GRADISON GROWTH TRUST, 485BPOS, 1995-08-28

GRADISON GROWTH TRUST
485BPOS, 1995-08-28

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<PAGE> 1

As filed with the Securities and Exchange Commission on August __ 1995

1933 Act Registration No. 2-84169
1940 Act File No. 811-3760
===========================================================================
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 ( )

Pre-Effective Amendment No. ( )
Post-Effective Amendment No. 16 (X)

and/or

REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940 ( )

Amendment No. 17 (X)
----------

G R A D I S O N G R O W T H T R U S T
(Exact Name of Registrant as Specified in Declaration of Trust)

580 Walnut Street, Cincinnati, Ohio 45202
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (513) 579-5700

Copy to:
Bradley E. Turner , Jr. Richard M. Wachterman
Gradison Growth Trust Gradison Growth Trust
580 Walnut Street 580 Walnut Street
Cincinnati, Ohio 45202 Cincinnati, Ohio 45202
(Name and Address of Agent for Service)

It is proposed that this filing will become effective (check appropriate box)

_____ immediately upon filing pursuant to paragraph (b) of
Rule 485.
X
_____ on September 1, l995 pursuant to paragraph (b) of Rule
485.

_____ _____ days after filing pursuant to paragraph (a) of Rule
485.

_____ on ______________ pursuant to paragraph (a) of Rule
485.

__________

Registrant has heretofore registered an indefinite number of shares of
beneficial interest, without par value, pursuant to Rule 24f-2 under the
Investment Company Act of 1940, as amended. Registrant's Rule 24f-2 Notice
was filed on May 25, l995.

==============================================================================

<PAGE> 2

GRADISON GROWTH TRUST

CONTENTS OF POST-EFFECTIVE AMENDMENT

The post-effective amendment to the registration statement of Gradison Growth
Trust contains the following documents:

Facing Sheet

Contents of Post-Effective Amendment

Cross-Reference Sheet

Part A - Prospectus

Gradison-McDonald Established Value Fund Gradison-McDonald
Opportunity Value Fund (Referred to collectively
with the Gradison-McDonald Established Value Fund as ("GM-EO")

Part B - Statement of Additional Information

Gradison-McDonald Established Value Fund
Gradison-McDonald Opportunity Value Fund

Part C - Other Information

Signature Page

Exhibits

--------------------------
The currently effective prospectuses and statements of additional information
for the following series of the Registrant are not affected by this Amendment:

Gradison-McDonald Growth and Income Fund ("GI")
Gradison-McDonald International Fund ("GM-Int")

<PAGE> 3

GRADISON GROWTH TRUST
Cross-Reference Sheet

Pursuant to Item 501(b) of Regulation S-K
Under the Securities Act of 1933

<TABLE>
<CAPTION>
Form N-1A
Item Number Location in Prospectus
----------- ----------------------
<S> <C>
1. Cover Page . . . . . . . . . . . . Cover Page of Prospectus
2. Synopsis . . . . . . . . . . . . . Expense Summary
3. Condensed Financial Information .. Performance Calculations
Financial Highlights
4. General Description of Registrant . . Cover Page; How the Fund Invests
General Information
5. Management of Fund . . . . . . . . . Management of the Fund;
Dividends and Distributions
6. Capital Stock and Other Securities . Cover Page; Dividends and
Distributions; Taxes; General
Information
7. Purchase of Securities Being Purchases and Redemptions; Net
Offered Asset Value; Optional Shareholder
Services; Distribution Plan;
Management of the Fund
8. Redemption or Repurchase . . . . Purchases and Redemptions
9. Pending Legal Proceedings . . . . Not applicable

Location in Statement
of Additional Information

10. Cover Page . . . . . . . . . . . Cover Page
11. Table of Contents . . . . . . . . Table of Contents
12. General Information and History . Not applicable
13. Investment Objectives and Policies. Investment Restrictions; Portfolio
Transactions
14. Management of the Fund . . . Trustees and Officers of the Trust
15. Control Persons and Principal
Holders of Securities . . . . . . . Not applicable
16. Investment Advisory and Other
Services . . . . . Investment Adviser
17. Brokerage Allocation and Other
Practices Portfolio Transactions
18. Capital Stock and Other Securities Description of the Trust
19. Purchase, Redemption and Pricing of
Securities Being Offered . . . . . Purchase of Shares; Redemption of
Shares; Net Asset Value
20. Tax Status . . . . . . . . . . Taxes
21. Underwriters . . . . . . . . . . . Investment Adviser
22. Calculation of Yield Quotations
of Money Market Funds . . . . . . . Not applicable
23. Financial Statements . . . . . . Financial Statements
</TABLE>

<PAGE> 4

[Dutone of portable phone
and envelopes]

To find out more about the
Gradison-McDonald
Established Value Fund
or other funds in the family

CALL

1-800-859-5999

OR WRITE

Gradison-McDonald Mutual Funds
580 Walnut Street
Cincinnati, Ohio 45202

GRADISON-MCDONALD

The investment return and value of an investment in the
Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost.
McDonald & Company Securities, Inc. - Distributor

ESTABLISHED VALUE FUND

GRADISON-MCDONALD

YOUR FUTURE STARTS TODAY

[Dutone of school picture, books,
globe, medal and varsity letter

P R O S P E C T U S
SEPTEMBER 1, 1995
<PAGE> 5

SIGNIFICANT FEATURES

Professional Management

No Redemption Fee or Penalty

Distributions Paid in Additional Shares or Cash

$1,000 Minimum Initial Investment

$500 Minimum Additional Investment

Exchange Privlege

Individual Retirement Accounts

LIKE ALL MUTUAL FUNDS, 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 COMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE DATE OF THIS PROSPECTUS IS SEPTEMBER 1, 1995

ESTABLISHED VALUE FUND

A COMMON STOCK FUND INVESTING IN LARGE
COMPANIES JUDGED TO BE UNDERVALUED

Gradison Growth Trust (the "Trust") is a diversified open-end management
investment company that seeks long-term capital growth by investing primarily
in common stocks. The Trust consists of four series, each of which in effect
represents a separate fund with its own investment policies. This Prospectus
pertains only to one series, the Gradison-McDonald Established Value Fund (the
"Fund"). McDonald & Company Securities, Inc., ("McDonald") through its
Gradison Division ("Gradison"), is the investment adviser and distributor
("Distributor") for the Fund. The Fund has a distribution expense/service plan
pursuant to which it compensates the Distributor for providing services to
shareholders. (See "Management of the Fund.")

The Fund invests primarily in common stocks which Gradison considers to be
undervalued, selected on the basis of disciplined portfolio construction and
comprehensive computer modeling. Stocks are selected from those included in
the Standard & Poor's 500 Composite Stock Price Index and other companies with
market capitalizations of $500 million or more.

This Prospectus is designed to provide you with information that you should
know before investing and should be retained for future reference. A Statement
of Additional Information for the Fund, dated September 1, 1995 has been filed
with the Securities and Exchange Commission and is incorporated herein by
reference. This Statement is available upon request without charge from the
Fund at the address shown below or by calling the phone numbers provided there.

For all information (including purchases, redemptions, and most recent Fund
price), call 579-5000 from Cincinnati, Ohio or 1-800-869-5999 toll free.

Shares of the Fund are not deposits or obligations of any credit union or
other depository institution and are not guaranteed or endorsed by the Federal
Deposit Insurance Corporation or any other government agency.

ICON OF MAN ON PHONE
1-800-869-5999

<PAGE> 6

TABLE OF CONTENTS
Expense Summary 2
Financial Highlights 3
How the Fund Invests 4
Purchases and Redemptions 5
Dividends and Distributions 6
Taxes 6
Net Asset Value 6
Optional Shareholder Services 6
Management of the Fund 7
Performance Calculations 8
Individual Retirement Accounts 8
General Information 8

EXPENSE SUMMARY

SHAREHOLDER TRANSACTION EXPENSES
Maximum sales load on purchases none
-------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)

Management Fees .56%
12b-1 Fees .50%
Other Expenses .14%
-----
TOTAL FUND OPERATING EXPENSES 1.20%
=====

-------------------------------------------------

Example: You would pay the following expenses on a $1,000 investment assuming a
5% annual return* and redemption at the end of each period:

1 Year 3 Years 5 Years 10 Years
$12 $38 $66 $145

* The 5% annual return is a standardized rate prescribed for use by all mutual
funds for the purpose of this example and does not represent the past or future
return of the Fund.

The purpose of the preceding table is to assist you in understanding the
various costs and expenses that an investor in the Fund will bear directly and
indirectly. The expenses shown have been restated to reflect current fees.
(For more information about expenses, see "Purchases and Redemptions," and
"Management of the Fund.")

THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

<PAGE> 7

FINANCIAL HIGHLIGHTS

The table below summarizes the financial highlights of the Fund's operations.
The information is expressed in terms of a single share outstanding throughout
each period. The financial highlights for the periods ended April 30, 1993 and
later have been audited by Arthur Anderson LLP, independent public accountants,
as indicated in their report which appears in the Statement of Additional
Information. The financial highlights for years ending prior to April 30, 1993
were audited by other accountants.

<TABLE>
<CAPTION>
11 MONTHS
ENDING PERIOD ENDED APRIL 30,
MARCH 31, -------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 22.515 $ 21.375 $ 18.366 $ 17.754 $ 17.189 $ 18.165 $ 16.270
-------- -------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .376 .256 .286 .386 .511 .723 .548
Net realized and unrealized gains
or losses on investments 1.520 2.104 3.278 .916 .804 (.474) 2.157
-------- -------- -------- -------- -------- -------- --------
Total income from
investment operations 1.896 2.360 3.564 1.302 1.315 .249 2.705
-------- -------- -------- -------- -------- -------- --------

DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net
investment income (.370) (.220) (.285) (.420) (.548) (.720) (.495)
Distributions from realized
capital gains (.660) (1.000) (.270) (.270) (.202) (.505) (.315)
-------- -------- -------- -------- -------- -------- --------
Total distributions to shareholders (1.030) (1.220) (.555) (.690) (.750) (1.225) (.810)
-------- -------- -------- -------- -------- -------- --------

Net asset value at end of period $ 23.381 $ 22.515 $ 21.375 $ 18.366 $ 17.754 $ 17.189 $ 18.165
======== ======== ======== ======== ======== ======== ========

Total return 8.85%(1) 11.30% 19.86% 7.59% 8.04% 1.11% 17.24%
======== ======== ======== ======== ======== ======== ========

RATIOS/SUPPLEMENTAL DATA:
Net assets at end of
period (in millions) $ 277.4 $ 253.3 $ 203.6 $ 175.5 $ 150.5 $ 134.6 $ 102.2
Ratio of expenses to average
net assets 1.20%(2) 1.22% 1.28% 1.31% 1.39% 1.40% 1.45%
Ratio of net investment income to
average net assets 1.87%(2) 1.15% 1.48% 2.12% 3.10% 4.14% 3.34%
Portfolio turnover ratio 24.23% 38.39% 28.08% 67.96% 73.88% 63.63% 49.87%

1988 1987 1986
-------- -------- --------
<S> <C> <C> <C>
Net asset value at beginning of period $ 17.685 $ 15.044 $ 11.658
-------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .433 .370 .310
Net realized and unrealized gains
or losses on investments .092 3.791 3.376
-------- -------- --------
Total income from
investment operations .525 4.161 3.686
-------- -------- --------

DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net
investment income (.500) (.340) (.300)
Distributions from realized
capital gains (1.440) (1.180) -
-------- -------- --------
Total distributions to shareholders (1.940) (1.520) (.300)
-------- -------- --------

Net asset value at end of period $ 16.270 $ 17.685 $ 15.044
======== ======== ========
Total return 3.62% 29.86% 31.98%
======== ======== ========

RATIOS/SUPPLEMENTAL DATA:
Net assets at end of
period (in millions) $ 69.2 $ 53.8 $ 30.7
Ratio of expenses to average
net assets 1.57% 1.61% 1.72%
Ratio of net investment income to
average net assets 2.67% 2.50% 2.63%
Portfolio turnover ratio 25.99% 75.94% 79.93%

<FN>
On October 4, 1991, McDonald & Co. Securities, Inc. became investment adviser
of the Fund as a result of a merger with Gradison & Company Incorporated.
(1) Total return for the eleven months ended March 1, 1995 represents the actual
return over the period and has not been annualized.
(2) Annualized.

</TABLE>

ICON OF MAN ON PHONE
3 1-800-869-5999

<PAGE> 8

HOW THE FUND INVESTS

The investment objective of the Fund is to seek long-term capital growth by
investing primarily in common stocks. Although the Fund seeks to reduce risk by
investing in a diversified portfolio of common stocks, such diversification
does not eliminate all risks. The value of an investment in the Fund will
fluctuate based on market conditions, and the value of shares, upon redemption,
may be more or less than their purchase price.

The Fund invests primarily in common stocks of companies that are considered by
Gradison to be undervalued. The companies are selected from those in the
Standard & Poor's 500 Composite Stock Price Index and from among other
companies with market capitalizations of $500 million or more. The selection of
specific companies is made by using a disciplined approach, which means that
investments are made in companies that meet certain objective requirements with
respect to earnings, price-earnings ratios, price-book ratios, rate of return
on shareholders' equity, and other similar factors. The securities in which
the Fund invests will normally have lower than average price-book and
price-earnings ratios.

OTHER INVESTMENT POLICIES

Gradison utilizes a disciplined approach, using computer modeling methodology
as the primary factor in making investment decisions with respect to the Fund.
The methodology generates recommendations on a monthly basis. Gradison
continuously monitors the recommendations and acts at any time during the
month, if necessary, to better achieve the objective of the Fund. Additionally,
Gradison continuously monitors the disciplined approach and will effect
modifications to the methodology if such modifications could better achieve the
objective of the Fund. (See "Advisory Agreement" in the Statement of Additional
Information.) William J. Leugers, Executive Vice President of the Trust, has
been primarily responsible for the day-to-day management of the Fund's
portfolio since the Fund's inception. During the past five years, Mr. Leugers
has been Executive Vice President of Gradison. Although investments in the Fund
are made for the purpose of long-term capital growth rather than short-term
profits, the Fund is not restricted with regard to portfolio turnover.

Under normal circumstances, at least 70% of the Fund's assets will be invested
in common stocks. The Fund may also invest in U.S. Government obligations,
certificates of deposit, commercial paper, other money market obligations, and
repurchase agreements (collectively "Reserves"). The Fund's maintenance of
Reserves is primarily to maintain liquidity for redemptions and to lower
volatility of the net asset value. For temporary defensive purposes, the
portion of the Fund's assets invested in Reserves may be increased without
limitation. Repurchase agreements are transactions by which the Fund purchases
obligations of the U.S. Government with the seller concurrently agreeing to
repurchase the securities at the Fund's cost plus interest within a specified
time (usually one business day) or upon demand by the Fund. In these
transactions, the security subject to repurchase is held by the Fund's
custodian, and the Fund ensures on a daily basis that the market value of the
security, including accrued interest, is no less than the price at which the
seller is required to repurchase it. If a seller fails to repurchase the
security, the Fund could incur costs to sell the security to another party and
possibly a loss if the sale is at less than the repurchase price. Under certain
circumstances, the Fund could also be delayed or limited in disposing of a
security, which could result in a decline in its value or loss of interest. The
Fund engages in repurchase agreement transactions only with domestic banks and
securities dealers which Gradison believes present minimal credit risk. These
investment policies and procedures are not fundamental policies and may be
changed by the Trustees without shareholder approval.

INVESTMENT RESTRICTIONS

The Fund will not purchase the securities of any issuer if, as a result: (i) it
would own more than 10% of the outstanding securities of such issuer; (ii) such
holdings would amount to more than 5% of its total assets; or (iii) more than
25% of its assets would be concentrated in any one industry. These investment
restrictions and the

4
<PAGE> 9
investment objective of the Fund may not be changed without shareholder
approval.

PURCHASES AND REDEMPTIONS

HOW TO PURCHASE SHARES

You may purchase shares of the Fund, without sales charge, by bringing or
mailing funds to Gradison, McDonald, or the Fund. Checks should be made payable
to the order of "Gradison#McDonald Established Value Fund" and should be
accompanied by your account name, and account number if you have one. A
completed Account Information Form must accompany or precede the initial
purchase. The minimum investment required to open an account in the Fund is
$1,000 and additional investments must be at least $50. These minimums may be
waived for certain group purchases. Purchase orders become effective when the
Fund receives the necessary information about your account and provision for
payment has been made.

HOW TO REDEEM SHARES

You may redeem Fund shares without charge by sending a signed redemption
request to the Fund identifying the account name and number and the number of
shares or dollar amount to be redeemed. You may redeem shares by telephone and
have the proceeds of your redemption mailed to the address on the Fund's
records. The Fund normally makes payment for redeemed shares within one
business day and, except in extraordinary circumstances, within seven days
after receipt of a properly executed redemption request. The Fund may delay
payment for the redemption of shares where the shares were purchased with a
personal check (or any other method of payment subject to collection), but only
until the purchase payment has cleared, which may be up to 15 days from the day
the purchase payment is received by the Fund. If you need more immediate access
to your investment, you should consider purchasing shares by wire, cash or
other immediately available funds. Shareholders may make special arrangements
for wire transfer of redemption proceeds by contacting the Fund in advance of a
share redemption.

TRANSACTIONS THROUGH GRADISON,
MCDONALD, AND OTHER AGENTS

Investors who maintain brokerage accounts with Gradison or McDonald may
purchase or redeem Fund shares without incurring any fees. Shares may also be
purchased or redeemed through a broker-dealer (other than Gradison or
McDonald), investment counselor or other agent or fiduciary, which may charge a
fee for its services. The Fund may agree to modify or waive its purchase and
redemption procedures or requirements in order to facilitate these
transactions. For example, investors may purchase shares through broker-dealers
who are members of the National Association of Securities Dealers, Inc. under
terms that require payment within three business days of purchase. No such
modification or waiver will result in an investor being assessed a fee by the
Fund in connection with any purchase or redemption of shares.

ADDITIONAL PURCHASE AND
REDEMPTION INFORMATION

All purchase and redemption information and authorizations (except those
effected by Gradison or McDonald) should be mailed or delivered to
Gradison-McDonald Mutual Funds, 580 Walnut Street, Cincinnati, Ohio 45202.

All purchases and redemptions are made at the net asset value per share next
calculated after receipt of a purchase order (and provision for payment has
been made) or a valid redemption request. If payment for a purchase of shares
is not received from a broker-dealer within the time required as set forth
above or if a purchaser's check is returned to the Fund as uncollectible, the
purchase is subject to cancellation and the broker-dealer or purchaser, as the
case may be, will be responsible for any loss incurred by the Fund. Although
share certificates may be issued on the written request of shareholders, they
will not be issued when certain plans or features have been elected. To redeem
share certificates, the certificates must be presented to the Fund with proper
endorsements and signature guarantees, a procedure that may result in delay.

ICON OF MAN ON PHONE
5
1-800-869-5999
<PAGE> 10

Under extraordinary circumstances, such as periods of drastic economic or
market changes, it is possible that you might not be able to reach the Fund by
telephone to effect a redemption. If such an occasion were ever to occur, you
can make a redemption request in writing (by mail or personally delivered) to
the Fund's offices. Shareholders who have brokerage accounts with Gradison or
McDonald can request that their investment consultant arrange the redemption.
The telephone redemption feature may be terminated or modified upon 30 days'
notice to shareholders.

