BT INVESTMENT FUNDS


                            Capital Appreciation Fund

                          Supplement to the Prospectus
                             Dated January 29, 1996

The following  replaces the information  relating to the portfolio manager under
the heading "Investment Adviser" on page 16 of the Fund's Prospectus:

     Mr. Bluford Putnam (PhD), Managing Director of Bankers Trust and Chief
     Investment Officer of Equity and Balanced Portfolios, is responsible for
     the management oversight of the Capital Appreciation Portfolio team which
     includes seven investment professionals. Mr. Putnam has been employed by
     Bankers Trust since 1994. His previous experience includes economist at the
     Federal Reserve Bank of New York, principal at Morgan Stanley and Chief
     Economist at Kleinwort Benson, Ltd. He was also a founding partner of Stern
     Stewart and Co., in 1982, a leading corporate finance advisory firm and is
     the author of "The Blackwell Guide to Wall Street," which focused, in part,
     on equity valuation. Mr. Anthony Takazawa (CFA), Vice President of Bankers
     Trust, has senior portfolio management responsibilities for the Capital
     Appreciation Portfolio. Mr. Takazawa joined Bankers Trust in 1996. He has
     eight years of investment and financial analysis experience. Previously, he
     worked at Phoenix Mutual Life Insurance Company as an investment analyst,
     portfolio manager and director of research.

                             SUPPLEMENT DATED AUGUST 8, 1996




                               BT INVESTMENT FUNDS


                                 Small Cap Fund

                          Supplement to the Prospectus
                             Dated January 29, 1996

The following  replaces the information  relating to the portfolio manager under
the heading "Investment Adviser" on page 17 of the Fund's Prospectus:

    Mr. Bluford Putnam (PhD), Managing Director of Bankers Trust and Chief
    Investment Officer of Equity and Balanced Portfolios, is responsible for the
    management oversight of the Small Cap Portfolio team which includes seven
    investment professionals. Mr. Putnam has been employed by Bankers Trust
    since 1994. His previous experience includes economist at the Federal
    Reserve Bank of New York, principal at Morgan Stanley and Chief Economist at
    Kleinwort Benson, Ltd. He was also a founding partner of Stern Stewart and
    Co., in 1982, a leading corporate finance advisory firm and is the author of
    "The Blackwell Guide to Wall Street," which focused, in part, on equity
    valuation. Mr. Anthony Takazawa (CFA), Vice President of Bankers Trust, has
    senior portfolio management responsibilities for the Capital Appreciation
    Portfolio. Mr. Takazawa joined Bankers Trust in 1996. He has eight years of
    investment and financial analysis experience. Previously, he worked at
    Phoenix Mutual Life Insurance Company as an investment analyst, portfolio
    manager and director of research.

                             SUPPLEMENT DATED AUGUST 8, 1996



                               BT INVESTMENT FUNDS

                            Capital Appreciation Fund
                                 Small Cap Fund

                      Supplement to the Combined Prospectus
                              Dated April 29, 1996

The following replaces the information relating to Mary Lisanti, Managing
Director of Bankers Trust for the Small Cap Portfolio and the Capital
Appreciation Portfolio under the subheading "Portfolio Managers" on page 27 of
the Funds' Prospectus:

     Mr. Bluford Putnam (PhD), Managing Director of Bankers Trust and Chief
     Investment Officer of Equity and Balanced Portfolios, is responsible for
     the management oversight investment products specializing in small and
     medium sized U.S. companies. The Small Cap and Capital Appreciation
     Portfolios investment management includes seven investment professionals
     headed by the team leader, Mr. Tim Woods (CFA), Vice President of Bankers
     Trust.

     Mr. Putnam has been employed by Bankers Trust since 1994. His previous
     experience includes economist at the Federal Reserve Bank of New York,
     principal at Morgan Stanley and Chief Economist at Kleinwort Benson, Ltd.
     He was also a founding partner of Stern Stewart and Co., in 1982, a leading
     corporate finance advisory firm and is the author of "The Blackwell Guide
     to Wall Street," which focused, in part, on equity valuation.

     Ms. Mary P. Dugan (CFA), Vice President of Bankers Trust, and Mr. Timothy
     Woods (CFA), Vice President of Bankers Trust, share senior portfolio
     management responsibilities of the Small Cap Portfolio. Ms. Dugan joined
     Bankers Trust in 1994. She has 13 years of investment analysis experience.
     Previously, she worked at Fred Alger Management, Dean Witter, Integrated
     Resources and Equitable Investment Management Corporation. Mr. Wood Joined
     Bankers Trust in 1992. He has twelve years of investment and financial
     experience. Previously, he worked at Prudential Securities, Chase Manhattan
     Bank and Bank of Boston. Mr. Anthony Takazawa (CFA), Vice President of
     Bankers Trust, has senior portfolio management responsibilities for the
     Capital Appreciation Portfolio. Mr. Takazawa joined Bankers Trust in 1996.
     He has eight years of investment and financial analysis experience.
     Previously, he worked at Phoenix Mutual Life Insurance Company as an
     investment analyst, portfolio manager and director of research.

                         SUPPLEMENT DATED AUGUST 8, 1996