LEUTHOLD FUNDS INC
485BPOS, 1998-01-26
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                                     Securities Act Registration No. 33-96634
                                     Investment Company Act Reg. No. 811-9094
   __________________________________________________________________________

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549
                           __________________________
                                    FORM N-1A
           REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

                         Pre-Effective Amendment No. __        [_]
      
                         Post-Effective Amendment No. 3        [X]        
                                     and/or

   REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940  [X]
      
                           Amendment No. 4 [X]       
                        (Check appropriate box or boxes.)
                             ______________________

                             LEUTHOLD FUNDS, INC.             
               (Exact Name of Registrant as Specified in Charter)

      100 North Sixth Street, Suite 700A
            Minneapolis, Minnesota                     55403  
   (Address of Principal Executive Offices)          (Zip Code)

                                 (612) 332-9141                   
              (Registrant's Telephone Number, including Area Code)
      
                                           Copy to:
        Steven C. Leuthold
        Leuthold & Anderson, Inc.          Richard L. Teigen
        100 North Sixth Street             Foley & Lardner
        Suite 700A                         777 East Wisconsin Avenue
        Minneapolis, Minnesota  55403      Milwaukee, Wisconsin 53202
   (Name and Address of Agent for Service)
       
   Approximate Date of Proposed Public Offering:  As soon as practicable
   after the Registration Statement becomes effective.

   It is proposed that this filing become effective (check appropriate box): 
      
   [_]  immediately upon filing pursuant to paragraph (b)

   [X]  on January 30, 1998 pursuant to paragraph (b)

   [_]  60 days after filing pursuant to paragraph (a)(1)

   [_]  on (date) pursuant to paragraph (a)(1)

   [_]  75 days after filing pursuant to paragraph (a)(2)

   [_]  on (date) pursuant to paragraph (a)(2) of Rule 485.

   If appropriate, check the following box:

   [_]  This post-effective amendment designates a new effective date for a
        previously filed post-effective amendment.
       

   <PAGE>

                              LEUTHOLD FUNDS, INC.

                              CROSS REFERENCE SHEET

             (Pursuant to Rule 481 showing the location in the Prospectus and
   the Statement of Additional Information of the responses to the Items of
   Parts A and B of Form N-1A.)
                                       Caption or Subheading in
                                       Prospectus or Statement of
    Item No. on Form N-1A              Additional Information    

    PART A - INFORMATION REQUIRED IN PROSPECTUS
    1.   Cover Page                    Cover Page

    2.   Synopsis                      Fund Expenses

    3.   Financial Highlights          Financial Highlights; Total
                                       Return
    4.   General Description of        Investment Objective; Investment
         Registrant                    Policies; Investment Risks; Who
                                       Should Invest; Implementation of
                                       Policies; Investment
                                       Restrictions

    5.   Management of the Fund        Management of the Fund;
                                       Investment Adviser;
                                       Administration of the Fund

    5A.  Management's Discussion of    Included in Annual Report to
         Fund Performance              Shareholders

    6.   Capital Stock and Other       Dividends, Capital Gains and
         Securities                    Taxes; General Information;
                                       Other Leuthold Services

    7.   Purchase of Securities Being  The Share Price of the Fund;
         Offered                       Opening an Account and
                                       Purchasing Shares; When Your
                                       Account Will be Credited

    8.   Redemption or Repurchase      Selling Your Shares; Important
                                       Information About Telephone
                                       Transactions; Transferring
                                       Registration

    9.   Legal Proceedings                  *


    PART B - INFORMATION REQUIRED IN STATEMENT
             OF ADDITIONAL INFORMATION        

    10.  Cover Page                    Cover Page

    11.  Table of Contents             Table of Contents

    12.  General Information and            *
         History

    13.  Investment Objectives and     Investment Restrictions;
         Policies                      Investment Considerations 

    14.  Management of the Fund        Directors and Officers of the
                                       Corporation

    15.  Control Persons and           Directors and Officers of the
         Principal Holders of          Corporation; Ownership of
         Securities                    Management and Principal
                                       Shareholders; Investment
                                       Adviser, Administrator,
                                       Custodian, Transfer Agent and
                                       Account Services Agent

    16.  Investment Advisory and       Investment Adviser,
         Other Services                Administrator, Custodian,
                                       Transfer Agent and Account
                                       Services Agent; Independent
                                       Accountants

    17.  Brokerage Allocation          Allocation of Portfolio
                                       Brokerage

    18.  Capital Stock and Other       Included in Prospectus under
         Securities                    "General Information"

    19.  Purchase, Redemption and      Included in Prospectus under
         Pricing of Securities Being   "The Share Price of the Fund";
         Offered                       "Opening an Account and
                                       Purchasing Shares"; "When Your
                                       Account Will Be Credited";
                                       "Selling Your Shares";
                                       "Important Information About
                                       Telephone Transactions";
                                       "Transferring Registration";
                                       Determination of Net Asset
                                       Value; Systematic Withdrawal
                                       Plan

    20.  Tax Status                    Taxes

    21.  Underwriters                            *

    22.  Calculations of Performance   Performance Information
         Data

    23.  Financial Statements          Financial Statements

   _______________________
   * Answer negative or inapplicable

   <PAGE>
   
PROSPECTUS
January 30, 1998

LEUTHOLD
CORE INVESTMENT FUND
    


NEW ACCOUNT INFORMATION:
Investor Information Department...............1-800-273-6886
   
TABLE OF CONTENTS
Fund Expenses............................................  2
Financial Highlights.....................................  2
Total Return.............................................  3
Investment Objective.....................................  3
Investment Policies......................................  3
Investment Risks.........................................  4
Who Should Invest........................................  4
Implementation of Policies...............................  4
Investment Restrictions..................................  8
Management of the Fund...................................  8
Investment Adviser.......................................  9
Administration of the Fund..............................  11
Dividends, Capital Gains and Taxes......................  11
The Share Price of the Fund.............................  12
General Information.....................................  12

SHAREHOLDER GUIDE
Opening an Account and Purchasing Shares................. 13
Choosing a Distribution Option........................... 14
Tax Caution.............................................. 14
Additional Information................................... 14
When Your Account Will Be Credited....................... 15
Selling Your Shares...................................... 15
Important Information About Telephone Transactions....... 17
Transferring Registration................................ 17
Other Leuthold Services.................................. 17
    

INVESTMENT OBJECTIVE AND POLICIES
   
Leuthold Funds, Inc. is an open-end diversified investment company consisting
of a single portfolio, the Leuthold Core Investment Fund (the "Fund"), that 
seeks total return (i.e., capital change plus income) consistent with prudent
investment risk over the long term. The Fund invests in common stocks and other
equity securities, bonds and other fixed-income securities, and money market
instruments in proportions consistent with their expected returns and risks as
evaluated by Leuthold & Anderson, Inc., the Fund's adviser (the "Adviser").
See "INVESTMENT POLICIES" and "IMPLEMENTATION OF POLICIES." The Adviser
believes that seeking total return involves minimizing market risk. There is
no assurance that the Fund will achieve its stated objective.
    

OPENING AN ACCOUNT
   
To open a regular (non-retirement) account, please complete and return the
Purchase Application. If you need assistance in completing this Form, please
call our Investor Information Department. The minimum initial investment is
$10,000 or $1,000 for Uniform Gifts/Transfers to Minors Act accounts and
Individual Retirement Accounts (IRAs). To open an IRA (Roth or traditional),
please use a Leuthold IRA Application. To obtain a copy of this form, call 1-
800-273-6886, Monday through Friday from 8:00 a.m. to 7:00 p.m. (Central time).
The Fund is offered on a no-load basis (i.e., there are no sales commissions
or 12b-1 fees). However, the Fund incurs expenses for investment advisory and
administrative services.
    

ABOUT THIS PROSPECTUS
   
This Prospectus is designed to set forth concisely the information you should
know about the Fund before you invest. It should be retained for future
reference. A "Statement of Additional Information" containing additional
information about the Fund has been filed with the Securities and Exchange
Commission. Such Statement is dated January 30, 1998 and has been incorporated
by reference into this Prospectus. A copy may be obtained without charge by
writing to the Fund or by calling the Investor Information Department. The
Securities and Exchange Commission maintains a web site (http:// www.sec.gov)
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding registrants that file electronically
with the Securities and Exchange Commission.
    
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.


FUND EXPENSES

The following table illustrates all expenses and fees that you would incur as
a shareholder of the Fund. The Annual Fund Operating Expenses are based on the
Fund's actual expenses incurred during the fiscal year ended September 30, 1997.

SHAREHOLDER TRANSACTION EXPENSES
Sales Load Imposed on Purchases                    None
Sales Load Imposed on Reinvested Dividends         None
Redemption Fees                                    None<F1>
Exchange Fees                                      None

ANNUAL FUND OPERATING EXPENSES
Management Fees                                   0.90%
12b-1 Fees                                         None
Other Expenses (after reimbursements) <F2>        0.35%

  TOTAL FUND OPERATING EXPENSES
  (after reimbursements) <F1>                     1.25%
   
<F1> A fee of $12.00 is charged for each wire redemption.
    
<F2> Other Expenses and Total Fund Operating Expenses reflect the fact that the
     Adviser has voluntarily agreed to waive its advisory fee and/or reimburse
     other operating expenses to the extent necessary to ensure that Total Fund
     Operating Expenses do not exceed 1.25% of the Fund's average daily net
     assets. Absent reimbursements, Other Expenses and Total Fund Operating
     Expenses for the Fund for the fiscal year ended September 30, 1997 would
     have been 0.57% and 1.47% respectively.

The purpose of this table is to assist you in understanding the various costs
and expenses that you would bear directly or indirectly as an investor in the
Fund.

The following example illustrates the expenses that you would incur on a 
$1,000 investment over various periods, assuming  (1) a 5% annual rate of
return and (2) redemption at the end of each period. As noted in the table
above, the Fund charges no redemption fees of any kind.

       1 Year   3 Years   5 Years   10 Years
       ------   -------   -------   --------
        $13       $40       $69       $151

THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE HIGHER OR LOWER THAN THOSE
SHOWN. SEE "INVESTMENT ADVISER" AND "ADMINISTRATION OF THE FUND" FOR A MORE
COMPLETE DISCUSSION OF APPLICABLE MANAGEMENT FEES.


FINANCIAL HIGHLIGHTS
   
The financial information of a share of the Leuthold Core Investment Fund (the
"Fund") included in the following table has been audited by Arthur Andersen
LLP, the Fund's independent accountants. The table should be read in conjunction
with the financial statements and related notes which have been incorporated by
reference into the Ststement of Additional Information and are contained in the
Fund's Annual Report to Shareholders. Copies of the Fund's Annual Report to
Shareholders may be obtained, without charge, upon request. The Fund's Annual
Report to Shareholders also contains further information about the performance
of the Fund.

                                                          NOV. 20,
                                             YEAR         1995<F3>
                                             ENDED         THROUGH
                                           SEPT. 30,      SEPT. 30,
                                             1997           1996
PER SHARE DATA:                              ----           ----
Net asset value, beginning
  of period                                 $10.18         $10.00
                                            ------         ------
Income from investment operations:
  Net investment income                       0.44<F4>       0.38
  Net realized and unrealized
    gains on investments                      1.32           0.16
                                            ------         ------
  Total from investment operations            1.76           0.54
                                            ------         ------
Less distributions:
  From net investment income                 (0.46)         (0.36)
  In excess of net investment
     income                                  (0.05)              -
  From net realized gains                    (0.26)              -
                                            ------         ------
  Total distributions                        (0.77)         (0.36)
                                            ------         ------
Net asset value, end of period              $11.17         $10.18
                                            ======         ======
Total return                                 17.96%          5.43%<F5>
Supplemental data and ratios:
  Net assets, end of period            $30,560,181    $31,740,501
Ratio of expenses to average
  net assets:
  Before expense reimbursement               1.47%          1.55%<F6>
  After expense reimbursement                1.25%          1.25%<F6>
Ratio of net investment income
  to average net assets:
  Before expense reimbursement               4.05%          4.14%<F6>
  After expense reimbursement                4.27%          4.44%<F6>
Portfolio turnover rate35.62%              103.30%
Average commission rate paid               $0.0600        $0.0600

<F3> Commencement of operations.
<F4> Net investment income per share is calculated using ending
     balances prior to consideration of adjustments for permanent
     book and tax differences.
<F5> Not annualized.
<F6> Annualized.

                     See notes to the financial statements.
    

TOTAL RETURN

From time to time the Fund may advertise its total return. Total return figures
are based on historical earnings and are not intended to indicate future
performance. An investment in the Fund will fluctuate in value and at redemption
its value may be more or less than the original investment. The "total return"
of the Fund refers to the average annual compounded rates of return over stated
periods or for the life of the Fund (which periods will be stated in the
advertisement) which, if applied to an initial investment in the Fund at the
beginning of a stated period and compounded over the period, would result in the
redeemable value of the Fund at the end of the stated period. The calculation
assumes reinvestment of all dividends and distributions and reflects the effect
of all recurring fees.
   
Additionally, the Fund may compare its performance to that of the Standard &
Poor's 500 Composite Stock Price Index ("S&P 500 Index"), the Lehman Brothers
Government/ Corporate Bond Indices, U.S. Treasury Bills, the Lipper Balanced
Fund Index, the Lipper Flexible Fund Index and to various combinations thereof.
    

INVESTMENT OBJECTIVE

THE FUND SEEKS TOTAL RETURN CONSISTENT WITH PRUDENT INVESTMENT RISK OVER THE
LONG TERM
The objective of the Fund is to seek total return (i.e., capital change plus
income) consistent with prudent investment risk over the long term. Capital
change includes both realized and unrealized changes. The Fund's investment
adviser, Leuthold & Anderson, Inc. (the "Adviser"), believes that seeking
total return involves minimizing market risk. The Adviser believes that
maintaining profits when the market declines is as important as earning profits.
There is no assurance that the Fund will achieve its stated objective.


INVESTMENT POLICIES
   
THE FUND INVESTS IN EQUITY SECURITIES, FIXED-INCOME SECURITIES AND MONEY MARKET
INSTRUMENTS IN VARYING PROPORTIONS
The Fund will allocate its assets among common stocks and other equity
securities, bonds and other fixed-income securities, and money market
instruments. The Fund may also, at times, invest indirectly in such securities
through investments in registered investment companies. See "IMPLEMENTATION
OF POLICIES" for a discussion of the types of equity and fixed-income 
securities in which the Fund may invest. The Adviser allocates the Fund's
assets among equity securities, fixed-income securities and money market
instruments in proportions which reflect the anticipated returns and risks of
each asset class. The estimates of return and risk are developed based upon the
Adviser's disciplined valuation methodology. There are no limitations on the
amount of the Fund's assets which may be allocated to each of the three asset
classes (equity securities, fixed-income securities and money market
instruments). However, except under what the Adviser considers unusual
circumstances, equity securities will comprise 30% to 70% of the Fund's total
assets. Fixed-income securities also typically will constitute 30% to 70% of the
Fund's total assets. Money market instruments typically will not exceed 20% of
the Fund's total assets. For purposes of determining such proportions,
investments in equity funds will be classified as equity securities, investments
in fixed-income funds will be classified as fixed-income securities and
investments in money market funds will be classified as money market securities.
The Fund is managed without regard to tax ramifications.

In estimating the relative attractiveness of each asset class, the Adviser takes
into account various factors. The Adviser initially begins the allocation
process by analyzing the government bond market, both domestic and foreign,
considering both economic and monetary factors and forecasting the trend of
inflation. It attempts to determine what risks and returns U.S. Treasury
securities present over the next one to five years. The Adviser then assesses
the probability that common stocks as an asset class will perform better than
U.S. Treasury securities. In doing so, it will consider The Leuthold Group's
Major Trend Index, which index comprises over 170 individual components that are
evaluated weekly. Key elements include stock market intrinsic value benchmark
studies, economic and monetary factors, inflation and interest rate levels and
trends, equity investor attitudinal factors, equity supply/demand considerations
and technical stock market measures.
    
Once expected return and volatility (risk) estimates are developed for each
asset class, the Adviser will implement and maintain a particular allocation
strategy. See "Implementation of Policies" for a description of the securities
in which the Fund invests and other investment practices of the Fund.

The investment objective and policies of the Fund (other than those indicated in
"Investment Restrictions") are not fundamental and so may be changed by the
Board of Directors without shareholder approval.


INVESTMENT RISKS

THE FUND IS SUBJECT TO STOCK AND BOND MARKET RISK
Depending on the Adviser's allocation of the Fund's assets among stocks, bonds
and money market instruments, investors in the Fund may be exposed to the market
risk of common stocks and bonds.

Stock market risk is the possibility that stock prices in general will decline
over short or even extended periods. This risk is in addition to the risks
inherent in the individual stock selections made by the Adviser which are
discussed in "Implementation of Policies."Bond market risk is the potential
for fluctuations in the market value of bonds. Bond prices vary inversely with
changes in the level of interest rates. When interest rates rise, the prices of
bonds fall; conversely, when interest rates fall, bond prices rise. While bonds
normally fluctuate less in price than stocks, there have been extended periods
of cyclical increases in interest rates that have caused significant declines in
bond prices. The risk of bonds declining in value, however, may be offset in
whole or in part by the higher level of income that bonds provide. In addition
to bond market risks, individual issues of bonds may be subject to the risk that
the issuer may not be able to make scheduled interest and principal payments.
This risk is discussed in "Implementation of Policies."

While the Fund invests in stocks, bonds and money market instruments in varying
proportions, investors should not construe the Fund as a balanced investment
program offering relatively stable allocations among these asset classes.
Because the allocation strategy of the Adviser may, at certain times, result in
a portfolio with a primary emphasis on common stocks, the Fund may from time to
time exhibit a level of volatility which is more consistent with a common stock
portfolio than a balanced portfolio. However, under normal circumstances, the
volatility of the Fund's total return is expected to be less than that of a
common stock portfolio, as represented, for example, by the S&P 500 Index.

THE ADVISER MAY FAIL TO ANTICIPATE MARKET ADVANCES OR DECLINES
Investors should also be aware that the investment results of the Fund depend,
in part, upon the Adviser's ability to anticipate correctly the relative
performance and risk of stocks, bonds and money market instruments. Historical
evidence indicates that correctly timing portfolio allocations among these asset
classes has been a difficult strategy to implement successfully. While the
Adviser has substantial experience in asset allocation, there can be no
assurance that the Adviser will correctly anticipate relative asset class
performance in the future on a consistent basis. The Fund's investment results
would suffer, for example, if only a small portion of the Fund's assets were
allocated to stocks during a significant stock market advance, or if a major
portion of its assets were allocated to stocks during a market decline.
Moreover, since the Fund's common stock investments will not parallel the S&P
500 Index or any other broad market index, it is possible that the Fund's common
stock investments may outperform or underperform the stock market in general.
Similarly, the Fund's performance could deteriorate if the Fund were
substantially invested in bonds at a time when interest rates moved adversely.


WHO SHOULD INVEST

LONG-TERM INVESTORS SEEKING TOTAL RETURN
The Fund is designed for investors seeking total return through an investment
vehicle which provides an actively managed mix of equity securities, fixed-
income securities and money market instruments. Because the Fund can and may
have a large percentage of its portfolio invested in common stocks, investors in
the Fund should be willing to accept certain risks, including the potential for
sudden, sometimes substantial declines in market value.

Due to the risks associated with common stock and bond investments, the Fund is
intended to be a long-term investment vehicle and is not designed to provide
investors with a means of speculating on short-term stock and bond market
movements. Investors who engage in excessive account activity generate
additional costs which are borne by all of the Fund's shareholders. In order to
minimize such costs the Fund has adopted the following policies. The Fund
reserves the right to reject any purchase request that is reasonably deemed to
be disruptive to efficient portfolio management, either because of the timing of
the investment or previous excessive trading by the investor. Additionally, the
Fund reserves the right to suspend the offering of its shares.

No assurance can be given that the Fund will achieve its objective or that
shareholders will be protected from the risk of loss that is inherent in equity
investing. Also, there can be no guarantee that the Adviser will correctly
anticipate fluctuations in the stock and bond markets in its effort to attain
total return while minimizing risk.


IMPLEMENTATION OF POLICIES

THE FUND MAY INVEST IN STOCKS AND OTHER EQUITY SECURITIES
In an effort to maximize its total investment return, the Fund utilizes a number
of investment practices.
   
Structuring a common stock portfolio begins with the Adviser overlaying current
and expected economic conditions against a detailed broad sector (investment
styles) risk/reward framework. The Adviser develops a broad sector strategy
based on historical and expected relationships between large capitalization
stocks (i.e., $4 billion or more) and small capitalization stocks (i.e., less
than $4 billion); between "growth" stocks (high price/earnings ratio),
"value" stocks (low price/earnings ratio) and "cyclical" stocks (economically
sensitive); and between aggressive stock groups and defensive stock groups.
Utilizing the broad sector (style) strategy, the Adviser determines individual
sector/group allocations focusing on traditional economic and industrial sectors
(e.g., housing, energy, food) as well as conceptual ("office of the future")
and quantitative ("emerging growth stocks") themes. The Adviser continually
monitors about seventy-five sectors and themes both on a fundamental and
technical basis. Finally, the Adviser selects individual stocks to achieve the
desired sector exposure.
    
Individual stocks are selected from within the sector framework, utilizing a
detailed composite ranking system in conjunction with the judgment of the
Adviser. The Adviser: (1) ranks each stock on numerous fundamental factors such
as earnings growth and price/earnings ratio, technical factors such as price
movement and relative strength, and sentiment factors such as insider activity
and short sales ratio; (2) formulates a weighted composite total score for each
stock; and (3) gives a ranking score for each stock. Stocks with the higher
ranking scores are expected to outperform the broad market averages as well as
the sector index.

In addition to investing directly in common stocks, the Fund may, at times,
invest indirectly in common stocks by investing in registered investment
companies which invest in common stocks. The Fund may do so to obtain (a)
exposure to international equity markets by investing in international funds,
(b) increased exposure to a particular industry by investing in a sector fund,
or (c) a broad exposure to small capitalization stocks by investing in small cap
funds.

The Fund may also occasionally invest in preferred stocks and warrants.
Preferred stock has a preference over common stock in liquidation (and generally
dividends as well) but is subordinated to the liabilities of the issuer in all
respects. As a general rule the market value of preferred stock with a fixed
dividend rate and no conversion element varies inversely with interest rates and
perceived credit risk, while the market price of convertible preferred stock
generally also reflects some element of conversion value. Because preferred
stock is junior to debt securities and other obligations of the issuer,
deterioration in the credit quality of the issuer will cause greater changes in
the value of a preferred stock than in a senior debt security with similar
stated yield characteristics. Unlike interest payments on debt securities,
preferred stock dividends are payable only if declared by the issuer's board of
directors. Preferred stock also may be subject to optional or mandatory
redemption provisions.

Warrants are securities permitting, but not obligating, their holders to
subscribe for other securities. Warrants do not carry with them the right to
dividends or voting rights with respect to the securities that they entitle
their holder to purchase, and they do not represent any rights in the assets of
the issuer. As a result, an investment in warrants may be considered to be more
speculative than certain other types of investments. In addition, the value of a
warrant does not necessarily change with the value of the underlying securities
and a warrant ceases to have value if it is not exercised prior to its
expiration date.

THE FUND MAY INVEST IN FIXED-INCOME SECURITIES
The principal components of the Fund's fixed-income portfolio typically will be
U.S. Treasury Notes and Bonds. The Fund may also invest in corporate fixed-
income securities, including high-yield securities commonly known as "junk
bonds", and fixed-income securities of foreign issuers. The average portfolio
maturity of the Fund's bond portfolio will depend on the Adviser's view of
interest rate trends considering both fundamental economic indicators and
technical market indicators. The Fund may also invest in zero coupon U.S.
Treasury securities which consist of U.S. Treasury Notes and Bonds that have
been stripped of their unmatured interest coupons by the U.S. Department of
Treasury. A zero coupon U.S. Treasury security pays no interest to its holders
during its life and its value to an investor consists of the difference between
its face value at the time of maturity and the price for which it was acquired,
which is generally an amount much less than its face value. Zero coupon U.S.
Treasury securities are generally subject to greater fluctuations in value in
response to changing interest rates than debt obligations that pay interest
currently.

The Fund may, at times, invest indirectly in fixed-income securities by
investing in registered investment companies which invest in such securities.
The Fund may do so to obtain (a) diversified exposure to corporate fixed-income
securities (including high yield or "junk" bonds) by investing in income funds
or (b) diversified exposure to international markets by investing in
international income funds.

THE FUND MAY INVEST IN MONEY MARKET INSTRUMENTS
The Fund's money market instruments may include (a) U.S. Treasury Securities
with a remaining maturity of less than 90 days, (b) repurchase agreements, (c)
high quality commercial paper issued by corporations rated (at the time of
purchase) in the highest category by Standard & Poor's Corporation ("S&P") or
Moody's Investors Service, Inc. ("Moody's") with a remaining maturity of less
than 90 days, or (d) commercial paper master demand notes rated in the highest
category by S&P or Moody's. Commercial paper master demand notes are unsecured
demand instruments without a fixed maturity bearing interest at rates which are
fixed to known lending rates and which adjust when such lending rates change.

THE FUND MAY INVEST IN SMALL CAP STOCKS
The Fund may invest directly in small capitalization stocks and may, at times,
invest in registered investment companies which invest in small capitalization
stocks. Investments in smaller capitalization companies may offer greater
potential for capital appreciation than larger companies. However greater market
risks are often associated with these companies. They may have limited product
lines, markets, market share and financial resources or they may be dependent on
a small or inexperienced management team. These stocks may trade less frequently
and in more limited volume and be subject to greater and more abrupt price
swings than stocks of larger companies.

THE FUND MAY INVEST IN FOREIGN SECURITIES
The Fund may invest up to 25% of its total assets in securities of foreign
issuers. In addition, a registered investment company in which the Fund may
invest may invest up to 100% of its assets in securities of foreign issuers.
Investments in foreign securities involve special risks and considerations that
are not present when the Fund invests in domestic securities.
   
There is often less information publicly available about a foreign issuer than
about a U.S. issuer. Foreign issuers generally are not  subject to accounting,
auditing, and financial reporting standards and practices comparable to those in
the United States. The securities of some foreign issuers are less liquid and at
times more volatile than securities of comparable U.S. issuers. This is
particularly true of securities in emerging markets which can be extremely
volatile. Foreign brokerage commissions, custodial expenses, and other fees are
also generally higher than for securities traded in the United States. There may
also be difficulties in enforcing legal rights outside the United States. There
may be a possibility of nationalization or expropriation of assets, imposition
of currency exchange controls, confiscatory taxation, political or financial
instability, and diplomatic developments which could affect the value of an
underlying registered investment company's investments in certain foreign
countries. Legal remedies available to investors may be more limited than those
available with respect to investments in the United States or in other foreign
countries. Income received by a registered investment company in which the Fund
invests may be reduced by withholding and other taxes imposed by such countries.
    
Individual foreign economies may differ favorably or unfavorably from the U.S.
economy in such respects as growth or gross national product, inflation rate,
capital reinvestment, resource self-sufficiency and balance of payment
positions. The economies of countries with emerging markets may be predominately
based on only a few industries, may be highly vulnerable to changes in global
trade conditions, and may suffer from extreme and volatile debt or inflation
rates. Debt obligations of issuers located in, or of, developing countries
involve a high degree of risk, and may be in default or present the risk of
default.

Since the Fund or a registered investment company in which the Fund may invest
may purchase securities denominated in foreign currencies, changes in foreign
currency exchange rates will affect, either directly or indirectly, the value of
the Fund's assets from the perspective of U.S. investors. Certain registered
investment companies, but not the Fund, may seek to protect themselves against
the adverse effects of currency exchange rate fluctuations by entering into
currency forward, futures or options contracts. Hedging transactions may not,
however, always be fully effective in protecting against adverse exchange rate
fluctuations. Furthermore, hedging transactions involve transaction costs and
the risk that the registered investment company might lose money; either because
exchange rates move in an unexpected direction, because another party to a
hedging contract defaults or for other reasons. Hedging transactions also limit
any potential gain which might result if exchange rates moved in a favorable
direction. The value of foreign investments and the investment income derived
from them may also be affected (either favorably or unfavorably) by exchange
control regulations. In addition, the value of foreign fixed-income investments
will fluctuate in response to changes in U.S. and foreign interest rates.

The Fund may hold securities of U.S. and foreign issuers in the form of American
Depository Receipts ("ADRs") or American Depository Shares ("ADSs"). These
securities may not necessarily be denominated in the same currency as the
securities for which they may be exchanged. ADRs and ADSs typically are issued
by an American bank or trust company and evidence ownership of underlying
securities issued by a foreign corporation. Generally, ADRs and ADSs in
registered form are designed for use in U.S. securities markets. For purposes of
the Fund's investment policies, the Fund's investments in ADRs and ADSs will be
deemed to be investments in equity securities representing the securities of
foreign issuers into which they may be converted.

THE FUND MAY BE EXPOSED TO THE RISKS OF INVESTING IN CORPORATE DEBT SECURITIES
INCLUDING HIGH-YIELD SECURITIES
The Fund may invest in corporate debt securities, including bonds and debentures
(which are long-term), and notes (which may be short or long-term). A registered
investment company in which the Fund invests may also invest in such debt
securities. These debt securities may be rated investment grade by S&P or
Moody's. Securities rated BBB by S&P or Baa by Moody's, although investment
grade, exhibit speculative characteristics and are more sensitive than higher
rated securities to changes in economic conditions. The Fund (and registered
investment companies in which the Fund may, at times, invest in) may also invest
in securities that are rated below investment grade. Investments in high yield
securities (i.e., less than investment grade), while providing greater income
and opportunity for gain than investments in higher-rated securities, entail
relatively greater risk of loss of income or principal. Lower-grade obligations
are commonly referred to as "junk bonds". Market prices of high-yield, lower-
grade obligations may fluctuate more than market prices of higher-rated
securities. Lower-grade, fixed income securities tend to reflect short-term
corporate and market developments to a greater extent than higher-rated
obligations which, assuming no change in their fundamental quality, react
primarily to fluctuations in the general level of interest rates.

Debt rated BB, B, CCC, CC and C and debt rated Ba, B, Caa, Ca and C are regarded
by S&P and Moody's, respectively, as predominantly speculative with respect to
the issuer's capacity to pay interest and repay principal in accordance with the
terms of the obligation. For S&P, BB indicates the lowest degree of speculation
and C the highest. For Moody's, Ba indicates the lowest degree of speculation
and C the highest. For additional information on the ratings used by S&P and
Moody's and a description of low-rated securities, see the Statement of
Additional Information.

Low-rated securities are especially subject to adverse changes in general
economic conditions and in the industries in which the issuers are engaged, to
changes in the financial condition of the issuers and to price fluctuation in
response to changes in interest rates. During periods of economic downturn or
rising interest rates, highly leveraged issuers may experience financial stress
which could adversely affect their ability to make payments of principal and
interest and increase the possibility of default. In addition, the market for
low-rated securities has expanded rapidly in recent years.

The market for low-rated securities is generally thinner and less active than
that for higher quality securities, which would limit the ability of the Fund
(or a registered investment company in which the Fund invests) to sell such
securities at fair value in response to changes in the economy or the financial
markets. While such securities may have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposure to adverse conditions. For additional information about the risks of
investing in low-rated securities, see the Statement of Additional Information.

THE FUND MAY INVEST IN SECURITIES OF OTHER REGISTERED INVESTMENT COMPANIES
The Fund may invest up to 25% of its net assets in shares of registered
investment companies. However, under normal market conditions, the Fund will not
invest more than 5% of its net assets in such shares. The Fund will not purchase
or otherwise acquire shares of any registered investment company (except as part
of a plan of merger, consolidation or reorganization approved by the
shareholders of the Fund) if (a) the Fund and its affiliated persons would own
more than 3% of any class of securities of such registered investment company or
(b) more than 5% of its net assets would be invested in the shares of any one
registered investment company. If the Fund purchases more than 1% of any class
of security of a registered open-end investment company, such investment will be
considered an illiquid investment.

Any investment in a registered investment company involves investment risk.
Additionally an investor could invest directly in the registered investment
companies in which the Fund invests. By investing indirectly through the Fund,
an investor bears not only his or her proportionate share of the expenses of the
Fund (including operating costs and investment advisory fees) but also indirect
similar expenses of the registered investment companies in which the Fund
invests. An investor may also indirectly bear expenses paid by registered
investment companies in which the Fund invests related to the distribution of
such registered investment company's shares.

Under certain circumstances an open-end investment company in which the Fund
invests may determine to make payment of a redemption by the Fund (wholly or in
part) by a distribution in kind of securities from its portfolio, instead of in
cash. As a result, the Fund may hold such securities until the Adviser
determines it appropriate to dispose of them. Such disposition will impose
additional costs on the Fund.

Investment decisions by the investment advisers to the registered investment
companies in which the Fund invests are made independently of the Fund and the
Adviser. At any particular time, one registered investment company in which the
Fund invests may be purchasing shares of an issuer whose shares are being sold
by another registered investment company in which the Fund invests. As a result,
the Fund would incur certain transactional costs without accomplishing any
investment purpose.

THE FUND MAY BE EXPOSED TO CERTAIN ADDITIONAL RISKS AS A RESULT OF INVESTING IN
SECURITIES OF OTHER REGISTERED INVESTMENT COMPANIES
   
Although the Fund will not concentrate its investments, registered investment
companies in which the Fund invests may concentrate their investments within one
industry (i.e. sector funds). Since the investment alternatives within an
industry are limited, the value of the shares of such a registered investment
company may be subject to greater market fluctuation than a registered
investment company which invests in a broader range of securities.
    
THE FUND MAY INVEST IN REGISTERED INVESTMENT COMPANIES WHICH UTILIZE STOCK AND
BOND FUTURES CONTRACTS AND OPTIONS ON STOCK AND BOND FUTURES
Futures contracts and options on futures contracts may be used for several
reasons: to permit exposure to the stock market by investing in stock index
futures while minimizing the transaction costs of holding each security
comprising the index; to maintain cash reserves while simulating full
investment; to facilitate trading; to seek higher investment returns when a
futures contract is priced more attractively than the underlying security or
index; or to hedge against changes in interest rates.

The primary risks associated with the use of futures contracts and options are:
(i) imperfect correlation between the change in market value of the securities
held by the registered investment company and the prices of futures contracts
and options on futures contracts; and (ii) possible lack of a liquid secondary
market for a futures contract and the resulting inability to close a futures
position prior to its maturity date.

The risk of loss in trading futures contracts in some strategies can be
substantial, due both to the low margin deposits required and the extremely high
degree of leverage involved in futures pricing. As a result, a relatively small
price movement in a futures contract may result in immediate and substantial
loss (or gain) to the investor.

THE FUND MAY BORROW MONEY UNDER UNUSUAL CIRCUMSTANCES
The Fund may borrow money, subject to the limitations set forth below, for
temporary or emergency purposes, including the meeting of redemption requests
which might otherwise require the untimely disposition of securities.

PORTFOLIO TURNOVER MAY BE HIGH
   
Due to the active asset allocation approach employed by the Fund, the Fund's
portfolio turnover rate may be high, but will generally not exceed 100% per
year. A 100% portfolio turnover rate would occur, for example, if all of the
Fund's securities were replaced within one year. High portfolio turnover (i.e.
over 100%) may involve correspondingly greater brokerage commissions and other
transaction costs, which are borne directly by the Fund. In addition, high
portfolio turnover may result in increased short-term capital gains which, when
distributed to shareholders, are treated as ordinary income.
    

INVESTMENT RESTRICTIONS
THE FUND HAS ADOPTED CERTAIN FUNDAMENTAL RESTRICTIONS
The Fund has adopted certain restrictions in an attempt to reduce its exposure
to specific situations. Some of these restrictions are that the Fund will not:
(a) with respect to 75% of the value of its total assets, purchase the
    securities of any issuer (except obligations of the United States
    government and its instrumentalities) if as a result the Fund would hold
    more than 10% of the outstanding voting securities of the issuer, or more
    than 5% of the value of the Fund's total assets would be invested in the
    securities of such issuer;
(b) concentrate 25% or more of its total assets in securities of any one
    industry (other than obligations issued or guaranteed by the United States
    Government, its agencies or instrumentalities);
(c) borrow money or issue securities, except for temporary bank borrowings (not
    exceeding 10% of the value of the Fund's total assets) or for emergency or
    extraordinary purposes;
(d) sell securities short, buy securities on margin, or write put or call
    options; and
(e) pledge or hypothecate its assets, except to secure borrowings for temporary
    or emergency purposes.