The Fund, Gradison, and McDonald, and their officers and employees will not be
liable for following instructions communicated by telephone that are reasonably
believed to be genuine. The Fund will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine, and if it does not,
in the view of the Securities and Exchange Commission, the Fund may be liable
for any losses resulting from unauthorized instructions. The Fund transmits
redemption proceeds only to shareholder names and addresses on its records (or
which it has otherwise verified), provides written confirmation of all
transactions initiated by telephone (either immediately or by monthly
statement, depending on the circumstances), requires identification from
individuals picking up checks at its offices, and may take other additional
steps to verify the identity of persons giving telephone instructions.
Telephone transactions are available to all shareholders as a standard service.

DIVIDENDS AND DISTRIBUTIONS

Substantially all of the net investment income of the Fund is distributed to
shareholders as quarterly dividends. Any net capital gains (net profits on the
sale of portfolio securities, less any available capital loss carryovers)
realized by the Fund are distributed to shareholders at least annually.
Additional distributions are sometimes necessary to meet tax requirements. The
record and distribution dates for income dividends and capital gain
distributions will be as determined by the Board of Trustees. Unless you select
the Distribution Plan, all income dividends and net realized capital gain
distributions from the Fund are automatically paid in additional shares of the
Fund at the net asset value for such shares on the date the distributions are
payable. Shareholders will receive a statement confirming each dividend or
distribution.

TAXES

The Fund intends to operate as a "regulated investment company" under the
Internal Revenue Code. In any fiscal year in which the Fund so qualifies and
distributes to shareholders all of its net investment income and net capital
gains, the Fund itself is relieved of federal income tax. All dividends and
capital gains are taxable to shareholders whether they are paid in shares or
received in cash - except as to shareholders who are exempt from taxation or
entitled to tax deferral. Dividends derived from net investment income and any
distributions of net realized short-term capital gains are taxable to
shareholders as ordinary income. Long-term capital gains distributions are
taxable as such regardless of how long shares of the Fund have been held. Each
year, shareholders will be notified of the amount and federal tax status of all
dividends and capital gains paid during the prior year.

NET ASSET VALUE

The net asset value of the shares of the Fund is calculated once daily, as of
the close of regular trading on the New York Stock Exchange (generally 4:00
p.m. Eastern time) on each day that Exchange is open. The net asset value per
share of the Fund, which is the price at which shares are purchased and
redeemed, is computed by dividing the value of the Fund's net assets (assets
minus liabilities) by the number of shares outstanding of the Fund. Securities
owned by the Fund are generally valued on the basis of market quotations.

OPTIONAL SHAREHOLDER SERVICES

AUTOMATIC INVESTMENT PLAN
You may arrange for a fixed amount of money to be transferred on a regular
automatic basis from your bank

6
<PAGE> 11
or other depository account to your Fund account. For additional information,
obtain the Gradison-McDonald Automatic Investment Plan form from the Fund.

DISTRIBUTION PLAN

You may elect (on the Account Information Form) to automatically receive cash
payments of dividends and/or capital gains distributions. (For this purpose,
short-term capital gains distributions are considered dividends.) You may
change or terminate this election at any time by written notice to the Fund.

AUTOMATIC PAYMENT PLAN

If your account has a value of at least $10,000, you may elect (on the Account
Information Form) to have monthly or quarterly payments of a specified amount
(but not less than $50) mailed to you or anyone specified on the form. You may
change or terminate this election at any time by written notice to the Fund.
Because the Fund cannot guarantee that payments will be made on the exact date
specified, the Plan should not be utilized for time-sensitive payments.
Investors utilizing the Automatic Payment Plan should be aware that each
payment constitutes a redemption for tax purposes.

EXCHANGES

Shares of the Fund may be exchanged, without administrative fees, for shares of
any other Gradison-McDonald fund and for shares of certain Federal/Ohio
tax-free money market funds.

You may request exchanges by telephoning or writing the Fund. Before making an
exchange, you should read the prospectus of the fund in which you are investing
which is available upon request. An exchange may not be made from the Fund to
the fund in which you are investing unless the shares of such fund are
registered for sale in the state in which you reside. Exchanges of Fund shares
for shares of funds sold subject to an initial sales charge will be subject to
such sales charge except to the extent that a sales charge has previously been
paid in connection with the shares. The terms of the exchange feature are
subject to change and the exchange feature is subject to termination, both upon
60 days' written notice, except that no notice shall be required under certain
circumstances provided for by rules of the Securities and Exchange Commission.

MANAGEMENT OF THE FUND

The Trust's Board of Trustees is responsible for the direction and supervision
of the Fund's operations. Subject to the authority of the Board of Trustees,
McDonald, through Gradison, manages the investment and reinvestment of the
assets of the Fund, and provides its employees to act as the officers of the
Fund who are responsible for the overall management of the Fund. McDonald, a
wholly owned subsidiary of McDonald & Company Investments, Inc., McDonald
Investment Center, 800 Superior Avenue, Cleveland, Ohio 44114, is an investment
adviser and a securities broker-dealer. McDonald, including Gradison's
predecessor, has served as an investment adviser to investment companies since
1976.

For the period ended March 31, 1995, the Fund paid McDonald a fee of
.81% of its average daily net assets for acting as its investment adviser.
Effective June 1, 1995, the investment advisory fee was reduced .25% at each
asset level in connection with increasing the 12b-1 expense by the same amount.
For the eleven months ended March 31, 1995 the cost reimbursement made by the
Fund to McDonald for shareholder service personnel for that year was $97,764
and McDonald provided data processing services to the Fund for which it
received fee of $.61 per month per shareholder account plus charges for
shareholder statement printing.

Effective June 1, 1995, McDonald, in lieu of providing to the Fund
shareholder services on a cost reimbursement basis and data processing services
pursuant to a data processing agreement, commenced providing such services to
the Fund pursuant to a Transfer Agency and Accounting Services Agreement. That
Agreement provides for the payment to McDonald of $18.25 per non-zero balance
shareholder account per year plus out-of-pocket costs for acting as transfer
agent and an accounting services fee based on the Fund's aver-

ICON OF MAN ON PHONE
7
1-800-869-5999
<PAGE> 12

age daily net assets at an annual rate of .03% on the first $100 million, .02%
of the next $100 million, and .01% on any amount in excess of $200 million,
with a minimum annual fee of $40,000 per year.

Under the terms of a distribution expense/service plan adopted pursuant to Rule
12b-1 under the Investment Company Act of 1940, the Fund makes service fee
payments to the Distributor for providing personal services to shareholders of
the Fund, including responding to shareholder inquiries and providing
information to shareholders about their Fund accounts, at an annual rate of
.25% of the assets of the Fund. The Fund also annually pays the Distributor a
distribution fee in the amount of .25% of the Fund's assets for a total annual
payment of .50% of the Fund's assets. The distribution fee is paid to the
Distributor for general distribution services and as compensation for selling
shares of the Fund. The fees are calculated on a daily basis and paid to the
Distributor monthly.

PERFORMANCE CALCULATIONS

From time to time the Fund's "total return" may be presented in advertisements.
THE TOTAL RETURN FIGURE IS AN HISTORICAL FIGURE AND IS NOT INTENDED TO INDICATE
FUTURE PERFORMANCE. The total return of the Fund may be presented in different
ways. One way will show the average annual compounded rate of return over an
indicated period that would equate an initial amount of money invested in the
Fund at the beginning of a stated period to the ending value of the investment.
Another calculation will show the aggregate total return over an indicated
period by dividing the change in value during the period by the initial amount
of the investment. Advertisements may also include figures (sometimes depicted
in graphs) reflecting the value of a specified amount of money invested in the
Fund over various time periods and comparison of the Fund's performance to the
performance of stock indices such as the Standard & Poor's 500 Composite Stock
Price Index. All calculations assume the reinvestment of all dividends and
distributions. The Fund may also advertise performance rankings assigned to it
by organizations which evaluate mutual fund performance such as Lipper
Analytical Securities Corp. It may also advertise "ratings" assigned to it by
organizations such as Morningstar, Inc. The Fund's Annual Report to
Shareholders contains additional performance information and will be made
available without charge.

INDIVIDUAL RETIREMENT ACCOUNTS

Shares of the Fund may be purchased in conjunction with an Individual
Retirement Account ("IRA"), which permits exchange privileges with
Gradison-McDonald mutual funds (see "Exchanges") and which may also be used
with a Gradison or McDonald self-directed brokerage account. Detailed
information concerning IRA accounts is available from the Fund by calling the
phone numbers listed on the first page of this Prospectus.

GENERAL INFORMATION

The Fund is a diversified series of the Gradison Growth Trust which is an Ohio
business trust organized under the laws of the State of Ohio by a Declaration
of Trust dated May 31, 1983 and is registered with the Securities and Exchange
Commission as an open-end management investment company. Each share of the Fund
has one vote and represents an equal pro rata interest in the Fund. Shareholder
inquiries should be directed to the phone numbers or address of the Fund listed
on the first page of this Prospectus.

8
<PAGE> 13

[Duotone of portable phone and envelopes]

To find out more about the
GRADISON-MCDONALD
OPPORTUNITY VALUE FUND
or other funds in the family

CALL
1-800-859-5999

OR WRITE
Gradison-McDonald Mutual Funds
580 Walnut Steet
Cincinnati, Ohio 45202

GRADISON-MCDONALD

The investment return and value of an investment in the Fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than the original cost. McDonald & Company Securities, Inc. - Distributor

OPPORTUNITY VALUE FUND

GRADISON-MCDONALD

[Duotone of baby blocks, teddy bear, sailboat and photo of baby]

Your Future
Starts Today

PROSPECTUS
SEPTEMBER 1, 1995

<PAGE> 14

SIGNIFICANT FEATURES

Professional Management
No Redemption Fee or Penalty
Distributions Paid in Additional Shares or Cash
$1,000 Minimum Initial Investment
$500 Minimum Additional Investment
Exchange Privilege
Individual Retirement Accounts

LIKE ALL MUTUAL FUNDS, 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 SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE DATE OF THIS PROSPECTUS IS SEPTEMBER 1, 1995

OPPORTUNITY VALUE FUND

A COMMON STOCK FUND INVESTING IN SMALLER COMPANIES JUDGED TO BE UNDERVALUED

Gradison Growth Trust (the "Trust") is a diversified open-end management
investment company that seeks long"term capital growth by investing primarily
in common stocks. The Trust consists of four series, each of which in effect
represents a separate fund with its own investment policies. This Prospectus
pertains only to one series, the Gradison-McDonald Opportunity Value Fund (the
"Fund"). McDonald & Company Securities, Inc., ("McDonald") through its
Gradison Division ("Gradison"), is the investment adviser and distributor
("Distributor") for the Fund. The Fund has a distribution expense/service plan
pursuant to which it compensates the Distributor for providing services to
shareholders. (See "Management of the Fund.")

The Fund invests primarily in common stocks of smaller companies that are
exhibiting high earnings growth, which are considered undervalued by Gradison,
and are selected on the basis of disciplined portfolio construction and
comprehensive computer modeling. Stocks are selected from securities which are
not included in the Standard & Poor's 500 Composite Stock Price Index.

For all information (including purchases, redemptions, and most recent Fund
price), call 579-5000 from Cincinnati, Ohio or 1-800-869-5999 toll free.

Shares of the Fund are not deposits or obligations of any credit union or other
depository institution and are not guaranteed or endorsed by the Federal
Deposit Insurance Corporation or any other government agency.

ICON OF MAN ON THE PHONE

1-800-869-5999

<PAGE> 15

TABLE OF CONTENTS

Expense Summary 2

Financial Highlights 3

How the Fund Invests 4

Purchases and Redemptions 5

Dividends and Distributions 6

Taxes 6

Net Asset Value 6

Optional Shareholder Services 7

Management of the Fund 7

Performance Calculations 8

Individual Retirement Account 8

General Information 8

EXPENSE SUMMARY

SHAREHOLDER TRANSACTION EXPENSES
Maximum sales load on purchases none

ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees .65%
12b-1 Fees .50%
Other Expenses .28%
-----
TOTAL FUND OPERATING EXPENSES 1.43%
=====

Example: You would pay the following expenses on a $1,000 investment assuming a
5% annual return* and redemption at the end of each period:

1 Year 3 Years 5 Years 10 Years
$15 $45 $78 $171

* The 5% annual return is a standardized rate prescribed for use by all mutual
funds for the purpose of this example and does not represent the past or future
return of the Fund.

THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

<PAGE> 16

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
11 MONTHS
ENDING PERIOD ENDED APRIL 30,
MARCH 31, -------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $18.348 $17.547 $16.462 $14.767 $13.644 $13.499 $12.967
------- ------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .136 .086 .081 .173 .245 .334 .232
Net realized and unrealized gains
or losses on investments .176 1.585 1.744 2.467 1.198 .401 1.200
------- ------- ------- ------- ------- ------- -------
Total income (loss) from
investment operations .312 1.671 1.825 2.640 1.443 .735 1.432
------- ------- ------- ------- ------- ------- -------

DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net
investment income (.120) (.070) (.100) (.270) (.252) (.330) (.180)
Distributions from realized
capital gains (.440) (.800) (.640) (.675) (.068) (.260) (.720)
Return of capital - - - - - - -
------- ------- ------- ------- ------- ------- -------
Total distributions to shareholders (.560) (.870) (.740) (.945) (.320) (.590) (.900)
------- ------- ------- ------- ------- ------- -------

Net asset value at end of period $18.100 $18.348 $17.547 $16.462 $14.767 $13.644 $13.499
======= ======= ======= ======= ======= ======= =======

Total return 1.75%(3) 9.75% 11.57% 18.60% 10.94% 5.16% 11.71%
======= ======= ======= ======= ======= ======= =======

RATIOS/SUPPLEMENTAL DATA:
Net assets at end of
period (in millions) $ 84.7 $ 83.3 $ 68.2 $ 47.4 $ 28.7 $ 23.0 $ 20.1
Ratio of expenses to average
net assets(1) 1.37%(2) 1.38% 1.44% 1.49% 1.61% 1.52% 1.84%
Ratio of net investment income to
average net assets(1) .84%(2) .47% .61% 1.32% 2.03% 2.47% 1.84%
Portfolio turnover ratio 31.90% 40.41% 39.00% 64.25% 63.88% 36.57% 35.79%

1988 1987 1986
------- ------- -------
Net asset value at beginning of period $13.233 $13.161 $ 9.298
------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .162 .105 .015
Net realized and unrealized gains
or losses on investments (.178) .807 3.873
------- ------- -------
Total income (loss) from
investment operations (.016) .912 3.888
------- ------- -------

DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net
investment income (.120) (.040) (.025)
Distributions from realized
capital gains (.130) (.380) -
Return of capital - (.420) -
------- ------- -------
Total distributions to shareholders (.250) (.840) (.025)
------- ------- -------
Net asset value at end of period $12.967 $13.233 $13.161
======= ======= =======
Total return 0.25% 7.34% 41.86%
======= ======= =======

RATIOS/SUPPLEMENTAL DATA:
Net assets at end of
period (in millions) $ 17.7 $ 20.3 $ 14.4

Ratio of expenses to average
net assets(1) 1.83% 1.73% 2.00%
Ratio of net investment income to
average net assets(1) 1.22% .90% .26%
Portfolio turnover ratio 73.93% 64.64% 83.08%

<FN>
On October 4, 1991, McDonald & Co. Securities, Inc. became investment adviser of the Fund as a result of a merger with Gradison &
Company Incorporated.
(1) For the period ended April 30, 1986, the Fund's investment adviser reimbursed the Fund for the amount by which aggregate
expenses for the year exceded limits set by the state securities regulations. With this reimbursement, the rations of expenses to
average net assets and net investment income (loss) to average net assets would have been 2.04% and .21% respectively, for the year.
(2) Annualized.
(3) Total return for the eleven months ended March 31, 1995 represents the actual return over the period and has not been
annualized.
</TABLE>

<PAGE> 17

HOW THE FUND INVESTS

The Fund invests primarily in common stocks of smaller companies that are
exhibiting high earnings growth in relation to their price-earnings ratio. The
companies are limited to approximately 2,000 stocks (most of which are listed
on the New York or American Stock Exchanges) and do not include companies in
the Standard & Poor's 500 Composite Stock Price Index. Companies in the Fund
generally will have market capitalizations of less than $500 million. The
selection of specific companies is made by using a disciplined approach, which
means that investments are made in companies that meet certain objective
requirements with respect to earnings, price-earnings ratios, price-book
ratios, and other similar factors. The securities in which the Fund invests
will normally have lower than average price-book and price-earnings ratios.

Investment in the stocks contained in the Fund may involve above average
investment risk. The market risks present in the investment in any equity
security are greater when investing in smaller companies, whose securities are
likely to be more thinly traded and subject to more erratic price movements
than larger, more established companies. In addition, smaller companies are
more likely to be limited in terms of product lines, financial resources and
management.

OTHER INVESTMENT POLICIES

Under normal circumstances, at least 70% of the Fund's assets will
be invested in common stocks. The Fund may also invest in U.S. Government
obligations, certificates of deposit, commercial paper, other money market
obligations, and repurchase agreements (collectively "Reserves"). The Fund's
maintenance of Reserves is primarily to maintain liquidity for redemptions and
to lower the volatility of the net asset value. For temporary defensive
purposes, the portion of the Fund's assets invested in Reserves may be
increased without limitation. Repurchase agreements are transactions by which
the Fund purchases obligations of the U.S. Government with the seller
concurrently agreeing to repurchase the securities at the Fund's cost plus
interest within a specified time (usually one business day) or upon demand by
the Fund. In these transactions, the security subject to repurchase is held by
the Fund's custodian, and the Fund ensures on a daily basis that the market
value of the security, including accrued interest, is no less than the price at
which the seller is required to repurchase it. Should a seller fail to
repurchase the security, the Fund could incur costs to sell the security to
another party and possibly a loss if the sale is at less than the repurchase
price. Under certain circumstances, the Fund could also be delayed or limited
in disposing of a security, which could result in a decline in its value or
loss of interest. The Fund engages in repurchase agreement transactions only
with domestic banks and securities dealers which Gradison believes present
minimal credit risk. These investment policies and procedures are not
fundamental

4
<PAGE> 18
policies and may be changed by the Trustees without shareholder approval.

INVESTMENT RESTRICTIONS

PURCHASES AND REDEMPTIONS

HOW TO PURCHASE SHARES

You may purchase shares of the Fund, without sales charge, by bringing or
mailing funds to Gradison, McDonald, or the Fund. Checks should be made payable
to the order of "Gradison-McDonald Opportunity Value Fund" and should be
accompanied by your account name, and account number if you have one. A
completed Account Information Form must accompany or precede the initial
purchase. The minimum investment required to open an account in the Fund is
$1,000 and additional investments must be at least $50. These minimums may be
waived for certain group purchases. Purchase orders become effective when the
Fund receives the necessary information about your account and provision for
payment has been made.

