfolio securities to
raise the capital necessary to meet its short sale obligations at a time when
fundamental investment considerations would not favor such sales.

In the view of the SEC, a short sale involves the creation of a "senior
security" as such term is defined in the 1940 Act unless the sale is against the
box and the securities sold short are placed in a segregated account (not with
the broker) or unless the Fund's obligation to deliver the securities sold short
is "covered" by placing in a segregated account (not with the broker) cash, U.S.
government securities or other liquid debt or equity securities in an amount
equal to the difference between the market value of the securities sold short at
the time of the short sale and any such collateral required to be deposited with
a broker in connection with the sale (not including the proceeds from the short
sale) which difference is adjusted daily for changes in the value of the
securities sold short. The total value of the cash, U.S. government securities
or other liquid debt or equity securities deposited with the broker and
otherwise segregated may not at any time be less than the market value of the
securities sold short at the time of the short sale. The Fund will comply with
these requirements. In addition, as a matter of policy, the Fund's Board has
determined that it will not make short sales of securities or maintain a short
position if to do so could create liabilities or require collateral deposits and
segregation of assets aggregating more than 25% of the Fund's total assets,
taken at market value.

The extent to which the Fund may enter into short sales transactions may be
limited by the Code requirements for qualification of the Fund as a RIC. See
"Dividends, Distributions and Taxes."

Temporary Defensive and Short-term Positions

The Fund may invest in short-term, high-quality debt instruments and in U.S.
government securities for the following purposes: (i) to meet anticipated
day-to-day operating expenses; (ii) to invest cash flow pending the adviser's or
sub-adviser's determination to do so within the investment guidelines and
policies of the Fund; (iii) to permit the Fund to meet redemption requests; and
(iv) to take a temporary defensive position.

Although it is expected that the Fund will normally be invested consistent with
its investment objectives and policies, the short-term instruments in which the
Fund may invest for temporary defensive purposes include: (i) short-term
obligations of the U.S. government and its agencies, instrumentalities,
authorities or political

                                       43



subdivisions; (ii) other short-term debt securities; (iii) commercial paper
including master notes; (iv) bank obligations including certificates of deposit,
time deposits and bankers' acceptances; and (v) repurchase agreements. The Fund
will invest in short-term instruments that do not have a maturity of greater
than one year.

When-Issued Securities and Delayed-Delivery Securities

In order to secure prices or yields deemed advantageous at the time, the Fund
may purchase or sell securities on a when-issued or a delayed-delivery basis,
generally 15 to 45 days after the commitment is made. The Fund may also enter
into forward commitments. The Fund will enter into a when-issued transaction for
the purpose of acquiring portfolio securities and not for the purpose of
leverage. In such transactions, delivery of the securities occurs beyond the
normal settlement periods but no payment or delivery is made by and no interest
accrues to the Fund prior to the actual delivery or payment by the other party
to the transaction. Due to fluctuations in the value of securities purchased on
a when-issued or a delayed-delivery basis, the yields obtained on such
securities may be higher or lower than the yields available in the market on the
dates when the investments are actually delivered to the buyers. Similarly, the
sale of securities for delayed-delivery can involve the risk that the prices
available in the market when delivery is made may actually be higher than those
obtained in the transaction itself. The Fund will establish a segregated account
with the custodian consisting of cash and/or liquid assets in an amount equal to
the amount of its when-issued and delayed-delivery commitments which will be
marked-to-market daily. The Fund will only make commitments to purchase such
securities with the intention of actually acquiring the securities but the Fund
may sell these securities before the settlement date if deemed an advisable
investment strategy. In these cases, the Fund may realize a capital gain or
loss. When the Fund engages in when-issued, forward commitment, and delayed
delivery transactions, it relies on the other party to consummate the trade.
Failure to do so may result in the Fund incurring a loss or missing an
opportunity to obtain a price believed to be advantageous.

When the time comes to pay for the securities acquired on a delayed delivery
basis, the Fund will meet its obligations from the available cash flow, sale of
the securities held in the segregated account, sale of other securities or,
although it would not normally expect to do so, from sale of the when-issued
securities themselves (which may have a market value greater or less than the
Fund's payment obligation). Depending on market conditions, the Fund could
experience fluctuations in share price as a result of delayed-delivery or
when-issued purchases.

                             INVESTMENT RESTRICTIONS

All percentage limitations set forth below apply immediately after a purchase or
initial investment and any subsequent change in any applicable percentage
resulting from market fluctuations will not require elimination of any security
from the relevant portfolio.

The Fund's investment objective is not fundamental and may be changed without
shareholder vote.

FUNDAMENTAL INVESTMENT RESTRICTIONS

The Fund has adopted the following investment restrictions as fundamental
policies which mean they cannot be changed without the approval of the holders
of a "majority" of the Fund's outstanding voting securities as that term is
defined in the 1940 Act. The term "majority" is defined in the 1940 Act as the
lesser of: (1) 67% or more of the Fund's shares present at a meeting of
shareholders at which the holders of more than 50% of the outstanding shares of
the Fund are present in person or by proxy; or (2) more than 50% of the Fund's
outstanding voting securities.

As a matter of fundamental policy the Fund may not:

1.   purchase securities of any issuer if, as a result, with respect to 75% of
     the Fund's total assets, more

                                       44



     than 5% of the value of its total assets would be invested in the
     securities of any one issuer or the Fund's ownership would be more than 10%
     of the outstanding voting securities of any issuer, provided that this
     restriction does not limit the Fund's investments in securities issued or
     guaranteed by the U.S. government, its agencies and instrumentalities, or
     investments in securities of other registered management investment
     companies;

2.   purchase any securities which would cause 25% or more of the value of its
     total assets at the time of purchase to be invested in securities of one or
     more issuers conducting their principal business activities in the same
     industry, provided that: (a) there is no limitation with respect to
     obligations issued or guaranteed by the U.S. government, or tax exempt
     securities issued by any state or territory of the United States, or any of
     their agencies, instrumentalities or political subdivisions; and (b)
     notwithstanding this limitation or any other fundamental investment
     limitation, assets may be invested in the securities of one or more
     registered management investment companies to the extent permitted by the
     1940 Act, the rules and regulations thereunder and any exemptive relief
     obtained by the Fund;

3.   make loans, except to the extent permitted under the 1940 Act, including
     the rules, regulations, interpretations thereunder and any exemptive
     relieve obtained by the Fund;

4.   issue senior securities except to the extent permitted by the 1940 Act, the
     rules and regulations thereunder and any exemptive relief obtained by the
     Fund;

5.   purchase or sell real estate, except that the Fund may: (i) acquire or
     lease office space for its own use; (ii) invest in securities of issuers
     that invest in real estate or interests therein; (iii) invest in
     mortgage-related securities and other securities that are secured by real
     estate or interests therein; or (iv) hold and sell real estate acquired by
     the Fund as a result of the ownership of securities;

6.   purchase or sell physical commodities unless acquired as a result of
     ownership of securities or other instruments (but this shall not prevent
     the Fund from purchasing or selling options and futures contracts or from
     investing in securities or other instruments backed by physical
     commodities). This limitation does not apply to foreign currency
     transactions, including, without limitation, forward currency contracts;

7.   borrow money, except to the extent permitted under the 194 Act, including
     the rules, regulations, interpretations thereunder and any exemptive relief
     obtained by the Fund; or

8.   underwrite any issue of securities within the meaning of the 1933 Act
     except when it might technically be deemed to be an underwriter either: (a)
     in connection with the disposition of a Fund security; or (b) in connection
     with the purchase of securities directly from the issuer thereof in
     accordance with its investment objective. This restriction shall not limit
     the Fund's ability to invest in securities issued by other registered
     management investment companies.

<R>
With respect to fundamental policy number (2), industry classifications are
determined in accordance with the classifications established by the Global
Industrial Classification Standards ("GIC") or Standard Industrial
Classification ("SIC"). The adviser or sub-adviser believes that the industry
characteristics selected are reasonable and not so broad that the primary
economic characteristics of the companies in a single class are materially
different. Industry classifications may be changed from time to time to reflect
changes in the market place.
</R>

                       NON-FUNDAMENTAL INVESTMENT POLICIES

The Board has adopted the following non-fundamental investment restrictions
which may be changed by the

                                       45



Board and without shareholder vote. The Fund will not:

1.   invest in companies for the purpose of exercising control or management;

2.   purchase interests in oil, gas or other mineral exploration programs.
     However, this limitation will not prohibit the acquisition of securities of
     companies engaged in the production or transmission of oil, gas, or other
     minerals;

3.   invest more than 15% of its net assets in illiquid securities. Illiquid
     securities are securities that are not readily marketable or cannot be
     disposed of promptly within seven days and in the usual course of business
     without taking a materially reduced price. Such securities include, but are
     not limited to, time deposits and repurchase agreements with maturities
     longer than seven days. Securities that may be resold under Rule 144A under
     the 1933 Act, or securities offered pursuant to Section 4(2) of the 1933
     Act, shall not be deemed illiquid solely by reason of being unregistered.
     The adviser or sub-adviser shall determine whether a particular security is
     deemed to be liquid based on the trading markets for the specific security
     and other factors; or

4.   invest more than 15% of the total value of its assets in high-yield bonds
     (securities rated below BBB- by S&P or Baa3 by Moody's or, if unrated,
     considered by the adviser or sub-adviser to be of comparable quality).

The Fund has adopted a non-fundamental policy as required by Rule 35d-1 under
the 1940 Act to invest, under normal circumstances, at least 80% of the value of
its net assets, plus the amount of any borrowings for investment purposes, in
securities of companies in the science and global technology sectors in a number
of countries outside the United States. The Fund has also adopted a policy to
provide its shareholders with at least 60 days' prior notice of any change in
such investment policy. If subsequent to an investment, the 80% requirement is
no longer met, the Fund's future investments will be made in a manner that will
bring the Fund into compliance with this policy.

                               PORTFOLIO TURNOVER

A change in securities held in the portfolio of the Fund is known as "portfolio
turnover" and may involve the payment by the Fund of dealer mark-ups or
brokerage or underwriting commissions and other transaction costs on the sale of
securities as well as on the reinvestment of the proceeds in other securities.
Portfolio turnover rate for a fiscal year is the percentage determined by
dividing the lesser of the cost of purchases or proceeds from sales of portfolio
securities by the average value of portfolio securities during such year all
excluding securities whose maturities at acquisition were one year or less. The
Fund cannot accurately predict its turnover rate, however, the rate will be
higher when the Fund finds it necessary to significantly change its portfolio to
adopt a temporary defensive position or respond to economic or market events. A
high turnover rate would increase expenses and may involve realization of
capital gains by the Fund. The Fund's historical turnover rates are included in
the Financial Highlights tables in the Prospectuses.

The Fund's portfolio turnover rate decreased from 140% in 2006 to 87% in 2007.
This decrease was predominately due to overall market dynamics and company
specific buy/sell decisions.

                  DISCLOSURE OF THE FUND'S PORTFOLIO SECURITIES

The Fund is required to file its complete portfolio holdings schedule with the
SEC on a quarterly basis. This schedule is filed with the Fund's annual and
semi-annual shareholder reports on Form N-CSR for the second and fourth fiscal
quarters and on Form N-Q for the first and third fiscal quarters.

In addition, the Fund posts its portfolio holdings schedule on ING's website on
a calendar-quarter basis and it is available on the first day of the second
month of the next quarter. The portfolio holdings schedule is as of

                                       46



the preceding quarter-end (e.g., the Fund will post the quarter-ending June 30
holdings on August 1).

The Fund also compiles a list composed of its ten largest holdings ("Top Ten").
This information is produced monthly and is made available on ING's website on
the tenth day of each month. The Top Ten holdings information is as of the last
day of the previous month.

Investors (both individual and institutional), financial intermediaries that
distribute the Fund's shares and most third parties may receive the Fund's
annual or semi-annual shareholder reports, or view on ING's website, the Fund's
portfolio holdings schedule. The Top Ten list also is provided in quarterly Fund
descriptions that are included in the offering materials of variable life
insurance products and variable annuity contracts.

Other than in regulatory filings or on ING's website, the Fund may provide its
portfolio holdings to certain unaffiliated third parties and affiliates when the
Fund has a legitimate business purpose for doing so. Unless otherwise noted
below, the Fund's disclosure of its portfolio holdings will be on an as-needed
basis with no lag time between the date of which the information is requested
and the date the information is provided. Specifically, the Fund's disclosure of
its portfolio holdings may include disclosure:

     .    To the Fund's independent registered public accounting firm, named
          herein, for use in providing audit opinions;

     .    To financial printers for the purpose of preparing Fund regulatory
          filings;

     .    For the purpose of due diligence regarding a merger or acquisition;

     .    To a new adviser or sub-adviser prior to the commencement of its
          management of the Fund;

     .    To rating and ranking agencies such as Bloomberg, Morningstar, Lipper
          and S&P's (such agencies may receive more data from the Fund than is
          posted on the Fund's website);

     .    To consultants for use in providing asset allocation advice in
          connection with investments by affiliated funds-of-funds in the Fund;

     .    To service providers such as proxy voting and class action services
          providers, on a daily basis, in connection with their providing
          services benefiting the Fund;

     .    To a third party for purposes of effecting in-kind redemptions of
          securities to facilitate orderly redemption of portfolio assets and
          minimal impact on remaining Fund shareholders; or

     .    To certain third parties, on a weekly basis with no lag time, that
          have financed the Fund's Class B shares.

In all instances of such disclosure the receiving party, by agreement, is
subject to a duty of confidentiality including a duty not to trade on such
information.

The Board has adopted policies and procedures ("Policies") designed to ensure
that disclosure of information regarding the Fund's portfolio securities is in
the best interests of Fund shareholders, including procedures to address
conflicts between the interests of the Fund's shareholders, on the one hand, and
those of the Fund's adviser, sub-adviser, principal underwriter or any
affiliated person of the Fund, on the other. Such Policies authorize the Fund's
administrator to implement the Board's Policies and direct the administrator to
document the expected benefit to shareholders. Among other considerations, the
administrator is directed to consider whether such disclosure may create an
advantage for the recipient or its affiliates or their clients over that of the
Fund's shareholders. Similarly, the administrator is directed to consider, among
other things, whether the disclosure of portfolio holdings creates a conflict
between the interests of shareholders and the interests of the adviser,
sub-adviser, principal underwriter and their affiliates. The Board has
authorized the senior officers of the Fund's administrator to authorize the
release of the Fund's portfolio holdings as necessary, in conformity with the
foregoing principles and to monitor for compliance with the Policies. The Fund's
administrator reports quarterly to the Board regarding the implementation of the
Policies.

The Fund has the following ongoing arrangements with certain third parties to
provide the Fund's full portfolio holdings:

                                       47

MANAGEMENT OF THE COMPANY

Set forth in the table below is information about each Director of the Company.

Position Term of Office Number of Funds
(s) Held and Length of Principal Occupation(s) in Fund Complex
with the Time during the Past overseen by Other Board Memberships held
Name, Address and Age Company Served/(1)/ 5 Years Director/(2)/ by Director
--------------------------- -------- -------------- ---------------------- --------------- -----------------------------
Directors who are not "Interested Persons"

Dr. Albert E. DePrince, Jr. Director June 1998 Professor of Economics 30 Academy of Economics and
7337 East Doubletree Ranch -Present and Finance, Middle Finance (February 2002
Road Scottsdale, Arizona Tennessee State -Present); Tennessee Tax
85258 Age: 66 University (August. Structure Commission
1991-Present)Formerly, (December 2002 - December
Director of Business 2004); and Business and
and Economic Research Economic Research Center
Center, Middle (August 1999-August 2003).
Tennessee State
University (August
1994-August 2003).

Maria Teresa Fighetti Director April 1994- Retired. Formerly, 30 None.
7337 East Doubletree Ranch Present Associate Commissioner
Road Scottsdale, Arizona /Attorney, New York
85258 Age: 64 City Department of
Mental Health (June
1973-October 2002).

Sidney Koch Director April 1994- Self-Employed 30 None.
7337 East Doubletree Ranch Present Consultant (June 2000
Road Scottsdale, Arizona -Present).
85258 Age: 72

Dr. Corine T. Norgaard Director June 1991- Retired. Formerly, 30 Mass Mutual Corporate and
7337 East Doubletree Ranch Present President, Thompson Participation Investors
Road Scottsdale, Arizona Enterprises (September (April 1997 - Present); Mass
85258 Age: 70 2004 -September 2005); Mutual Premier Series
and Dean of the Barney (December 2004 - Present);
School of Business, and Mass Mutual MML Series II
University of (April 2005 - Present).
Hartford, (August
1996-June 2004).

Edward T. O'Dell Director June 2002- Retired. Formerly, 30 None.
7337 East Doubletree Ranch Present Partner of Goodwin
Road Scottsdale, Arizona Procter LLP (June 1966
85258 Age: 72 -September 2000).

Joseph E. Obermeyer Director January 2003- President, Obermeyer & 30 None.
7337 East Doubletree Ranch Present Associates, Inc.
Road Scottsdale, Arizona (November 1999 -
85258 Age: 50 Present).

Russell Jones Director December 2007- Senior Vice President, 30 None.
7337 East Doubletree Ranch Present Chief Investment
Rd. Scottsdale, Arizona Officer and Treasurer
85258 Age: 63 Kaman Corporation
(1973-Present).



Directors who are "Interested Persons"

Shaun Mathews/(3)(4)/        Director  December 2007-  President and Chief            30        Mark Twain House & Museum
7337 East Doubletree Ranch             Present         Executive Officer ING                    (September 2002-Present;
Rd. Scottsdale, Arizona                                Investments, LLC                         Connecticut Forum (May
85258 Age: 52                                          (December 2006-                          2002-Present); Capital
                                                       Present) and Head of                     Community College Foundation
                                                       ING USFS Mutual Funds                    (February 2002-Present); ING
                                                       and Investment                           Services Holding Company,
                                                       Products (October 2004                   Inc. (May 2000-Present);
                                                       -Present). CMO of ING.                   Southland Life Insurance
                                                       USFS (April 2002-                        Company (June 2002-Present);
                                                       October 2004) and Head                   and ING Capital Corporation,
                                                       of Rollover/Payout                       LLC, ING Funds Distributor,
                                                       (October 2001-December                   LLC, ING Funds Services, LLC,
                                                       2003)                                    ING Investments, LLC, and ING
                                                                                                Pilgrim Funding, Inc. (March
                                                                                                2006-Present).

Fredric (Rick) A. Nelson     Director  December 2007-  Vice Chairman and              30        None.
III/(3)/ 7337 East                     Present         Chief Investment
Doubletree Ranch Rd.                                   Officer, ING
Scottsdale, Arizona 85258                              Investment Management
Age:  51                                               Americas. Formerly,
                                                       head of the U.S.Equity
                                                       Group as well as a
                                                       member of the Global
                                                       and U.S. Executive
                                                       Committees at JPMorgan
                                                       Fleming Investment
                                                       Management, Inc. until
                                                       2003.

(1)  Directors serve until their successors are duly elected and qualified.

(2)  For the purposes of this table, "Fund Complex" mean the following
     investment companies: ING GET Fund; ING Series Fund, Inc.; ING Strategic
     Allocation Portfolios, Inc.; ING Variable Funds; ING VP Balanced Portfolio,
     Inc.; ING VP Intermediate Bond Portfolio; ING VP Money Market Portfolio.
     The number of Funds in the Fund Complex is as of January 31, 2008.

(3)  "Interested person" of the Company, as defined in the 1940 Act, is such
     because of a relationship with ING Groep N.V., the parent corporation of
     the adviser of the Fund, ING Investments, LLC, and the Distributor, ING
     Funds Distributor, LLC.

(4)  Shaun Mathews, President, ING USFS Mutual Funds and Investment Products,
     has held a seat on the Board of Directors of The Mark Twain House & Museum
     since September 19, 2002. ING Groep N.V. affiliates make non-material,
     charitable contributions to The Mark Twain House & Museum.

Officers

Information about the Fund's Officers are set forth in the table below:

                                  Positions Held with the   Term of Office and Length   Principal Occupation(s) During the
      Name, Address and Age               Company              of Time Served/(1)/                 Last Five Years
-------------------------------   -----------------------   -------------------------   -------------------------------------------
Shaun P. Mathews                  President and Chief       December 2006-Present       President and Chief Executive
7337 East Doubletree Ranch Road   Executive Officer                                     Officer, ING Investments, LLC/(2)/
Scottsdale, Arizona 85258                                                               and ING Funds Services, LLC/(3)/
Age: 52                                                                                 (December 2006 - Present) and Head
                                                                                        of ING USFS Mutual Funds and
                                                                                        Investment Products (October 2004
                                                                                        - Present). Formerly, CMO, ING
                                                                                        USFS (April 2002-October 2004)
                                                                                        and Head of Rollover/Payout
                                                                                        (October 2001-December 2003).

                                       50



                                  Positions Held with the   Term of Office and Length   Principal Occupation(s) During the
      Name, Address and Age               Company              of Time Served/(1)/                 Last Five Years
--------------------------------  -------------------------  ------------------------  --------------------------------------------
Michael J. Roland                 Executive Vice President   April 2002 - Present      Head of Mutual Fund Platform (February
7337 East Doubletree Ranch Road                                                        2007 - Present) and Executive Vice
Scottsdale, Arizona 85258                                                              President, ING Investments, LLC/(2)/
Age: 49                                                                                (December 2001 - Present). Formerly,
                                                                                       Head of Product Management (January
                                                                                       2005 - January 2007); Chief Compliance
                                                                                       Officer, ING Investments, LLC/(2)/, and
                                                                                       Directed Services, LLC/(5)/ (October 2004
                                                                                       - December 2005); and Chief Financial
                                                                                       Officer and Treasurer, ING Investments,
                                                                                       LLC/(2)/ (December 2001 - March 2005).

Stanley D. Vyner                  Executive Vice President   March 2002 - Present      Executive Vice President, ING
7337 East Doubletree Ranch Road.                                                       Investments, LLC/(2)/ (July 2000 -
Scottsdale, Arizona 85258                                                              Present) and Chief Investment Risk
Age: 57                                                                                Officer, ING Investments, LLC/(2)/
                                                                                       (January 2003 - Present). Formerly,
                                                                                       Chief Investment Officer of the
                                                                                       International Investments (August 2000
                                                                                       - January 2003).

Joseph M. O'Donnell               Executive Vice President   March 2006 - Present      Chief Compliance Officer of the ING
7337 East Doubletree Ranch Road   Chief Compliance Officer   November 2004 - Present   Funds (November 2004 - Present); and
Scottsdale, Arizona 85258                                                              ING Investments, LLC/(2)/, and Directed
Age: 53                                                                                Services, LLC/(5)/ (March 2006 -
                                                                                       Present); and Executive Vice President
                                                                                       of the ING Funds (March 2006 -
                                                                                       Present). Formerly, Chief Compliance
                                                                                       Officer ING Life Insurance and Annuity
                                                                                       Company (March 2006 - December 2006);
                                                                                       Vice President, Chief Legal Counsel,
                                                                                       Chief Compliance Officer and Secretary
                                                                                       of Atlas Securities, Inc., Atlas
                                                                                       Advisers, Inc. and Atlas Funds (October
                                                                                       2001 - October 2004).

Todd Modic                        Senior Vice President,     March 2005 - Present      Senior Vice President, ING Funds
7337 East Doubletree Ranch Road   Chief/Principal Financial                            Services, LLC/(3)/ (April 2005 -
Scottsdale, Arizona 85258         Officer and Assistant                                Present). Formerly, Vice President, ING
Age: 40                           Secretary                                            Funds Services, LLC/(3)/ (September 2002
                                                                                       - March 2005); and Director of
                                                                                       Financial Reporting, ING Investments,
                                                                                       LLC/(2)/ (March 2001- September 2002).

Kimberly A. Anderson              Senior Vice President      December 2003 - Present   Senior Vice President, ING Investments,
7337 East Doubletree Ranch Road                                                        LLC/(2)/ (October 2003 - Present).
Scottsdale, Arizona 85258                                                              Formerly, Vice President and Assistant
Age: 43                                                                                Secretary, ING Investments, LLC/(2)/
                                                                                       (January 2001 - October 2003).

Ernest J. C'DeBaca                Senior Vice President      June 2006 - Present       Senior Vice President ING Investments,
7337 East Doubletree Ranch Road                                                        LLC/(2)/ (December 2006 - Present) and
Scottsdale, Arizona 85258                                                              ING Funds Services, LLC/(3)/ (April 2006
Age: 38                                                                                - Present). Formerly, Counsel, ING
                                                                                       Americas, U.S. Legal Services (January
                                                                                       2004 - March 2006); and
                                                                                       Attorney-Adviser, U.S. Securities and
                                                                                       Exchange Commission (May 2001 -
                                                                                       December 2003).

Robert Terris                     Senior Vice President      June 2006 - Present       Senior Vice President, Head of Division
7337 East Doubletree Ranch Road                                                        Operations, ING Funds (May
Scottsdale, Arizona 85258                                                              2006-Present) and Vice President, Head
Age: 37                                                                                of Division Operations, ING Funds
                                                                                       Services, LLC/(3)/ (March 2006 -
                                                                                       Present). Formerly, Vice President of
                                                                                       Administration, ING Funds Services,
                                                                                       LLC/(3)/ (October 2001 - March 2006).

Robyn L. Ichilov                  Vice President and         March 2002 - Present      Vice President and Treasurer, ING Funds
7337 East Doubletree Ranch Road   Treasurer                                            Services, LLC/(3)/ (October 2001 -
Scottsdale, Arizona 85258                                                              Present) and ING Investments, LLC/(2)/
Age: 40                                                                                (August 1997 - Present).

                                       51



<R>
                                  Positions Held with the   Term of Office and Length   Principal Occupation(s) During the
      Name, Address and Age               Company              of Time Served/(1)/                 Last Five Years
--------------------------------  -------------------------  ------------------------  --------------------------------------------
Lauren D. Bensinger               Vice President             March 2003 - Present      Vice President and Chief Compliance
7337 East Doubletree Ranch Road                                                        Officer, ING Funds Distributor, LLC/(4)/
Scottsdale, Arizona 85258                                                              (July 1995 - Present) and Vice
Age: 54                                                                                President (February 1996 - Present);
                                                                                       and Director of Compliance, ING
                                                                                       Investments, LLC/(2)/ (October 2004 -
                                                                                       Present). Formerly, Chief Compliance
                                                                                       Officer, ING Investments, LLC/(2)/
                                                                                       (October 2001 - October 2004).

Maria M. Anderson                 Vice President             September 2004 - Present  Vice President, ING Funds Services,
7337 East Doubletree Ranch Road                                                        LLC/(3)/ (September 2004 - Present).
Scottsdale, Arizona 85258                                                              Formerly, Assistant Vice President, ING
Age: 49                                                                                Funds Services, LLC/(3)/ (October 2001 -
                                                                                       September 2004); and Manager of Fund
                                                                                       Accounting and Fund Compliance, ING
                                                                                       Investments, LLC/(2)/ (September 1999 -
                                                                                       October 2001).