These investment restrictions are considered at the time investment securities
are purchased. The investment limitations described here and certain investment
limitations described in the Statement of Additional Information may be changed
only with the approval of a majority of the Fund's shareholders.


MANAGEMENT OF THE FUND
The Officers of the Fund manage its day-to-day operations and are responsible to
the Fund's Board of Directors. The Directors set broad policies for the Fund and
choose its Officers. A list of Directors and Officers of the Fund and a
statement of their present positions and principal occupations during the past
five years can be found in the Statement of Additional Information.
INVESTMENT ADVISER

LEUTHOLD & ANDERSON, INC. MANAGES THE FUND'S INVESTMENTS
The Fund employs Leuthold & Anderson, Inc. (the "Adviser"), 100 North Sixth
Street, Suite 700A, Minneapolis, Minnesota 55403, as its investment adviser.
Under an investment advisory agreement dated October 30, 1995 (the "Advisory
Agreement"), the Adviser furnishes continuous investment advisory services to
the Fund. The Adviser discharges its responsibilities subject to the control of
the Officers and Directors of the Fund.

The Adviser was organized in August, 1987. Mr. Steven C. Leuthold, President,
Treasurer and a Director of the Fund serves as the portfolio manager of the Fund
and, as such, is responsible for the day-to-day management of its portfolio. Mr.
Leuthold has been Chairman and Portfolio Manager for the Adviser since August,
1987. He has also been a Portfolio Manager for Leuthold, Weeden &Associates,
L.P. since January, 1991 and Chairman of The Leuthold Group since November,
1981. Prior to founding The Leuthold Group, Mr. Leuthold was employed by
Criterion Investment Management, Houston, Texas, as a portfolio manager for the
Pilot Fund and the Industries Trend Fund.

The Adviser supervises and manages the investment portfolio of the Fund and,
subject to such policies as the Board of Directors of the Fund may determine,
directs the purchase or sale of investment securities in the day-to-day
management of the Fund's investment portfolio. Under the Advisory Agreement, the
Adviser, at its own expense and without reimbursement from the Fund, furnishes
office space and all necessary office facilities, equipment and executive
personnel for managing the investments of the Fund and pays salaries and fees of
all officers and directors of the Fund (except the fees paid to directors who
are not interested persons of the Adviser). For the foregoing, the Adviser
receives a monthly fee based on the Fund's average daily net assets at the
annual rate of 0.90%.
   
The Fund will pay all of its expenses not assumed by the Adviser including, but
not limited to, the costs of preparing and printing its registration statements
required under the Securities Act of 1933 and the Investment Company Act of 1940
and any amendments thereto, the expenses of registering its shares with the
Securities and Exchange Commission and in the various states, the printing and
distribution cost of prospectuses mailed to existing shareholders, the cost of
director and officer liability insurance, reports to shareholders, reports to
government authorities and proxy statements, interest charges, brokerage
commissions, and expenses incurred in connection with portfolio transactions.
The Fund will also pay the fees of directors who are not officers of the Fund,
salaries of administrative and clerical personnel, association membership dues,
auditing and accounting services, fees and expenses of any custodian or trustees
having custody of Fund assets, expenses of calculating the net asset value and
repurchasing and redeeming shares, and charges and expenses of dividend
disbursing agents, registrars, and share transfer agents, including the cost of
keeping all necessary shareholder records and accounts and handling any problems
relating thereto. The Adviser has voluntarily agreed to reimburse the Fund for
expenses in excess of 1.25% of its average net assets. Such voluntary
reimbursements to the Fund may be modified or discontinued at any time.
    
The Advisory Agreement authorizes the Adviser to select brokers or dealers to
execute purchases and sales of the Fund's portfolio securities, and directs the
Adviser to use its best efforts to obtain the best available price and most
favorable execution with respect to all transactions. The full range and quality
of brokerage services available are considered in making these determinations.
   
The Fund has authorized the Adviser to pay higher commissions in recognition of
brokerage or research services felt necessary for the achievement of better
execution, provided the Adviser believes this to be in the best interest of the
Fund. Although the Fund does not market its shares through intermediary brokers
or dealers, the Fund may place orders with qualified broker-dealers who
recommend the Fund to clients if the Adviser of the Fund believes that the
quality of the transaction and the commission are comparable to what they would
be with other qualified brokerage firms. The Fund may also place orders with
Weeden & Co., L.P., with which Steven C. Leuthold is affiliated, if the quality
of the transaction and the commissions are comparable to what they would be with
other qualified brokerage firms.

THE ADVISER HAS EXPERIENCE MANAGING ACCOUNTS WITH THE SAME INVESTMENT OBJECTIVE
AS THE FUND
Set forth below is historical performance data relating to the Adviser. The data
is provided to illustrate past performance in managing similar portfolios as
measured against specified market indices. Composite figures reflect the
performance of all active accounts of the Adviser invested in the Adviser's
conventional portfolio. The composite does not reflect all of the Adviser's
assets under management and may not accurately reflect the performance of all
accounts managed by the Adviser. The accounts included in the composite had the
same investment objective as the Fund and were managed using substantially
similar, though not in all cases, identical, investment strategies and
techniques as those used by the Fund. See "Investment Objective" and
"Investment Policies." All performance data presented is historical and
investors should not consider this performance data as an indication of the
future performance of the Fund or the results an individual investor might
achieve by investing in the Fund. Investors should not rely on the historical
performance of the Adviser when making an investment decision.

All returns quoted are time-weighted total rates of return and include the
reinvestment of dividends and interest. Performance figures are net of the
advisory fees charged by the Adviser to the accounts comprising the composite.
Consequently, the figures do not reflect the assessment of the Fund's advisory
fee or other expenses equivalent to the Fund's operating expenses. The fees and
expenses of the composite were less than the annual expenses of the Fund. The
performance of the composite would have been lower had the composite incurred
higher fees and expenses. The net effect of the deduction of the Fund's advisory
fee and the operation expenses on annualized performance, including the
compounded effect over time, may be substantial. The composite was not subject
to certain investment limitations, diversification requirements and other
restrictions imposed by the Investment Company Act of 1940 and the Internal
Revenue Code.

All information presented is based on data supplied by the Adviser or from
statistical services, reports or other sources believed by the Adviser to be
reliable. However, such information has not been verified by any third party and
is unaudited.


<TABLE>
                                                    ANNUAL RATES OF RETURN <F8>
<CAPTION>
                                                                Years Ended December 31,
                                        1997   1996   1995    1994   1993    1992   1991    1990   1989    1988
                                        ----   ----   ----    ----   ----    ----   ----    ----   ----    ----
<S>                                     <C>    <C>    <C>    <C>     <C>     <C>    <C>     <C>    <C>     <C>
Leuthold & Anderson, Inc. Composite<F7> 18.1    9.9   18.4   (4.1)   14.6     1.4   17.9     1.6   24.9    20.1
Leuthold Core Investment Fund           17.3    9.3    n/a     n/a    n/a     n/a    n/a     n/a    n/a     n/a
Combined Index<F9>                      19.6   11.9   25.7   (0.6)    9.8     7.3   21.4     3.3   21.3    11.6
Lipper Flexible Fund Index<F10>         18.7   14.1   23.6   (2.7)   12.7     5.7   27.0     0.9   17.2     8.7
</TABLE>

                     COMPOUNDED ANNUAL RATES OF RETURN <F8>

                                      (For the Period Ended December 31, 1997)
                                       10 Years   5 Years  3 Years    1 Year
                                        -------   -------  -------    ------
Leuthold & Anderson, Inc. Composite<F7>  11.9      11.0      15.4      18.1
Leuthold Core Investment Fund             n/a       n/a       n/a      17.3
Combined Index<F9>                       12.8      12.9      18.9      19.6
Lipper Flexible Fund Index<F10>          12.2      12.9      18.7      18.7

<F7> Includes the Leuthold Core Investment Fund since 11/30/95.
<F8>  The calculation of the rates of return was performed in accordance with
      the Performance Presentation Standards endorsed by the Association for
      Investment Management and Research ("AIMR"). Other performance
      calculation methods may produce different results. The AIMR performance
      presentation criteria require the presentation of at least a ten-year
      performance record or performance for the period since inception, if
      shorter.

      Total annual rate of return is the change in redemption value of units
      purchased with an initial $1,000 investment, assuming the reinvestment of
      dividends. Compounded annual rate of return represents the level annual
      rate which, if earned for each year in a multiple year period, would
      produce the cumulative rate of return over that period.

<F9>  The Combined Index is an unmanaged portfolio composed of 45% stocks (S&P
      500), 45% bonds (Lehman Bros. Government/Corporate Bond Index), and 10%
      cash (90-day T-bills).

<F10> The Lipper Flexible Fund Index is an equally-weighted performance index,
      adjusted for capital gains distributions and income dividends, of the
      largest qualifying funds.

Past performance may not be indicative of future rates of return. Investors
should also be aware that other performance calculation methods may produce
different results, and that comparisons of investment results should consider
qualitative circumstances and should be made only for portfolios with generally
similar investment objectives.
    

ADMINISTRATION OF THE FUND
FIRSTAR TRUST COMPANY ADMINISTERS THE FUND
The Fund has entered into an administration agreement (the "Administration
Agreement") with Firstar Trust Company, 615 East Michigan Street, Milwaukee,
Wisconsin 53202 (the "Administrator"). Under the Administration Agreement, the
Administrator prepares and maintains the books, accounts and other documents
required by the Investment Company Act of 1940, responds to shareholder
inquiries, prepares the Fund's financial statements and tax returns, prepares
certain reports and filings with the Securities and Exchange Commission and with
state Blue Sky authorities, furnishes statistical and research data, clerical,
accounting and bookkeeping services and stationery and office supplies, keeps
and maintains the Fund's financial and accounting records and generally assists
in all aspects of the Fund's operations. The Administrator, at its own expense
and without reimbursement from the Fund, furnishes office space and all
necessary office facilities, equipment and executive personnel for performing
the services required to be performed by it under the Administration Agreement.
For the foregoing, the Administrator receives from the Fund a fee, paid monthly
at an annual rate of .05% of the first $100,000,000 of the Fund's average net
assets, .04% of the next $400,000,000 of the Fund's average net assets, and .03%
of the Fund's average net assets in excess of $500,000,000. Notwithstanding the
foregoing, the minimum annual fee payable to the Administrator is $30,000.
   
Firstar Trust Company also provides custodial, transfer
agency and accounting services for the Fund. Information regarding these
services is provided in the Statement of Additional Information.
    

DIVIDENDS, CAPITAL GAINS AND TAXES

THE FUND PAYS QUARTERLY DIVIDENDS AND ANY CAPITAL
GAINS ANNUALLY
The Fund expects to pay dividends quarterly from ordinary income. Net capital
gains distributions, if any, will be
made annually.

In addition, in order to satisfy certain distribution requirements of the Tax
Reform Act of 1986, the Fund may declare special year-end dividend and capital
gains distributions during December. Such distributions, if received by
shareholders by January 31, are deemed to have been paid by the Fund and
received by shareholders on December 31st of the prior year.

Dividend and capital gains distributions may be automatically reinvested or
received in cash. See "Choosing a Distribution Option" for a description of
these distribution methods.

The Fund intends to continue to qualify for taxation as a "regulated investment
company" under the Internal Revenue Code so that it will not be subject to
federal income tax to the extent its income is distributed to shareholders.
Dividends paid by the Fund from net investment income and net short-term capital
gains, whether received in cash or reinvested in additional shares, will be
taxable to shareholders as ordinary income.
   
Distributions paid by the Fund from long-term capital gains, whether received in
cash or reinvested in additional shares, are taxable as long-term capital gains,
regardless of the length of time you have owned shares in the Fund. The Internal
Revenue Code provides for a three-tiered tax rate structure for long-term
capital gains dependent upon the Fund's holding period of  the underlying
financial instrument or capital asset. Capital gains distributions are made when
the Fund realizes net capital gains on sales of portfolio securities during the
year. The Fund does not seek to realize any particular amount of capital gains
during a year; rather, realized gains are a by-product of portfolio management
activities. Consequently, capital gains distributions may be expected to vary
considerably from year to year; there will be no capital gains distributions in
years when the Fund realizes net capital losses.
    
Note that if you accept capital gains distributions in cash, instead of
reinvesting them in additional shares, you are in effect reducing the capital at
work for you in the Fund. Also, keep in mind that if you purchase shares in the
Fund shortly before the record date for a dividend or capital gains
distribution, a portion of your investment will be returned to you as a taxable
distribution, regardless of whether you are reinvesting your distributions or
receiving them in cash.

The Fund will notify you annually as to the tax status of dividend and capital
gains distributions paid by the Fund.

A CAPITAL GAIN OR LOSS MAY BE REALIZED UPON EXCHANGE OR REDEMPTION
A sale or redemption of shares of the Fund is a taxable event and may result in
a capital gain or loss.

Dividend distributions, capital gains distributions, and capital gains or losses
from redemptions may be subject to state and local taxes.
The Fund is required to withhold 31% of taxable dividends, capital gains
distributions, and redemptions paid to shareholders who have not complied with
IRS taxpayer identification regulations. You may avoid this withholding
requirement by certifying on your Purchase Application your proper Social
Security or Taxpayer Identification Number and by certifying that you are not
subject to backup withholding.

The tax discussion set forth above is included for general information only.
Prospective investors should consult their own tax advisers concerning the tax
consequences of an investment in the Fund. The Fund is managed without regard to
tax ramifications.


THE SHARE PRICE OF THE FUND
The Fund's share price or "net asset value" per share is determined by
dividing the total market value of the Fund's investments and other assets, less
any liabilities, by the number of outstanding shares of the Fund. The Fund's net
asset value is determined at the close of regular trading (generally, 4:00 p.m.
Eastern time) each day the New York Stock Exchange is open for trading.

Common stocks that are listed on a securities exchange are valued at the last
quoted sales price on the day the valuation is made. Price information on listed
stocks is taken from the exchange where the security is primarily traded.
Options and securities which are listed on an exchange but which are not traded
on the valuation date are valued at the most recent bid prices. Unlisted
securities for which market quotations are readily available are valued at the
latest quoted bid price. Debt securities are valued at the latest bid prices
furnished by independent pricing services. Other assets and securities for which
no quotations are readily available are valued at fair value as determined in
good faith by the Directors. Short-term instruments (those with remaining
maturities of 60 days or less) are valued at amortized cost, which approximates
market.

GENERAL INFORMATION
The Fund is a Maryland corporation. The Articles of Incorporation permit the
Directors to issue 500,000,000 shares of common stock, with a $.0001 par value.
The Board of Directors has the power to designate one or more classes
("series") of shares of common stock and to classify or reclassify any
unissued shares with respect to such series. Currently the Fund is offering one
class of shares.

The shares of the Fund are fully paid and non-assessable; have no preference as
to conversion, exchange, dividends, retirement or other features; and have no
preemptive rights. Such shares have non-cumulative voting rights, meaning that
the holders of more than 50% of the shares voting for the election of Directors
can elect 100% of the Directors if they so choose.

Annual meetings of shareholders will not be held except as required by the
Investment Company Act of 1940 and other applicable law. An annual meeting will
be held to vote on the removal of a Director or Directors of the Fund if
requested in writing by the holders of not less than 10% of the outstanding
shares of the Fund.

All securities and cash of the Fund are held by Firstar Trust Company, which
also serves as the Fund's Transfer and Dividend Disbursing Agent. Arthur
Andersen LLP serves as independent accountants for the Fund and will audit its
financial statements annually. The Fund is not involved in any litigation.


SHAREHOLDER GUIDE
   
OPENING AN ACCOUNT AND PURCHASING SHARES
You may open a regular (non-retirement) account, either by mail or wire. Simply
complete and return a Purchase Application and any required legal documentation,
indicating the amount you wish to invest. Your purchase must be equal to or
greater than the $10,000 minimum initial investment requirement or $1,000 for
Uniform Gifts/Transfers to Minors Act accounts and Individual Retirement
Accounts (IRAs). The officers of the Fund may, but are not required to, lower
the $10,000 minimum initial investment requirement to not less than $1,000 for
investors who are related to, or affiliated with, shareholders who have invested
$10,000 in the Fund. You must open a new IRA (Roth or traditional) by mail (IRAs
may not be opened by wire) using a Leuthold IRA Application. Your purchase must
be equal to or greater than the $1,000 minimum initial investment requirement,
but no more than $2,000 if you are making a regular IRA contribution. Rollover
contributions are generally limited to the amount withdrawn within the past 60
days from an IRA or other qualified retirement plan. If you need assistance with
the forms or have any questions about the Fund, please call our Investor
Information Department at 1-800-273-6886. Note: For other types of account
registrations (e.g., corporations, associations, other organizations, trusts or
powers of attorney), please call us to determine which additional forms you may
need.
    
Because of the risks associated with common stock and bond investments, the Fund
is intended to be a long-term investment vehicle and is not designed to provide
investors with a means of speculating on short-term market movements.
Consequently, the Fund reserves the right to reject any specific purchase
request. The Fund also reserves the right to suspend the offering of shares for
a period of time.

The Fund's shares are purchased at the next-determined net asset value after
your investment has been received. The Fund is offered on a no-load basis (i.e.,
there are no sales commissions or 12b-1 fees).

ADDITIONAL INVESTMENTS TO EXISTING ACCOUNTS
Subsequent investments to any account may be made by mail or wire. The minimum
subsequent investment is $100.

PURCHASING BY MAIL
Complete and sign the enclosed Purchase Application.

NEW ACCOUNT - Please include the amount of your initial investment on the
Purchase Application, make your check payable to Leuthold Core Investment Fund
and mail to:
Leuthold Funds, Inc.
c/o Firstar Trust Company
Mutual Fund Services
P.O. Box 701
Milwaukee, Wisconsin 53201-0701

For registered, overnight courier or express mail, send to:
Leuthold Funds, Inc.
c/o Firstar Trust Company
Mutual Fund Services
3rd Floor
615 East Michigan Street
Milwaukee, Wisconsin 53202

The U.S. Postal Service and other independent delivery services are not agents
of the Fund. Therefore, deposit of purchase applications in the mail or with
such services does not constitute receipt by Firstar Trust Company or the Fund.

ADDITIONAL INVESTMENTS - Additional investments should include the Additional
Investment Form attached to your Fund confirmation statements. Please make your
check payable to Leuthold Core Investment Fund, write your account number on
your check and, using the return envelope provided, mail to one of the addresses
indicated for new accounts.

All written requests should be mailed to one of the addresses indicated for new
accounts. DO NOT send registered, overnight or express mail to the post office
box address.

PURCHASING BY WIRE
   
Instruct your bank to use the following instructions when wiring funds:
Wire to:
Firstar Bank Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
ABA Number 075000022
Credit: Firstar Trust Company
Account Number 112-952-137
Further credit: Leuthold Core Investment Fund, "account number and shareholder
name"
    
BEFORE WIRING
   
To assure proper receipt, please be sure to contact our Investor Information
Department at 1-800-273-6886 before wiring and to include the above-referenced
information. If you are opening a new account, please complete the Purchase
Application and mail it to the "New Account" address after completing your
wire arrangement. Note: Federal Funds wire purchase orders will be accepted only
when the Fund and Custodian Bank are open for business. The Fund and its
transfer agent are not responsible for the consequences of delays resulting from
the banking or Federal Reserve Wire System, or from incomplete wiring
instructions.
    
TELEPHONE PURCHASE AND AUTOMATIC INVESTMENT
   
The Telephone Purchase option lets you move money from your bank account to your
Leuthold Core Investment Fund account at your request. Only bank accounts held
at domestic financial institutions that are Automated Clearing House (ACH)
members can be used for telephone transactions. To have your Fund shares
purchased at the net asset value determined as of the close of regular trading
on a given date, Firstar Trust Company must receive both the purchase order and
payment by Electronic Funds Transfer through the ACH System before the close of
regular trading on such date. Most transfers are completed within 3 business
days. Telephone transactions may not be used for initial purchases of Fund
shares. The minimum amount that can be transferred by telephone is $100.

If you choose the Automatic Investment option, money will be moved from your
bank account to your Leuthold Core Investment Fund account on the schedule
(e.g., monthly, bimonthly [every other month], quarterly or yearly) you select,
and may be in any amount subject to a $50 minimum. To establish these options,
complete the appropriate sections of the Purchase Application. Please call our
Investor Information Department at 1-800-273-6886 if you have questions. Please
wait three weeks before using the service.
    

CHOOSING A DISTRIBUTION OPTION
You must select one of three distribution options:
1. AUTOMATIC REINVESTMENT OPTION - Both dividends and capital gains
distributions will be reinvested in additional Fund shares. This option will be
selected for you unless you specify one of the other options.

2. CASH DIVIDEND OPTION - Your dividends will be paid in cash and your capital
gains will be reinvested in additional Fund shares.

3. ALL CASH OPTION - Both dividend and capital gains distributions will be paid
in cash.

You may change your option by calling our Investor Information Department at 1-
800-273-6886.


TAX CAUTION

INVESTORS SHOULD ASK ABOUT THE TIMING OF CAPITAL GAINS AND DIVIDEND
DISTRIBUTIONS BEFORE INVESTING

Under Federal tax laws, the Fund is required to distribute net capital gains and
dividend income to Fund shareholders. These distributions are made to all
shareholders who own Fund shares as of the distribution's record date,
regardless of how long the shares have been owned. Purchasing shares just prior
to the record date could have a significant impact on your tax liability for the
year. For example, if you purchase shares immediately prior to the record date
of a sizable capital gain or income dividend distribution, you will be assessed
taxes on the amount of the capital gain and/or dividend distribution later paid
even though you owned the Fund shares for just a short period of time. (Taxes
are due on the distributions even if the dividend or gain is reinvested in
additional Fund shares.) While the total value of your investment will be the
same after the distribution-the amount of the distribution will offset the drop
in the net asset value of the shares-you should be aware of the tax implications
the timing of your purchase may have.

Prospective investors should, therefore, inquire about potential distributions
before investing. The Fund's annual capital gains distributions normally occur
in December, while income dividends are generally paid quarterly in March, June,
September and December. For additional information on distributions and taxes,
see the section entitled "Dividends, Capital Gains, and Taxes."


ADDITIONAL INFORMATION

SIGNATURE GUARANTEES - For our mutual protection, we may require a signature
guarantee on certain written transaction requests. A signature guarantee
verifies the authenticity of your signature and may be obtained from banks,
brokers and any other guarantor that the Fund deems acceptable. A SIGNATURE
GUARANTEE CANNOT BE PROVIDED BY A NOTARY PUBLIC.

CERTIFICATES - Share certificates will be issued upon request. If a certificate
is lost, you may incur an expense to replace it.
   
BROKER-DEALER AND OTHER PROCESSING INTERMEDIARY PURCHASES - You may purchase
shares through programs of services offered or administered by broker-dealers,
investment advisers, financial institutions or other service providers
("Processing Intermediaries") that have entered into agreements with the Fund.
These Processing Intermediaries may become shareholders of record and may use
procedures and impose restrictions in addition to or different from those
applicable to you if you invest directly in the Fund. Some of the services the
Fund provides may not be available to you or may be modified in connection with
the programs provided by Processing Intermediaries. If a Processing Intermediary
is the shareholder of record of your account, the Fund may accept requests to
purchase additional shares into your account only from the Processing
Intermediary. Processing Intermediaries may charge fees or assess other charges
for the services they provide to their customers. These fees, if any, are
retained by the Processing Intermediaries and are not remitted to the Fund or
the Adviser. The Adviser and/or the Fund may pay fees to Processing
Intermediaries to compensate them for the services they provide. Before you
invest in the Fund through a Processing Intermediary, you should read the
program materials provided by the Processing Intermediary. You may purchase
shares of the Fund through Processing Intermediaries without regard to the
Fund's minimum purchase requirement.

The Fund may authorize one or more Processing Intermediaries (and other
Processing Intermediaries properly designated thereby) to accept orders on the
Fund's behalf. In such event, the Fund will be deemed to have received a
purchase order when the Processing Intermediary accepts the customer's order,
and the order will be priced at the Fund's net asset value next computed after
its accepted by the Processing Intermediary.
    
CANCELLING TRADES - The Fund will not cancel any trade (e.g., a purchase or
redemption) believed to be authentic, received in writing or by telephone, once
the trade has been received.


WHEN YOUR ACCOUNT WILL BE CREDITED
   
Your trade date is the date on which your account is credited. If your purchase
is made by check or Federal Funds wire and is received by the close of regular
trading on the New York Stock Exchange (generally 4:00 p.m. Eastern time), your
trade date is the day of receipt. If your purchase is received after the close
of the Exchange, your trade date is the next business day. Your shares are
purchased at the net asset value determined on your trade date. Certain
Processing Intermediaries may enter orders by telephone, with payment to follow
the next business day as specified in their agreement with the Fund. In such
event the Fund will effect such purchase orders at the net asset value next
determined after the receipt of the telephone purchase order. The Fund will not
accept third-party checks to open an account. Please be sure your purchase check
is made payable to "Leuthold Core Investment Fund." If a purchase is cancelled
due to nonpayment or because a check does not clear (and, therefore, the account
is required to be redeemed), the purchaser will be responsible for any loss the
Fund incurs. The transfer agent charges a $20.00 fee against a shareholder's
account for any check that does not clear. When you purchase shares through
Processing Intermediaries, it is the responsibility of the Processing
Intermediary to place the order with the Fund on a timely basis. If payment is
not received within the time period specified in the Fund's agreement with the
Processing Intermediary, the Processing Intermediary could be held liable for
any resulting fees or losses.
    
SELLING YOUR SHARES
You may withdraw any portion of the funds in your account by redeeming shares at
any time (please see "Important Redemption Information"). You may initiate a
request by writing or by telephoning. Your redemption proceeds will be mailed no
later than the seventh day after the receipt of the request in Good Order,
except that when a purchase has been made by check, the Fund can hold payment on
redemption until it is reasonably satisfied the check has cleared. (This may
normally take up to 3 days for local personal or corporate checks and up to 7
days for other personal or corporate checks.) Your redemption proceeds will be
mailed upon clearance of the purchase check. If you redeem by telephone and
request wire payment, such payment will normally be made in Federal Funds on the
next business day.

SELLING BY MAIL - Requests should be mailed to Leuthold Funds, Inc., c/o Firstar
Trust Company, Mutual Fund Services, P.O. Box 701, Milwaukee, Wisconsin 53201-
0701 (For  registered, overnight courier or express mail, send your request to
Leuthold Funds, Inc., c/o Firstar Trust Company, Mutual Fund Services, 3rd
Floor, 615 East Michigan Street, Milwaukee, Wisconsin 53202. DO NOT send to
Firstar Trust Company's post office address.)

The U.S. Postal Service and other independent delivery services are not agents
of the Fund. Therefore, deposit of redemption requests in the mail or with such
services does not constitute receipt by Firstar Trust Company or the Fund.
If you are requesting a redemption of shares from an Individual Retirement
Account (IRA), you must include instructions regarding federal income tax
withholding. Unless otherwise indicated, such a redemption, as well as
redemptions of other retirement plans not involving a direct rollover to an
eligible plan, will be subject to federal income tax withholding.
The redemption price of shares will be the Fund's net asset value next
determined after Firstar Trust Company has received all required documents in
Good Order.

DEFINITION OF GOOD ORDER - Good Order means that the request includes the
following:
1.The account number and Fund name.
2.The amount of the transaction (specified in dollars
  or shares).
3.Signatures of all owners exactly as they are registered on
  the account.
4.Any required signature guarantees.
5.Other supporting legal documentation that might be
  required in the case of estates, corporations, trusts and
  certain other accounts.
6.Any certificates you hold for the account.

If you have questions about this definition as it pertains to your request,
please call our Investor Information Department at
1-800-273-6886.
   
SELLING BY TELEPHONE - To sell shares by telephone, you or your pre-authorized
representative may call our Investor Information Department at 1-800-273-6886.
The proceeds will be sent to you by mail, unless you request wire payment. If
you redeem by telephone and request wire payment, such payment will normally be
made in Federal Funds on the next business day. Firstar Trust Company will wire
redemption proceeds only to the bank and account designated on your Purchase
Application or in written instructions (with signature guarantee) subsequently
received by Firstar Trust Company, and only if the bank is a commercial bank
located within the United States. Firstar Trust Company charges a fee (currently
$12.00, but subject to change without notice) for each payment made by wire of
redemption proceeds, which fee will be deducted from your account. Please see
"Important Information About Telephone Transactions."
    
TELEPHONE REDEMPTION & SYSTEMATIC WITHDRAWAL - The Telephone Redemption option
lets you move money from your Fund account to your bank account via Electronic
Funds Transfer (EFT) at your request. If you select the Systematic Withdrawal
option, money will be automatically moved from your Fund account to your bank
account according to the schedule you have selected. The Systematic Withdrawal
option may be in any amount subject to a $100 minimum. You may elect these
options by completing the appropriate sections of the Purchase Application. If
money is moved via EFT, you will not be charged for these services.

IMPORTANT REDEMPTION INFORMATION - Shares purchased may be redeemed at any time.
However, your redemption proceeds will not be paid until payment for the
purchase is collected, which may take up to ten calendar days.

DELIVERY OF REDEMPTION PROCEEDS - Redemption requests received by telephone
prior to the close of regular trading on the New York Stock Exchange (generally
4:00 p.m. Eastern time) are processed on the day of receipt and the redemption
proceeds are normally sent on the following business day.

Redemption requests received by telephone after the close of the Exchange are
processed on the business day following receipt and the proceeds are normally
sent on the second business day following receipt. The Fund reserves the right
to revise or terminate the telephone redemption privilege at any time.

Redemption proceeds must be sent to you within seven days of receipt of your
request in Good Order.

If you experience difficulty in making a telephone redemption during periods of
drastic economic or market changes, your redemption request may be made by
regular or express mail. It will be implemented at the net asset value next
determined after your request has been received by Firstar Trust Company in Good
Order.

The Fund may suspend the redemption right or postpone payment at times when the
New York Stock Exchange is closed or under any emergency circumstances as
determined by the United States Securities and Exchange Commission.
   
REDEMPTIONS THROUGH PROCESSING INTERMEDIARIES - If you purchase shares through
Processing Intermediaries, you may be required to redeem your shares through the
Processing Intermediary. These Processing Intermediaries may use procedures and
impose restrictions in addition to or different from those applicable to you if
you invest directly in the Fund. If a Processing Intermediary is the shareholder
of record of your account, the Fund may accept redemption requests only from the
Processing Intermediary. The Fund may authorize one or more Processing
Intermediaries (and other Processing Intermediaries properly designated thereby)
to accept redemption requests on the Fund's behalf. In such event, the Fund will
be deemed to have received a redemption request when the Processing Intermediary
accepts the shareholder's request, and the request will be priced at the Fund's
net asset value next computed after it is accepted by the Processing
Intermediary.
    
MINIMUM ACCOUNT BALANCE REQUIREMENTS - Due to the relatively high cost of
maintaining smaller accounts, the Fund reserves the right to redeem
involuntarily shares in any account that is below $1,000. You will be notified
if the value of your account is below this minimum account balance requirement.
You will then be allowed 60 days to make an additional investment before the
account is liquidated. If an account is liquidated, the proceeds will be
promptly paid to the shareholder.

IMPORTANT INFORMATION ABOUT TELEPHONE TRANSACTIONS
To protect your account from losses resulting from unauthorized or fraudulent
telephone instructions, the Fund adheres to the following security procedures:

1. SECURITY CHECK -  To request a transaction by telephone, the caller must know
(i) the name of the Fund; (ii) the 10-digit account number; (iii) the exact name
and address used in the registration; and (iv) the Social Security or Employer
Identification number listed on the account.

2. PAYMENT POLICY - The proceeds of any telephone redemption by mail will be
made payable to the registered shareowner and mailed to the address of record,
only. The proceeds of any telephone redemption by wire will be wired only to the
bank and account designated on the Purchase Application or in written
instructions (with signature guarantee) subsequently received by Firstar Trust
Company from the registered shareowner, and only if the bank is a commercial
bank located within the United States.

Neither the Fund nor Firstar Trust Company will be responsible for the
authenticity of transaction instructions received by telephone, provided that
reasonable security procedures have been followed. The Fund believes that the
security procedures described above are reasonable and that if such procedures
are followed, you will bear the risk of any losses resulting from unauthorized
or fraudulent telephone transactions on your account. If the Fund or Firstar
Trust Company fails to follow reasonable security procedures, it may be liable
for any losses resulting from unauthorized or fraudulent telephone transactions
on your account.


TRANSFERRING REGISTRATION
You may request transfer of the registration of any of your Fund shares to
another person by writing to: Leuthold Funds, Inc., c/o Firstar Trust Company,
Mutual Fund Services, P.O. Box 701, Milwaukee, Wisconsin 53201-0701. The request
must be in Good Order. For further instructions, please call our Investor
Information Department at 1-800-273-6886.


OTHER LEUTHOLD SERVICES
For more information about any of these services, please call our Investor
Information Department at 1-800-273-6886.

Firstar Trust Company will send you a confirmation statement each time you
initiate a transaction in your account. You will also receive an account
statement at the end of each calendar quarter. The fourth-quarter statement will
be a year-end statement, listing all transaction activity for the entire
calendar year.

Financial Reports on the Fund will be mailed to you semi-annually, according to
the Fund's fiscal year-end.



LEUTHOLD CORE INVESTMENT FUND


INVESTOR INFORMATION DEPARTMENT:
1-800-273-6886

TELE-ACCOUNT FOR 24-HOUR ACCESS:
1-800-273-6886

TELECOMMUNICATION SERVICE FOR THE HEARING-IMPAIRED:
1-800-684-3416

TRANSFER AGENT:
Firstar Trust Company
615 East Michigan Street
P.O. Box 701
Milwaukee, Wisconsin  53201-0701
(Regular Mail Address)

MUTUAL FUND SERVICES
3rd Floor
615 East Michigan Street
Milwaukee, Wisconsin  53202
(Overnight or Express Mail Address)


   <PAGE>
      
   STATEMENT OF ADDITIONAL INFORMATION                       JANUARY 30, 1998
       

                              LEUTHOLD FUNDS, INC.
                             100 North Sixth Street
                                   Suite 700A
                          Minneapolis, Minnesota  55403




      
             This Statement of Additional Information is not a prospectus and
   should be read in conjunction with the Prospectus of Leuthold Funds, Inc.
   dated January 30, 1998.  Requests for copies of the Prospectus should be
   made by writing to Leuthold Funds, Inc., 100 North Sixth Street, Suite
   700A, Minneapolis, Minnesota 55403, Attention:  Corporate Secretary, or by
   calling 1-800-273-6886.         


                              Leuthold Funds, Inc.

                                TABLE OF CONTENTS

                                                                     Page No.


   INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . .  1

   INVESTMENT CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . .  3

   DIRECTORS AND OFFICERS OF THE CORPORATION . . . . . . . . . . . . . . . 11
      
   OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS  . . . . . . . . . . 13
       
   INVESTMENT ADVISER, ADMINISTRATOR, CUSTODIAN,
        TRANSFER AGENT AND ACCOUNT SERVICES AGENT  . . . . . . . . . . . . 14

   DETERMINATION OF NET ASSET VALUE  . . . . . . . . . . . . . . . . . . . 17
      
   SYSTEMATIC WITHDRAWAL PLAN  . . . . . . . . . . . . . . . . . . . . . . 17
       
   ALLOCATION OF PORTFOLIO BROKERAGE . . . . . . . . . . . . . . . . . . . 18

   TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

   STOCKHOLDER MEETINGS  . . . . . . . . . . . . . . . . . . . . . . . . . 21

   PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . 22

   DESCRIPTION OF SECURITIES RATINGS . . . . . . . . . . . . . . . . . . . 23

   INDEPENDENT ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . . . . 27
      
   FINANCIAL STATEMENTS  . . . . . . . . . . . . . . . . . . . . . . . . . 28
       
      
        No person has been authorized to give any information or to make any
   representations other than those contained in this Statement of Additional
   Information and the Prospectus dated January 30, 1998, and, if given or
   made, such information or representations may not be relied upon as having
   been authorized by Leuthold Funds, Inc.        

        This Statement of Additional Information does not constitute an offer
   to sell securities.