HOW TO REDEEM SHARES

TRANSACTIONS THROUGH GRADISON, MCDONALD, AND OTHER AGENTS

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

ICON OF MAN ON THE PHONE

1-800-869-5999
5
<PAGE> 19

is returned to the Fund as uncollectible, the purchase is subject to
cancellation and the broker-dealer or purchaser, as the case may be, will be
responsible for any loss incurred by the Fund. Although share certificates
may be issued on the written request of shareholders, they will not be issued
when certain plans or features have been elected. To redeem share certificates,
the certificates must be presented to the Fund with proper endorsements and
signature guarantees, a procedure that may result in delay.

The Fund, Gradison, McDonald, and their officers and employees will not be
liable for following instructions communicated by telephone that are reasonably
believed to be genuine. The Fund will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, and if it does
not, in the view of the Securities and Exchange Commission, the Fund may be
liable for any losses resulting from unauthorized instructions. The Fund
transmits redemption proceeds only to shareholder names and addresses on its
records (or which it has otherwise verified), provides written confirmation of
all transactions initiated by telephone (either immediately or by monthly
statement, depending on the circumstances), requires identification from
individuals picking up checks at its offices, and may take other additional
steps to verify the identity of persons giving telephone instructions.
Telephone transactions are available to all shareholders as a standard service.

DIVIDENDS AND DISTRIBUTIONS

Substantially all of the net investment income of the Fund is distributed to
shareholders as semiannual dividends. Any net capital gains (net profits on the
sale of portfolio securities, less any available capital loss carryovers)
realized by the Fund are distributed to shareholders at least annually.
Additional distributions are sometimes necessary to meet tax requirements. The
record and distribution dates for income dividends and capital gain
distributions will be as determined by the Board of Trustees. Unless you select
the Distribution Plan, all income dividends and net realized capital gain
distributions from the Fund are automatically paid in additional shares of the
Fund at the net asset value for such shares on the date the distributions are
payable. Shareholders will receive a statement confirming each dividend or
distribution.

TAXES

NET ASSET VALUE

6
<PAGE> 20
liabilities) by the number of shares outstanding of the Fund. Securities
owned by the Fund are generally valued on the basis of market quotations.

OPTIONAL SHAREHOLDER SERVICES

AUTOMATIC INVESTMENT PLAN

You may arrange for a fixed amount of money to be transferred on a regular
automatic basis from your bank or other depository account to your Fund
account. For additional information, obtain the Gradison-McDonald Automatic
Investment Plan form from the Fund.

DISTRIBUTION PLAN

AUTOMATIC PAYMENT PLAN

EXCHANGES

Shares of the Fund may be exchanged, without administrative fees, for shares of
any other Gradison-McDonald fund and for shares of certain Federal/Ohio
tax-free money market funds.

You may request exchanges by telephoning or writing the Fund. Before making an
exchange, you should read the prospectus of the fund in which you are
investing which is available upon request. An exchange may not be made from the
Fund to the fund in which you are investing unless the shares of such fund are
registered for sale in the state in which you reside. Exchanges of Fund shares
for shares of funds sold subject to an initial sales charge will be subject to
such sales charge except to the extent that a sales charge has previously been
paid in connection with the shares. The terms of the exchange feature are
subject to change and the exchange feature is subject to termination, both upon
60 days' written notice, except that no notice shall be required under certain
circumstances provided for by rules of the Securities and Exchange Commission.

MANAGEMENT OF THE FUND

For the period ended March 31, 1995, the Fund paid McDonald a fee of .90% of
its average daily net assets for acting as its investment adviser. Effective
June 1, 1995, the investment advisory fee was reduced .25% at each asset level
in connection with increasing the 12b-1 expense by the same amount. For the
eleven months ended March 31, 1995 the cost reimbursement made by the Fund to
McDonald for shareholder service personnel was $32,231 and McDonald provided
data processing services to the Fund for which it received a fee of $.61 per
month per shareholder account plus charges for shareholder statement printing.

Icon of man on the phone
1-800-869-5999
7
<PAGE> 21

Effective June 1, 1995, McDonald, in lieu of providing to the Fund shareholder
services on a cost reimbursement basis and data processing services pursuant to
a data processing agreement, commenced providing such services to the Fund
pursuant to a Transfer Agency and Accounting Services Agreement. That
Agreement provides for the payment to McDonald of $18.25 per non-zero balance
shareholder account per year plus out-of-pocket costs for acting as transfer
agent and an accounting services fee based on the Fund's average daily net
assets at an annual rate of .03% on the first $100 million, .02% of the next
$100 million, and .01% on any amount in excess of $200 million, with a minimum
annual fee of $40,000 per year.

PERFORMANCE CALCULATIONS

From time to time the Fund's "total return" may be presented in advertisements.
The total return figure is an historical figure and is not intended to indicate
future performance. The total return of the Fund may be presented in different
ways. One way will show the average annual compounded rate of return over an
indicated period that would equate an initial amount of money invested in the
Fund at the beginning of a stated period to the ending value of the investment.
Another calculation will show the aggregate total return over an indicated
period by dividing the change in value during the period by the initial amount
of the investment. Advertisements may also include figures (sometimes depicted
in graphs) reflecting the value of a specified amount of money invested in the
Fund over various time periods and comparison of the Fund's performance to the
performance of stock indices such as the Standard & Poor's 500 Composite Stock
Price Index and the Russell 2000 Stock Index. All calculations assume the
reinvestment of all dividends and distributions. The Fund may also advertise
performance rankings assigned to it by organizations which evaluate mutual fund
performance such as Lipper Analytical Securities Corp. It may also advertise
"ratings" assigned to it by organizations such as Morningstar, Inc. The Fund's
Annual Report to Shareholders contains additional performance information and
will be made available without charge.

INDIVIDUAL RETIREMENT ACCOUNTS

GENERAL INFORMATION

8
<PAGE> 22

GRADISON GROWTH TRUST

AN OPEN-END INVESTMENT COMPANY

GRADISON-McDONALD ESTABLISHED VALUE FUND
GRADISON-McDONALD OPPORTUNITY VALUE FUND

________________________________________________________________________________

STATEMENT OF ADDITIONAL

INFORMATION

________________________________________________________________________________

For information, call:
579-5700 from Cincinnati, Ohio

Toll free (800) 869-5999 from outside Cincinnati

Information may also be obtained from the Trust at:
580 Walnut Street
Cincinnati, Ohio 45202

________________________________________________________________________________

This Statement of Additional Information is not a prospectus and should
be read in conjunction with the Prospectus of each Fund of the Trust, dated
September 1, 1995, which have been filed with the Securities and Exchange
Commission. The Prospectuses are available upon request without charge from
the Trust at the above address or by calling the phone numbers provided above.

The date of this Statement of Additional Information is September 1,
1995.

<PAGE> 23

<TABLE>
<CAPTION>
CONTENTS Page Location in Prospectuses
<S> <C>
INVESTMENT RESTRICTIONS . . . . . . . . . . . 3 How the Fund Invests

PURCHASE OF SHARES . . . . . . . . . . . . . 4 Purchases and Redemptions

REDEMPTION OF SHARES . . . . . . . . . . . . 5 Purchases and Redemptions

EXCHANGE PRIVILEGE . . . . . . . . . . . . . 5 Optional Shareholder Services
Telephone Exchanges . . . . . . . . . . 5
Written Exchanges . . . . . . . . . . . 5
General Exchange Information . . . . . . 6

TAXES . . . . . . . . . . . . . . . . . . . . 6 Taxes

NET ASSET VALUE . . . . . . . . . . . . . . . 8 Net Asset Value

PORTFOLIO TRANSACTIONS . . . . . . . . . . . 8

INVESTMENT PERFORMANCE . . . . . . . . . . . 11 Performance Calculations

INVESTMENT ADVISER . . . . . . . . . . . . . 12 Management of the Fund
Advisory Agreement . . . . . . . . . . . 12
Distribution Expense/Service Plan. . . . 14
Transfer Agency and Accounting
Services Agreement . . . . . . . . . . . 16

TRUSTEES AND OFFICERS OF THE TRUST . . . . . 16

DESCRIPTION OF THE TRUST . . . . . . . . . . 18 General Information

CUSTODIAN . . . . . . . . . . . . . . . . . . 19

ACCOUNTANTS . . . . . . . . . . . . . . . . . 20

LEGAL COUNSEL . . . . . . . . . . . . . . . . 20

FINANCIAL STATEMENTS AND REPORT OF
INDEPENDENT PUBLIC ACCOUNTANT . . . . .Following Page 20 Financial Highlights

SALES BROCHURE INFORMATION . . . . . . Following Financial Statements
</TABLE>

2
<PAGE> 24

INVESTMENT RESTRICTIONS

In addition to the investment restrictions described in the Prospectus
of each Fund, the Trust has adopted the following investment restrictions and
limitations, which may not be changed with respect to either Fund without the
approval of the holders of a majority of the outstanding shares of that Fund.
(See "Description of the Trust".) The Trust will not:

(1) Borrow money, except as a temporary measure for extraordinary or
emergency purposes, and then only in amounts not exceeding 5% of the
total assets of a Fund, taken at the lower of acquisition cost or
market value;

(2) Make loans, except (a) through the purchase of publicly
distributed corporate securities, U.S. Government obligations,
certificates of deposit, high-grade commercial paper and other money
market instruments, and (b) loans of portfolio securities to
persons unaffiliated with the Trust not in excess of 20% of the value
of a Fund's total assets (taken at market value) made in accordance
with the guidelines of the Securities and Exchange Commission and
with any standards established from time to time by the Trust's Board
of Trustees, including the maintenance of collateral from the
borrower at all times in an amount at least equal to the current
market value of the securities loaned;

(3) Mortgage, pledge or hypothecate securities, except in connection with a
permissible borrowing as set forth in investment restriction (1) above,
and then only in amounts not exceeding 10% of the value of the assets
of a Fund (taken at the lower acquisition cost or market value);

(4) Make short sales of securities or purchase securities on margin, except
short-term credit necessary for the clearance of transactions;

(5) Purchase or sell real estate, except it is permissible to purchase
securities secured by real estate or real estate interests or issued by
companies that invest in real estate or real estate interests;

(6) Purchase the securities of other investment companies, except in
connection with a merger, consolidation, reorganization or acquisition
of assets, and except by purchase in the open market of securities of
closed-end investment companies involving only customary broker's
commissions, and then only if immediately after such purchase, no more
than 10% of the value of the total assets of a Fund would be invested
in such securities;

(7) Invest in companies for the purpose of exercising control or management;

(8) Purchase securities subject to restrictions on disposition under the
Securities Act of 1933;

(9) Purchase securities for which no readily available market quotation
exists, if at the time of acquisition more than 5% of the total assets
of a Fund would be invested in such securities (repurchase agreements
maturing in more than seven days are included within this restriction);

3
<PAGE> 25

(10) Underwrite the securities of other issuers, except insofar as the Trust
may technically be deemed an underwriter under the Securities Act of
1933 in connection with the disposition of portfolio securities;

(11) Purchase or sell commodities, commodity contracts, or interests in oil,
gas or other mineral exploration or development programs, except it is
permissible to purchase securities issued by companies that hold
interests in oil, gas or other mineral exploration or development
programs;

(12) Participate on a joint, or a joint and several, basis in any securities
trading account;

(13) Write, purchase or sell puts, calls or combinations thereof;

(14) Purchase or retain the securities of any issuer if any Trustee or
officer of the Trust is or becomes a director or officer of such issuer
and owns beneficially more than 1/2 of 1% of the securities of such
issuer, or if those directors, trustees and officers of the Trust and
its investment adviser who are directors or officers of such issuer
together own or acquire more than 5% of the securities of such issuer;

(15) Purchase any securities of companies which have (with their
predecessors) a record of less than three years of continuous
operation, if at the time of acquisition more than 5% of a Fund's total
assets would be invested in such securities; or

(16) Purchase any securities (other than obligations issued or guaranteed by
the U.S. Government or its agencies or instrumentalities) if
immediately after such purchase, more than 5% of a Fund's total assets
would be invested in securities of any one issuer or more than 10% of
the outstanding securities of any one issuer would be owned by the
Trust and held in that Fund.

If a percentage restriction set forth above is met at the time of
investment, a later movement above the restriction level resulting from a
change in the value of securities held by the Fund will not be considered a
violation of the investment restriction. Pursuant to an undertaking to a state
regulatory authority, the Funds will not invest more than 5% of their assets in
warrants. For purposes of restriction number two above, repurchase agreements
are not considered loans.

PURCHASE OF SHARES

The Trust reserves the right to impose a charge of $15 for any purchase
check returned to the Trust as uncollectible and to collect such fee by
redeeming shares of the Trust from such shareholder's account.

Unless specifically requested in writing, share certificates will not
be issued. Under no circumstances will certificates be issued for fractional
shares or to investors who elect Automatic Payments. The Trust reserves the
right to limit the amount of any purchase and to reject any purchase order.
Shares of both Funds are offered continuously; however, the offering of shares
of one or both Funds may be suspended at any time and resumed at any time
thereafter. The Trust intends to waive the initial and subsequent purchase
minimums for employees of McDonald & Company Securities, Inc. ("McDonald")
which,

4
<PAGE> 26

through its Gradison Division ("Gradison"), acts as the investment
adviser and distributor ("Adviser" and "Distributor").

REDEMPTION OF SHARES

The Trust may suspend the right of redemption or may delay payment (a)
during any period when the New York Stock Exchange is closed other than for
customary weekend and holiday closings, (b) when trading in markets normally
utilized by the Trust is restricted, or an emergency exists (determined in
accordance with the rules and regulations of the Securities and Exchange
Commission) so that disposal of the securities held in the Fund or
determination of the net asset value of a Fund is not reasonably practicable,
or (c) for such other periods as the Securities and Exchange Commission by
order may permit for the protection of the Trust's shareholders.

EXCHANGE PRIVILEGE

If a new account is established by an exchange, the dollar amount of
the exchange must at least be equal to the minimum initial investment of the
fund into which the exchange is made; if an exchange is made into an existing
account, the minimum additional investment amount must be met.

TELEPHONE EXCHANGES

You may request exchanges by telephoning the Trust at 579-5700 from
Cincinnati, or toll free (800) 869-5999 from outside Cincinnati. Such request
should include your name and account number and the number of shares or dollar
amount of the fund to be exchanged. Telephone exchanges may be made only when
the registration of the two accounts will be identical and may not be made by
shareholders who have had share certificates issued for their shares.

WRITTEN EXCHANGES

You may also exchange your shares of either Fund by written request
directed to:

Gradison-McDonald Mutual Funds
580 Walnut Street
Cincinnati, Ohio 45202

Such written request should include your name and account number and the number
of shares or dollar amount of the Fund to be exchanged. If you have share
certificates for the shares being exchanged, they must accompany or precede the
exchange request and must be properly endorsed with signatures guaranteed by a
domestic commercial bank or trust company or a member firm of a national
securities exchange. Unless otherwise indicated, a new account established by
written exchange will have the same registration and selected options as your
present account.

5
<PAGE> 27

GENERAL EXCHANGE INFORMATION

An exchange involves a redemption of the shares of the fund being
exchanged and the investment of the redemption proceeds into shares of the fund
being purchased. Both the redemption and investment will occur at the
respective net asset value per share (except in the case of purchases of mutual
funds sold subject to a sales load) next determined after receipt by the Trust
of a proper exchange request. For Federal income tax purposes, an exchange of
shares is considered to be a sale and, depending upon the circumstances, a
short or long-term gain or loss may be realized.

The Gradison-McDonald mutual funds and Gradison (with respect to any
tax-free money market funds) each reserve the right to reject any exchange
request. The exchange feature may be terminated at any time by the
shareholder, the Gradison-McDonald-Mutual Funds or Gradison. In the case of
excessive use of the exchange feature, the Trust, upon 30 days' written notice,
may make reasonable service charges (as specified in the notice) by redeeming
shares from such shareholder's account.

TAXES

Each Fund has qualified, and intends to qualify in the future, as a
regulated investment company under Subchapter M of the Internal Revenue Code
(the "Code"). By so qualifying, the Funds will not be taxed on net investment
income and net realized capital gains distributed to shareholders.

Dividends from net investment income and distributions from net
realized short-term capital gains are taxable to shareholders as ordinary
income, whether paid in cash or in additional shares of a Fund. All or a part
of the dividends distributed to shareholders will qualify for the deduction for
dividends received by corporations. The specific amounts eligible for this
deduction depend upon certain factors set forth in the Code, and the Trust will
furnish shareholders annually with written advice as to the amounts of dividend
distributions eligible for such deduction.

Distributions of any net realized long-term capital gains are taxable
to shareholders as long-term capital gains, whether paid in cash or in
additional shares of a Fund and regardless of the length of time a shareholder
has owned shares of a Fund. These capital gains distributions are not eligible
for the dividends received deduction for corporations. The Trust will furnish
shareholders with written notification as to the amount of any long-term
capital gains concurrently with any distribution that includes long-term
capital gains.

Investors should be aware of the tax implications of purchasing shares
shortly before a record date for a dividend or capital gains distribution. To
the extent that the net asset value of a Fund at the time of purchase reflects
undistributed income or capital gains, or net unrealized appreciation of
securities held by the Fund, a subsequent distribution to the shareholder of
such amounts, although in effect constituting a return of his or her
investment, would be taxable as described above. Correspondingly, for Federal
income tax purposes, a shareholder's tax basis in his or her shares continues
to be his or her original cost, so that upon redemption of shares, capital gain
or loss will be realized in the amount of the difference between the redemption
price and the shareholder's original cost.

6
<PAGE> 28

In order to continue to qualify for treatment as a regulated investment
company under the Internal Revenue Code of 1986, as amended, the Fund must
distribute to its shareholders for each taxable year at least 90% of its
investment company taxable income (consisting generally of taxable net
investment income plus net short-term capital gain, if any), and must meet
several additional requirements. These requirements include the following:
(1) the Fund must derive at least 90% of its gross income each taxable year
from dividends, interest, payments with respect to securities loans, gains from
the sale or other disposition of securities and certain other income; (2) the
Fund must derive less than 30% of its gross income each taxable year from the
sale or other disposition of securities held for less than three months; (3) at
the close of each quarter of the Fund's taxable year, at least 50% of the value
of its total assets must be represented by cash and cash items, U.S. government
securities and other securities, with these other securities limited, in
respect of any one issuer, to an amount that does not exceed 5% of the value of
the Fund's total assets; and (4) at the close of each quarter of the Fund's
taxable year, not more than 25% of the value of its total assets may be
invested in securities (other than U.S. government securities) of any one
issuer.

The Fund will be subject to a nondeductible 4% excise tax to the extent
it fails to distribute by the end of any calendar year substantially all of its
net investment income for that year and any net realized capital gains for the
one-year period ending on October 31 of that year, plus certain other amounts.

Although dividends generally will be treated as distributed when paid,
dividends declared in October, November or December, payable to shareholders of
record on a specified date in such a month and paid in January of the following
year, will be treated as having been received by shareholders on December 31 of
the year in which the dividend was declared.

Redemption or resale of shares of the Fund will be a taxable
transaction for federal income tax purposes. Redeeming shareholders will
recognize a gain or loss in an amount equal to the difference between their
basis in such redeemed shares of the Fund and the amount received. If such
shares are held as a capital asset, the gain or loss will be a capital gain or
loss and will generally be long-term if such shareholders have held their
shares for more than one year. Any loss realized upon a taxable disposition of
shares held for six months or less will be treated as a long-term capital loss
to the extent of any capital gain dividends received with respect to such
shares.