William Evans                     Vice President             December 2007 - Present   Vice President, Head of Mutual Fund
10 State House Square                                                                  Advisory Group (April 2007-present),
Hartford, CT 06103                                                                     Vice President, U.S. Mutual Funds and
Age: 35                                                                                Investment Products (May 2005-April
                                                                                       2007), Senior Fund Analyst, U.S. Mutual
                                                                                       Funds and Investment Products (May
                                                                                       2002-May 2005).

Denise Lewis                      Vice President             April 2007 - Present      Vice President, ING Funds Services,
7337 East Doubletree Ranch Road                                                        LLC/(3)/ (December 2006 - Present).
Scottsdale, Arizona 85258                                                              Formerly, Senior Vice President, UMB
Age: 44                                                                                Investment Services Group, LLC
                                                                                       (November 2003 - December 2006); and
                                                                                       Vice President, Wells Fargo Funds
                                                                                       Management, LLC (December 2000 - August
                                                                                       2003).

Kimberly K. Palmer                Vice President             March 2006 - Present      Vice President, ING Funds Services,
7337 East Doubletree Ranch Road                                                        LLC/(3)/ (March 2006 - Present).
Scottsdale, Arizona 85258                                                              Formerly, Assistant Vice President, ING
Age: 50                                                                                Funds Services, LLC/(3)/ (August
                                                                                       2004-March 2006); Manager, Registration
                                                                                       Statements, ING Funds Services, LLC/(3)/
                                                                                       (May 2003 - August 2004); Associate
                                                                                       Partner, AMVESCAP PLC (October 2000 -
                                                                                       May 2003); and Director of Federal
                                                                                       Filings and Blue Sky Filings, INVESCO
                                                                                       Funds Group, Inc. (March 1994 - May
                                                                                       2003).

Susan P. Kinens                   Assistant Vice President   March 2003 - Present      Assistant Vice President, ING Funds
7337 East Doubletree Ranch Road                                                        Services, LLC/(3)/ (December 2002 -
Scottsdale, Arizona 85258                                                              Present); and has held various other
Age: 31                                                                                positions with ING Funds Services,
                                                                                       LLC/(3)/ for more than the last five
                                                                                       years.

Theresa K. Kelety                 Secretary                  September 2003 - Present  Counsel, ING Americas, U.S. Legal
7337 East Doubletree Ranch Rd.                                                         Services (April 2003 - Present).
Scottsdale, Arizona 85258                                                              Formerly, Senior Associate with
Age: 45                                                                                Shearman & Sterling (February 2000 -
                                                                                       April 2003).

Huey P. Falgout, Jr.              Assistant Secretary        September 2003 - Present  Chief Counsel, ING Americas, U.S. Legal
7337 East Doubletree Ranch Road                                                        Services (September 2003 - Present).
Scottsdale, Arizona 85258                                                              Formerly, Counsel, ING Americas, U.S.
Age: 45                                                                                Legal Services (November 2002 -
                                                                                       September 2003); and Associate General
                                                                                       Counsel, AIG American General (January
                                                                                       1999 - November 2002).
</R>

(1)  The officers hold office until the next annual meeting of the Directors and
     until their successors shall have been elected and qualified.

(2)  ING Investments, LLC was previously named ING Pilgrim Investments, LLC. ING
     Pilgrim Investments, LLC is the successor in interest to ING Pilgrim
     Investments, Inc. which was previously known as Pilgrim Investments, Inc.
     and before that was known as Pilgrim America Investments, Inc.

(3)  ING Funds Services, LLC was previously named ING Pilgrim Group, LLC. ING
     Pilgrim Group, LLC is the successor in interest to ING Pilgrim Group, Inc.
     which was previously known as Pilgrim Group, Inc. and before that was known
     as Pilgrim America Group, Inc.

                                       52



Board

The Board governs the Fund and is responsible for protecting the interests of
shareholders. The Board is comprised of experienced executives who oversee the
Fund's activities, review contractual arrangements with companies that provide
services to the Fund and review the Fund's performance.

Frequency of Board Meetings

The Board currently conducts regular meetings four (4) times a year. The Audit
Committee also meets regularly four (4) times per year and the remaining
Committees meet as needed. In addition, the Board or the Committees may hold
special meetings by telephone or in person to discuss specific matters that may
require action prior to the next regular meeting. Each Committee listed below
operates pursuant to a Charter approved by the Board.

Committees

The Board has an Audit Committee whose functions include, among other things,
meeting with the independent registered public accounting firm of the Fund to
review the scope of the Fund's audit, its financial statements and interim
accounting controls, and to meet with management concerning these matters. The
Audit Committee currently consists of Messrs. Obermeyer, DePrince, Jones, Koch
and O'Dell and Dr. Norgaard and Ms. Fighetti (collectively, the "Independent
Directors"). Mr. Obermeyer currently serves as Chairperson and Dr. Norgaard
currently serves as Vice Chairperson of the Audit Committee. The Audit Committee
held four (4) meetings during the fiscal year ended October 31, 2007.

The Board has a Contracts Committee whose function is to consider, evaluate and
make recommendations to the full Board concerning contractual arrangements with
service providers to the Fund and all other matters in which the investment
adviser or any affiliated entity has an actual or potential conflict of interest
with the Fund or its shareholders. The Contracts Committee currently consists of
Messrs. Koch, DePrince, Jones, Obermeyer and O'Dell, Dr. Norgaard and Ms.
Fighetti. Mr. Koch currently serves as Chairperson and Dr. DePrince currently
serves as Vice Chairperson of the Contracts Committee. The Contracts Committee
held five (5) meetings during the fiscal year ended October 31, 2007.

The Board has a Nominating Committee for the purpose of considering and
presenting to the Board candidates it proposes for nomination to fill
Independent Director vacancies on the Board. The Nominating Committee currently
consists of Messrs. DePrince, Jones, Koch, Obermeyer and O'Dell, Dr. Norgaard
and Ms. Fighetti. The Nominating Committee will consider nominations for
vacancies received by shareholders and will access nominees in the same manner
as it reviews its own nominees. Shareholders wishing to submit a nomination for
Director at an annual or special meeting of shareholders must provide such
recommendation in a sufficiently timely manner (and in any event no later than
the date specified for receipt of shareholder proposals in any applicable proxy
statement with respect to the Fund) in writing to the Nominating Committee, c/o
the Secretary of the Funds, ING Series Fund, Inc., 7337 East Doubletree Ranch
Road, Scottsdale, Arizona 85258. Any recommendation made by a shareholder must
contain sufficient information for the Nominating Committee to make an
assessment of the candidate's suitability for the position of Independent
Director. The Nominating Committee held no meetings during the fiscal year ended
October 31, 2007.

The Board has a Valuation Committee for the purpose of approving fair value
determinations at the time they are being considered by management. The
Valuation Committee currently consists of Messrs. Koch, DePrince, Jones,
Obermeyer and O'Dell, Dr. Norgaard and Ms. Fighetti. The Valuation Committee
held no meetings during the fiscal year ended October 31, 2007.

The Board has a Compliance Committee for the purposes of: (1) providing
oversight with respect to compliance by the Fund and its service providers with
applicable laws, regulations and internal policies and procedures affecting the
operations of the Fund; and (2) to serve as a committee and in such capacity to

                                       54

receive, retain and act upon reports of evidence of possible material violations
of applicable U.S. federal or state securities laws and breaches of fiduciary
duty arising under U.S. federal or state securities laws. The Compliance
Committee currently consists of Dr. Norgaard, Messrs. O'Dell, DePrince, Jones,
Koch and Obermeyer, and Ms. Fighetti. Dr. Norgaard currently serves as
Chairperson and Mr. O'Dell currently serves as Vice Chairperson of the
Compliance Committee. The Compliance Committee meets as needed. The Compliance
Committee held three (3) meetings during the fiscal year ended October 31, 2007.

Director Ownership of Securities

Set forth below is the dollar range of equity securities owned by each Director
as of December 31, 2007.

Aggregate Dollar Range of Equity
Securities in all Registered
Investment Companies Overseen
Dollar Range of by Director in Family of
Name of Director Shares in the Fund Investment Companies
----------------------- ------------------ --------------------------------
Independent Directors
Albert E. DePrince, Jr. None Over $100,000/(1)/
Maria Theresa Fighetti None Over $100,000/(1)/
Sidney Koch None Over $100,000
Corine T. Norgaard None Over $100,000
Joseph E. Obermeyer None Over $100,000/(1)/
Edward T. O'Dell None Over $100,000/(1)/
Russell Jones/(2)/ None $10,000-$50,000/(1)/
Interested Directors
Shaun Mathews/(2)/ $1-$10,000/(1)/ Over $100,000/(1)/
Rick Nelson/(2)/ None Over $100,000/(1)/

(1) Includes the value of shares in which the Director has an indirect interest
through a Deferred Compensation Plan.

(2) Messrs. Jones, Mathews and Nelson commenced services as Directors effective
December 2007.

Independent Director Ownership of Securities

Set forth in the table below is information regarding each Independent
Director's (and his or her immediate family members) share ownership in
securities of the Fund's adviser or principal underwriter and the ownership of
securities in any entity controlling, controlled by or under common control with
ING Investments or principal underwriter of the Fund (not including registered
investment companies) as of December 31, 2007.

Name of Owners
and Relationship Title of Value of Percentage of
Name of Director to Director Company Class Securities Class
----------------------- ---------------- ------- -------- ---------- -------------
Albert E. DePrince, Jr. N/A N/A N/A $-- N/A
Maria T. Fighetti N/A N/A N/A $-- N/A
Sidney Koch N/A N/A N/A $-- N/A
Corine T. Norgaard N/A N/A N/A $-- N/A
Joseph Obermeyer N/A N/A N/A $-- N/A
Edward T. O'Dell N/A N/A N/A $-- N/A
Russell Jones N/A N/A N/A $-- N/A
Interested Directors
Shaun Mathews N/A N/A N/A $-- N/A
Rick Nelson N/A N/A N/A $-- N/A

Compensation of Directors

For service on the Board and the boards of other investment companies in the ING
Board Complex, each Independent Director who is not an "interested person" of
ING is entitled to receive (i) an annual retainer of $60,000, payable in equal
quarterly installments; (ii) $7,500 per meeting for each Board meeting in which
the Independent Director participates in person; (iii) $7,500 per meeting for
each Contracts Committee meeting in which the Independent Director participates
in person; (iv) $3,500 per meeting for each committee meeting,



other than for a Contracts Committee meeting, held in conjunction with a Board
meeting in which the Independent Director participates in person, and $5,000 per
meeting for each committee meeting, other than for Contracts Committee meeting,
not held in conjunction with a Board meeting, in which the Independent Director
participates in person; (v) $2,500 per meeting for each meeting of the Board or
an committee in which the Independent Director participates by telephone
(including via video conference); (vi) $35,000 per annum for serving as
Chairperson of the Contracts Committee, payable in equal quarterly installments;
(vii) $15,000 per annum for serving as Chairperson of the Audit Committee,
payable in equal quarterly installments; (viii) $15,000 per annum for serving as
Chairperson of the Compliance Committee, payable in equal quarterly
installments; (ix) $5,000 per annum for serving as Chairperson of the Nominating
Committee (in periods in which the Committee has operated), payable in equal
quarterly installments; (x) $20,000, $7,500 and $7,500 per annum for serving as
Committee Vice Chairperson of the Contracts, Compliance and Audit Committees,
respectively, payable in equal quarterly installments. In addition, each
Independent Director is entitled to reimbursement for out-of-pocket expenses
incurred in attending Board and Committee meetings. All such fees and expense
reimbursements are allocated among all funds within the ING Board Complex pro
rata based upon the average net assets of all the funds within the ING Board
Complex as of the date the payment is due. None of the Independent Directors is
entitled to receive pension or retirement benefits.

The following table sets forth information provided by the Fund's adviser
regarding compensation of Directors by the Fund and other funds managed by the
adviser and its affiliates for the fiscal year ended October 31, 2007. Officers
of the Company and Directors who are interested persons of the Company do not
receive any compensation from the Fund or any other funds managed by the adviser
or its affiliates. None of these Directors were entitled to receive pension or
retirement benefits.

Compensation Table

                                           Pension or
                                           Retirement      Total Compensation
                           Aggregate    Benefits Accrued   From Registrant and
     Name of Person      Compensation   as Part of Fund   Fund Complex Paid to
        Position         from the Fund      Expenses          Directors/(1)/
-----------------------  -------------  ----------------  --------------------
Albert E. DePrince, Jr.     $910.37           None              $205,000
Director
Maria T. Fighetti           $810.47           None              $182,500
Director
Sydney Koch                 $966.13           None              $217,500
Director
Corine Norgaard             $910.53           None              $205,000
Director
Joseph E. Obermeyer         $877.18           None              $197,500
Director
Edward T. O'Dell            $785.80           None              $177,500
Director
Russell Jones/(2)/            None            None                None
Director
Interested Directors
Shaun Mathews/(2)/            None            None                None
Director
Rick Nelson/(2)/              None            None                None
Director

(1)  Represents compensation from 33 funds (total in complex as of the fiscal
     year ended October 31, 2007).

(2)  Messrs. Jones, Mathews and Mr. Nelson commenced services as Directors
     effective December 2007.

                                       56



The Board has adopted a retirement policy under with each Independent Director
is subject to mandatory retirement as of the later of (i) the March 31 next
occurring after he or she attains the age of 72 and (ii) the date his or her
successor is elected or appointed to the Board, provided that each Independent
Director under the age of 72 as of March 31, 2002 who held office as of that
date may, upon the vote of the other Independent Directors, be granted up to
three one-year extensions commencing as of the March 31 next occurring after he
or she attains the age of 72.

                                 CODE OF ETHICS

The Fund, the adviser, the sub-adviser, and the Distributor have adopted a code
of ethics ("Code of Ethics" or written supervisory procedures) governing
personal trading activities of all Directors, Officers of the Fund and persons
who, in connection with their regular functions, play a role in the
recommendation of any purchase or sale of a security by the Fund or obtain
information pertaining to such purchase or sale. The Code of Ethics is intended
to prohibit fraud against the Fund that may arise from personal trading of
securities that may be purchased or held by the Fund or the Fund's shares. The
Code of Ethics also prohibits short-term trading of the Fund by persons subject
to the Code of Ethics. Personal trading is permitted by such persons subject to
certain restrictions. However such persons are generally required to pre-clear
all security transactions with the Fund's Compliance Department and to report
all transactions on a regular basis. The sub-adviser has adopted its own Codes
of Ethics to govern the personal trading activities of its personnel.

                             PROXY VOTING PROCEDURES

The Board has adopted proxy voting procedures and guidelines to govern the
voting of proxies relating to the Fund's portfolio securities. The proxy voting
procedures delegate to the adviser the authority to vote proxies relating to
portfolio securities and provide a method for responding to potential conflicts
of interest. In delegating voting authority to the adviser, the Board has also
approved the adviser's proxy voting procedures, which require the adviser to
vote proxies in accordance with the Fund's proxy voting procedures and
guidelines. An independent proxy voting service has been retained to assist in
the voting of Fund proxies through the provision of vote analysis,
implementation and recordkeeping and disclosure services. A copy of the proxy
voting procedures and guidelines of the Fund, including procedures of the
adviser, is attached hereto as Appendix A. No later than August 31st of each
year, information regarding how the Fund voted proxies relating to portfolio
securities for the one-year period ending June 30th is available through the ING
Funds' website (www.ingfunds.com) or by accessing the SEC's EDGAR database
(www.sec.gov).

                   CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS

"Control" is defined by the 1940 Act as the beneficial ownership, either
directly or through one or more controlled companies, of more than 25% of the
voting securities of the Company. A control person may be able to take action
regarding the Fund without the consent or approval of shareholders. As of
February 28, 2008, the Directors and Officers of the Company as a group owned
less than 1% of the outstanding shares of the Fund. As of that date to the
knowledge of management, no person owned, beneficially or of record, more than
5% of the outstanding Class A, Class B, Class C, Class I or Class O shares of
the Fund except as set forth below. Unless otherwise indicated below, the
Company has no knowledge as to whether all or any portion of the shares owned of
record are also owned beneficially.

                                             Class and
                                              Record    Percentage  Percentage
             Name and Address                Ownership   of Class    of Fund
-------------------------------------------  ---------  ----------  ----------
            ING National Trust
        AFS Central Valuation Unit
          Attn: Gordon Elrod TN41             Class A      29.1%       9.8%
            151 Farmington Ave.
          Hartford, CT 06156-0001

                                       57



                                             Class and
                                              Record    Percentage  Percentage
             Name and Address                Ownership   of Class    of Fund
-------------------------------------------  ---------  ----------  ----------
     ING Life Insurance & Annuity Co.
            151 Farmington Ave.               Class A      18.9%       6.4%
      Hartford, CT 06156-0001101-0001

      Citigroup Global Markets, Inc.
       Attn: Peter Booth, 7th Floor
              33 W. 34th St.                  Class C       5.3%       0.2%
          New York, NY 10001-2402

            ING National Trust
          151 Farmington Ave. #41             Class I      31.0%       1.8%
          Hartford, CT 06156-0001

        Reliance Trust Company Cust           Class I      59.6%       3.4%
FBO ING Americas Deferred Comp Savings Plan
          P.O. Box 48529 STE 200
          Atlanta, GA 30362-1529

                                     ADVISER

The investment adviser for the Fund is ING Investments, LLC ("ING Investments"
or "Adviser") which is registered with the SEC as an investment adviser and
serves as an investment adviser to registered investment companies (or series
thereof) as well as structured finance vehicles. ING Investments, subject to the
authority of the Directors of the Fund, has the overall responsibility for the
management of the Fund's portfolio subject to delegation of certain
responsibilities to other investment advisers including BlackRock Advisors, LLC
("BlackRock Advisors" or "Sub-Adviser"). BlackRock Advisors is the Sub-Adviser
to the Fund. ING Investments is indirect, wholly-owned subsidiaries of ING Groep
N.V. ("ING Groep") (NYSE: ING). ING Groep is one of the largest financial
services organizations in the world with approximately 120,000 employees. Based
in Amsterdam, ING Groep offers an array of banking, insurance and asset
management services to both individual and institutional investors. The
principal executive offices of ING Groep are located at Amstelveensesweg 500,
1081 Amsterdam, P.O. Box 810, 1000 AV Amsterdam, the Netherlands.

On February 26, 2001, the name of the Adviser changed from "ING Pilgrim
Investments, Inc." to "ING Pilgrim Investments, LLC." On March 1, 2002, the name
of the Adviser was changed from "ING Pilgrim Investments, LLC" to "ING
Investments, LLC." Prior to March 1, 2002, ING Investment Management Co. served
as adviser to the Fund.

ING Investments serves pursuant to an investment management agreement
("Investment Advisory Agreement") between ING Investments and the Company on
behalf of the Fund. The Investment Advisory Agreement requires ING Investments
to oversee the provision of all investment advisory and portfolio management
services for the Fund. Pursuant to a sub-advisory agreement ("Sub-Advisory
Agreement"), ING Investments has delegated certain management responsibilities
to BlackRock Advisors. ING Investments oversees the investment management of the
Sub-Adviser for the Fund.

The Investment Advisory Agreement requires ING Investments to provide, subject
to the supervision of the Board, investment advice and investment services to
the Fund and to furnish advice and recommendations with respect to investment of
the Fund's assets and the purchase or sale of its portfolio securities. ING
Investments also provides investment research and analysis. The Investment
Advisory Agreement provides that ING Investments is not subject to liability to
the Fund for any act or omission in the course of, or connected with, rendering
services under the Investment Advisory Agreement except by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties under the Investment Advisory Agreement.

After an initial term of two years, the Investment Advisory Agreement and
Sub-Advisory Agreement continue in effect from year to year so long as such
continuance is specifically approved at least annually by: (a) the

                                       58



Board; or (b) the vote of a "majority" (as defined in the 1940 Act) of the
Fund's outstanding shares voting as a single class provided that in either event
the continuance is also approved by at least a majority of the Board who are not
"interested persons" (as defined in the 1940 Act) of the Advisor or Sub-Adviser,
as the case may be, by vote cast in person at a meeting called for the purpose
of voting on such approval.

For information regarding the basis for the Board's approval of the investment
advisory and sub-advisory relationships, please refer to the Fund's semi-annual
shareholder report dated April 30.

The Investment Advisory Agreement may be terminated without penalty with not
less than 60 days' notice by the Board or by a vote of the holders of a majority
of the Fund's outstanding shares voting as a single class or upon not less than
60 days' notice by ING Investments. The Investment Advisory Agreement will
terminate automatically in the event of its "assignment" (as defined in the 1940
Act).

Advisory Fees

ING Investments bears the expense of providing its services and pays the fees of
BlackRock Advisors. For its services, the Fund pays ING Investments, expressed
as an annual rate, a monthly fee in arrears equal to the following as a
percentage of the Fund's average daily net assets during the month:

Fund                     Advisory Fee
----------------------   ----------------------------------------------
ING Global Science and   1.050% on the first $500 million of the Fund's
Technology               average daily net assets;
                         1.025% on the next $500 million of the Fund's
                         average daily net assets; and
                         1.000% of the Fund's average daily net assets
                         in excess of $1 billion.

Total Advisory Fees Paid by the Fund

The following tables set forth the total amount the Fund paid to ING Investments
for the fiscal years ended October 31, 2007, 2006 and 2005:

                                             October 31,
                                   ----------------------------
              Fund                   2007      2006      2005
--------------------------------   --------  --------  --------
ING Global Science and Technology  $868,500  $823,396  $750,041

                          EXPENSE LIMITATION AGREEMENT

ING Investments has entered into an expense limitation agreement with the Fund
pursuant to which ING Investments has agreed to waive or limit its fees. In
connection with these agreements and certain U.S. tax requirements, ING
Investments will assume other expenses so that the total annual ordinary
operating expenses of the Fund (which excludes interest, taxes, brokerage
commissions, other investment related costs, extraordinary expenses (and
acquired fund fees and expenses) such as litigation,, and other expenses not
incurred in the normal course of the Fund's business) and expenses of any
counsel or other persons or services retained by the Fund's Directors who are
not "interested persons" (as defined in the 1940 Act) of ING Investments do not
exceed the following expense limitations:

Fund                                 Class A  Class B  Class C  Class I  Class O
ING Global Science and Technology     1.75%    2.50%    2.50%    1.50%    1.75%

The Fund may, at a later date, reimburse ING Investments for management fees
waived and other expenses assumed by ING Investments during the previous
thirty-six (36) months but only if, after such reimbursement, the Fund's expense
ratio does not exceed the percentage described above. ING Investments will only
be reimbursed for fees waived or expenses assumed after the effective date of
the expense limitation agreements.

The expense limitation agreement provides that these expense limitations shall
continue until March 1, 2009. The expense limitations are contractual and will
automatically renew for one-year terms unless ING

                                       59



Investments provides written notice of the termination of the expense limitation
agreement to the lead Independent Director of the Company within ninety (90)
days prior to the end of the then-current term or upon termination of the
Investment Advisory Agreement. The expense limitation agreement may also be
terminated by the Company, without payment of any penalty, upon ninety (90) days
prior written notice to ING Investments at its principal place of business.

                                   SUB-ADVISER

The Investment Advisory Agreement for the Fund provides that ING Investments,
with the approval of the Board, may select and employ an investment adviser to
serve as sub-adviser for the Fund, shall monitor the Sub-Adviser's investment
programs and results, and coordinate the investment activities of the
Sub-Adviser to ensure compliance with regulatory restrictions. ING Investments
pays all of its expenses arising from the performance of its obligations under
the Investment Advisory Agreement including all fees payable to the Sub-Adviser
and executive salaries and expenses of the Directors and Officers of the Company
who are employees of ING Investments or its affiliates. The Sub-Adviser pays all
of its expenses arising from the performance of its obligations under the
Sub-Advisory agreement.

Subject to the expense reimbursement provisions described in this SAI, other
expenses incurred in the operation of the Fund are borne by the Fund including,
without limitation, advisory fees; brokerage commissions; interest; legal fees
and expenses of attorneys; fees of independent registered public accounting
firms, transfer agents and dividend disbursing agents, accounting agents, and
custodians; the expense of obtaining quotations for calculating the Fund's NAV;
taxes, if any, and the preparation of the Fund's tax returns and any other
expenses (including clerical expenses) of issue, sale, repurchase or redemption
of shares; fees and expenses of registering and maintaining the registration of
shares of the Fund under federal and state laws and regulations; expenses of
printing and distributing annual and semi-annual shareholder reports, notices
and proxy materials to existing shareholders; expenses of printing and filing
annual and semi-annual shareholder reports and other documents filed with
governmental agencies; expenses of annual and special shareholder meetings;
expenses of printing and distributing prospectuses and statements of additional
information to existing shareholders; fees and expenses of Directors of the
Company who are not employees of the Adviser or Sub-Adviser, or their
affiliates; membership dues in trade associations; insurance premiums; and
extraordinary expenses such as litigation expenses.

The Sub-Advisory Agreement may be terminated without payment of any penalties by
ING Investments, the Board on behalf of the Fund, or the shareholders of the
Fund upon 60 days' prior written notice. The Sub-Advisory Agreement, after its
initial term through December 31, 2006, continues in effect from year to year
subject to the annual approval of the Board on behalf of the Fund, or the vote
of a majority of the outstanding voting securities, and the vote, cast in person
at a meeting duly called and held, of a majority of the Directors, on behalf of
the Fund who are not parties to the Sub-Advisory Agreements or "interested
persons" (as defined in the 1940 Act) of any such party.

The Fund and ING Investments have received an exemptive order from the SEC that
allows ING Investments to enter into a new investment sub-advisory agreement on
behalf of the Fund with a non-affiliated sub-adviser or materially amend an
existing Sub-Advisory Agreement subject to the approval of the Fund's Board
(including a majority of Independent Directors) but without shareholder
approval. In accordance with the exemptive order received from the SEC, an
information statement describing any sub-adviser changes will be provided to
shareholders within ninety (90) days of the change. ING Investments remains
responsible for providing for the general management services to the Fund
including overall supervisory responsibility for the general management and
investment of the Fund's assets, and, subject to the review and approval of the
Board, will among other things: (i) set the Fund's overall investment
strategies; (ii) evaluate, select and recommend a sub-adviser to manage all or
part of the Fund's assets; (iii) when appropriate, allocate and reallocate the
Fund's assets among multiple sub-advisers; (iv) monitor and evaluate the
investment performance of the Sub-Adviser; and (v) implement procedures
reasonably designed to ensure that the Sub-Adviser complies with the Fund's
investment objectives, policies and restrictions.

                                       60



Pursuant to a Sub-Advisory Agreement between ING Investments and BlackRock
Advisors, BlackRock Advisors serves as Sub-Adviser to the Fund. Effective
September 30, 2006, BlackRock Advisors began serving as Sub-Adviser to the Fund.
On September 29, 2006, BlackRock, Inc. consummated a transaction with Merrill
Lynch & Co., Inc. whereby Merrill Lynch & Co., Inc.'s investment management
businesses combined with that of BlackRock, Inc. to create a new independent
company and on September 29, 2006 BlackRock Advisors, Inc. reorganized into
BlackRock Advisors. Prior to September 30, 2006, BlackRock Advisors, Inc. served
as Sub-Adviser to the Fund beginning January 1, 2004. Prior to January 1, 2004,
AIC Asset Management, LLC served as sub-adviser. In its capacity as Sub-Adviser,
BlackRock Advisors, subject to the supervision and control of ING Investments
and the Board on behalf of the Fund, manages the Fund's investment portfolio
consistently with the Fund's investment objective and executes any of the Fund's
investment policies that it deems appropriate to utilize from time to time. Fees
payable under the Sub-Advisory Agreement accrue daily and are paid monthly by
ING Investments. BlackRock Advisors' address is 100 Bellevue Parkway,
Wilmington, Delaware 19809. Founded in 1994, BlackRock Advisors is a
wholly-owned subsidiary of BlackRock, Inc., one of the largest publicly-traded
investment management firms in the United States.