                             INVESTMENT RESTRICTIONS
      
             As set forth in the Prospectus dated January 30, 1998, of
   Leuthold Funds, Inc. (the "Corporation") under the caption "INVESTMENT
   OBJECTIVE," the investment objective of the Leuthold Core Investment Fund
   (the "Fund") is to seek total return (i.e. capital change plus income)
   consistent with prudent investment risk over the long term.  (Prior to
   January 30, 1998 the Fund was called the "Leuthold Asset Allocation
   Fund".)  Consistent with this investment objective, the Fund has adopted
   the following investment restrictions which are matters of fundamental
   policy and cannot be changed without approval of the holders of the lesser
   of:  (i) 67% of the Fund's shares present or represented at a
   stockholder's meeting at which the holders of more than 50% of such shares
   are present or represented; or (ii) more than 50% of the outstanding
   shares of the Fund.       

             1.   The Fund will diversify its assets in different
        companies and will not purchase securities of any issuer if, as
        a result of such purchase, the Fund would own more than 10% of
        the outstanding voting securities of such issuer or more than 5%
        of the Fund's assets would be invested in securities of such
        issuer (except that up to 25% of the value of the Fund's total
        assets may be invested without regard to this limitation).  This
        restriction does not apply to obligations issued or guaranteed
        by the United States Government, its agencies or
        instrumentalities.

             2.   The Fund will not sell securities short, buy
        securities on margin, or write put or call options.

             3.   The Fund will not borrow money or issue senior
        securities, except for temporary bank borrowings (not exceeding
        10% of the value of the Fund's total assets) or for emergency or
        extraordinary purposes.  The Fund will not borrow money for the
        purpose of investing in securities, and the Fund will not
        purchase any portfolio securities for so long as any borrowed
        amounts remain outstanding.

             4.   The Fund will not pledge or hypothecate its assets,
        except to secure borrowings for temporary or emergency purposes.

             5.   The Fund will not act as an underwriter or distributor
        of securities other than shares of the Fund (except to the
        extent that the Fund may be deemed to be an underwriter within
        the meaning of the Securities Act of 1933, as amended, in the
        disposition of restricted securities).
      
             6.   The Fund will not make loans, except it may enter into
        repurchase agreements or acquire debt securities from the issuer
        or others which are publicly distributed or are of a type
        normally acquired by institutional investors and except that it
        may make loans of portfolio securities if any such loans are
        secured continuously by collateral at least equal to the market
        value of the securities loaned in the form of cash and/or
        securities issued or guaranteed by the U.S. Government, its
        agencies or instrumentalities and provided that no such loan
        will be made if upon the making of that loan more than 30% of
        the value of the Fund's total assets would be the subject of
        such loans.  The Fund has determined not to enter into
        repurchase agreements with respect to more than 5% of its net
        assets during the fiscal year ending September 30, 1998.       

             7.   The Fund will not concentrate more than 25% of its
        total assets in securities of any one industry.  This
        restriction does not apply to obligations issued or guaranteed
        by the United States Government, its agencies or
        instrumentalities.

             8.   The Fund will not make investments for the purpose of
        exercising control or management of any company.

             9.   The Fund will not purchase or sell real estate or real
        estate mortgage loans and will not make any investments in real
        estate limited partnerships.

             10.  The Fund will not purchase or sell commodities or
        commodity contracts, including futures contracts.

             11.  The Fund will not purchase or sell any interest in any
        oil, gas or other mineral exploration or development program,
        including any oil, gas or mineral leases.
     
             The Fund has adopted certain other investment restrictions which
   are not fundamental policies and which may be changed by the Fund's Board
   of Directors without stockholder approval.  These additional restrictions
   are as follows:

             1.   The Fund will not acquire or retain any security
        issued by a company, an officer or director of which is an
        officer or director of the Fund or an officer, director or other
        affiliated person of the Fund's investment adviser.

             2.   The Fund will not invest more than 5% of the Fund's
        total assets in securities of any issuer which has a record of
        less than three (3) years of continuous operation, including the
        operation of any predecessor business of a company which came
        into existence as a result of a merger, consolidation,
        reorganization or purchase of substantially all of the assets of
        such predecessor business.

             3.   The Fund will not purchase illiquid securities if, as
        a result of such purchase, more than 5% of the total value of
        its total assets would be invested in such securities.

             4.   The Fund's investments in warrants will be limited to
        5% of the Fund's net assets.  Included within such 5%, but not
        to exceed 2% of the value of the Fund's net assets, may be
        warrants which are not listed on either the New York Stock
        Exchange or the American Stock Exchange.

             5.   The Fund may purchase put or call options provided
        that the Fund's investments in such put or call options will be
        limited to 5% of the Fund's net assets.

             6.   The Fund will not purchase the securities of other
        investment companies except:  (a) as part of a plan of merger,
        consolidation or reorganization approved by the stockholders of
        the Fund; (b) securities of registered open-end investment
        companies; or (c) securities of registered closed-end investment
        companies on the open market where no commission results, other
        than the usual and customary broker's commission.  No purchases
        described in (b) and (c) will be made if as a result of such
        purchases (i) the Fund and its affiliated persons would hold
        more than 3% of any class of securities, including voting
        securities, of any registered investment company; (ii) more than
        5% of the Fund's net assets would be invested in shares of any
        one registered investment company; and (iii) more than 25% of
        the Fund's net assets would be invested in shares of registered
        investment companies.

             The aforementioned percentage restrictions on investment or
   utilization of assets refer to the percentage at the time an investment is
   made.  If these restrictions are adhered to at the time an investment is
   made, and such percentage subsequently changes as a result of changing
   market values or some similar event, no violation of the Fund's
   fundamental restrictions will be deemed to have occurred.  Any changes in
   the Fund's investment restrictions made by the Board of Directors will be
   communicated to stockholders prior to their implementation.

                            INVESTMENT CONSIDERATIONS

   Warrants and Put and Call Options

             As set forth in the Corporation's Prospectus, the Fund may
   invest in warrants and put and call options on securities.

             By purchasing a put option, the Fund obtains the right (but not
   the obligation) to sell the option's underlying security at a fixed strike
   price.  In return for this right, the Fund pays the current market price
   for the option (known as the option premium).  The Fund may terminate its
   position in a put option it has purchased by allowing it to expire or by
   exercising the option.  If the option is allowed to expire, the Fund will
   lose the entire premium it paid.  If the Fund exercises the option, it
   completes the sale of the underlying security at the strike price.  The
   Fund may also terminate a put option position by closing it out in the
   secondary market at its current price, if a liquid secondary market
   exists.  The buyer of a put option can expect to realize a gain if
   security prices fall substantially.  However, if the underlying security's
   price does not fall enough to offset the cost of purchasing the option, a
   put buyer can expect to suffer a loss (limited to the amount of the
   premium paid, plus related transaction costs).

             The features of call options are essentially the same as those
   of put options, except that the purchaser of a call option obtains the
   right to purchase, rather than sell, the underlying security at the
   option's strike price.  A call buyer attempts to participate in potential
   price increases of the underlying security with risk limited to the cost
   of the option if security prices fall.  At the same time, the buyer can
   expect to suffer a loss if security prices do not rise sufficiently to
   offset the cost of the option.

             Warrants are similar to call options in that the purchaser of a
   warrant has the right (but not the obligation) to purchase the underlying
   security at a fixed price.  Warrants are issued by the issuer of the
   underlying security whereas options are not.  Warrants typically have
   exercise periods in excess of those of call options.

   High Yield Securities

             As set forth in the Corporation's Prospectus, the Fund (or a
   registered investment company in which the Fund invests) may invest in
   high yield, high risk, lower-rated securities, commonly known as "junk
   bonds."  Investments in such securities are subject to the risk factors
   outlined below.

             The high yield market is relatively new and at times is subject
   to substantial volatility.  An economic downturn or increase in interest
   rates may have a more significant effect on the high yield securities in
   an underlying registered investment company's portfolio and their markets,
   as well as on the ability of securities' issuers to repay principal and
   interest. Issuers of high yield securities may be of low creditworthiness
   and the high yield securities may be subordinated to the claims of senior
   lenders.  During periods of economic downturn or rising interest rates the
   issuers of high yield securities may have greater potential for insolvency
   and a higher incidence of high yield bond defaults may be experienced.
      
             The prices of high yield securities have been found to be less
   sensitive to interest rate changes than higher-rated investments but are
   more sensitive to adverse economic changes or individual corporate
   developments.  During an economic downturn or substantial period of rising
   interest rates, highly leveraged issuers may experience financial stress
   which would adversely affect their ability to service their principal and
   interest payment obligations, to meet projected business goals, and to
   obtain additional financing.  If the issuer of a high yield security owned
   by the Fund (or by a registered investment company in which the Fund
   invests) defaults, the Fund (or such registered investment company) may
   incur additional expenses in seeking recovery.  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 net asset value. 
   Yields on high yield securities will fluctuate over time.  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 therefor tend to be more volatile than the
   market prices of securities which pay interest periodically and in cash.
       
      
             Certain securities held by the Fund (or a registered investment
   company in which the Fund invests), including high yield securities, may
   contain redemption or call provisions.  If an issuer exercises these
   provisions in a declining interest rate market, the Fund (or such
   registered investment company) would have to replace the security with a
   lower yielding security, resulting in a decreased return for the investor. 
   Conversely, a high yield security's value will decrease in a rising
   interest rate market, as will the value of the Fund's (or the underlying
   registered investment company's) net assets.       

             The secondary market for high yield securities may at times
   become less liquid or respond to adverse publicity or investor perceptions
   making it more difficult for the Fund (or a registered investment company
   in which the Fund invests) to value accurately high yield securities or
   dispose of them.  To the extent the Fund (or a registered investment
   company in which the Fund invests) owns or may acquire illiquid or
   restricted high yield securities, these securities may involve special
   registration responsibilities, liabilities and costs, and liquidity
   difficulties, and judgment will play a greater role in valuation because
   there is less reliable and objective data available.

             Special tax considerations are associated with investing in high
   yield bonds structured as zero coupon or pay-in-kind securities.  The Fund
   (or a registered investment company in which the Fund invests) will report
   the interest on these securities as income even though it receives no cash
   interest until the security's maturity or payment date.  Further, the Fund
   (or a registered investment company in which the Fund invests) must
   distribute substantially all of its income to its shareholders to qualify
   for pass-through treatment under the tax law.  Accordingly, the Fund (or a
   registered investment company in which the Fund invests) may have to
   dispose of its portfolio securities under disadvantageous circumstances to
   generate cash or may have to borrow to satisfy distribution requirements.

             Credit ratings evaluate the safety of principal and interest
   payments, not the market value risk of high yield securities.  Since
   credit rating agencies may fail to timely change the credit ratings to
   reflect subsequent events, the investment adviser to the Fund (or a
   registered investment company in which the Fund invests) should monitor
   the issuers of high yield securities in the portfolio to determine if the
   issuers will have sufficient cash flow and profits to meet required
   principal and interest payments, and to attempt to assure the securities'
   liquidity so the fund can meet redemption requests.  To the extent that
   the Fund (or a registered investment company in which the Fund invests)
   invests in high yield securities, the achievement of its investment
   objective may be more dependent on its own credit analysis than is the
   case for higher quality bonds.  The Fund (or a registered investment
   company in which the Fund invests) may retain a portfolio security whose
   rating has been changed.

   Futures Contracts

             A registered investment company in which the Fund invests may
   enter into futures contracts for the purchase or sale of debt securities
   and stock indexes.  A futures contract is an agreement between two parties
   to buy and sell a security or an index for a set price on a future date. 
   Futures contracts are traded on designated "contract markets" which,
   through their clearing corporations, guarantee performance of the
   contracts.

             A financial futures contract sale creates an obligation by the
   seller to deliver the type of financial instrument called for in the
   contract in a specified delivery month for a stated price.  A financial
   futures contract purchase creates an obligation by the purchaser to take
   delivery of the type of financial instrument called for in the contract in
   a specified delivery month at a stated price.  The specific instruments
   delivered or taken, respectively, at settlement date are not determined
   until on or near such date.  The determination is made in accordance with
   the rules of the exchange on which the futures contract sale or purchase
   was made.  Futures contracts are traded in the United States only on
   commodity exchanges or boards of trade -- known as "contract markets" --
   approved for such trading by the Commodity Futures Trading Commission (the
   "CFTC"), and must be executed through a futures commission merchant or
   brokerage firm which is a member of the relevant contract market.

             Although futures contracts by their terms call for actual
   delivery or acceptance of commodities or securities, in most cases the
   contracts are closed out before the settlement date without the making or
   taking of delivery.  Closing out a futures contract sale is effected by
   purchasing a futures contract for the same aggregate amount of the
   specific type of financial instrument or commodity with the same delivery
   date.  If the price of the initial sale of the futures contract exceeds
   the price of the offsetting purchase, the seller is paid the difference
   and realizes a gain.  On the other hand, if the price of the offsetting
   purchase exceeds the price of the initial sale, the seller realizes a
   loss.  The closing out of a futures contract purchase is effected by the
   purchaser's entering into a futures contract sale.  If the offsetting sale
   price exceeds the purchase price, the purchaser realizes a gain, and if
   the purchase price exceeds the offsetting sale price, the purchaser
   realizes a loss.

             A registered investment company in which the Fund invests may
   sell financial futures contracts in anticipation of an increase in the
   general level of interest rates.  Generally, as interest rates rise, the
   market value of the securities held by an underlying registered investment
   company will fall, thus reducing its net asset value.  This interest rate
   risk may be reduced without the use of futures as a hedge by selling such
   securities and either reinvesting the proceeds in securities with shorter
   maturities or by holding assets in cash.  This strategy, however, entails
   increased transaction costs in the form of dealer spreads and brokerage
   commissions and would typically reduce the registered investment company's
   average yield as a result of the shortening of maturities.

             The sale of financial futures contracts serves as a means of
   hedging against rising interest rates.  As interest rates increase, the
   value of an underlying registered investment company's short position in
   the futures contracts will also tend to increase, thus offsetting all or a
   portion of the depreciation in the market value of the investments being
   hedged.  While a registered investment company in which the Fund invests
   will incur commission expenses in selling and closing out futures
   positions (by taking an opposite position in the futures contract),
   commissions on futures transactions tend to be lower than transaction
   costs incurred in the purchase and sale of portfolio securities.

             A registered investment company in which the Fund invests may
   purchase interest rate futures contracts in anticipation of a decline in
   interest rates when it is not fully invested.  As such purchases are made,
   an underlying registered investment company would probably expect that an
   equivalent amount of futures contracts will be closed out.

             Unlike when a registered investment company in which the Fund
   invests purchases or sells a security, no price is paid or received by the
   registered investment company upon the purchase or sale of a futures
   contract.  Upon entering into a contract, the underlying registered
   investment company is required to deposit with its custodian in a
   segregated account in the name of the futures broker an amount of cash
   and/or U.S. Government securities.  This is known as "initial margin." 
   Initial margin is similar to a performance bond or good faith deposit
   which is returned to an underlying registered investment company upon
   termination of the futures contract, assuming all contractual obligations
   have been satisfied.  Futures contracts also involve brokerage costs.

             Subsequent payments, called "variation margin" or "maintenance
   margin", to and from the broker (or the custodian) are made on a daily
   basis as the price of the underlying security or commodity fluctuates,
   making the long and short positions in the futures contract more or less
   valuable.  This is known as "marking to the market."

             A registered investment company in which the Fund invests may
   elect to close some or all of its futures positions at any time prior to
   their expiration in order to reduce or eliminate a hedge position then
   currently held by the registered investment company.  The underlying
   registered investment company may close its positions by taking opposite
   positions which will operate to terminate its position in the futures
   contracts.  Final determinations of variation margin are then made,
   additional cash is required to be paid by or released to the underlying
   registered investment company, and it realizes a loss or a gain.  Such
   closing transactions involve additional commission costs.

             A stock index futures contract may be used to hedge an
   underlying registered investment company's portfolio with regard to market
   risk as distinguished from risk related to a specific security.  A stock
   index futures contract is a contract to buy or sell units of an index at a
   specified future date at a price agreed upon when the contract is made.  A
   stock index futures contract does not require the physical delivery of
   securities, but merely provides for profits and losses resulting from
   changes in the market value of the contract to be credited or debited at
   the close of each trading day to the respective accounts of the parties to
   the contract.  On the contract's expiration date, a final cash settlement
   occurs.  Changes in the market value of a particular stock index futures
   contract reflect changes in the specified index of equity securities on
   which the future is based.

             In the event of an imperfect correlation between the futures
   contract and the portfolio position which is intended to be protected, the
   desired protection may not be obtained and the registered investment
   company may be exposed to risk of loss.  Further, unanticipated changes in
   interest rates or stock price movements may result in a poorer overall
   performance for the registered investment company than if it had not
   entered into futures contracts on debt securities or stock indexes.

             The market prices of futures contracts may also be affected by
   certain factors.  First, all participants in the futures market are
   subject to margin deposit and maintenance requirements.  Rather than
   meeting additional margin deposit requirements, participants may close
   futures contracts through offsetting transactions which could distort the
   normal relationship between the securities and futures markets.  Second,
   the deposit requirements in the futures market are less stringent than
   margin requirements in the securities market.  Accordingly, increased
   participation by speculators in the futures market may also cause
   temporary price distortions.

             Positions in futures contracts may be closed out only on an
   exchange or board of trade providing a secondary market for such futures. 
   There is no assurance that a liquid secondary market on an exchange or
   board of trade will exist for any particular contract or at any particular
   time.
      
             In order to assure that registered investment companies have
   sufficient assets to satisfy their obligations under their futures
   contracts, the registered investment companies in which the Fund invests
   are required to establish segregated accounts with their custodians.  Such
   segregated accounts are required to contain an amount of cash or liquid
   securities equal in value to the current value of the underlying
   instrument less the margin deposit.       

             The risk to an underlying registered investment company from
   investing in futures is potentially unlimited.  Gains and losses on
   investments in futures depend upon the underlying registered investment
   company's investment adviser's ability to predict correctly the direction
   of stock prices, interest rates and other economic factors.

   Options on Futures Contracts

             A registered investment company in which the Fund invests may
   also purchase and sell listed put and call options on futures contracts. 
   An option on a futures contract gives the purchaser the right in return
   for the premium paid, to assume a position in a futures contract (a long
   position if the option is a call and a short position if the option is a
   put), at a specified exercise price at any time during the option period. 
   When an option on a futures contract is exercised, delivery of the futures
   position is accompanied by cash representing the difference between the
   current market price of the futures contract and the exercise price of the
   option.  The underlying registered investment company may also purchase
   put options on futures contracts in lieu of, and for the same purpose as,
   a sale of a futures contract.  A registered investment company in which
   the Fund invests may also purchase such put options in order to hedge a
   long position in the underlying futures contract in the same manner as it
   purchases "protective puts" on securities.

             The holder of an option may terminate the position by selling an
   option of the same series.  There is, however, no guarantee that such a
   closing transaction can be effected.  An underlying registered investment
   company is required to deposit initial and maintenance margin with respect
   to put and call options on futures contracts written by it pursuant to
   brokers' requirements similar to those applicable to futures contracts
   described above and, in addition, net option premiums received will be
   included as initial margin deposits.

             In addition to the risks which apply to all options
   transactions, there are several risks relating to options on futures
   contracts.  The ability to establish and close out positions on such
   options is subject to the development and maintenance of a liquid
   secondary market.  It is not certain that this market will develop.  In
   comparison with the use of futures contracts,the purchase of options on
   futures contracts involves less potential risk to a registered investment
   company because the maximum amount of risk is the premium paid for the
   option (plus transaction costs).  There may, however, be circumstances
   when the use of an option on a futures contract would result in a loss to
   a registered investment company in which the Fund invests when the use of
   a futures contract would not, such as when there is no movement in the
   prices of the underlying securities.  Writing an option on a futures
   contract involves risks similar to those arising in the sale of futures
   contracts, as described above.

   Illiquid Securities

             The Fund may invest up to 5% of its net assets in securities for
   which there is no readily available market ("illiquid securities").  The
   5% limitation includes securities whose disposition would be subject to
   legal restrictions ("restricted securities").  Illiquid and restricted
   securities often have a market value lower than the market price of
   unrestricted securities of the same issuer and are not readily marketable
   without some time delay.  This could result in the Fund being unable to
   realize a favorable price upon disposition of such securities and in some
   cases might make disposition of such securities at the time desired by the
   Fund impossible.

   Lending Portfolio Securities
      
             The Fund may lend its investment securities to qualified
   institutional investors for either short-term or long-term purposes of
   realizing additional income.  However, the Fund has determined not to lend
   investment securities during the fiscal year ending September 30, 1998. 
   Loans of securities by the Fund will be collateralized by cash, letters of
   credit, or securities issued or guaranteed by the U.S. Government or its
   agencies.  The collateral will equal at least 100% of the current market
   value of the loaned securities.       

                    DIRECTORS AND OFFICERS OF THE CORPORATION

             The name, age, address, principal occupation(s) during the past
   five years, and other information with respect to each of the directors
   and officers of the Corporation are as follows:
      
             * Thomas F. Elsen -- Director and Vice President.  Mr. Elsen,
   41, has been Managing Director and Chief Operating Officer of Leuthold &
   Anderson, Inc. (the "Adviser") since March 1, 1997.  Prior to joining the
   Adviser, Mr. Elsen was the sole proprietor of T. Elsen Marketing, a
   financial services marketing consulting firm, from May, 1991 until
   February, 1997.  Prior to founding T. Elsen Marketing, Mr. Elsen was
   employed by the Trust & Investments department of Norwest Bank, Minnesota,
   N.A., in Minneapolis as the Marketing Director from December, 1986 until
   May, 1991.  Mr. Elsen graduated from Macalester College with a B.A. in
   Economics in 1978.  His address is c/o Leuthold & Anderson, Inc., 100
   North Sixth Street, Suite 700A, Minneapolis, MN  55403.       
      
             * Steven C. Leuthold -- Director, President and Treasurer.  Mr.
   Leuthold, 60, has been Chairman and Portfolio Manager for the Adviser
   since August, 1987.  He has also been a Portfolio Manager for Leuthold,
   Weeden & Associates, L.P. since January, 1991 and Chairman of The Leuthold
   Group since November, 1981.  He is also a director of Minnesota Brewing
   Company, a public company engaged in contract and proprietary brewing. 
   Mr. Leuthold graduated from the University of Minnesota with a B.S. in
   History in 1960.  His address is c/o Leuthold & Anderson, Inc., 100 North
   Sixth Street, Suite 700A, Minneapolis, MN  55403.      
      
             * Charles D. Zender -- Director.  Mr. Zender, 52, has been
   Managing Director of The Leuthold Group since January, 1991.  Prior to
   such time, he served as a marketing/sales executive of The Leuthold Group
   since May, 1988.  Mr. Zender graduated from the University of Northern
   Iowa with a B.A. in Accounting/Business Administration in 1970.  His
   address is c/o Leuthold & Anderson, Inc., 100 North Sixth Street, Suite
   700A, Minneapolis, MN  55403.       

   ____________
   *  Messrs. Leuthold, Elsen and Zender are "interested persons" of the
   Corporation (as defined in the Act).

      
             John S. Chipman -- Director.  Mr. Chipman, 71, has been Regent's
   Professor of Economics at the University of Minnesota since 1981.  He was
   a Guest Professor at the University of Konstanz, Germany from 1986 to 1991
   and was awarded an honorary doctorate from such institution in 1991.  Mr.
   Chipman received his Ph.D in Economics from Johns Hopkins University in
   1950.  His address is c/o Leuthold & Anderson, Inc., 100 North Sixth
   Street, Suite 700A, Minneapolis, MN  55403.       
      
             Lawrence L. Horsch -- Director.  Mr. Horsch, 63, has been a
   member of the Board of Directors of Boston Scientific Corp., a public
   company engaged in developing, producing and marketing medical devices,
   since February, 1995, when SCIMED Life Systems, Inc., a medical products
   company he helped organize in 1971, merged with Boston Scientific Corp. 
   Prior to such merger, Mr. Horsch served in various capacities with SCIMED
   Life Systems, Inc., including Acting Chief Financial Officer from 1994 to
   1995, Chairman of the Board from 1977 to 1994, and as a director from 1977
   to 1995.  He has also served as Chairman of Eagle Management & Financial
   Corp., a management consulting firm, since 1990.  Mr. Horsch attended the
   College of St. Thomas and Northwestern University, where he received an
   M.B.A. in Finance in 1958.  His address is c/o Leuthold & Anderson, Inc.,
   100 North Sixth Street, Suite 700A, Minneapolis, MN  55403.        
      
             Paul M. Kelnberger -- Director.  Mr. Kelnberger, 54, joined
   Johnson, West & Co., PLC, a public accounting firm, in 1969 and has been a
   partner since 1975.  He is also a director of Video Update, Inc., a public
   company engaged in owning, operating and franchising video rental
   superstores.  Mr. Kelnberger is a Certified Public Accountant (CPA).  His
   address is c/o Johnson, West & Co., PLC, 336 Robert Street North, Suite
   1400, St. Paul, MN  55101.        
      
             Elizabeth Page -- Vice President and Secretary.  Ms. Page, 38,
   has been Operations Manager of the Adviser since 1988 and Operations and
   Compliance Director since January, 1995.  Ms. Page graduated from the
   University of Wisconsin-Stout with a B.S. in Business Administration in
   1982.  Her address is c/o Leuthold & Anderson, Inc., 100 North Sixth
   Street, Suite 700A, Minneapolis, MN  55403.       
      
             Kristen Voigtsberger -- Vice President.  Ms. Voigtsberger, 34,
   has been Account Administrator of the Adviser since 1990 and Manager of
   Administration & Client Services since January, 1997.  Ms. Voigtsberger
   graduated from Pennsylvania State University in 1985 with a B.A. in
   Russian.  Her address is c/o Leuthold & Anderson, Inc., 100 North Sixth
   Street, Suite 700A, Minneapolis, MN  55403.        
      
             The Corporation's standard method of compensating directors is
   to pay each director who is not an interested person of the Corporation a
   fee of $500 for each meeting of the Board of Directors attended.  The
   Corporation also may reimburse its directors for travel expenses incurred
   in order to attend meetings of the Board of Directors.        
      
             The table below sets forth the compensation paid by the
   Corporation to each of the directors of the Corporation during the fiscal
   year ended September 30, 1997:

   <TABLE>
   <CAPTION>
                                          COMPENSATION TABLE

                                                                                       Total
                                                 Pension or                        Compensation
                                                 Retirement        Estimated     from Corporation
                               Aggregate      Benefits Accrued      Annual           and Fund
           Name of           Compensation      As Part of Fund   Benefits Upon    Complex Paid to
           Person          from Corporation       Expenses        Retirement         Directors

    <S>                         <C>                  <C>              <C>             <C> 
    David D. Deming*              $0                 $0               $0                $0

    Thomas F. Elsen               $0                 $0               $0                $0

    Steven C. Leuthold            $0                 $0               $0                $0

    Charles D. Zender             $0                 $0               $0                $0

    John S. Chipman             $2,000               $0               $0              $2,000

    Lawrence L. Horsch          $2,000               $0               $0              $2,000

    Paul M. Kelnberger          $2,000               $0               $0              $2,000

   ________________________
   * Mr. Deming resigned, effective April 21, 1997, from his positions as
   Vice President, Secretary and Director of the Corporation.
   </TABLE>

       
               OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS
      
             Set forth below are the names and addresses of all holders of
   the Fund's shares who as of December 31, 1997 beneficially owned more than
   5% of the Fund's then outstanding shares, as well as the number of shares
   of the Fund beneficially owned by all officers and directors of the Fund
   as a group.  

            Name and Address
           of Beneficial Owner         Number of Shares   Percent of Class

    Norwest Bank Minnesota, Trustee
    Interstate Medical Center
      Profit Sharing Plan
    U/A dated 6/1/84
    733 Marquette Avenue, #0036
    Minneapolis, MN  55479-0001            236,631              8.0%

    Piper Trust Company, Trustee
    FBO Omnibus Reinvest
    222 S. 9th Street
    Minneapolis, MN  55402-3389           226,048(1)            7.6%

    Paul K. Miller
    1809 Lydia Avenue
    St. Paul, MN  55113-1451               189,457              6.4%

    Duncan Highsmith Trust
    Highsmith Inc. Employees
      Defined Benefit Plan
    W5527 Hwy 106
    Ft. Atkinson, WI  53538-0800           159,710              5.4%

    Officers and Directors as a
    Group (8 persons)                   122,714(1)(2)           4.1%
   _____________________________

        (1)  Includes 10,531 shares held in the Leuthold & Anderson
             Retirement Plan

        (2)  Includes 72,227 shares held by the Steven Leuthold Trust, for
             which Albert Andrews, Jr. serves as sole trustee, and 11,555
             shares held by the Steven C. Leuthold Family Foundation, a
             charitable trust controlled by Steven C. Leuthold.
       

                  INVESTMENT ADVISER, ADMINISTRATOR, CUSTODIAN,
                    TRANSFER AGENT AND ACCOUNT SERVICES AGENT
      
             As set forth in the Prospectus under the caption "MANAGEMENT OF
   THE FUND," the investment adviser to the Fund is Leuthold & Anderson,
   Inc., 100 North Sixth Street, Suite 700A, Minneapolis, Minnesota  55403
   (the "Adviser").  Pursuant to the investment advisory agreement entered
   into between the Corporation and the Adviser with respect to the Fund (the
   "Advisory Agreement"), the Adviser furnishes continuous investment
   advisory services to the Fund.  The Fund did not commence operations until
   November 20, 1995.  During the period from November 20, 1995 through
   September 30, 1996 and the fiscal year ended September 30, 1997, the Fund
   incurred advisory fees payable to the Adviser of $236,333 and $269,461,
   respectively.  The Adviser is controlled by Steven C. Leuthold, its
   Chairman and principal shareholder.       
      
             The Adviser has undertaken to reimburse the Fund to the extent
   that the aggregate annual operating expenses, including the investment
   advisory fee and the administration fee but excluding interest, taxes,
   brokerage commissions and other costs incurred in connection with the
   purchase or sale of portfolio securities, and extraordinary items, exceed
   that percentage of the average net assets of the Fund for such year, as
   determined by valuations made as of the close of each business day of the
   year, which is the most restrictive percentage provided by the state laws
   of the various states in which the shares of the Fund are qualified for
   sale or, if the states in which the shares of the Fund are qualified for
   sale impose no such restrictions, 2%.  As of the date hereof, no such
   state law provision was applicable to the Fund.  Additionally, the Adviser
   has voluntarily agreed to reimburse the Fund to the extent aggregate
   annual operating expenses as described above exceed 1.25% of the Fund's
   daily net assets.  The Fund monitors its expense ratio on a monthly basis. 
   If the accrued amount of the expenses of the Fund exceeds the expense
   limitation, the Fund creates an account receivable from the Adviser for
   the amount of such excess.  In such a situation the monthly payment of the
   Adviser's fee will be reduced by the amount of such excess (and if the
   amount of such excess in any month is greater than the monthly payment of
   the Adviser's fee, the Adviser will pay the Fund the amount of such
   difference), subject to adjustment month by month during the balance of
   the Fund's fiscal year if accrued expenses thereafter fall below this
   limit.  During the period from November 20, 1995 (commencement of
   operations) through September 30, 1996 and the fiscal year ended September
   30, 1997, the Adviser reimbursed the Fund $77,769 and $65,500,
   respectively, for excess expenses.        

             The Advisory Agreement will remain in effect as long as its
   continuance is specifically approved at least annually (i) by the Board of
   Directors of the Corporation or by the vote of a majority (as defined in
   the Act) of the outstanding shares of the Fund, and (ii) by the vote of a
   majority of the directors of the Fund who are not parties to the Advisory
   Agreement or interested persons of the Adviser, cast in person at a
   meeting called for the purpose of voting on such approval.  The Advisory
   Agreement provides that it may be terminated at any time without the
   payment of any penalty, by the Board of Directors of the Corporation or by
   vote of the majority of the Fund's stockholders on sixty (60) days'
   written notice to the Adviser, and by the Adviser on the same notice to
   the Corporation, and that it shall be automatically terminated if it is
   assigned.

             The Advisory Agreement provides that the Adviser shall not be
   liable to the Corporation or its stockholders for anything other than
   willful misfeasance, bad faith, gross negligence or reckless disregard of
   its obligations or duties.  The Advisory Agreement also provides that the
   Adviser and its officers, directors and employees may engage in other
   businesses, devote time and attention to any other business whether of a
   similar or dissimilar nature, and render services to others.
      
             As set forth in the Prospectus under the caption "MANAGEMENT OF
   THE FUND,"  the administrator to the Corporation is Firstar Trust Company,
   615 East Michigan Street, Milwaukee, Wisconsin 53202 (the
   "Administrator").  The Fund Administration Servicing Agreement entered
   into between the Corporation and the Administrator relating to the Fund
   (the "Administration Agreement") will remain in effect until terminated by
   either party.  The Administration Agreement may be terminated at any time,
   without the payment of any penalty, by the Board of Directors of the
   Corporation upon the giving of ninety (90) days' written notice to the
   Administrator, or by the Administrator upon the giving of ninety (90)
   days' written notice to the Corporation.  The Fund did not commence
   operations until November 20, 1995.  During the period from November 20,
   1995 through September 30, 1996 and the fiscal year ended September 30,
   1997, the Fund incurred fees of $24,689 and $31,718, respectively, payable
   to the Administrator pursuant to the Administration Agreement.       

             Under the Administration Agreement, the Administrator shall
   exercise reasonable care and is not liable for any error or judgment or
   mistake of law or for any loss suffered by the Corporation in connection
   with the performance of the Administration Agreement, except a loss
   resulting from willful misfeasance, bad faith or negligence on the part of
   the Administrator in the performance of its duties under the
   Administration Agreement.
      
             Firstar Trust Company also serves as custodian of the
   Corporation's assets pursuant to a Custody Agreement.  Under the Custody
   Agreement, Firstar Trust Company has agreed to (i) maintain a separate
   account in the name of the Fund, (ii) make receipts and disbursements of
   money on behalf of the Fund, (iii) collect and receive all income and
   other payments and distributions on account of the Fund's portfolio
   investments, (iv) respond to correspondence from shareholders, security
   brokers and others relating to its duties and (v) make periodic reports to
   the Fund concerning the Fund's operations.  Firstar Trust Company does not
   exercise any supervisory function over the purchase and sale of
   securities.       
      
             Firstar Trust Company also serves as transfer agent and dividend
   disbursing agent for the Fund under a Shareholder Servicing Agent
   Agreement.  As transfer and dividend disbursing agent, Firstar Trust
   Company has agreed to (i) issue and redeem shares of the Fund, (ii) make
   dividend and other distributions to shareholders of the Fund, (iii)
   respond to correspondence by Fund shareholders and others relating to its
   duties, (iv) maintain shareholder accounts, and (v) make periodic reports
   to the Fund.        
      
             In addition the Corporation has entered into a Fund Accounting
   Servicing Agreement with Firstar Trust Company pursuant to which Firstar
   Trust Company has agreed to maintain the financial accounts and records of
   the Fund and provide other accounting services to the Fund.  For its
   accounting services, Firstar Trust Company is entitled to receive fees,
   payable monthly, based on the total annual rate of $22,000 for the first
   $40 million in average net assets of the Fund, .01% on the next $200
   million of average net assets, and .005% on average net assets exceeding
   $240 million.  Firstar Trust Company is also entitled to certain out of
   pocket expenses, including pricing expenses.  During the period from
   November 20, 1995 (commencement of operations) through September 30, 1996
   and the fiscal year ended September 30, 1997, the Fund incurred fees of
   $20,751 and $24,906, respectively, payable to Firstar Trust Company
   pursuant to the Accounting Servicing Agreement.         

                        DETERMINATION OF NET ASSET VALUE
      
             As set forth in the Prospectus under the caption "DETERMINATION
   OF NET ASSET VALUE," the net asset value of the Fund will be determined as
   of the close of regular trading (currently 4:00 p.m. Eastern time) on each
   day the New York Stock Exchange is open for trading.  The New York Stock
   Exchange is open for trading Monday through Friday except New Year's Day,
   Dr. Martin Luther King, Jr. Day, President's Day, Good Friday, Memorial
   Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. 
   Additionally, when any of the aforementioned holidays falls on a Saturday,
   the New York Stock Exchange will not be open for trading on the preceding
   Friday and when any such holiday falls on a Sunday, the New York Stock
   Exchange will not be open for trading on the succeeding Monday, unless
   unusual business conditions exist, such as the ending of a monthly or the
   yearly accounting period.  The New York Stock Exchange also may be closed
   on national days of mourning.       