The Fund is required, in certain circumstances, to withhold 31% of
dividends and certain other payments, including redemptions, paid to
shareholders who do not furnish to the Fund their correct taxpayer
identification number or who are otherwise subject to backup withholding.

The Federal income tax matters summarized above are subject to change
by legislation, administrative action and judicial decision. In addition,
shareholders may be subject to state and local taxes with respect to their
ownership of shares or distributions from the Trust. Shareholders should
consult their tax adviser as to their personal tax situation.

7
<PAGE> 29

NET ASSET VALUE

The net asset value of each Fund is calculated once daily Monday
through Friday except on the following holidays: New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day.

The assets and liabilities of each Fund are determined in accordance
with generally accepted accounting principles and the applicable rules and
regulations of the Securities and Exchange Commission. Assets and liabilities
attributable to a specific Fund are allocated to that Fund. Assets and
liabilities not readily attributable to a Fund are allocated to each Fund in a
manner and on a basis determined in good faith by the Trustees to be fair and
equitable.

When calculating the net asset value of the Fund, a security listed or
traded on an exchange is valued at its last sale price on that exchange, or if
there were no sales that day, the security is valued at the closing bid price.
All other portfolio securities for which over-the-counter market quotations are
readily available are valued at the latest bid price. Portfolio securities and
other assets for which market quotations are not readily available are valued
at their fair value as determined by management of the Fund and approved in
good faith by the Board of Trustees. Short-term securities with remaining
maturities of less than 60 days are valued at amortized cost which approximates
market value.

PORTFOLIO TRANSACTIONS

The Adviser is responsible for making the Trust's portfolio decisions,
including allocation of the Trust's brokerage business and negotiation of
brokerage commissions, subject to policies established by the Trust's Board of
Trustees. The Trust places orders for transactions with a number of brokers
and dealers. For the period ended March 31 1995, the aggregate brokerage
commissions paid by the Established Value Fund were $135,330 and for the
Opportunity Value Fund were $51,129. For the fiscal year ended April 30, 1994,
the aggregate brokerage commissions paid by the Established Value Fund were
$224,982 and for the Opportunity Value Fund were $76,520. For the fiscal year
ended April 30, 1993, the aggregate amount of brokerage commissions paid by the
Trust was $157,605 for the Established Value Fund and $79,489 for the
Opportunity Value Fund.

The portfolio turnover rate for the Trust for the respective fiscal
periods ended March 31, 1995 and April 30, 1994, for the Established Value Fund
was 24.23% and 38.39% and for the Opportunity Value Fund was 31.90% and 40.41%.

In purchasing and selling portfolio securities, brokers and dealers are
selected so as to obtain the most favorable net results, taking into account
various factors, including the price of the security, the commission rate, the
size of the transaction, the difficulty of execution and other services offered
by brokers or dealers which are of benefit to the Trust. The Adviser selects
brokers and dealers to execute transactions on the basis of its judgment of
their professional capability to provide the service at reasonably competitive
rates. The Adviser's determination of what constitutes reasonably competitive
rates is based upon its professional judgment and knowledge as to rates paid
and charged for similar transactions throughout the securities industry. The
Adviser may consider sales by brokers or dealers of shares of the Funds of the
Trust when selecting
8
<PAGE> 30
brokers or dealers to execute portfolio transactions as long as the most
favorable net results are obtained.

The Adviser may receive commissions from the Funds for effecting
transactions only in accordance with procedures adopted by the Board of
Trustees. Any procedures adopted by the Trustees will incorporate the standard
contained in Rule 17e-1 under the Investment Company Act of 1940 that the
commissions paid must be "reasonable and fair compared to the commission, fee
or other remuneration received or to be received by other brokers in connection
with comparable transactions involving similar securities during a comparable
period of time". Pursuant to Rule 17e-1, the Board of Trustees will review at
least annually the appropriateness of any procedures in effect and will conduct
compliance reviews at least quarterly and maintain records in connection with
such reviews. The Adviser has assured the Trust that in all transactions
placed with the Adviser, the Funds will be charged a commission that is at
least as favorable as the rate the Adviser charges to its other customers in
similar transactions. No commission charged to the Funds by the Adviser or any
broker affiliated with the Adviser will include compensation for research
services provided by the Adviser or any such affiliated broker. Since
inception of the Funds neither the Adviser nor any broker affiliated with the
Adviser received any commissions from the Funds.

During the period ended March 31, 1995, the Funds purchased commercial
paper of Goldman Sachs Group, L.P., which is an affiliate of one of the Funds'
regular dealers. As of March 31, 1995, $4,974,917 and $1,492,475 of this
commercial paper was held, respectively by the Established Value and
Opportunity Value Funds.

Brokers who provide supplemental investment research to the Adviser may
receive orders for transactions in portfolio securities of the Trust. Such
supplemental research services ordinarily consist of assessments and analyses
of the business or prospects of a company, industry, or economic sector.
Information so received is in addition to and not in lieu of the services
required to be performed by the Adviser under the Investment Advisory Agreement
with the Trust. If in the judgment of the Adviser the commission is reasonable
in relation to the brokerage and research services provided, the Adviser is
authorized to pay brokerage commissions in excess of commissions another broker
would have received for effecting the same transaction, subject to the review
of the Trust's Board of Trustees. Not all such research services may be used
by the Adviser in connection with managing the Funds. The expenses of the
Adviser will not necessarily be reduced as a result of the receipt of such
supplemental information, and the Adviser may use such information in servicing
its other accounts.

Because of the affiliation of the Adviser with the Trust, the Trust is
prohibited from engaging in certain transactions involving the Adviser except
in compliance with the provisions of the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder. Accordingly, the Trust will
not purchase or sell portfolio securities from or to the Adviser in any
transaction in which the Adviser acts as principal, including transactions in
the over-the-counter market. The Trust may purchase securities from other
members of an underwriting syndicate of which the Adviser is a participant, but
only under the conditions set forth in applicable rules of the Securities and
Exchange Commission.

The Board of Trustees of the Trust has considered the possibility of
recapturing, for the benefit of the Trust, underwriting commissions or similar
fees incurred when purchasing portfolio securities and has determined not do
so.

9
<PAGE> 31

The Adviser also serves as the investment adviser to other investment
companies and furnishes investment advice to other clients. Investment
decisions for each Fund of the Trust are made independently from those for the
other Fund and for other Gradison-McDonald mutual funds although other clients
advised by the Adviser may have similar objectives and investment programs as
the Funds. Purchases and sales of particular securities may be effected
simultaneously for such entities and clients. In such instances, the
transactions will be allocated as to price and amount in a manner the Adviser
considers equitable to each of the affected entities or clients, which could
have a detrimental effect upon the price or amount of the securities purchased
or sold for a Fund. On the other hand, in some cases the ability of the Trust
to participate in volume transactions may produce better executions for the
Trust. It is the opinion of the Board of Trustees that the benefits available
to the Trust from retaining the Adviser outweigh any disadvantages that may
arise from exposure to simultaneous transactions.

10
<PAGE> 32

INVESTMENT PERFORMANCE
<TABLE>
<CAPTION>
Total Return
------------
Percentage Change:
------------------
Quarter
Since Inception Year Ending December 31 ended 3/30/95
(8/16/83-3/31/95)---------------------------------------------------------------------------------------
(Not annualized) 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 (Not annualized)
---------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Established 328.9% 4.5% 28.8% 22.3% 12.4% 15.1% 16.0% (8.1%) 22.2% 10.2% 20.7% .3% 7.6%
Value Fund

Standard 341.3% 6.3% 31.8% 18.6% 5.2% 16.4% 31.7% (3.1%) 30.5% 7.6% 10.7% 1.3% 9.7%
and Poor's 500
Stock Index
---------------------------------------------------------------------------------------------------------------------
Opportunity +173.6% (3.2%) 28.1% 13.1% (5.4%) 23.6% 23.1% (13.1%) 35.9% 14.3% 11.1% (2.2%) 3.8%
Value Fund
Russell 2000 +177.5% (7.3%) 31.0% 5.7% (8.8%) 24.9% 16.2% (19.5%) 46.0% 18.4% 18.9% (1.8%) 4.6%
Index
</TABLE>

The Average Annual Total Return of the Funds has been as follows:
<TABLE>
<CAPTION>
Established Standard Opportunity Russell
Value & Poor's Value 2000
Fund 500 Fund Index
----------- -------- ----------- -----
<S> <C> <C> <C> <C>
For 10 years ending 3/31/95 13.41% 14.43% 11.16% 10.59%
For 5 years ending 3/31/95 10.61% 11.41% 9.55% 11.69%
For 12 months ending 3/31/95 7.98% 15.56% 4.08% 5.52%
</TABLE>

The results of all of the Funds and Indices include assumed
reinvestment of dividends and other distributions. Dividend income for the
Standard & Poor's 500 Stock Index for the period from August 16, 1983 to August
31, 1983 is an estimate.

During the quarter ended March 31,1995, the approximate cash position
of the Established Value Fund ranged between 25.2% and 27.8% and stood at 26.3%
on March 31, 1995. For the Opportunity Value Fund, the range of the approximate
cash position was between 24.2% and 29.0%. On March 31, 1995, it stood at
27.8%.

The performance of the Standard & Poor's 500 Composite Stock Price
Index is included to compare the Established Value Fund's results with those of
a group of unmanaged securities widely regarded by investors as representative
of the stock market in general and because it generally represents the universe
from which securities are selected for the Established Value Fund. The
performance of the Russell 2000 Index has been included to compare the results
of the Opportunity Value Fund with those of a universe of securities which is
representative of small company stock performance.

The performance quoted above represents past performance. The
investment return and value of an investment in the Funds will fluctuate so
that an investor's shares may be worth more or less than their cost, when
redeemed.

11
<PAGE> 33

INVESTMENT ADVISER

The Adviser manages the investment and reinvestment of the assets of
the Funds of the Trust in accordance with the Trust's investment objective,
policies and restrictions, subject to the general supervision and control of
the Trust's Board of Trustees and pursuant to the terms of the Investment
Advisory Agreement between the Trust and Adviser.

The Adviser provides to the Trust at its own expense the executive
officers who are necessary for the management and operations of the Trust and
also furnishes to the Trust, at cost, personnel to perform shareholder
services, such as responding to inquiries from shareholders and receiving
purchase orders and redemption requests delivered to the Trust.

ADVISORY AGREEMENT

The Investment Advisory Agreement provides that the Adviser will manage
the investments of each Fund of the Trust, subject to review by the Board of
Trustees of the Trust. The Adviser also bears the cost of salaries and related
expenses of executive officers of the Trust who are necessary for the
management and operation of the Trust and compensates the Trustees who are
affiliated with the Adviser. The Adviser pays a fee (at an annual rate of
$20,000) to William Breen, a professor at Northwestern University, for the
right to use the computer modeling methodology and the related data base
employed for the Funds (see "How the Fund Invests" in the Prospectus). In
addition, except as borne by the Trust pursuant to an effective plan under Rule
12b-1 under the Investment Company Act of 1940, the Adviser bears the expenses
related to distribution of shares of the Funds, such as costs of preparing,
printing and mailing sales literature and other advertising materials, costs of
furnishing prospectuses, annual and semiannual reports of the Trust and other
materials regarding distributing shares of the Trust to potential investors,
and service fee payments to brokers and dealers.

All expenses not specifically assumed by the Adviser and incurred in
the operation of the Trust are borne by the Trust pursuant to the Investment
Advisory Agreement. Some of these expenses may be paid by the Adviser subject
to reimbursement by the Trust. These expenses include expenses for office
space, facilities and equipment and utilities; cost of preparing, printing and
mailing registration statements, prospectuses, periodic reports and other
documents furnished to shareholders and regulatory authorities; such
distribution/service expenses as may be incurred pursuant to an effective plan
under Rule 12b-1 under the Investment Company Act of 1940; registration, filing
and similar fees; legal expenses (including reimbursement to the Adviser for
legal services provided to the Trust, subject to review by the Trust's outside
counsel); auditing and accounting expenses; taxes and other fees; brokers'
commissions and issue or transfer taxes chargeable to the Trust in connection
with securities transactions; expenses of issue, sale, redemption and
repurchase of shares; cost of share certificates; expenses incurred by the
Trust relating to shareholder services (such as responding to inquiries from
shareholders and receiving purchase orders and redemption requests) provided by
the Adviser or others; fees of Trustees who are not affiliated with the
Adviser; charges and expenses of any transfer and dividend disbursing agent,
registrar, custodian or depository appointed by the Trust; other expenses of
the Trust, including expenses of shareholders' and Trustees' meetings; and fees
and other expenses incurred by the Trust in connection with its membership in
any organization. Expenses borne by the Trust and attributable to a specific
Fund are allocated to that Fund; expenses that are not specifically

12
<PAGE> 34

attributable to a Fund are allocated to each Fund in a manner and on a basis
determined in good faith by the Adviser to be fair and equitable (generally, on
the basis of the respective net assets of the Funds), subject to review by the
Trustees.

As compensation for its services under the Investment Advisory
Agreement, the Adviser receives from the Trust a monthly fee based upon the
average value of the daily net assets for the month of each Fund at an annual
rate of .65% on the first $100 million of each Fund, .55% on the next $100
million of each Fund and .45% on any amounts in excess of $200 million of each
Fund. For fiscal periods ended March 31, 1995, April 30, 1994, and April 30,
1993, the advisory fees paid by the Trust to the Adviser, respectively,
amounted to $1,951,674, 1,944,969, and $1,564,137, for the Established Value
Fund and $683,260, $694,530, and $485,606, for the Opportunity Value Fund.

The Adviser will reimburse the Trust for aggregate expenses of a Fund
during any fiscal year which exceed the limits prescribed by any state in which
the shares of that Fund are registered for sale. Currently, the most stringent
limit is 2 1/2% of average net assets up to $30 million, 2% on the next $70
million and 1 1/2% on additional net assets. However, certain expenses such as
brokerage commissions, taxes, interest and items of an extraordinary nature are
excluded from such limitation.

Prior to June 1, 1995, the Adviser furnished directly to the Trust, at
cost, personnel to perform shareholder services, such as responding to
inquiries from shareholders and receiving purchase orders and redemption
requests delivered to the Trust. For the periods ended March 31, 1995, April
30, 1994, and April 30, 1993, the cost to the Trust for such personnel was,
respectively, $97,764, $117,403, and $103,810, as relates to the Established
Value Fund, and $32,231, $38,810, and $32,037, as relates to the Opportunity
Value Fund.

The Investment Advisory Agreement also provides that the Adviser, as a
registered broker-dealer, will distribute the shares of the Funds in states in
which it may be qualified to do so, upon request of the Trust. The Adviser
accepts orders for the purchase of such shares at net asset value only, and no
sales commission, fee or other charge is incurred by the investor. The Adviser
receives no compensation for acting as the Trust's distributor except as may be
provided pursuant to the Distribution Expense Plan of the Trust.

The Investment Advisory Agreement further provides that in the absence
of willful misfeasance, bad faith or gross negligence in the performance of its
duties thereunder, or reckless disregard of its obligations thereunder, the
Adviser is not liable to the Trust or any of its shareholders for any act or
omission by the Adviser. The Agreement in no way restricts the Adviser from
acting as an investment manager or adviser for others.

The Investment Advisory Agreement grants to the Trust the right to use
the name "Gradison" and "McDonald" as a part of its name, without charge,
subject to withdrawal of such right by the Adviser upon not less than 30 days'
written notice to the Trust and subject to the automatic termination of such
right within 30 days after the termination of the Investment Advisory Agreement
for any reason. The Investment Advisory Agreement does not impair the right of
the Adviser to use the name Gradison or McDonald in the name of or in
connection with any other business enterprise with which it is or may become
associated.

13
<PAGE> 35

The Investment Advisory Agreement continues in effect as to each Fund
from year to year if such continuance is specifically approved at least
annually by the vote of the holders of a majority of the outstanding voting
securities of that Fund or by the vote of a majority of the Trust's Board of
Trustees, and in either event by the vote cast in person of a majority of the
Trustees who are not "interested persons" of any party to the Investment
Advisory Agreement.

The Investment Advisory Agreement may be terminated at any time with
respect to either Fund without penalty upon 60 days' written notice by (i) the
Board of Trustees, (ii) the vote of the holders of a majority of the
outstanding voting securities of that Fund or (iii) the Adviser. The
Investment Advisory Agreement will terminate automatically in the event of its
assignment by the Adviser. The Investment Advisory Agreement may be amended at
any time by the mutual consent of the parties thereto, provided that such
consent on the part of the Trust shall have been approved by the vote of the
holders of a majority of the outstanding voting securities of the affected Fund
and by the vote of a majority of the Board of Trustees, including the vote cast
in person by a majority of the Trustees who are not "interested persons" of any
party to the Investment Advisory Agreement.

DISTRIBUTION EXPENSE SERVICE PLAN

The Trust has in effect a Distribution Expense Service Plan (the
"Plan") under Rule 12b-1 of the Investment Company Act of 1940. Rule 12b-1
permits an investment company to finance, directly or indirectly, activities
primarily intended to result in the sale of its shares in accordance with the
provisions of such Rule. The purpose of the Plan is to increase sales of
shares of the Funds to enable the Trust to acquire and retain a sufficient
level of assets to enable it to operate at an efficient level. Higher levels
of assets tend to result in operating efficiencies with respect to the Trust's
fixed costs and portfolio management.

The Plan permits the Trust to incur expenses related to the
distribution of the shares of its Funds, but only as specifically contemplated
by the Plan. Under the Plan, the Trust may incur distribution expenses
relative to a Fund up to an amount that does not exceed an annual rate of .50%
of the average daily net assets of that Fund. Distribution expenses that may
be incurred by the Trust under the Plan within the limitation described above
are limited to (a) payments to broker-dealers (including the Adviser) or other
persons as compensation for personal services rendered to shareholders of the
Funds including providing shareholder liaison services such as responding to
shareholder inquiries and providing information to shareholders about their
accounts, and (b) expenses otherwise promoting the sale of the shares of a
Fund, such as expenses of preparation, printing and mailing prospectuses,
annual and semiannual reports, sales literature and other promotional material
to potential investors and of purchasing radio, television, newspaper and other
advertising. In the absence of exemptive relief from certain provisions of the
Investment Company Act of 1940, as amended, the Trust may incur expenses
relative to a Fund under the Plan only when such expenses are directly
attributable to that Fund and may not incur expenses under the Plan on a joint
basis with other Fund(s).

The Plan also specifically authorizes the payment of those operational
expenses enumerated as being incurred by the Trust pursuant to the Investment
Advisory Agreement, as described under the caption "Advisory Agreement" above,
to the extent that such payments might be considered to be primarily intended
to result in the sale of shares of

<PAGE> 36
the Funds. It further specifically authorizes the payment of advisory fees
pursuant to the Investment Advisory Agreement to the extent that the Trust
might be deemed to be indirectly financing the Adviser's distribution
activities through payment of advisory fees. The Board of Trustees does not
believe that the payment of such operational expenses by the Trust or payment
of the advisory fee constitute the direct or indirect financing of activities
primarily intended to result in the sale of shares of the Funds. Thus,
although such payments are authorized by the Plan as a protective measure, they
are not restricted by the .50% limitation included in the Plan.