Sub-Advisory Fees

As compensation to the Sub-Adviser for its services, ING Investments pays the
Sub-Adviser a monthly fee in arrears equal to the following as a percentage of
the Fund's average daily net assets managed during the month:

Fund                                   Annual Sub-Advisory Fee
----------------------   ------------------------------------------------------
ING Global Science and   0.50% on the first $200 million of the Fund's average
Technology(1)            daily net assets;
                         0.45% on the next $300 million of the Fund's average
                         daily net assets; and
                         0.40% of the Fund's average daily net assets in excess
                         of $500 million

(1)  For purposes of calculating fees under this agreement, the assets of the
     series shall be aggregated with the assets of ING VP Global Science and
     Technology Portfolio, a series of ING Variable Portfolios, Inc. a
     registered investment company that is not a party to this Sub-Advisory
     Agreement. The aggregated assets will be applied to the above schedule and
     the resulting fee shall be prorated back to the series and its Sub-Adviser
     based on relative net assets.

Total Sub-Advisory Fees Paid by ING Investments

For the fiscal years ended October 31, 2007, 2006 and 2005 ING Investments paid
BlackRock Advisors in its capacity as Sub-Adviser, sub-advisory fees as follows:

                                               October 31,
                                    ------------------------------
               Fund                   2007       2006       2005
---------------------------------   --------   --------   --------
ING Global Science and Technology   $413,572   $392,094   $357,163

                                PORTFOLIO MANAGER

ING Global Science and Technology Fund
Sub-Adviser: BlackRock Advisors

Other Accounts Managed

The following table shows the number of accounts and total assets in the
accounts managed by the portfolio managers as of October 31, 2007:

                                       61



                    Registered Investment   Other Pooled Investment
                         Companies                  Vehicles              Other Accounts
                   -----------------------  -----------------------  -----------------------
                   Number of                Number of                Number of
Portfolio Manager  Accounts   Total Assets  Accounts   Total Assets  Accounts   Total Assets
-----------------  ---------  ------------  ---------  ------------  ---------  ------------

Thomas P. Callan       9      $7.6 billion   10/(1)/   $912 million    5/(2)/   $994 million
Jean Rosenbaum         6      $4.3 billion      2      $171 million     0           none
Erin Xie               5      $3.9 billion    6/(1)/   $338 million     1       $51 million

/(1)/ One of these accounts with total assets of $39.5 million is subject to
      performance fees.

/(2)/ One of these accounts with total assets of $604 million is subject to
      performance fees.

Potential Material Conflicts of Interest

BlackRock has built a professional working environment, firm-wide compliance
culture and compliance procedures and systems designed to protect against
potential incentives that may favor one account over another. BlackRock has
adopted policies and procedures that address the allocation of investment
opportunities, execution of portfolio transactions, personal trading by
employees and other potential conflicts of interest that are designed to ensure
that all client accounts are treated equitably over time. Nevertheless,
BlackRock furnishes investment management and advisory services to numerous
clients in addition to the Fund, and BlackRock may, consistent with applicable
law, make investment recommendations to other clients or accounts (including
accounts which are hedge funds or have performance or higher fees paid to
BlackRock, or in which portfolio managers have a personal interest in the
receipt of such fees), which may be the same as or different from those made to
the Fund. In addition, BlackRock, its affiliates and any officer, director,
stockholder or employee may or may not have an interest in the securities whose
purchase and sale BlackRock recommends to the Fund. BlackRock, or any of its
affiliates, or any officer, director, stockholder, employee or any member of
their families may take different actions than those recommended to the Fund by
BlackRock with respect to the same securities. Moreover, BlackRock may refrain
from rendering any advice or services concerning securities of companies of
which any of BlackRock's (or its affiliates') officers, directors or employees
are directors or officers, or companies as to which BlackRock or any of its
affiliates or the officers, directors and employees of any of them has any
substantial economic interest or possesses material non-public information. Each
portfolio manager also may manage accounts whose investment strategies may at
times be opposed to the strategy utilized for the Fund. In this connection, it
should be noted that Mr. Callan and Ms. Xie currently manage certain accounts
that are subject to performance fees. Additional portfolio managers may in the
future manage other such accounts or funds and may be entitled to receive
incentive fees.

As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat
each client fairly. When BlackRock purchases or sells securities for more than
one account, the trades must be allocated in a manner consistent with its
fiduciary duties. BlackRock attempts to allocate investments in a fair and
equitable manner among client accounts, with no account receiving preferential
treatment. To this end, BlackRock has adopted a policy that is intended to
ensure that investment opportunities are allocated fairly and equitably among
client accounts over time. This policy also seeks to achieve reasonable
efficiency in client transactions and provide BlackRock with sufficient
flexibility to allocate investments in a manner that is consistent with the
particular investment discipline and client base.

Portfolio Manager Compensation

BlackRock's financial arrangements with its portfolio managers, its competitive
compensation and its career path emphasis at all levels reflect the value senior
management places on key resources. Compensation may include a variety of
components and may vary from year to year based on a number of factors. The
principal components of compensation include a base salary, a discretionary
bonus, participation in various benefits programs and one or more of the
incentive compensation programs established by BlackRock such as its Long-Term
Retention and Incentive Plan and Restricted Stock Program.

                                       62



Base compensation. Generally, portfolio managers receive base compensation based
on their seniority and/or their position with the firm.

Discretionary compensation. In addition to base compensation, portfolio managers
may receive discretionary compensation, which can be a substantial portion of
total compensation. Discretionary compensation can include a discretionary cash
bonus as well as one or more of the following:

Long-Term Retention and Incentive Plan ("LTIP") -- The LTIP is a long-term
incentive plan that seeks to reward certain key employees. Prior to 2006, the
plan provided for the grant of awards that were expressed as an amount of cash
that, if properly vested and subject to the attainment of certain performance
goals, will be settled in cash and/or in BlackRock, Inc. common stock ("LTIP
awards"). Beginning in 2006, awards are granted under the plan in the form of
BlackRock, Inc. restricted stock units that, if properly vested and subject to
the attainment of certain performance goals, will be settled in BlackRock, Inc.
common stock ("LTIP II awards"). Each portfolio manager has received awards
under the LTIP.

Deferred Compensation Program -- A portion of the compensation paid to each
portfolio manager may be voluntarily deferred by the portfolio manager into an
account that tracks the performance of certain of the firm's investment
products. Each portfolio manager is permitted to allocate his deferred amounts
among various options, including to certain of the firm's hedge funds and other
unregistered products. In addition, prior to 2005, a portion of the annual
compensation of certain senior managers, including Ms. Rosenbaum, and Mr.
Callan, was mandatorily deferred in a similar manner for a number of years.
Beginning in 2005, a portion of the annual compensation of each portfolio
manager is eligible to be paid in the form of BlackRock, Inc. restricted stock
units which vest ratably over a number of years. Each portfolio manager
participates in the deferred compensation program. Paying a portion of annual
bonuses in stock puts compensation earned by a portfolio manager for a given
year "at risk" based on the Company's ability to sustain and improve its
performance over future periods.

Options and Restricted Stock Awards -- Prior to mandatorily deferring a portion
of a portfolio manager's annual bonus in BlackRock, Inc. restricted stock units,
the Company granted stock options to key employees, including certain portfolio
managers who may still hold unexercised or unvested options. BlackRock, Inc.
also granted restricted stock awards designed to reward certain key employees as
an incentive to contribute to the long-term success of BlackRock. These awards
vest over a period of years. Ms. Rosenbaum and Mr. Callan have been granted
stock options and/or restricted stock in prior years.

Incentive Savings Plans -- BlackRock, Inc. has created a variety of incentive
savings plans in which BlackRock employees are eligible to participate,
including a 401(k) plan, the BlackRock Retirement Savings Plan (RSP) and the
BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution
components of the RSP include a company match equal to 50% of the first 6% of
eligible pay contributed to the plan capped at $4,000 per year, and a company
retirement contribution equal to 3% of eligible compensation, plus an additional
contribution of 2% for any year in which BlackRock has positive net operating
income. The RSP offers a range of investment options, including registered
investment companies managed by the firm. Company contributions follow the
investment direction set by participants for their own contributions or absent,
employee investment direction, are invested into a stable value fund. The ESPP
allows for investment in BlackRock common stock at a 5% discount on the fair
market value of the stock on the purchase date. Annual participation in the ESPP
is limited to the purchase of 1,000 shares or a dollar value of $25,000. Each
portfolio manager is eligible to participate in these plans.

Annual discretionary incentive compensation for each portfolio manager is a
function of several components: the performance of BlackRock, Inc., the
performance of the portfolio manager's group within BlackRock, the investment
performance, including risk-adjusted returns, of the firm's assets under
management or supervision by that portfolio manager relative to predetermined
benchmarks, and the individual's seniority, role within the portfolio management
team, teamwork and contribution to the overall performance of these portfolios
and BlackRock. Unlike many other firms, portfolio managers at BlackRock compete
against one or more market

                                       63



or custom benchmarks rather than each other. In most cases, including for the
portfolio managers of the Fund, these benchmarks are the same as the benchmark
or benchmarks against which the performance of the Fund or other accounts are
measured. A group of BlackRock, Inc.'s officers determines the benchmarks
against which to compare the performance of funds and other accounts managed by
each portfolio manager and the period of time over which performance is
evaluated. With respect to the Fund's portfolio managers, such benchmarks
include the following:

                                                                     Benchmarks Applicable to Each Portfolio
Portfolio Manager        Portfolios Managed                          Manager
----------------------   -----------------------------------------   ---------------------------------------------
Thomas P. Callan, CFA    Health Sciences Opportunities               A combination of market-based indices (e.g.,
                         Global Science & Technology Opportunities   Standard & Poor's 500 Index, Lipper
                         U.S. Opportunities                          Health/Biotechnology Funds Index, The Russell
                         International Opportunities                 3000 Healthcare Index, The S&P/Citigroup
                                                                     Extended Market Index, The S&P/Citigroup
                         Global Opportunities                        Extended Market Global Ex-U.S. Index, The
                                                                     NYSE Arca Tech 100 Index, The S&P/Citigroup
                                                                     Global BMI), certain customized indices and
                                                                     certain fund industry peer groups.

Erin Xie, PhD            Health Sciences Opportunities               A combination of market-based indices (e.g.,
                         Global Science & Technology Opportunities   Standard & Poor's 500 Index, Lipper
                                                                     Health/Biotechnology Funds Index, The Russell
                         Global Opportunities                        3000 Healthcare Index, The S&P/Citigroup
                                                                     Extended Market Index, The NYSE Arca Tech 100
                                                                     Index, The S&P/Citigroup Global BMI), certain
                                                                     customized indices and certain fund industry
                                                                     peer groups.

Jean M. Rosenbaum, CFA   U.S. Opportunities                          A combination of market-based indices (e.g.,
                         Global Science & Technology Opportunities   The S&P/Citigroup Extended Market Index, The
                                                                     NYSE Arca Tech 100 Index, The S&P/Citigroup
                         Global Opportunities                        Global BMI), certain customized indices and
                                                                     certain fund industry peer groups.

The group of BlackRock, Inc.'s officers then makes a subjective determination
with respect to the portfolio manager's compensation based on the performance of
the funds and other accounts managed by each portfolio manager relative to the
various benchmarks. Performance is measured on both a pre-tax and after-tax
basis over various time periods, including 1, 3, 5 and 10-year periods, as
applicable. Senior portfolio managers who perform additional management
functions within the portfolio management group or within BlackRock may receive
additional compensation for serving in these other capacities.

Portfolio Manager Ownership of Securities

As of October 31, 2007, the end of the Fund's most recently completed fiscal
year, the dollar range of securities beneficially owned by each portfolio
manager in the Fund is shown below:

Portfolio Manager         Dollar Range of Securities of the Fund Owned
-----------------         --------------------------------------------
Thomas Callan                                None
Erin Xie                                     None
Jean Rosenbaum                               None

                                RULE 12B-1 PLANS

Fund shares are distributed by the Distributor. With respect to Class A shares
of the Fund, the Distributor is paid an annual fee at the rate of 0.25% of the
value of average daily net assets attributable to those shares under the
Distribution and Shareholder Services Plan adopted by the Company pursuant to
Rule 12b-1

                                       64



the 1940 Act ("Rule 12b-1 Plans"). With respect to Class B shares of the Fund,
the Distributor is paid an annual fee at the rate of 1% of the value of average
daily net assets attributable to those shares under the Rule 12b-1 Plan. With
respect to Class C shares of the Fund, the Distributor is paid an annual fee at
the rate of 1% of the value of average daily net assets attributable to those
shares under the Rule 12b-1 Plan. The Fund does not have a distribution plan for
Class I shares. The fee for a specific class may be used to pay securities
dealers (which may include the principal underwriter itself) and other financial
institutions and organizations for servicing shareholder accounts. To the extent
not used for servicing shareholder accounts, the fee may be paid to cover
expenses incurred in promoting the sale of that class of shares including: (a)
the costs of printing and distributing to prospective investors Prospectuses,
SAIs and sales literature; (b) payments to investment professionals and other
persons to obtain various distribution and/or administrative services for the
Fund; (c) overhead and other distribution related expenses; and (d) accruals for
interest on the amount of the foregoing expenses that exceed distribution fees
and contingent deferred sales charges. The fee for Class B shares may also be
used to pay the financing cost of accruing certain unreimbursed expenses. The
Distributor may re-allow all or a portion of these fees to broker-dealers
entering into selling agreements with it including its affiliates. Payments
under the Rule 12b-1 Plan are not tied exclusively to actual distribution and
service expenses and the payments may exceed distribution and service expenses
actually incurred.

Class O shares are subject to a Shareholder Services Plan adopted pursuant to
Rule 12b-1. Under the 12b-1 Plan, the Distributor is paid a servicing fee at an
annual rate of 0.25% of the average daily net assets of the Class O shares of
each Fund. The Service Fee may be used by the Distributor to compensate ING
DIRECT Securities, Inc. ("ING Direct") for servicing and maintaining shareholder
accounts. Payments under the Rule 12b-1 Plan are not tied exclusively to actual
distribution and service expenses and the payments may exceed distribution and
services expenses actually incurred. The value of a shareholder's investment
will be unaffected by these payments. Additional cash payments may be made by
the Distributor to ING Direct for providing shareholder servicing and/or
distribution services. Under this arrangement, the Distributor may pay ING
Direct an additional 0.15% of sales of the Class O shares of the Fund above the
0.25%.

The Distributor is required to report in writing to the Board at least quarterly
on the amounts and purpose of any payment made under the Rule 12b-1 Plan and any
related agreements as well as to furnish the Board with such other information
as may reasonably be requested in order to enable the Board to make an informed
determination whether the Plan should be continued. The terms and provisions of
the Plan relating to required reports, term, and approval are consistent with
the requirements of Rule 12b-1 Plan.

The Rule 12b-1 Plan continues from year to year from its inception date provided
such continuance is approved annually by a vote of the Board including a
majority of Independent Directors. The Rule 12b-1 Plan may not be amended to
increase the amount to be spent for the services provided by the Distributor
without shareholder approval. All amendments to the Rule 12b-1 Plan must be
approved by the Board in the manner described above for annual renewals. The
Rule 12b-1 Plan may be terminated at any time, without penalty, by vote of a
majority of the Independent Directors upon not more than thirty (30) days'
written notice to any other party to the Rule 12b-1 Plan. All persons who are
under common control of the Fund could be deemed to have a financial interest in
the Rule 12b-1 Plan. No other interested person of the Fund has a financial
interest in the Rule 12b-1 Plan.

In approving the Rule 12b-1 Plan, the Board considered all the features of the
distribution system including: (1) the advantages to the shareholders of
economies of scale resulting from growth in the Fund's assets and potential
continued growth; (2) the services provided to the Fund and its shareholders by
the Distributor; and (3) the Distributor's shareholder distribution-related
expenses and costs.

ING Investments and the Sub-Adviser or their affiliates may make payments to
securities dealers that enter into agreements providing the Distributor with
preferential access to registered representatives of the securities dealer.
These payments may be in an amount up to 0.07% of the total Fund assets held in
omnibus accounts or in customer accounts that designate such firm(s) and the
selling broker-dealer.

                                       65



Total distribution expenses incurred by the Distributor for the costs of
promotion and distribution with respect to each class of shares for the Fund
paid to the Distributor for the fiscal year ended October 31, 2007 were as
follows:

  Distribution Expenses      Class A   Class B   Class C   Class I   Class O
Advertising                 $    190        40        13       107       292
Printing                    $  3,608       752       248     2,031     5,549
Salaries & Commissions      $ 30,428     3,492     1,396    12,235    20,722
Broker Servicing            $ 83,337    26,276    29,349     3,725    88,324
Miscellaneous               $  7,424     4,562     4,866     3,591    56,252
-------------------------   --------   -------   -------   -------   -------
Total                       $124,987    35,122    35,873    21,689   171,138

                                  ADMINISTRATOR

ING Funds Services, LLC ("Administrator") serves as administrator for the Fund
pursuant to an Administration Agreement with the Company. The Administrator is
an affiliate of ING Investments. The address of the Administrator is 7337 East
Doubletree Ranch Road, Scottsdale, Arizona 85258. Subject to the supervision of
the Board, the Administrator provides the overall business management and
administrative services necessary to the proper conduct of the Fund's business
except for those services performed by ING Investments under the Investment
Advisory Agreement, the Sub-Adviser under the applicable Sub-Advisory Agreement,
the custodian under the Custodian Agreement, the transfer agent under the
Transfer Agency Agreement, and such other service providers as may be retained
by the Fund from time to time. The Administrator acts as a liaison among these
service providers to the Fund. The Administrator is also responsible for
monitoring the Fund in compliance with applicable legal requirements and the
investment policies and restrictions of the Fund.

The Administrative Services Agreement may be cancelled by the Board, without
payment of any penalty, by a majority of the Directors upon sixty (60) days'
written notice to the Administrator, or by the Administrator at any time,
without the payment of any penalty, upon sixty (60) days' written notice to the
Company.

Administrative Fees Paid

For its services the Administrator is entitled to receive from the Fund a fee at
an annual rate of 0.08% of the Fund's average daily net assets.

During the fiscal years ended October 31, 2007, 2006 and 2005, the Fund paid the
Administrator the following total administrative service fees:

                                            October 31,
                                    ---------------------------
              Fund                    2007      2006      2005
---------------------------------   -------   ------    -------
ING Global Science and Technology   $66,172   $62,736   $57,147

                                    CUSTODIAN

The Bank of New York Mellon Corporation (formerly, The Bank of New York), One
Wall Street, New York, New York, 10286, serves as custodian of the Fund. The
custodian does not participate in determining the investment policies of the
Fund or in deciding which securities are purchased or sold by the Fund. However,
the Fund may invest in obligations of the custodian and may purchase or sell
securities from or to the custodian. For portfolio securities that are purchased
and held outside of the United States, The Bank of New York Mellon Corporation
has entered into sub-custodian arrangements (which are designed to comply with
Rule 17f-5 under the 1940 Act) with certain foreign banks and clearing agencies.

                                       66



                                  LEGAL COUNSEL

Legal matters for the Company are passed upon by Goodwin Procter LLP, Exchange
Place, 53 State Street, Boston, Massachusetts, 02109.

                  INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

KPMG LLP serves as the independent registered public accounting firm for the
Fund. KPMG LLP provides audit services, tax return preparation and assistance
and consultation in connection with the review of SEC filings. KPMG LLP is
located at 99 High Street, Boston, Massachusetts 02110.

                                 TRANSFER AGENT

DST Systems, Inc, 330 West 9th Street, Kansas City, Missouri 64105-1514 serves
as the transfer and dividend-paying agent to the Fund.

                    BROKERAGE ALLOCATION AND TRADING POLICIES

<R>
Portfolio Transactions
</R>

The Sub-Adviser for the Fund places orders for the purchase and sale of
investment securities for the Fund pursuant to authority granted in the relevant
Investment Sub-Advisory Agreement. Subject to policies and procedures approved
by the Company's Board, the Sub-Adviser has discretion to make decisions
relating to placing these orders including, where applicable, selecting the
brokers or dealers that will execute the purchase and sale of investment
securities, negotiating the commission or other compensation paid to the broker
or dealer executing the trade, or using an electronic trading network ("ECN") or
alternative trading system ("ATS").

In situations where the Sub-Adviser resigns or ING Investments otherwise assumes
day to day management of the Fund pursuant to its Investment Advisory Agreement
with the Fund, ING Investments will perform the services described herein as
being performed by the Sub-Adviser.

How Securities Transactions are Effected

<R>
Purchases and sales of securities on a securities exchange (which include most
equity securities) are effected through brokers who charge a commission for
their services. In transactions on securities exchanges in the United States,
these commissions are negotiated, while on many foreign securities exchanges
commissions are fixed. Securities traded in the over-the-counter markets (such
as fixed income securities and some equity securities) are generally traded on a
"net" basis with market makers acting as dealers; in these transactions, the
dealers act as principal for their own accounts without a stated commission,
although the price of the security usually includes a profit to the dealer.
Transactions in certain over-the counter securities also may be effected on an
agency basis when, in the Sub-Adviser's opinion, the total price paid (including
commission) is equal to or better than the best total price available from a
market maker. In underwritten offerings, securities are usually purchased at a
fixed price which includes an amount of compensation to the underwriter,
generally referred to as the underwriter's concession or discount. On occasion,
certain money market instruments may be purchased directly from an issuer, in
which case no commissions or discounts are paid. The Sub-Adviser may also place
trades using an ECN or ATS.
</R>

How the Sub-Adviser Selects Broker Dealers

The Sub-Adviser has a duty to seek to obtain best execution of the Fund's
orders, taking into consideration a full range of factors designed to produce
the most favorable overall terms reasonably available under the circumstances.
In selecting brokers and dealers to execute trades, the Sub-Adviser may consider
both the

                                       67



characteristics of the trade and the full range and quality of the brokerage
services available from eligible broker dealers. This consideration often
involves qualitative as well as quantitative judgments. Factors relevant to the
nature of the trade may include, among others, price (including the applicable
brokerage commission or dollar spread), the size of the order, the nature and
characteristics (including liquidity) of the market for the security, the
difficulty of execution, the timing of the order, potential market impact, and
the need for confidentiality, speed, and certainty of execution. Factors
relevant to the range and quality of brokerage services available from eligible
brokers and dealers may include, among others, the firms' execution, clearance,
settlement, and other operational facilities; willingness and ability to commit
capital or take risk in positioning a block of securities, where necessary;
special expertise in particular securities or markets; ability to provide
liquidity, speed and anonymity; the nature and quality of other brokerage and
research services provided to the Sub-Adviser (consistent with the "safe harbor"
described below); and the firms' general reputation, financial condition and
responsiveness to the Sub-Adviser, as demonstrated in the particular transaction
or other transactions. Subject to its duty to seek best execution of the Fund's
orders, the Sub-Adviser may select broker-dealers that participate in commission
recapture programs that have been established for the benefit of the Fund. Under
these programs, the participating broker-dealers will return to the Fund (in the
form of a credit to the Fund) a portion of the brokerage commissions paid to the
broker-dealers by the Fund. Theses credits are used to pay certain expenses of
the Fund. These commission recapture payments benefit the Fund and not the
Sub-Adviser.

The Safe Harbor for Soft Dollar Practices

In selecting broker dealers to execute a trade for the Fund, the Sub-Adviser may
consider the nature and quality of brokerage and research services provided to
the Sub-Adviser as a factor in evaluating the most favorable overall terms
reasonably available under the circumstances. As permitted by Section 28(e) of
the 1934 Act, the Sub-Adviser may cause the Fund to pay a broker-dealer a
commission for effecting a securities transaction for the Fund that is in excess
of the commission which another broker-dealer would have charged for effecting
the transaction, if the Sub-Adviser makes a good faith determination that the
broker's commission paid by the Fund is reasonable in relation to the value of
the brokerage and research services provided by the broker-dealer, viewed in
terms of either the particular transaction or the Sub-Adviser's overall
responsibilities to the Fund and its other investment advisory clients. The
practice of using a portion of the Fund's commission dollars to pay for
brokerage and research services provided to the Sub-Adviser is sometimes
referred to as "soft dollars." Section 28(e) is sometimes referred to as a "safe
harbor," because it permits this practice, subject to a number of restrictions,
including the Sub-Adviser's compliance with certain procedural requirements and
limitations on the type of brokerage and research services that qualify for the
safe harbor.

     Brokerage and Research Products and Services Under the Safe Harbor -
     Research products and services may include, but are not limited to, general
     economic, political, business and market information and reviews, industry
     and company information and reviews, evaluations of securities and
     recommendations as to the purchase and sale of securities, financial data
     on a company or companies, performance and risk measuring services and
     analysis, stock price quotation services, computerized historical financial
     databases and related software, credit rating services, analysis of
     corporate responsibility issues, brokerage analysts' earning estimates,
     computerized links to current market data, software dedicated to research,
     and portfolio modeling. Research services may be provided in the form of
     reports, computer-generated data feeds and other services, telephone
     contacts, and personal meetings with securities analysts, as well as in the
     form of meetings arranged with corporate officers and industry
     spokespersons, economists, academics and governmental representatives.
     Brokerage products and services assist in the execution, clearance and
     settlement of securities transactions, as well as functions incidental
     thereto, including but not limited to, related communication and
     connectivity services and equipment, software related to order routing,
     market access, algorithmic trading, and other trading activities. On
     occasion, a broker-dealer may furnish the Sub-Adviser with a service that
     has a mixed use (that is, the service is used both for brokerage and
     research activities that are within the safe harbor and for other
     activities). In this case, the Sub-Adviser is required to reasonably
     allocate the cost of the service so that any portion of the service that
     does not qualify for

                                       68



     the safe harbor is paid for by the Sub-Adviser from its own funds, and not
     by portfolio commissions paid by the Fund.

     Benefits to the Sub-Adviser - Research products and services provided to
     the Sub-Adviser by broker dealers that effect securities transactions for
     the Fund may be used by the Sub-Adviser in servicing all of its accounts.
     Accordingly, not all of these services may be used by the Sub-Adviser in
     connection with the Fund. Some of these products and services are also
     available to the Sub-Adviser for cash and some do not have an explicit cost
     or determinable value. The research received does not reduce the
     sub-advisory fees payable to the Sub-Adviser for services provided to the
     Fund. The Sub-Adviser's expenses would likely increase if the Sub-Adviser
     had to generate these research products and services through its own
     efforts or if it paid for these products or services itself.

Broker Dealers that are Affiliated with ING Investments or a Sub-Adviser

Portfolio transactions may be executed by brokers affiliated with the ING Groep,
ING Investments, or the Sub-Adviser, so long as the commission paid to the
affiliated broker is reasonable and fair compared to the commission that would
be charged by an unaffiliated broker in a comparable transaction.