             The Fund has adopted procedures pursuant to Rule 17a-7 under the
   Investment Company Act of 1940 pursuant to which the Fund may effect a
   purchase and sale transaction with an affiliate person of the Fund (or an
   affiliate person of such an affiliated person) in which the Fund issues
   its shares in exchange for securities of a type which are permitted
   investments for the Fund.  For purposes of determining the number of
   shares to be issued, the securities to be exchanged will be valued in
   accordance with the requirements of Rule 17a-7.

                           SYSTEMATIC WITHDRAWAL PLAN

             An investor who owns Fund shares worth at least $10,000 at the
   current net asset value may, by completing an application which may be
   obtained from the Fund or Firstar Trust Company, create a Systematic
   Withdrawal Plan from which a fixed sum will be paid to the investor at
   regular intervals.  To establish the Systematic Withdrawal Plan, the
   investor deposits Fund shares with the Corporation and appoints it as
   agent to effect redemptions of Fund shares held in the account for the
   purpose of making monthly or quarterly withdrawal payments of a fixed
   amount to the investor out of the account.  Fund shares deposited by the
   investor in the account need not be endorsed or accompanied by a stock
   power if registered in the same name as the account; otherwise, a properly
   executed endorsement or stock power, obtained from any bank, broker-dealer
   or the Corporation is required.  The investor's signature should be
   guaranteed by a bank, a member firm of a national stock exchange or other
   eligible guarantor.

             The minimum amount of a withdrawal payment is $100.  These
   payments will be made from the proceeds of periodic redemptions of shares
   in the account at net asset value.  Redemptions will be made in accordance
   with the schedule (e.g., monthly, bimonthly [every other month], quarterly
   or yearly, but in no event more than monthly) selected by the investor. 
   If a scheduled redemption day is a weekend day or a holiday, such
   redemption will be made on the next preceding business day.  Establishment
   of a Systematic Withdrawal Plan constitutes an election by the investor to
   reinvest in additional Fund shares, at net asset value, all income
   dividends and capital gains distributions payable by the Fund on shares
   held in such account, and shares so acquired will be added to such
   account.  The investor may deposit additional Fund shares in his account
   at any time.

             Withdrawal payments cannot be considered as yield or income on
   the investor's investment, since portions of each payment will normally
   consist of a return of capital.  Depending on the size or the frequency of
   the disbursements requested, and the fluctuation in the value of the
   Fund's portfolio, redemptions for the purpose of making such disbursements
   may reduce or even exhaust the investor's account.

             The investor may vary the amount or frequency of withdrawal
   payments, temporarily discontinue them, or change the designated payee or
   payee's address, by notifying Firstar Trust Company in writing thirty (30)
   days prior to the next payment.

                        ALLOCATION OF PORTFOLIO BROKERAGE

             The Fund's securities trading and brokerage policies and
   procedures are reviewed by and subject to the supervision of the
   Corporation's Board of Directors.  Decisions to buy and sell securities
   for the Fund are made by the Adviser subject to review by the
   Corporation's Board of Directors.  In placing purchase and sale orders for
   portfolio securities for the Fund, it is the policy of the Adviser to seek
   the best execution of orders at the most favorable price in light of the
   overall quality of brokerage and research services provided, as described
   in this and the following paragraphs.  Many of these transactions involve
   payment of a brokerage commission by the Fund.  In some cases,
   transactions are with firms who act as principals of their own accounts. 
   In selecting brokers to effect portfolio transactions, the determination
   of what is expected to result in best execution at the most favorable
   price involves a number of largely judgmental considerations.  Among these
   are the Adviser's evaluation of the broker's efficiency in executing and
   clearing transactions, block trading capability (including the broker's
   willingness to position securities) and the broker's reputation, financial
   strength and stability.  The most favorable price to the Fund means the
   best net price without regard to the mix between purchase or sale price
   and commission, if any.  Over-the-counter securities may be purchased and
   sold directly with principal market makers who retain the difference in
   their cost in the security and its selling price.  In some instances, the
   Adviser feels that better prices are available from non-principal market
   makers who are paid commissions directly.  Although the Fund does not
   initially intend to market its shares through intermediary broker-dealers,
   the Fund may place portfolio orders with broker-dealers who recommend the
   purchase of Fund shares to clients (if the Adviser believes the
   commissions and transaction quality are comparable to that available from
   other brokers) and may allocate portfolio brokerage on that basis.

             The Adviser may allocate brokerage to Weeden & Co., L.P.
   ("Weeden") but only if the Adviser reasonably believes the commission and
   transaction quality are comparable to that available from other qualified
   brokers.  Steven C. Leuthold is a limited partner and director of Weeden. 
   Weeden's institutional investment research division is designated The
   Leuthold Group, in which Steven C. Leuthold has a separate fifty-percent
   pecuniary interest.  Under the Act, Weeden is prohibited from dealing with
   the Fund as a principal in the purchase and sale of securities.  Since
   transactions in the over-the-counter securities market generally involve
   transactions with dealers acting as principal for their own account,
   Weeden may not serve as the Fund's dealer in connection with such
   transactions.  Weeden, when acting as a broker for the Fund in any of its
   portfolio transactions executed on a securities exchange of which Weeden
   is a member, will act in accordance with the requirements of Section 11(a)
   of the Securities Exchange Act of 1934 and the rules of such exchanges.
      
             In allocating brokerage business for the Fund, the Adviser also
   takes into consideration the research, analytical, statistical and other
   information and services provided by the broker, such as general economic
   reports and information, reports or analyses of particular companies or
   industry groups, market timing and technical information, and the
   availability of the brokerage firm's analysts for consultation.  While the
   Adviser believes these services have substantial value, they are
   considered supplemental to the Adviser's own efforts in the performance of
   its duties under the Advisory Agreement.  Other clients of the Adviser may
   indirectly benefit from the availability of these services to the Adviser,
   and the Fund may indirectly benefit from services available to the Adviser
   as a result of transactions for other clients.  The Advisory Agreement
   provides that the Adviser may cause the Fund to pay a broker which
   provides brokerage and research services to the Adviser a commission for
   effecting a securities transaction in excess of the amount another broker
   would have charged for effecting the transaction, if the Adviser
   determines in good faith that such amount of commission is reasonable in
   relation to the value of brokerage and research services provided by the
   executing broker viewed in terms of either the particular transaction or
   the Adviser's overall responsibilities with respect to the Fund and the
   other accounts as to which he exercises investment discretion.  Weeden
   will not receive higher commissions because of research services provided. 
   The Fund did not commence operations until November 20, 1995.  During the
   period from November 20, 1995 through September 30, 1996, the Fund paid
   brokerage commissions of $45,325 on transactions having a total market
   value of $121,323,358.  During the same period, the Fund paid Weeden
   brokerage commissions of $27,821 (or 61.4% of the total commissions paid)
   on transactions having a total market value of $104,631,000 (or 86.2% of
   the Fund's aggregate amount of transactions).  During the fiscal year
   ended September 30, 1997, the Fund paid brokerage commissions of $33,952
   on transactions having a total market value of $18,038,053.  During the
   same period, the Fund paid Weeden brokerage commissions of $18,636 (or
   54.9% of the total commissions paid) on transactions having a total market
   value of $9,746,418 (or 54.0% of the Fund's aggregate amount of
   transactions).  All of the brokers to whom commissions were paid provided
   research services to the Adviser.        

                                      TAXES

             As set forth in the Prospectus under the caption "TAXES," the
   Fund will endeavor to qualify annually for and elect tax treatment
   applicable to a regulated investment company under Subchapter M of the
   Internal Revenue Code of 1986, as amended.
      
             Dividends from the Fund's net investment income are taxable to
   stockholders as ordinary income, while distributions of net capital gain
   are taxable as long-term capital gain regardless of the stockholder's
   holding period for the shares.  The Code provides for a three-tiered tax
   rate structure for long-term capital gains dependent upon the Fund's
   holding period of the underlying financial instrument or capital asset. 
   Such dividends and distributions are taxable to stockholders whether
   received in cash or in additional shares.  The 70% dividends-received
   deduction for corporations will apply to dividends from the Fund's net
   investment income, subject to proportionate reductions if the aggregate
   dividends received by the Fund from domestic corporations in any year are
   less than 100% of the net investment company taxable income distributions
   made by the Fund.        

             Redemption of shares will generally result in a capital gain or
   loss for income tax purposes.  Such capital gain or loss will be long term
   or short term, depending upon the holding period.  However, if a loss is
   realized on shares held for six months or less, and the investor received
   a capital gain distribution during that period, then such loss is treated
   as a long-term capital loss to the extent of the capital gain distribution
   received.

             This section is not intended to be a full discussion of present
   or proposed federal income tax laws and the effect of such laws on an
   investor.  Investors are urged to consult with their respective tax
   advisers for a complete review of the tax ramifications of an investment
   in the Fund.

                              STOCKHOLDER MEETINGS

             The Maryland General Corporation Law permits registered
   investment companies, such as the Fund, to operate without an annual
   meeting of stockholders under specified circumstances if an annual meeting
   is not required by the Act.  The Fund has adopted the appropriate
   provisions in its Bylaws and may, at its discretion, not hold an annual
   meeting in any year in which the election of directors is not required to
   be acted on by stockholders under the Act.

             The Fund's Bylaws also contain procedures for the removal of
   directors by its stockholders.  At any meeting of stockholders, duly
   called and at which a quorum is present, the stockholders may, by the
   affirmative vote of the holders of a majority of the votes entitled to be
   cast thereon, remove any director or directors from office and may elect a
   successor or successors to fill any resulting vacancies for the unexpired
   terms of removed directors.

             Upon the written request of the holders of shares entitled to
   not less than ten percent (10%) of all the votes entitled to be cast at
   such meeting, the Secretary of the Fund shall promptly call a special
   meeting of stockholders for the purpose of voting upon the question of
   removal of any director.  Whenever ten or more stockholders of record who
   have been such for at least six months preceding the date of application,
   and who hold in the aggregate either shares having a net asset value of at
   least $25,000 or at least one percent (1%) of the total outstanding
   shares, whichever is less, shall apply to the Fund's Secretary in writing,
   stating that they wish to communicate with other stockholders with a view
   to obtaining signatures to a request for a meeting as described above and
   accompanied by a form of communication and request which they wish to
   transmit, the Secretary shall within five business days after such
   application either:  (1) afford to such applicants access to a list of the
   names and addresses of all stockholders as recorded on the books of the
   Fund; or (2) inform such applicants as to the approximate number of
   stockholders of record and the approximate cost of mailing to them the
   proposed communication and form of request.

             If the Secretary elects to follow the course specified in clause
   (2) of the last sentence of the preceding paragraph, the Secretary, upon
   the written request of such applicants, accompanied by a tender of the
   material to be mailed and of the reasonable expenses of mailing, shall,
   with reasonable promptness, mail such material to all stockholders of
   record at their addresses as recorded on the books unless within five
   business days after such tender the Secretary shall mail to such
   applicants and file with the Securities and Exchange Commission, together
   with a copy of the material to be mailed, a written statement signed by at
   least a majority of the Board of Directors to the effect that in their
   opinion either such material contains untrue statements of fact or omits
   to state facts necessary to make the statements contained therein not
   misleading, or would be in violation of applicable law, and specifying the
   basis of such opinion.

             After opportunity for hearing upon the objections specified in
   the written statement so filed, the Securities and Exchange Commission
   may, and if demanded by the Board of Directors or by such applicants
   shall, enter an order either sustaining one or more of such objections or
   refusing to sustain any of them.  If the Securities and Exchange
   Commission shall enter an order refusing to sustain any of such
   objections, or if, after the entry of an order sustaining one or more of
   such objections, the Securities and Exchange Commission shall find, after
   notice and opportunity for hearing, that all objections so sustained have
   been met, and shall enter an order so declaring, the Secretary shall mail
   copies of such material to all stockholders with reasonable promptness
   after the entry of such order and the renewal of such tender.

                             PERFORMANCE INFORMATION

             Average annual total return measures both the net investment
   income generated by, and the effect of any realized or unrealized
   appreciation or depreciation of, the underlying investments in the Fund's
   investment portfolio.  The Fund's average annual total return figures are
   computed in accordance with the standardized method prescribed by the
   Securities and Exchange Commission by determining the average annual
   compounded rates of return over the periods indicated, that would equate
   the initial amount invested to the ending redeemable value, according to
   the following formula:

                                         n
                                 P(1 + T)  = ERV

   Where:    P    =    a hypothetical initial payment of $1,000
             T    =    average annual total return
             n    =    number of years
             ERV  =    ending redeemable value at the end of
                       the period of a hypothetical $1,000
                       payment made at the beginning of such
                       period

   This calculation (i) assumes all dividends and distributions are
   reinvested at net asset value or the appropriate reinvestment dates as
   described in the Prospectus, and (ii) deducts all recurring fees, such as
   advisory fees, charged as expenses to all investor accounts.

             Total return is the cumulative rate of investment growth which
   assumes that income dividends and capital gains are reinvested.  It is
   determined by assuming a hypothetical investment at the net asset value at
   the beginning of the period, adding in the reinvestment of all income
   dividends and capital gains, calculating the ending value of the 
   investment at the net asset value as of the end of the specified time
   period, subtracting the amount of the original investment, and dividing
   this amount by the amount of the original investment.  This calculated
   amount is then expressed as a percentage by multiplying by 100.
      
             The Fund's average annual total return for the period from the
   Fund's commencement of operations (November 20, 1995) through September
   30, 1997 was 12.4% and for the one year period ended September 30, 1997
   was 18.0%.  The foregoing performance results are based on historical
   earnings and should not be considered as representative of the performance
   of the Fund in the future.  Such performance results also reflect
   reimbursements made by the Adviser during the period from November 20,
   1995 through September 30, 1997 to keep aggregate annual operating
   expenses at or below 1.25% of daily net assets.  An investment in the Fund
   will fluctuate in value and at redemption its value may be more or less
   than the initial investment.        

                        DESCRIPTION OF SECURITIES RATINGS

             As set forth in the Corporation's Prospectus, the Fund (or a
   registered investment company in which the Fund invests) may invest in
   bonds and debentures assigned ratings of either Standard & Poor's
   Corporation ("Standard & Poor's") or Moody's Investors Service, Inc.
   ("Moody's").  As also set forth therein, the Fund may invest in commercial
   paper and commercial paper master notes rated by Standard & Poor's or
   Moody's.  A brief description of the ratings symbols and their meanings
   follows.

             Standard & Poor's Debt Ratings.  A Standard & Poor's corporate
   or municipal debt rating is a current assessment of the creditworthiness
   of an obligor with respect to a specific obligation.  This assessment may
   take into consideration obligors such as guarantors, insurers or lessees.

             The debt rating is not a recommendation to purchase, sell or
   hold a security, inasmuch as it does not comment as to market price or
   suitability for a particular investor.

             The ratings are based on current information furnished by the
   issuer or obtained by Standard & Poor's from other sources it considers
   reliable.  Standard & Poor's does not perform any audit in connection with
   any rating and may, on occasion, rely on unaudited financial information. 
   The ratings may be changed, suspended or withdrawn as a result of changes
   in, or unavailability of, such information, or for other circumstances.

             The ratings are based, in varying degrees, on the following
   considerations:

             I.   Likelihood of default - capacity and willingness of the
                  obligor as to the timely payment of interest and repayment
                  of principal in accordance with the terms of the
                  obligation;

             II.  Nature of and provisions of the obligation;

             III. Protection afforded by, and relative position of, the
                  obligation in the event of bankruptcy, reorganization or
                  other arrangement under the laws of bankruptcy and other
                  laws affecting creditors' rights.

             AAA - Debt rated AAA has the highest rating assigned by Standard
   & Poor's.  Capacity to pay interest and repay principal is extremely
   strong.

             AA - Debt rated AA has a very strong capacity to pay interest
   and repay principal and differs from the higher rated issues only in small
   degree.

             A - Debt rated A has a strong capacity to pay interest and repay
   principal although it is somewhat more susceptible to the adverse effects
   of changes in circumstances and economic conditions than debt in the
   higher rated categories.

             BBB - Debt rated BBB is regarded as having an adequate capacity
   to pay interest and repay principal.  Whereas it normally exhibits
   adequate protection parameters, adverse economic conditions or changing
   circumstances are more likely to lead to a weakened capacity to pay
   interest and repay principal for debts in this category than in higher
   rated categories.

             BB, B, CCC, CC, C - Debt rated BB, B, CCC, CC and C is regarded,
   on balance, as predominantly speculative with respect to capacity to pay
   interest and repay principal in accordance with the terms of the
   obligation.  BB indicates the lowest degree of speculation and C the
   highest degree of speculation.  While such debt will likely have some
   quality and protective characteristics, these are outweighed by large
   uncertainties or major risk exposures to adverse conditions.

             Moody's Bond Ratings.

             Aaa - Bonds which are rated Aaa are judged to be the best
   quality.  They carry the smallest degree of investment risk and are
   generally referred to as "gilt edged."  Interest payments are protected by
   a large, or by an exceptionally stable margin and principal is secure. 
   While the various protective elements are likely to change, such changes
   as can be visualized are most unlikely to impair the fundamentally strong
   position of such issues.

             Aa - Bonds which are Aa are judged to be of high quality by all
   standards.  Together with the Aaa group they comprise what are generally
   known as high-grade bonds.  They are rated lower than the best bonds
   because margins of protection may not be as large as in Aaa securities or
   fluctuation of protective elements may be of greater amplitude, or there
   may be other elements present which make the long-term risks appear
   somewhat larger than in Aaa securities.

             A - Bonds which are rated A possess many favorable investment
   attributes and are to be considered as upper medium grade obligations. 
   Factors giving security to principal and interest are considered adequate,
   but elements may be present which suggest a susceptibility to impairment
   sometime in the future.

             Baa - Bonds which are rated Baa are considered to be medium-
   grade obligations (i.e., they are neither highly protected nor poorly
   secured).  Interest payments and principal security appear adequate for
   the present but certain protective elements may be lacking or may be
   characteristically unreliable over any great length of time.  Such bonds
   lack outstanding investment characteristics and in fact have speculative
   characteristics as well.

             Ba - Bonds which are rated Ba are judged to have speculative
   elements; their future cannot be considered as well-assured.  Often the
   protection of interest and principal payments may be very moderate, and
   thereby not well safeguarded during both good and bad times over the
   future.  Uncertainty of position characterizes Bonds in this class.

             B - Bonds which are rated B generally lack characteristics of
   the desirable investment.  Assurance of interest and principal payments or
   of maintenance of other terms of the contract over any long period of time
   may be small.

             Caa - Bonds which are rated 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 - Bonds which are rated Ca represent obligations which are
   speculative in a high degree.  Such issues are often in default or have
   other marked shortcomings.

             C - Bonds which are rated C are the lowest rated class of bonds,
   and issues so rated can be regarded as having extremely poor prospects of
   ever attaining any real investment standing.

             Moody's applies numerical modifiers 1, 2 and 3 in each generic
   rating classification from Aa to B.  The modifier 1 indicates that the
   company ranks in the higher end of its generic rating category; the
   modifier 2 indicates a mid-range ranking; and the modifier 3 indicates
   that the company ranks in the lower end of its generic rating category.

             Standard & Poor's Commercial Paper Ratings.  A Standard & Poor's
   commercial paper rating is a current assessment of the likelihood of
   timely payment of debt considered short-term in the relevant market. 
   Ratings are graded into several categories, ranging from A-1 for the
   highest quality obligations to D for the lowest.  The categories rated A-3
   or higher are as follows:

             A-1.  This highest category indicates that the degree of safety
   regarding timely payment is strong.  Those issuers determined to possess
   extremely strong safety characteristics are denoted with a plus sign (+)
   designation.

             A-2.  Capacity for timely payment on issues with this
   designation is satisfactory.  However the relative degree of safety is not
   as high as for issuers designed "A-1".

             A-3.  Issues carrying this designation have adequate capacity
   for timely payment.  They are, however, more vulnerable to the adverse
   effects of changes in circumstances than obligations carrying the higher
   designation.

             Moody's Short-Term Debt Ratings.  Moody's short-term debt
   ratings are opinions of the ability of issuers to repay punctually senior
   debt obligations which have an original maturity not exceeding one year. 
   Obligations relying upon support mechanisms such as letters-of-credit and
   bonds of indemnity are excluded unless explicitly rated.

             Moody's employs the following three designations, all judged to
   be investment grade, to indicate the relative repayment ability of rated
   issuers:

             Prime-1.  Issuers rated Prime-1 (or supporting institutions)
   have a superior ability for repayment of senior short-term debt
   obligations.  Prime-1 repayment ability will often be evidenced by many of
   the following characteristics:

        -    Leading market positions in well-established industries.

        -    High rates of return on funds employed.

        -    Conservative capitalization structure with moderate reliance on
             debt and ample asset protection.

        -    Broad margins in earnings coverage of fixed financial charges
             and high internal cash generation.

        -    Well-established access to a range of financial markets and
             assured sources of alternate liquidity.

             Prime-2.  Issuers rated Prime-2 (or supporting institutions)
   have a strong ability for repayment of senior short-term debt obligations. 
   This will normally be evidenced by many of the characteristics cited above
   but to a lesser degree.  Earnings trends and coverage ratios, while sound,
   may be more subject to variation.  Capitalization characteristics, while
   still appropriate, may be more affected by external conditions.  Ample
   alternate liquidity is maintained.

             Prime-3.  Issuers rated Prime-3 (or supporting institutions)
   have an acceptable ability for repayment of senior short-term obligations. 
   The effect of industry characteristics and market compositions may be more
   pronounced.  Variability in earnings and profitability may result in
   changes in the level of debt protection measurements and may require
   relatively high financial leverage.  Adequate alternate liquidity is
   maintained.

                             INDEPENDENT ACCOUNTANTS

             Arthur Andersen LLP, 100 East Wisconsin Avenue, Milwaukee,
   Wisconsin  53202, serves as the independent accountants for the Fund.
      
                              FINANCIAL STATEMENTS

             The following financial statements are incorporated by reference
   to the Annual Report, dated September 30, 1997, of the Fund (File No. 811-
   9094), as filed with the Securities and Exchange Commission on December 4,
   1997:

             -    Report of Independent Public Accountants

             -    Statement of Assets and Liabilities as of September 30,
                  1997

             -    Statement of Operations For the Fiscal Year Ended September
                  30, 1997

             -    Statement of Changes in Net Assets For the Period From
                  November 20, 1995 (Commencement of Operations) through
                  September 30, 1996 and For the Fiscal Year Ended September
                  30, 1997

             -    Financial Highlights

             -    Schedule of Investments as of September 30, 1997

             -    Notes to the Financial Statements 

       

                                     PART C

                                OTHER INFORMATION

   Item 24.    Financial Statements and Exhibits
      
        (a.)   Financial Statements (Financial Highlights included in Part A
               and all incorporated by reference to the Annual Report, dated
               September 30, 1997 (File No. 811-9094), of Leuthold Funds,
               Inc. (as filed with the Securities and Exchange Commission on
               December 4, 1997))       

               Statement of Assets and Liabilities

               Statement of Operations

               Statement of Changes in Net Assets

               Financial Highlights

               Schedule of Investments

               Notes to the Financial Statements

        (b.)   Exhibits
      
             (1.1)   Registrant's Articles of Incorporation.

             (1.2)   Articles of Amendment

               (2)   Registrant's Bylaws.
       
               (3)   None
      
               (4)   None

               (5)   Investment Advisory Agreement with Leuthold & Anderson,
                     Inc.
       
               (6)   None

               (7)   None
      
               (8)   Custodian Agreement with Firstar Trust Company.

             (9.1)   Fund Administration Servicing Agreement with Firstar
                     Trust Company.

             (9.2)   Transfer Agent Agreement with Firstar Trust Company.

             (9.3)   Fund Accounting Servicing Agreement with Firstar Trust
                     Company.

              (10)   Opinion of Foley & Lardner, counsel for Registrant.
       
              (11)   Consent of Arthur Andersen LLP.

              (12)   None
      
              (13)   Subscription Agreement.

              (14)   Individual Retirement Custodial Accounts.
       
              (15)   None

              (16)   Schedule for Computation of Performance Quotations
                     (Exhibit 16 to Post-Effective Amendment No. 1 to
                     Registrant's Registration Statement on Form N-1A is
                     incorporated by reference pursuant to Rule 411 under the
                     Securities Act of 1933).

              (17)   Financial Data Schedule

              (18)   None

   Item 25.  Persons Controlled by or under Common Control with Registrant

             Registrant is not controlled by any person.  Registrant neither
   controls any person nor is under common control with any other person.

   Item 26.  Number of Holders of Securities

      
                                               Number of Record Holders
               Title of Class                   as of December 31, 1997  


      Class A Common Stock, $0.0001 par                   152
      value (Leuthold Asset Allocation
                    Fund)
       

   Item 27.  Indemnification

             Pursuant to the authority of the Maryland General Corporation
   Law, particularly Section 2-418 thereof, Registrant's Board of Directors
   has adopted the following bylaw which is in full force and effect and has
   not been modified or cancelled:

                                   Article VII

                               GENERAL PROVISIONS

   Section 7.     Indemnification.

        A.   The Corporation shall indemnify all of its corporate
   representatives against expenses, including attorneys fees, judgments,
   fines and amounts paid in settlement actually and reasonably incurred by
   them in connection with the defense of any action, suit or proceeding, or
   threat or claim of such action, suit or proceeding, whether civil,
   criminal, administrative, or legislative, no matter by whom brought, or in
   any appeal in which they or any of them are made parties or a party by
   reason of being or having been a corporate representative, if the
   corporate representative acted in good faith and in a manner reasonably
   believed to be in or not opposed to the best interests of the corporation
   and with respect to any criminal proceeding, if he had no reasonable cause
   to believe his conduct was unlawful provided that the corporation shall
   not indemnify corporate representatives in relation to matters as to which
   any such corporate representative shall be adjudged in such action, suit
   or proceeding to be liable for gross negligence, willful misfeasance, bad
   faith, reckless disregard of the duties and obligations involved in the
   conduct of his office, or when indemnification is otherwise not permitted
   by the Maryland General Corporation Law.

        B.   In the absence of an adjudication which expressly absolves the
   corporate representative, or in the event of a settlement, each corporate
   representative shall be indemnified hereunder only if there has been a
   reasonable determination based on a review of the facts that
   indemnification of the corporate representative is proper because he has
   met the applicable standard of conduct set forth in paragraph A.  Such
   determination shall be made:  (i) by the board of directors, by a majority
   vote of a quorum which consists of directors who were not parties to the
   action, suit or proceeding, or if such a quorum cannot be obtained, then
   by a majority vote of a committee of the board consisting solely of two or
   more directors, not, at the time, parties to the action, suit or
   proceeding and who were duly designated to act in the matter by the full
   board in which the designated directors who are parties to the action,
   suit or proceeding may participate; or (ii) by special legal counsel
   selected by the board of directors or a committee of the board by vote as
   set forth in (i) of this paragraph, or, if the requisite quorum of the
   full board cannot be obtained therefor and the committee cannot be
   established, by a majority vote of the full board in which directors who
   are parties to the action, suit or proceeding may participate.

        C.   The termination of any action, suit or proceeding by judgment,
   order, settlement, conviction, or upon a plea of nolo contendere or its
   equivalent, shall create a rebuttable presumption that the person was
   guilty of willful misfeasance, bad faith, gross negligence or reckless
   disregard to the duties and obligations involved in the conduct of his or
   her office, and, with respect to any criminal action or proceeding, had
   reasonable cause to believe that his or her conduct was unlawful.

        D.   Expenses, including attorneys' fees, incurred in the preparation
   of and/or presentation of the defense of a civil or criminal action, suit
   or proceeding may be paid by the corporation in advance of the final
   disposition of such action, suit or proceeding as authorized in the manner
   provided in Section 2-418(F) of the Maryland General Corporation Law upon
   receipt of:  (i) an undertaking by or on behalf of the corporate
   representative to repay such amount unless it shall ultimately be
   determined that he or she is entitled to be indemnified by the corporation
   as authorized in this bylaw; and (ii) a written affirmation by the
   corporate representative of the corporate representative's good faith
   belief that the standard of conduct necessary for indemnification by the
   corporation has been met.

        E.   The indemnification provided by this bylaw shall not be deemed
   exclusive of any other rights to which those indemnified may be entitled
   under these bylaws, any agreement, vote of stockholders or disinterested
   directors or otherwise, both as to action in his or her official capacity
   and as to action in another capacity while holding such office, and shall
   continue as to a person who has ceased to be a director, officer, employee
   or agent and shall inure to the benefit of the heirs, executors and
   administrators of such a person subject to the limitations imposed from
   time to time by the Investment Company Act of 1940, as amended.

        F.   This corporation shall have power to purchase and maintain
   insurance on behalf of any corporate representative against any liability
   asserted against him or her and incurred by him or her in such capacity or
   arising out of his or her status as such, whether or not the corporation
   would have the power to indemnify him or her against such liability under
   this bylaw provided that no insurance may be purchased or maintained to
   protect any corporate representative against liability for gross
   negligence, willful misfeasance, bad faith or reckless disregard of the
   duties and obligations involved in the conduct of his or her office.

        G.   "Corporate Representative" means an individual who is or was a
   director, officer, agent or employee of the corporation or who serves or
   served another corporation, partnership, joint venture, trust or other
   enterprise in one of these capacities at the request of the corporation
   and who, by reason of his or her position, is, was, or is threatened to be
   made, a party to a proceeding described herein.

             Insofar as indemnification for and with respect to liabilities
   arising under the Securities Act of 1933 may be permitted to directors,
   officers and controlling persons of Registrant pursuant to the foregoing
   provisions or otherwise, Registrant has been advised that in the opinion
   of the Securities and Exchange Commission such indemnification is against
   public policy as expressed in the Act and is, therefore, unenforceable. 
   In the event that a claim for indemnification against such liabilities
   (other than the payment by Registrant of expenses incurred or paid by a
   director, officer or controlling person or Registrant in the successful
   defense of any action, suit or proceeding) is asserted by such director,
   officer or controlling person in connection with the securities being
   registered, Registrant will, unless in the opinion of its counsel the
   matter has been settled by controlling precedent, submit to a court of
   appropriate jurisdiction the question of whether such indemnification is
   against public policy as expressed in the Act and will be governed by the
   final adjudication of such issue.

   Item 28.  Business and Other Connections of Investment Adviser

             Incorporated by reference to pages 11 through 13 of the
   Statement of Additional Information pursuant to Rule 411 under the
   Securities Act of 1933.

   Item 29.  Principal Underwriters

             Not Applicable.

   Item 30.  Location of Accounts and Records

             The accounts, books and other documents required to be
   maintained by Registrant pursuant to Section 31(a) of the Investment
   Company Act of 1940 and the rules promulgated thereunder are in the
   physical possession of Registrant and Registrant's Administrator as
   follows:  the documents required to be maintained by paragraphs (5), (6),
   (7), (10) and (11) of Rule 31a-1(b) will be maintained by the Registrant
   at 100 North Sixth Street, Suite 700A, Minneapolis, Minnesota; and all
   other records will be maintained by the Registrant's Administrator,
   Firstar Trust Company, 615 East Michigan Street, Milwaukee, Wisconsin.

   Item 31.  Management Services

             All management-related service contracts entered into by
   Registrant are discussed in Parts A and B of this Registration Statement.

   Item 32.  Undertakings

             Registrant undertakes, if requested to do so by the holders of
   at least 10% of the Registrant's outstanding shares, to call a meeting of
   shareholders for the purpose of voting upon the question of removal of a
   director or directors and to assist in communications with other
   shareholders as required by Section 16(c) of the Investment Company Act of
   1940.

             Registrant undertakes to furnish each person to whom a
   prospectus is delivered a copy of Registrant's latest annual report to
   shareholders, upon request and without charge.


                                   SIGNATURES
      
             Pursuant to the requirements of the Securities Act of 1933 and
   the Investment Company Act of 1940, the Registrant certifies that it meets
   all of the requirements for effectiveness of this Amended Registration
   Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
   duly caused this Amended Registration Statement to be signed on its behalf
   by the undersigned, thereunto duly authorized, in the City of Minneapolis
   and State of Minnesota on the 9th day of January, 1998.   

                                      LEUTHOLD FUNDS, INC.
                                           (Registrant)


                                      By:  /s/Steven C. Leuthold         
                                           Steven C. Leuthold, President
       
             Pursuant to the requirements of the Securities Act of 1933, this
   Amended Registration Statement has been signed below by the following
   persons in the capacities and on the date(s) indicated.
      
        Name                     Title                      Date


   /s/Steven C. Leuthold      President and Treasurer     January 9, 1998
   Steven C. Leuthold         (Principal Executive,
                              Financial and Accounting
                              Officer) and a Director

   /s/Thomas F. Elsen         Director                     January 9, 1998 
   Thomas F. Elsen              


   /s/Charles D. Zender       Director                    January 9, 1998
   Charles D. Zender


   /s/John S. Chipman         Director                    January 9, 1998
   John S. Chipman                     


   /s/Lawrence L. Horsch      Director                    January 12, 1998
   Lawrence L. Horsch


   /s/Paul M. Kelnberger      Director                    January 9, 1998
   Paul M. Kelnberger
       


   <PAGE>
                                  EXHIBIT INDEX
      Exhibit No.                    Exhibit                    Page No.

          (1.1)      Registrant's Articles of Incorporation
       
          (1.2)      Articles of Amendment

            (2)      Registrant's Bylaws

            (3)      None

            (4)      None           
       
            (5)      Investment Advisory Agreement with
                     Leuthold and Anderson, Inc.           

            (6)      None

            (7)      None
       
            (8)      Custodian Agreement with Firstar Trust
                     Company

          (9.1)      Fund Administration Servicing Agreement
                     with Firstar Trust Company 

          (9.2)      Transfer Agent Agreement with Firstar
                     Trust Company

          (9.3)      Fund Accounting Servicing Agreement with
                     Firstar Trust Company

           (10)      Opinion of Foley & Lardner, counsel for
                     Registrant           

           (11)      Consent of Arthur Andersen LLP

           (12)      None
       
           (13)      Subscription Agreement

           (14)      Individual Retirement Custodial Accounts         

           (15)      None

           (16)      Schedule for Computation of Performance
                     Quotations*

           (17)      Financial Data Schedule

           (18)      None
   __________________________________

   *  Incorporated by reference.



                                                                  Exhibit 1.1

                            ARTICLES OF INCORPORATION

                                       OF

                              LEUTHOLD FUNDS, INC.
                                  (as amended)


             The undersigned sole incorporator, being at least eighteen years
   of age, hereby adopts the following Articles of Incorporation for the
   purpose of forming a Maryland corporation under the general laws of the
   State of Maryland:

                                    ARTICLE I

             The name of the corporation (hereinafter called "Corporation")
   is:

                              LEUTHOLD FUNDS, INC.

                                   ARTICLE II

                   The period of existence shall be perpetual.

                                   ARTICLE III

             The purposes for which the Corporation is formed are to engage
   in any lawful business for which corporations may be organized under the
   Maryland General Corporation Law.

                                   ARTICLE IV

             A.   The aggregate number of shares of capital stock which the
   Corporation shall have authority to issue is Five Hundred Million
   (500,000,000) shares, all with a par value of One Hundredth of a Cent
   ($0.0001) per share, to be known and designated as "Common Stock." The
   aggregate par value of the authorized shares of the Corporation is Fifty
   Thousand Dollars ($50,000).  The Board of Directors of the Corporation may
   increase or decrease the aggregate number of authorized shares of Common
   Stock pursuant to Section 2-105 of the Maryland General Corporation Law or
   any successor provision thereto.  The Board of Directors of the
   Corporation may classify or reclassify any unissued shares of Common Stock
   and may designate or redesignate the name of any class of outstanding
   Common Stock. The Board of Directors may fix the number of shares of
   Common Stock in any such class and, except as specifically set forth in
   these Articles of Incorporation, may set or change the preferences,
   conversion or other rights, voting powers, restrictions, limitations as to
   dividends, qualifications and terms or conditions of redemption of any
   class of unissued shares of Common Stock.  A total of Two Hundred Fifty
   Million (250,000,000) shares of Common Stock shall be classified as "Class
   A Common Stock" (the "Leuthold Core Investment Fund" or such other name
   designated by the Corporation's Board of Directors).