In approving the Plan, the Board of Trustees concluded that there was a
reasonable likelihood that the Plan will benefit the Trust and its
shareholders. The Plan was approved by the holders of a majority of the
outstanding shares of each Fund on August 24, 1984. The Plan (together with
any agreements relating to implementation of the Plan) continues in effect as
to each Fund for a period of more than one year only so long as such
continuance is specifically approved at least annually by the vote of a
majority of the Board of Trustees, including the vote of a majority of the
Independent Trustees, cast in person at a meeting called for such purpose. The
Plan may not be amended to materially increase the amount of distribution
expenses incurred by the Trust as to a Fund without the approval of a majority
of the outstanding voting securities of that Fund, and all material amendments
to the Plan must be approved by a majority of the Board of Trustees and a
majority of the Independent Trustees by votes cast in person at a meeting
called for the purpose of voting on such amendment. The Plan may be terminated
as to a Fund at any time by a vote of a majority of the Independent Trustees or
by a vote of the majority of the outstanding voting securities of that Fund.
Any agreement implementing the Plan may be terminated at any time, without the
payment of any penalty, by a vote of a majority of the Independent Trustees or
by a vote of a majority of the outstanding voting securities of the affected
Fund, on not more than 60 days' written notice to the other party to the
agreement, and any related agreement will terminate automatically in the event
of its assignment. The Plan requires that the Board of Trustees receive at
least quarterly written reports as to the amounts expended during each quarter
pursuant to the Plan and the purposes for which such amounts were expended.
While the Plan is in effect, the selection and nomination of those Trustees who
are not "interested persons" (as defined in the Investment Company Act of 1940)
of the Trust shall be committed to the discretion of the disinterested Trustees
then in office.

Pursuant to the Plan, the Trust has entered into a distribution
agreement ("Agreement") with the Adviser. This agreement provides that the
Adviser will receive compensation for rendering personal services to
shareholders of the Funds including providing shareholder liaison services such
as responding to shareholder inquiries and providing information to
shareholders about their Fund accounts at an annual rate of .25% of the value
of the assets of each Fund of the Trust and, additionally, a fee for other
distribution services at an annual rate of .25% of the value of the assets of
each Fund. The Agreement may be terminated at any time, without penalty, by a
vote of a majority of the Independent Trustees of the Trust or by a vote of a
majority of the outstanding voting securities of either Fund. The Agreement is
contingent on the continued effectiveness of the Trust's Distribution Expense
Plan and automatically terminates in the event of its assignment.

During the periods ended March 31, 1995, April 30, 1994, and April 30,
1993, $558,790 $549,288, and $427,530, respectively, were paid by the
Established Value Fund, and $178,864, $172,893, and $121,331, respectively,
were paid by the Opportunity Value Fund to

15
<PAGE> 37
securities broker-dealers (substantially all of which was received by McDonald)
for their assistance in distributing shares of the Fund.

TRANSFER AGENT AND ACCOUNTING SERVICES AGREEMENT

Pursuant to the Transfer Agent and Accounting Services Agreement,
Gradison provides transfer agent, dividend disbursing, and accounting services
for the Fund. Gradison responds to inquiries from shareholders, processes
purchase and redemption requests, maintains shareholder account records and
provides statements and confirmations to shareholders and maintains the Fund's
books and accounting records. This Agreement become effective June 1, 1995.
Prior to that, the services provided pursuant to the Agreement were provided
pursuant to a Data Processing Services Agreement and cost-reimbursement of the
Adviser. For the periods ending March 31, 1995, April 30, 1994, and April 30,
1993, the fees paid pursuant to the Data Processing Services Agreement were
respectively $93,708, $89,142, and $89,081 with respect to the Established
Value Fund and $45,784, $29,168, and $39,336 with respect to the Opportunity
Value Fund.

TRUSTEES AND OFFICERS OF THE TRUST

The Trustees and officers of the Trust, together with information as to
their principal occupations during the past five years and positions currently
held with Gradison-McDonald Cash Reserves Trust ("GMCR"), Gradison Custodian
Trust ("GCT"), and Gradison-McDonald Municipal Custodian Trust ("GMMCT"),
Gradison, and McDonald, are listed below. All principal occupations have been
held for at least five years unless otherwise indicated. Positions held with
Gradison were formerly held with Gradison & Company Incorporated.

*DONALD E. WESTON, 580 Walnut Street, Cincinnati, Ohio. Trustee and
Chairman of the Board; Chairman of Gradison; Director of McDonald & Company
Investments, Inc. and Cincinnati Milacron Commercial Corp. (financing of
capital goods); Trustee and Chairman of the Board of GMCR, GCT, and GMMCT.

DANIEL J. CASTELLINI, 312 Walnut Street, Cincinnati, Ohio. Trustee; Senior
Vice President/Finance and Administration of the E.W. Scripps Company
(communications); Director and Treasurer of Scripps Howard Broadcasting
Company; Trustee of GMCR, GCT, and GMMCT.

THEODORE H. EMMERICH, 1201 Edgecliff Place, Cincinnati, Ohio. Trustee.
Retired; Former managing partner (Cincinnati office) Ernst & Young (independent
public accountants); Director of Carillon Fund, Inc.(investment company),
American Financial Group Inc.(insurance), Citicasters, Inc.,(broadcasting) and
Cincinnati Milacron Commercial Corp.; Trustee of Summit Investment Trust and
Carillon Investment Trust (investment companies); Trustee of GMCR, GCT, and
GMMCT.

JEROME E. SCHNEE, 11558 Stable Watch Court, Cincinnati, Ohio 45249. Trustee.
Professor of Management, College of Business Administration, University of
Cincinnati, Director of National Sanitary Supply Co. and Roto Rooter, Inc.;
Trustee of GMCR, GCT, and GMMCT.

RICHARD A. RANKIN, 434 Scott Street, Covington, Kentucky 41011. Trustee.
Partner, Rankin and Rankin (independent public accountants); Trustee GMCR, GCT,
and GMMCT.

16
<PAGE> 38

BRADLEY E. TURNER, 580 Walnut Street, Cincinnati, Ohio. President.
Managing Director of McDonald; President of GMCR, GCT, and GMMCT.

WILLIAM J. LEUGERS, JR., 580 Walnut Street, Cincinnati, Ohio. Executive Vice
President and Portfolio Manager of the Gradison-McDonald Established and
Opportunity Value Funds. Executive Vice President of Gradison.

JULIAN BALL, 800 Superior Avenue, Cleveland, Ohio. Executive Vice President
and Portfolio Manager of the Gradison-McDonald Growth and Income Fund; Vice
President of McDonald since July 1994; prior to that, Vice President of Duff &
Phelps Investment Management Company.

PAUL J. WESTON, 580 Walnut Street, Cincinnati, Ohio. Senior Vice President;
Executive Vice President of GMCR; Senior Vice President of GCT, and GMMCT;
Executive Vice President of Gradison; Director of McDonald. Mr. Weston is the
brother of Donald E. Weston.

DANIEL R. SHICK, 580 Walnut Street, Cincinnati, Ohio. Vice President;
Senior Vice President of Gradison.

ALFRED M. BRUNNER, 580 Walnut Street, Cincinnati, Ohio. Vice President; Vice
President of Gradison.

RICHARD M. WACHTERMAN, 580 Walnut Street, Cincinnati, Ohio 45202.
Secretary; Senior Vice President and General Counsel of Gradison. Secretary
of GMCR, GCT, and GMMCT.

PATRICIA JAMIESON, 800 Superior Avenue, Cleveland, Ohio 44114. Treasurer; Chief
Accounting Officer, McDonald; Treasurer of GMCR, GCT, and GMMCT.

MARK A. FRIETCH, 580 Walnut Street, Cincinnati, Ohio. Assistant Treasurer.
Assistant Treasurer of GMCR, GCT, and GMMCT (since May 1995); Controller of
Gradison-McDonald mutual funds; prior to that Financial Consultant and
Assistant Controller of Union Central Life Insurance Company.

_____________________________________________
*Interested and affiliated person as defined by the Investment Company Act of
1940, because of employment with and stock ownership of the investment adviser.

Trustees and officers of the Trust who are affiliated with the Adviser receive
no remuneration from the Trust. Trustees who are not affiliated with the
Adviser receive fees as determined by the Board of Trustees. As of August 11,
1995, the Trustees and officers of the Trust owned an aggregate of less than 1%
of the outstanding shares of the Established Value Fund and the Opportunity
Value Fund and no person was known to own 5% or more of the shares of either
Fund.
17
<PAGE> 39

Trustee Compensation Table
--------------------------

<TABLE>
<CAPTION>
Name of Trustee Aggregate Total Compensation
---------------- Compensation From Trust and fund
From Trust* complex (3 additional
----------- Trusts) paid to
trustee*
--------

<S> <C> <C>
Theodore H. Emmerich** 0 $18,833
Richard A. Rankin** 0 $18,833
Jerome E. Schnee** 0 $18,833
Daniel J. Castellini $6,083 $10,500
</TABLE>

* Amounts shown as compensation from the Gradison Growth Trust are for the
period ending March 31, 1995. Amounts shown as compensation from the Fund and
the fund complex are for the year ending December 31, 1994. The Trust
maintains a deferred compensation plan which allows trustees to defer receipt
of trustee fees otherwise payable to them until a future date. Deferred
amounts are credited with interest at a rate equal to the yield of the
Gradison-McDonald U.S. Government Reserves Fund. The Trust does not maintain
any other pension or retirement plans.

** Commenced service as trustee on April 12, 1995.

DESCRIPTION OF THE TRUST

The Trust is a diversified, open-end investment company organized under
the laws of the State of Ohio by a Declaration of Trust dated May 31, 1983,
which was amended on July 27, 1983. The Declaration of Trust provides for an
unlimited number of full and fractional shares of beneficial interest, without
par value, of any series authorized by the Board of Trustees. The Board of
Trustees has authorized the issuance of shares of two series, representing the
Established Value Fund and the Opportunity Value Fund, respectively, (named the
Gradison Established Growth Fund and the Gradison Opportunity Growth Fund,
respectively, prior to August 3, 1992). Any additional series of shares must
be issued in compliance with the Investment Company Act of 1940 and must not
constitute a security that is senior to the shares offered pursuant to the
Prospectuses. Each share of each series represents an equal, proportionate
interest in the related Fund with each other share of that series. All shares
are of the same class and are freely transferable. Upon issuance and sale in
accordance with the terms of the offering, each share will be fully paid and
nonassessable. Shares have no preemptive, subscription or conversion rights
and are redeemable as set forth under "How to Redeem Shares."

Holders of shares of each series are entitled to one vote per share;
however, separate votes are taken by each series on matters specifically
affecting the related Fund. Voting rights are not cumulative, which means that
the holders of more than 50% of the shares voting in any election of Trustees
can elect all of the Trustees of the Trust if they choose to do so, in which
event the holders of the remaining shares will be unable to elect a Trustee.
Trustees were initially elected by the shareholders at the first annual meeting
of shareholders, at special meetings of shareholders, and may be appointed by
the remaining trustees under certain circumstances. Under the Declaration of
Trust, no

18
<PAGE> 40

further meetings of shareholders are required to be held for the
purpose of electing Trustees, unless less than a majority of Trustees holding
office have been elected by the shareholders. Shareholders' meetings will be
held only when required pursuant to the Declaration of Trust or the Investment
Company Act of 1940, and when called by the Trust or share holders pursuant to
the Declaration of Trust. Pursuant to the Declaration of Trust, shareholders
of record of not less than two-thirds of the outstanding shares of the Trust
may remove a Trustee through a declaration in writing or by vote cast in person
or by proxy at a meeting called for that purpose. The Trustees are required to
call a meeting of shareholders for the purpose of voting upon the question of
removal of any Trustee when requested in writing to do so by shareholders of
record of not less than 10 percent of the Trust's outstanding shares. Whenever
the approval of a majority of the outstanding shares of a Fund of the Trust is
required in connection with shareholder approval of the Investment Advisory
Agreement or the Distribution Expense Plan, or changes in the investment
objective or the investment restrictions, a "majority" shall mean the vote of
(i) 67% or more of the outstanding shares of the Fund present at a meeting, if
the holders of more than 50% of the outstanding shares of that Fund are present
in person or by proxy, or (ii) more than 50% of the outstanding shares of that
Fund, whichever is the lesser.

The assets of the Trust received upon the issuance of the shares of
each Fund and all income, earnings, profits and proceeds thereof, subject only
to the rights of creditors, are especially allocated to each such Fund and
constitute the underlying assets of each such Fund. The underlying assets of
each Fund are segregated on the books of account and are to be charged with the
liabilities in respect to each such Fund and with a share of the general
liabilities of the Trust. In the event of the termination and liquidation of
the Trust, the holders of the shares of any series are entitled to receive, as
a class, the underlying assets of the related Fund available for distribution
to shareholders.

The Trust is currently operating, and intends to continue to operate,
in compliance with the Ohio law relating to business trusts. Under Ohio law,
the shareholders of a complying business trust have no liability to third
persons for obligations of the Trust, which are to be satisfied solely from the
Trust's property. The Declaration of Trust provides that no Trustee, officer
or agent of the Trust shall be personally liable to any person for any action
or failure to act except (1) for his own bad faith, willful misfeasance, gross
negligence, or reckless disregard of his duties, (2) with respect to any
matters as to which he did not act in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the Trust, or (3)
in the case of any criminal proceeding, with respect to any conduct which he
had reasonable cause to believe was unlawful.

CUSTODIAN

Star Bank, N.A.. ("Star Bank"), Star Bank Center, Cincinnati, Ohio
45201 acts as the custodian of the portfolio securities and other assets of the
Trust. Star Bank has no part in determining the investment policies of the
Trust or the securities which are to be purchased, held or sold by the Trust.
The Trust may purchase or sell securities from or to Star Bank.

19
<PAGE> 41

ACCOUNTANTS

Arthur Andersen LLP, 425 Walnut Street, Cincinnati, Ohio 45202, is the
independent public accountant for the Trust.

LEGAL COUNSEL

Kirkpatrick & Lockhart LLP acts as legal counsel to the Trust.

<PAGE> 42
ESTABLISHED VALUE
FUND

STATEMENT OF NET ASSETS MARCH 31, 1995

<TABLE>
<CAPTION>
NUMBER COMMON STOCKS - 74.97% VALUE
OF SHARES
<S> <C> <C>
AEROSPACE/DEFENSE
COMPANIES - 7.29%
99,756 Lockheed Martin Corporation $ 5,274,599
150,000 Loral Corporation 6,375,000
63,200 Raytheon Company 4,605,700
70,000 Textron, Inc. 3,963,750
------------
20,219,049
------------
AUTOMOTIVE - 6.08%
86,000 Chrysler Corporation 3,601,250
86,000 Cummins Engine Company, Inc. 3,848,500
149,000 Echlin, Inc. 5,736,500
136,000 Ford Motor Company 3,672,000
------------
16,858,250
------------
CHEMICALS - 4.49%
193,500 Engelhard Corporation 5,732,438
144,000 Hercules, Inc. 6,714,000
------------
12,446,438
------------
COMPUTING PRODUCTS - 10.20%
186,000 (1) Compaq Computer Corporation 6,417,000
80,000 Intel Corporation 6,780,000
62,000 International Business
Machines Corporation 5,076,250
148,000 (1) Sun Microsystems, Inc. 5,106,000
103,000 Tandy Corporation 4,918,250
------------
28,297,500
------------
CONSUMER DURABLES - 7.20%
140,000 Briggs & Stratton Corporation 5,162,500
177,000 Fleetwood Enterprises, Inc. 4,181,625
97,000 Goodyear Tire & Rubber
(The) Company 3,564,750
130,000 Pulte Corporation 3,055,000
73,000 Whirlpool Corporation 3,996,750
------------
19,960,625
------------
FINANCIAL SERVICES - 9.61%
101,000 Beneficial Corporation 3,964,250
119,000 Household International, Inc. 5,176,500
42,000 ITT Corporation 4,310,250
110,000 Providian Corporation 3,863,750
70,000 Transamerica Corporation 3,963,750
139,000 Travelers, Inc. 5,368,875
------------
26,647,375
------------
</TABLE>

<TABLE>
<CAPTION>
NUMBER COMMON STOCKS (CONTINUED) VALUE
OF SHARES
<S> <C> <C>
INDUSTRIAL PRODUCTS - 5.82%
120,000 Foster Wheeler Corporation $ 4,065,000
90,000 Goodrich (B.F.) Company 3,993,750
90,000 Harris Corporation 4,308,750
74,000 Johnson Controls, Inc. 3,764,750
------------
16,132,250
------------
NATURAL RESOURCES /
FOREST PRODUCTS - 5.88%
118,000 Ashland Oil, Inc. 4,203,750
145,000 Coastal Corporation 4,168,750
55,000 International Paper Company 4,131,875
85,000 Temple-Inland, Inc. 3,814,375
------------
16,318,750
------------
RETAIL TRADE - 6.05%
138,400 American Greetings Corporation 4,117,400
160,000 American Stores Company 4,100,000
99,000 Mercantile Stores, Inc. 4,417,875
254,000 Wendy's International, Inc. 4,159,250
------------
16,794,525
------------
TELEPHONE
COMMUNICATIONS - 4.36%
187,500 (1) Andrew Corporation 7,593,750
220,000 MCI Communications
Corporation 4,510,000
------------
12,103,750
------------
TRANSPORTATION - 7.99%
190,000 Consolidated Freightways, Inc. 5,058,750
75,000 Consolidated Rail Corporation 4,209,375
67,000 (1) Federal Express Corporation 4,530,875
156,000 Pittston Services Group 4,290,000
170,000 Ryder System, Inc. 4,080,000
------------
22,169,000
------------
TOTAL COMMON STOCKS
(COST = $145,898,815) $207,947,512
------------
</TABLE>

See accompanying notes to financial statements.