Prohibition on Use of Brokerage Commissions for Sales or Promotional Activities

<R>
The placement of portfolio brokerage with broker-dealers who have sold shares of
the Fund is subject to rules adopted by the Securities and Exchange Commission
and the Financial Industry Regulatory Authority ("FINRA"). Under these rules,
the Sub-Adviser may not consider a broker's promotional or sales efforts on
behalf of the Fund when selecting a broker dealer for Fund portfolio
transactions and neither the Fund, nor a Sub-Adviser, may enter into an
agreement under which the Fund directs brokerage transactions (or revenue
generated from such transactions) to a broker dealer to pay for distribution of
Fund shares. The Fund has adopted policies and procedures, approved by the
Board, that are designed to attain compliance with these prohibitions.
</R>

Principal Trades and Research

Purchases of securities for the Fund also may be made directly from issuers or
from underwriters. Purchase and sale transactions may be effected through
dealers which specialize in the types of securities which the Fund will be
holding. Dealers and underwriters usually act as principals for their own
account. Purchases from underwriters will include a concession paid by the
issuer to the underwriter and purchases from dealers will include the spread
between the bid and the asked price. If the execution and price offered by more
than one dealer or underwriter are comparable, the order may be allocated to a
dealer or underwriter which has provided such research or other services as
mentioned above.

More Information about trading in Fixed Income Securities

Purchases and sales of fixed-income securities will usually be principal
transactions. Such securities often will be purchased or sold from or to dealers
serving as market makers for the securities at a net price. The Fund may also
purchase such securities in underwritten offerings and will, on occasion,
purchase securities directly from the issuer. Generally, fixed income securities
are traded on a net basis and do not involve brokerage commissions. The cost of
executing fixed income securities transactions consists primarily of dealer
spreads and underwriting commissions.

In purchasing and selling fixed income securities, it is the policy of the Fund
to obtain the best results while taking into account the dealer's general
execution and operational facilities, the type of transaction involved and other
factors, such as the dealer's risk in positioning the securities involved. While
the Sub-Adviser generally seeks reasonably competitive spreads or commissions,
the Fund will not necessarily pay the lowest spread or commission available.

                                       69



Transition Management

Changes in the Sub-Adviser, investment personnel, reorganizations or mergers of
the Fund may result in the sale of a significant portion or even all of the
Fund's portfolio securities. This type of change generally will increase trading
costs and the portfolio turnover for the Fund. The Fund, ING Investments, or the
Sub-Adviser may engage a broker-dealer to provide transition management services
in connection with a change in Sub-Adviser, a reorganization, or other changes.

Allocation of Trades

Some securities considered for investment by the Fund may also be appropriate
for other clients served by the Fund's Sub-Adviser. If the purchase or sale of
securities consistent with the investment policies of the Fund and one or more
of these other clients is considered at or about the same time, transactions in
such securities will be placed on an aggregate basis and allocated among the
Fund and such other clients in a manner deemed fair and equitable, over time, by
the Sub-Adviser and consistent with the Sub-Adviser's written policies and
procedures. The Sub-Adviser may use different methods of allocating the results
aggregated trades. The Sub-Adviser's relevant policies and procedures and the
results of aggregated trades in which the Fund participated are subject to
periodic review by the Board. To the extent the Fund seeks to acquire (or
dispose of) the same security at the same time, the Fund may not be able to
acquire (or dispose of) as large a position in such security as it desires, or
it may have to pay a higher (or receive a lower) price for such security. It is
recognized that in some cases, this system could have a detrimental effect on
the price or value of the security insofar as the Fund is concerned. However,
over time, the Fund's ability to participate in aggregate trades is expected to
provide better execution for the Fund.

Cross-Transactions

The Board has adopted a policy allowing trades to be made between affiliated
registered investment companies or series thereof provided they meet the
condition of Rule 17a-7 under the 1940 Act and conditions of the policy.

Brokerage commissions were paid as follows:

For the fiscal years ended October 31, 2007, 2006 and 2005 brokerage commissions
were paid as follows:

              Fund                    2007       2006       2005
---------------------------------   --------   --------   --------
ING Global Science and Technology   $213,778   $354,471   $385,205

For the fiscal year ended October 31, 2007, 2006 and 2005 brokerage commissions
in the amounts listed below were paid to firms that also provided research,
statistical, or other services to the Adviser:

Fund                                  2007      2006      2005
---------------------------------   -------   -------   -------
ING Global Science and Technology   $60,253   $56,854   $84,309

The Board has adopted a policy allowing trades to be made between affiliated
registered investment companies or series thereof provided such trades meet the
terms of Rule 17a-7 under the 1940 Act.

During the fiscal year ended October 31, 2007 the Fund paid affiliated persons
of the Fund brokerage commissions as follows:

                     Total Fund       % of     Affiliated   Fund Total      % of
Affiliated Broker     Principal    Principal   Commission   Commission   Commission
-----------------   ------------   ---------   ----------   ----------   ----------
ING Baring LLC      $137,513,072     0.11%        $377       $210,680       0.18%

                                       70



During the fiscal year ended October 31, 2007 the Fund paid no affiliated
persons brokerage commissions.

During the fiscal year ended October 31, 2007 the Fund acquired securities of
its regular brokers or dealers (as defined in Rule 10b-1 under the 1940 Act) or
their parents. The holdings of securities of such brokers and dealers were as
follows as of fiscal year ended October 31, 2007:

              Fund                  Security Description   Market Value
---------------------------------   --------------------   ------------
ING Global Science and Technology           None                $0

                        PURCHASE AND REDEMPTION OF SHARES

A complete description of the manner in which shares may be purchased, redeemed
or exchanged appears in the Class A, Class B, Class C, Class I or Class O
shares' respective Prospectuses under "Shareholder Guide."

Class I and Class O shares of the Company are purchased and redeemed at the
applicable NAV next determined after a purchase or redemption order is received,
as described in the Prospectuses. Class B and Class C shares of the Company are
purchased at the applicable NAV next determined after a purchase order is
received. Class B and Class C shares are redeemed at the applicable NAV next
determined less any applicable contingent deferred sales charge ("CDSC") after a
redemption request is received, as described in the Prospectus. Class A shares
of the Company are purchased at the applicable NAV next determined after a
purchase order is received less any applicable front-end sales charge and
redeemed at the applicable NAV next determined adjusted for any applicable CDSC
after a redemption request is received, as described in the Prospectus.

Except as provided below, payment for shares redeemed will be made within seven
days (or the maximum period allowed by law, if shorter) after the redemption
request is received in proper form by the transfer agent. The right to redeem
shares may be suspended or payment therefore postponed for any period during
which (a) trading on the New York Stock Exchange ("NYSE") is restricted as
determined by the SEC or the NYSE is closed for other than weekends and
holidays; (b) an emergency exists as determined by the SEC as a result of which:
(i) disposal by the Fund of securities owned by it is not reasonably
practicable; or (ii) it is not reasonably practicable for the Fund to determine
fairly the value of its net assets; or (c) the SEC by order so permits for the
protection of shareholders of the Fund.

If you invest in the Fund through a financial intermediary, you may be charged a
commission or transaction fee by the financial intermediary for the purchase and
sale of Fund shares.

Any written request to redeem shares in amounts in excess of $100,000 must bear
the signatures of all the registered holders of those shares. The signatures
must be guaranteed by a national or state bank, trust company or a member of a
national securities exchange. Information about any additional requirements for
shares held in the name of a corporation, partnership, trustee, guardian or in
any other representative capacity can be obtained from the transfer agent.

The Fund has the right to satisfy redemption requests by delivering securities
from its investment portfolio rather than cash when it decides that distributing
cash would not be in the best interests of shareholders. However, the Fund is
obligated to redeem its shares solely in cash up to an amount equal to the
lesser of $250,000 or 1% of its net assets for any one shareholder of the Fund
in any 90-day period. To the extent possible, the Fund will distribute readily
marketable securities, in conformity with applicable rules of the SEC. In the
event such redemption is requested by institutional investors, the Fund will
weigh the affects on non-redeeming shareholders in applying this policy.
Securities distributed to shareholders may be difficult to sell and may result
in additional costs to the shareholders.

Purchases and exchanges should be made for investment purposes only. The Fund
reserves the right to reject any specific purchase or exchange request. In the
event the Fund rejects an exchange request, neither the

                                       71



redemption nor the purchase side of the exchange will be processed until the
Fund receives further redemption instructions.

Front-end Sales Charge Waivers

Front-end sales charges will not apply if you are buying Class A shares with
proceeds from the following sources:

Redemptions from any ING -advised fund if you:

     .    Originally paid a front-end sales charge on the shares and

     .    Reinvest the money within 90 days of the redemption date.

The Fund's front-end sales charges will also not apply to Class A purchases by:

<R>
1.   Employees of ING Groep and its affiliates (including retired employees and
     members of employees' and retired employees' immediate families and board
     members and their immediate families), FINRA registered representatives of
     the Distributor or any affiliated broker-dealer (including members of their
     immediate families) purchasing shares for their own accounts, and members
     of the Board (including their immediate families).
</R>

2.   Investors who purchase Fund shares with redemption proceeds received in
     connection with a distribution from a retirement plan investing either: (1)
     directly in any fund or through an unregistered separate account sponsored
     by ING Life Insurance and Annuity Company ("ILIAC") or any successor
     thereto or affiliate thereof; or (2) in a registered separate account
     sponsored by ILIAC or any successor thereto or affiliate thereof but only
     if no deferred sales charge is paid in connection with such distribution
     and the investor receives the distribution in connection with a separation
     from service, retirement, death or disability.

3.   Certain trust companies and bank trust departments investing on behalf of
     their clients.

4.   Certain retirement plans that are sponsored by an employer and have plan
     assets of $500,000 or more.

5.   Current employees of broker-dealers and financial institutions that have
     entered into a selling agreement with the Distributor (or otherwise having
     an arrangement with a broker-dealer or financial institution with respect
     to sales of Fund shares) and their immediate family members, as allowed by
     the internal policies of their employer.

6.   Registered investment companies.

7.   Insurance companies (including separate accounts).

8.   Shareholders of the Adviser Class at the time such shares were
     re-designated as Class A shares.

9.   Certain executive deferred compensation plans.

Contingent Deferred Sales Charge

Certain Class A shares, all Class B shares and all Class C shares are subject to
a CDSC, as described in the Prospectus. For shareholders opening accounts on or
after March 1, 2002, there is no CDSC imposed on:

     .    redemptions of shares purchased through reinvestment of dividends or
          capital gains distributions; and

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     .    shares purchased more than one year (in the case of Class A and Class
          C shares), or six years (in the case of Class B shares) prior to the
          redemption

CDSC Waivers

The CDSC will be waived for:

.    exchanges to other funds of the same class;

.    redemptions following the death or disability of the shareholder or
     beneficial owner;

.    redemptions related to distributions from retirement plans or accounts
     under Code Section 403(b) after you attain age 70 1/2;

.    tax-free returns of excess contributions from employee benefit plans;

.    distributions from employee benefit plans, including those due to plan
     termination or plan transfer; and

.    redemptions made in connection with the Automatic Cash Withdrawal Plan (see
     Shareholder Services and Other Features) provided that such redemptions:

     .    are limited annually to no more than 12% of the original account
          value;

     .    are made in equal monthly amounts, not to exceed 1% per month; and

     .    the minimum account value at the time the Automatic Cash Withdrawal
          Plan was initiated was no less than $10,000.

Letter of Intent

You may qualify for a reduced sales charge when you buy Class A shares as
described in the Prospectus. At any time you may file with the Company a signed
shareholder application with the Letter of Intent section completed. After the
Letter of Intent is filed, each additional investment will be entitled to the
sales charge applicable to the level of investment indicated on the Letter of
Intent. Sales charge reductions are based on purchases in more than one fund and
will be effective only after notification to the Distributor that the investment
qualifies for a discount. Your holdings in the funds acquired within 90 days of
the day the Letter of Intent is filed will be counted towards completion of the
Letter of Intent and will be entitled to a retroactive downward adjustment in
the sales charge. Such adjustment will be made by the purchase of additional
shares in an equivalent amount.

Five percent (5%) of the amount of the total intended purchase will be held by
the transfer agent in escrow until you fulfill the Letter of Intent. If, at the
end of the 13-month period, you have not met the terms of the Letter of Intent
an amount of shares equal to the difference owed will be deducted from your
account. In the event of a total redemption of the account before fulfillment of
the Letter of Intent, the additional sales charge due will be deducted from the
proceeds of the redemption and the balance will be forwarded to you.

If the Letter of Intent is not completed within the 13-month period, there will
be an upward adjustment of the sales charge depending on the amount actually
purchased during the period. The upward adjustment will be paid with shares
redeemed from your account.

Right of Accumulation/Cumulative Quantity Discount

A purchaser of Class A shares may qualify for a cumulative quantity discount by
combining a current purchase (or combined purchases as described above) with
certain other Class A shares of a fund already owned. To determine if you may
pay a reduced front-end sales charge, the amount of your current purchase is
added to the cost or current value, whichever is higher, of your other Class A
shares as well as those Class A shares of your spouse and children under the age
of 21. If you are the sole owner of a company, you may also add any company
accounts including retirement plan accounts invested in Class A shares of the
funds. Companies with one or more retirement plans may add together the total
plan assets invested in Class A shares of the funds to determine the front-end
sales charge that applies.

                                       73



To qualify for the cumulative quantity discount on a purchase through an
investment dealer, when each purchase is made, the investor or dealer must
provide the Company with sufficient information to verify that the purchase
qualifies for the privilege or discount. The shareholder must furnish this
information to the Company when making direct cash investments.

                        SHAREHOLDER ACCOUNTS AND SERVICES

Shareholder Accounts and Services Systematic Investment - The Systematic
Investment feature, using the Electronic Funds Transfer ("EFT") capability,
allows you to make automatic monthly investments in any fund. On the application
you may select the amount of money to be moved and the fund in which it will be
invested. In order to elect EFT you must first have established an account
subject to the minimum amount specified in the Prospectuses. Thereafter, the
minimum monthly Systematic Investment is currently $50 per fund and we reserve
the right to increase that amount. EFT transactions will be effective 15 days
following the receipt by the Transfer Agent of your application. The Systematic
Investment feature and EFT capability will be terminated upon total redemption
of your shares. Payment of redemption proceeds will be held until a Systematic
Investment has cleared which may take up to 12 calendar days.

Shareholder Information - The Fund's transfer agent will maintain your account
information. Account statements will be sent at least quarterly. A Form 1099
generally will also be sent each year by January 31. Annual and semiannual
shareholder reports will also be sent to shareholders. The transfer agent may
charge you a fee for special requests such as historical transcripts of your
account and copies of cancelled checks.

Consolidated statements reflecting current values, share balances and
year-to-date transactions generally will be sent to you each quarter. All
accounts identified by the same social security number and address will be
consolidated. For example, you could receive a consolidated statement showing
your individual and Individual Retirement Accounts ("IRA"). With the prior
permission of the other shareholders involved, you have the option of requesting
that accounts controlled by other shareholders be shown on one consolidated
statement. For example, information on your individual account, your IRA, your
spouse's individual account and your spouse's IRA may be shown on one
consolidated statement.

Automatic Cash Withdrawal Plan - A CDSC may be applied to withdrawals made under
this plan. The Automatic Cash Withdrawal Plan permits you to have payments of
$100 or more automatically transferred from the Fund to your designated bank
account on a monthly basis. To enroll in this plan, you must have a minimum
balance of $10,000 in the Fund ($250,000 in the case of Class I shares). Your
automatic cash withdrawals will be processed on a regular basis beginning on or
about the first day of the month. There may be tax consequences associated with
these transactions. Please consult your tax adviser.

Cross Investing - Cross investing may only be made in the Fund that has been
previously established with the minimum investment. To request information or to
initiate a transaction under either or both of these features, please call
1-800-992-0180.

Dividend Investing - You may elect to have dividend and/or capital gains
distributions automatically invested in the same class of one other fund.

Systematic Exchange - You may establish an automatic exchange of shares from one
fund to another. The exchange will occur on or about the 15th day of each month
and must be for a minimum of $50 per month. Because this transaction is treated
as an exchange, the policies related to the exchange privilege apply. There may
be tax consequences associated with these exchanges. Please consult your tax
adviser.

Signature Guarantee - A signature guarantee is verification of the authenticity
of the signature given by certain authorized institutions. The Company requires
a medallion signature guarantee for redemption requests in amounts in excess of
$100,000. In addition, if you wish to have your redemption proceeds transferred
by wire to your designated bank account, paid to someone other than the
shareholder of record, or sent somewhere

                                       74



other than the shareholder address of record, you must provide a medallion
signature guarantee with your written redemption instructions regardless of the
amount of redemption.

A medallion signature guarantee may be obtained from a domestic bank or trust
company, broker, dealer, clearing agency, savings association, or other
financial institution which is participating in a medallion program recognized
by the Securities Transfer Association. The three recognized medallion programs
are Securities Transfer Agents Medallion Program ("STAMP"), Stock Exchanges
Medallion Program ("SEMP") and New York Stock Exchange, Inc. Medallion Signature
Program ("NYSE MSP"). Signature guarantees from financial institutions which are
not participating in one of these programs will not be accepted. Please note
that signature guarantees are not provided by notaries public. The Company
reserves the right to amend or discontinue this policy at any time and establish
other criteria for verifying the authenticity of any redemption request.

                                 NET ASSET VALUE

As noted in the Prospectuses, the NAV and offering price of each class of the
Fund's shares will be determined once daily as of the close of regular trading
("Market Close") on the NYSE (normally 4:00 p.m. Eastern time unless otherwise
designated by the exchange) during each day on which the NYSE is open for
trading. As of the date of this SAI, the NYSE is closed on the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.

Portfolio securities listed or traded on a national securities exchange will be
valued at the last reported sale price on the valuation day. Securities traded
on an exchange for which there has been no sale that day and other securities
traded in the over-the-counter market will be valued at the mean between the
last reported bid and asked prices on the valuation day. Portfolio securities
reported by NASDAQ will be valued at the NASDAQ Official Closing Price on the
valuation day. In cases in which securities are traded on more than one
exchange, the securities are valued on the exchange that is normally the primary
market. Short-term obligations maturing in 60 days or less will generally be
valued at amortized cost. This involves valuing a security at cost on the date
of acquisition and thereafter assuming a constant accretion of a discount or
amortization of a premium to maturity regardless of the impact of fluctuating
interest rates on the market value of the instrument. While this method provides
certainty in valuation, it may result in periods during which value, as
determined by amortized cost, is higher or lower than the price the Fund would
receive if it sold the instrument. See "Net Asset Value" in the shareholder
guide of the Prospectuses. The long-term debt obligations held in the Fund's
portfolio will be valued at the mean between the most recent bid and asked
prices as obtained from one or more dealers that make markets in the securities
when over-the counter market quotations are readily available.

Securities and assets for which market quotations are not readily available
(which may include certain restricted securities which are subject to
limitations as to their sale) or are deemed unreliable are valued at their fair
values as determined in good faith by or under the supervision of the Fund's
Board in accordance with methods that are specifically authorized by the Board.
Securities traded on exchanges, including foreign exchanges, which close earlier
than the time that the Fund calculates its NAV may also be valued at their fair
values as determined in good faith by or under the supervision of the Fund's
Board in accordance with methods that are specifically authorized by the Board.
The valuation techniques applied in any specific instance are likely to vary
from case to case. With respect to a restricted security, for example,
consideration is generally given to the cost of the investment, the market value
of any unrestricted securities of the same class at the time of valuation, the
potential expiration of restrictions on the security, the existence of any
registration rights, the costs to the Fund related to registration of the
security, as well as factors relevant to the issuer itself. Consideration may
also be given to the price and extent of any public trading in similar
securities of the issuer or comparable companies' securities.

The value of a foreign security traded on an exchange outside the United States
is generally based on its price

                                       75



on the principal foreign exchange where it trades as of the time the Fund
determines its NAV or if the foreign exchange closes prior to the time the Fund
determines its NAV, the most recent closing price of the foreign security on its
principal exchange. Trading in certain non-U.S. securities may not take place on
all days on which the NYSE is open. Further, trading takes place in various
foreign markets on days on which the NYSE is not open. Consequently, the
calculation of the Fund's NAV may not take place contemporaneously with the
determination of the prices of securities held by the Fund in foreign securities
markets. Further, the value of the Fund's assets may be significantly affected
by foreign trading on days when a shareholder cannot purchase or redeem shares
of the Fund. In calculating the Fund's NAV, foreign securities in foreign
currency are converted to U.S. dollar equivalents.

If an event occurs after the time at which the market for foreign securities
held by the Fund closes but before the time that the Fund's NAV is calculated,
such event may cause the closing price on the foreign exchange to not represent
a readily available reliable market value quotation for such securities at the
time the Fund determines its NAV. In such a case, the Fund will use the fair
value of such securities as determined under the Fund's valuation procedures.
Events after the close of trading on a foreign market that could require the
Fund to fair value some or all of its foreign securities include, among others,
securities trading in the United States and other markets, corporate
announcements, natural and other disasters, and political and other events.
Among other elements of analysis in the determination of a security's fair
value, the Board has authorized the use of one or more independent research
services to assist with such determinations. An independent research service may
use statistical analyses and quantitative models to help determine fair value as
of the time the Fund calculates its NAV. There can be no assurance that such
models accurately reflect the behavior of the applicable markets or the affect
of the behavior of such markets on the fair value of securities, nor that such
markets will continue to behave in a fashion that is consistent with such
models. Unlike the closing price of a security on an exchange, fair value
determinations employ elements of judgment. Consequently, the fair value
assigned to a security may not represent the actual value that the Fund could
obtain if it were to sell the security at the time of the close of the NYSE.
Pursuant to procedures adopted by the Board, the Fund is not obligated to use
the fair valuations suggested by any research service and valuation
recommendations provided by such research services may be overridden if other
events have occurred or if other fair valuations are determined in good faith to
be more accurate. Unless an event is such that it causes the Fund to determine
that the closing prices for one or more securities do not represent readily
available reliable market value quotations at the time the Fund determines its
NAV, events that occur between the time of the close of the foreign market on
which they are traded and the close of regular trading on the NYSE will not be
reflected in the Fund's NAV.

Options on securities, currencies, futures, and other financial instruments
purchased by the Fund are valued at their last bid price in the case of listed
options or at the average of the last bid prices obtained from dealers in the
case of OTC Options.

The price of silver and gold bullion is determined by measuring the mean between
the closing bid and asked quotations of silver and gold bullion set at the time
of the close of the NYSE as supplied by the Fund's custodian bank or other
broker-dealers or banks approved by the Fund on each date that the NYSE is open
for business.

The fair value of other assets is added to the value of all securities positions
to arrive at the value of the Fund's total assets. The Fund's liabilities,
including accruals for expenses, are deducted from its total assets. Once the
total value of the Fund's net assets is so determined, that value is then
divided by the total number of shares outstanding (excluding treasury shares)
and the result, rounded to the nearest cent, is the NAV per share.

In computing the NAV for a class of shares of the Fund, all class-specific
liabilities incurred or accrued are deducted from the class' net assets. The
resulting net assets are divided by the number of shares of the class
outstanding at the time of the valuation and the result (adjusted to the nearest
cent) is the NAV per share.

The per share NAV of Class A shares generally will be higher than the per share
NAV of shares of the other

                                       76



classes, reflecting daily expense accruals of the higher distribution fees
applicable to Class B and Class C. However, it is expected that the per share
NAV of the classes will tend to converge immediately after the payment of
dividends or distributions that will differ by approximately the amount of the
expense accrual differentials between the classes.

Orders received by dealers prior to Market Close will be confirmed at the
offering price computed as of the close of regular trading on the NYSE provided
the order is received by the Transfer Agent prior to Market Close that same day.
It is the responsibility of the dealer to insure that all orders are transmitted
timely to the Fund. Orders received by dealers after Market Close will be
confirmed at the next computed offering price as described in the Prospectuses.

                        FEDERAL INCOME TAX CONSIDERATIONS

The following discussion summarizes certain U.S. federal tax considerations
generally affecting the Fund and its shareholders. This discussion does not
provide a detailed explanation of all tax consequences and shareholders are
advised to consult their own tax adviser with respect to the particular federal,
state, local and foreign tax consequences to them of an investment in the Fund.
This discussion is based on the Code, Treasury Regulations issued thereunder,
and judicial and administrative authorities as in effect on the date of this
SAI, all of which are subject to change which change may be retroactive.

Qualification as a Regulated Investment Company

The Fund intends to qualify as a RIC under the provisions of Subchapter M of the
Code. To so qualify and to be taxed as a RIC, the Fund must, among other things:
(a) derive at least 90% of its gross income each taxable year from dividends,
interest, payments with respect to securities loans, gains from the sale or
other disposition of stock or securities or foreign currencies, net income
derived from an interest in a qualified publicly traded partnership, or other
income (including gains from options, futures or forward contracts) derived with
respect to the Fund's business of investing in stocks, securities or currencies;
(b) diversify its holdings so that, at the end of each quarter of the taxable
year: (i) at least 50% of the value of the Fund's total assets is represented by
cash and cash items (including receivables), U.S. government securities,
securities of other RICs, and other securities, with such other securities
limited in respect of any one issuer to an amount not greater in value than 5%
of the Fund's total assets and to not more than 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25% of the value of the Fund's
total assets is invested in the securities (other than U.S. government
securities or securities of other RICs) of any one issuer, the securities (other
than the securities of other RICs) any two or more issuers that the Fund
controls (i.e., owns 20% or more of the total combined voting power of all
classes of stock entitled to vote) and that are determined to be engaged in the
same or similar trades or businesses or related trades or businesses or the
securities of one or more qualified publicly traded partnerships; and (c)
distribute at least 90% of its investment company taxable income (which
includes, among other items, dividends, interest and net short-term capital
gains in excess of net long-term capital losses) each taxable year, and at least
90% of its net tax-exempt interest income in each taxable year.

The U.S. Treasury Department is authorized to issue regulations providing that
foreign currency gains that are not directly related to the Fund's principal
business of investing in stock or securities (or options and futures with
respect to stock or securities) will be excluded from the income which qualifies
for purposes of the 90% gross income requirement described above. To date,
however, no such regulations have been issued.

As a RIC, the Fund generally will be relieved of liability for U.S. federal
income tax on that portion of its investment company taxable income and net
realized capital gains which it distributes to its shareholders. Amounts not
distributed on a timely basis in accordance with a calendar year distribution
requirement also are subject to a nondeductible 4% excise tax. To prevent
application of the excise tax, the Fund currently intends to make distributions
in accordance with the calendar year distribution requirement.

If in any taxable year the Fund fails to qualify as a RIC under the Code or
fails to meet the distribution

                                       77



requirement, it would be taxed in the same manner as an ordinary corporation and
distributions to its shareholders would not be deductible by the Fund in
computing its taxable income. In addition, the Fund's distributions, to the
extent derived from its current or accumulated earnings and profits, would
constitute dividends which are taxable to shareholders as ordinary income or as
qualified dividend income eligible for a reduced rate of tax (or, in the case of
corporate shareholders, may be eligible for the dividends-received deduction) as
discussed below. Moreover, the Fund would not be required to make any
distributions to its shareholders. If the Fund fails to qualify as a RIC in any
year, it must pay out its earnings and profits accumulated in that year in order
to qualify again as a RIC. Moreover, if the Fund failed to qualify as a RIC for
a period greater than one taxable year the Fund may be required to recognize any
net built-in gains with respect to certain of its assets (the excess of the
aggregate gains, including items of income, over aggregate losses that would
have been realized if the Fund had been liquidated) in order to qualify as a RIC
in a subsequent year.

