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SUPPLEMENT TO THE PROSPECTUS
United Municipal Bond Fund, Inc. Class A Shares
The following information supplements and supersedes any contrary information
contained in the Prospectus:
At a special meeting of shareholders scheduled for July 24, 1997, shareholders
of the Fund will be asked to approve proposals relating to the following:
1. Investment Restrictions. Shareholders of the Fund will be asked to approve
elimination of or changes to certain of the Fund's fundamental investment
restrictions. If approved, the current fundamental restrictions regarding
restricted securities, unseasoned issuers, repurchase transactions, arbitrage
transactions, securities owned by affiliated persons and options, futures
contracts, forward currency contracts and other derivative instruments would be
eliminated. Also, if approved, the current fundamental restrictions regarding
diversification, investments in commodities and commodity contracts, loans,
margin purchases and short sales would be modified.
If the foregoing changes to the Fund's fundamental investment restrictions are
approved, the Fund intends to implement new non-fundamental, operating policies
regarding unseasoned issuers and derivative instruments. These operating
policies would be in addition to the other non-fundamental restrictions and
policies set forth in the prospectus and Statement of Additional Information and
could be changed by the Board of Directors without shareholder approval.
2. Service Plan. Class A shareholders of the Fund will be asked to amend the
Fund's current Service Plan to permit payment of distribution fees, with no
change to the Plan's current limit on the total expenses payable.
To be attached to the cover page of the Prospectus of United Municipal Bond
Fund, Inc. Class A shares dated December 31, 1996.
This Supplement is dated May 29, 1997.
NUS1008A
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SUPPLEMENT TO THE PROSPECTUS
United Municipal Bond Fund, Inc. Class Y Shares
The following information supplements and supersedes any contrary information
contained in the Prospectus:
At a special meeting of shareholders scheduled for July 24, 1997, shareholders
of the Fund will be asked to approve elimination of or changes to certain of the
Fund's fundamental investment restrictions. If approved, the current
fundamental restrictions regarding restricted securities, unseasoned issuers,
repurchase transactions, arbitrage transactions, securities owned by affiliated
persons and options, futures contracts, forward currency contracts and other
derivative instruments would be eliminated. Also, if approved, the current
fundamental restrictions regarding diversification, investments in commodities
and commodity contracts, loans, margin purchases and short sales would be
modified.
If the foregoing changes to the Fund's fundamental investment restrictions are
approved, the Fund intends to implement new non-fundamental, operating policies
regarding unseasoned issuers and derivative instruments. These operating
policies would be in addition to the other non-fundamental restrictions and
policies set forth in the prospectus and Statement of Additional Information and
could be changed by the Board of Directors without shareholder approval.
To be attached to the cover page of the Prospectus of United Municipal Bond
Fund, Inc. Class Y shares dated December 31, 1996.
This Supplement is dated May 29, 1997.
NUS1008-Y
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UNITED MUNICIPAL BOND FUND, INC.
Supplement to the Statement of Additional Information
Dated December 31, 1996
The following information supplements and supersedes any contrary information
contained in the Statement of Additional Information:
1. Investment Restrictions. At a special meeting of shareholders scheduled for
July 24, 1997 ("Special Meeting"), shareholders of the Fund will be asked to
approve elimination and modification of certain of the Fund's fundamental
investment restrictions. If approved, the following investment restrictions
will supersede and replace the restrictions listed in the "Investment
Restrictions" section:
The Fund:
(i) May not make any investments other than in the municipal bonds and in
the taxable obligations, options, futures contracts and other financial
instruments described in the Prospectus. Further, such municipal bonds and
taxable obligations are subject to the percentage limitations and quality
restrictions described in the Prospectus. Thus, the Fund may not: purchase
any voting securities; purchase or sell physical commodities; however, this
policy shall not prevent the Fund from purchasing and selling foreign
currency, futures contracts, options, forward contracts, swaps, caps,
collars, floors and other financial instruments; or purchase any real
estate or interests in real estate investment trusts or any investment
company securities;
(ii) May not lend money or other assets; it may, however, buy debt
securities and other obligations consistent with its goal and its other
investment policies and restrictions;
(iii) May not invest for the purpose of exercising control or management
of other companies;
(iv) May not sell securities short (unless it owns or has the right to
obtain securities equivalent in kind and amount to the securities sold
short) or purchase securities on margin, except that (1) this policy does
not prevent the Fund from entering into short positions in foreign
currency, futures contracts, options, forward contracts, swaps, caps,
collars, floors and other financial instruments, (2) the Fund may obtain
such short-term credits as are necessary for the clearance of transactions,
and (3) the Fund may make margin payments in connection with futures
contracts, options, forward contracts, swaps, caps, collars, floors and
other financial instruments;
(v) May not participate on a joint, or a joint and several, basis in any
trading account in securities;
(vi) May not engage in the underwriting of securities, that is, the
selling of securities for others;
(vii) With respect to 75% of its total assets, may not purchase securities
of any one issuer (other than cash items and "Government securities" as
defined in the Investment Company Act of 1940, as amended (the "1940
Act")), if immediately after and as a result of such purchase, the value of
the holdings of the Fund in the securities of such issuer exceeds 5% of the
value of the Fund's total assets; or
(viii) May not purchase securities of issuers in any one
industry except for municipal bonds and U.S. Government Securities if more
than 25% of the value of its assets would then be invested in issuers in
that industry.
If the proposed changes to the Fund's fundamental investment restrictions
are approved, the Fund intends to implement the following new non-fundamental,
operating policies which would supersede and replace the Fund's current non-
fundamental restrictions and policies on these matters:
(i) The Fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
of continuous operation. This restriction does not apply to any
obligations issued or guaranteed by the U.S. government, or a state or
local government authority, or their respective agencies or
instrumentalities, or to collateralized mortgage obligations, other
mortgage-related securities, asset-backed securities, indexed securities or
over-the-counter derivative financial instruments.
(ii) Generally, the Fund may purchase and sell any type of derivative
instrument (including, without limitation, futures contracts, options,
forward contracts, swaps, caps, collars, floors and indexed securities).
However, the Fund will only purchase or sell a particular derivative
instrument if the Fund is authorized to invest in the type of asset by
which the return on, or value of, the derivative instrument is primarily
measured.
2. Service Plan. Class A shareholders of the Fund will be asked to amend the
Fund's current Service Plan to permit payment of distribution fees, with no
change to the Plan's current limit on the total expenses payable.
This Supplement is dated May 29, 1997.
