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OHIO NATIONAL FUND, INC.
SUPPLEMENT DATED JUNE 18, 1999 TO THE
PROSPECTUS DATED MAY 1, 1999
This prospectus supplement describes the following changes to the May 1, 1999
prospectus:
-> A proposed new sub-advisory agreement, management fee increase
and investment policy changes for the Equity portfolio
-> Changes in the portfolio managers for the Social Awareness and
Core Growth portfolios
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
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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.
-> 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.
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-> 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.
SOCIAL AWARENESS PORTFOLIO
The portfolio manager of the Social Awareness portfolio is Stephen J. Komrska.
He is an investment officer of ONLI and has managed equity securities for ONLI
and the Adviser since 1997. For six years before that he was a fixed income
analyst and high yield bond portfolio manager for Ohio Casualty Insurance
Company. Mr. Komrska is a chartered financial analyst with a bachelor of
business administration degree in finance and marketing from the University of
Michigan.
CORE GROWTH PORTFOLIO
The portfolio manager of the Core Growth portfolio is Jeffrey A. Wrona. He is
also the portfolio manager of the PBHG Growth II portfolio, co-manager of the
PBHG Technology & Communications Fund and has managed other small and mid cap
portfolios for PBA since 1997. Prior to that he was a senior portfolio manager
at Munder Capital Management for seven years, and before that he was a
securities analyst for Drexel Burnham Lambert and a design engineer for Ford
Motor Company. Mr. Wrona is a chartered financial analyst. He has a bachelor's
degree in engineering and a master of business administration from the
University of Michigan.
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