Distributions

Distributions of investment company taxable income (including short-term capital
gains) are generally taxable to shareholders as ordinary income. Distributions
of investment company taxable income may be eligible for the corporate
dividends-received deduction to the extent that such distributions are
attributable to the Fund's dividend income from U.S. corporations and if other
applicable requirements are met. However, the alternative minimum tax applicable
to corporations may reduce the benefit of the dividends-received deduction.
Distributions of net capital gain (the excess of net long-term capital gains
over net short-term capital losses) designated by the Fund as capital gain
dividends are not eligible for the corporate dividends-received deduction and
will generally be taxable to shareholders as long-term capital gains regardless
of the length of time that the Fund's shares have been held by a shareholder.
Distributions of short-term capital gains from assets held for one year or less
will be taxed as ordinary income. Generally, distributions from the Fund are
taxable to shareholders whether received in cash or reinvested in shares of the
Fund. Any distributions that are not from the Fund's investment company taxable
income or net capital gain may be characterized as a return of capital to
shareholders or, in some cases, as capital gain. Shareholders will be notified
annually as to the federal tax status of dividends and distributions they
receive and any tax withheld thereon.

Current tax law generally provides for a maximum tax rate for individual
taxpayers of 15% on long-term capital gains and on certain qualifying dividends
on corporate stock that are treated as qualified dividend income. The rate
reductions do not apply to corporate taxpayers. The Fund will be able to
separately designate distributions of any qualifying long-term capital gains or
qualified dividend income earned by the Fund that would be eligible for the 15%
rate. A shareholder would also have to satisfy a more than 60-day holding period
with respect to any distributions of qualifying dividends in order to obtain the
benefit of the lower rate. Qualified dividend income generally includes
dividends from taxable domestic corporations and certain qualified foreign
corporations provided that the Fund has held the stock in such corporation for
more than 60 days during the 121 day period beginning on the date which is 60
days before the date on which such stock becomes ex-dividend with respect to
such dividend. Distributions from the Fund investing in bonds and other debt
instruments will not generally qualify for the lower rates. Qualified foreign
corporations are corporations incorporated in a U.S. possession, corporations
whose stock is readily tradable on an established securities market in the
United States, and corporations eligible for the benefits of a comprehensive
income tax treaty with the United States and that satisfy certain other
requirements. Passive foreign investment companies are not treated as "qualified
foreign corporations." The lower rates on long-term capital gains and qualifying
dividends are currently scheduled to apply through 2010. In the absence of
further Congressional action, for calendar years after 2010, the maximum rate on
long-term capital gains for individual taxpayers would increase to 20% and
income from dividends would be taxed at the rates applicable to ordinary income.

Dividends, including capital gain dividends, declared in October, November, or
December with a record date in such month and paid during the following January
will be treated as having been paid by the Fund and received by shareholders on
December 31 of the calendar year in which declared rather than the calendar year
in which the dividends are actually received.

                                       78



Distributions by the Fund reduce the NAV of the Fund's shares. Should a
distribution reduce the NAV below a shareholder's cost basis, the distribution
nevertheless may be taxable to the shareholder as dividend income or capital
gain as described above even though, from an investment standpoint, it may
constitute a partial return of capital. In particular, investors should be
careful to consider the tax implication of buying shares just prior to a
distribution by the Fund. The price of shares purchased at that time includes
the amount of the forthcoming distribution but the distribution will generally
be taxable to the investors.

Original Issue Discount and Market Discount

Certain debt securities acquired by the Fund may be treated as debt securities
that were originally issued at a discount. Original issue discount can generally
be defined as the difference between the price at which a security was issued
and its stated redemption price at maturity. Although no cash income is actually
received by the Fund, original issue discount that accrues on a debt security in
a given year generally is treated for federal income tax purposes as interest
and therefore, such income would be subject to the distribution requirements of
the Code.

Some debt securities may be purchased by the Fund at a discount which exceeds
the original issue discount on such debt securities, if any. This additional
discount represents market discount for federal income tax purposes. The gain
realized on the disposition of any taxable debt security having market discount
generally will be treated as ordinary income to the extent it does not exceed
the accrued market discount on such debt security. If the amount of market
discount is more than a de minimis amount, a portion of such market discount
must be included as ordinary income (not capital gain) by the Fund in each
taxable year in which the Fund owns an interest in such debt security and
receives a principal payment on it. In particular, the Fund will be required to
allocate that principal payment first to the portion of the market discount on
the debt security that has accrued but has not previously been included in
income. In general that amount of market discount that must be included for each
period is equal to the lesser of: (i) the amount of market discount accruing
during such period (plus any accrued market discount for prior periods not
previously taken into account); or (ii) the amount of the principal payment with
respect to such period. Generally, market discount accrues on a daily basis for
each day the debt security is held by the Fund at a constant rate over the time
remaining to the debt security's maturity or, at the election of the Fund, at a
constant yield to maturity which takes into account the semi-annual compounding
of interest.

Foreign Currency Transactions

Under the Code, gains or losses attributable to fluctuations in foreign currency
exchange rates which occur between the time the Fund accrues income or other
receivable or accrues expenses or other liabilities denominated in a foreign
currency and the time the Fund actually collects such receivable or pays such
liabilities generally are treated as ordinary income or ordinary loss.
Similarly, on disposition of debt securities denominated in a foreign currency
and on disposition of certain financial contracts and options, gains or losses
attributable to fluctuations in the value of foreign currency between the date
of acquisition of the security or contract and the date of disposition also are
treated as ordinary gain or loss. These gains and losses, referred to under the
Code as Section 988 gains and losses, may increase or decrease the amount of the
Fund's net investment income to be distributed to its shareholders as ordinary
income.

Passive Foreign Investment Companies

The Fund may invest in stocks of foreign companies that are classified under the
Code as passive foreign investment companies ("PFICs"). In general, a foreign
company is classified as a PFIC if at least 50% of its assets constitute
investment-type assets or 75% or more of its gross income is investment-type
income (including dividends, interest, royalties, rents, and certain other types
of investment income). Under the PFIC rules, an excess distribution received
with respect to PFIC stock is treated as having been realized ratably over the
period during which the Fund held the PFIC stock. The Fund itself will be
subject to tax on the portion, if any, of the excess distribution that is
allocated to the Fund's holding period in prior taxable years (and an

                                       79



interest factor will be added to the tax as if the tax had actually been payable
in such prior taxable years) even though the Fund distributes the corresponding
income to shareholders. Gain from the sale of PFIC stock as well as certain
distributions from a PFIC are treated as excess distributions. All excess
distributions are taxable as ordinary income.

The Fund may be able to elect alternative tax treatment with respect to PFIC
stock. Under an election that currently may be available, the Fund generally
would be required to include in its gross income its share of the earnings of a
PFIC on a current basis regardless of whether any distributions are received
from the PFIC. If this election is made, the special rules, discussed above,
relating to the taxation of excess distributions would not apply. Alternatively,
another election may be available that involves marking-to-market the Fund's
PFIC stock at the end of each taxable year with the result that unrealized gains
are treated as though they were realized and are reported as ordinary income;
any mark-to-market losses as well as loss from an actual disposition of PFIC
stock, are reported as ordinary loss to the extent of any net mark-to-market
gains included in income in prior years.

Because the application of the PFIC rules may affect, among other things, the
character of gains, the amount of gain or loss and the timing of the recognition
of income with respect to PFIC stock as well as subject the Fund itself to tax
on certain income from PFIC stock, the amount that must be distributed to
shareholders and which will be taxed to shareholders as ordinary income or
long-term capital gain, may be increased or decreased substantially as compared
to a fund that did not invest in PFIC stock. Note that distributions from a PFIC
are not eligible for the reduced rate of tax on qualified dividend income.

Foreign Withholding Taxes

Income received by the Fund from sources within foreign countries may be subject
to withholding and other income or similar taxes imposed by such countries.
However, tax treaties between certain countries and the United States may reduce
or eliminate these taxes. Furthermore, many foreign countries do not impose
taxes on capital gains in respect of investments by foreign investors. If more
than 50% of the value of the Fund's total assets at the close of its taxable
year consists of securities of foreign corporations, the Fund will be eligible
and may elect to "pass through" to the Fund's shareholders the amount of foreign
income and similar taxes paid by the Fund. Pursuant to this election, a
shareholder will be required to include in gross income (in addition to taxable
dividends actually received) his or her pro rata share of the foreign taxes paid
by the Fund and will be entitled either to deduct (as an itemized deduction) his
or her pro rata share of foreign income and similar taxes in computing his or
her taxable income or to use it as a foreign tax credit against his or her U.S.
federal income tax liability, subject to limitations. No deduction for foreign
taxes may be claimed by a shareholder who does not itemize deductions but such a
shareholder may be eligible to claim the foreign tax credit (see below). Each
shareholder will be notified within sixty (60) days after the close of the
Fund's taxable year whether the foreign taxes paid by the Fund will "pass
through" for that year. Furthermore, the amount of the foreign tax credit that
is available may be limited to the extent that dividends from a foreign
corporation qualify for the lower tax rate on "qualifying dividends."

Generally, a credit for foreign taxes is subject to the limitations that it may
not exceed the shareholder's U.S. tax attributable to his or her foreign source
taxable income. For this purpose, if the pass-through election is made, the
source of the Fund's income flows through to its shareholders. With respect to
the Fund, gains from the sale of securities will generally be treated as derived
from U.S. sources and certain currency fluctuation gains including fluctuation
gains from foreign currency denominated debt securities, receivables and
payables, will be treated as ordinary income derived from U.S. sources. The
limitation on foreign tax credit is applied separately to foreign source passive
income (as defined for purposes of the foreign tax credit) including the foreign
source passive income passed through by the Fund. Shareholders may be unable to
claim a credit for the full amount of their proportionate share of the foreign
taxes paid by the Fund. The foreign tax credit limitation rules do not apply to
certain electing individual taxpayers who have limited creditable foreign taxes
and no foreign source income other than passive investment-type income. The
foreign tax credit is eliminated with respect to foreign taxes withheld on
dividends if the dividend-paying shares or the shares of the Fund are

                                       80



held by the Fund or the shareholders, as the case may be, for less than sixteen
(16) days (forty-six (46) days in the case of preferred shares) during the
thirty-one (31) day period (ninety-one (91) day period for preferred shares)
beginning fifteen (15) days (forty-five (45) days for preferred shares) before
the shares become ex-divided. If the Fund is not eligible to make the election
to "pass through" to its shareholders its foreign taxes, the foreign income
taxes it pays generally will reduce investment company taxable income and the
distributions by the Fund will be treated as U.S. source income.

Options and Hedging Transactions

The taxation of equity options (including options on narrow-based stock indices)
and OTC Options on debt securities is governed by Code Section 1234. Pursuant to
Code Section 1234, with respect to a put or call option that is purchased by the
Fund, if the option is sold, any resulting gain or loss will be a capital gain
or loss and will be short-term or long term depending upon the holding period of
the option. If the option expires, the resulting loss is a capital loss and is
short-term or long-term depending upon the holding period of the option. If the
option is exercised, the cost of the option, in the case of a call option, is
added to the basis of the purchased security and, in the case of a put option,
reduces the amount realized on the underlying security in determining gain or
loss.

Certain options and financial contracts in which the Fund may invest are Section
1256 contracts. Gains or losses on Section 1256 contracts generally are
considered 60% long-term and 40% short-term capital gains or losses ("60/40").
However, foreign currency gains or losses (as discussed below) arising from
certain Section 1256 contracts may be treated as ordinary income or loss. Also,
Section 1256 contracts held by the Fund at the end of each taxable year (and on
certain other dates as prescribed under the Code) are marked-to-market with the
result that unrealized gains or losses are treated as though they were realized.

Generally, the hedging transactions undertaken by the Fund may result in
straddles for U.S. federal income tax purposes. The straddle rules may affect
the character of gains (or losses) realized by the Fund. In addition, losses
realized by the Fund on positions that are part of the straddle may be deferred
under the straddle rules rather than being taken into account in calculating the
taxable income for the taxable year in which the losses are realized. Because
only a few regulations implementing the straddle rules have been promulgated,
the tax consequences to the Fund of hedging transactions are not entirely clear.
The hedging transactions may increase the amount of short-term capital gain
realized by the Fund which is taxed as ordinary income when distributed to
shareholders.

The Fund may make one or more of the elections available under the Code which
are applicable to straddles. If the Fund makes any of the elections, the amount,
character, and timing of the recognition of gains or losses from the affected
straddle positions will be determined under rules that vary according to the
election(s) made. The rules applicable under certain of the elections may
operate to accelerate the recognition of gains or losses from the affected
straddle positions.

Because application of the straddle rules may affect the character of gains or
losses, defer losses and/or accelerate the recognition of gains or losses from
the affected straddle positions, the amount which must be distributed to
shareholders and which will be taxed to shareholders as ordinary income or
long-term capital gain may be increased or decreased as compared to a fund that
did not engage in such hedging transactions.

Notwithstanding any of the foregoing, the Fund may recognize gain (but not loss)
from a constructive sale of certain "appreciated financial positions" if the
Fund enters into a short sale, offsetting notional principal contract, futures
or forward contract transaction with respect to the appreciated position or
substantially identical property. Appreciated financial positions subject to
this constructive sale treatment are interests (including options, futures and
forward contracts and short sales) in stock, partnership interests, certain
actively traded trust instruments and certain debt instruments. Constructive
sale treatment does not apply to certain transactions if such transaction is
closed before the end of the 30th day after the close of the Fund's taxable year
and the Fund holds the appreciated financial position throughout the sixty (60)
day period

                                       81



beginning on the day such transaction was closed, if the Fund's risk of loss is
not reduced during that sixty (60) day period.

Under recently enacted tax law, certain hedging activities may cause a dividend
that would otherwise be subjected to the lower tax rate applicable to a
qualified dividend income to instead be taxed at the tax rate of tax applicable
to ordinary income.

Requirements relating to the Fund's tax status as a RIC may limit the extent to
which the Fund will be able to engage in transactions in options and foreign
currency forward contracts.

Short Sales

If the Fund sells securities short, it will recognize short-term gain or loss
upon the purchase of securities to close the short sale. Such gain or loss
generally will be long- or short-term depending upon the length of time the Fund
held the security which it sold short. In some circumstances, short sales may
have the affect of reducing an otherwise applicable holding period of a security
in the portfolio. However, the constructive sale rule alters this treatment by
treating certain other transactions as a constructive sale of the underlying
security held by the Fund thereby requiring current recognition of gain as
described more fully under "Options and Hedging Transactions" above. Similarly,
if the Fund enters into a short sale of property that becomes substantially
worthless, the Fund will recognize gain at that time as though it had closed the
short sale. Future Treasury regulations may apply similar treatment to other
transactions with respect to property that becomes substantially worthless.

Sale or Other Disposition of Shares

Upon the sale or exchange of his or her shares, a shareholder will recognize a
taxable gain or loss depending upon such shareholder's basis in the shares. Such
gain or loss will be treated as capital gain or loss if the shares are capital
assets in the shareholder's hands which generally may be eligible for reduced
federal tax rates depending on the shareholder's holding period for the shares.
Any loss realized on a sale or exchange will be disallowed to the extent that
the shares disposed of are replaced (including replacement through the
reinvesting of dividends and capital gain distributions in the Fund) within a
period of sixty-one (61) days beginning thirty (30) days before and ending
thirty (30) days after the disposition of the shares. In such a case, the basis
of the shares acquired will be adjusted to reflect the disallowed loss. Any loss
realized by a shareholder on the sale of the Fund's shares held by the
shareholder for six (6) months or less will be treated for federal income tax
purposes as a long-term capital loss to the extent of any distributions of
capital gain dividends received by the shareholder with respect to such shares.
As noted above, the maximum tax rate for individual tax payers is 15% on
long-term gains.

In some cases, shareholders will not be permitted to take sales charges into
account for purposes of determining the amount of gain or loss realized on the
disposition of their shares. This prohibition generally applies where: (1) the
shareholder incurs a sales charge in acquiring the stock of a RIC; (2) the stock
is disposed of before the 91st day after the date on which it was acquired; and
(3) the shareholder subsequently acquires shares of the same or another RIC and
the otherwise applicable sales charge is reduced or eliminated under a
"reinvestment right" received upon the initial purchase of shares of stock. In
that case, the gain or loss recognized will be determined by excluding from the
tax basis of the shares exchanged all or a portion of the sales charge incurred
in acquiring those shares. This exclusion applies to the extent that the
otherwise applicable sales charge with respect to the newly acquired shares is
reduced as a result of having incurred a sales charge initially. Sales charges
affected by this rule are treated as if they were incurred with respect to the
stock acquired under the reinvestment right. This provision may be applied to
successive acquisitions of stock.

Backup Withholding

The Fund generally will be required to withhold federal income tax at a rate
equal to the fourth lowest tax rate

                                       82



applicable to unmarried individuals (currently 28%) ("backup withholding") from
dividends paid, capital gain distributions, and redemption proceeds to
shareholders if: (1) the shareholder fails to furnish the Fund with the
shareholder's correct taxpayer identification number or social security number
and to make such certifications as the Fund may require; (2) the IRS notifies
the Fund that the taxpayer identification number furnished by the shareholder is
incorrect; (3) the IRS notifies the shareholder or the Fund that the shareholder
has failed to report properly certain interest and dividend income to the IRS
and to respond to notices to that effect; or (4) when required to do so, the
shareholder fails to certify that he or she is not subject to backup
withholding. Any amounts withheld may be credited against the shareholder's
federal income tax liability.

Foreign Shareholders

<R>
Taxation of a shareholder who, as to the United States, is a nonresident alien
individual, foreign trust or estate, foreign corporation, or foreign partnership
("foreign shareholder") depends on whether the income from the Fund is
"effectively connected" with a U.S. trade or business carried on by such
shareholder. If the income from the Fund is not effectively connected with a
U.S. trade or business carried on by a foreign shareholder, ordinary income
dividends (including distributions of any net short-term capital gains) will
generally be subject to U.S. withholding tax at the rate of 30% (or lower treaty
rate) upon the gross amount of the dividend. Note that the 15% rate of tax
applicable to certain dividends (discussed above) does not apply to dividends
paid to foreign shareholders. Such a foreign shareholder would generally be
exempt from U.S. federal income tax on gains realized on the sale of shares of
the Fund and distributions of net long-term capital gains that are designated as
capital gain dividends. If the income from the Fund is effectively connected
with a U.S. trade or business carried on by a foreign shareholder, then ordinary
income dividends, capital gain dividends and any gains realized upon the sale of
shares of the Fund will be subject to U.S. federal income tax at the rates
applicable to U.S. citizens or domestic corporations.
</R>

The tax consequences to a foreign shareholder entitled to claim the benefits of
an applicable tax treaty may be different from those described herein. Foreign
shareholders are urged to consult their own tax adviser with respect to the
particular tax consequences to them of an investment in the Fund including the
applicability of foreign taxes.

Other Taxes

Distributions also may be subject to state, local and foreign taxes. U.S. tax
rules applicable to foreign investors may differ significantly from those
outlined above.

This discussion does not purport to deal with all of the tax consequences
applicable to shareholders. Shareholders are advised to consult their own tax
adviser for details with respect to the particular tax consequences to them of
an investment in the Fund.

                                  DISTRIBUTOR

Shares of the Fund are distributed by the Distributor pursuant to an
underwriting agreement between the Company on behalf of the Fund and the
Distributor ("Underwriting Agreement"). The Underwriting Agreement requires the
Distributor to use its best efforts on a continuing basis to solicit purchases
of shares of the Fund. The Company and the Distributor have agreed to indemnify
each other against certain liabilities. At the direction of the Distributor, all
sales charges may at times be re-allowed to an authorized dealer ("Authorized
Dealer"). If 90% or more of the sales commission is re-allowed such Authorized
dealer may be

                                       83



deemed to be an "Underwriter" as that term is defined under the 1933 Act. The
Underwriting Agreement will remain in effect for two years from its inception
date and from year-to-year thereafter only if its continuance is approved
annually by a majority of the Board who are not parties to such agreement or
"interested persons" of any such party and must be approved either by votes of a
majority of the Directors or a majority of the outstanding voting securities of
the Fund. See the Prospectuses for information on how to purchase and sell
shares of the Fund and the charges and expenses associated with an investment.
The sales charge retained by the Distributor and the commissions re-allowed to
selling dealers are not an expense of the Fund and have no affect on the NAV of
the Fund. The Distributor's address is 7337 East Doubletree Ranch Road,
Scottsdale, Arizona 85258. The Distributor is a Delaware corporation and is an
affiliate of ING Investments and an indirect wholly-owned subsidiary of ING
Groep.

The Distributor may, at its discretion, pay additional cash compensation to its
employee sales staff for sales by certain broker-dealers or "focus firms." The
Distributor may pay up to an additional 0.10% to its employee sales staff for
sales that are made by registered representatives of these focus firms. As of
the date of this SAI, the focus firms are: A.G. Edwards & Sons, Inc; Advantage
Capital Corporation; AIG Financial Advisors, Inc.; American General Securities,
Inc.; Banc of America Investment Services, Inc.; Banc of America Securities,
LLC; Banc One Securities Corporation; Chase Investment Services; Citigroup
Global Markets, Inc; Citistreet Equities, LLC; Financial Network Investment
Corporation; FSC Securities Corporation; H & R Block Financial Advisors, LLC;
ING Financial Partners, Inc.; JP Morgan Investment, LLC; JP Morgan Securities,
Inc.; Linsco Private Ledger Financial Services; Merrill Lynch, Morgan Stanley &
Co, Inc.; Morgan Stanley Dean Witter; Multi-Financial Securities Corporation;
PrimeVest Financial Services, Inc.; Prudential Investment Management Services,
LLC; Prudential Retirement Brokerage Services, Inc.; Prudential Securities;
Raymond James & Associates, Inc.; Raymond James Financial Services, Inc.; RBC
Dain Rauscher, Inc.; Royal Alliance Associates, Inc.; UBS Financial Services,
Inc.; Wachovia Bank; Wachovia Brokerage Services, Inc.; Wachovia Securities
Financial Network, Inc.; Wachovia Securities, LLC; Wells Fargo Bank; Wells Fargo
Bank N.A.; and Wells Fargo Investments, LLC.

For the fiscal years ended October 31, 2007, 2006, and 2005 the Distributor
recovered the following amounts in sales charges in connection with the sale of
shares:

                                                      Total Underwriting Fees
                                                  ------------------------------
                      Fund                          2007       2006       2005
-----------------------------------------------   --------   --------   --------
ING Global Science and Technology                 $297,759   $304,565   $277,149

The following table shows all commissions and other compensation received by
each principal underwriter who is an affiliated person of the Fund or an
affiliated person of that affiliated person, directly of indirectly, from the
Fund during the Fund's most recent fiscal year.

                                             Net Underwriting   Compensation on
                         Name of Principal     Discounts and    Redemptions and    Brokerage       Other
          Fund              Underwriter         Commissions       Repurchases     Commissions   Compensation
----------------------   -----------------   ----------------   ---------------   -----------   ------------
ING Global Science and   ING Funds                $313.15          $2,526.82         $1,291          $0
Technology               Distributor, LLC

Other Payments to Securities Dealers

Typically, the portion of the front-end sales charge on Class A shares shown in
the following tables is paid to your securities dealer. However, your securities
dealer may receive up to the entire amount of the front-end sales charge.

                                        Amount of sales charge typically are
                                        allowed to dealers as a percentage of
     When you invest this amount:                    offering price:
-------------------------------------   -------------------------------------
            Under $50,000                                5.00%
 $50,000 or more but under $100,000                      3.75%

                                       84



                                        Amount of sales charge typically are
                                        allowed to dealers as a percentage of
     When you invest this amount:                    offering price:
-------------------------------------   -------------------------------------
$100,000 or more but under $250,000                      2.75%
$250,000 or more but under $500,000                      2.00%
$500,000 or more but under $1,000,000                    1.75%

Securities dealers that sell Class A shares in amounts of $1 million or more may
be entitled to receive the following commissions:

                                              Commission
                                              ----------
.    on sales of $1 million to $2,499,999        1.00%

.    on sales of $2.5 million to $4,999,999      0.50%

.    on sales of $5 million or greater           0.25%

For sales of Class B shares, your securities dealer is paid an up-front
commission equal to four percent (4%) of the amount sold. Beginning in the
thirteenth month after the sale is made, the Distributor uses the 0.25%
servicing fee to compensate securities dealers for providing personal services
to accounts that hold Class B shares on a monthly basis.

The Distributor or its affiliates may make payments in addition to those
described above to securities dealers that enter into agreements providing the
Distributor with preferential access to registered representatives of the
securities dealer. These payments may be in an amount up to 0.13% of the total
Fund assets held in omnibus accounts or in customer accounts that designate such
firm(s) as the selling broker-dealer(s).

In addition, the Adviser may make payments of up to 0.05% of the Fund's average
daily net assets to national broker-dealers who, as a result of an acquisition
of a member of the Company's selling group, agree to allow Fund shares to be
made available to their clients in a proprietary wrap account program provided
such accounts are networked accounts.

The Distributor or its affiliates may, from time to time, also make payments to
clearing firms that offer networking services which make the Fund available to
their customers. Such payments to clearing firms will not exceed 0.10% of the
total Fund assets held in omnibus accounts or in customer accounts that
designate such firm(s) as the selling broker-dealer.

The Distributor has agreed to reimburse Financial Network Investment
Corporation, an affiliate of the Distributor, for trading costs incurred in
connection with trades through the Pershing brokerage clearing system.

The Distributor may make, or cause to be made, payments to affiliated and
unaffiliated securities dealers that engage in wholesaling efforts on behalf of
the Company and the Fund. These payments will not exceed 0.33% of the value of
Fund shares sold as a result of such wholesaling efforts. The Distributor may
also pay such firms a quarterly fee based on a percentage of assets retained as
of the end of a calendar quarter, not to exceed 0.125% of the value of such
assets.

The value of a shareholder's investment will be unaffected by these payments.

For the fiscal years ended October 31, 2007, 2006 and 2005 the Distributor
received the following amounts in sales charges in connection with the sale of
shares:

                     Class A Sales Charges   Class A Sales Charges       Class B          Class C
ING Global Science       Before Dealer            After Dealer       Deferred Sales   Deferred Sales
  and Technology          Re-Allowance            Re-Allowance           Charges          Charges
------------------   ---------------------   ---------------------   --------------   --------------
       2007                  $2,527                   $--                $    --           $313
       2006                  $5,195                   $--                $21,040           $400
       2005                  $2,840                   $--                $44,044           $122

                                       85



                         CALCULATION OF PERFORMANCE DATA

Average Annual Total Return

The Fund may, from time to time, include "total return" in advertisements or
reports to shareholders or prospective investors. Quotations of average annual
total return will be expressed in terms of the average annual compounded rate of
return of a hypothetical investment in the Fund over periods of one, five and
ten years (up to the life of the Fund) calculated pursuant to the following
formula which is prescribed by the SEC:

                               P (1 + T)/n/ = ERV

Where:  P    = a hypothetical initial payment of $1,000,
        T    = the average annual total return,
        n    = the number of years, and
        ERV  = the ending redeemable value of a hypothetical $1,000  payment
               made at the  beginning of the period.

