Deutsche Asset Management

Small Cap - Investment Class

Supplement dated March 5, 2001 to Prospectus dated January 29, 2001

The following replaces the `Portfolio Managers' section in the Fund's
prospectus:

The following portfolio managers are responsible for the day-to-day management
of the Fund's investments:

Audrey M. T. Jones, CFA, Managing Director of Deutsche Asset Management and Lead
Manager of the Fund.
 .  Joined Deutsche Asset Management in 1986 and the Fund at its inception.
 .  Portfolio manager with a primary focus on the credit sensitive, communication
   services, energy, process industries and transportation sectors.
 .  29 years of investment industry experience.
 .  BBA from Pace University Lubin School of Business.

Doris R. Klug, CFA, Director of Deutsche Asset Management and Co-Manager of the
Fund.
 .  Joined Deutsche Asset Management in 2000.
 .  Portfolio manager with primary focus on the consumer and capital goods
   sector.
 .  Vice President of Mutual of America from 1993 to 2000.
 .  19 years of financial industry experience.
 .  MBA from New York University's Stern School of Business.

The following replaces the `Dividends and Distributions' section in the Fund's
prospectus:

If the Fund earns net investment income or recognizes net capital gains, its
policy is to distribute to shareholders all or substantially all of that income
and capital gain at least annually. The Fund also may pay dividends and capital
gains distributions at other times if necessary for the Fund to avoid federal
income or excise tax. If you invest in a Fund close to the time that the Fund
makes a capital gains distribution, generally you will pay a higher price per
share and you will pay taxes on the amount of the distribution whether you
reinvest the distribution or receive it as cash. We automatically reinvest all
dividends and any capital gains, unless you tell us otherwise.

                                                       A Member of the
                                                       Deutsche Bank Group [/]


The following replaces the second chart in the `Tax Considerations' section in
the Fund's prospectus:

 TRANSACTION             TAX STATUS

 Income dividends        Ordinary income

 Short-term capital      Ordinary income
 gains
 distributions

 Long-term capital       Long-term capital gains
 gains
 distributions

Every year the Fund will send you information on the distributions for the
previous year. In addition, the sale (including a redemption or exchange) of
Fund shares is a taxable transaction for you.

 TRANSACTION           TAX STATUS

 Your sale of          Generally, long-term
 shares owned          capital gains or losses
 more than one
 year

 Your sale of          Generally, short-term
 shares owned          capital gains or losses;
 for one year or       losses subject to
 less                  special rules.

You must provide your social security number or other taxpayer identification
number to your Fund along with the certifications required by the Internal
Revenue Service when you open an account. If you do not or if it is otherwise
legally required to do so, the Fund will withhold 31%


`backup withholding' tax from you dividends, distributions, sales proceed and
any other payments to you.

The following replaces the `Minimum Account Investments' portion of the `Buying
and Selling Fund Shares' section in the Fund's prospectus:

Minimum Account Investments

Initial purchase:                                   Minimum amount:
        A standard account                          $2,000
        An IRA account                              $1,000
        An automatic investment plan account        $1,000

Qualified retirement plans                          $    0
(such as 401(k), pension
or profit sharing plan)

Subsequent purchase:
        A standard account                          $  100
        An IRA account                              $  100
        An automatic investment plan account        $  100
Account balance:
        Non-retirement account                      $1,000
        An IRA account                              None

Accounts opened through a service agent may have different minimum investment
amounts. The Fund and its service agents reserve the right to, from time to time
in their discretion, waive or reduce the investment minimums.




               Please Retain This Supplement for Future Reference

SUPP1698
BT Investment Funds
CUSIP:
055922769