Financial Statement Page 1

<PAGE> 43
STATEMENT OF NET ASSETS MARCH 31, 1995

<TABLE>
<CAPTION>
PRINCIPAL COMMERCIAL PAPER - 12.56% MATURITY INTEREST VALUE
AMOUNT RATE (2)
<S> <C> <C> <C> <C>
$ 5,000,000 Du Pont (E.I.) de Nemours &Company 05/09/95 5.98% $ 4,968,439
5,000,000 Goldman Sachs Group (The), L.P. 05/01/95 6.02 4,974,917
5,000,000 Heinz, (H.J.) Company 04/26/95 5.97 4,979,271
5,000,000 Minnesota Mining & Mfg. Company 05/22/95 5.97 4,957,713
5,000,000 Phillip Morris Company 04/21/95 6.00 4,983,333
5,000,000 SmithKline Beecham Corporation 05/12/95 5.98 4,965,947
5,000,000 Southwestern Bell Corporation 04/04/95 5.93 4,997,529
-----------
TOTAL COMMERCIAL PAPER (COST = $34,827,149) 34,827,149
-----------
</TABLE>

<TABLE>
<CAPTION>
PRINCIPAL DISCOUNT NOTE - 13.73% MATURITY INTEREST VALUE
AMOUNT RATE (2)
<S> <C> <C> <C> <C>
$38,100,000 Federal Home Loan Bank
(Cost = $38,086,771) 04/01/95 6.25% $ 38,086,771
------------

TOTAL INVESTMENTS, AT VALUE (NOTE 1) (COST = $218,812,735) - 101.26% 280,861,432

DIVIDEND & INTEREST RECEIVABLE - 0.14% 398,433
RECEIVABLE FOR FUND SHARES SOLD - 0.08% 212,811
PAYABLE FOR FUND SHARES REDEEMED - (1.41%) (3,898,037)
ACCRUED INVESTMENT ADVISORY FEE (NOTE 2) - (0.07%) (188,508)
OTHER ACCRUED EXPENSES PAYABLE TO ADVISER (NOTE 2) - (0.02%) (71,289)
OTHER ASSETS & LIABILITIES, NET - 0.02% 54,865
------------

NET ASSETS - APPLICABLE TO 11,862,814 OUTSTANDING SHARES
(NO PAR VALUE - UNLIMITED NUMBER OF SHARES AUTHORIZED)(NOTE 4) - 100% $277,369,707
============

NET ASSET VALUE AND REDEMPTION PRICE PER SHARE (NOTE 1) $23.38
======
<FN>
(1) Non-income producing.
(2) For commercial paper and discount notes, the rate is the discount rate
at the time of purchase by the Fund.
</TABLE>

See accompanying notes to financial statements.

Financial Statement Page 2

<PAGE> 44

<TABLE>
STATEMENT OF OPERATIONS FOR THE ELEVEN MONTHS ENDED
MARCH 31, 1995 (NOTE 1)

<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 3,937,169
Interest 3,418,779
-----------
Total investment income $ 7,355,948
EXPENSES:
Investment advisory fees (Note 2) 1,951,674
Distribution (Note 2) 558,790
Personnel costs (Note 2) 97,764
Data processing fees (Note 2) 93,708
Postage and mailing 30,017
Printing 24,433
Professional fees 22,904
Custodian fees 19,629
Registration fees 19,513
TrusteesG fees (Note 2) 13,030
Other 34,785
-----------
TOTAL EXPENSES 2,866,247
-----------
NET INVESTMENT INCOME 4,489,701
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments 7,099,956
Net increase in unrealized appreciation of investments 11,638,554
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 18,738,510
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $23,228,211
===========

See accompanying notes to financial statements.
</TABLE>

Financial Statement Page 3

<PAGE> 45

STATEMENTS OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
ELEVEN MONTHS
ENDED YEAR ENDED
MARCH 31, 1995 APRIL 30, 1994
(NOTE 1)
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 4,489,701 $ 2,713,987
Net realized gain on investments 7,099,956 12,281,145
Net increase in unrealized
appreciation of investments 11,638,554 8,215,133
------------- -------------
Net increase in net assets resulting from operations 23,228,211 23,210,265
------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (4,392,688) (2,238,638)
Net realized capital gains (7,525,690) (10,051,216)
------------- -------------
Decrease in net assets from distributions to shareholders (11,918,378) (12,289,854)
------------- -------------
FROM FUND SHARE TRANSACTIONS:
Proceeds from shares sold 163,689,905 201,048,434
Net asset value of shares issued in reinvestment of distributions 11,790,560 12,147,143
Payments for shares redeemed (162,712,174) (174,425,568)
------------- -------------
Net increase in net assets from Fund share transactions 12,768,291 38,770,009
------------- -------------
TOTAL INCREASE IN NET ASSETS 24,078,124 49,690,420

NET ASSETS:
Beginning of period 253,291,583 203,601,163
------------- -------------
End of period (including undistributed net investment
income of $596,222 and $499,209, respectively) (Note 1) $ 277,369,707 $ 253,291,583
============= =============
NUMBER OF FUND SHARES:
Sold 7,449,070 8,868,177
Issued in reinvestment of distributions to shareholders 541,606 554,490
Redeemed (7,377,921) (7,697,837)
------------- -------------
Net increase in shares outstanding 612,755 1,724,830
Outstanding at beginning of period 11,250,059 9,525,229
------------- -------------
Outstanding at end of period 11,862,814 11,250,059
============= =============
</TABLE>
See accompanying notes to financial statements.

Financial Statement Page 4

<PAGE> 46

NOTES TO FINANCIAL STATEMENTS MARCH 31, 1995

NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES

Gradison Growth Trust (the "Trust") is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management investment
company. The Trust was created under Ohio law on May 31, 1983; it commenced
investment operations and the public offering of its shares on August 16, 1983.
The Trust consists of three series, the Gradison-McDonald Established Value
Fund, the Gradison-McDonald Opportunity Value Fund and the Gradison-McDonald
Growth & Income Fund (collectively, the "Funds"); each of which in effect
represents a separate fund with its own investment policies. This Annual Report
to Shareholders pertains only to the Gradison-McDonald Established Value Fund
(the "Fund").

The Fund changed its fiscal year end to March 31, effective with the September
30, 1994 Semiannual Report.

The following is a summary of the Fund's significant accounting policies:

SECURITIES VALUATION -- Portfolio securities listed or traded on the New York or
American Stock Exchanges are valued at the last sale price on that exchange, or
if there were no sales that day, the securities are valued at the closing bid
price. All other portfolio securities for which over-the-counter market
quotations are readily available are valued at the latest bid price. Commercial
paper and discount notes are valued using the amortized cost method which
approximates market value. This involves initially valuing a security at its
original cost and thereafter assuming a constant amortization to maturity of
any discount or premium. Portfolio securities for which market quotations are
not readily available are valued at their fair value as determined in good
faith under procedures adopted by the Board of Trustees.

Repurchase agreements, which are collateralized by U.S. Government obligations,
are valued at cost which, together with accrued interest, approximates market.
Collateral for repurchase agreements is held in safekeeping in the
customer-only account of the Fund's custodian. At the time the Fund enters into
a repurchase agreement, the seller agrees that the value of the underlying
security, including accrued interest, will be equal to or exceed the face
amount of the repurchase agreement. In the event of a bankruptcy or other
default of the seller of a repurchase agreement, the Fund could experience both
delays in liquidating the underlying security and losses. These losses would
not exceed an amount equal to the difference between the liquidating value of
the underlying security and the face amount of the repurchase agreement and
accrued interest. To minimize the possibility of loss, the Fund enters into
repurchase agreements only with selected domestic banks and securities dealers
which the Fund's investment adviser believes present minimal credit risk. There
were no repurchase agreements held in the portfolio at March 31, 1995.

SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions are
accounted for on the trade date (the date the order to buy or sell is
executed), and dividend income is recorded on the ex-dividend date. Interest
income is accrued as earned. Gains and losses on sales of investments are
calculated on the identified cost basis for financial reporting and tax
purposes.

TAXES -- It is the Fund's policy to comply with the provisions of the Internal
Revenue Code available to regulated investment companies. As provided therein,
in any fiscal year in which the Fund so qualifies, and distributes at least 90%
of its taxable net income, the Fund will be relieved of federal income tax on
the income distributed. Accordingly, no provision for income taxes has been
made.

In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends in
each calendar year, at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains, if any (earned
during the twelve months ended October 31), plus undistributed amounts from
prior years.

The tax basis of investments is equal to the cost as shown on the Statement of
Net Assets.

Financial Statement Page 5

<PAGE> 47

NOTES TO FINANCIAL STATEMENTS MARCH 31, 1995

For both financial reporting and tax purposes, gross unrealized appreciation
and gross unrealized depreciation of securities at March 31, 1995 was
$64,003,240 and $1,954,543, respectively.

FUND SHARE VALUATION AND DISTRIBUTIONS TO SHAREHOLDERS -- The net asset value
per share is computed by dividing the net asset value of the Fund (total assets
less total liabilities) by the number of shares outstanding. The redemption
price per share is equal to the net asset value per share.

Distributions to shareholders are recorded on the ex-dividend date. During the
period ended March 31, 1995, the Fund made total distributions of $1.03 per
share, of which $.37 is treated as dividend income and $.66 is treated as
long-term capital gain.

EXPENSES -- Common expenses incurred by the Trust are allocated to the Fund
based on the ratio of the net assets of the Fund to the combined net assets of
the Trust. In all other respects, expenses are charged to the Fund as incurred
on a specific identification basis.

RECLASSIFICATION OF CAPITAL ACCOUNTS -- During the prior fiscal year, the Fund
adopted Statement of Position 93-2 "Determination, Disclosure, and Financial
Statement Presentation of Income, Capital Gain, and Return of Capital
Distributions by Investment Companies" ("SOP"). The purpose of this SOP is to
report the undistributed net investment income and accumulated net realized
capital gain (loss) accounts in such a manner as to approximate amounts
available for future distributions (or to offset future realized capital gains)
and to achieve uniformity in the presentation of distributions by investment
companies.

During the current fiscal year, the Fund has reclassified $375,314 from
accumulated undistributed net investment income to accumulated undistributed
net realized gains in compliance with this SOP. This reclassification, which
has no impact on the net asset value of the Fund, is primarily attributable to
certain differences in the computation of net investment income and capital
gains under federal tax rules and generally accepted accounting principles.
Additional adjustments may be necessary in subsequent reporting periods.

NOTE 2 -- TRANSACTIONS WITH AFFILIATES

The Trust's investments are managed, subject to the general supervision and
control of the Trust's Board of Trustees, by McDonald & Company Securities,
Inc. ("McDonald"), a registered investment adviser and securities dealer,
pursuant to the terms of an Investment Advisory Agreement ("Agreement"). Under
the terms of the Agreement, the Fund pays McDonald a fee computed and accrued
daily and paid monthly based upon the Fund's daily net assets at the annual
rate of .90% on the first $100 million, .80% on the next $100 million and .70%
on any amounts in excess of $200 million. McDonald is to reimburse the Fund for
the amount by which the Fund's aggregate expenses for a fiscal year, including
the advisory fee but excluding interest, taxes and extraordinary expenses,
exceed limits set by state securities regulations. No such reimbursement was
required for the period ended March 31, 1995.

Under the terms of the Agreement, the Fund reimburses McDonald for the cost of
furnishing personnel to perform shareholder and certain other services for the
Fund. The Agreement also provides that McDonald bear the cost of salaries and
related expenses of executive officers of the Fund who are necessary for the
management and operations of the Fund. In addition, McDonald bears the costs of
preparing, printing and mailing sales literature and other advertising
materials, and compensates the Fund's trustees who are affiliated with
McDonald. All expenses not specifically assumed by McDonald are borne by the
Fund. Effective June 1, 1995, the Fund will pay McDonald an investment advisory
fee at an annual rate of .65% on the first $100 million, .55% on the next $100
million and .45% on any amounts in excess of $200 million.

Financial Statement Page 6

<PAGE> 48

NOTES TO FINANCIAL STATEMENTS MARCH 31, 1995

Under the terms of a Data Processing Agreement between the Trust and McDonald,
the Fund pays McDonald a monthly fee at an annual rate of $7.36 per shareholder
non-zero balance account for data processing services provided to the Fund plus
the cost of shareholder statement printing.

Effective June 1, 1995, the Fund and McDonald have executed a Transfer Agency,
Accounting Services and Administrative Services Agreement ("Services
Agreement"). Under the terms of the Services Agreement, McDonald will provide
transfer agent, dividend disbursing, accounting services and administrative
services to the Fund. The Fund will pay McDonald a monthly fee for transfer
agency and administrative services at an annual rate of $18.25 per shareholder
non-zero balance account, plus out-of-pocket costs for statement paper,
statement and reply envelopes and reply postage. The Fund will pay McDonald a
monthly fee for accounting services based on the Fund's average daily net
assets at an annual rate of .03% on the first $100 million, .02% on the next
$100 million and .01% on any amount in excess of $200 million, with a minimum
annual fee of $40,000. The Services Agreement replaces the Data Processing
Agreement and the fund's reimbursement of McDonald's cost of furnishing
personnel to perform shareholder and certain other services.

In accordance with the terms of a Distribution Service Plan adopted under Rule
12b-1 of the Investment Company Act of 1940, the Fund pays McDonald a fee for
its assistance in distribution of shares of the Fund. This fee is computed and
paid at an annual rate of .25% of average daily net assets and may be more or
less than actual expenses incurred by McDonald for rendering distribution
services.

Effective June 1, 1995, the Distribution Service Plan was amended to increase
the total fee to .50%. The Fund will pay McDonald a service fee for personal
services to shareholders, including shareholder liaison services such as
responding to shareholder inquiries and providing information to customers
about their Fund accounts. This fee is computed and paid at an annual rate .25%
of the Fund's average daily net assets. The Fund will also pay McDonald a fee
for its assistance in selling shares of the Fund, including advising
shareholders regarding purchase, sale and retention of Fund shares. This fee
will be computed and paid at an annual rate of .25% of the Fund's average daily
net assets.

The officers of the Trust are also officers of McDonald.

Each trustee of the Trust who is not affiliated with McDonald receives fees
from the Trust for services as a trustee. The amounts of such fees for each
trustee are as follows: (a) an annual fee of $5,000 payable in quarterly
installments for service during each fiscal quarter and (b) $500 for each Board
of Trustees or committee meeting attended.

NOTE 3 -- SUMMARY OF PURCHASES AND SALES OF INVESTMENTS

For the period ended March 31, 1995, purchases and sales of securities,
excluding short-term securities, amounted to $54,964,366 and $38,295,010,
respectively.

NOTE 4 -- NET ASSETS

At March 31, 1995, net assets of the Fund consisted of:
<TABLE>
<S> <C>
Aggregate paid-in capital $208,174,852
Accumulated undistributed net investment income 596,222
Accumulated undistributed net realized gains 6,549,936
Net unrealized appreciation of investments 62,048,697
------------
Net assets $277,369,707
============
</TABLE>

NOTE 5 -- SUBSEQUENT EVENT

The Board of Trustees declared a dividend from net investment income of $0.12
per share and a long-term capital gain distribution of $0.54 per share payable
on May 26, 1995 to shareholders of record on May 25, 1995.

Financial Statement Page 7

<PAGE> 49

ARTHUR
ANDERSEN
ARTHUR ANDERSEN & CO, SC

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and Board of Trustees of the
Gradison-McDonald Established Value Fund
of the Gradison Growth Trust:

We have audited the accompanying statement of net assets of the
Gradison-McDonald Established Value Fund of the Gradison Growth Trust (an Ohio
business trust), as of March 31, 1995, and the related statement of operations
for the period then ended, the statements of changes in net assets for the
periods indicated thereon, and the financial highlights for each of the three
periods in the period then ended. These financial statements and financial
highlights are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits. The financial highlights for each of the two years in the
period ended April 30, 1992, of the Gradison-McDonald Established Value Fund
of the Gradison Growth Trust, were audited by other auditors whose report dated
May 22, 1992, expressed an unqualified opinion on those financial highlights.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of March 31, 1995, by correspondence with the custodian. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Gradison-McDonald Established Value Fund of the Gradison Growth Trust as of
March 31, 1995, the results of its operations for the period then ended, the
changes in its net assets for the periods indicated thereon, and the financial
highlights for each of the three periods in the period then ended, in
conformity with generally accepted accounting principles.

Cincinnati, Ohio,
May 25, 1995

Financial Statement Page 8

<PAGE> 50

OPPORTUNITY VALUE
FUND

<TABLE>
STATEMENT OF NET ASSETS MARCH 31, 1995
<CAPTION>
NUMBER
OF SHARES COMMON STOCKS -- 72.24% VALUE
<S> <C> <C>
BANKS -- 7.29%
29,600 Boatmen's Bankshares, Inc. $ 895,400
5,000 First Empire State Corporation 855,000
31,100 Firstar Corporation 917,450
45,000 HUBCO, Inc. 714,375
30,750 Mercantile Bankshares
Corporation 672,656
24,050 Old Kent Financial Corporation 754,569
24,800 Union Planters Corporation 573,500
29,000 West One Bancorp 790,250
----------
6,173,200
----------
BUSINESS SERVICES -- 5.76%
45,000 ABM Industries, Inc. 1,023,750
27,000 Banta Corporation 891,000
50,000(1) Norstan, Inc. 1,125,000
26,000 PHH Corporation 988,000
18,000 Xtra Corporation 850,500
----------
4,878,250
----------
COMPUTER HARDWARE -- 7.27%
50,000(1) Adaptec, Inc. 1,637,500
55,000(1) Dallas Semiconductor
Corporation 1,010,625
37,500(1) D.H. Technologies, Inc. 778,125
60,000(1) EXAR Corporation 1,260,000
50,000 Quantum Corporation 743,750
45,000(1) Standard Microsystems
Corporation 731,250
----------
6,161,250
----------
COMPUTER SOFTWARE -- 3.13%
48,500(1) BancTec Inc. 727,500
11,250(1) Keane Inc. 272,813
29,000(1) Legent Corporation 949,750
51,000 Western Digital Corporation 701,250
----------
2,651,313
----------
CONSUMER DURABLES -- 4.37%
24,000 Arvin Industries Inc. 510,000
42,000 Culp, Inc. 378,000
28,500 Durakon Industries, Inc. 448,875
27,000(1) Mueller Industries, Inc. 901,125
14,000 Sturm, Ruger & Company, Inc. 446,250
47,000 Wynn's International, Inc. 1,016,375
----------
3,700,625
----------
<CAPTION>
NUMBER
OF SHARES COMMON STOCKS (CONTINUED) VALUE
<S> <C> <C>
CONSUMER NON-DURABLES -- 3.56%
50,000(1) CSS Industries, Inc. $ 887,500
50,000 Comair Holdings, Inc. 862,500
29,000 Galey & Lord, Inc. 351,625
34,000 Oxford Industries, Inc. 654,500
6,000 Raven Industries, Inc. 114,000
7,000(1) Vista Resources, Inc. 149,625
----------
3,019,750
----------
ELECTRONICS -- 7.42%
100,000(1) Aerovox Incorporated 700,000
61,000(1) Audiovox Corporation 396,500
140,000 Griffon Corporation 1,190,000
55,000(1) Input/Output, Inc. 1,450,625
40,650(1) Kent Electronics Corporation 1,199,175
30,000 Pioneer Standard Electronics, Inc. 532,500
69,000(1) Sterling Electronics Corporation 819,375
----------
6,288,175
----------
FINANCIAL SERVICES -- 3.64%
47,000 Aames Financial Corporation 599,250
48,000 ADVANTA Corporation 1,584,000
21,000 TCF Financial Corporation 905,625
----------
3,088,875
----------
HEALTH CARE -- 8.26%
49,000(1) Community Health Systems, Inc. 1,543,500
20,000(1) Cordis Corporation 1,455,000
35,000(1) HEALTHSOUTH Corporation 1,421,875
43,500 Isomedix, Inc. 641,625
70,000(1) NovaCare, Inc. 551,250
55,000(1) Universal Health Services, Inc. 1,388,750
----------
7,002,000
----------
HOUSING / BUILDING
MATERIALS -- 5.93%
26,000(1) Butler Manufacturing Company 923,000
72,000 Justin Industries, Inc. 693,000
57,000 Oakwood Homes Corporation 1,503,375
95,000(1) Patrick Industries, Inc. 1,128,125
76,500 Republic Gypsum Company 774,563
----------
5,022,063
----------
INSURANCE COMPANIES -- 7.21%
35,000 American Bankers
Insurance Group, Inc. 993,125
26,000 Equitable of Iowa Companies 880,750
45,000 Fidelity National Financial, Inc. 450,000
34,000 Fremont General Corporation 667,250
63,630 GAINSCO, Inc. 660,161
30,000 PXRE Corporation 720,000
19,800 Torchmark Corporation 821,700
23,300 United Wisconsin Services, Inc. 917,438
----------
6,110,424
----------
</TABLE>
See accompanying notes to financial statements.