             B.   Notwithstanding the authority granted to the Board of
   Directors of the Corporation with respect to the designation,
   classification and reclassification of the unissued shares of Common Stock
   of the Corporation, each class of Common Stock shall have the following
   preferences, conversion or other rights, voting powers, restrictions,
   limitations as to dividends, qualifications and terms or conditions of
   redemption:

             1.   Each holder of shares of Common Stock of the
        Corporation, irrespective of the class, shall be entitled to one
        (1) vote for each full share (and a fractional vote for each
        fractional share) then standing in his or her name on the books
        of the Corporation; provided, however, that shares of any class
        of Common Stock owned, other than in a fiduciary capacity, by
        the Corporation or by another corporation in which the
        Corporation owns shares entitled to cast a majority of all the
        votes entitled to be cast by all shares outstanding and entitled
        to vote of such corporation, shall not be voted at any meeting
        of stockholders.  On any matter submitted to a vote of
        stockholders all shares of the Corporation's Common Stock then
        issued and outstanding and entitled to vote, irrespective of the
        class, shall be voted in the aggregate and not by class, except
        that:  (a) when otherwise expressly provided by the Maryland
        General Corporation Law, the Investment Company Act of 1940 and
        the regulations thereunder, or other applicable law, shares
        shall be voted by individual class; and (b) when the matter to
        be acted upon does not affect any interest of a particular class
        of the Corporation's Common Stock, then only shares of the
        affected class shall be entitled to vote thereon.  At all
        elections of directors of the Corporation, each stockholder
        shall be entitled to vote the shares owned of record by him for
        as many persons as there are directors to be elected, but shall
        not be entitled to exercise any right of cumulative voting.

             2.   All consideration received by the Corporation for the
        issue or sale of shares of any class of the Corporation's Common
        Stock, together with all assets in which such consideration is
        invested and reinvested, income, earnings, profits and proceeds
        thereof, including any proceeds derived from the sale, exchange
        or liquidation thereof, and any such funds or payments derived
        from any reinvestment of such proceeds in whatever form the same
        may be, shall irrevocably belong to the class of the
        Corporation's Common Stock with respect to which such assets,
        payments or funds were received by the Corporation for all
        purposes, subject only to the rights of creditors, and shall be
        so handled upon the books of account of the Corporation.  Such
        consideration, assets, income, earnings, profits and proceeds
        thereof, including any proceeds derived from the sale, exchange
        or liquidation thereof, and any assets derived from any
        reinvestment of such proceeds in whatever form, are herein
        referred to as "assets belonging to" such class.  Any assets,
        income, earnings, profits and proceeds thereof, funds or
        payments which are not readily attributable to any particular
        class of the Corporation's Common Stock shall be allocable among
        any one or more of the classes of the Corporation's Common Stock
        in such manner and on such basis as the Board of Directors, in
        its sole discretion, shall deem fair and equitable.  The power
        to make such allocations may be delegated by the Board of
        Directors from time to time to one or more of the officers of
        the Corporation.

             3.   The assets belonging to any class of the Corporation's
        Common Stock shall be charged with the liabilities in respect of
        such class of the Corporation's Common Stock, and shall also be
        charged with the share of the general liabilities of the
        Corporation allocated to such class determined as hereinafter
        provided.  The determination of the Board of Directors shall be
        conclusive as to:  (a) the amount of such liabilities, including
        the amount of accrued expenses and reserves; (b) any allocation
        of the same to a given class; and (c) whether the same are
        allocable to one or more classes.  The liabilities so allocated
        to a class are herein referred to as "liabilities belonging to"
        such class.  Any liabilities which are not readily attributable
        to any particular class of the Corporation's Common Stock shall
        be allocable among any one or more of the classes of the
        Corporation's Common Stock in such manner and on such basis as
        the Board of Directors, in its sole discretion, shall deem fair
        and equitable.  The power to make such allocations may be
        delegated by the Board of Directors from time to time to one or
        more of the officers of the Corporation.

             4.   Shares of a class of the Corporation's Common Stock
        shall be entitled to such dividends and distributions, in stock
        or in cash or both, as may be declared from time to time by the
        Board of Directors, acting in its sole discretion, with respect
        to such class; provided, however, that dividends and
        distributions on shares of a class of the Corporation's Common
        Stock shall be paid only out of the lawfully available "assets
        belonging to" such class as such phrase is defined in this
        Article IV.

             5.   In the event of the liquidation or dissolution of the
        Corporation, stockholders of a class of the Corporation's Common
        Stock shall be entitled to receive, as a class, out of the
        assets of the Corporation available for distribution to
        stockholders, but other than general assets not belonging to any
        particular class, the assets belonging to such class, and the
        assets so distributable to the holders of any class of the
        Corporation's Common Stock shall be distributed among such
        holders in proportion to the number of shares of such class of
        the Corporation's Common Stock held by them and recorded on the
        books of the Corporation.  In the event that there are any
        general assets not belonging to any particular class of the
        Corporation's Common Stock and available for distribution, such
        distribution shall be made to the holders of all classes of the
        Corporation's Common Stock in proportion to the net asset value
        of the respective class of the Corporation's Common Stock
        determined as set forth in the Bylaws of the Corporation.

             6.   Each share of each class of Common Stock of the
        Corporation now or hereafter issued shall be subject to
        redemption by the stockholders of the Corporation and, subject
        to the suspension of such right of redemption as provided in the
        Bylaws, each holder of shares of any class of Common Stock of
        the Corporation, upon request to the Corporation accompanied by
        surrender of the appropriate stock certificate or certificates,
        if any, in proper form for transfer and after complying with any
        other redemption procedures established by the Board of
        Directors, shall be entitled to require the Corporation to
        redeem all or any part of the shares of such class of Common
        Stock standing in the name of such holder on the books of the
        Corporation at the net asset value of such shares.  In the event
        that no certificates have been issued to the holder, the Board
        of Directors may require the submission of a stock power with an
        appropriate signature guarantee.  All shares of any class of its
        Common Stock redeemed by the Corporation shall be deemed to be
        cancelled and restored to the status of authorized but unissued
        shares.  The method of computing the net asset value of shares
        of each class of Common Stock of the Corporation for purposes of
        the issuance and sale, or redemption, thereof, as well as the
        time as of which such net asset value shall be computed, shall
        be as set forth in the Bylaws.  Payment of the net asset value
        of each share of each class of Common Stock of the Corporation
        surrendered to it for redemption shall be made by the
        Corporation within seven (7) days after surrender of such stock
        to the Corporation for such purpose, or within such other
        reasonable period as may be determined from time to time by the
        Board of Directors.  The Board of Directors of the Corporation
        may, upon reasonable notice to the stockholders of the
        Corporation, impose a fee for the privilege of redeeming shares,
        such fee to be not in excess of one percent (1.0%) of the
        proceeds of any such redemption.  The Board shall have
        discretionary authority to rescind the imposition of any such
        fee and to reimpose the redemption fee from time to time upon
        reasonable notice.  Any fee so imposed shall be uniform as to
        all stockholders.

             7.   If, at any time when a request for transfer or
        redemption of the shares of any class of Common Stock is
        received by the Corporation or its agent, the value (computed as
        set forth in the Bylaws) of the shares of such class in a
        stockholder's account is less than Five Hundred Dollars
        ($500.00), after giving effect to such transfer or redemption,
        the Corporation may cause the remaining shares of such class in
        such stockholder's account to be redeemed in accordance with
        such procedures as the Board of Directors shall adopt.

             8.   Each holder of shares of the Corporation's Common
        Stock, irrespective of the class, may, upon request to the
        Corporation accompanied by surrender of the appropriate stock
        certificate or certificates, if any, in proper form for transfer
        and after complying with any other conversion procedures
        established by the Board of Directors, convert such shares into
        shares of any other class of the Corporation's Common Stock on
        the basis of their relative net asset values (determined in
        accordance with the Bylaws of the Corporation) less a conversion
        charge or discount determined by the Board of Directors.  Any
        fee so imposed shall be uniform as to all stockholders.

             9.   No holder of shares of any class of Common Stock of
        the Corporation shall, as such holder, have any right to
        purchase or subscribe for any shares of any class of the Common
        Stock of the Corporation which it may issue or sell (whether out
        of the number of shares authorized by these Articles of
        Incorporation, or out of any shares of any class of Common Stock
        of the Corporation acquired by it after the issue thereof, or
        otherwise) other than such right, if any, as the Board of
        Directors, in its discretion, may determine.

                                    ARTICLE V

             The number of directors constituting the Board of Directors
   shall initially be five (5), and the names of the initial directors are
   __________________, ______________, _______________,
   ______________________ and _________________.  Thereafter, the number of
   directors shall be such number as is fixed from time to time by the
   Bylaws.

                                   ARTICLE VI

             The Corporation reserves the right to enter into, from time to
   time, investment advisory and administration agreements providing for the
   management and supervision of the investments of the Corporation, the
   furnishing of advice to the Corporation with respect to the desirability
   of investing in, purchasing or selling securities or other property and
   the furnishing of clerical and administrative services to the Corporation.
   Such agreements shall contain such other terms, provisions and conditions
   as the Board of Directors of the Corporation may deem advisable and as are
   permitted by the Investment Company Act of 1940.

             The Corporation may designate custodians, transfer agents,
   registrars and/or disbursing agents for the stock and assets of the
   Corporation and employ and fix the powers, rights, duties,
   responsibilities and compensation of each such custodian, transfer agent,
   registrar and/or disbursing agent.

                                   ARTICLE VII

             The following provisions define, limit and regulate the powers
   of the Corporation, the Board of Directors and the stockholders:

             A.   The Corporation may issue and sell shares of any class of
   its own Common Stock in such amounts and on such terms and conditions, for
   such purposes and for such amount or kind of consideration now or
   hereafter permitted by the laws of the State of Maryland, the Bylaws and
   these Articles of Incorporation, as its Board of Directors may determine;
   provided, however, that the consideration per share to be received by the
   Corporation upon the sale of any shares of any class of its Common Stock
   shall not be less than the net asset value per share of such class of
   Common Stock outstanding at the time as of which the computation of said
   net asset value shall be made.

             B.   The Board of Directors may, in its sole and absolute
   discretion, reject in whole or in part orders for the purchase of shares
   of any class of Common Stock and may, in addition, require such orders to
   be in such minimum amounts as it shall determine.

             C.   The holders of any fractional shares of any class Common
   Stock shall be entitled to the payment of dividends on such fractional
   shares, to receive the net asset value thereof upon redemption, to share
   in the assets of the Corporation upon liquidation and to exercise voting
   rights with respect thereto.

             D.   The Board of Directors shall have full power in accordance
   with good accounting practice: (a) to determine what receipts of the
   Corporation shall constitute income available for payment of dividends and
   what receipts shall constitute principal and to make such allocation of
   any particular receipt between principal and income as it may deem proper;
   and (b) from time to time, in its discretion (i) to determine whether any
   and all expenses and other outlays paid or incurred (including any and all
   taxes, assessments or governmental charges which the Corporation may be
   required to pay or hold under any present or future law of the United
   States of America or of any other taxing authority therein) shall be
   charged to or paid from principal or income or both, and (ii) to apportion
   any and all of said expenses and outlays, including taxes, between
   principal and income.

             E.   The Board of Directors shall have the power to determine
   from time to time whether and to what extent and at what time and places
   and under what conditions and regulations the books, accounts and
   documents of the Corporation or any of them, shall be open to the
   inspection of stockholders, except as otherwise provided by applicable
   law; and except as so provided, no stockholder shall have any right to
   inspect any book, account or document of the Corporation unless authorized
   to do so by resolution of the Board of Directors.

                                  ARTICLE VIII

             The address of the principal office of the Corporation in
   Maryland is c/o The Corporation Trust Incorporated, 32 South Street,
   Baltimore, Maryland 21202.

                                   ARTICLE IX

             The address of the initial registered office is c/o The
   Corporation Trust Incorporated, 32 South Street, Baltimore, Maryland
   21202.


                                    ARTICLE X

             The name of the initial registered agent at such address is The
   Corporation Trust, Incorporated, a Maryland corporation.

                                   ARTICLE XI

             The name and address of the sole incorporator is:

                      Name                         Address

             Todd B. Pfister               c/o Foley & Lardner
                                           777 South Flagler Drive
                                           Suite 200
                                           West Palm Beach, FL 33401


             IN WITNESS WHEREOF, the undersigned incorporator who executed
   the foregoing Articles of Incorporation hereby acknowledges the same to be
   his act and further acknowledges that, to the best of his knowledge, the
   matters and facts set forth therein are true in all material respects
   under the penalties of perjury.

             Dated this ___ day of July, 1995.



                                 __________________________________
                                 Todd B. Pfister
                                 Sole Incorporator


                                                                  Exhibit 1.2


                              ARTICLES OF AMENDMENT
                                       TO
                            ARTICLES OF INCORPORATION
                                       OF
                              LEUTHOLD FUNDS, INC.

             The undersigned officers of Leuthold Funds, Inc., a corporation
   duly organized and existing under the Maryland General Corporation Law
   (the "Corporation"), does hereby certify:

             FIRST:  That the name of the Corporation is LEUTHOLD FUNDS, INC.

             SECOND:  That the last sentence of Section A of Article IV of
   the Corporation's Articles of Incorporation is amended in its entirety to
   read as follows:

             A total of Two Hundred Fifty Million (250,000,000) shares
        of Common Stock shall be classified as "Class A Common Stock"
        (the "Leuthold Core Investment Fund" or such other name
        designated by the Corporation's Board of Directors).

             THIRD:  That the Amendment to the Corporation's Articles of
   Incorporation (the "Amendment") was approved by a majority of the entire
   Board of Directors of the Corporation.

             FOURTH:  That the Amendment is limited to a change expressly
   permitted by Section 2-605 of the Maryland General Corporation law to be
   made without action by the stockholders of the Corporation.

             FIFTH:  That the Corporation is registered as an open-end
   investment company under the Investment Company Act of 1940.

             IN WITNESS WHEREOF, the undersigned officers of the Corporation
   who executed the foregoing Articles of Amendment hereby acknowledge the
   same to be their act and further acknowledge that, to the best of their
   knowledge, information and belief, the matters set forth herein are true
   in all material respects under the penalties of perjury.

             Dated this ____ day of January, 1998.

                                      LEUTHOLD FUNDS, INC.


                                      By:  _____________________________
                                           Steven C. Leuthold, President


                                      Attest:_________________________
                                             Elizabeth Page, Secretary


                                                                    Exhibit 2


                                     BYLAWS

                                       OF

                              LEUTHOLD FUNDS, INC.


                                    ARTICLE I

                             STOCKHOLDERS' MEETINGS

   Section 1.     Place of Meetings.  All meetings of stockholders shall be
   held at such location as the Board of Directors shall direct.

   Section 2.     Annual Meeting.

             (a)  The annual meeting of stockholders for the election of
   directors and the transaction of such other business as may properly come
   before it, if the annual meeting shall be held, shall be held during the
   month of May of each year (or during such other month as the Board of
   Directors shall determine), commencing in 1996, at such date and time as
   shall be fixed by the Board of Directors and stated in the notice of such
   meeting, but in no event more than one hundred twenty (120) days after the
   occurrence of the event requiring the meeting to elect directors.  Any
   business of the corporation may be transacted at the annual meeting
   without being specifically designated in the notice, except such business
   as is specifically required by statute to be stated in the notice.

             (b)  The corporation shall not be required to hold an annual
   meeting in any year in which the election of directors is not required to
   be acted on by stockholders under the Investment Company Act of 1940.

   Section 3.     Special Meeting.  Special meetings of the stockholders may
   be called by the board of directors, the president, any vice president, or
   the secretary, and shall be called by the secretary upon the written
   request of the holders of shares entitled to not less than ten percent
   (10%) of all the votes entitled to be cast at such meeting; provided that
   such holders prepay the costs to the corporation of preparing and mailing
   the notice of the meeting.  The business transacted at any special meeting
   of stockholders shall be limited to the purposes stated in the notice.

   Section 4.     Notice of Meeting.  Not less than ten (10) days nor more
   than ninety (90) days before the date of every stockholders' meeting, the
   secretary shall give to each stockholder entitled to vote at such meeting
   and to each other stockholder entitled to notice of such meeting under
   applicable law, written or printed notice stating the time and place of
   the meeting, and in the case of a special meeting (or where required by
   applicable law) the purpose or purposes for which the meeting is called,
   either by mail, by presenting it to him personally or by leaving it at his
   residence or usual place of business.  If mailed, such notice shall be
   deemed to be given when deposited in the United States mail addressed to
   the stockholder at his post office address as it appears on the records of
   the corporation, with postage thereon prepaid.

   Section 5.     Quorum.  At any meeting of stockholders the presence in
   person or by proxy of stockholders entitled to cast a majority of the
   votes thereat shall constitute a quorum; but this section shall not affect
   any requirement under statute or under the charter for the vote necessary
   for the adoption of any measure.  If at any meeting a quorum is not
   present or represented, the chairman of the meeting or the holders of a
   majority of the stock present or represented may adjourn the meeting from
   time to time, without notice other than announcement at the meeting, until
   a quorum is present or represented.  At such adjourned meeting at which a
   quorum is present or represented, any business may be transacted which
   might have been transacted at the meeting as originally called.

   Section 6.     Stock Entitled to Vote.  Each issued share of each class of
   stock shall be entitled to vote at any meeting of stockholders except
   shares owned, other than in a fiduciary capacity, by the corporation or by
   another corporation in which the corporation owns shares entitled to cast
   a majority of all the votes entitled to be cast by all shares outstanding
   and entitled to vote of such corporation.

   Section 7.     Voting.  Each outstanding share of each class of stock
   entitled to vote at a meeting of stockholders shall be entitled to one
   vote on each matter submitted to a vote.  In all elections for directors
   every stockholder shall have the right to vote the shares of each class
   owned of record by him for as many persons as there are directors to be
   elected, but shall not be entitled to exercise any right of cumulative
   voting.  A stockholder may vote the shares owned of record by him either
   in person or by proxy executed in writing by the stockholder or by his
   authorized attorney-in-fact.  No proxy shall be valid after eleven (11)
   months from its date unless otherwise provided in the proxy.  At all
   meetings of stockholders, unless the voting is conducted by inspectors,
   all questions relating to the qualification of voters, the validity of
   proxies and the acceptance or rejection of votes shall be decided by the
   chairman of the meeting.  A majority of the votes cast at a meeting of
   stockholders, duly called and at which a quorum is present, shall be
   sufficient to take or authorize any action which may properly come before
   the meeting, unless a greater number is required by statute or by the
   charter.

   Section 8.     Informal Action.  Any action required or permitted to be
   taken at any meeting of stockholders may be taken without a meeting, if a
   consent in writing, setting forth such action, is signed by all the
   stockholders entitled to vote on the subject matter thereof and such
   consent is filed with the records of the corporation.

                                   ARTICLE II

                                    DIRECTORS

   Section 1.     Number.  The number of directors of the corporation shall
   be five (5).  By vote of a majority of the entire board of directors, the
   number of directors fixed by the charter or by these bylaws may be
   increased or decreased from time to time to not more than fifteen nor less
   than three, but the tenure of office of a director shall not be affected
   by any decrease in the number of directors so made by the board.

   Section 2.     Election and Qualification.  Until the first annual meeting
   of stockholders and until successors are duly elected and qualify, the
   board of directors shall consist of the persons named as such in the
   charter.  At the first annual meeting of stockholders, the stockholders
   shall elect directors to hold office until their successors are elected
   and qualify. A director need not be a stockholder of the corporation, but
   must be eligible to serve as a director of a registered investment company
   under the Investment Company Act of 1940.

   Section 3.     Vacancies.  Any vacancy on the board of directors occurring
   between stockholders' meetings called for the purpose of electing
   directors may be filled, if immediately after filling any such vacancy at
   least two-thirds of the directors then holding office shall have been
   elected to such office at an annual or special meeting of stockholders, in
   the following manner:  (i) for a vacancy occurring other than by reason of
   an increase in directors, by a majority of the remaining members of the
   board, although such majority is less than a quorum; and (ii) for a
   vacancy occurring by reason of an increase in the number of directors, by
   action of a majority of the entire board.  A director elected by the board
   to fill a vacancy shall be elected to hold office until the next annual
   meeting of stockholders or until his successor is elected and qualifies. 
   If by reason of the death, disqualification or bona fide resignation of
   any director or directors, more than sixty percent (60%) of the members of
   the board of directors are interested persons of the corporation, as
   defined in the Investment Company Act of 1940, such vacancy shall be
   filled within thirty (30) days if it may be filled by the board, or within
   sixty (60) days if a vote of stockholders is required to fill such
   vacancy; provided that such vacancy may be filled within such longer
   period as the Securities and Exchange Commission may prescribe by rules
   and regulations, upon its own motion or by order upon application.  In the
   event that at any time less than a majority of the directors were elected
   by the stockholders, the board or proper officer shall forthwith cause to
   be held as promptly as possible, and in any event within sixty (60) days,
   a meeting of the stockholders for the purpose of electing directors to
   fill any existing vacancies in the board, unless the Securities and
   Exchange Commission shall by order extend such period.

   Section 4.     Powers.  The business and affairs of the corporation shall
   be managed under the direction of the board of directors, which may
   exercise all of the powers of the corporation, except such as are by law
   or by the charter or by these bylaws conferred upon or reserved to the
   stockholders.

   Section 5.     Removal.

             (a)  At any meeting of stockholders, duly called and at which a
   quorum is present, the stockholders may, by the affirmative vote of the
   holders of a majority of the votes entitled to be cast thereon, remove any
   director or directors from office and may elect a successor or successors
   to fill any resulting vacancies for the unexpired terms of removed
   directors.

             (b)  Notwithstanding any other provisions of these bylaws, the
   secretary of the corporation shall promptly call a special meeting of
   stockholders for the purpose of voting upon the question of removal of any
   director upon the written request of the holders of shares entitled to not
   less than ten percent (10%) of all the votes entitled to be cast at such
   meeting.

             (c)  Whenever ten or more stockholders of record who have been
   such for at least six months preceding the date of application, and who
   hold in the aggregate either shares having a net asset value of at least
   $25,000 or at least one percent (1%) of the total outstanding shares,
   whichever is less, shall apply to the corporation's secretary in writing,
   stating that they wish to communicate with other stockholders with a view
   to obtaining signatures to a request for a meeting pursuant to subsection
   (b) above and accompanied by a form of communication and request which
   they wish to transmit, the secretary shall within five business days after
   such application either:  (1) afford to such applicants access to a list
   of the names and addresses of all stockholders as recorded on the books of
   the corporation; or (2) inform such applicants as to the approximate
   number of stockholders of record and the approximate cost of mailing to
   them the proposed communication and form of request.

             (d)  If the secretary elects to follow the course specified in
   clause (2) of subsection (c) above, the secretary, upon the written
   request of such applicants, accompanied by a tender of the material to be
   mailed and of the reasonable expenses of mailing, shall, with reasonable
   promptness, mail such material to all stockholders of record at their
   addresses as recorded on the books, unless within five (5) business days
   after such tender the secretary shall mail to such applicants and file
   with the Securities and Exchange Commission, together with a copy of the
   material to be mailed, a written statement signed by at least a majority
   of the board of directors to the effect that in their opinion either such
   material contains untrue statements of fact or omits to state facts
   necessary to make the statements contained therein not misleading, or
   would be in violation of applicable law, and specifying the basis of such
   opinion.

             (e)  After opportunity for hearing upon the objections specified
   in the written statement so filed, the Securities and Exchange Commission
   may, and if demanded by the board of directors or by such applicants
   shall, enter an order either sustaining one or more of such objections or
   refusing to sustain any of them.  If the Securities and Exchange
   Commission shall enter an order refusing to sustain any of such
   objections, or if, after the entry of an order sustaining one or more of
   such objections, the Securities and Exchange Commission shall find, after
   notice and opportunity for hearing, that all objections so sustained have
   been met, and shall enter an order so declaring, the secretary shall mail
   copies of such material to all shareholders with reasonable promptness
   after the entry of such order and the renewal of such tender.
    
   Section 6.     Place of Meetings.  Meetings of the board of directors,
   regular or special, may be held at any place in or out of the State of
   Maryland as the board may from time to time determine or as may be
   specified in the notice of meeting.

   Section 7.     First Meeting of Newly Elected Board.  The first meeting of
   each newly elected board of directors shall be held without notice
   immediately after and at the same general place as the annual meeting of
   the stockholders, for the purpose of organizing the board, electing
   officers and transacting any other business that may properly come before
   the meeting.

   Section 8.     Regular Meetings.  Regular meetings of the board of
   directors may be held without notice at such time and place as shall from
   time to time be determined by the board.

   Section 9.     Special Meetings.  Special meetings of the board of
   directors may be called at any time either by the board, the president, a
   vice president or a majority of the directors in writing with or without a
   meeting.  Notice of special meetings shall either be mailed by the
   secretary to each director at least three (3) days before the meeting or
   shall be given personally or telegraphed to each director at least one (1)
   day before the meeting.  Such notice shall set forth the time and place of
   such meeting but need not, unless otherwise required by law, state the
   purposes of the meeting.

   Section 10.    Quorum and Vote Required for Action.  At all meetings of
   the board of directors a majority of the entire board shall constitute a
   quorum for the transaction of business, and the action of a majority of
   the directors present at any meetings at which a quorum is present shall
   be the action of the board of directors unless the concurrence of a
   greater proportion is required for such action by statute, the articles of
   incorporation or these bylaws.  If at any meeting a quorum is not present,
   a majority of the directors present may adjourn the meeting from time to
   time, without notice other than announcement at the meeting, until a
   quorum is present.  Members of the board of directors or a committee of
   the board may participate in a meeting by means of a conference telephone
   or similar communications equipment if all persons participating in the
   meeting can hear each other at the same time; provided, however, that a
   director may not participate in a meeting by means of a conference
   telephone or similar communications equipment if the purpose of the
   meeting is to approve the corporation's investment advisory agreement
   and/or to approve the selection of the corporation's auditors, or if
   participation in such a manner would otherwise violate the Investment
   Company Act of 1940 or other applicable laws.  Except as set forth in the
   preceding sentence, participation in a meeting by these means constitutes
   presence in person at the meeting.

   Section 11.    Executive and Other Committees.  The board of directors may
   appoint from among its members an executive and other committees composed
   of two (2) or more directors. The board may delegate to such committees in
   the intervals between meetings of the board any of the powers of the board
   to manage the business and affairs of the corporation, except the power
   to:  (i) declare dividends or distributions upon the stock of the
   corporation; (ii) issue stock of the corporation; (iii) recommend to the
   stockholders any action which requires stockholder approval; (iv) amend
   the bylaws; (v) approve any merger or share exchange which does not
   require stockholder approval; or (vi) take any action required by the
   Investment Company Act of 1940 to be taken by the independent directors of
   the corporation or by the full board of directors.

   Section 12.    Informal Action.  Except as set forth in the following
   sentence, any action required or permitted to be taken at any meeting of
   the board of directors or of a committee of the board may be taken without
   a meeting, if a written consent to such action is signed by all members of
   the board or the committee, as the case may be, and such written consent
   is filed with the minutes of proceedings of the board or committee. 
   Notwithstanding the preceding sentence, no action may be taken by the
   board of directors pursuant to a written consent with respect to the
   approval of the corporation's investment advisory agreement, the approval
   of the selection of the corporation's auditors, or any action required by
   the Investment Company Act of 1940 or other applicable law to be taken at
   a meeting of the board of directors to be held in person.

                                   ARTICLE III

                             OFFICERS AND EMPLOYEES

   Section 1.     Election and Qualification.  At the first meeting of each
   newly elected board of directors there shall be elected a president, one
   or more vice presidents, a secretary and a treasurer.  The board may also
   elect one or more assistant secretaries and assistant treasurers.  No
   officer need be a director.  Any two or more offices, except the offices
   of president and vice president, may be held by the same person but no
   officer shall execute, acknowledge or verify any instrument in more than
   one capacity, if such instrument is required by law, charter or these
   bylaws to be executed, acknowledged or verified by two or more officers.
   Each officer must be eligible to serve as an officer of a registered
   investment company under the Investment Company Act of 1940.  Nothing
   herein shall preclude the employment of other employees or agents by the
   corporation from time to time without action by the board.

   Section 2.     Term, Removal and Vacancies.  The officers shall be elected
   to serve until the next first meeting of a newly elected board of
   directors and until their successors are elected and qualify.  Any officer
   may be removed by the board, with or without cause, whenever in its
   judgment the best interests of the corporation will be served thereby, but
   such removal shall be without prejudice to the contractual rights, if any,
   of the person so removed.  A vacancy in any office shall be filled by the
   board for the unexpired term.

   Section 3.     Bonding.  Each officer and employee of the corporation who
   singly or jointly with others has access to securities or funds of the
   corporation, either directly or through authority to draw upon such funds,
   or to direct generally the disposition of such securities shall be bonded
   against larceny and embezzlement by a reputable fidelity insurance company
   authorized to do business in Illinois and Wisconsin. Each such bond, which
   may be in the form of an individual bond, a schedule or blanket bond
   covering the corporation's officers and employees and the officers and
   employees of the investment adviser to the corporation and other
   corporations to which said investment adviser also acts as investment
   adviser, shall be in such form and for such amount (determined at least
   annually) as the board of directors shall determine in compliance with the
   requirements of Section 17(g) of the Investment Company Act of 1940, as
   amended from time to time, and the rules, regulations or orders of the
   Securities and Exchange Commission thereunder.

   Section 4.     President.  The president shall be the principal executive
   officer of the corporation.  He shall preside at all meetings of the
   stockholders and directors, have general and active management of the
   business of the corporation, see that all orders and resolutions of the
   board of directors are carried into effect, and execute in the name of the
   corporation all authorized instruments of the corporation, except where
   the signing shall be expressly delegated by the board to some other
   officer or agent of the corporation.

   Section 5.     Vice Presidents.  The vice president, or if there be more
   than one, the vice presidents in the order determined by the board of
   directors, shall, in the absence or disability of the president, perform
   the duties and exercise the powers of the president, and shall have such
   other duties and powers as the board may from time to time prescribe or
   the president delegate.

   Section 6.     Secretary and Assistant Secretaries.  The secretary shall
   give notice of, attend and record the minutes of meetings of stockholders
   and directors, keep the corporate seal and, when authorized by the board,
   affix the same to any instrument requiring it, attesting to the same by
   his signature, and shall have such further duties and powers as are
   incident to his office or as the board may from time to time prescribe. 
   The assistant secretary, if any, or, if there be more than one, the
   assistant secretaries in the order determined by the board, shall in the
   absence or disability of the secretary, perform the duties and exercise
   the powers of the secretary, and shall have such other duties and powers
   as the board may from time to time prescribe or the secretary delegate.

   Section 7.     Treasurer and Assistant Treasurers.  The treasurer shall be
   the principal financial and accounting officer of the corporation.  He
   shall be responsible for the custody and supervision of the corporation's
   books of account and subsidiary accounting records, and shall have such
   further duties and powers as are incident to his office or as the board of
   directors may from time to time prescribe.  The assistant treasurer, if
   any, or, if there be more than one, the assistant treasurers in the order
   determined by the board, shall in the absence or disability of the
   treasurer, perform all duties and exercise the powers of the treasurer,
   and shall have such other duties and powers as the board may from time to
   time prescribe or the treasurer delegate.

                                   ARTICLE IV

                          RESTRICTIONS ON COMPENSATION
                          TRANSACTIONS AND INVESTMENTS

   Section 1.     Salary and Expenses.  Directors and executive officers as
   such shall not receive any salary for their services or reimbursement for
   expenses from the corporation; provided that the corporation may pay fees
   in such amounts and at such times as the board of directors shall
   determine to directors who are not interested persons of the corporation
   for attendance at meetings of the board of directors. Clerical employees
   shall receive compensation for their services from the corporation in such
   amounts as are determined by the board of directors.

   Section 2.     Compensation and Profit from Purchase and Sales. No
   affiliated person of the corporation, as defined in the Investment Company
   Act of 1940, or affiliated person of such person, shall, except as
   permitted by Section 17(e) of the Act, or the rules, regulations or orders
   of the Securities and Exchange Commission thereunder, (i) acting as agent,
   accept from any source any compensation for the purchase or sale of any
   property or securities to or for the corporation or any controlled company
   of the corporation, as defined in such Act, or (ii) acting as a broker, in
   connection with the sale of securities to or by the corporation or any
   controlled company of the corporation, receive from any source a
   commission, fee or other remuneration for effecting such transaction.  The
   investment adviser to the corporation shall not profit directly or
   indirectly from sales of securities to or from the corporation.

   Section 3.     Transactions with Affiliated Person.  No affiliated person
   of the corporation, as defined in the Investment Company Act of 1940, or
   affiliated person of such person shall knowingly (i) sell any security or
   other property to the corporation or to any company controlled by the
   corporation, as defined in the Act, except shares of stock of the
   corporation or securities of which such person is the issuer and which are
   part of a general offering to the holders of a class of its securities,
   (ii) purchase from the corporation or any such controlled company any
   security or property except shares of stock of the corporation or
   securities of which such person is the issuer, (iii) borrow money or other
   property from the corporation or any such controlled company, or (iv)
   acting as a principal effect any transaction in which the corporation or
   controlled company is a joint or joint and several participant with such
   person; provided, however, that this section shall not apply to any
   transaction permitted by Sections 17(a), (b), (c), (d) or 21(b) of the
   Investment Company Act of 1940 or the rules, regulations or orders of the
   Securities and Exchange Commission thereunder, and shall not prohibit the
   joint participation by the corporation and an affiliate in a fidelity bond
   arrangement.

   Section 4.     Investment Adviser.  The corporation shall employ one or
   more investment advisers, the employment of which shall be pursuant to
   written agreements in accordance with Section 15 of the Investment Company
   Act of 1940, as amended from time to time.

                                    ARTICLE V
                      STOCK CERTIFICATES AND TRANSFER BOOKS

   Section 1.     Certificates.  Each holder of shares of any class of stock
   of the corporation shall be entitled to a certificate or certificates, in
   such form as the board of directors shall from time to time approve,
   representing and certifying the number of shares of such class of stock
   owned by him in the corporation.  Each certificate shall be signed,
   manually or by facsimile signature, by the president or a vice president,
   countersigned, manually or by facsimile signature, by the secretary, an
   assistant secretary, the treasurer or an assistant treasurer and sealed
   with the corporate seal or facsimile thereof.  In case any officer who has
   signed any certificate, or whose facsimile signature appears thereon,
   ceases to be an officer of the corporation before the certificate is
   issued, the certificate may nevertheless be issued with the same effect as
   if the officer had not ceased to be such officer as of the date of its
   issue.  Each certificate shall contain on its face or back a full
   statement or summary of the designations and any preferences, conversion
   and other rights, voting powers, restrictions, limitations as to
   dividends, qualifications and terms of each class of stock of the
   corporation or shall state that the corporation will furnish such
   information to the stockholder on request and without charge.  Any
   certificate representing stock which is restricted or limited as to
   transferability also shall have a full statement of such restriction or
   limitation plainly stated thereon or shall state that the corporation will
   furnish such information to the stockholder on request and without charge.

   Section 2.     Lost Certificates.  The board of directors may direct a new
   certificate or certificates to be issued in place of any certificate or
   certificates theretofore issued by the corporation alleged to have been
   lost, stolen, destroyed or mutilated (or may delegate such authority to
   one or more officers of the corporation) upon the making of an affidavit
   of that fact by the person claiming the certificate to be lost, stolen,
   destroyed or mutilated.  The board or such officer may, in its or his
   discretion, require the owner of such certificate or his legal
   representative to give bond with sufficient surety to the corporation to
   indemnify it against any loss or claim which may arise or expense which
   may be incurred by reason of the issuance of a new certificate.

   Section 3.     Stock Ledger.  The corporation shall maintain at its office
   in Minneapolis, Minnesota, or at the office of its principal transfer
   agent, if any, an original or duplicate stock ledger containing the names
   and addresses of all stockholders and the number of shares of each class
   of stock held by each stockholder.

