WANGER U.S. SMALL CAP
                        WANGER INTERNATIONAL SMALL CAP
                                 WANGER TWENTY
                             WANGER FOREIGN FORTY

                         Supplement dated July 7, 2000
           to Prospectus dated May 1, 2000 of Wanger Advisors Trust

     PROPOSED ADVISORY AGREEMENT. On June 9, 2000, Wanger Asset Management, L.P.
("WAM"), the Funds' investment adviser, and Wanger Asset Management, Ltd., the
general partner of WAM, entered into an Agreement and Plan of Merger ("Merger
Agreement") with Liberty Financial Companies, Inc. ("Liberty") and WAM
Acquisition L.P., a newly formed limited partnership ("Liberty Sub"). Under the
Merger Agreement, Liberty Sub would be merged with and into WAM (the "Merger").
WAM would be the surviving entity and would be a wholly-owned subsidiary of
Liberty. After the merger, WAM will operate under the name Liberty Wanger Asset
Management, L.P. ("Liberty WAM").

     On July 6, 2000, the board of trustees of Wanger Advisors Trust (on behalf
of each of the Funds) approved a new investment advisory agreement with Liberty
WAM (the "Proposed Advisory Agreement") that, if approved by shareholders, will
become effective upon the consummation of the Merger. You will receive a proxy
statement describing the Merger and the Proposed Advisory Agreement in more
detail and seeking approval of the Proposed Advisory Agreement by the
shareholders of each Fund. The Merger Agreement provides that the Merger is
conditioned upon the shareholders of Wanger U.S. Small Cap and Wanger
International Small Cap approving the Proposed Advisory Agreement and certain
other conditions are met.

     Subject to the receipt of the necessary shareholder approvals and the
satisfaction of other conditions contained in the Merger Agreement, it is
anticipated that the Merger will occur as soon as reasonably practicable after
the requisite shareholder approvals have been obtained.