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OHIO NATIONAL FUND, INC.
SUPPLEMENT DATED MAY 24, 1999 TO THE
PROSPECTUS DATED MAY 1, 1999
EQUITY PORTFOLIO
The Board of Directors has approved a sub-advisory agreement between the Adviser
and Legg Mason Fund Adviser, Inc. (LMFA). LMFA is located at 100 Light Street,
Baltimore, Maryland 21203. It was founded in 1982 to manage equity mutual funds
and presently has in excess of $12 billion of assets under management. LMFA is
wholly-owned by Legg Mason, Inc.
The sub-advisory agreement will not take effect until it is approved by the
owners of a majority of the outstanding shares of the Equity portfolio voting in
person or by proxy at a special meeting of shareholders to be held on or about
August 2, 1999. Shareholders of record as of June 1, 1999 will be entitled to
vote at that meeting. Proxy solicitation material will be distributed to all
eligible shareholders.
The sub-advisory agreement provides for the Adviser to pay LMFA a sub-advisory
fee at the annual rate of 0.45% of the first $500 million of the average daily
net assets of the Equity portfolio and 0.40% of the average daily net assets of
the portfolio in excess of $500 million.
The Board of Directors has also approved an increase in the investment advisory
fee paid to the Adviser by the portfolio. If approved by the Equity portfolio's
shareholders at the special meeting on or about August 2, 1999, the new
investment advisory fee will be at the annual rate of 0.80% of the first $500
million of the average daily net assets of the Equity portfolio and 0.75% of the
portfolio's average daily net assets in excess of $500 million.
Currently, the Equity portfolio pays the Adviser an investment advisory fee at
the annual rate of 0.60% of the first $100 million, 0.50% of the next $150
million, 0.45% of the next $250 million, 0.40% of the next $500 million, 0.30%
of the next $1 billion, and 0.25% of average daily net assets over $2 billion.
The Board of Directors has approved the following changes in the Equity
portfolio's investment policies, provided that these changes are approved by the
Equity portfolio's shareholders at the special meeting on or about August 2,
1999:
- The statement that "Current income is a secondary consideration
although growth of income may accompany growth of capital" is
deleted from the portfolio's investment objectives.
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- The restriction that not more than 5% of the value of the total
assets of the portfolio may be invested in the securities of any
one issuer (except U.S. government securities) shall only apply as
to 75% of the portfolio's total assets.
- The following investment restrictions are reclassified as
non-fundamental policies that may be modified by the Board of
Directors without shareholder approval:
- The portfolio will not invest more than 10% of the value of
its assets in securities or other investments, including
repurchase agreements maturing in more than seven days, that
are subject to legal or contractual restrictions upon resale
or are otherwise not readily marketable.
- The portfolio will not purchase or sell put or call options,
except that the portfolio may, for hedging purposes, (a) write
call options traded on a registered national securities
exchange if the portfolio owns the underlying securities
subject to such options, and purchase call options for the
purpose of closing out positions in options it has written,
(b) purchase put options on securities owned, and sell such
options in order to close its positions in put options, (c)
purchase and sell financial futures contracts and options
thereon, and (d) purchase and sell financial index options;
provided, however, that no option or futures contract shall be
purchased or sold if, as a result, more than one-third of the
total assets of the portfolio would be hedged by options or
futures contracts, and no more than 5% of the portfolio's
total assets, at market value, may be used for premiums on
open options and initial margin deposits on futures contracts.
- The portfolio may invest up to 15% of its assets in securities
of foreign issuers.
- The portfolio will not sell securities short or purchase
securities on margin except such short-term credits as are
required to clear transactions.
- The portfolio will not participate on a joint or joint and
several basis in any trading account in securities, or
purchase securities for the purpose of exercising control or
management.
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