   Section 4.     Registered Stockholders.  The corporation shall be entitled
   to recognize the exclusive right of a person registered on its books as
   such, as the owner of shares for all purposes, and shall not be bound to
   recognize any equitable or other claim to or interest in such shares on
   the part of any other person, whether or not it shall have express or
   other notice thereof, except as other provided by the laws of Maryland.

   Section 5.     Transfer Agent and Registrar.  The corporation may maintain
   one or more transfer offices or agencies, each in charge of a transfer
   agent designated by the board of directors, where the shares of each class
   of stock of the corporation shall be transferable.  The corporation may
   also maintain one or more registry offices, each in charge of a registrar
   designated by the board, where the shares of such classes of stock shall
   be registered.

   Section  6.    Transfers of Stock.  Upon surrender to the corporation or a
   transfer agent of a certificate for shares of any class duly endorsed or
   accompanied by proper evidence of succession, assignment or authority to
   transfer, it shall be the duty of the corporation to issue a new
   certificate to the person entitled thereto, cancel the old certificate and
   record the transaction upon its books.

   Section 7.     Fixing of Record Dates and Closing of Transfer Books.  The
   board of directors may fix, in advance, a date as the record date for the
   purpose of determining stockholders entitled to notice of, or to vote at,
   any meeting of stockholders, or stockholders entitled to receive payment
   of any dividend or the allotment of any rights, or in order to make a
   determination of stockholders for any other proper purpose.  Such date, in
   any case, shall be not more than ninety (90) days, and in case of a
   meeting of stockholders not less than ten (10) days, prior to the date on
   which the particular action requiring such determination of stockholders
   is to be taken.  In lieu of fixing a record date, the board may provide
   that the stock transfer books shall be closed for a stated period but not
   to exceed, in any case, twenty (20) days.  If the stock transfer books are
   closed or a record date is fixed for the purpose of determining
   stockholders entitled to vote at a meeting of stockholders, such books
   shall be closed for at least ten (10) days immediately preceding such
   action.

                                   ARTICLE VI

        ACCOUNTS, REPORTS, CUSTODIAN AND INVESTMENT ADVISER

   Section 1.     Inspection of Books.  The board of directors shall
   determine from time to time whether, and, if allowed, when and under what
   conditions and regulations the accounts and books of the corporation
   (except such as may by statute be specifically open to inspection) or any
   of them, shall be open to the inspection of the stockholders, and the
   stockholders' rights in this respect are and shall be limited accordingly.

   Section 2.     Reliance on Records.  Each director and officer shall, in
   the performance of his duties, be fully protected in relying in good faith
   on the books of account or reports made to the corporation by any of its
   officials or by an independent public accountant.

   Section 3.     Preparation and Maintenance of Accounts, Records and
   Statements.  The president, a vice president or the treasurer shall
   prepare or cause to be prepared annually, a full and correct statement of
   the affairs of the corporation, including a balance sheet or statement of
   financial condition and a financial statement of operations for the
   preceding fiscal year, which shall be submitted at the annual meeting of
   the stockholders and filed within twenty (20) days thereafter at the
   principal office of the corporation in the State of Minnesota.  If the
   corporation is not required to hold an annual meeting of stockholders, the
   statement of affairs shall be placed on file at the corporation's
   principal office within one hundred twenty (120) days after the end of the
   fiscal year.  The proper officers of the corporation shall also prepare,
   maintain and preserve or cause to be prepared, maintained and preserved
   the accounts, books and other documents required by Section 2-111 of the
   Maryland General Corporation Law and Section 31 of the Investment Company
   Act of 1940 and shall prepare and file or cause to be prepared and filed
   the reports required by Section 30 of such Act.  No financial statement
   shall be filed with the Securities and Exchange Commission unless the
   officers or employees who prepared or participated in the preparation of
   such financial statement have been specifically designated for such
   purpose by the board of directors.

   Section 4.     Auditors.  No independent public accountant shall be
   retained or employed by the corporation to examine, certify or report on
   its financial statements for any fiscal year unless such selection:  (i)
   shall have been approved by a majority of the entire board of directors
   within thirty (30) days before or after the beginning of such fiscal year
   or before the annual ratification by the stockholders; (ii) shall have
   been ratified by the stockholders, provided that any vacancy occurring
   between such annual ratification due to the death or resignation of such
   accountant may be filled by the board of directors; and (iii) shall
   otherwise meet the requirements of Section 32 of the Investment Company
   Act of 1940.

   Section 5.     Custodianship.  All securities owned by the corporation and
   all cash, including, without limiting the generality of the foregoing, the
   proceeds from sales of securities owned by the corporation and from the
   issuance of shares of the capital stock of the corporation, payments of
   principal upon securities owned by the corporation, and distributions in
   respect of securities owned by the corporation which at the time of
   payment are represented by the distributing corporation to be capital
   distributions, shall be held by a custodian or custodians which shall be a
   bank, as that term is defined in the Investment Company Act of 1940,
   having capital, surplus and undivided profits aggregating not less than
   $2,000,000.  The terms of custody of such securities and cash shall
   include provisions to the effect that the custodian shall deliver
   securities owned by the corporation only (a) upon sales of such securities
   for the account of the corporation and receipt by the custodian of payment
   therefor, (b) when such securities are called, redeemed or retired or
   otherwise become payable, (c) for examination by any broker selling any
   such securities in accordance with "street delivery" custom, (d) in
   exchange for or upon conversion into other securities alone or other
   securities and cash whether pursuant to any plan of merger, consolidation,
   reorganization, recapitalization or readjustment, or otherwise, (e) upon
   conversion of such securities pursuant to their terms into other
   securities, (f) upon exercise of subscription, purchase or other similar
   rights represented by such securities, (g) for the purpose of exchanging
   interim receipts or temporary securities for definitive securities, (h)
   for the purpose of redeeming in kind shares of the capital stock of the
   corporation, or (i) for other proper corporate purposes. Such terms of
   custody shall also include provisions to the effect that the custodian
   shall hold the securities and funds of the corporation in a separate
   account or accounts and shall have sole power to release and deliver any
   such securities and draw upon any such account, any of the securities or
   funds of the corporation only on receipt by such custodian of written
   instruction from one or more persons authorized by the board of directors
   to give such instructions on behalf of the corporation, and that the
   custodian shall deliver cash of the corporation required by this Section 5
   to be deposited with the custodian only upon the purchase of securities
   for the portfolio of the corporation and the delivery of such securities
   to the custodian, for the purchase or redemption of shares of the capital
   stock of the corporation, for the payment of interest, dividends, taxes,
   management or supervisory fees or operating expenses, for payments in
   connection with the conversion, exchange or surrender of securities owned
   by the corporation, or for other proper corporate purposes.  Upon the
   resignation or inability to serve of any such custodian the corporation
   shall (a) use its best efforts to obtain a successor custodian, (b)
   require the cash and securities of the corporation held by the custodian
   to be delivered directly to the successor custodian, and (c) in the event
   that no successor custodian can be found, submit to the stockholders of
   the corporation, before permitting delivery of such cash and securities to
   anyone other than a successor custodian, the question whether the
   corporation shall be dissolved or shall function without a custodian;
   provided, however, that nothing herein contained shall prevent the
   termination of any agreement between the corporation and any such
   custodian by the affirmative vote of the holders of a majority of all the
   shares of the capital stock of the corporation at the time outstanding and
   entitled to vote.  Upon its resignation or inability to serve, the
   custodian may deliver any assets of the corporation held by it to a
   qualified bank or trust company selected by it, such assets to be held
   subject to the terms of custody which governed such retiring custodian,
   pending action by the corporation as set forth in this Section 5.

   Section 6.     Termination of Custodian Agreement.  Any employment
   agreement with a custodian shall be terminable on not more than sixty (60)
   days' notice in writing by the board of directors or the custodian and
   upon any such termination the custodian shall turn over only to the
   succeeding custodian designated by the board of directors all funds,
   securities and property and documents of the corporation in its
   possession.

   Section 7.     Checks and Requisitions.  Except as otherwise authorized by
   the board of directors, all checks and drafts for the payment of money
   shall be signed in the name of the corporation by a custodian, and all
   requisitions or orders for the payment of money by a custodian or for the
   issue of checks and drafts therefore, all promissory notes, all
   assignments of stock or securities standing in the name of the
   corporation, and all requisitions or orders for the assignment of stock or
   securities standing in the name of a custodian or its nominee, or for the
   execution of powers to transfer the same, shall be signed in the name of
   the corporation by not less than two persons (who shall be among those
   persons, not in excess of five, designated for this purpose by the board
   of directors) at least one of which shall be an officer.  Promissory
   notes, checks or drafts payable to the corporation may be endorsed only to
   the order of a custodian or its nominee by the treasurer or president or
   by such other person or persons as shall be thereto authorized by the
   board of directors.

   Section 8.     Investment Advisory Contract.  Any investment advisory
   contract in effect after the first annual meeting of stockholders of the
   corporation, to which the corporation is or shall become a party, whereby,
   subject to the control of the board of directors of the corporation, the
   investment portfolio with respect to any class of Common Stock of the
   corporation shall be managed or supervised by the other party to such
   contract, shall be effective and binding only upon the affirmative vote of
   a majority of the outstanding voting securities of such class of Common
   Stock of the corporation (as defined in the Investment Company Act of
   1940), and the investment advisory contract currently in effect with
   respect to any class of Common Stock shall be submitted to the holders of
   shares of such class of Common Stock for ratification by the affirmative
   vote of such majority.  Any investment advisory contract to which the
   corporation shall be a party whereby, subject to the control of the board
   of directors of the corporation, the investment portfolio with respect to
   any class of Common Stock of the corporation shall be managed or
   supervised by the other party to such contract, shall provide, among other
   things, that such contract cannot be assigned.  Such investment advisory
   contract shall prohibit the other party thereto from making short sales of
   shares of capital stock of the corporation; and such investment advisory
   contract shall prohibit such other party from purchasing shares otherwise
   than for investment, and shall require such other party to advise the
   corporation of any sales of shares of the capital stock of the corporation
   made by such person or organization less than two months after the date of
   any purchase by him or it of shares of the capital stock of the
   corporation.  Unless any such contract shall expressly otherwise provide,
   any provisions therein for the termination thereof by action of the board
   of directors of the corporation shall be construed to require that such
   termination can be accomplished only upon the vote of a majority of the
   entire board.

                                   ARTICLE VII

                               GENERAL PROVISIONS

   Section 1.     Offices.  The registered office of the corporation in the
   State of Maryland shall be in the City of Baltimore.  The corporation
   shall also have an office in Minneapolis, Minnesota.  The corporation may
   also have offices at such other places within and without the State of
   Maryland as the board of directors may from time to time determine. Except
   as otherwise required by statute, the books and records of the corporation
   may be kept outside the State of Maryland.

   Section 2.     Seal.  The corporate seal shall have inscribed thereon the
   name of the corporation, and the words "Corporate Seal" and "Maryland". 
   The seal may be used by causing it or a facsimile thereof to be impressed,
   affixed, reproduced or otherwise.

   Section 3.     Fiscal Year.  The fiscal year of the corporation shall be
   fixed by the board of directors.

   Section 4.     Notice of Waiver of Notice.  Whenever any notice of the
   time, place or purpose of any meeting of stockholders or directors is
   required to be given under the statute, the charter or these bylaws, a
   waiver thereof in writing, signed by the person or persons entitled to
   such notice and filed with the records of the meeting, either before or
   after the holding thereof, or actual attendance at the meeting of
   stockholders in person or by proxy or at the meeting of directors in
   person, shall be deemed equivalent to the giving of such notice to such
   person.  No notice need be given to any person with whom communication is
   made unlawful by any law of the United States or any rule, regulation,
   proclamation or executive order issued by any such law.

   Section 5.     Voting of Stock.  Unless otherwise ordered by the board of
   directors, the president shall have full power and authority, in the name
   and on behalf of the corporation, (i) to attend, act and vote at any
   meeting of stockholders of any company in which the corporation may own
   shares of stock of record, beneficially (as the proxy or attorney-in-fact
   of the record holder) or of record and beneficially, and (ii) to give
   voting directions to the record stockholder of any such stock beneficially
   owned.  At any such meeting, he shall possess and may exercise any and all
   rights and powers incident to the ownership of such shares which, as the
   holder or beneficial owner and proxy of the holder thereof, the
   corporation might possess and exercise if personally present, and may
   delegate such power and authority to any officer, agent or employee of the
   corporation.

   Section 6.     Dividends.  Dividends upon any class of stock of the
   corporation, subject to the provisions of the charter, if any, may be
   declared by the board of directors in any lawful manner.  The source of
   each dividend payment shall be disclosed to the stockholders receiving
   such dividend, to the extent required by the laws of the State of Maryland
   and by Section 19 of the Investment Company Act of 1940 and the rules and
   regulations of the Securities and Exchange Commission thereunder.

   Section 7.     Indemnification.

        A.   The corporation shall indemnify all of its corporate
   representatives against expenses, including attorneys' fees, judgments,
   fines and amounts paid in settlement actually and reasonably incurred by
   them in connection with the defense of any action, suit or proceeding, or
   threat or claim of such action, suit or proceeding, whether civil,
   criminal, administrative, or legislative, no matter by whom brought, or in
   any appeal in which they or any of them are made parties or a party by
   reason of being or having been a corporate representative, if the
   corporate representative acted in good faith and in a manner reasonably
   believed to be in or not opposed to the best interests of the corporation
   and with respect to any criminal proceeding, if he had no reasonable cause
   to believe his conduct was unlawful provided that the corporation shall
   not indemnify corporate representatives in relation to matters as to which
   any such corporate representative shall be adjudged in such action, suit
   or proceeding to be liable for gross negligence, willful misfeasance, bad
   faith, reckless disregard of the duties and obligations involved in the
   conduct of his office, or when indemnification is otherwise not permitted
   by the Maryland General Corporation Law.

        B.   In the absence of an adjudication which expressly absolves the
   corporate representative, or in the event of a settlement, each corporate
   representative shall be indemnified hereunder only if there has been a
   reasonable determination based on a review of the facts that
   indemnification of the corporate representative is proper because he has
   met the applicable standard of conduct set forth in paragraph A. Such
   determination shall be made:  (i) by the board of directors, by a majority
   vote of a quorum which consists of directors who were not parties to the
   action, suit or proceeding, or if such a quorum cannot be obtained, then
   by a majority vote of a committee of the board consisting solely of two or
   more directors, not, at the time, parties to the action, suit or
   proceeding and who were duly designated to act in the matter by the full
   board in which the designated directors who are parties to the action,
   suit or proceeding may participate; or (ii) by special legal counsel
   selected by the board of directors or a committee of the board by vote as
   set forth in (i) of this paragraph, or, if the requisite quorum of the
   full board cannot be obtained therefor and the committee cannot be
   established, by a majority vote of the full board in which directors who
   are parties to the action, suit or proceeding may participate.

        C.   The termination of any action, suit or proceeding by judgment,
   order, settlement, conviction, or upon a plea of nolo contendere or its
   equivalent, shall create a rebuttable presumption that the person was
   guilty of willful misfeasance, bad faith, gross negligence or reckless
   disregard to the duties and obligations involved in the conduct of his or
   her office, and, with respect to any criminal action or proceeding, had
   reasonable cause to believe that his or her conduct was unlawful.

        D.   Expenses, including attorneys' fees, incurred in the preparation
   of and/or presentation of the defense of a civil or criminal action, suit
   or proceeding may be paid by the corporation in advance of the final
   disposition of such action, suit or proceeding as authorized in the manner
   provided in Section 2-418(F) of the Maryland General Corporation Law upon
   receipt of:  (i) an undertaking by or on behalf of the corporate
   representative to repay such amount unless it shall ultimately be
   determined that he or she is entitled to be indemnified by the corporation
   as authorized in this bylaw; and (ii) a written affirmation by the
   corporate representative of the corporate representative's good faith
   belief that the standard of conduct necessary for indemnification by the
   corporation has been met.

        E.   The indemnification provided by this bylaw shall not be deemed
   exclusive of any other rights to which those indemnified may be entitled
   under these bylaws, any agreement, vote of stockholders or disinterested
   directors or otherwise, both as to action in his or her official capacity
   and as to action in another capacity while holding such office, and shall
   continue as to a person who has ceased to be a director, officer, employee
   or agent and shall inure to the benefit of the heirs, executors and
   administrators of such a person subject to the limitations imposed from
   time to time by the Investment Company Act of 1940, as amended.

        F.   This corporation shall have power to purchase and maintain
   insurance on behalf of any corporate representative against any liability
   asserted against him or her and incurred by him or her in such capacity or
   arising out of his or her status as such, whether or not the corporation
   would have the power to indemnify him or her against such liability under
   this bylaw provided that no insurance may be purchased or maintained to
   protect any corporate representative against liability for gross
   negligence, willful misfeasance, bad faith or reckless disregard of the
   duties and obligations involved in the conduct of his or her office.

        G.   "Corporate Representative" means an individual who is or was a
   director, officer, agent or employee of the corporation or who serves or
   served another corporation, partnership, joint venture, trust or other
   enterprise in one of these capacities at the request of the corporation
   and who, by reason of his or her position, is, was, or is threatened to be
   made, a party to a proceeding described herein.

   Section 8.     Amendments.

             A.   These bylaws may be altered, amended or repealed and new
   bylaws may be adopted by the stockholders by affirmative vote of not less
   than a majority of the shares of all classes of stock present or
   represented at any annual or special meeting of the stockholders at which
   a quorum is in attendance.

             B.   These bylaws may also be altered, amended or repealed and
   new bylaws may be adopted by the Board of Directors by affirmative vote of
   a majority of the number of directors present at any meeting at which a
   quorum is in attendance; but no bylaw adopted by the stockholders shall be
   amended or repealed by the Board of Directors if the bylaws so adopted so
   provides.

             C.   Any action taken or authorized by the stockholders or by
   the Board of Directors, which would be inconsistent with the bylaws then
   in effect but is taken or authorized by affirmative vote of not less than
   the number of shares or the number of directors required to amend the
   bylaws so that the bylaws would be consistent with such action, shall be
   given the same effect as though the bylaws had been temporarily amended or
   suspended so far, but only so far, as was necessary to permit the specific
   action so taken or authorized.

   Section 9.     Reports to Stockholders.  The books of account of the
   corporation shall be examined by an independent firm of public accountants
   at the close of each annual fiscal period of the corporation and at such
   other times, if any, as may be directed by the Board of Directors of the
   corporation.  A report to the stockholders based upon each such
   examination shall be mailed to each stockholder of the corporation of
   record on such date with respect to each report as may be determined by
   the Board of Directors at his address as the same appears on the books of
   the corporation.  Each such report shall include the financial information
   required to be transmitted to stockholders by rules or regulations of the
   Securities and Exchange Commission under the Investment Company Act of
   1940 and shall be in such form as the Board of Directors shall determine
   pursuant to rules and regulations of the Securities and Exchange
   Commission.

   Section 10.    Information to Accompany Dividends.  At the time of the
   payment by the corporation of any dividend to the holders of any class of
   stock of the corporation, each stockholder to whom such dividend is paid
   shall be notified of the account or accounts from which it is paid and the
   amount thereof paid from each such account.

                                  ARTICLE VIII

                              SALES, REDEMPTION AND
                            NET ASSET VALUE OF SHARES

   Section 1.     Sales of Shares.  Shares of any class of Common Stock of
   the corporation shall be sold by it for the net asset value per share of
   such class of Common Stock outstanding at the time as of which the
   computation of said net asset value shall be made as hereinafter provided
   in these bylaws.

   Section 2.     Periodic Investment and Dividend Reinvestment Plans.  The
   corporation acting by and through the Board of Directors shall have the
   right to adopt and to offer to the holders of each class of stock and to
   the public a periodic investment plan and an automatic reinvestment of
   dividend plan subject to the limitations and restrictions imposed thereon
   and as set forth in the Investment Company Act of 1940 and any rule or
   regulation adopted or issued thereunder.

   Section 3.     Shares Issued for Securities.  In the case of shares of any
   class of stock of the corporation issued in whole or in part in exchange
   for securities, there may, at the discretion of the board of directors of
   the corporation, be included in the value of said securities, for the
   purpose of determining the number of shares of such class stock of the
   corporation issuable in exchange therefor, the amount, if any, of
   brokerage commissions (not exceeding an amount equal to the rates payable
   in connection with the purchase of comparable securities on the New York
   Stock Exchange) or other similar costs of acquisition of such securities
   paid by the holder of said securities in acquiring the same.

   Section 4.     Redemption of Shares.  Each share of each class of Common
   Stock of the corporation now or hereafter issued shall be subject to
   redemption, as provided in the Articles of Incorporation of the
   corporation.

   Section 5.     Suspension of Right of Redemption.  The Board of Directors
   of the corporation may suspend the right of the holders of any class of
   Common Stock of the corporation to require the corporation to redeem
   shares of such class:

             (1)  for any period (a) during which the New York Stock
        Exchange is closed other than customary weekend and holiday
        closings, or (b) during which trading on the New York Stock
        Exchange is restricted;

             (2)  for any period during which an emergency, as defined
        by rules of the Securities and Exchange Commission or any
        successor thereto, exists as a result of which (a) disposal by
        the corporation of securities owned by it is not reasonably
        practicable, or (b) it is not reasonably practicable for the
        corporation fairly to determine the value of its net assets; or

             (3)  for such other periods as the Securities and Exchange
        Commission or any successor thereto may by order permit for the
        protection of security holders of the corporation.

   Section 6.     Computation of Net Asset Value.  For purposes of these
   bylaws, the following rules shall apply:

             A.   The net asset value of each share of each class of
        Common Stock of the corporation shall be determined at such time
        or times as may be disclosed in the then currently effective
        Prospectus relating to such class of Common Stock of this
        corporation.  The Board of Directors may also, from time to time
        by resolution, designate a time or times intermediate of the
        opening and closing of trading on the New York Stock Exchange on
        each day that said Exchange is open for trading as of which the
        net asset value of each share of each class of Common Stock of
        the corporation shall be determined or estimated.

             Any determination or estimation of net asset value as
        provided in this subparagraph A shall be effective at the time
        as of which such determination or estimation is made.

             The net asset value of each share of each class of Common
        Stock of the corporation for purposes of the issue of such class
        of Common Stock shall be the net asset value which becomes
        effective as provided in this Subparagraph A, next succeeding
        receipt of the subscription to such share of such class Common
        Stock.  The net asset value of each share of each class of
        Common Stock of the corporation tendered for redemption shall be
        the net asset value which becomes effective as provided in this
        Subparagraph A, next succeeding the tender of such share of such
        class of Common Stock for redemption.

             B.   The net asset value of each share of each class of
        Common Stock of the corporation, as of the close of business on
        any day, shall be the quotient obtained by dividing the value at
        such close of the net assets belonging to such class (meaning
        the assets belonging to such class and any other assets
        allocated to such class less the liabilities belonging to such
        class and any other liabilities allocated to such class
        excluding capital and surplus) of the corporation by the total
        number of shares of such class outstanding at such close.

                  (i)  The assets belonging to any class of Common
             Stock shall be that portion of the total assets of the
             corporation as determined in accordance with the
             provisions of Article IV of the Articles of
             Incorporation of the corporation.  The assets of the
             corporation shall be deemed to include (a) all cash on
             hand, on deposit, or on call, (b) all bills and notes
             and accounts receivable, (c) all shares of stock and
             subscription rights and other securities owned or
             contracted for by the corporation, other than its own
             common stock, (d) all stock and cash dividends and
             cash distributions, to be received by the corporation,
             and not yet received by it but declared to
             stockholders of record on a date on or before the date
             as of which the net asset value is being determined,
             (e) all interest accrued on any interest-bearing
             securities owned by the corporation, and (f) all other
             property of every kind and nature including prepaid
             expenses; the value of such assets to be determined in
             accordance with the corporation's registration
             statement filed with the Securities and Exchange
             Commission.

                  (ii) The liabilities belonging to any class of
             Common Stock shall be that portion of the total
             liabilities of the corporation as determined in
             accordance with the provisions of Article IV of the
             Articles of Incorporation of the corporation.  The
             liabilities of the corporation shall be deemed to
             include (a) all bills and notes and accounts payable,
             (b) all administration expenses payable and/or accrued
             (including investment advisory fees), (c) all
             contractual obligations for the payment of money or
             property including the amount of any unpaid dividend
             declared upon the corporation's stock and payable to
             stockholders of record on or before the day as of
             which the value of the corporation's stock is being
             determined, (d) all reserves, if any, authorized or
             approved by the Board of Directors for taxes,
             including reserves for taxes at current rates based on
             any unrealized appreciation in the value of the assets
             of the corporation, and (e) all other liabilities of
             the corporation of whatever kind and nature except
             liabilities represented by outstanding capital stock
             and surplus of the corporation.

                  (iii)     For the purposes hereof:  (a) shares of
             each class of Common Stock subscribed for shall be
             deemed to be outstanding as of the time of acceptance
             of any subscription and the entry thereof on the books
             of the corporation and the net price thereof shall be
             deemed to be an asset belonging to such class; and (b)
             shares of each class of Common Stock surrendered for
             redemption by the corporation shall be deemed to be
             outstanding until the time as of which the net asset
             value for purposes of such redemption is determined or
             estimated.

             C.   The net asset value of each share of each class of
        Common Stock of the corporation, as of any time other than the
        close of business on any day, may be determined by applying to
        the net asset value as of the close of business on the preceding
        business day, computed as provided in Paragraph B of this
        Section of these bylaws, such adjustments as are authorized by
        or pursuant to the direction of the Board of Directors and
        designed reasonably to reflect any material changes in the
        market value of securities and other assets held and any other
        material changes in the assets or liabilities of the corporation
        and in the number of its outstanding shares which shall have
        taken place since the close of business on such preceding
        business day.

             D.   In addition to the foregoing, the Board of Directors
        is empowered, in its absolute discretion, to establish other
        bases or times, or both, for determining the net asset value of
        each share of each class of the Common Stock of the corporation.


                                                                    Exhibit 5


                          INVESTMENT ADVISORY AGREEMENT

             Agreement made this _____ day of _________________, 1995 between
   Leuthold Funds, Inc., a Maryland corporation (the "Company"), and Leuthold
   & Anderson, Inc., a Minnesota corporation (the "Adviser").

                              W I T N E S S E T H:

             WHEREAS, the Company is in the process of registering with the
   Securities and Exchange Commission under the Investment Company Act of
   1940 (the "Act") as an open-end management investment company consisting
   initially of one series, the Leuthold Spectrum Fund (the "Fund"); and

             WHEREAS, the Company desires to retain the Adviser, which is an
   investment adviser registered under the Investment Advisers Act of 1940,
   as the investment adviser for the Fund.

             NOW, THEREFORE, the Company and the Adviser do mutually promise
   and agree as follows:

             1.   Employment.  The Company hereby employs the Adviser to
   manage the investment and reinvestment of the assets of the Fund for the
   period and on the terms set forth in this Agreement.  The Adviser hereby
   accepts such employment for the compensation herein provided and agrees
   during such period to render the services and to assume the obligations
   herein set forth.

             2.   Authority of the Adviser.  The Adviser shall supervise and
   manage the investment portfolio of the Fund, and, subject to such policies
   as the board of directors of the Company may determine, direct the
   purchase and sale of investment securities in the day to day management of
   the Fund.  The Adviser shall for all purposes herein be deemed to be an
   independent contractor and shall, unless otherwise expressly provided or
   authorized, have no authority to act for or represent the Company or the
   Fund in any way or otherwise be deemed an agent of the Company or the
   Fund.  However, one or more shareholders, officers, directors or employees
   of the Adviser may serve as directors and/or officers of the Company, but
   without compensation or reimbursement of expenses for such services from
   the Company.  Nothing herein contained shall be deemed to require the
   Company to take any action contrary to its Articles of Incorporation, as
   amended, restated or supplemented from time to time, or any applicable
   statute or regulation, or to relieve or deprive the board of directors of
   the Company of its responsibility for and control of the affairs of the
   Fund.

             3.   Expenses.  The Adviser, at its own expense and without
   reimbursement from the Company or the Fund, shall furnish office space,
   and all necessary office facilities, equipment and executive personnel for
   managing the investments of the Fund.  The Adviser shall not be required
   to pay any expenses of the Fund except as provided herein if the total
   expenses borne by the Fund, including the Adviser's fee and the fees paid
   to the Fund's Administrator but excluding all federal, state and local
   taxes, interest, brokerage commissions and extraordinary items, in any
   year exceed that percentage of the average net assets of the Fund for such
   year, as determined by valuations made as of the close of each business
   day, which is the most restrictive percentage provided by the state laws
   of the various states in which the Fund's shares are qualified for sale
   or, if the states in which the Fund's shares are qualified for sale impose
   no such restrictions, 2%.  The expenses of the Fund's operations borne by
   the Fund include by way of illustration and not limitation, directors fees
   paid to those directors who are not officers of the Company, the costs of
   preparing and printing registration statements required under the
   Securities Act of 1933 and the Act (and amendments thereto), the expense
   of registering its shares with the Securities and Exchange Commission and
   in the various states, the printing and distribution cost of prospectuses
   mailed to existing shareholders, the cost of stock certificates (if any),
   director and officer liability insurance, reports to shareholders, reports
   to government authorities and proxy statements, interest charges, taxes,
   legal expenses, salaries of administrative and clerical personnel,
   association membership dues, auditing and accounting services, insurance
   premiums, brokerage and other expenses connected with the execution of
   portfolio securities transactions, fees and expenses of the custodian of
   the Fund's assets, expenses of calculating the net asset value and
   repurchasing and redeeming shares, printing and mailing expenses, charges
   and expenses of dividend disbursing agents, registrars and stock transfer
   agents and the cost of keeping all necessary shareholder records and
   accounts.

             The Company shall monitor the expense ratio of the Fund on a
   monthly basis.  If the accrued amount of the expenses of the Fund exceeds
   the expense limitation established herein, the Company shall create an
   account receivable from the Adviser in the amount of such excess.  In such
   a situation the monthly payment of the Adviser's fee will be reduced by
   the amount of such excess, subject to adjustment month by month during the
   balance of the Company's fiscal year if accrued expenses thereafter fall
   below the expense limitation.

             4.   Compensation of the Adviser.  For the services to be
   rendered by the Adviser hereunder, the Company, through and on behalf of
   the Fund, shall pay to the Adviser an advisory fee, paid monthly, based on
   the average net assets of the Fund, as determined by valuations made as of
   the close of each business day of the month.  The advisory fee shall be
   1/12 of ______% (_____% per annum) on the average daily net assets of the
   Fund.  For any month in which this Agreement is not in effect for the
   entire month, such fee shall be reduced proportionately on the basis of
   the number of calendar days during which it is in effect and the fee
   computed upon the average net asset value of the business days during
   which it is so in effect.

             5.   Ownership of Shares of the Fund.  The Adviser shall not
   take an ownership position in the Fund, and shall not permit any of its
   shareholders, officers, directors or employees to take a long or short
   position in the shares of the Fund, except for the purchase of shares of
   the Fund for investment purposes at the same price as that available to
   the public at the time of purchase or in connection with the initial
   capitalization of the Fund.

             6.   Exclusivity.  The services of the Adviser to the Fund
   hereunder are not to be deemed exclusive and the Adviser shall be free to
   furnish similar services to others as long as the services hereunder are
   not impaired thereby.  Although the Adviser has agreed to permit the Fund
   and the Company to use the name "Leuthold", if they so desire, it is
   understood and agreed that the Adviser reserves the right to use and to
   permit other persons, firms or corporations, including investment
   companies, to use such name, and that the Fund and the Company will not
   use such name if the Adviser ceases to be the Fund's sole investment
   adviser.  During the period that this Agreement is in effect, the Adviser
   shall be the Fund's sole investment adviser.

             7.   Liability.  In the absence of willful misfeasance, bad
   faith, gross negligence or reckless disregard of obligations or duties
   hereunder on the part of the Adviser, the Adviser shall not be subject to
   liability to the Fund or to any shareholder of the Fund for any act or
   omission in the course of, or connected with, rendering services
   hereunder, or for any losses that may be sustained in the purchase,
   holding or sale of any security.

             8.   Brokerage Commissions.  The Adviser, subject to the control
   and direction of the Company's Board of Directors, shall have authority
   and discretion to select brokers and dealers to execute portfolio
   transactions for the Fund and for the selection of the markets on or in
   which the transactions will be executed.  The Adviser may cause the Fund
   to pay a broker-dealer which provides brokerage and research services, as
   such services are defined in Section 28(e) of the Securities Exchange Act
   of 1934 (the "Exchange Act"), to the Adviser a commission for effecting a
   securities transaction in excess of the amount another broker-dealer would
   have charged for effecting such transaction, if the Adviser determines in
   good faith that such amount of commission is reasonable in relation to the
   value of brokerage and research services provided by the executing
   broker-dealer viewed in terms of either that particular transaction or his
   overall responsibilities with respect to the accounts as to which he
   exercises investment discretion (as defined in Section 3(a)(35) of the
   Exchange Act).  The Adviser shall provide such reports as the Company's
   Board of Directors may reasonable request with respect to the Fund's total
   brokerage and the manner in which that brokerage was allocated.

             9.   Code of Ethics.  The Adviser has adopted a written code of
   ethics complying with the requirements of Rule 17j-1 under the Act and has
   provided the Company with a copy of the code of ethics and evidence of its
   adoption.  Upon the written request of the Company, the Adviser shall
   permit the Company to examine any reports required to be made by the
   Adviser pursuant to Rule 17j-1(c)(1) under the Act.

             10.  Amendments.  This Agreement may be amended by the mutual
   consent of the parties; provided, however, that in no event may it be
   amended without the approval of the board of directors of the Company in
   the manner required by the Act, and by the vote of the majority of the
   outstanding voting securities of the Fund, as defined in the Act.

             11.  Termination.  This Agreement may be terminated at any time,
   without the payment of any penalty, by the board of directors of the
   Company or by a vote of the majority of the outstanding voting securities
   of the Fund, as defined in the Act, upon giving sixty (60) days' written
   notice to the Adviser.  This Agreement may be terminated by the Adviser at
   any time upon the giving of sixty (60) days' written notice to the
   Company.  This Agreement shall terminate automatically in the event of its
   assignment (as defined in Section 2(a)(4) of the Act).  Subject to prior
   termination as hereinbefore provided, this Agreement shall continue in
   effect for an initial period beginning as of the date hereof and ending
   ______________________, 1997 and indefinitely thereafter, but only so long
   as the continuance after such initial period is specifically approved
   annually by (i) the board of directors of the Company or by the vote of
   the majority of the outstanding voting securities of the Fund, as defined
   in the Act, and (ii) the board of directors of the Company in the manner
   required by the Act, provided that any such approval may be made effective
   not more than sixty (60) days thereafter.

             IN WITNESS WHEREOF, the parties hereto have caused this
   Agreement to be executed on the day first above written.


                                      LEUTHOLD & ANDERSON, INC.
                                      (the "Adviser")



   Attest:  __________________        By:  ___________________________
            Secretary                      President

                                      LEUTHOLD FUNDS, INC. 
                                      (the "Company")


   Attest: ___________________        By:  __________________________
           Secretary                       President


                    CUSTODIAN SERVICING AGREEMENT


                THIS AGREEMENT made on October 3, 1995, between Leuthold
Funds, Inc., a  Maryland Corporation hereinafter called the
("Fund"), and FIRSTAR TRUST COMPANY, a corporation organized
under the laws of the State of Wisconsin (hereinafter called
"Custodian"),

                WHEREAS, the Fund desires that its securities and cash shall
be hereafter held and administered by Custodian pursuant to the
terms of this Agreement;

                NOW, THEREFORE, in consideration of the mutual agreements
herein made, the Fund and Custodian agree as follows:

1.	Definitions

		The word "securities" as used herein includes stocks, shares,
bonds, debentures, notes, mortgages or other obligations, and
any certificates, receipts, warrants or other instruments
representing rights to receive, purchase or subscribe for the
same, or evidencing or representing any other rights or
interests therein, or in any property or assets.

		The words "officers' certificate" shall mean a request or
direction or certification in writing signed in the name of the
Fund by any two of the President, a Vice President, the
Secretary and the Treasurer of the Fund, or any other persons
duly authorized to sign by the Board of Directors.

		The word "Board" shall mean Board of Directors of Leuthold
Funds, Inc.

2.	Names, Titles, and Signatures of the Fund's Officers

		An officer of the Fund will certify to Custodian the names and
signatures of those persons authorized to sign the officers'
certificates described in Section 1 hereof, and the names of the
members of the Board of Directors, together with any changes
which may occur from time to time.