Financial Statement Page 1

<PAGE> 51

STATEMENT OF NET ASSETS MARCH 31, 1995

<TABLE>
<CAPTION>
NUMBER
OF SHARES COMMON STOCKS (CONTINUED) VALUE

<S> <C> <C>
NATURAL RESOURCES -- 2.31%
54,000(1) Astec Industries, Inc. $ 634,500
22,000 Energen Corporation 503,250
51,000 KCS Energy, Inc. 822,375
-----------
1,960,125
-----------
<CAPTION>
NUMBER
OF SHARES COMMON STOCKS (CONTINUED) VALUE
<S> <C> <C>
RETAIL TRADE E 6.09%
42,000(1) Caldor Corporation $ 897,750
70,000(1) DAKA International, Inc. 1,295,000
47,500 Heilig-Meyers Company 1,039,063
37,000(1) Michaels Stores, Inc. 1,211,750
51,000(1) Rex Stores Corporation 714,000
-----------
5,157,563
-----------
TOTAL COMMON STOCKS
(COST = $47,875,010) $61,213,613
-----------
</TABLE>

<TABLE>
<CAPTION>
PRINCIPAL MATURITY INTEREST VALUE
AMOUNT COMMERCIAL PAPER -- 12.33% RATE(2)
<S> <C> <C> <C> <C>
$1,500,000 Du Pont (E.I.) de Nemours & Company 05/09/95 5.98% $ 1,490,532
1,500,000 Goldman Sachs Group (The), L.P. 05/01/95 6.02 1,492,475
1,500,000 Heinz, (H.J.) Company 04/26/95 5.97 1,493,781
1,500,000 Minnesota Mining & Mfg. Company 05/22/95 5.97 1,487,314
1,500,000 Phillip Morris Company 04/21/95 6.00 1,495,000
1,500,000 SmithKline Beecham Corporation 05/12/95 5.98 1,489,784
1,500,000 Southwestern Bell Corporation 04/04/95 5.93 1,499,259
-----------
TOTAL COMMERCIAL PAPER (COST = $10,448,145) 10,448,145
-----------
</TABLE>

<TABLE>
<CAPTION>
PRINCIPAL MATURITY INTEREST VALUE
AMOUNT DISCOUNT NOTE -- 15.45% RATE(2)
<S> <C> <C> <C> <C>
$13,100,000 Federal Home Loan Bank
(Cost = $13,095,451) 04/03/95 6.25% $13,095,451
-----------
TOTAL INVESTMENTS, AT VALUE (NOTE 1) (COST = $71,418,606) -- 100.02% 84,757,209
DIVIDEND & INTEREST RECEIVABLE -- 0.05% 41,955
RECEIVABLE FOR FUND SHARES SOLD -- 0.04% 30,092
ACCRUED INVESTMENT ADVISORY FEE (NOTE 2) -- (0.07%) (63,579)
OTHER ACCRUED EXPENSES PAYABLE TO ADVISER (NOTE 2) -- (0.03%) (23,477)
PAYABLE FOR FUND SHARES REDEEMED -- (0.03%) (25,634)
OTHER ASSETS & LIABILITIES, NET -- 0.02% 21,857
-----------
NET ASSETS - APPLICABLE TO 4,681,737 OUTSTANDING SHARES
(NO PAR VALUE - UNLIMITED NUMBER OF SHARES AUTHORIZED)(NOTE 4) -- 100% $84,738,423
===========
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE (NOTE 1) $18.10
======
<FN>
(1) Non-income producing.
(2) For commercial paper and discount notes, the rate is the discount rate at
the time of purchase by the Fund.
</TABLE>

See accompanying notes to financial statements.

Financial Statement Page 2

<PAGE> 52

STATEMENT OF OPERATIONS FOR THE ELEVEN MONTHS ENDED
MARCH 31, 1995 (NOTE 1)

<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest $1,096,476
Dividends 585,825
----------
Total investment income $1,682,301

EXPENSES:
Investment advisory fees (Note 2) 683,260
Distribution (Note 2) 178,864
Data processing fees (Note 2) 45,784
Personnel costs (Note 2) 32,231
Professional fees 21,978
Registration fees 21,359
Custodian fees 16,667
Postage and mailing 13,607
Trustee's fees (Note 2) 12,839
Printing 12,559
Other 3,882
----------
TOTAL EXPENSES 1,043,030
----------
NET INVESTMENT INCOME 639,271

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 2,529,940
Net decrease in unrealized appreciation of investments (1,671,004)
----------

NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 858,936
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,498,207
==========
</TABLE>

See accompanying notes to financial statements.

Financial Statement Page 3

<PAGE> 53

STATEMENTS OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
ELEVEN MONTHS
ENDED YEAR ENDED
MARCH 31, 1995 APRIL 30, 1994
(NOTE 1)
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 639,271 $ 366,145
Net realized gain on investments 2,529,940 3,707,762
Net increase (decrease) in unrealized
appreciation of investments (1,671,004) 2,561,307
----------- -----------
Net increase in net assets resulting from operations 1,498,207 6,635,214
----------- -----------

FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (573,964) (297,402)
Net realized capital gains (2,002,612) (3,272,841)
----------- -----------
Decrease in net assets from distributions to shareholders (2,576,576) (3,570,243)
----------- -----------

FROM FUND SHARE TRANSACTIONS:
Proceeds from shares sold 45,495,191 72,274,054
Net asset value of shares issued in reinvestment of distributions 2,526,554 3,511,822
Payments for shares redeemed (45,501,572) (63,704,815)
----------- -----------
Net increase in net assets from Fund share transactions 2,520,173 12,081,061
----------- -----------

TOTAL INCREASE IN NET ASSETS 1,441,804 15,146,032

NET ASSETS:
Beginning of period 83,296,619 68,150,587
----------- -----------
End of period (including undistributed net investment
income of $139,200 and $72,770, respectively) (Note 1) $84,738,423 $83,296,619
=========== ===========

NUMBER OF FUND SHARES:
Sold 2,552,279 3,951,045
Issued in reinvestment of distributions to shareholders 141,556 197,969
Redeemed (2,551,892) (3,492,999)
----------- -----------
Net increase in shares outstanding 141,943 656,015
Outstanding at beginning of period 4,539,794 3,883,779
----------- -----------
Outstanding at end of period 4,681,737 4,539,794
=========== ===========
</TABLE>

See accompanying notes to financial statements.

Financial Statement Page 4

<PAGE> 54

NOTES TO FINANCIAL STATEMENTS MARCH 31, 1995

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

Gradison Growth Trust (the "Trust") is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management investment
company. The Trust was created under Ohio law on May 31, 1983; it commenced
investment operations and the public offering of its shares on August 16, 1983.
The Trust consists of three series, the Gradison-McDonald Opportunity Value
Fund, the Gradison-McDonald Established Value Fund and the Gradison-McDonald
Growth & Income Fund (collectively, the "Funds"); each of which in effect
represents a separate fund with its own investment policies. This Annual Report
to Shareholders pertains only to the Gradison-McDonald Opportunity Value Fund
(the "Fund").

The Fund changed its fiscal year end to March 31, effective with the September
30, 1994 Semiannual Report.

The following is a summary of the Fund's significant accounting policies:

SECURITIES VALUATION - Portfolio securities listed or traded on the New York or
American Stock Exchanges are valued at the last sale price on that exchange, or
if there were no sales that day, the securities are valued at the closing bid
price. All other portfolio securities for which over-the-counter market
quotations are readily available are valued at the latest bid price. Commercial
paper and discount notes are valued using the amortized cost method which
approximates market value. This involves initially valuing a security at its
original cost and thereafter assuming a constant amortization to maturity of
any discount or premium. Portfolio securities for which market quotations are
not readily available are valued at their fair value as determined in good
faith under procedures adopted by the Board of Trustees.

SECURITIES TRANSACTIONS AND INVESTMENT INCOME - Securities transactions are
accounted for on the trade date (the date the order to buy or sell is
executed), and dividend income is recorded on the ex-dividend date. Interest
income is accrued as earned. Gains and losses on sales of investments are
calculated on the identified cost basis for financial reporting and tax
purposes.

TAXES - It is the Fund's policy to comply with the provisions of the Internal
Revenue Code available to regulated investment companies. As provided therein,
in any fiscal year in which the Fund so qualifies, and distributes at least 90%
of its taxable net income, the Fund will be relieved of federal income tax on
the income distributed. Accordingly, no provision for income taxes has been
made.

In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends
in each calendar year, at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains, if any (earned
during the twelve months ended October 31), plus undistributed amounts from
prior years.

The tax basis of investments is equal to the cost as shown on the Statement of
Net Assets.

Financial Statement Page 5

<PAGE> 55

NOTES TO FINANCIAL STATEMENTS MARCH 31, 1995

For both financial reporting and tax purposes, gross unrealized appreciation
and gross unrealized depreciation of securities at March 31, 1995 was
$16,409,219 and $3,070,616, respectively.

FUND SHARE VALUATION AND DISTRIBUTIONS TO SHAREHOLDERS - The net asset value
per share is computed by dividing the net asset value of the Fund (total assets
less total liabilities) by the number of shares outstanding. The redemption
price per share is equal to the net asset value per share.

Distributions to shareholders are recorded on the ex-dividend date. During the
period ended March 31, 1995, the Fund made total distributions of $.56 per
share, of which for tax purposes $.25 is treated as dividend income ($.12 from
net investment income and $.13 from short-term capital gains) and $.31 is
treated as long-term capital gain.

EXPENSES - Common expenses incurred by the Trust are allocated to the Fund
based on the ratio of the net assets of the Fund to the combined net assets of
the Trust. In all other respects, expenses are charged to the Fund as incurred
on a specific identification basis.

RECLASSIFICATION OF CAPITAL ACCOUNTS - During the prior fiscal year, the Fund
adopted Statement of Position 93-2 "Determination, Disclosure, and Financial
Statement Presentation of Income, Capital Gain, and Return of Capital
Distributions by Investment Companies" ("SOP"). The purpose of this SOP is to
report the undistributed net investment income and accumulated net realized
capital gain (loss) accounts in such a manner as to approximate amounts
available for future distributions (or to offset future realized capital gains)
and to achieve uniformity in the presentation of distributions by investment
companies.

During the current fiscal year, the Fund has reclassified $1,123 to accumulated
undistributed net investment income from accumulated undistributed net realized
gains in compliance with this SOP. This reclassification, which has no impact
on the net asset value of the Fund, is primarily attributable to certain
differences in the computation of net investment income and capital gains under
federal tax rules and generally accepted accounting principles. Additional
adjustments may be necessary in subsequent reporting periods.

NOTE 2 - TRANSACTIONS WITH AFFILIATES

Under the terms of the Agreement, the Fund reimburses McDonald for the cost of
furnishing personnel to perform shareholder and certain other services for the
Fund. The Agreement also provides that McDonald bear the cost of salaries and
related expenses of executive officers of the Fund who are necessary for the
management and operations of the Fund. In addition, McDonald bears the costs of
preparing, printing and mailing sales literature and other advertising
materials, and compensates the FundGs trustees who are affiliated with
McDonald. All expenses not specifically assumed by McDonald are borne by the
Fund.

Financial Statement Page 7

<PAGE> 56

NOTES TO FINANCIAL STATEMENTS MARCH 31, 1995

Effective June 1, 1995, the Fund and McDonald have executed a Transfer Agency,
Accounting Services and Administrative Services Agreement ("Services
Agreement"). Under the terms of the Services Agreement, McDonald will provide
transfer agent, dividend disbursing, accounting services and administrative
services to the Fund. The Fund will pay McDonald a monthly fee for transfer
agency and administrative services at an annual rate of $18.25 per shareholder
non-zero balance account, plus out-of-pocket costs for statement paper,
statement and reply envelopes and reply postage. The Fund will pay McDonald a
monthly fee for accounting services based on the Fund's average daily net
assets at an annual rate of .03% on the first $100 million, .02% on the next
$100 million and .01% on any amount in excess of $200 million, with a minimum
annual fee of $40,000. The Services Agreement replaces the Data Processing
Agreement and the Fund's reimbursement of McDonald's cost of furnishing
personnel to perform shareholder and certain other services.

In accordance with the terms of a Distribution Service Plan adopted under Rule
12b-1 of the Investment Company Act of 1940, the Fund pays McDonald a fee for
its assistance in distribution of shares of the Fund. This fee is computed and
paid at an annual rate of .25% of average daily net assets and may be more or
less than expenses incurred by McDonald for rendering distribution services.

Effective June 1, 1995, the Distribution Service Plan was amended to increase
the total fee to .50%. The Fund will pay McDonald a service fee for personal
services to shareholders, including shareholder liaison services such as
responding to shareholders inquiries and providing information to customers
about their Fund accounts. This fee is computed and paid at an annual rate .25%
of the Fund's average daily net assets. The Fund will also pay McDonald a fee
for its assistance in selling shares of the Fund including advising
shareholders regarding purchase, sale and retention of Fund shares. This fee
will be computed and paid at an annual rate of .25% of the Fund's average daily
net assets.

The officers of the Trust are also officers of McDonald.

Each trustee of the Trust who is not affiliated with Gradison receives fees
from the Trust for services as a trustee. The amounts of such fees for each
trustee are as follows: (a) an annual fee of $5,000 payable in quarterly
installments for service during each fiscal quarter and (b) $500 for each Board
of Trustees, or committee meeting attended.

NOTE 3 - SUMMARY OF PURCHASES AND SALES OF INVESTMENTS

For the period ended March 31, 1995, purchases and sales of securities,
excluding short-term securities, amounted to $23,151,776 and $16,266,420,
respectively.

NOTE 4 - NET ASSETS

At March 31, 1995, net assets of the Fund consisted of:

<TABLE>
<S> <C>
Aggregate paid-in capital $68,901,132
Accumulated undistributed net investment income 139,200
Accumulated undistributed net realized gains 2,359,488
Net unrealized appreciation of investments 13,338,603
-----------
Net assets $84,738,423
===========
</TABLE>

NOTE 5 - SUBSEQUENT EVENT

The Board of Trustees declared a dividend from net investment income of $0.07
per share and a long-term capital gain distribution of $0.52 per share payable
on May 26, 1995 to shareholders of record on May 25, 1995.

Financial Statement Page 6

<PAGE> 57

ARTHUR
ANDERSEN

ARTHUR ANDERSEN & CO, SC

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and Board of Trustees of the
Gradison-McDonald Opportunity Value Fund
of the Gradison Growth Trust:

We have audited the accompanying statement of net assets of the
Gradison-McDonald Opportunity Value Fund of the Gradison Growth Trust (an Ohio
business trust), as of March 31, 1995, and the related statement of operations
for the period then ended, the statements of changes in net assets for the
periods indicated thereon, and the financial highlights for each of the three
periods in the period then ended. These financial statements and financial
highlights are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits. The financial highlights for each of the two years in the
period ended April 30, 1992, of the Gradison-McDonald Opportunity Value Fund
of the Gradison Growth Trust, were audited by other auditors whose report dated
May 22, 1992, expressed an unqualified opinion on those financial highlights.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Gradison-McDonald Opportunity Value Fund of the Gradison Growth Trust as of
March 31, 1995, the results of its operations for the period then ended, the
changes in its net assets for the periods indicated thereon, and the financial
highlights for each of the three periods in the period then ended, in
conformity with generally accepted accounting principles.

Cincinnati, Ohio,
May 25, 1995

Financial Statement Page 8

<PAGE> 58

COVER PAGE
----------

OPPORTUNITY VALUE
FUND

GRADISON - McDONALD

[Graphic: Collage of children's things such as blocks, and baby picture with
title "Your future starts here]

A COMMON STOCK FUND INVESTING IN SMALLER COMPANIES JUDGED TO BE UNDERVALUED

<PAGE> 59

INSIDE COVER
------------

FAMILY OF MUTUAL FUNDS

OPPORTUNITY
VALUE

INTERMEDIATE OHIO TAX-FREE
MUNICIPAL INCOME

INTERNATIONAL GOVERNMENT
INCOME

MONEY MARKET ESTABLISHED
VALUE
GROWTH
& INCOME

<PAGE> 60

PAGE 1
------

[Graphic: Portion of graphic described above.]

Whatever your goals or ASPIRATIONS.
Whatever your objective. One thing is certain.
An INVESTMENT made today brings
you that much closer to meeting that OBJECTIVE
AND REACHING THAT GOAL ...
whether it's buying a house, starting a family,
SAVING for college education,
or planning for retirement. Hesitate and
time will pass you by.

Increasingly, MUTUAL FUNDS are the
PREFERRED VEHICLE for starting and building
and investment program.
And today, GRADISON McDONALD is a
preferred name in mutual funds
for a GROWING number of investors.

1-800-869-5999 [Phone information graphic]

<PAGE> 61

PAGE 2
------

OPPORTUNITY VALUE
FUND

GRADISON-McDONALD OPPORTUNITY VALUE
FUND SEEKS TO PROVIDE LONG-TERM CAPITAL
APPRECIATION THROUGH INVESTMENTS IN THE
STOCK OF SMALLER COMPANIES THAT OUR DISCI-
PLINED ANALYSIS JUDGES AS UNDERVALUED. THESE
SMALL CAP COMPANIES GENERALLY HAVE CAPITAL-
IZATIONS OF $500 MILLION OR LESS. THE FUND IS
PROFESSIONALLY MANAGED BY EXPERIENCED
GRADISON McDONALD PORTFOLIO MANAGERS.

THE CASE FOR SMALL CAP STOCKS
-----------------------------

Traditionally, smaller companies have been the birth-
place of many important new technologies, products and
services. It is important to understand that smaller com-
panies' stocks may have greater price fluctuations than
larger companies', and are subject to greatest risks related to
their size.

CHART- WEALTH INDICES OF INVESTMENTS
[Comparing 30 Day US T-Bill, 20-Year US T-Bond, Russell 2000 with inflation
from 1983-1993. Inflation value is approximately $100; Bills value is
approximately $100; Bonds value is approximately $110; Russell 2000 value is
approximately $280.[

Small company stocks are represented by the Russell 2000 Index with dividends
reinvested. The indices and securities in the chart above do not reflect the
Fund's actual portfolio composition, performance, or the fees and expenses
associated with investing in the Fund. T-bills and T-bonds are backed by the
full faith and credit of the U.S. Government, and are less volatile and risky
than equity investments such as the Fund and small or large company stocks.
The Russell 2000 is an unmanaged group of stocks with an average market
capitalization of $100 million. The chart is not intended to imply future
performance of any of these investments or of the Fund. Performance figures of
the Fund, which began operations on 8/16/83 are available upon request from
Gradison McDonald. The returns for small company common stocks, Treasury
Bonds, and Treasury Bills include the reinvestment of dividends and interest.
Source: "Ibbotson Associates: Stocks, Bills, and Inflation," 1994 Yearbook.