These total return figures show the average percentage change in value of an
investment in the Fund from the beginning date of the measuring period. These
figures reflect changes in the price of the Fund's shares and assume that any
income dividends and/or capital gains distributions made by the Fund during the
period were reinvested in shares of the Fund. Figures will be given for one,
five and ten year periods (if applicable) and may be given for other periods as
well (such as from commencement of the Fund's operations or on a year-by-year
basis).

Average Annual Total Return (After Taxes on Distributions) Quotation

The Fund may, from time to time, include "total return after taxes on
distributions" in advertisements or reports to shareholders or prospective
investors. Quotations of average annual total return after taxes on
distributions will be expressed in terms of the average annual compounded rate
of return of a hypothetical investment in the Fund over periods of one, five and
ten years (up to the life of the Fund) calculated pursuant to the following
formula which is prescribed by the SEC:

                             P (1 + T)/n/ = ATV//D//

Where:  P         =  a hypothetical initial payment of $1,000,
        T         =  the average annual total return (after taxes on
                     distributions),
        n         =  the number of years, and
        ATV//D//  =  ending value of a hypothetical $1,000 payment made at the
                     beginning of the one, five, or ten year periods (or
                     fractional portion) after taxes on Fund distributions but
                     not after taxes on redemptions.

All total return figures assume that all dividends are reinvested when paid.
Taxes are calculated using the highest individual marginal federal income tax
rates in effect on the reinvestment date. The rates used correspond to the
character of each component of the distributions (e.g., ordinary income rate for
ordinary income distributions, short-term capital gain rate for short-term
capital gain distributions, and long-term capital gain rate for long-term
capital gain distributions). The calculations do not consider any potential tax
liabilities other than federal tax liability.

Average Annual Total Return (After Taxes on Distributions and Redemption)
Quotation

The Fund may, from time to time, include "total return after taxes on
distributions and redemption" in advertisements or reports to shareholders or
prospective investors. Quotations of average annual total return

                                       86



after taxes on distributions and redemption will be expressed in terms of the
average annual compounded rate of return of a hypothetical investment in the
Fund over periods of one, five and ten years (up to the life of the Fund)
calculated pursuant to the following formula which is prescribed by the SEC:

                            P (1 + T)/n/ = ATV//DR//

Where:  P          = a hypothetical initial payment of $1,000,
        T          = the average annual total return (after taxes on
                     distributions),
        n          = the number of years, and
        ATV//DR//  = ending value of a  hypothetical $1,000  payment made at the
                     beginning of the one, five, or ten year periods (or
                     fractional portion) after taxes on Fund distributions and
                     redemption.

All total return figures assume that all dividends are reinvested when paid.
Taxes are calculated using the highest individual marginal federal income tax
rates in effect on the reinvestment date. The rates used correspond to the
character of each component of the distributions (e.g., ordinary income rate for
ordinary income distributions, short-term capital gain rate for short-term
capital gain distributions, and long-term capital gain rate for long-term
capital gain distributions). The ending value is determined by subtracting
capital gain taxes resulting from the redemption and adding the tax benefit from
capital losses resulting from the redemption. The calculations do not consider
any potential tax liabilities other than federal tax liability.

Dividend Yield

The Fund may also publish a distribution rate in sales literature and in
investor communications preceded or accompanied by a copy of the current
Prospectus. The current distribution rate for the Fund is the annualization of
the Fund's distribution per share divided by the maximum offering price per
share of the Fund at the respective month-end. The current distribution rate may
differ from current yield because the distribution rate may contain items of
capital gain and other items of income while yield reflects only earned net
investment income. In each case, the yield, distribution rates and total return
figures will reflect all recurring charges against the Fund's income and will
assume the payment of the maximum sales load including any applicable contingent
deferred sales charge.

Additional Performance Quotations

Advertisements of total return will always show a calculation that includes the
affect of the maximum sales charge but may also show total return without giving
affect to that charge. Because these additional quotations will not reflect the
maximum sales charge payable, these performance quotations will be higher than
the performance quotations that reflect the maximum sales charge.

Total returns and yields are based on past results and are not necessarily a
prediction of future performance.

                             PERFORMANCE COMPARISONS

In reports or other communications to shareholders or in advertising material,
the Fund may compare the performance of its Class A, Class B, Class C, Class I
and Class O shares with that of other mutual funds as listed in the rankings
prepared by Lipper Analytical Services, Inc., Morningstar, Inc., CDA
Technologies, Inc., Value Line, Inc. or similar independent services that
monitor the performance of mutual funds or with other appropriate indices of
investment securities. In addition, certain indices may be used to illustrate
historic performance of select asset classes. The performance information may
also include evaluations of the Fund published by nationally recognized ranking
services and by financial publications that are nationally recognized such as
Business Week, Forbes, Fortune, Institutional Investor, Money and The Wall
Street Journal. If the Fund compares its performance to other funds or to
relevant indices, the Fund's performance will be stated in the same terms in
which such comparative data and indices are stated which is normally total
return rather than yield. For these purposes the performance of the Fund, as
well as the performance of such

                                       87

The following are the Proxy Voting Procedures and Guidelines (the “Procedures and Guidelines”) of the ING Funds set forth on Exhibit 1 attached hereto and each portfolio or series thereof (each a “Fund” and collectively, the “Funds”). The purpose of these Procedures and Guidelines is to set forth the process by which each Fund will vote proxies related to the equity assets in its investment portfolio (the “portfolio securities”). The Procedures and Guidelines have been approved by the Funds’ Boards of Trustees/Directors¹ (each a “Board” and collectively, the “Boards”), including a majority of the independent Trustees/Directors² of the Board. Only the Board may amend these Procedures and Guidelines. The Board shall review these Procedures and Guidelines at its discretion, and make any revisions thereto as deemed appropriate by the Board.

The Board hereby delegates to ING Investments, LLC (the “Adviser”) the authority and responsibility to vote all proxies with respect to all portfolio securities of the Fund, in accordance with the then-current Procedures and Guidelines approved by the Board. The Board may revoke such delegation with respect to any proxy or proposal, and assume the responsibility of voting any Fund proxy or proxies, as it deems appropriate. The President or Chief Financial Officer of a Fund may approve non-material amendments to the Procedures and Guidelines for immediate implementation, subject to ratification at the next regularly scheduled meeting of the Board.

When a Fund participates in the lending of its securities and the securities are on loan at record date, proxies related to such securities will not be forwarded to the Adviser by the Fund’s custodian and therefore will not be voted.

Funds that are “funds-of-funds” will “echo” vote their interests in underlying mutual funds, which may include ING Funds (or portfolios or series thereof) other than those set forth on Exhibit 1 attached hereto. This means that, if the fund-of-funds must vote on a proposal with respect to an underlying investment company, the fund-of-funds will vote its interest in that underlying fund in the same proportion all other shareholders in the investment company voted their interests.

The Adviser has adopted proxy voting procedures in connection with the voting of portfolio securities for the Funds as attached hereto in Exhibit 3. The Board hereby approves such procedures.

Any material changes to the Adviser’s proxy voting procedures (the “Adviser Procedures”) must be approved by the Board prior to voting any Fund proxies in accordance with such amended procedures. The President or Chief Financial Officer of the Adviser may approve non-material amendments to the Procedures and Guidelines for immediate implementation, subject to ratification at the next regularly scheduled meeting of the Board of the Fund.

The Guidelines that are set forth in Exhibit 4 hereto specify the manner in which the Funds generally will vote with respect to the proposals discussed therein.

Unless otherwise noted, the defined terms used hereafter shall have the same meaning as defined in the Adviser Procedures.

The Agent shall be instructed to submit a vote in accordance with the Guidelines where such Guidelines provide a clear “For,” “Against,” “Withhold” or “Abstain” on a proposal. However, the Agent shall be directed to refer any proxy proposal to the Proxy Coordinator for instructions as if it were a matter requiring case-by-case consideration under circumstances where the application of the Guidelines is unclear, it appears to involve unusual or controversial issues, or an Investment Professional (as such term is defined for purposes of the Adviser Procedures) recommends a vote contrary to the Guidelines.

The Agent shall be directed to refer proxy proposals accompanied by its written analysis and voting recommendation to the Proxy Coordinator where the Guidelines have noted “case-by-case” consideration.

Upon receipt of a referral from the Agent, the Proxy Coordinator may solicit additional research from the Agent, Investment Professional(s), as well as from any other source or service.

Except in cases in which the Proxy Group has previously provided the Proxy Coordinator with standing instructions to vote in accordance with the Agent’s recommendation, the Proxy Coordinator will forward the Agent’s analysis and recommendation and/or any research obtained from the Investment Professional(s), the Agent or any other source to the Proxy Group. The Proxy Group may consult with the Agent and/or Investment Professional(s), as it deems necessary.

The Proxy Coordinator shall use best efforts to convene the Proxy Group with respect to all matters requiring its consideration. In the event quorum requirements cannot be timely met in connection with a voting deadline, it shall be the policy of the Funds to vote in accordance with the Agent’s recommendation, unless the Agent’s recommendation is deemed to be conflicted as provided for under the Adviser Procedures, in which case no action shall be taken on such matter (i.e., a “Non-Vote”).

In the event the Proxy Group, and where applicable, any Investment Professional participating in the voting process, recommend a vote Within Guidelines, the Proxy Group will instruct the Agent, through the Proxy Coordinator, to vote in this manner. Except as provided for herein, no Conflicts Report (as such term is defined for purposes of the Adviser Procedures) is required in connection with Within-Guidelines Votes.

The Proxy Group may recommend that a Fund refrain from voting under the following circumstances: (1) if the economic effect on shareholders’ interests or the value of the portfolio holding is indeterminable or insignificant, e.g., proxies in connection with securities no longer held in the portfolio of an ING Fund or proxies being considered on behalf of a Fund that is no longer in existence; or (2) if the cost of voting a proxy outweighs the benefits, e.g., certain international proxies, particularly in cases in which share blocking practices may impose trading restrictions on the relevant portfolio security. In such instances, the Proxy Group may instruct the Agent, through the Proxy Coordinator, not to vote such proxy. The Proxy Group may provide the Proxy Coordinator with standing instructions on parameters that would dictate a Non-Vote without the Proxy Group’s review of a specific proxy. It is noted a Non-Vote determination would generally not be made in connection with voting rights received pursuant to class action participation; while a Fund may no longer hold the security, a continuing economic effect on shareholders’ interests is likely.

Reasonable efforts shall be made to secure and vote all other proxies for the Funds, but, particularly in markets in which shareholders’ rights are limited, Non-Votes may also occur in connection with a Fund’s related inability to timely access ballots or other proxy information in connection with its portfolio securities.

Non-Votes may also result in certain cases in which the Agent’s recommendation has been deemed to be conflicted, as described in Section IV.B. above and Section V. below.

If the Proxy Group recommends that a Fund vote contrary to the Procedures and Guidelines, or the recommendation of the Agent, where applicable, if the Agent has made no recommendation on a matter requiring case-by-case consideration and the Procedures and Guidelines are silent, or the Agent’s recommendation on a matter requiring case-by-case consideration is deemed to be conflicted as provided for under the Adviser Procedures, the Proxy Coordinator will then request that all members of the Proxy Group, including any members not in attendance at the meeting at which the relevant proxy is being considered, and each Investment Professional participating in the voting process complete a Conflicts Report (as such term is defined for purposes of the Adviser Procedures), in substantially the form attached hereto as Exhibit 2. As provided for in the Adviser Procedures, the Proxy Coordinator shall be responsible for identifying to Counsel potential conflicts of interest with respect to the Agent.

If Counsel determines that a conflict of interest appears to exist with respect to the Agent, any member of the Proxy Group or the participating Investment Professional(s), the Proxy Coordinator will instruct the Agent to vote the proxy as directed by the Guidelines, or in accordance with the recommendation of the Agent, where applicable. Cases in which any member of the Proxy Group or a participating Investment Professional has failed to complete and return a Conflicts Report shall be treated as if a conflict of interest appears to exist, except that, upon Counsel’s finding that a conflict of interest exists with respect to one or more members of the Proxy Group or the Advisers generally, the remaining members of the Proxy Group shall not be required to complete a Conflicts Report in connection with the proxy.

If Counsel determines that each member of the Proxy Group has completed and returned a Conflicts Report and there does not appear to be a conflict of interest with respect to the Agent, any member of the Proxy Group or the participating Investment Professional(s), the Proxy Coordinator will instruct the Agent to vote the proxy as recommended by the Proxy Group.

In any case in which there appears to be a conflict of interest with respect to the Agent’s recommendation on a matter requiring case-by-case consideration, no action shall be taken on such matter (i.e., a “Non-Vote”). In any case in which a member of the Proxy Group has failed to complete and return a Conflicts Report when so required, or in which there appears to be a conflict of interest with respect to any member of the Proxy Group or any Investment Professional participating in the voting process, the Agent will be directed to vote Within Guidelines so that the Adviser shall have no opportunity to vote a Fund’s proxy in a situation in which the Adviser or certain other related parties may be deemed to have a conflict of interest.

Annually in August, each Fund will post its proxy voting record or a link thereto for the prior one-year period ending on June 30^th on the ING Funds website. The proxy voting record for each Fund will also be available in the EDGAR database on the SEC’s website.

At each regularly scheduled meeting, the Board will receive a report from the Adviser’s Proxy Coordinator indicating each proxy proposal, or a summary of such proposals, (1) that was voted Out-of-Guidelines; and (2) for which the Proxy Group initially recommended a vote Out-of-Guidelines, but which was ultimately voted Within Guidelines in accordance with Section V hereof. Such report shall indicate the name of the issuer, the substance of the proposal, and the reasons for voting, or recommending, an Out-of-Guidelines Vote.

Affiliate means (A) any company directly or indirectly owning, controlling, or holding with power to vote, 5% or more of the outstanding voting securities of the Issuer; (B) any company 5% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by the issuer; (C) any company directly or indirectly controlling, controlled by, or under common control with, the Issuer; (D) any officer, director, partner, copartner, or employee of the Issuer; (E) if the Issuer is an investment company, any investment adviser thereof or any member of an advisory board thereof; and (F) if the Issuer is an unincorporated investment company not having a board of directors, the depositor thereof.

ING Entity means all direct and indirect subsidiaries, joint ventures and business units of ING Groep N.V., including, but not limited to, ING Investments, LLC, ING Funds Distributor, LLC, ING Investment Management Co., ING Investment Management Americas, Directed Services, LLC and ING Financial Advisers, LLC.

Issuer includes the company with respect to which the proxy is solicited, and any other entity which you know to be affiliated therewith, such as a pension plan, joint venture, merger partner, subsidiary or parent, or company under common control, but does not include entities associated with the Issuer solely through the provision of consulting, advisory or other professional services.

Material Business Relationship means, but, subject to review by Counsel, may not be limited to, a relationship which you know to constitute (1) participation in a joint venture, (2) revenues to ING of $1 million or more per year, or (3) ownership by ING of more than 5% of the outstanding securities of the Issuer (“5% Issuer”) (except that an Issuer’s affiliation with a 5% Issuer shall not constitute a de facto conflict of interest for ING with the first Issuer).

** Please return to ING Funds Proxy Coordinator at 480-477-2786 or proxycoordinator@ingfunds.com **

ING Investments, LLC, ING Investment Management Co. and Directed Services, LLC (each an “Adviser” and collectively, the “Advisers”) are the investment advisers for the registered investment companies and each series or portfolio thereof (each a “Fund” and collectively, the “Funds”) comprising the ING family of funds. As such, the Advisers have been delegated the authority to vote proxies with respect to securities for certain Funds over which they have day-to-day portfolio management responsibility.

The Advisers will abide by the proxy voting guidelines adopted by a Fund’s respective Board of Directors or Trustees (each a “Board” and collectively, the “Boards”) with regard to the voting of proxies unless otherwise provided in the proxy voting procedures adopted by a Fund’s Board.

In voting proxies, the Advisers are guided by general fiduciary principles. Each must act prudently, solely in the interest of the beneficial owners of the Funds it manages. The Advisers will not subordinate the interest of beneficial owners to unrelated objectives. Each Adviser will vote proxies in the manner that it believes will do the most to maximize shareholder value.

The following are the Proxy Voting Procedures of ING Investments, LLC, ING Investment Management Co. and Directed Services, LLC (the “Adviser Procedures”) with respect to the voting of proxies on behalf of their client Funds as approved by the respective Board of each Fund.

Unless otherwise noted, best efforts shall be used to vote proxies in all instances.

The Proxy Coordinator identified in Appendix 1 will assist in the coordination of the voting of each Fund’s proxies in accordance with the ING Funds Proxy Voting Procedures and Guidelines (the “Procedures” or “Guidelines” and collectively the “Procedures and Guidelines”). The Proxy Coordinator is authorized to direct the Agent to vote a Fund’s proxy in accordance with the Procedures and Guidelines unless the Proxy Coordinator receives a recommendation from an Investment Professional (as described below) to vote contrary to the Procedures and Guidelines. In such event, and in connection with proxy proposals requiring case-by-case consideration (except in cases in which the Proxy Group has previously provided the Proxy Coordinator with standing instructions to vote in accordance with the Agent’s recommendation), the Proxy Coordinator will call a meeting of the Proxy Group (as described below).

Responsibilities assigned herein to the Proxy Coordinator, or activities in support thereof, may be performed by such members of the Proxy Group or employees of the Advisers’ affiliates as are deemed appropriate by the Proxy Group.

Unless specified otherwise, information provided to the Proxy Coordinator in connection with duties of the parties described herein shall be deemed delivered to the Advisers.

An independent proxy voting service (the “Agent”), as approved by the Board of each Fund, shall be engaged to assist in the voting of Fund proxies for publicly traded securities through the provision of vote analysis, implementation, recordkeeping and disclosure services. The Agent is Institutional Shareholder Services, Inc. The Agent is responsible for coordinating with the Funds’ custodians to ensure that all proxy materials received by the custodians relating to the portfolio securities are processed in a timely fashion. To the extent applicable, the Agent is required to vote and/or refer all proxies in accordance with these Adviser Procedures. The Agent will retain a record of all proxy votes handled by the Agent. Such record must reflect all the information required to be disclosed in a Fund’s Form N-PX pursuant to Rule 30b1-4 under the Investment Company Act. In addition, the Agent is responsible for maintaining copies of all proxy statements received by issuers and to promptly provide such materials to the Adviser upon request.

The Agent shall be instructed to vote all proxies in accordance with a Fund’s Guidelines, except as otherwise instructed through the Proxy Coordinator by the Adviser’s Proxy Group, or a Fund’s Valuation, Proxy and Brokerage Committee (“Committee”).

The Agent shall be instructed to obtain all proxies from the Funds’ custodians and to review each proxy proposal against the Guidelines. The Agent also shall be requested to call the Proxy Coordinator’s attention to specific proxy proposals that although governed by the Guidelines appear to involve unusual or controversial issues.

Subject to the oversight of the Advisers, the Agent shall establish and maintain adequate internal controls and policies in connection with the provision of proxy voting services voting to the Advisers, including methods to reasonably ensure that its analysis and recommendations are not influenced by conflict of interest, and shall disclose such controls and policies to the Advisers when and as provided for herein. Unless otherwise specified, references herein to recommendations of the Agent shall refer to those in which no conflict of interest has been identified.

The Adviser shall establish a Proxy Group (the “Group” or “Proxy Group”) which shall assist in the review of the Agent’s recommendations when a proxy voting issue is referred to the Group through the Proxy Coordinator. The members of the Proxy Group, which may include employees of the Advisers’ affiliates, are identified in Appendix 1, as may be amended from time at the Advisers’ discretion.

A minimum of four (4) members of the Proxy Group (or three (3) if one member of the quorum is either the Fund’s Chief Investment Risk Officer or Chief Financial Officer) shall constitute a quorum for purposes of taking action at any meeting of the Group. The vote of a simple majority of the members present and voting shall determine any matter submitted to a vote. Tie votes shall be broken by securing the vote of members not present at the meeting; provided, however, that the Proxy Coordinator shall ensure compliance with all applicable voting and conflict of interest procedures and shall use best efforts to secure votes from all or as many absent members as may reasonably be accomplished. The Proxy Group may meet in person or by telephone. The Proxy Group also may take action via electronic mail in lieu of a meeting, provided that each Group member has received a copy of any relevant electronic mail transmissions circulated by each other participating Group member prior to voting and provided that the Proxy Coordinator follows the directions of a majority of a quorum (as defined above) responding via electronic mail. For all votes taken in person or by telephone or teleconference, the vote shall be taken outside the presence of any person other than the members of the Proxy Group and such other persons whose attendance may be deemed appropriate by the Proxy Group from time to time in furtherance of its duties or the day-to-day administration of the Funds. In its discretion, the Proxy Group may provide the Proxy Coordinator with standing instructions to perform responsibilities assigned herein to the Proxy Group, or activities in support thereof, on its behalf, provided that such instructions do not contravene any requirements of these Adviser Procedures or a Fund’s Procedures and Guidelines.

A meeting of the Proxy Group will be held whenever (1) the Proxy Coordinator receives a recommendation from an Investment Professional to vote a Fund’s proxy contrary to the Procedures and Guidelines, or the recommendation of the Agent, where applicable, (2) the Agent has made no recommendation with respect to a vote on a proposal, or (3) a

matter requires case-by-case consideration, including those in which the Agent’s recommendation is deemed to be conflicted as provided for under these Adviser Procedures, provided that, if the Proxy Group has previously provided the Proxy Coordinator with standing instructions to vote in accordance with the Agent’s recommendation and no issue of conflict must be considered, the Proxy Coordinator may implement the instructions without calling a meeting of the Proxy Group.

For each proposal referred to the Proxy Group, it will review (1) the relevant Procedures and Guidelines, (2) the recommendation of the Agent, if any, (3) the recommendation of the Investment Professional(s), if any, and (4) any other resources that any member of the Proxy Group deems appropriate to aid in a determination of a recommendation.

If the Proxy Group recommends that a Fund vote in accordance with the Procedures and Guidelines, or the recommendation of the Agent, where applicable, it shall instruct the Proxy Coordinator to so advise the Agent.

If the Proxy Group recommends that a Fund vote contrary to the Procedures and Guidelines, or the recommendation of the Agent, where applicable, or if the Agent’s recommendation on a matter requiring case-by-case consideration is deemed to be conflicted, it shall follow the procedures for such voting as established by a Fund’s Board.

The Proxy Coordinator shall use best efforts to convene the Proxy Group with respect to all matters requiring its consideration. In the event quorum requirements cannot be timely met in connection with to a voting deadline, the Proxy Coordinator shall follow the procedures for such voting as established by a Fund’s Board.

The Funds’ Advisers, sub-advisers and/or portfolio managers (each referred to herein as an “Investment Professional” and collectively, “Investment Professionals”) may submit, or be asked to submit, a recommendation to the Proxy Group regarding the voting of proxies related to the portfolio securities over which they have day-to-day portfolio management responsibility. The Investment Professionals may accompany their recommendation with any other research materials that they deem appropriate or with a request that lending activity with respect to the relevant security be reviewed, such requests to be timely considered by the Proxy Group.

The Agent shall be instructed to submit a vote in accordance with the Guidelines where such Guidelines provide a clear “For”, “Against,” “Withhold” or “Abstain” on a proposal. However, the Agent shall be directed to refer any proxy proposal to the Proxy Coordinator for instructions as if it were a matter requiring case-by-case consideration under circumstances where the application of the Guidelines is unclear, it appears to involve unusual or controversial issues, or an Investment Professional recommends a vote contrary to the Guidelines.

Upon receipt of a referral from the Agent, the Proxy Coordinator may solicit additional research from the Agent, Investment Professional(s), as well as from any other source or service.

In the event the Proxy Group, and where applicable, any Investment Professional participating in the voting process, recommend a vote Within Guidelines, the Proxy Group will instruct the Agent, through the Proxy Coordinator, to vote in this manner. Except as provided for herein, no Conflicts Report (as such term is defined herein) is required in connection with Within-Guidelines Votes.

Group may instruct the Agent, through the Proxy Coordinator, not to vote such proxy. The Proxy Group may provide the Proxy Coordinator with standing instructions on parameters that would dictate a Non-Vote without the Proxy Group’s review of a specific proxy. It is noted a Non-Vote determination would generally not be made in connection with voting rights received pursuant to class action participation; while a Fund may no longer hold the security, a continuing economic effect on shareholders’ interests is likely.

Non-Votes may also result in certain cases in which the Agent’s recommendation has been deemed to be conflicted, as provided for in the Funds’ Procedures.

In furtherance of the Advisers’ fiduciary duty to the Funds and their beneficial owners, the Advisers shall establish the following:

The Advisers shall establish that the Agent (1) is independent from the Advisers, (2) has resources that indicate it can competently provide analysis of proxy issues and (3) can make recommendations in an impartial manner and in the best interests of the Funds and their beneficial owners. The Advisers shall utilize, and the Agent shall comply with, such methods for establishing the foregoing as the

Advisers may deem reasonably appropriate and shall do not less than annually as well as prior to engaging the services of any new proxy service. The Agent shall also notify the Advisers in writing within fifteen (15) calendar days of any material change to information previously provided to an Adviser in connection with establishing the Agent’s independence, competence or impartiality.

Information provided in connection with assessment of the Agent shall be forwarded to a member of the mutual funds practice group of ING US Legal Services (“Counsel”) for review. Counsel shall review such information and advise the Proxy Coordinator as to whether a material concern exists and if so, determine the most appropriate course of action to eliminate such concern.

The Advisers shall establish and maintain procedures to identify and address conflicts that may arise from time to time concerning the Agent. Upon the Advisers’ request, which shall be not less than annually, and within fifteen (15) calendar days of any material change to such information previously provided to an Adviser, the Agent shall provide the Advisers with such information as the Advisers deem reasonable and appropriate for use in determining material relationships of the Agent that may pose a conflict of interest with respect to the Agent’s proxy analysis or recommendations. The Proxy Coordinator shall forward all such information to Counsel for review. Counsel shall review such information and provide the Proxy Coordinator with a brief statement regarding whether or not a material conflict of interest is present. Matters as to which a material conflict of interest is deemed to be present shall be handled as provided in the Fund’s Procedures and Guidelines.

In connection with their participation in the voting process for portfolio securities, each member of the Proxy Group, and each Investment Professional participating in the voting process, must act solely in the best interests of the beneficial owners of the applicable Fund. The members of the Proxy Group may not subordinate the interests of the Fund’s beneficial owners to unrelated objectives, including taking steps to reasonably insulate the voting process from any conflict of interest that may exist in connection with the Agent’s services or utilization thereof.