3.	Receipt and Disbursement of Money

		A.   Custodian shall open and maintain a separate account or
accounts in the name of the Fund, subject only to draft or order
by Custodian acting pursuant to the terms of this Agreement. 
Custodian shall hold in such account or accounts, subject to the
provisions hereof, all cash received by it from or for the
account of the Fund.  Custodian shall make payments of cash to,
or for the account of, the Fund from such cash only:

 		(a)	for the purchase of securities for the portfolio of
the Fund upon the delivery of such securities to Custodian,
registered in the name of the Fund or of the nominee of
Custodian referred to in Section 7 or in proper form for
transfer;

		(b)	for the purchase or redemption of shares of the common
stock of the Fund upon delivery thereof to Custodian, or upon
proper instructions from the Leuthold Funds, Inc.;

		(c)	for the payment of interest, dividends, taxes, 
investment adviser's fees or operating expenses (including, without
limitation thereto, fees for legal, accounting, auditing and
custodian services and expenses for printing and postage);

		(d)	for payments in connection with the conversion,
exchange or surrender of securities owned or subscribed to by the Fund
held by or to be delivered to Custodian; or 

		(e)	for other proper corporate purposes certified by
resolution of the Board of Directors of the Fund.  

                Before making any such payment, Custodian shall receive (and
may rely upon) an officers' certificate requesting such payment
and stating that it is for a purpose permitted under the terms
of items (a), (b), (c), or (d) of this Subsection A, and also,
in respect of item (e), upon receipt of an officers' certificate
specifying the amount of such payment, setting forth the purpose
for which such payment is to be made, declaring such purpose to
be a proper corporate purpose, and naming the person or persons
to whom such payment is to be made, provided, however, that an
officers' certificate need not precede the disbursement of cash
for the purpose of purchasing a money market instrument, or any
other security with same or next-day settlement, if the
President, a Vice President, the Secretary or the Treasurer of
the Fund issues appropriate oral or facsimile instructions to
Custodian and an appropriate officers' certificate is received
by Custodian within two business days thereafter.

		B.   Custodian is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money received
by Custodian for the account of the Fund.

		C.   Custodian shall, upon receipt of proper instructions,
make federal funds available to the Fund as of specified times
agreed upon from time to time by the Fund and the custodian in
the amount of checks received in payment for shares of the Fund
which are deposited into the Fund's account.

4.	Segregated Accounts

 		Upon receipt of proper instructions, the Custodian shall
establish and maintain a segregated account(s) for and on behalf
of the portfolio, into which account(s) may be transferred cash
and/or securities.

5.	Transfer, Exchange, Redelivery, etc. of Securities

		Custodian shall have sole power to release or deliver any
securities of the Fund held by it pursuant to this Agreement. 
Custodian agrees to transfer, exchange or deliver securities
held by it hereunder only:

		(a)	for sales of such securities for the account of 
the Fund upon receipt by Custodian of payment therefore; 

		(b)	when such securities are called, redeemed or 
retired or otherwise become payable; 

		(c)	for examination by any broker selling any such 
securities in accordance with "street delivery" custom; 

		(d)	in exchange for, or upon conversion into, other
securities alone or other securities and cash whether pursuant to any plan
of merger, consolidation, reorganization, recapitalization or
readjustment, or otherwise; 

		(e)	upon conversion of such securities pursuant to 
their terms into other securities; 

		(f)	upon exercise of subscription, purchase or 
other similar rights represented by such securities; 

		(g)	for the purpose of exchanging interim receipts or
temporary securities for definitive securities; 

		(h)	for the purpose of redeeming in kind shares of common
stock of the Fund upon delivery thereof to Custodian; or 

		(i)  	for other proper corporate purposes.  

		As to any deliveries made by Custodian pursuant to items (a),
(b), (d), (e), (f), and (g), securities or cash receivable in
exchange therefore shall be deliverable to Custodian.  

		Before making any such transfer, exchange or delivery,
Custodian shall receive (and may rely upon) an officers'
certificate requesting such transfer, exchange or delivery, and
stating that it is for a purpose permitted under the terms of
items (a), (b), (c), (d), (e), (f), (g), or (h) of this Section
5 and also, in respect of item (i), upon receipt of an officers'
certificate specifying the securities to be delivered, setting
forth the purpose for which such delivery is to be made,
declaring such purpose to be a proper corporate purpose, and
naming the person or persons to whom delivery of such securities
shall be made, provided, however, that an officers' certificate
need not precede any such transfer, exchange or delivery of a
money market instrument, or any other security with same or
next-day settlement, if the President, a Vice President, the
Secretary or the Treasurer of the Fund issues appropriate oral
or facsimile instructions to Custodian and an appropriate
officers' certificate is received by Custodian within two
business days thereafter.

6.	Custodian's Acts Without Instructions

		Unless and until Custodian receives an officers' certificate
to the contrary, Custodian shall:  (a) present for payment all
coupons and other income items held by it for the account of the
Fund, which call for payment upon presentation and hold the cash
received by it upon such payment for the account of the Fund;
(b) collect interest and cash dividends received, with notice to
the Fund, for the account of the Fund; (c) hold for the account
of the Fund hereunder all stock dividends, rights and similar
securities issued with respect to any securities held by it
hereunder; and (d) execute, as agent on behalf of the Fund, all
necessary ownership certificates required by the Internal
Revenue Code or the Income Tax Regulations of the United States
Treasury Department or under the laws of any state now or
hereafter in effect, inserting the Fund's name on such
certificates as the owner of the securities covered thereby, to
the extent it may lawfully do so.

7.	Registration of Securities

		Except as otherwise directed by an officers' certificate,
Custodian shall register all securities, except such as are in
bearer form, in the name of a registered nominee of Custodian as
defined in the Internal Revenue Code and any Regulations of the
Treasury Department issued hereunder or in any provision of any
subsequent federal tax law exempting such transaction from
liability for stock transfer taxes, and shall execute and
deliver all such certificates in connection therewith as may be
required by such laws or regulations or under the laws of any
state.  Custodian shall use its best efforts to the end that the
specific securities held by it hereunder shall be at all times
identifiable in its records.

		The Fund shall from time to time furnish to Custodian
appropriate instruments to enable Custodian to hold or deliver
in proper form for transfer, or to register in the name of its
registered nominee, any securities which it may hold for the
account of the Fund and which may from time to time be
registered in the name of the Fund.

8.	Voting and Other Action

		Neither Custodian nor any nominee of Custodian shall vote any
of the securities held hereunder by or for the account of the
Fund, except in accordance with the instructions contained in an
officers' certificate.  Custodian shall deliver, or cause to be
executed and delivered, to the Corporation all notices, proxies
and proxy soliciting materials with relation to such securities,
such proxies to be executed by the registered holder of such
securities (if registered otherwise than in the name of the
Fund), but without indicating the manner in which such proxies
are to be voted.

9.	Transfer Tax and Other Disbursements

		The Fund shall pay or reimburse Custodian from time to time
for any transfer taxes payable upon transfers of securities made
hereunder, and for all other necessary and proper disbursements
and expenses made or incurred by Custodian in the performance of
this Agreement.

 		Custodian shall execute and deliver such certificates in
connection with securities delivered to it or by it under this
Agreement as may be required under the provisions of the
Internal Revenue Code and any Regulations of the Treasury
Department issued thereunder, or under the laws of any state, to
exempt from taxation any exemptable transfers and/or deliveries
of any such securities.

10.	Concerning Custodian

		Custodian shall be paid as compensation for its services
pursuant to this Agreement such compensation as may from time to
time be agreed upon in writing between the two parties.  Until
modified in writing, such compensation shall be as set forth in
Exhibit A attached hereto.  

		Custodian shall not be liable for any action taken in good
faith upon any certificate herein described or certified copy of
any resolution of the Board, and may rely on the genuineness of
any such document which it may in good faith believe to have
been validly executed.

		The Fund agrees to indemnify and hold harmless Custodian and
its nominee from all taxes, charges, expenses, assessments,
claims and liabilities (including counsel fees) incurred or
assessed against it or by its nominee in connection with the
performance of this Agreement, except such as may arise from its
or its nominee's own negligent action, negligent failure to act
or willful misconduct.  Custodian is authorized to charge any
account of the Fund for such items. 

In the event of any advance of cash for any purpose made by
Custodian resulting from orders or instructions of the Fund, or
in the event that Custodian or its nominee shall incur or be
assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this
Agreement, except such as may arise from its or its nominee's
own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the
Fund shall be security therefore.

Custodian agrees to indemnify and hold harmless Fund from all
charges, expenses, assessments, and claims/liabilities
(including counsel fees) incurred or assessed against it in
connection with the performance of this agreement, except such
as may arise from the Fund's own negligent action, negligent
failure to act, or willful misconduct.

11.	Subcustodians

		Custodian is hereby authorized to engage another bank or trust
company as a Subcustodian for all or any part of the Fund's
assets, so long as any such bank or trust company is a bank or
trust company organized under the laws of any state of the
United States, having an aggregate capital, surplus and
undivided profit, as shown by its last published report, of not
less than Two Million Dollars ($2,000,000) and provided further
that, if the Custodian utilizes the services of a Subcustodian,
the Custodian shall remain fully liable and responsible for any
losses caused to the Fund by the Subcustodian as fully as if the
Custodian was directly responsible for any such losses under the
terms of the Custodian Agreement.

		Notwithstanding anything contained herein, if the Fund
requires the Custodian to engage specific Subcustodians for the
safekeeping and/or clearing of assets, the Fund agrees to
indemnify and hold harmless Custodian from all claims, expenses
and liabilities incurred or assessed against it in connection
with the use of such Subcustodian in regard to the Fund's
assets, except as may arise from its own negligent action,
negligent failure to act or willful misconduct.

12.	Reports by Custodian

		Custodian shall furnish the Fund periodically as agreed upon
with a statement summarizing all transactions and entries for
the account of Fund.  Custodian shall furnish to the Fund, at
the end of every month, a list of the portfolio securities
showing the aggregate cost of each issue.  The books and records
of Custodian pertaining to its actions under this Agreement
shall be open to inspection and audit at reasonable times by
officers of, and of auditors employed by, the Fund.

13.	Termination or Assignment

		This Agreement may be terminated by the Fund, or by Custodian,
on ninety (90) days notice, given in writing and sent by
registered mail to Custodian at Firstar Trust Company, 615 East
Michigan Street, Milwaukee, Wisconsin 53202, or to the Fund at  
______________________________________________________, as the
case may be.  Upon any termination of this Agreement, pending
appointment of a successor to Custodian or a vote of the
shareholders of the Fund to dissolve or to function without a
custodian of its cash, securities and other property, Custodian
shall not deliver cash, securities or other property of the Fund
to the Fund, but may deliver them to a bank or trust company of
its own selection, having an aggregate capital, surplus and
undivided profits, as shown by its last published report of not
less than Two Million Dollars ($2,000,000) as a Custodian for
the Fund to be held under terms similar to those of this
Agreement, provided, however, that Custodian shall not be
required to make any such delivery or payment until full payment
shall have been made by the Fund of all liabilities constituting
a charge on or against the properties then held by Custodian or
on or against Custodian, and until full payment shall have been
made to Custodian of all its fees, compensation, costs and
expenses, subject to the provisions of Section 10 of this
Agreement.

		This Agreement may not be assigned by Custodian without the
consent of the Fund, authorized or approved by a resolution of
its Board of Directors.

14.	Deposits of Securities in Securities Depositories

		No provision of this Agreement shall be deemed to prevent the
use by Custodian of a central securities clearing agency or
securities depository, provided, however, that Custodian and the
central securities clearing agency or securities depository meet
all applicable federal and state laws and regulations, and the
Board of Directors of the Fund approves by resolution the use of
such central securities clearing agency or securities depository.

15.	Records

		To the extent that Custodian in any capacity prepares or
maintains any records required to be maintained and preserved by
the Fund pursuant to the provisions of the Investment Company
Act of 1940, as amended, or the rules and regulations
promulgated thereunder, Custodian agrees to make any such
records available to the Fund upon request and to preserve such
records for the periods prescribed in Rule 31a-2 under the
Investment Company Act of 1940, as amended.

16.	Notices

		Notices of any kind to be given by either party to the other
party shall be in writing and shall be duly given if mailed or
delivered as follows:  Notice to FTC shall be sent to:

		Firstar Trust Company
		615 East Michigan Street
		Milwaukee, WI  53202


and notice to _________________________________ shall be sent to:





		IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and their respective corporate seals to
be affixed hereto as of the date first above-written by their
respective officers thereunto duly authorized.

		Executed in several counterparts, each of which is an
original.


Attest:					FIRSTAR TRUST COMPANY



___________________________________  	By _____________________________
Assistant Secretary			   Vice President


Attest:					LEUTHOLD FUNDS, INC.



___________________________________	By _____________________________



                Fund Administration Servicing Agreement

This Agreement is made and entered into on this third day of
October, 1995, by and between Leuthold Funds, Inc. (hereinafter
referred to as the "Fund") and Firstar Trust Company, a
corporation organized under the laws of the State of Wisconsin
(hereinafter referred to as "FTC").

WHEREAS, The Fund is an open-ended management investment company
which is registered under the Investment Company Act of 1940;

WHEREAS, FTC is an trust company and, among other things, is in
the business of providing fund administration services for the
benefit of its customers;

NOW, THEREFORE, the Fund and FTC do mutually promise and agree
as follows:

I.	Appointment of Administrator

	The Fund hereby appoints FTC as Administrator of the Fund on
        the terms and conditions set forth in this Agreement, and FTC
        hereby accepts such appointment and agrees to perform the
        services and duties set forth in this Agreement in consideration
        of the compensation provided for herein.

II.	Duties and Responsibilities of FTC

	A.	General Fund Management

		1.	Act as liaison among all fund service providers

		2.	Coordinate board communication by:

			a.	Assisting fund counsel in establishing meeting
                                agendas
			b.	Preparing board reports based on financial and
                                administrative data
			c.	Evaluating independent auditor
			d.	Securing and monitoring fidelity bond and 
                                director and officers liability coverage, and 
                                making the necessary SEC filings relating 
                                thereto

		3.	Audits

			a.	Prepare appropriate schedules and assist 
                                independent auditors
			b.	Provide information to SEC and facilitate 
                                audit process
			c.	Provide office facilities

		4.	Assist in overall operations of the Fund

	B.	Compliance

		1.	Regulatory Compliance

			a.	Periodically monitor compliance with 
                                Investment Company Act of 1940 requirements

				1)	Asset diversification tests
				2)	Total return and SEC yield 
                                        calculations
				3)	Maintenance of books and records 
                                        under Rule 31a-3
				4)	Code of ethics

			b.	Periodically monitor Fund's compliance with
                                the policies and investment limitations of 
                                the Fund as set forth in its prospectus and 
                                statement of additional information

		2.	Blue Sky Compliance

			a.	Prepare and file with the appropriate state
                                securities authorities any and all required 
                                compliance filings relating to the 
                                registration of the securities of the Fund 
                                so as to enable the Fund to make a continuous
                                offering of its shares
			b.	Monitor status and maintain registrations in 
                                each state

		3.	SEC Registration and Reporting

			a.	Assisting Fund's counsel in updating prospectus
                                and statement of additional information; and 
                                in preparing proxy statements, and Rule 24f-2 
                                notice, 
			b.	Annual and semiannual reports

		4.	IRS Compliance

			a.	Periodically monitor Fund's status as a 
                                regulated investment company under Subchapter
                                M through review of the following:

				1)	Asset diversification requirements
				2)	Qualifying income requirements
				3)	Distribution requirements

			b.	Monitor short short testing
			c.	Calculate required distributions (including 
                                excise tax distributions)

	C.	Financial Reporting

		1.	Provide financial data required by fund prospectus and
                        statement of additional information

		2.	Prepare financial reports for shareholders, the board,
                        the SEC, and independent auditors

		3.	Supervise the Fund's Custodian and Fund Accountants 
                        in the maintenance of the Fund's general ledger and in
                        the preparation of the Fund's financial statements 
                        including oversight of expense accruals and payments, 
                        of the determination of net asset value of the Fund's 
                        net assets and of the Fund's shares, and of the
                        declaration and payment of dividends and other 
                        distributions to shareholders

	D.	Tax Reporting

		1.	Prepare and file on a timely basis appropriate federal
                        and state tax returns including forms 1120/8610 with 
                        any necessary schedules

		2.	Prepare state income breakdowns where relevant

		3.	File 1099 Miscellaneous for payments to directors 
                        and other service providers

		4.	Monitor wash losses

		5.	Calculate eligible dividend income for corporate
                        shareholders

III.	Compensation

	The Fund agrees to pay FTC for performance of the duties listed
        in this Agreement and the fees and out-of-pocket expenses as set
        forth in the attached Schedule A.

	The Fund agrees to pay all fees and reimbursable expenses
        within ten (10) business days following the mailing of the
        billing notice.

IV.	Performance of Service; Limitation of Liability

             A.    FTC shall exercise reasonable care in the performance
        of its duties under this Agreement.  FTC shall not be liable for
        any error of judgment or mistake of law or for any loss suffered
        by the Fund in connection with matters to which this Agreement 
        relates, including losses resulting from mechanical breakdowns
        or the failure of communication or power supplies beyond FTC's 
        control, except a loss resulting from FTC's refusal or failure 
        to comply with the terms of this Agreement or from bad faith,
        negligence, or willful misconduct on its part in the performance
        of its duties under this Agreement.  Notwithstanding any other
        provision of this Agreement, the Fund shall indemnify and hold
        harmless FTC from and against any and all claims, demands,
        losses, expenses, and liabilities (whether with or without basis
        in fact or law) of any and every nature (including reasonable
        attorneys' fees) which FTC may sustain or incur or which may be
        asserted against FTC by any person arising out of any action
        taken or omitted to be taken by it in performing the services
        hereunder (i) in accordance with the foregoing standards, or
        (ii) in reliance upon any written or oral instruction provided
        to FTC by any duly authorized officer of the Fund, such duly
        authorized officer to be included in a list of authorized
        officers furnished to FTC and as amended from time to time in
        writing by resolution of the Board of Directors of the Fund.
 
		In the event of a mechanical breakdown or failure of
        communication or power supplies beyond its control, FTC shall
        take all reasonable steps to minimize service interruptions for
        any period that such interruption continues beyond FTC's
        control.  FTC will make every reasonable effort to restore any
        lost or damaged data and correct any errors resulting from such
        a breakdown at the expense of FTC.  FTC agrees that it shall, at
        all times, have reasonable contingency plans with appropriate
        parties, making reasonable provision for emergency use of
        electrical data processing equipment to the extent appropriate
        equipment is available.  Representatives of the Fund shall be
        entitled to inspect FTC's premises and operating capabilities at
        any time during regular business hours of FTC, upon reasonable
        notice to FTC.
 
 		Regardless of the above, FTC reserves the right to reprocess
        and correct administrative errors at its own expense.

                B.  In order that the indemnification provisions contained in
        this section shall apply, it is understood that if in any case
        the Fund may be asked to indemnify or hold FTC harmless, the
        Fund shall be fully and promptly advised of all pertinent facts
        concerning the situation in question, and it is further
        understood that FTC will use all reasonable care to notify the
        Fund promptly concerning any situation which presents or appears
        likely to present the probability of such a claim for 
        indemnification against the Fund.  The Fund shall have the
        option to defend FTC against any claim which may be the subject
        of this indemnification.  In the event that the Fund so elects,
        it will so notify FTC and thereupon the Fund shall take over
        complete defense of the claim, and FTC shall in such situation
        initiate no further legal or other expenses for which it shall
        seek indemnification under this section.  FTC shall in no case
        confess any claim or make any compromise in any case in which
        the Fund will be asked to indemnify FTC except with the Fund's
        prior written consent.
  
              C.  FTC shall indemnify and hold the Fund harmless from and
        against any and all claims, demands, losses, expenses, and
        liabilities (whether with or without basis in fact or law) of
        any and every nature (including reasonable attorneys' fees)
        which may be asserted against the Fund by any person arising out
        of any action taken or omitted to be taken by FTC as a result of
        FTC's refusal or failure to comply with the terms of this
        Agreement, its bad faith, negligence, or willful misconduct.

V.	Confidentiality

	FTC shall handle, in confidence, all information relating to
        the Fund's business which is received by FTC during the course
        of rendering any service hereunder.

VI.	Data Necessary to Perform Service

	The Fund or its agent, which may be FTC, shall furnish to FTC
        the data necessary to perform the services described herein at
        times and in such form as mutually agreed upon.

VII.	Terms of Agreement

	This Agreement shall become effective as of the date hereof
        and, unless sooner terminated as provided herein, shall continue
        automatically in effect for successive annual periods.  The
        Agreement may be terminated by either party upon giving ninety
        (90) days prior written notice to the other party or such
        shorter period as is mutually agreed upon by the parties.

VIII.	Duties in the Event of Termination

	In the event that, in connection with termination, a successor
        to any of FTC's duties or responsibilities hereunder is
        designated by the Fund by written notice to FTC, FTC will
        promptly, upon such termination and at the expense of the Fund,
        transfer to such successor all relevant books, records,
        correspondence, and other data established or maintained by FTC
        under this Agreement in a form reasonably  acceptable to the
        Fund (if such form differs from the form in which FTC has
        maintained, the Fund shall pay any expenses associated with
        transferring the data to such form), and will cooperate in the
        transfer of such duties and responsibilities, including
        provision for assistance from FTC's personnel in the
        establishment of books, records, and other data by such
        successor.

IX.	Choice of Law

	This Agreement shall be construed in accordance with the laws
        of the State of Wisconsin.

X.	Notices

	Notices of any kind to be given by either party to the other
        party shall be in writing and shall be duly given if mailed or
        delivered as follows:  Notice to FTC shall be sent to:

		Firstar Trust Company
		615 East Michigan Street
		Milwaukee, WI  53202

 	and notice to Fund shall be sent to:

XI.	Records


	FTC shall keep records relating to the services to be performed
        hereunder, in the form and manner, and for such period as it may
        deem advisable and is agreeable to the Fund but not inconsistent
        with the rules and regulations of appropriate government
        authorities, in particular, Section 31 of the Investment Company
        Act of 1940 as amended (the "Investment Company Act"), and the
        rules thereunder.  FTC agrees that all such records prepared or
        maintained by FTC relating to the services to be performed by
        FTC hereunder are the property of the Fund and will be
        preserved, maintained, and made available with such section and
        rules of the Investment Company Act and will be promptly
        surrendered to the Fund on and in accordance with its request.
 

LEUTHOLD FUNDS, INC.		        FIRSTAR TRUST COMPANY



By: _________________________________	By:  ______________________________



Attest: _____________________________	Attest: ___________________________




                 TRANSFER AGENT SERVICING AGREEMENT


	THIS AGREEMENT is made and entered into on this third day of 
October, 1995, by and between Leuthold Funds, Inc. (hereinafter
referred to as the "Fund") and Firstar Trust Company, a
corporation organized under the laws of the State of Wisconsin
(hereinafter referred to as the "Agent").

	WHEREAS, the Fund is an open-ended management investment
company which is registered under the Investment Company Act of
1940; and

	WHEREAS, the Agent is a trust company and, among other things,
is in the business of administering transfer and dividend
disbursing agent functions for the benefit of its customers;

	NOW, THEREFORE, the  Fund and the Agent do mutually promise and
agree as follows:

1.	Terms of Appointment; Duties of the Agent

	Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints the Agent to act
as transfer agent and dividend disbursing agent.

	The Agent shall perform all of the customary services of a
transfer agent and dividend disbursing agent, and as relevant,
agent in connection with accumulation, open account or similar
plans (including without limitation any periodic investment plan
or periodic withdrawal program), including but not limited to:

	A.	Receive orders for the purchase of shares, with prompt
                delivery, where appropriate, of payment and supporting
                documentation to the Fund's custodian; 

	B.	Process purchase orders and issue the appropriate number of
                certificated or uncertificated shares with such uncertificated
                shares being held in the appropriate shareholder account;

	C.	Process redemption requests received in good order and,
                where relevant, deliver appropriate documentation to the
                Fund's custodian;

	D.	Pay monies upon receipt from the Fund's custodian, where
                relevant in accordance with the instructions of redeeming
                shareholders;

	E.	Process transfers of shares in accordance with the
                shareowner's instructions;

 	F.	Process exchanges between funds within the same family of
                funds; 

	G.	Issue and/or cancel certificates as instructed; replace
                lost, stolen or destroyed certificates upon receipt of
                satisfactory indemnification or surety bond;

	H.	Prepare and transmit payments for dividends and
                distributions declared by the Fund;

	I.	Make changes to shareholder records, including, but not
                limited to, address changes in plans (i.e., systematic
                withdrawal, automatic investment, dividend reinvestment,
                etc.);

	J.	Record the issuance of shares of the Fund and maintain,
                pursuant to Securities Exchange Act of 1934 Rule 17ad-10(e), a
                record of the total number of shares of the Fund which are
                authorized, issued and outstanding;

	K.	Prepare shareholder meeting lists and, if applicable, mail, 
                receive and tabulate proxies;

	L.	Mail shareholder reports and prospectuses to current
                shareholders;

	M.	Prepare and file U.S. Treasury Department forms 1099 and
                other appropriate information returns required with respect to
                dividends and distributions for all shareholders;

	N.	Provide shareholder account information upon request and
                prepare and mail confirmations and statements of account to
                shareholders for all purchases, redemptions and other
                confirmable transactions as agreed upon with the Fund; and

	O.	Provide a Blue Sky System which will enable the Fund to
                monitor the total number of shares sold in each state.  In
                addition, the Fund shall identify to the Agent in writing 
                those transactions and assets to be treated as exempt from 
                the Blue Sky reporting to the Fund for each state.  The
                responsibility of the Agent for the Fund's Blue Sky state
                registration status is solely limited to the initial 
                compliance by the Fund and the reporting of such transactions
                to the Fund.

2.	Compensation

	The Fund agrees to pay the Agent for performance of the duties
listed in this Agreement; the fees and out-of-pocket expenses
include, but are not limited to the following:  printing,
postage, forms, stationery, record retention, mailing,
insertion, programming, labels, shareholder lists and proxy
expenses. 

	These fees and reimbursable expenses may be changed from time
to time subject to mutual written agreement between the Fund and
the Agent.

	The Fund agrees to pay all fees and reimbursable expenses
within ten (10) business days following the mailing of the
billing notice.

 3.	Representations of Agent

	The Agent represents and warrants to the  Fund that:

	A.	It is a trust company duly organized, existing and in good
                standing under the laws of Wisconsin;

	B.	It is a registered transfer agent under the Securities
                Exchange Act of 1934 as amended.

	C.	It is duly qualified to carry on its business in the state
                of Wisconsin;

	D.	It is empowered under applicable laws and by its charter and
                bylaws to enter into and perform this Agreement;

	E.	All requisite corporate proceedings have been taken to
                authorize it to enter and perform this Agreement; and

	F.	It has and will continue to have access to the necessary
                facilities, equipment and personnel to perform its duties and
                obligations under this Agreement.

	G.	It will comply with all applicable requirements of the
                Securities Act of 1933 and the Securities Exchange Act of 
                1934, as amended, the Investment Company Act of 1940, as 
                amended, and any laws, rules, and regulations of governmental
                authorities having jurisdiction.

4.	Representations of the Fund

	The Fund represents and warrants to the Agent that:

	A.	The Fund is an open-ended diversified investment company
                under the Investment Company Act of 1940;

	B.	The Fund is a corporation organized, existing, and in good
                standing under the laws of Maryland;

	C.	The Fund is empowered under applicable laws and by its
                Corporate Charter and bylaws to enter into and perform this
                Agreement;

	D.	All necessary proceedings required by the Corporate Charter
                have been taken to authorize it to enter into and perform this
                Agreement;

	E.	The Fund will comply with all applicable requirements of the
                Securities Act of 1933 and the Securities Exchange Act of
                1934, as amended, the Investment Company Act of 1940, as 
                amended, and any laws, rules and regulations of governmental
                authorities having jurisdiction; and

	F.	A registration statement under the Securities Act of 1933 is
                currently effective and will remain effective, and appropriate
                state securities law filings have been made and will continue
                to be made, with respect to all shares of the Fund being 
                offered for sale.

5.	Covenants of Fund and Agent

	The Fund shall furnish the Agent a certified copy of the
resolution of the Board of  Directors of the Fund authorizing
the appointment of the Agent and the execution of this
Agreement.  The Fund  shall provide to the Agent a copy of the
Corporate Charter, bylaws of the Corporation and all amendments.

 	The Agent shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem
advisable.  To the extent required by Section 31 of the
Investment Company Act of 1940, as amended, and the rules
thereunder, the Agent agrees that all such records prepared or
maintained by the Agent relating to the services to be performed
by the Agent hereunder are the property of the Fund and will be
preserved, maintained and made available in accordance with such
section and rules and will be surrendered to the Fund on and in
accordance with its request.

6.	Indemnification; Remedies Upon Breach

	The Agent shall exercise reasonable care in the performance of
its duties under this Agreement.  The Agent shall not be liable
for any error of judgment or mistake of law or for any loss
suffered by the Fund in connection with matters to which this
Agreement relates, including losses resulting from mechanical
breakdowns or the failure of communication or power supplies
beyond the Agent's control, except a loss resulting from the
Agent's refusal or failure to comply with the terms of this
Agreement or from bad faith, negligence, or willful misconduct
on its part in the performance of its duties under this
Agreement.  Notwithstanding any other provision of this
Agreement, the Fund shall indemnify and hold harmless the Agent
from and against any and all claims, demands, losses, expenses,
and liabilities (whether with or without basis in fact or law)
of any and every nature (including reasonable attorneys' fees)
which the Agent may sustain or incur or which may be asserted
against the Agent by any person arising out of any action taken
or omitted to be taken by it in performing the services
hereunder (i) in accordance with the foregoing standards, or
(ii) in reliance upon any written or oral instruction provided
to the Agent by any duly authorized officer of the Fund, such
duly authorized officer to be included in a list of authorized
officers furnished to the Agent and as amended from time to time
in writing by resolution of the Board of Directors of the Fund.

	Further, the Fund will indemnify and hold the Agent harmless
against any and all losses, claims, damages, liabilities or
expenses (including reasonable counsel fees and expenses)
resulting from any claim, demand, action, or suit as a result of
the negligence of the Fund or the principal underwriter (unless
contributed to by the Agent's breach of this Agreement or other
Agreements between the Fund and the Agent, or the Agent's own
negligence or bad faith); or as a result of the Agent acting
upon telephone instructions relating to the exchange or
redemption of shares received by the Agent and reasonably
believed by the Agent under a standard of care customarily used
in the industry to have originated from the record owner of the
subject shares; or as a result of acting in reliance upon any
genuine instrument or stock certificate signed, countersigned,
or executed by any person or persons authorized to sign,
countersign, or execute the same.

	In the event of a mechanical breakdown or failure of
communication or power supplies beyond its control, the Agent
shall take all reasonable steps to minimize service
interruptions for any period that such interruption continues
beyond the Agent's control.  The Agent will make every
reasonable effort to restore any lost or damaged data and
correct any errors resulting from such a breakdown at the
expense of the Agent.  The Agent agrees that it shall, at all
times, have reasonable contingency plans with appropriate
parties, making reasonable provision for emergency use of
electrical data processing equipment to the extent appropriate
equipment is available.  Representatives of the Fund shall be
entitled to inspect the Agent's premises and operating
capabilities at any time during regular business hours of the
Agent, upon reasonable notice to the Agent.

	Regardless of the above, the Agent reserves the right to
reprocess and correct administrative errors at its own expense.

 	In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the
Fund may be asked to indemnify or hold the Agent harmless, the
Fund shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further
understood that the Agent will use all reasonable care to notify
the Fund promptly concerning any situation which presents or
appears likely to present the probability of such a claim for
indemnification against the Fund.  The Fund shall have the
option to defend the Agent against any claim which may be the
subject of this indemnification.  In the event that the Fund so
elects, it will so notify the Agent and thereupon the Fund shall
take over complete defense of the claim, and the Agent shall in
such situation initiate no further legal or other expenses for
which it shall seek indemnification under this section.  The
Agent shall in no case confess any claim or make any compromise
in any case in which the Fund will be asked to indemnify the
Agent except with the Fund's prior written consent.

	The Agent shall indemnify and hold the Fund harmless from and
against any and all claims, demands, losses, expenses, and
liabilities (whether with or without basis in fact or law) of
any and every nature (including reasonable attorneys' fees)
which may be asserted against the Fund by any person arising out
of any action taken or omitted to be taken by the Agent as a
result of the Agent's refusal or failure to comply with the
terms of this Agreement, its bad faith, negligence, or willful
misconduct.

7.	Confidentiality

	The Agent agrees on behalf of itself and its employees to treat
confidentially all records and other information relative to the
Fund and its shareholders and shall not be disclosed to any
other party, except after prior notification to and approval in
writing by the Fund, which approval shall not be unreasonably
withheld and may not be withheld where the Agent may be exposed
to civil or criminal contempt proceedings for failure to comply
after being requested to divulge such information by duly
constituted authorities.

	The ________________________ is authorized to issue separate
classes of shares of beneficial interest representing interests
in separate investment portfolios.  The parties intend that each
portfolio established by the trust, now or in the future, be
covered by the terms and conditions of this agreement.  

8.	Records

	The Agent shall keep records relating to the services to be
performed hereunder, in the form and manner, and for such period
as it may deem advisable and is agreeable to the Fund but not
inconsistent with the rules and regulations of appropriate
government authorities, in particular, Section 31 of The
Investment Company Act of 1940 as amended (the "Investment
Company Act"), and the rules thereunder.  The Agent agrees that
all such records prepared or maintained by The Agent relating to
the services to be performed by the Agent hereunder are the
property of the Fund and will be preserved, maintained, and made
available with such section and rules of the Investment Company
Act and will be promptly surrendered to the Fund on and in
accordance with its request.

9.	Wisconsin Law to Apply

	This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the state
of Wisconsin.

10.	Amendment, Assignment, Termination and Notice

	A.	This Agreement may be amended by the mutual written consent
                of the parties.

	B.	This Agreement may be terminated upon ninety (90) day's
                written notice given by one party to the other.

	C.	This Agreement and any right or obligation hereunder may not
                be assigned by either party without the signed, written 
                consent of the other party.

	D.	Any notice required to be given by the parties to each other
                under the terms of this Agreement shall be in writing, 
                addressed and delivered, or mailed to the principal place of
                business of the other party.  If to the agent, such notice 
                should to be sent to:

			Firstar Trust Company
			615 East Michigan Street
			Milwaukee, WI  53202

		If to the Fund, such notice should be sent to:

	E.	In the event that the Fund gives to the Agent its written
                intention to terminate and appoint a successor transfer agent,
                the Agent agrees to cooperate in the transfer of its duties
                and responsibilities to the successor, including any and all
                relevant books, records and other data established or 
                maintained by the Agent under this Agreement.

	F.	Should the Fund exercise its right to terminate, all
                out-of-pocket expenses associated with the movement of records
                and material will be paid by the Fund.


Leuthold Funds, Inc.			Firstar Trust Company



By:  ___________________________  	By: _____________________________



Attest:  _______________________  	Attest: _________________________
						   Assistant Secretary



                  FUND ACCOUNTING SERVICING AGREEMENT


This Agreement between Leuthold Funds, Inc., a Maryland
Corporation, hereinafter called the "Fund," and Firstar Trust
Company, a Wisconsin corporation, hereinafter called "FTC," is
entered into on this third day of  October 1995.

	WHEREAS, Leuthold Funds, Inc., is an open-ended management
investment company registered under the Investment Company Act
of 1940; and

	WHEREAS, Firstar Trust Company ("FTC") is in the business of
providing, among other things, mutual fund accounting services
to investment companies;

	NOW, THEREFORE, the parties do mutually promise and agree as
follows:

	1.	Services.  FTC agrees to provide the following mutual fund
accounting services to the Fund:  

		A.	Portfolio Accounting Services:  

			(1)  Maintain portfolio records on a trade date +1
                basis using security trade information communicated from the
                investment manager on a timely basis.  

			(2)  For each valuation date, obtain prices from a
                pricing source approved by the Board of Trustees and apply 
                those prices to the portfolio positions.  For those securities
                where market quotations are not readily available, the Board 
                of Trustees shall approve, in good faith, the method for 
                determining the fair value for such securities.  