For all matters for which the Proxy Group recommends an Out-of-Guidelines Vote, or for which a recommendation contrary to that of the Agent has been received from an Investment Professional and is to be utilized, the Proxy Coordinator will implement the procedures for handling such votes as adopted by the Fund’s Board, including completion of such Conflicts Reports as may be required under the Fund’s Procedures. Completed Conflicts Reports shall be provided to the Proxy Coordinator within two (2) business days. Such Conflicts Report should describe any known conflicts of either a business or personal nature, and set forth any contacts with respect to the referral item with non-investment personnel in its organization or with outside parties (except for routine communications from proxy solicitors). The Conflicts Report should also include written confirmation that any recommendation from an Investment Professional provided in connection with an Out-of-Guidelines Vote or under circumstances where a conflict of interest exists was made solely on the investment merits and without regard to any other consideration.

The Proxy Coordinator shall forward all Conflicts Reports to Counsel for review. Counsel shall review each report and provide the Proxy Coordinator with a brief statement regarding whether or not a material conflict of interest is present. Matters as to which a material conflict of interest is deemed to be present shall be handled as provided in the Fund’s Procedures and Guidelines.

The Adviser shall maintain the records required by Rule 204-2(c)(2), as may be amended from time to time, including the following: (1) A copy of each proxy statement received regarding a Fund’s portfolio securities. Such proxy statements received from issuers are available either in the SEC’s EDGAR database or are kept by the Agent and are available upon request. (2) A record of each vote cast on behalf of a Fund. (3) A copy of any document created by the Adviser that was material to making a decision how to vote a proxy, or that memorializes the basis for that decision. (4) A copy of written requests for Fund proxy voting information and any written response thereto or to any oral request for information on how the Adviser voted proxies on behalf of a Fund. All proxy voting materials and supporting documentation will be retained for a minimum of six (6) years.

Proxy Group for registered investment company clients of ING Investments, LLC, ING Investment Management Co. and Directed Services, LLC:

The following is a statement of the Proxy Voting Guidelines (“Guidelines”) that have been adopted by the respective Boards of Directors or Trustees of each Fund. Unless otherwise provided for herein, any defined term used herein shall have the meaning assigned to it in the Funds’ and Advisers’ Proxy Voting Procedures (the “Procedures”).

Proxies must be voted in the best interest of the Fund(s). The Guidelines summarize the Funds’ positions on various issues of concern to investors, and give a general indication of how Fund portfolio securities will be voted on proposals dealing with particular issues. The Guidelines are not exhaustive and do not include all potential voting issues.

The Adviser, in exercising its delegated authority, will abide by the Guidelines as outlined below with regard to the voting of proxies except as otherwise provided in the Procedures. In voting proxies, the Adviser is guided by general fiduciary principles. It must act prudently, solely in the interest of the beneficial owners of the Funds it manages. The Adviser will not subordinate the interest of beneficial owners to unrelated objectives. The Adviser will vote proxies in the manner that it believes will do the most to maximize shareholder value.

The following Guidelines are grouped according to the types of proposals generally presented to shareholders of U.S. issuers: Board of Directors, Proxy Contests, Auditors, Proxy Contest Defenses, Tender Offer Defenses, Miscellaneous, Capital Structure, Executive and Director Compensation, State of Incorporation, Mergers and Corporate Restructurings, Mutual Fund Proxies and Social and Environmental Issues. An additional section addresses proposals most frequently found in global proxies.

These Guidelines apply to securities of publicly traded companies and to those of privately held companies if publicly available disclosure permits such application. All matters for which such disclosure is not available shall be considered CASE-BY-CASE.

It shall generally be the policy of the Funds to take no action on a proxy for which no Fund holds a position or otherwise maintains an economic interest in the relevant security at the time the vote is to be cast.

In all cases receiving CASE-BY-CASE consideration, including cases not specifically provided for under these Guidelines, unless otherwise provided for under these Guidelines, it shall generally be the policy of the Funds to vote in accordance with the recommendation provided by the Funds’ Agent, Institutional Shareholder Services, Inc.

Unless otherwise provided for herein, it shall generally be the policy of the Funds to vote in accordance with the Agent’s recommendation in cases in which such recommendation aligns with the recommendation of the relevant issuer’s management. However, this policy shall not apply to CASE-BY-CASE proposals for which a contrary recommendation from the Investment Professional for the relevant Fund has been received and is to be utilized, provided that incorporation of any such recommendation shall be subject to the conflict of interest review process required under the Procedures.

Recommendations from the Investment Professionals, while not required under the Procedures, are likely to be considered with respect to proxies for private equity securities and/or proposals related to merger transactions/corporate restructurings, proxy contests related to takeover bids/contested business combinations, or unusual or controversial issues. Such input shall be given primary consideration with respect to CASE-BY-CASE proposals being considered on behalf of the relevant Fund.

Except as otherwise provided for herein, it shall generally be the policy of the Funds not to support proposals that would impose a negative impact on existing rights of the Funds to the extent that any positive impact would not be deemed sufficient to outweigh removal or diminution of such rights.

The foregoing policies may be overridden in any case as provided for in the Procedures. Similarly, the Procedures provide that proposals whose Guidelines prescribe a firm voting position may instead be considered on a CASE-BY-CASE basis in cases in which unusual or controversial circumstances so dictate.

Interpretation and application of these Guidelines is not intended to supersede any law, regulation, binding agreement or other legal requirement to which an issuer may be or become subject. No proposal shall be supported whose implementation would contravene such requirements.


Issuer:
Meeting Date:

1.	To your knowledge, do you, or anyone in your immediate household, have a personal relationship of any sort with the Issuer, its officers, directors, or employees, or might you, or anyone in your immediate household, be affected by the outcome of the proxy proposal? This does not include former business relationships with which you have had no communication for at least one year and have no expectation of future or ongoing communication.

	Explanation:	YES ¨	NO ¨

2.	To your knowledge, (1) does any ING Entity have a Material Business Relationship with the Issuer or (2) is any ING Entity actively seeking to have a Material Business Relationship with the Issuer?

	Explanation:	YES ¨	NO ¨

3.	Have you, or, to your knowledge, anyone else employed by an ING Entity, been contacted by any person or organization, including another ING employee or affiliate, with a recommendation or request that a proxy be voted for (or against) a particular proposal with respect to the Issuer? This includes communications from the Issuer or its Affiliates, from a shareholder, or from a commercial, union or any other special interest group, but would not include routine communications from proxy solicitors.

	Explanation:	YES ¨	NO ¨

4.	Are you aware of any other information that might lead a reasonable person to conclude that an ING Entity appears to have a conflict of interest with respect to the proxy proposal?

	Explanation:	YES ¨	NO ¨


Name		Title or Affiliation
Stanley D. Vyner		Chief Investment Risk Officer and Executive Vice President, ING Investments, LLC

Todd Modic		Senior Vice President, ING Funds Services, LLC and ING Investments, LLC; and Chief Financial Officer of the ING Funds

Maria Anderson		Vice President of Fund Compliance, ING Funds Services, LLC

Karla J. Bos		Proxy Coordinator for the ING Funds and Assistant Vice President – Special Projects, ING Funds Services, LLC

Julius A. Drelick III, CFA		Vice President, Platform Product Management and Project Management, ING Funds Services, LLC

Theresa K. Kelety, Esq.		Counsel, ING Americas US Legal Services

Steve Wastek, Esq.		Counsel, ING Americas US Legal Services


PROPOSAL		Guidelines
THE BOARD OF DIRECTORS

Unless otherwise provided for herein, the Agent’s standards with respect to determining director independence shall apply. These standards generally provide that, to be considered completely


PROPOSAL		Guidelines
independent, a director shall have no material connection to the company other than the board seat. Agreement with the Agent’s independence standards shall not dictate that a Fund’s vote shall be cast according to the Agent’s corresponding recommendation. Where applicable and except as otherwise provided for herein, it shall be the policy of the Funds to lodge disagreement with an issuer’s policies or practices by withholding support from a proposal for the relevant policy or practice rather than the director nominee(s) to which the Agent assigns a correlation. Withholding support from a nominee shall be effected by withholding votes from, or voting against, the candidate, pursuant to the applicable election standard.

Voting on director nominees in uncontested elections not subject to specific policies described herein		Case-by-Case

Voting on independent outside director nominees if application of the policies described herein is likely to result in withholding votes from the majority of independent outside directors sitting on a board, or removal of such directors would negatively impact majority board independence, unless the concerns identified are of such grave nature as to merit removal of the independent directors.		Do Not Withhold

Where applicable and except as otherwise provided for herein, votes in connection with issues raised by the Agent if the nominee did not serve on the board or relevant committee during the majority of the time period relevant to the concerns cited by the Agent.		Do Not Withhold

Votes from a nominee who, during both of the most recent two years, attended less than 75 percent of the board and committee meetings without a valid reason for the absences. Do not withhold votes in connection with attendance issues for nominees who have served on the board for less than the two most recent years.		Withhold

Votes from a nominee in connection with poison pill or anti-takeover considerations (e.g., furtherance of measures serving to disenfranchise shareholders or failure to remove restrictive pill features or ensure pill expiration or submission to shareholders for vote) in cases for which culpability for implementation or renewal of the pill in such form can be specifically attributed to the nominee		Withhold

Provided that a nominee served on the board during the relevant time period, votes from a nominee who has failed to implement a shareholder proposal that was approved by (1) a majority of the issuer’s shares outstanding (most recent annual meeting) or (2) a majority of the votes cast for two consecutive years. However, in the case of shareholder proposals seeking shareholder ratification of a poison pill, generally do not withhold votes from a nominee in such cases if the company has already implemented a policy that should reasonably prevent abusive use of the pill.		Withhold


PROPOSAL		Guidelines
Voting on a nominee who has not acted upon withhold votes representing a majority of the votes cast at the previous annual meeting		Case-by-Case

• Such nominees when (1) the issue relevant to the majority withhold has been adequately addressed or cured or (2) the Funds’ Guidelines or voting record do not support the relevant issue.		For

Votes from inside directors or affiliated outside directors who sit on the audit committee		Withhold

Votes from inside directors or affiliated outside directors who sit on the nominating or compensation committee, provided that such committee meets the applicable independence requirements of the relevant listing exchange.		Do Not Withhold

Votes from inside directors or affiliated outside directors if the full board serves as the compensation or nominating committee OR has not created one or both committees, provided that the issuer is in compliance with all provisions of the listing exchange in connection with performance of relevant functions (e.g., performance of relevant functions by a majority of independent directors in lieu of the formation of a separate committee).		Do Not Withhold

In cases in which the Agent has identified a “pay for performance disconnect,” as defined by the Agent, votes on director nominees.		Do Not Withhold

• Nominees if the Agent has raised other considerations regarding “poor compensation practices,” but where applicable and except as otherwise provided for herein, generally do not withhold votes from nominees who did not serve on the compensation committee, or board, as applicable, during the majority of the time period relevant to the concerns cited by the Agent.		Case-by-Case

Independent outside director nominees serving on the audit committee, but if total non-audit fees exceed the total of audit fees, audit-related fees and tax compliance and preparation fees, do vote against auditor ratification if concerns exist regarding such fees, e.g., that remuneration for the non-audit work is so lucrative as to taint the auditor’s independence or is excessive in connection with the level and type of services provided.		For

It shall generally be the policy of the Funds that a board should be majority independent. Inside director or affiliated outside director nominees in cases in which the full board is not majority independent.		Case-by-Case


PROPOSAL		Guidelines
(1) Votes from the fewest directors whose removal would achieve majority independence across the remaining board.		Withhold

(2) Votes from all non-independent nominees, including the founder, chairman or CEO, if the number required to achieve majority independence is equal to or greater than the number of non-independent nominees.		Withhold

(3) Except as provided above, votes on non-independent nominees in the role of CEO, and when appropriate, founder or chairman. Determine support for other non-independent nominees based on the qualifications and contributions of the nominee as well as the Funds’ voting precedent for assessing relative independence to management, e.g., insiders holding senior executive positions are deemed less independent than affiliated outsiders with a transactional or advisory relationship to the company, and affiliated outsiders with a material transactional or advisory relationship are deemed less independent than those with lesser relationships.		For

(4) Non-voting directors (e.g., director emeritus or advisory director) shall be excluded from calculations with respect to majority board independence.

(5) When conditions contributing to a lack of majority independence remain substantially similar to those in the previous year, it shall generally be the policy of the Funds to vote on nominees in a manner consistent with votes cast by the Fund(s) in the previous year.

Nominees without regard to “over-boarding” issues raised by the Agent, unless other concerns requiring case-by-case consideration have been raised		For

Votes on nominees when the Agent so recommends due to assessment that they acted in bad faith or against shareholder interests in connection with a major transaction, such as a merger or acquisition		Withhold

Performance Test for Directors

• Votes on nominees failing the Agent’s performance test, which includes market-based and operating performance measures, provided that input from the Investment Professional(s) for a given Fund shall be given primary consideration with respect to such proposals.		Case-by-Case

Proposals Regarding Board Composition or Board Service

• Shareholder proposals to impose new board structures or		Against


PROPOSAL		Guidelines
policies, including those requiring that the positions of Chairman and CEO be held separately, except consider such proposals on a case-by-case basis if the board is not majority independent or pervasive corporate governance concerns have been identified.

• Management proposals to adopt or amend board structures or policies, except consider such proposals on a case-by-case basis if the board is not majority independent, pervasive corporate governance concerns have been identified, or the proposal may result in a material reduction in shareholders’ rights.		For

• Shareholder proposals seeking more than a simple majority of independent directors		Against

• Shareholder proposals asking that board compensation and/or nominating committees be composed exclusively of independent directors		Against

• Shareholder proposals to limit the number of public company boards on which a director may serve		Against

• Shareholder proposals that seek to redefine director independence or directors’ specific roles (e.g., responsibilities of the lead director)		Against

• Shareholder proposals requesting creation of additional board committees or offices, except as otherwise provided for herein		Against

• Shareholder proposals that seek creation of an audit, compensation or nominating committee of the board, unless the committee in question is already in existence or the issuer has availed itself of an applicable exemption of the listing exchange (e.g., performance of relevant functions by a majority of independent directors in lieu of the formation of a separate committee)		For

• Shareholder proposals to limit the tenure of outside directors		Against

• Shareholder proposals to impose a mandatory retirement age for outside directors unless the proposal seeks to relax existing standards, but generally do not vote against management proposals seeking to establish a retirement age for directors		Against

Shareholder proposals requiring directors to own a minimum amount of company stock in order to qualify as a director or to remain on the board		Against

Director and Officer Indemnification and Liability Protection		Case-by-Case


PROPOSAL		Guidelines
• Limit or eliminate entirely directors’ and officers’ liability for monetary damages for violating the duty of care		Against

• Proposals that would expand coverage beyond just legal expenses to acts, such as negligence, that are more serious violations of fiduciary obligation than mere carelessness		Against

• Proposals providing such expanded coverage in cases when a director’s or officer’s legal defense was unsuccessful if:		For

(1) The director was found to have acted in good faith and in a manner that he reasonably believed was in the best interests of the company, and

(2) Only if the director’s legal expenses would be covered

PROXY CONTESTS

Input from the Investment Professional(s) for a given Fund shall be given primary consideration with respect to proposals in connection with proxy contests related to takeover bids or other contested business combinations being considered on behalf of that Fund.

Voting for director nominees in contested elections		Case-by-Case

Reimburse proxy solicitation expenses		Case-by-Case

AUDITORS

Management proposals to ratify auditors, except in cases of high non-audit fees		For

Non-Audit Services

• Approval of auditors when total non-audit fees exceed the total of audit fees, audit-related fees and tax compliance and preparation fees. Vote against management proposals to ratify auditors in cases in which concerns exist that remuneration for the non-audit work is so lucrative as to taint the auditor’s independence. If such concerns exist or an issuer has a history of questionable accounting practices, also vote for shareholder proposals asking the issuer to present its auditor annually for ratification, but in other cases generally vote against.		Case-by-Case

Auditor Independence

• Shareholder proposals asking companies to prohibit their auditors from engaging in non-audit services or capping the level of non-audit services		Case-by-Case


PROPOSAL		Guidelines
Audit Firm Rotation

• Shareholder proposals asking for mandatory audit firm rotation		Against

PROXY CONTEST DEFENSES

Board Structure: Staggered vs. Annual Elections

• Proposals to classify		Against

• Proposals to repeal classified boards and to elect all directors annually		For

Shareholder Ability to Remove Directors

• Proposals that provide that directors may be removed only for cause		Against

• Proposals to restore shareholder ability to remove directors with or without cause		For

• Proposals that provide that only continuing directors may elect replacement to fill board vacancies		Against

• Proposals that permit shareholders to elect directors to fill board vacancies		For

Cumulative Voting

• Management proposals to eliminate cumulative voting, unless the company maintains a classified board of directors		For

• Shareholder proposals to restore or permit cumulative voting, in cases in which the company maintains a classified board of directors		For

Time-Phased Voting

• Proposals to implement time-phased or other forms of voting that do not promote a one share, one vote standard		Against

• Proposals to eliminate such forms of voting		For

Shareholder Ability to Call Special Meetings

• Proposals to restrict or prohibit shareholder ability to call special meetings		Against

• Proposals that remove restrictions on the right of shareholders to act independently of management		For


PROPOSAL		Guidelines
Shareholder Ability to Act by Written Consent

• Proposals to restrict or prohibit shareholder ability to take action by written consent		Against

• Proposals to allow or make easier shareholder action by written consent		For

Shareholder Ability to Alter the Size of the Board

• Proposals that seek to fix the size of the board		Case-by-Case

• Proposals that give management the ability to alter the size of the board without shareholder approval		Against

TENDER OFFER DEFENSES

Poison Pills

• Proposals that ask a company to submit its poison pill for shareholder ratification, or to redeem its pill in lieu thereof, unless:		For

(1) shareholders have approved adoption of the plan, (2) a policy has already been implemented by the company that should reasonably prevent abusive use of the pill, or (3) the board had determined that it was in the best interest of shareholders to adopt a pill without delay, provided that such plan would be put to shareholder vote within twelve months of adoption or expire, and if not approved by a majority of the votes cast, would immediately terminate		Against

• Shareholder proposals to redeem a company’s poison pill		Case-by-Case

• Management proposals to approve or ratify a poison pill or any plan that can reasonably be construed as an anti-takeover measure, with voting decisions generally based on the Agent’s approach to evaluating such proposals, considering factors such as rationale, trigger level and sunset provisions. Votes will generally be cast in a manner that seeks to preserve shareholder value and the right to consider a valid offer.		Case-by-Case

• Management proposals in connection with poison pills or anti-takeover activities that do not meet the Agent’s standards		Against

Fair Price Provisions

• Proposals to adopt fair price provisions		Case-by-Case


PROPOSAL		Guidelines
• Fair price provisions with shareholder vote requirements greater than a majority of disinterested shares		Against

Greenmail

• Proposals to adopt antigreenmail charter or bylaw amendments or otherwise restrict a company’s ability to make greenmail payments		For

• Antigreenmail proposals when they are bundled with other charter or bylaw amendments		Case-by-Case

Pale Greenmail		Case-by-Case

Unequal Voting Rights

• Dual-class exchange offers		Against

• Dual-class recapitalizations		Against

Supermajority Shareholder Vote Requirement to Amend the Charter or Bylaws

• Management proposals to require a supermajority shareholder to approve charter and bylaw amendments or other key proposals		Against

• Shareholder proposals to lower supermajority shareholder vote requirements for charter and bylaw amendments, unless the proposal also asks the issuer to mount a solicitation campaign or similar form of comprehensive commitment to obtain passage of the proposal		For

Supermajority Shareholder Vote Requirement to Approve Mergers

• Management proposals to require a supermajority shareholder vote to approve mergers and other significant business combinations		Against

• Shareholder proposals to lower supermajority shareholder vote requirements for mergers and other significant business combinations		For

White Squire Replacements		For

Amendments to Corporate Documents

• Unless support is recommended by the Agent or Investment Professional (including, for example, as a condition to a major transaction such as a merger), proposals seeking to remove shareholder approval requirements or otherwise remove or diminish shareholder rights, e.g., by:		Against

(1) adding restrictive provisions,


PROPOSAL		Guidelines
(2) removing article provisions or moving them to portions of the charter not requiring shareholder approval or (3) in corporate structures such as holding companies, removing provisions in an active subsidiary’s charter that provide voting rights to parent company shareholders. This policy would also generally apply to proposals seeking approval of corporate agreements or amendments to such agreements that the Agent recommends against because a similar reduction in shareholder rights is requested.

• Proposals for charter amendments that may support board entrenchment or may be used as an anti-takeover device, particularly if the proposal is bundled or the board is classified		Against

• Proposals seeking charter or bylaw amendments to remove anti-takeover provisions		For

MISCELLANEOUS

Shareholder proposals to adopt confidential voting, use independent tabulators, and use independent inspectors of election		For

Management proposals to adopt confidential voting		For

Open Access

• Shareholder proposals seeking open access to management’s proxy material in order to nominate their own candidates to the board		Case-by-Case

Majority Voting Standard

• Management proposals, and shareholder proposals also supported by management, seeking election of directors by the affirmative vote of the majority of votes cast in connection with a meeting of shareholders, including amendments to corporate documents or other actions in furtherance of such standard, and provided such standard when supported does not conflict with state law in which the company is incorporated		For

• Shareholder proposals not otherwise supported by management seeking adoption of the majority voting standard or related amendments or actions		Against

• Proposals seeking adoption of the majority voting standard for issuers with a history of board malfeasance or pervasive corporate governance concerns		Case-by-Case


PROPOSAL		Guidelines
Bundled or “Conditioned” Proxy Proposals		Case-by-Case

• Proposals containing one or more items not supported under these Guidelines if the Agent or an Investment Professional deems the negative impact, on balance, to outweigh any positive impact		Against

Shareholder Advisory Committees		Case-by-Case

Reimburse Shareholder for Expenses Incurred

• Proposals to reimburse expenses incurred in connection with shareholder proposals, with voting decisions determined based on the Agent’s criteria, considering whether the related proposal received the requisite support for approval and was adopted for the benefit of the company and its shareholders		Case-by-Case

Management proposals for Other Business, in connection with proxies of U.S. issuers, except in connection with a proxy contest in which a Fund is not voting in support of management		For

Proposals to lower quorum requirements for shareholder meetings below a majority of the shares outstanding		Case-by-Case

Advance Notice for Shareholder Proposals

• Management proposals related to advance notice period requirements, provided that the period requested is in accordance with applicable law and no material governance concerns have been identified in connection with the issuer		For

CAPITAL STRUCTURE

Common Stock Authorization

• Proposals to increase the number of shares of common stock, taking into consideration whether intention exists to significantly dilute shareholders proportionate interest or to be unduly dilutive to shareholders’ proportionate interest. Except where otherwise indicated, the Agent’s proprietary approach, utilizing quantitative criteria (e.g., dilution, peer group comparison, company performance and history) to determine appropriate thresholds and, for requests marginally above such allowable threshold, a qualitative review (e.g., rationale and prudent historical usage), will generally be utilized in evaluating such proposals.		Case-by-Case


PROPOSAL		Guidelines
• Proposals to authorize capital increases within the Agent’s allowable thresholds or those in excess but meeting Agent’s qualitative standards. Consider on a case-by-case basis those requests failing the Agent’s review for proposals in connection with which a contrary recommendation from the Investment Professional(s) has been received and is to be utilized (e.g., in support of a merger or acquisition proposal).		For

• Proposals to authorize capital increases within the Agent’s allowable thresholds or those in excess but meeting Agent’s qualitative standards, unless the company states that the stock may be used as a takeover defense. In those cases, consider on a case-by-case basis if a contrary recommendation from the Investment Professional(s) has been received and is to be utilized.		For

• Proposals to authorize capital increases exceeding the Agent’s thresholds when a company’s shares are in danger of being delisted or if a company’s ability to continue to operate as a going concern is uncertain.		For

• Proposals to increase the number of authorized shares of a class of stock if the issuance which the increase is intended to service is not supported under these Guidelines.		Against

Dual Class Capital Structures

• Proposals to increase the number of authorized shares of the class of stock that has superior voting rights in companies that have dual class capital structures, but consider case-by-case if bundled with favorable proposal(s) or if approval of such proposal(s) is a condition of such favorable proposal(s)		Against

• Management proposals to create or perpetuate dual class capital structures with unequal voting rights in cases in which the relevant Fund owns the class with inferior voting rights (except consider case-by-case if bundled with favorable proposal(s) or if approval of such proposal(s) is a condition of such favorable proposal(s)), but generally vote for such proposals if the relevant Fund owns the class with superior voting rights		Against

• Shareholder proposals to eliminate dual class capital structures with unequal voting rights in cases in which the relevant Fund owns the class with inferior voting rights, but generally vote against such proposals if the relevant Fund owns the class with superior voting rights, and consider case-by-case if bundled with favorable proposal(s) or if approval of such proposal(s) is a condition of such favorable proposal(s)		For


PROPOSAL		Guidelines
• Management proposals to eliminate dual class capital structures, generally voting with the Agent’s recommendation unless a contrary recommendation has been received from the Investment Professional for the relevant Fund and is to be utilized		Case-by-Case

Stock Distributions: Splits and Dividends

• Management proposals to increase common share authorization for a stock split, provided that the increase in authorized shares falls within the Agent’s allowable thresholds, but consider on a case-by-case basis those proposals exceeding the Agent’s threshold for proposals in connection with which a contrary recommendation from the Investment Professional(s) has been received and is to be utilized		For

Reverse Stock Splits

• Management proposals to implement a reverse stock split when the number of shares authorized for issue is proportionately reduced		For

• Proposals to implement a reverse stock split that do not proportionately reduce the number of shares of authorized for issue		Case-by-Case

• Requests that do not proportionately reduce the number of shares authorized and effectively exceed the Agent’s allowable threshold for capital increase if the Agent otherwise supports management’s rationale		For

Preferred Stock

• Proposals authorizing the issuance of preferred stock or creation of new classes of preferred stock with unspecified voting, conversion, dividend distribution, and other rights (“blank check” preferred stock), but vote for if the Agent or an Investment Professional so recommends because the issuance is required to effect a merger or acquisition proposal		Against

• Proposals to issue or create blank check preferred stock in cases where the company expressly states that the stock will not be used as a takeover defense. Generally vote against in cases where the company expressly states that, or fails to disclose whether, the stock may be used as a takeover defense, but vote for if the Agent or an Investment Professional so recommends because the issuance is required to effect a merger or acquisition proposal		For


PROPOSAL		Guidelines
• Proposals to issue or authorize preferred stock in cases where the company specified the voting, dividend, conversion, and other rights of such stock and the terms of the preferred stock appear reasonable		For

• Proposals to increase the number of blank check preferred shares after analyzing the number of preferred shares available for issue given a company’s industry performance in terms of shareholder returns		Case-by-Case

Shareholder proposals to have blank check preferred stock placements, other than those shares issued for the purpose of raising capital or making acquisitions in the normal course of business, submitted for shareholder ratification		For

Management Proposals to Reduce the Par Value of Common Stock		For

Shareholder Proposals that Seek Preemptive Rights or Management Proposals that Seek to Eliminate Them		Case-by-Case

Debt Restructuring		Case-by-Case

Share Repurchase Programs

• Proposals for open-market share repurchase plans in which all shareholders may participate on equal terms		For

• Proposals for programs with terms favoring selected, non-Fund parties		Against

• Proposals for share repurchase methods lacking adequate risk mitigation as assessed by the Agent		Against

Management Proposals to Cancel Repurchased Shares		For

Tracking Stock		Case-by-Case

EXECUTIVE AND DIRECTOR COMPENSATION

Votes with respect to compensation and employee benefit plans, unless otherwise provided for herein, with voting decisions generally based on the Agent’s quantitative approach to evaluating such plans, which includes determination of costs and comparison to an allowable cap.		Case-by-Case

• Generally vote in accordance with the Agent’s recommendations for equity-based plans with costs within such cap and against those with costs in excess of it, except that plans above the cap may be supported if so recommended by the Agent or Investment Professional as a condition to a major transaction such as a merger.


PROPOSAL		Guidelines
• Proposals seeking approval of plans for which the Agent suggests cost or dilution assessment may not be possible due to the method of disclosing shares allocated to the plan(s), except that such concerns arising in connection with evergreen provisions shall be considered case-by-case		Against

• Proposals for plans with costs within the cap if the considerations raised by the Agent pertain solely to equity compensation burn rate or pay for performance as defined by the Agent		For

• Proposals for plans administered by potential grant recipients		Against

• Proposals for plans for which the Agent raises other considerations not otherwise provided for herein		Case-by-Case

Restricted Stock or Stock Option Plans

• Proposals for restricted stock or stock option plans, or the issuance of shares in connection with such plans, considering factors such as level of disclosure and adequacy of vesting or performance requirements. Proposals for plans that do not meet the Agent’s criteria in this regard may be supported, but vote against if no disclosure is provided regarding either vesting or performance requirements.		Case-by-Case

Management Proposals Seeking Approval to Reprice, Replace or Exchange Options, considering factors such as rationale, historic trading patterns, value-for-value exchange, vesting periods and replacement option terms		Case-by-Case

• Proposals that meet the Agent’s criteria for acceptable repricing, replacement or exchange transactions, except that considerations raised by the Agent regarding burn rate or executive participation shall not be grounds for withholding support		For

• Management proposals seeking approval of compensation plans that: (1) permit or may permit (e.g., history of repricing and no express prohibition against future repricing) repricing of stock options, or any form or alternative to repricing, without shareholder approval, (2) include provisions that permit repricing, replacement or exchange transactions that do not meet the Agent’s criteria (except regarding burn rate or executive participation as noted above), or		Against


PROPOSAL		Guidelines
(3) give the board sole discretion to approve option repricing, replacement or exchange programs

Director Compensation, with voting decisions generally based on the Agent’s quantitative approach described above as well as a review of qualitative features of the plan in cases in which costs exceed the Agent’s threshold. Do not vote against plans for which burn rate is the sole consideration raised by the Agent.		Case-by-Case

Employee Stock Purchase Plans, and capital issuances in support of such plans, with voting decisions generally based on the Agent’s approach to evaluating such plans, except that negative recommendations by the Agent due to evergreen provisions will be reviewed case-by-case.		Case-by-Case

OBRA-Related Compensation Proposals

• Amendments that Place a Cap on Annual Grants or Amend Administrative Features		For

• Amendments to Add Performance-Based Goals		For

• Amendments to Increase Shares and Retain Tax Deductions Under OBRA		Case-by-Case

• Approval of Cash or Cash-and-Stock Bonus Plan, with primary consideration given to management’s assessment that such plan meets the requirements for exemption of performance-based compensation		For

Shareholder Proposals Regarding Executive and Director Pay

• Regarding the remuneration of individuals other than senior executives and directors, proposals that seek to expand or restrict disclosure or require shareholder approval beyond regulatory requirements and market practice, or proposals seeking disclosure of executive and director compensation if providing it would be out of step with market practice and potentially disruptive to the business		Against

• Proposals that seek to impose new compensation structures or policies, such as “claw back” recoupments or advisory votes, unless evidence exists of abuse in historical compensation practices, and except as otherwise provided for herein		Against

Golden and Tin Parachutes

• Shareholder proposals to have golden and tin parachutes submitted for shareholder ratification, provided that such		For


PROPOSAL		Guidelines
“parachutes” specify change-in-control events and that the proposal does not include unduly restrictive or arbitrary provisions such as advance approval requirements

• Shareholder proposals to submit executive severance agreements that do not specify change-in-control events; Supplemental Executive Retirement Plans; or deferred executive compensation plans for shareholder ratification, unless such ratification is required by the listing exchange		Against

• All proposals to ratify or cancel golden or tin parachutes		Case-by-Case

Employee Stock Ownership Plans (ESOPs)		For

401(k) Employee Benefit Plans		For

Shareholder proposals to expense stock options, unless company has already publicly committed to expensing options by a specific date		For

Shareholder proposals requiring mandatory periods for officers and directors to hold company stock		Against

STATE OF INCORPORATION

Voting on State Takeover Statutes		Case-by-Case

Voting on Reincorporation Proposals, generally supporting management proposals not assessed by the Agent as a potential takeover defense		Case-by-Case

• Management reincorporation proposals upon which another key proposal, such as a merger transaction, is contingent if the other key proposal is also supported		For

• Shareholder reincorporation proposals not also supported by the company		Against

MERGERS AND CORPORATE RESTRUCTURINGS

Input from the Investment Professional(s) for a given Fund shall be given primary consideration with respect to proposals regarding business combinations, particularly those between otherwise unaffiliated parties, or other corporate restructurings being considered on behalf of that Fund.

Proposals not typically supported under these Guidelines, if a key proposal, such as a merger transaction, is contingent upon its support and a vote for is accordingly recommended by the Agent or an Investment Professional		For


PROPOSAL		Guidelines
Mergers and Acquisitions		Case-by-Case

Corporate Restructuring, including demergers, minority squeezeouts, leveraged buyouts, spinoffs, liquidations, dispositions, divestitures and asset sales, with voting decisions generally based on the Agent’s approach to evaluating such proposals		Case-by-Case

Appraisal Rights		For

Changing Corporate Name		For

Adjournment of Meeting

• Proposals to adjourn a meeting when the primary proposal is also voted FOR		For

MUTUAL FUND PROXIES

Election of Directors		Case-by-Case

Converting Closed-end Fund to Open-end Fund		Case-by-Case

Proxy Contests		Case-by-Case

Investment Advisory Agreements		Case-by-Case

Approving New Classes or Series of Shares		For

Preferred Stock Proposals		Case-by-Case

1940 Act Policies		Case-by-Case

Changing a Fundamental Restriction to Nonfundamental Restriction		Case-by-Case

Change Fundamental Investment Objective to Nonfundamental		Case-by-Case

Name Rule Proposals		Case-by-Case

Disposition of Assets/Termination/Liquidation		Case-by-Case

Changes to the Charter Document		Case-by-Case

Changing the Domicile of a Fund		Case-by-Case

Change in Fund’s Subclassification		Case-by-Case

Authorizing the Board to Hire and Terminate Subadvisors Without Shareholder Approval		For

Distribution Agreements		Case-by-Case

Master-Feeder Structure		For

Mergers		Case-by-Case


PROPOSAL		Guidelines
Shareholder Proposals to Establish Director Ownership Requirement		Against

Reimburse Shareholder for Expenses Incurred		Case-by-Case

Terminate the Investment Advisor		Case-by-Case

SOCIAL AND ENVIRONMENTAL ISSUES

Unless otherwise specified herein. While a wide variety of factors may go into each analysis, the overall principle guiding all vote recommendations focuses on how or whether the proposal will enhance the economic value of the company. Because a company’s board is likely to have access to relevant, non-public information regarding a company’s business, such proposals will generally be voted in a manner intended to give the board (rather than shareholders) latitude to set corporate policy and oversee management.		Case-by-Case

Shareholder proposals seeking to dictate corporate conduct, apply existing law, duplicate policies already substantially in place and/or addressed by the issuer or release information that would not help a shareholder evaluate an investment in the corporation as an economic matter, absent concurring support from the issuer, compelling evidence of abuse, significant public controversy or litigation, the issuer’s significant history of relevant violations; or activities not in step with market practice or regulatory requirements, or unless provided for otherwise herein. • Such proposals would generally include those seeking preparation of reports and/or implementation or additional disclosure of corporate policies related to issues such as: • consumer and public safety • environment and energy • labor standards and human rights • military business and political concerns • workplace diversity and non-discrimination • sustainability • social issues • vendor activities • economic risk, or • matters of science and engineering		Against


PROPOSAL		Guidelines
GLOBAL PROXIES

The foregoing Guidelines provided in connection with proxies of U.S. issuers shall also be applied to global proxies where applicable and not provided for otherwise herein. The following provide for differing regulatory and legal requirements, market practices and political and economic systems existing in various global markets.

Proposals in cases in which the Agent recommends voting against such proposal because relevant disclosure by the issuer, or the time provided for consideration of such disclosure, is inadequate, unless otherwise provided for herein. For purposes of these global Guidelines, “against” shall mean withholding of support for a proposal, resulting in submission of a vote of against or abstain, as appropriate for the given market and level of concern raised by the Agent regarding the issue or lack of disclosure or time provided.		Against

Proposals for which the Agent recommends support of practices described herein as associated with a firm against vote: (1) as the issuer or market transitions to better practices (e.g., having committed to new regulations or governance codes) or (2) as the more favorable choice in cases in which shareholders must choose between alternate proposals		Case-by-Case

Routine Management Proposals		For

• The opening of the shareholder meeting		For

• That the meeting has been convened under local regulatory requirements		For

• The presence of quorum		For

• The agenda for the shareholder meeting		For

• The election of the chair of the meeting		For

• The appointment of shareholders to co-sign the minutes of the meeting		For

• Regulatory filings (e.g., to effect approved share issuances)		For

• The designation of inspector or shareholder representative(s) of minutes of meeting		For

• The designation of two shareholders to approve and sign minutes of meeting		For

• The allowance of questions		For


PROPOSAL		Guidelines
• The publication of minutes		For

• The closing of the shareholder meeting		For

• Other similar routine management proposals		For

Discharge of Management/Supervisory Board Members

• Management proposals seeking the discharge of management and supervisory board members, unless the Agent recommends against due to concern about the past actions of the company’s auditors or directors or legal action is being taken against the board by other shareholders, including when the proposal is bundled		For

Director Elections

• Votes on director nominees in contested elections, or in uncontested elections not subject to policies described herein. Unless otherwise provided for herein, the Agent’s standards with respect to determining director independence shall apply. These standards generally provide that, to be considered completely independent, a director shall have no material connection to the company other than the board seat. Agreement with the Agent’s independence standards shall not dictate that a Fund’s vote shall be cast according to the Agent’s corresponding recommendation. Further, the application of Guidelines in connection with such standards shall apply only in cases in which the nominee’s level of independence can be ascertained based on available disclosure.		Case-by-Case

• For issuers domiciled in Canada, Finland, France, Ireland, the Netherlands, Sweden or tax haven markets, non-independent directors in cases in which the full board serves as the audit committee, or the company does not have an audit committee		Against

• For issuers in all markets, including those in tax haven markets and those in Japan that have adopted the U.S.-style board-with-committees structure, non-independent directors who sit on the audit committee, or, if the slate of nominees is bundled, the slate. However, if the slate is bundled and audit committee membership is unclear, vote for if the Agent otherwise recommends support.		Against

• In tax haven markets, non-independent directors in cases in which the full board serves as the compensation committee, or the company does not have a compensation committee		Do Not Vote Against

• Non-independent directors who sit on the compensation or		Do Not Vote Against


PROPOSAL		Guidelines
nominating committees, provided that such committees meet the applicable independence requirements of the relevant listing exchange

• In cases in which committee membership is unclear, non-independent director nominees if no other issues have been raised in connection with his/her nomination		Case-by-Case

• Individuals nominated as outside/non-executive directors who do not meet the Agent’s standard for independence, unless the slate of nominees is bundled, in which case the proposal(s) to elect board members shall be considered on a case-by-case basis		Against

• For issuers in Canada and tax haven markets, votes on bundled slates of nominees if the board is non-majority independent. For issuers in other global markets, generally follow Agent’s standards for withholding support from bundled slates or non-independent directors excluding the CEO, as applicable, if the board is non-majority independent or the board’s independence cannot be ascertained due to inadequate disclosure.		Against

• Nominees or slates of nominees presented in a manner not aligned with market practice and/or legislation, including: • Bundled slates of nominees (e.g., Hong Kong or France); • Simultaneous reappointment of retiring directors (e.g., South Africa); • In markets with term lengths capped by legislation or market practice, nominees whose terms exceed the caps or are not disclosed (except that bundled slates with such lack of disclosure shall be considered on a case-by-case basis); or		Against

• Nominees whose names are not disclosed in advance of the meeting (e.g., Austria, Philippines, Hong Kong or South Africa) • Such criteria will not generally provide grounds for withholding support in countries in which they may be identified as best practice but such legislation or market practice is not yet applicable, unless specific governance shortfalls identified by the Agent dictate that less latitude should be extended to the issuer.

• In cases in which cumulative or net voting applies, generally vote with Agent’s recommendation to support nominees asserted by the issuer to be independent, even if independence disclosure or criteria fall short of Agent’s standards.


PROPOSAL		Guidelines
• Nominees for whom the Agent has raised concerns regarding scandals or internal controls		Case-by-Case

• Nominees or slates of nominees when (1) the scandal or shortfall in controls took place at the company, or an affiliate, for which the nominee is being considered; (2) culpability can be attributed to the nominee (e.g., nominee manages or audits relevant function), and (3) the nominee has been directly implicated, with resulting arrest and criminal charge or regulatory sanction.		Against

• For markets such as the tax havens, Canada, Australia, South Africa and Malaysia (and for outside directors in South Korea) in which nominees’ attendance records are adequately disclosed, the Funds’ U.S. Guidelines with respect to director attendance shall apply.

• Self-nominated director candidates, with voting decisions generally based on the Agent’s approach to evaluating such candidates		Case-by-Case

• Nominees for whom “over-boarding” issues have been raised by the Agent, unless other concerns require case-by-case consideration		For

• For companies incorporated in tax haven markets but which trade exclusively in the U.S., the Funds’ U.S. Guidelines with respect to director elections shall apply.

Board Structure

• Proposals to fix board size, but also support proposals seeking a board range if the range is reasonable in the context of market practice and anti-takeover considerations		For

• Proposed article amendments in this regard, with voting decisions generally based on the Agent’s approach to evaluating such proposals		Case-by-Case

Director and Officer Indemnification and Liability Protection, voting in accordance with the Agent’s standards		Case-by-Case

• Proposals seeking approval of overly broad provisions		Against

Independent Statutory Auditors

• With respect to Japanese companies that have not adopted the U.S.-style board-with-committees structure, any nominee to the		Against


PROPOSAL		Guidelines
position of “independent statutory auditor” whom the Agent considers affiliated, e.g., if the nominee has worked a significant portion of his career for the company, its main bank or one of its top shareholders. Where shareholders are forced to vote on multiple nominees in a single resolution, vote against all nominees.

• Incumbent nominees at companies implicated in scandals or exhibiting poor internal controls		Against

Key Committees

• Proposals that permit non-board members to serve on the audit, compensation or nominating committee, provided that bundled slates may be supported if no slate nominee serves on the relevant committee(s)		Against

Director Remuneration, with voting decisions generally based on the Agent’s approach to evaluating such proposals, while also factoring in the merits of the rationale and disclosure provided		Case-by-Case

• Proposals to approve the remuneration of directors as long as the amount is not excessive and there is no evidence of abuse		For

Retirement Bonuses

With respect to Japanese companies:

• Proposals if all payments are for directors and auditors who have served as executives of the company		For

• Proposals if one or more payments are for non-executive, affiliated directors or statutory auditors; when one or more of the individuals to whom the grants are being proposed (1) has not served in an executive capacity for the company for at least three years or (2) has been designated by the company as an independent statutory auditor, regardless of the length of time he/she has served		Against

• If Agent raises scandal or internal control considerations, bonus proposals only for nominees whom a Fund is also voting against for that reason, unless bundled with bonuses for a majority of retirees a Fund is voting for		Against

Stock Option Plans for Independent Internal Statutory Auditors

• With respect to Japanese companies, proposals regarding option grants to independent internal statutory auditors, following the Agent’s guidelines		Against


PROPOSAL		Guidelines
Compensation Plans

• Votes with respect to compensation plans, and awards thereunder or capital issuances in support thereof, unless otherwise provided for herein, with voting decisions generally based on the Agent’s approach to evaluating such plans, considering quantitative or qualitative factors as appropriate for the market		Case-by-Case

Amendment Procedures for Equity Compensation Plans and ESPPs

• For Toronto (Canada) Stock Exchange issuers, votes with respect to amendment procedures for security-based compensation arrangements and employee share purchase plans shall generally be cast in a manner designed to preserve shareholder approval rights, with voting decisions generally based on the Agent’s recommendation.

Shares Reserved for Equity Compensation Plans

• Unless otherwise provided for herein, voting decisions shall generally be based on the Agent’s methodology, including classification of a company’s stage of development as growth or mature and the corresponding determination as to reasonability of the share requests.

• Equity compensation plans (e.g., option, warrant, restricted stock or employee share purchase plans or participation in company offerings such as IPOs or private placements), the issuance of shares in connection with such plans, or related management proposals that:		Against

• Exceed Agent’s recommended dilution limits, including cases in which Agent suggests dilution assessment is precluded by inadequate disclosure; • Provide deep or near-term discounts to executives or directors, unless discounts to executives are deemed by the Agent to be adequately mitigated by other vesting requirements (e.g., Japan); • Are administered by potential grant recipients; • Permit financial assistance in the form of non-recourse (or essentially non-recourse) loans in connection with executive’s participation; • For matching share plans, do not meet the Agent’s standards, considering holding period, discounts, dilution, purchase price and performance criteria;


PROPOSAL		Guidelines
• Provide for vesting upon change in control if deemed by the Agent to evidence a conflict of interest or anti-takeover device; • Provide no disclosure regarding vesting or performance criteria (provided that proposals providing disclosure in one or both areas, without regard to Agent’s criteria for such disclosure, shall be supported provided they otherwise satisfy these Guidelines); • Allow plan administrators to make material amendments without shareholder approval unless adequate prior disclosure has been provided, with such voting decisions generally based on the Agent’s approach to evaluating such plans; or • Provide for retesting in connection with achievement of performance hurdles unless the Agent’s analysis indicates that: (1) Performance targets are adequately increased in proportion to the additional time available, (2) Retesting is de minimis as a percentage of overall compensation or is acceptable relative to market practice, or (3) The issuer has committed to cease retesting within a reasonable period of time.

• Such plans/awards or the related issuance of shares that: (1) Do not suffer from the defects noted above or (2) Otherwise meet the Agent’s tests if the considerations raised by the Agent pertain primarily to performance hurdles, contract or notice periods, discretionary bonuses or vesting upon change in control (other than addressed above), provided the company has provided a reasonable rationale in support of the relevant plan/award, practice or participation		For

• Proposals in connection with such plans or the related issuance of shares in other instances		Case-by-Case

Remuneration Reports

• Reports that include compensation plans permitting: (1) Practices or features not supported under these Guidelines, including financial assistance under the conditions described above; (2) Retesting deemed by the Agent to be excessive relative to market practice (irrespective of the Agent’s support for the report as a whole);		Against


PROPOSAL		Guidelines
(3) Equity award valuation triggering a negative recommendation from the Agent; or (4) Provisions for retirement benefits or equity incentive awards to outside directors if not in line with market practice, except that reports will generally be voted for if contractual components are reasonably aligned with market practices on a going-forward basis (e.g., existing obligations related to retirement benefits or terms contrary to evolving standards would not preclude support for the report)

• Reports receiving the Agent’s support and not triggering the concerns cited above		For

• Unless otherwise provided for herein, reports not receiving the Agent’s support due to concerns regarding severance/termination payments, “leaver” status, incentive structures and vesting or performance criteria not otherwise supported by these Guidelines. Reports with unsupported features may be voted for in cases in which the Agent recommends their initial support as the issuer or market transitions to better practices (e.g., having committed to new regulations or governance codes).		Case-by-Case

Shareholder Proposals Regarding Executive and Director Pay

• The Funds’ U.S. Guidelines with respect to such shareholder proposals shall apply.

General Share Issuances

• Unless otherwise provided for herein, voting decisions shall generally be based on the Agent’s practice to support general issuance requests with preemptive rights to a maximum of 100 percent over currently issued capital, general issuance requests without preemptive rights to a maximum of 20 percent of currently issued capital, and requests to reissue repurchased shares if the related general issuance request is also supported.		For

• Specific issuance requests, based on the proposed use and the company’s rationale		Case-by-Case

• Proposals to issue shares (with or without preemptive rights), or to grant rights to acquire shares, in cases in which concerns have been identified by the Agent with respect to inadequate disclosure, inadequate restrictions on discounts, or authority to refresh share issuance amounts without prior shareholder approval		Against


PROPOSAL		Guidelines
Increases in Authorized Capital

• Unless otherwise provided for herein, voting decisions should generally be based on the Agent’s approach.

• Nonspecific proposals, including bundled proposals, to increase authorized capital up to 100 percent over the current authorization unless the increase would leave the company with less than 30 percent of its new authorization outstanding		For

• Specific proposals to increase authorized capital, unless:		For

• The specific purpose of the increase (such as a share-based acquisition or merger) does not meet these Guidelines for the purpose being proposed; or • The increase would leave the company with less than 30 percent of its new authorization outstanding after adjusting for all proposed issuances		Against

• Proposals to adopt unlimited capital authorizations		Against

• The Agent’s market-specific exceptions to the above parameters (e.g., The Netherlands, due to hybrid market controls) shall be applied.

Preferred Stock

• Unless otherwise provided for herein, voting decisions should generally be based on the Agent’s approach.

• Creation of a new class of preferred stock or issuances of preferred stock up to 50 percent of issued capital unless the terms of the preferred stock would adversely affect the rights of existing shareholders		For

• Creation/issuance of convertible preferred stock as long as the maximum number of common shares that could be issued upon conversion meets the Agent’s guidelines on equity issuance requests		For

• Creation of (1) a new class of preference shares that would carry superior voting rights to the common shares or (2) blank check preferred stock unless the board states that the authorization will not be used to thwart a takeover bid		Against

Poison Pills/Protective Preference Shares

• Management proposals in connection with poison pills or anti-takeover activities (e.g., issuances, transfers or repurchases) that		Against


PROPOSAL		Guidelines
do not meet the Agent’s standards. Generally vote in accordance with Agent’s recommendation to withhold support from a nominee in connection with poison pill or anti-takeover considerations when culpability for the actions can be specifically attributed to the nominee.

• Director remuneration in connection with poison pill considerations raised by the Agent.		Do Not Vote Against

Approval of Financial Statements and Director and Auditor Reports

• Management proposals seeking approval of financial accounts and reports, unless there is concern about the company’s financial accounts and reporting, which, in the case of related party transactions, would include concerns raised by the Agent regarding consulting agreements with non-executive directors		For

• Such proposals in connection with remuneration practices otherwise supported under these Guidelines or as a means of expressing disapproval of broader practices of the issuer or its board		Do Not Vote Against

Remuneration of Auditors

• Proposals to authorize the board to determine the remuneration of auditors, unless there is evidence of excessive compensation relative to the size and nature of the company		For

Indemnification of Auditors		Against

Ratification of Auditors and Approval of Auditors’ Fees, generally following the Agent’s standards for proposals seeking auditor ratification or approval of auditors’ fees

• Such proposals for companies in the MSCI EAFE index, provided the level of audit fee disclosure meets the Agent’s standards		For

• In other cases, such proposals unless there are material concerns raised by the Agent about the auditor’s practices or independence		For

Allocation of Income and Dividends

• Management proposals concerning allocation of income and the distribution of dividends		For

Stock (Scrip) Dividend Alternatives		For

• Stock (scrip) dividend proposals that do not allow for a cash option unless management demonstrates that the cash option is harmful to shareholder value		Against


PROPOSAL		Guidelines
Debt Instruments

• Proposals authorizing excessive discretion, as assessed by the Agent, to a board to issue or set terms for debt instruments (e.g., commercial paper)		Against

Debt Issuance Requests		Case-by-Case

When evaluating a debt .issuance request, the issuing company’s present financial situation is examined. The main factor for analysis is the company’s current debt-to-equity ratio, or gearing level. A high gearing level may incline markets and financial analysts to downgrade the company’s bond rating, increasing its investment risk factor in the process. A gearing level up to 100 percent is considered acceptable.

• Debt issuances for companies when the gearing level is between zero and 100 percent		For

• Proposals where the issuance of debt will result in the gearing level being greater than 100 percent, or for which inadequate disclosure precludes calculation of the gearing level, comparing any such proposed debt issuance to industry and market standards, and with voting decisions generally based on the Agent’s approach to evaluating such requests		Case-by-Case

Financing Plans

• Adoption of financing plans if they are in the best economic interests of shareholders		For

Related Party Transactions		Case-by-Case

• Approval of such transactions unless the agreement requests a strategic move outside the company’s charter or contains unfavorable terms		For

Approval of Donations

• Proposals for which adequate, prior disclosure of amounts is not provided		Against

Capitalization of Reserves

• Proposals to capitalize the company’s reserves for bonus issues of shares or to increase the par value of shares		For

Amendments to Articles of Association		Case-by-Case

• That are editorial in nature		For


PROPOSAL		Guidelines
• Where shareholder rights are protected		For

• Where there is negligible or positive impact on shareholder value		For

• For which management provides adequate reasons for the amendments or the Agent otherwise supports management’s position		For

• That seek to discontinue and/or delist a form of the issuer’s securities in cases in which the relevant Fund does not hold the affected security type		For

• Which the company is required to do so by law (if applicable)		For

• That remove or lower quorum requirements for board or shareholder meetings below levels recommended by the Agent		Against

• That reduce relevant disclosure to shareholders		Against

• That seek to align the articles with provisions of another proposal not supported by these Guidelines		Against

• That are not supported under these Guidelines, are presented within a bundled proposal, and for which the Agent deems the negative impact, on balance, to outweigh any positive impact		Against

• That impose a negative impact on existing shareholder rights, including rights of the Funds, to the extent that any positive impact would not be deemed by the Agent to be sufficient to outweigh removal or diminution of such rights		Against

• With respect to article amendments for Japanese companies:

• Management proposals to amend a company’s articles to expand its business lines		For

• Management proposals to amend a company’s articles to provide for an expansion or reduction in the size of the board, unless the expansion/ reduction is clearly disproportionate to the growth/decrease in the scale of the business or raises anti-takeover concerns		For

• If anti-takeover concerns exist, management proposals, including bundled proposals, to amend a company’s articles to authorize the Board to vary the annual meeting record date or to otherwise align them with provisions of a takeover defense		Against

• Management proposals regarding amendments to authorize share repurchases at the board’s discretion, unless there is		Against


PROPOSAL		Guidelines
little to no likelihood of a “creeping takeover” (major shareholder owns nearly enough shares to reach a critical control threshold) or constraints on liquidity (free float of shares is low), and where the company is trading at below book value or is facing a real likelihood of substantial share sales; or where this amendment is bundled with other amendments which are clearly in shareholders’ interest (generally following the Agent’s guidelines)

Other Business

• Management proposals for Other Business in connection with global proxies, voting in accordance with the Agent’s market-specific recommendations		Against