			(3)  Identify interest and dividend accrual balances
                as of each valuation date and calculate gross earnings on 
                investments for the accounting period.  

			(4)  Determine gain/loss on security sales and 
                identify them as to short-short, short- or long-term status; 
                account for periodic distributions of gains or losses to 
                shareholders and maintain undistributed gain or loss balances
                as of each valuation date.  

		B.	Expense Accrual and Payment Services:  

			(1)  For each valuation date, calculate the expense
                accrual amounts as directed by the Fund as to methodology, 
                rate or dollar amount.  

			(2)  Record payments for Fund expenses upon receipt of
                written authorization from the Fund.  

 			(3)  Account for fund expenditures and maintain expense
                accrual balances at the level of accounting detail, as agreed
                upon by FTC and the Fund.

			(4)  Provide expense accrual and payment reporting.

		C.	Fund Valuation and Financial Reporting Services:  

			(1)  Account for fund share purchases, sales, 
                exchanges, transfers, dividend reinvestments, and other fund 
                share activity as reported by the transfer agent on a timely
                basis.  

			(2)  Apply equalization accounting as directed by the
                Fund.

			(3)  Determine net investment income (earnings) for
                the Fund as of each valuation date.  Account for periodic 
                distributions of earnings to shareholders and maintain 
                undistributed net investment income balances as of each 
                valuation date.

			(4)  Maintain a general ledger for the Fund in the
                form as agreed upon. 

			(5)  For each day the Fund is open as defined in the
                prospectus, determine the net asset value of the according to
                the accounting policies and procedures set forth in the
                prospectus.  

			(6)  Calculate per share net asset value, per share
                net earnings, and other per share amounts reflective of fund
                operation at such time as required by the nature and
                characteristics of the Fund.  

			(7)  Communicate, at an agreed upon time, the per
                share price for each valuation date to parties as agreed upon
                from time to time.  

			(8)  Prepare monthly reports which document the 
                adequacy of accounting detail to support month-end ledger 
                balances.  

		D.	Tax Accounting Services:  

			(1)   Maintain accounting records for the investment
                portfolio of the Fund to support the tax reporting required
                for IRS-defined regulated investment companies.  

			(2)   Maintain tax lot detail for the investment 
                portfolio.  

			(3)  Calculate taxable gain/loss on security sales 
                using the tax lot relief method designated by the Fund.  

			(4)  Provide the necessary financial information to 
                support the taxable components of income and capital gains 
                distributions to the transfer agent to support tax reporting 
                to the shareholders.  

 		E.	Compliance Control Services:  

			(1)  Support reporting to regulatory bodies and 
                support financial statement preparation by making the fund 
                accounting records available to Leuthold Funds, Inc., the 
                Securities and Exchange Commission, and the outside auditors.

			(2)  Maintain accounting records according to the 
                Investment Company Act of 1940 and regulations provided 
                thereunder.  

	2.	Pricing of Securities.  For each valuation date, obtain
prices from a pricing source selected by FTC but approved by the
Fund's Board and apply those prices to the portfolio positions. 
For those securities where market quotations are not readily
available, the Fund's Board shall approve, in good faith, the
method for determining the fair value for such securities.

		If the Fund desires to provide a price which varies from the
pricing source, the Fund shall promptly notify and supply FTC
with the valuation of any such security on each valuation date. 
All pricing changes made by the Fund will be in writing and must
specifically identify the securities to be changed by CUSIP,
name of security, new price or rate to be applied, and, if
applicable, the time period for which the new price(s) is/are
effective.

	3.	Changes in Accounting Procedures.  Any resolution passed by
the Board of Trustees that affects accounting practices and
procedures under this agreement shall be effective upon written
receipt and acceptance by the FTC.  

	4.	Changes in Equipment, Systems, Service, Etc.  FTC reserves
the right to make changes from time to time, as it deems
advisable, relating to its services, systems, programs, rules,
operating schedules and equipment, so long as such changes do
not adversely affect the service provided to the Fund under this
Agreement.

	5.	Compensation.  FTC shall be compensated for providing the
services set forth in this Agreement in accordance with the Fee
Schedule attached hereto as Exhibit A and as mutually agreed
upon and amended from time to time.  

	6.	Performance of Service.

			A.	FTC shall exercise reasonable care in the
                performance of its duties under this Agreement.  FTC shall
                not be liable for any error of judgment or mistake of law or
                for any loss suffered by the Fund in connection with matters 
                to which this Agreement relates, including losses resulting 
                from mechanical breakdowns or the failure of communication 
                or power supplies beyond FTC's control, except a loss 
                resulting from FTC's refusal or failure to comply with the 
                terms of this Agreement or from bad faith, negligence, or 
                willful misconduct on its part in the performance of its 
                duties under this Agreement.  Notwithstanding any other
                provision of this Agreement, the Fund shall indemnify and hold
                harmless FTC from and against any and all claims, demands,
                losses, expenses, and liabilities (whether with or without
                basis in fact or law) of any and every nature (including 
                reasonable attorneys' fees) which FTC may sustain or incur or
                which may be asserted against FTC by any person arising out of
                any action taken or omitted to be taken by it in performing 
                the services hereunder (i) in accordance with the foregoing 
                standards, or (ii) in reliance upon any written or oral 
                instruction provided to FTC by any duly authorized officer of
                the Fund, such duly authorized officer to be included in a 
                list of authorized officers furnished to FTC and as amended 
                from time to time in writing by resolution of the Board of 
                Directors of the Fund.

			In the event of a mechanical breakdown or failure of
                communication or power supplies beyond its control, FTC shall
                take all reasonable steps to minimize service interruptions
                for any period that such interruption continues beyond FTC's
                control.  FTC will make every reasonable effort to restore any
                lost or damaged data and correct any errors resulting from such
                a breakdown at the expense of FTC.  FTC agrees that it shall,
                at all times, have reasonable contingency plans with appro-
                priate parties, making reasonable provision for emergency use
                of electrical data processing equipment to the extent 
                appropriate equipment is available.  Representatives of the 
                Fund shall be entitled to inspect FTC's premises and operating
                capabilities at any time during regular business hours of FTC,
                upon reasonable notice to FTC.

			Regardless of the above, FTC reserves the right to 
                reprocess and correct administrative errors at its own expense.

			B.	In order that the indemnification provisions 
                contained in this section shall apply, it is understood that if
                in any case the Fund may be asked to indemnify or hold FTC
                harmless, the Fund shall be fully and promptly advised of all
                pertinent facts concerning the situation in question, and it 
                is further understood that FTC will use all reasonable care to
                notify the Fund promptly concerning any situation which 
                presents or appears likely to present the probability of such
                a claim for indemnification against the Fund.  The Fund shall
                have the option to defend FTC against any claim which may be
                the subject of this indemnification.  In the event that the 
                Fund so elects, it will so notify FTC and thereupon the Fund 
                shall take over complete defense of the claim, and FTC shall 
                in such situation initiate no further legal or other expenses
                for which it shall seek indemnification under this section.  
                FTC shall in no case confess any claim or make any compromise 
                in any case in which the Fund will be asked to indemnify FTC 
                except with the Fund's prior written consent.

			C.	FTC shall indemnify and hold the Fund harmless
                from and against any and all claims, demands, losses, expenses,
                and liabilities (whether with or without basis in fact or law)
                of any and every nature (including reasonable attorneys' fees)
                which may be asserted against the Fund by any person arising
                out of any action taken or omitted to be taken by FTC as a 
                result of FTC's refusal or failure to comply with the terms 
                of this Agreement, its bad faith, negligence, or willful 
                misconduct.

	7.	Records.  FTC shall keep records relating to the services to
be performed hereunder, in the form and manner, and for such
period as it may deem advisable and is agreeable to the Fund but
not inconsistent with the rules and regulations of appropriate
government authorities, in particular, Section 31 of The
Investment Company Act of 1940 as amended (the "Investment
Company Act"), and the rules thereunder.  FTC agrees that all
such records prepared or maintained by FTC relating to the
services to be performed by FTC hereunder are the property of
the Fund and will be preserved, maintained, and made available
with such section and rules of the Investment Company Act and
will be promptly surrendered to the Fund on and in accordance
with its request.

	8.	Confidentiality.  FTC shall handle in confidence all
information relating to the Fund's business, which is received
by FTC during the course of rendering any service hereunder.

	9.	Data Necessary to Perform Services.  The Fund or its agent,
which may be FTC, shall furnish to FTC the data necessary to
perform the services described herein at times and in such form
as mutually agreed upon.

	10.	Notification of Error.  The Fund will notify FTC of any
balancing or control error caused by FTC within three (3)
business days after receipt of any reports rendered by FTC to
the Fund, or within three (3) business days after discovery of
any error or omission not covered in the balancing or control
procedure, or within three (3) business days of receiving notice
from any shareholder.

	11.	Term of Agreement.  This Agreement may be terminated by
either party upon giving ninety (90) days prior written notice
to the other party or such shorter period as is mutually agreed
upon by the parties.  However, this Agreement may be replaced or
modified by a subsequent agreement between the parties.  

	12.	Duties in the Event of Termination.  In the event that in
connection with termination a Successor to any of FTC's duties
or responsibilities hereunder is designated by Leuthold Funds,
Inc. by written notice to FTC, FTC will promptly, upon such
termination and at the expense of Leuthold Funds, Inc., transfer
to such Successor all relevant books, records, correspondence
and other data established or maintained by FTC under this
Agreement in a form reasonably acceptable to Leuthold Funds,
Inc. (if such form differs from the form in which FTC has
maintained the same, Leuthold Funds, Inc. shall pay any expenses
associated with transferring the same to such form), and will
cooperate in the transfer of such duties and responsibilities,
including provision for assistance from FTC's personnel in the
establishment of books, records and other data by such successor.

	13.	Notices.  Notices of any kind to be given by either party
to the other party shall be in writing and shall be duly given
if mailed or delivered as follows:  Notice to FTC shall be sent
to:

			Firstar Trust Company
			615 East Michigan Street
			Milwaukee, WI  53202


and notice to _____________________________ shall be sent to:


	14.	Choice of Law.  This Agreement shall be construed in
accordance with the laws of the State of Wisconsin.

	IN WITNESS WHEREOF, the due execution hereof on the date first
above written.  


ATTEST:	                              Firstar Trust Company



_____________________________         By  _______________________________



ATTEST:                               Leuthold Funds, Inc.



_____________________________         By  _______________________________





                                                                   EXHIBIT 10


                           F O L E Y  &  L A R D N E R

                          A T T O R N E Y S  A T  L A W

   CHICAGO                       FIRSTAR CENTER                     SAN DIEGO
   JACKSONVILLE             777 EAST WISCONSIN AVENUE           SAN FRANCISCO
   LOS ANGELES           MILWAUKEE, WISCONSIN 53202-5367          TALLAHASSEE
   MADISON                  TELEPHONE (414) 271-2400                    TAMPA
   ORLANDO                  FACSIMILE (414) 297-4900         WASHINGTON, D.C.
   SACRAMENTO                                                 WEST PALM BEACH

                                October 23, 1995



   Leuthold Funds, Inc.
   100 North Sixth Street
   Suite 700A
   Minneapolis, Minnesota  55403

   Ladies and Gentlemen:

             We have acted as counsel for you in connection with the
   preparation of a Registration Statement on Form N-1A relating to the sale
   by you of an indefinite amount of shares of Class A Common Stock, $0.0001
   par value, of Leuthold Funds, Inc. (such class of Common Stock being
   hereinafter referred to as the "Stock") in the manner set forth in the
   Registration Statement to which reference is made.  In this connection we
   have examined:  (a) the Registration Statement on Form N-1A including the
   Prospectus constituting a part thereof; (b) your Articles of Incorporation
   and Bylaws, as amended to date; (c) corporate proceedings relative to the
   authorization for issuance of the Stock; and (d) such other proceedings,
   documents and records as we have deemed necessary to enable us to render
   this opinion.

             Based upon the foregoing, we are of the opinion that the shares
   of Stock when sold as contemplated in the Registration Statement will be
   legally issued, fully paid and nonassessable.

             We hereby consent to the use of this opinion as an exhibit to
   the Form N-1A Registration Statement.  In giving this consent, we do not
   admit that we are experts within the meaning of Section 11 of the
   Securities Act of 1933, as amended, or within the category of persons
   whose consent is required by Section 7 of said Act.

                                      Very truly yours,


                                      FOLEY & LARDNER



                                                       EXHIBIT 11





                   CONSENT OF INDEPENDENT ACCOUNTANTS


As independent public accountants, we hereby consent to the use of our report,
and to all references to our firm, included in or made a part of Post-
Effective Amendment No. 3 to Form N-1A registration statement (No. 33-96634)
for Leuthold Funds, Inc.



                                          ARTHUR ANDERSEN LLP

Milwaukee, Wisconsin,
January 22, 1998.


                                                                   EXHIBIT 13


                             SUBSCRIPTION AGREEMENT

   Leuthold Funds, Inc.
   100 North Sixth Street
   Suite 700A
   Minneapolis, Minnesota  55403

   Ladies and Gentlemen:

             The undersigned hereby subscribes to 10,000 shares of Class A
   Common Stock (Leuthold Asset Allocation Fund), $0.0001 par value per
   share, of Leuthold Funds, Inc., in consideration for which the undersigned
   agrees to transfer to you upon demand cash in the amount of $100,000.

             It is understood that a certificate or certificates representing
   the shares subscribed for shall be issued to the undersigned upon request
   at any time after receipt by you of payment therefor, and that said shares
   shall be deemed to be fully paid and nonassessable.

             The undersigned agrees that the shares are being purchased for
   investment with no present intention of reselling or redeeming said
   shares.

             Dated and effective as of this 20th day of October, 1995.

                                      STEVEN C. LEUTHOLD FAMILY
                                         FOUNDATION



                                      _______________________________________
                                      Steven C. Leuthold, Trustee

                                   ACCEPTANCE

             The foregoing subscription is hereby accepted.  Dated and
   effective as of this 20th day of October, 1995.



                                      By:  _________________________________
                                           Steven C. Leuthold, President

   (CORPORATE SEAL)

                                      Attest:   ___________________________
                                                David D. Deming
                                                Vice President and Secretary





                               THE LEUTHOLD FUNDS
                     INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT

             The following constitutes an agreement establishing an
   Individual Retirement Account (under Section 408(a) of the Internal
   Revenue Code) between the Depositor and the Custodian.

                                    ARTICLE I

             The Custodian may accept additional cash contributions on behalf
   of the Depositor for a tax year of the Depositor.  The total cash
   contributions are limited to $2,000 for the tax year unless the
   contribution is a rollover contribution described in Section 402(c) (but
   only after December 31, 1992), 403(a)(4), 403(b)(8), 408(d)(3), or an
   employer contribution to a simplified employee pension plan as described
   in Section 408(k).  Rollover contributions before January 1, 1993, include
   rollovers described in Section 402(a)(5), 402(a)(6), 402(a)(7), 403(a)(4),
   403(b)(8), 408(d)(3), or an employer contribution to a simplified employee
   pension plan as described in Section 408(k).

                                   ARTICLE II

             The Depositor's interest in the balance in the custodial account
   is nonforfeitable.

                                   ARTICLE III

             1.   No part of the custodial funds may be invested in life
   insurance contracts, nor may the assets of the custodial account be
   commingled with other property except in a common trust fund or common
   investment fund (within the meaning of Section 408(a)(5)).

             2.   No part of the custodial funds may be invested in
   collectibles (within the meaning of Section 408(m)) except as otherwise
   permitted by Section 408(m)(3) which provides an exception for certain
   gold and silver coins and coins issued under the laws of any state.

                                   ARTICLE IV

             1.   Notwithstanding any provision of this agreement to the
   contrary, the distribution of the Depositor's interest in the custodial
   account shall be made in accordance with the following requirements and
   shall otherwise comply with Section 408(a)(6) and Proposed Regulations
   Section 1.408-8, including the incidental death benefit provisions of
   Proposed Regulations Section 1.401(a)(9)-2, the provisions of which are
   incorporated by reference.

             2.   Unless otherwise elected by the time distributions are
   required to begin to the Depositor under Paragraph 3, or to the surviving
   spouse under Paragraph 4, other than in the case of a life annuity, life
   expectancies shall be recalculated annually.  Such election shall be
   irrevocable as to the Depositor and the surviving spouse and shall apply
   to all subsequent years.  The life expectancy of a nonspouse beneficiary
   may not be recalculated.

             3.   The Depositor's entire interest in the custodial account
   must be, or begin to be, distributed by the Depositor's required beginning
   date, (April 1 following the calendar year end in which the Depositor
   reaches age 70 1/2).  By that date, the Depositor may elect, in a manner
   acceptable to the Custodian, to have the balance in the custodial account
   distributed in:

             (a)  A single sum payment.

             (b)  An annuity contract that provides equal or substantially
   equal monthly, quarterly, or annual payments over the life of the
   Depositor.

             (c)  An annuity contract that provides equal or substantially
   equal monthly, quarterly, or annual payments over the joint and last
   survivor lives of the Depositor and his or her designated beneficiary.

             (d)  Equal or substantially equal annual payments over a
   specified period that may not be longer than the Depositor's life
   expectancy.

             (e)  Equal or substantially equal annual payments over a
   specified period that may not be longer than the joint life and last
   survivor expectancy of the Depositor and his or her designated
   beneficiary.

             4.   If the Depositor dies before his or her entire interest is
   distributed to him or her, the entire remaining interest will be
   distributed as follows:

             (a)  If the Depositor dies on or after distribution of his or
   her interest has begun, distribution must continue to be made in
   accordance with Paragraph 3.

             (b)  If the Depositor dies before distribution of his or her
   interest has begun, the entire remaining interest will, at the election of
   the Depositor or, if the Depositor has not so elected, at the election of
   the beneficiary or beneficiaries, either

             (i)  Be distributed by the December 31 of the year
             containing the fifth anniversary of the Depositor's
             death, or

             (ii) Be distributed in equal or substantially equal
             payments over the life or life expectancy of the
             designated beneficiary or beneficiaries starting by
             December 31 of the year following the year of the
             Depositor's death.  If, however, the beneficiary is
             the Depositor's surviving spouse, then this
             distribution is not required to begin before December
             31 of the year in which the Depositor would have
             turned age 70 1/2.

             (c)  Except where distribution in the form of an annuity meeting
   the requirements of Section 408(b)(3) and its related regulations has
   irrevocably commenced, distributions are treated as having begun on the
   Depositor's required beginning date, even though payments may actually
   have been made before that date.

             (d)  If the Depositor dies before his or her entire interest has
   been distributed and if the beneficiary is other than the surviving
   spouse, no additional cash contributions or rollover contributions may be
   accepted in the account.

             5.   In the case of a distribution over life expectancy in equal
   or substantially equal annual payments, to determine the minimum annual
   payment for each year, divide the Depositor's entire interest in the
   custodial account as of the close of business on December 31 of the
   preceding year by the life expectancy of the Depositor (or the joint life
   and last survivor expectancy of the Depositor and the Depositor's
   designated beneficiary, or the life expectancy of the designated
   beneficiary, whichever applies).  In the case of distributions under
   Paragraph 3, determine the initial life expectancy (or joint life and last
   survivor expectancy) using the attained ages of the Depositor and designed
   beneficiary as of their birthdays in the year the Depositor reaches age 70
   1/2.  In the case of a distribution in accordance with Paragraph 4(b)(ii),
   determine life expectancy using the attained age of the designated
   beneficiary as of the beneficiary's birthday in the year distributions are
   required to commence.

             6.   The owner of two or more individual retirement accounts may
   use the "alternative method" described in Notice 88-38, 1988-1 C.B. 524,
   to satisfy the minimum distribution requirements described above.  This
   method permits an individual to satisfy these requirements by taking from
   one individual retirement account the amount required to satisfy the
   requirement for another.

                                    ARTICLE V

             1.   The Depositor agrees to provide the Custodian with
   information necessary for the Custodian to prepare any reports required
   under Section 408(i) and Regulations Section 1.408-5 and 1.408-6.

             2.   The Custodian agrees to submit reports to the Internal
   Revenue Service and the Depositor prescribed by the Internal Revenue
   Service.

                                   ARTICLE VI

             Notwithstanding any other articles which may be added or
   incorporated, the provisions of Articles I through III and this sentence
   will be controlling.  Any additional articles that are not consistent with
   Section 408(a) and related regulations will be invalid.

                                   ARTICLE VII

             This agreement will be amended from time to time to comply with
   the provisions of the Code and related regulations.  Other amendments may
   be made with the consent of the persons whose signatures appear below.

                                  ARTICLE VIII

             1.   Investment of Account Assets.  (a) All contributions to the
   custodial account shall be invested in the shares of any regulated
   investment company ("Investment Company") for which Leuthold & Anderson,
   Inc. serves as investment advisor, or any other regulated investment
   company designated by the investment advisor.  Shares of stock of an
   Investment Company shall be referred to as Investment Company Shares."

             (b)  Each contribution to the custodial account shall identify
   the Depositor's account number and be accompanied by a signed statement
   directing the investment of that contribution.  The Custodian may return
   to the Depositor, without liability for interest thereon, any contribution
   which is not accompanied by adequate account identification or an
   appropriate signed statement directing investment of that contribution.

             (c)  Contributions shall be invested in whole and fractional
   Investment Company Shares at the price and in the manner such shares are
   offered to the public.  All distributions received on Investment Company
   Shares held in the custodial account shall be reinvested in like shares. 
   If any distribution of Investment Company Shares may be received in
   additional like shares or in cash or other property, the Custodian shall
   elect to receive such distribution in additional like Investment Company
   Shares.

             (d)  All Investment Company Shares acquired by the Custodian
   shall be registered in the name of the Custodian or its nominee.  The
   Depositor shall be the beneficial owner of all Investment Company Shares
   held in the custodial account and the Custodian shall not vote any such
   shares, except upon written direction of the Depositor.  The Custodian
   agrees to forward to the Depositor each prospectus, report, notice, proxy
   and related proxy soliciting materials applicable to Investment Company
   Shares held in the custodial account received by the Custodian.

             (e)  The Depositor may, at any time, by written notice to the
   Custodian, redeem any number of shares held in the custodial account and
   reinvest the proceeds in the shares of any other Investment Company.  Such
   redemptions and reinvestments shall be done at the price and in the manner
   such shares are then being redeemed or offered by the respective
   Investment Companies.

             2.   Amendment and Termination.  (a)  The Custodian may amend
   the Custodial Account (including retroactive amendments) by delivering to
   the Depositor written notice of such amendment setting forth the substance
   and effective date of the amendment.  The Depositor shall be deemed to
   have consented to any such amendment not objected to in writing by the
   Depositor within thirty (30) days of receipt of the notice, provided that
   no amendment shall cause or permit any part of the assets of the custodial
   account to be diverted to purposes other than for the exclusive benefit of
   the Depositor or his or her beneficiaries.  

             (b)  The Depositor may terminate the custodial account at any
   time by delivering to the Custodian a written notice of such termination.

             (c)  The custodial account shall automatically terminate upon
   distribution to the Depositor or his or her beneficiaries of its entire
   balance.

             3.   Taxes and Custodial Fees.  Any income taxes or other taxes
   levied or assessed upon or in respect of the assets or income of the
   custodial account and any transfer taxes incurred shall be paid from the
   custodial account.  All administrative expenses incurred by the Custodian
   in the performance of its duties, including fees for legal services
   rendered to the Custodian, and the Custodian's compensation shall be paid
   from the custodial account, unless otherwise paid by the Depositor or his
   or her beneficiaries.

             The Custodian's fees are set forth in a schedule provided to the
   Depositor.  Extraordinary charges resulting from unusual administrative
   responsibilities not contemplated by the schedule will be subject to such
   additional charges as will reasonably compensate the Custodian.  Fees for
   refund of excess contributions, transferring to a successor trustee or
   custodian, or redemption/reinvestment of Investment Company Shares will be
   deducted from the refund or redemption proceeds and the remaining balance
   will be remitted to the Depositor, or reinvested or transferred in
   accordance with the Depositor's instructions.

             4.   Reports and Notices.  (a)  The Custodian shall keep
   adequate records of transactions it is required to perform hereunder. 
   After the close of each calendar year, the Custodian shall provide to the
   Depositor or his or her legal representative a written report or reports
   reflecting the transactions effected by it during such year and the assets
   and liabilities of the Custodial Account at the close of the year.

             (b)  All communications or notices shall be deemed to be given
   upon receipt by the Custodian at The Leuthold Funds, c/o Firstar Trust
   Company, Mutual Fund Services, 615 East Michigan Street, 3rd Floor, P.O.
   Box 701, Milwaukee, WI  53201-0701, or the Depositor at his most recent
   address shown in the Custodian's records.  The Depositor agrees to advise
   the Custodian promptly, in writing, of any change of address.

             5.   Designation of Beneficiary.  The Depositor may designate a
   beneficiary or beneficiaries to receive benefits from the custodial
   account in the event of the Depositor's death.  In the event the Depositor
   has not designated a beneficiary, or if all beneficiaries shall predecease
   the Depositor, the following persons shall take in the order named:

             (a)  The spouse of the Depositor;

             (b)  If the spouse shall predecease the Depositor or if the
   Depositor does not have a spouse, then to the personal representative of
   the Depositor's estate.

             6.   Multiple  Individual Retirement Accounts.  In the event the
   Depositor maintains more than one individual retirement account (as
   defined in Section 408(a)) and elects to satisfy his or her minimum
   distribution requirements described in Article IV above by making a
   distribution for another individual retirement account in accordance with
   Paragraph 6 thereof, the Depositor shall be deemed to have elected to
   calculate the amount of his or her minimum distribution under this
   custodial account in the same manner as under the individual retirement
   account from which the distribution is made.

             7.   Inalienability of Benefits.  The benefits provided under
   this custodial account shall not be subject to alienation, assignment,
   garnishment, attachment, execution or levy of any kind and any attempt to
   cause such benefits to be so subjected shall not be recognized except to
   the extent as may be required by law.

             8.   Rollover Contributions and Transfers.  The Custodian shall
   have the right to receive rollover contributions and to receive direct
   transfers from other custodians or trustees.  All contributions must be
   made in cash or check.

             9.   Conflict in Provisions.  To the extent that any provisions
   of this Article VIII shall conflict with the provisions of Articles IV, V
   and/or VII, the provisions of this Article VIII shall govern.

             10.  Applicable State Law.  This custodial account shall be
   construed, administered and enforced according to the laws of the State of
   Wisconsin.

   <PAGE>

                               THE LEUTHOLD FUNDS
                  ROTH INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT

             The following constitutes an agreement establishing a Roth IRA
   (under Section 408A of the Internal Revenue Code) between the depositor
   and the custodian.

                                    ARTICLE I

        1.   If this Roth IRA is not designated as a Roth Conversion IRA,
   then, except in the case of a rollover contribution described in section
   408A(e), the custodian will accept only cash contributions and only up to
   a maximum amount of $2,000 for any tax year of the depositor.

        2.   If this Roth IRA is designated as a Roth Conversion IRA, no
   contributions other than IRA Conversion Contributions made during the same
   tax year will be accepted.

                                   ARTICLE II

                The $2,000 limit described in Article I is gradually reduced
   to $0 between certain levels of adjusted gross income (AGI).  For a single
   depositor, the $2,000 annual contribution is phased out between AGI of
   $95,000 and $110,000; for a married depositor who files jointly, between
   AGI of $150,000 and $160,000; and for a married depositor who files
   separately, between $0 and $10,000. In the case of a conversion, the
   custodian will not accept IRA Conversion Contributions in a tax year if
   the depositor's AGI for that tax year exceeds $100,000 or if the depositor
   is married and files a separate return.  Adjusted gross income is defined
   in section 408A(c)(3) and does not include IRA Conversion Contributions.

                                   ARTICLE III

             The depositor's interest in the balance in the custodial account
   if nonforfeitable.

                                   ARTICLE IV

        1.   No part of the custodial funds may be invested in life insurance
   contracts, nor may the assets of the custodial account be commingled with
   other property except in a common trust fund or common investment fund
   (within the meaning of section 408(a)(5)).

        2.   No part of the custodial funds may be invested in collectibles
   (within the meaning of section 408(m) except as otherwise permitted by
   section 408(m)(3), which provides an exception for certain gold, silver,
   and platinum coins, coins issued under the laws of any state, and certain
   bullion.

                                    ARTICLE V

        1.   If the depositor dies before his or her entire interest is
   distributed to him or her and the grantor's surviving spouse is not the
   sole beneficiary, the entire remaining interest will, at the election of
   the depositor or, if the depositor has not so elected, at the election of
   the beneficiary or beneficiaries, either.

               (a) Be distributed by December 31 of the year containing the
   fifth anniversary of the depositor's death, or

               (b) Be distributed over the life expectancy of the designated
   beneficiary starting no later than December 31 of the year following the
   year of the depositor's death.

               If distributions do not begin by the date described in (b),
   distribution method (a) will apply.

        2.   In the case of distribution method 1.(b) above, to determine the
   minimum annual payment for each year, divide the grantor's entire interest
   in the trust as of the close of business on December 31 of the preceding
   year by the life expectancy of the designated beneficiary using the
   attained age of the designated beneficiary as of the beneficiary's
   birthday in the year distributions are required to commence and subtract 1
   for each subsequent year.

        3.   If the depositor's spouse is the sole beneficiary on the
   depositor's date of death, such spouse will then be treated as the
   depositor.

                                   ARTICLE VI

        1.   The depositor agrees to provide the custodian with information
   necessary for the custodian to prepare any reports required under section
   408(i) and 408A(d)(3)(E), regulations sections 1.408-5 and 1.408-6, and
   under guidance published by the Internal Revenue Service.

        2.   The custodian agrees to submit reports to the Internal Revenue
   Service and the depositor prescribed by the Internal Revenue Service.

                                   ARTICLE VII

             Notwithstanding any other articles which may be added or
   incorporated, the provisions of Articles I through IV and this sentence
   will be controlling.  Any additional articles that are not consistent with
   section 408A, the related regulations, and other published guidance will
   be invalid.

                                  ARTICLE VIII

             This Agreement will be amended from time to time to comply with
   the provisions of the Code, related regulations, and other published
   guidance.  Other amendments may be made with the consent of the persons
   whose signatures appear below.

                                   ARTICLE IX

        1.   Investment of Account Assets.  a.  All contributions to the
   custodial account shall be invested in the shares of any regulated
   investment company ("Investment Company") for which Leuthold & Anderson,
   Inc. serves as investment advisor, or any other regulated investment
   company designated by the investment advisor.  Shares of stock of an
   Investment Company shall be referred to as "Investment Company Shares."

        b.      Each contribution to the custodial account shall identify the
   depositor's account number and be accompanied by a signed statement
   directing the investment of that contribution.  The custodian may return
   to the depositor, without liability for interest thereon, any contribution
   which is not accompanied by adequate account identification or an
   appropriate signed statement directing investment of that contribution.

        c.      Contributions shall be invested in whole and fractional
   Investment Company Shares at the price and in the manner such shares are
   offered to the public.  All distributions received on Investment Company
   Shares held in the custodial account shall be reinvested in like shares. 
   If any distribution of Investment Company Shares may be received in
   additional like shares or in cash or other property, the custodian shall
   elect to receive such distribution in additional like Investment Company
   Shares.

        d.      All Investment Company Shares acquired by the custodian shall
   be registered in the name of the custodian or its nominee.  The depositor
   shall be the beneficial owner of all Investment Company Shares held in the
   custodial account and the custodian shall not vote any such shares, except
   upon written direction of the depositor.  The custodian agrees to forward
   to the depositor each prospectus, report, notice, proxy and related proxy
   soliciting materials applicable to Investment Company Shares held in the
   custodial account received by the custodian.

        e.      The depositor may, at any time, by written notice to the
   custodian, redeem any number of shares held in the custodial account and
   reinvest the proceeds in the shares of any other Investment Company.  Such
   redemptions and reinvestments shall be done at the price and in the manner
   such shares are then being redeemed or offered by the respective
   Investment Companies.

        2.   Amendment and Termination.  a.  The custodian may amend the
   Custodial Account (including retroactive amendments) by delivering to the
   depositor written notice of such amendment setting forth the substance and
   effective date of the amendment.  The depositor shall be deemed to have
   consented to any such amendment not objected to in writing by the
   depositor within thirty (30) days of receipt of the notice, provided that
   no amendment shall cause or permit any part of the assets of the custodial
   account to be diverted to purposes other than for the exclusive benefit of
   the depositor or his or her beneficiaries.  

        b.      The depositor may terminate the custodial account at any time
   by delivering to the custodian a written notice of such termination.

        c.      The custodial account shall automatically terminate upon
   distribution to the depositor or his or her beneficiaries of its entire
   balance.

        3.   Taxes and Custodial Fees.  Any income taxes or other taxes
   levied or assessed upon or in respect of the assets or income of the
   custodial account and any transfer taxes incurred shall be paid from the
   custodial account.  All administrative expenses incurred by the custodian
   in the performance of its duties, including fees for legal services
   rendered to the custodian, and the custodian's compensation shall be paid
   from the custodial account, unless otherwise paid by the depositor or his
   or her beneficiaries.

             The custodian's fees are set forth in a schedule provided to the
   depositor.  Extraordinary charges resulting from unusual administrative
   responsibilities not contemplated by the schedule will be subject to such
   additional charges as will reasonably compensate the custodian.  Fees for
   refund of excess contributions, transferring to a successor trustee or
   custodian, or redemption/reinvestment of Investment Company Shares will be
   deducted from the refund or redemption proceeds and the remaining balance
   will be remitted to the depositor, or reinvested or transferred in
   accordance with the depositor's instructions.

        4.   Reports and Notices.  a.  The custodian shall keep adequate
   records of transactions it is required to perform hereunder.  After the
   close of each calendar year, the custodian shall provide to the depositor
   or his or her legal representative a written report or reports reflecting
   the transactions effected by it during such year and the assets and
   liabilities of the Custodial Account at the close of the year.

        b.      All communications or notices shall be deemed to be given
   upon receipt by the custodian at The Leuthold Funds, c/o Firstar Trust
   Company, Mutual Fund Services, 615 East Michigan Street, 3rd Floor, P.O.
   Box 701, Milwaukee, WI  53201-0701, or the depositor at his most recent
   address shown in the custodian's records.  The depositor agrees to advise
   the custodian promptly, in writing, of any change of address.

        5.   Designation of Beneficiary.  The depositor may designate a
   beneficiary or beneficiaries to receive benefits from the custodial
   account in the event of the depositor's death.  In the event the depositor
   has not designated a beneficiary, or if all beneficiaries shall predecease
   the depositor, the following persons shall take in the order named:

        a.      The spouse of the depositor;

        b.      If the spouse shall predecease the depositor or if the
   depositor does not have a spouse, then to the personal representative of
   the depositor's estate.

        6.   Inalienability of Benefits.  The benefits provided under this
   custodial account shall not be subject to alienation, assignment,
   garnishment, attachment, execution or levy of any kind and any attempt to
   cause such benefits to be so subjected shall not be recognized except to
   the extent as may be required by law.

        7.   Rollover Contributions and Transfers.  Subject to the
   restrictions in Article I, the custodian shall have the right to receive
   rollover contributions and to receive direct transfers from other
   custodians or trustees.  All contributions must be made in cash or check.

        8.   Conflict in Provisions.  To the extent that any provisions of
   this Article VIII shall conflict with the provisions of Articles V, VI
   and/or VIII, the provisions of this Article IX shall govern.

        9.   Applicable State Law.  This custodial account shall be
   construed, administered and enforced according to the laws of the State of
   Wisconsin.


<TABLE> <S> <C>

<ARTICLE> 6
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          SEP-30-1997
<PERIOD-START>                             OCT-01-1996
<PERIOD-END>                               SEP-30-1997
<INVESTMENTS-AT-COST>                       27,169,861
<INVESTMENTS-AT-VALUE>                      30,305,854
<RECEIVABLES>                                  271,792
<ASSETS-OTHER>                                  41,834
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                              30,619,480
<PAYABLE-FOR-SECURITIES>                             0
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                       59,299
<TOTAL-LIABILITIES>                             59,299
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                    26,627,417
<SHARES-COMMON-STOCK>                        2,736,025
<SHARES-COMMON-PRIOR>                        3,118,196
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                        796,771
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                     3,135,993
<NET-ASSETS>                                30,560,181
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