<PAGE> 62

PAGE 3
------

[Graphic: Portion of first graphic described.]

Smaller companies may respond to change more easily
than larger ones. The decision-making process in
smaller companies is often less complex and more
direct. Consequently, these companies can often iden-
tify and seize opportunity more quickly than their
larger counterparts.

VALUE INVESTING
---------------

Gradison-McDonald Opportunity Value Fund employs
and investment strategy known as value investing. This
analytic technique identifies stocks which have a low
price-to-book ratio and/or price-earnings ratio. That is,
the stock's selling price is relatively low compared to its
estimated book value and/or the companies earnings.
The technique has been fundamental to the success of
many well-known mutual fund managers.

Long-held companies in the Opportunity Value Fund include:

Old Kent Financial Corp.
Heiliq-Myers Co.
Pioneer Standard Electronics
Sturm Ruger & Co.
Community Health Systems

The securities, comprising 5% of the Fund's assets at
September 30, 1994 may change in the future.

1-800-869-5999 [Phone information graphic

<PAGE> 63

PAGE 4
------

DISCIPLINED APPROACH
--------------------

Gradison-McDonald Opportunity Value Fund portfolio managers follow a strict
set of objective criteria in selecting small cap stocks. Consequently, stocks
are purchased because of sound fundamentals, not merely someone's intuition
about the market or rumors from wall Street.

LOW MINIMUM INVESTMENT
----------------------

The Gradison-McDonald Opportunity Value Fund has a low minimum initial
investment of $1,000. Additional investments can be made for as little as $50.

EXCHANGES
---------

You can move money from one Gradison McDonald fund to another at any time. The
Gradison McDonald funds currently include:

Established Value Fund
Government Income Fund
U.S. Government Reserves
Ohio Tax-Free Income Fund
Intermediate Municipal Income Fund

Gradison-McDonald funds planned for 1995 by prospectus only include:

Growth & Income Fund
International Fund

ACCESS
------

You can redeem shares on any business day at their current net

[Graphic: Children's blocks]

<PAGE> 64

INSIDE BACK COVER
-----------------

A TRUSTED NAME

Gradison-McDonald
is headquartered in Cincinnati and has m
managed mutual funds since 1976.
The parent company, McDonald & Company
Investments, was founded in 1924
and has been listed on the
New York Stock Exchange since 1983.
It operates a leading regional
investment advisory, investment banking
and investment brokerage firm
with offices throughout
Ohio, Michigan and Indiana,
and in Atlanta, Boston, Dallas, Chicago,
Los Angeles, the New York City area
and Naples, Florida

1-800-869-5999 [Phone information graphic

<PAGE> 65

BACK COVER
----------

[Graphic: Telephone and two envelopes]

To find out more about the

Gradison-McDonald

OPPORTUNITY VALUE FUND

or other funds in the family

CALL
----

1-800-869-5999

OR WRITE
--------

Gradison-McDonald Mutual Funds

580 Walnut Street

Cincinnati, Ohio 45202

Gradison-McDonald
-------------------

You many obtain a prospectus containing complete information about the funds
from a Gradison-McDonald Mutual Funds representative or your Investment
Consultant. Read it carefully before investing. Upon redemption, the value of
an McDonald & Company Securities, Inc.

<PAGE> 66

COVER PAGE
----------
ESTABLISHED VALUE
FUND

GRADISON-McDONALD

[Graphic: Collage of school picture with title "Your Future Starts Today",
college memorabilia and books.]

A COMMON STOCK FUND INVESTING IN LARGE COMPANIES JUDGED TO BE UNDERVALUED

<PAGE> 67

INSIDE COVER
------------

FAMILY OF MUTUAL FUNDS

ESTABLISHED
VALUE

INTERMEDIATE OHIO TAX-FREE
MUNICIPAL INCOME

INTERNATIONAL GOVERNMENT INCOME

MONEY MARKET OPPORTUNITY
VALUE
GROWTH
& INCOME

<PAGE> 68

PAGE 1
------
[Graphic: One portion of graphic described above.]

Whatever your goals or ASPIRATIONS.
Whatever your objective. One thing is certain.
An INVESTMENT made today brings
you that much closer to meeting that OBJECTIVE
and reaching that GOAL...
whether it's buying a house, starting a family,
SAVING for a college education,
or planning for retirement. Hesitate and
time will pass you by.

Increasingly, MUTUAL FUNDS are the
PREFERRED VEHICLE for starting and building
an investment program.
And today, GRADISON-McDONALD is a
preferred name in mutual funds
for a GROWING number of investors.

1-800-869-5999 [ Graphic: Call for information telephone logo.]

<PAGE> 69

PAGE 2
------

ESTABLISHED VALUE
FUND

GRADISON-McDONALD ESTABLISHED VALUE FUND
SEEKS TO PROVIDE LONG-TERM CAPITAL
APPRECIATION THROUGH INVESTMENTS IN THE
STOCK OF COMPANIES WHICH OUR DISCIPLINED
ANALYSIS JUDGES AS UNDERVALUED BY THE MARKET.
THE FUND IS PROFESSIONALLY MANAGED BY
EXPERIENCED GRADISON McDONALD
PORTFOLIO MANAGERS.

THE CASE FOR COMMON STOCKS
--------------------------

Historically, common stocks have offered the greatest potential for long-term
growth. Over the long-term they have outperformed fixed income investments and
provided a rate of return well above the rate of inflation. It is important to
understand that common stocks pose greater risks and market volatility than
fixed income investments.

CHART
[Ibbotson chart comparing growth of a dollar invested from 1925-1993 in 30 day
US T-bills 20- Year vs T. Bonds, common stocks with inflation. Inflation value
is almost $10; 30 day bills value is just over $10; 20 year bonds' value is
approximately $40; Common stocks' value is approximately $900.]

Common Stocks are represented by the Standard & Poor's 500 Composite Stock
Index. The indices and securities in the chart above do not reflect the Fund's
actual portfolio composition, performance, or the fees and expenses associated
with investing in the Fund. T-bills and T-bonds are backed by the full faith
and credit of the U.S. Government, and are less volatile and risky than equity
investments such as the Fund and stocks. The s&P 500 is an unmanaged index of
500 of the largest U.S. stocks. The chart is not intended to imply future
performance of any of these investments or of the Fund. Performance figures of
the Fund, which began operations on 8/16/83 are available upon request from
Gradison McDonald. The returns for common stocks, Treasury Bonds, and Treasury
Bills include the reinvestment of dividends and interest.
Source: "Ibbotson Associates: Stocks, Bills, and Inflation," 1994 Yearbook.

<PAGE> 70

PAGE 3
------
[Graphic of portion of same picture described above.]
VALUE INVESTING
---------------

Gradison-McDonald Established Value Fund employs an investment strategy known
as value investing. This analytic technique identifies stocks which have a low
price-to-book ration and/or price-earnings ratio. The stocks are from companies
in the Standard & Poor's 500 Index and also other companies of similar size.
That is, the stock's selling price is relatively low compared to its estimated
book value and/or the company's earnings. The technique has been fundamental
to the success of many well-known mutual fund managers.

<TABLE>
Historical Returns From a
Diversified Portfolio of Stocks 1

<CAPTION>
Holding Period Percentage of Times the S&P 500
Achieved a Positive Return
<S> <C>
1 year 70%

5 years 82%

10 years 90%

15 years 100%

<FN>
1 Based on total returns from the Standard & Poor's 500 Composite Index during
the 60 calendar years ending 12/31/93.
</TABLE>

Common stock investments have outperformed those of CDs and other conservative
instruments over the years. However, they present more risk and volatility
especially for short-term investors. Investors who spend longer periods of
time in the market have tended to enjoy more consistently positive returns.
Those who try to time the market for short-term gains tend to be less
successful.

1-800-869-5999 [ Graphic: Call for information telephone logo.]

<PAGE> 71

PAGE 4
------

LOW MINIMUM INVESTMENT
----------------------

The Gradison-McDonald Established Value Fund has a low minimum initial
investment of $1,000. Additional investments can be made for as little as $50.

EXCHANGES
---------

You can move money from one Gradison-McDonald fund to another at any time. The
Gradison-McDonald funds currently include:

Opportunity Value Fund
Government Income Fund
U.S. Government Reserves
Ohio Tax-Free Income Fund
Intermediate Municipal Income Fund

Gradison-McDonald funds planned for 1995 and sold by prospectus only include:

Growth & Income
International Fund

ACCESS
------

You can redeem shares on any business day at their current net asset value.

[Graphic; medal and ribbon]

<PAGE> 72

INSIDE BACK COVER
-----------------

A TRUSTED NAME

Gradison-McDonald
is headquartered in Cincinnati and has
managed mutual funds since 1976.
The parent company, McDonald & Company
Investments, was founded in 1924
and has been listed on the
New York Stock Exchange since 1983.
It operates a leading regional
investment advisory, investment banking,
and investment brokerage firm
with offices throughout
Ohio, Michigan and Indiana,
and in Atlanta, Boston, Dallas, Chicago,
Los Angeles, the New York City area
and Naples, Florida.

1-800-869-5999 [ Graphic: Call for information telephone logo.]

<PAGE> 73

BACK COVER
----------
[Graphic: telephone and two envelpes.]

To find out more about the

GRADISON-McDONALD

ESTABLISHED VALUE FUND

or other funds in the family

CALL

1-800-869-5999

OR WRITE

Gradison-McDonald Mutual Funds

580 Walnut Street

Cincinnati, Ohio 45202

GRADISON-McDONALD

You may obtain a prospectus containing complete information about the funds
from a Gradison McDonald Mutual Funds representative or your Investment
Consultant. Read it carefully before investing. Upon redemption, the value of
an investment in the Fund may be worth more or less than its costs.
McDonald & Company Securities, Inc.---Distributor

<PAGE> 74

PART C

OTHER INFORMATION

Item 24. FINANCIAL STATEMENTS AND EXHIBITS

(a)(1) Financial Highlights of Gradison-McDonald Established Value Fund
and Gradison-McDonald Opportunity Value Fund (the "Funds") for periods ending
from April 30, l986 through March 31, l995 included in the prospectuses of the
Funds.

The following Financial Statements are included in the Prospectus of
the Gradison-McDonald Growth and Income Fund, which are not affected by this
Amendment:

Financial Highlights.

(a)(2) Financial Statements of the Funds included in the Statement of
Additional Information for the Funds:

Report of Independent Accountant
Statement of Net Assets at March 31, l995
Statement of Operations for the fiscal period ended March 31, l995
Statement of Change in Net Assets for the fiscal period ended
March 31, 1995 and for the Fiscal Year Ended April 30, l994
Notes to Financial Statements

The following Financial Statements are included in the Statement of Additional
Information of GI which are not affected by this Amendment:

C-1
<PAGE> 75

(b)Exhibits

( 1)(a) First Amended Declaration of Trust.*
( 1)(b) Amendment dated October 4, 1991 to Registrant's Declaration
of Trust (Amending Paragraph 2.6. +
( 1)(c) Amendments dated May 25, l995, to First Amended Declaration
of Trust ++.
( 2)(a) Registrant's By-Laws.**
( 2)(b) Amendment to Registrant's By-Laws dated July 16, 1991
(Amending Section 3.1). +
( 3) None.
( 4)(a) Form of certificate of share of beneficial interest of
GM-E/O. *
( 5)(a) Investment Advisory Agreement (GM-E/O) dated October 4,
1991. +
( 5)(b) Amendments to Investment Advisory Agreements of GM-E/O dated
June 1, l995. ++
( 5)(c) Investment Advisory Agreement of Fund dated May 25, l995. ++
( 5)(d) Investment Advisory Agreement of GM-Int dated June 1, l995. ++
( 5)(e) Sub-Advisory Agreement of GM-Int dated May 25, l995. ++
( 6) None.
( 7) None.
( 8) Custodian Agreement (GM-E/O). *
( 8)(a) Custodian Agreement of GI. ++
( 8)(b) Custodian Agreement of GM-Int with Chase Manhattan Bank. ++
( 8)(c) Account Agreement with Star Bank. ++
( 9)(a) Transfer Agency Accounting Services Agreement (GM-E/O) dated
June 1, l995. ++
( 9)(b) Transfer Agency Accounting Services Agreement (GI) dated
February 28, l995. ++
( 9)(c) Transfer Agency Accounting Services Agreement (Int) dated June 1,
l995. ++
(10) Opinion of Counsel is filed yearly with Registrant's Rule 24f-2
Notice and was most recently filed on May 25, l995.
(11) Consent of Independent Public Accountants (Included herein).
(12) None.
(14) Documents used in establishment of individual retirement accounts
in conjunction with shares of Registrant. ****
(15)(a) Distribution Plan of GM-E/O, as amended October 31, l994. ***
(15)(b) Distribution Agreements dated June 1, l995 of GM-E/O. ++
(15)(c) Distribution Agreement of GI dated February 28, l995. ++
(15)(d) Distribution Agreement of GM-Int dated June 1, l995. ++
(16)(a) Schedule of Total Return Computations.+
(18) Powers of Attorney of Jacob Kamm, Bradley Turner, Gordon Price,
Daniel Castellini, W.G. Alpaugh, George Reiveschl, and Donald
E. Weston.***
(18)(a) Powers of Attorney of Patricia Jamieson, Theodore Emmerich, Jerome
Schnee, Richard Rankin, and Julian Ball. ++

C-2
<PAGE> 76

____________________________________________________________
* Incorporated by reference to Exhibits 1,4, and 8 to Registrant's Form N-1
Registration Statement No. 2-84169 previously filed with the Securities and
Exchange Commission on August 9, 1983.

+ Incorporated by reference to Exhibits 1(b),2(b) 5, 15(b) and 16(a)to
Registrant's Form N-1A Registration Statement No. 2-84169 previously filed
with the Securities and Exchange Commission on June 1, 1992.

** Incorporated by reference to Exhibit 2(b) to Registrant's Form N-1
Registration Statement No. 2-84169 previously filed with the Securities and
Exchange Commission on June 2, 1983

****Incorporated by reference to Exhibit 14 to Registrant's Form N-1A
Registration Statement No. 2-84169 previously filed with the Securities and
Exchange Commission on June 20, 1986.

*** Incorporated by reference to Exhibits 15(a) and 18 to Registrant's
Form N-1A Registration Statement No. 2-84169 previously filed with the
Securities and Exchange Commission on November 23, 1994.

++ Incorporated by reference to Exhibits 1(c), 5(b), 5(c), 5(d), 5(e),8(a),
8(b), 8(c), 9(a), 9(b). 9(c), 15(b), 15(c), 15(d), and 18(a) to Registrant's
Form N-1A Registration Statement No. 2-84169 previously filed with the
Securities and Exchange Commission on July 27, 1995..

C-3
<PAGE> 77

Item 26. NUMBER OF HOLDERS OF SECURITIES
<TABLE>
<CAPTION>
Number of
Record Holders
as of
Title of Class July 10, l995
-------------- -------------
<S> <C>
Shares of beneficial interest, without par
value of:

Gradison-McDonald Established Value Fund 13,264
Gradison-McDonald Opportunity Value Fund 5,998
Gradison-McDonald Growth and Income Fund 451
Gradison-McDonald International Fund 224
</TABLE>
Item 28. I- BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

Reference is made to the captions "Management of the Fund" on page 6 of
the Prospectus of GM-E/O that is part of Part A of this Registration
Statement, "Trustees and Officers of the Trust" on page 17 of the Statement of
Additional Information of GM-E/O that is part of Part B of this Registration
Statement and to Item 29(b) of this Part C of the Registration Statement.

II- BUSINESS AND OTHER CONNECTIONS OF INVESTMENT SUB-ADVISER OF
GRADISON-MCDONALD INTERNATIONAL FUND

The address of Blairlogie Capital Management, Limited is 4th Floor,
125 Princes Street, Edinburgh EH2 4AD, Scotland.
<TABLE>
<CAPTION>
Name Position with Other Affiliations
Investment Sub-Adviser
<S> <C> <C>
Gavin R. Dobson Chief Executive Officer Director, Blairlogie
Holdings Limited
(U.K.)

James G.S. Smith Chief Investment Director, Blairlogie
Officer Holdings Limited
(U.K.)

John R.W. Stevens Chief Financial Director, Blairlogie
Officer Holdings Limited
(U.K.)
</TABLE>
Item 29. PRINCIPAL UNDERWRITERS

(a) The principal underwriter of the Registrant is McDonald & Company
Securities, Inc., which also serves as the principal underwriter and investment
adviser for Gradison-McDonald Cash Reserves Trust, GradisonMcDonald Municipal
Trust and Gradison Custodian Trust.

(b) Information pertaining to its directors and officers is contained in the
following table.

C-4
<PAGE> 78
<TABLE>
<CAPTION>

Positions Business Positions
Name With Underwriter Address With
Registrant
<S> <C> <C> <C>
Daniel F. Austin Director, Vice 800 Superior Avenue None
Chairman Cleveland Ohio 44114

Jack N. Aydin Director, Managing One Evertrust Plaza None
Director Jersey City, NJ 07302

Eugene H. Bosart, Director, Managing 260 East Brown Street None
III Director Birmingham, MI 48009

Thomas G. Clevidence Director, Managing 800 Superior Avenue None
Director Cleveland, OH 44114

Robert T. Clutterbuck Director, 800 Superior Avenue None
President, Chief Cleveland, OH 44114
Financial and
Operating Officer
Officer

Dennis J. Donnelly Director, Senior 800 Superior Avenue None
Managing Director Cleveland, OH 44114

David W. Ellis, III Director, and 580 Walnut Street None
Senior Vice Cincinnati, OH 45202
President (Gradison
Division)

David W. Knall Director, Managing One American Square None
Director Indianapolis, IN 46282

John F. O'Brien Director, Senior 800 Superior Avenue None
Managing Director Cleveland, OH 44114

Lawrence T. Oakar Director and 800 Superior Avenue None
Senior Vice Cleveland, OH 44114
President

Gordon A. Price Director, Managing 800 Superior Avenue None
Director, Cleveland, OH 44114
Treasurer and
Secretary

James C. Redinger Director, Senior 800 Superior Avenue None
Managing Director Cleveland, OH 44114

William B. Summers, Director, Chairman, 800 Superior Avenue None
Jr. and Chief Executive Cleveland, OH 44114
Officer

C-5
<PAGE> 79

Name Positions Business Positions
With underwriter Address With
Registrant

David D. Sutcliffe Director, Senior Vice 800 Superior Avenue None
President Cleveland, OH 44114

Francis S. Tobias Director, Managing 800 Superior Avenue None
Director Cleveland, OH 44114

Donald E. Weston Chairman 580 Walnut Street Trustee and
(Gradison Division) Cincinnati, OH 45202 Chairman

Thomas McDonald Managing Director 800 Superior Avenue None
Cleveland, OH 44114

</TABLE>
C-6
<PAGE> 80

Item 30. LOCATION OF ACCOUNTS AND RECORDS

All accounts, books and documents required to be maintained by the
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
Rules 31a-1 through 31(a) thereunder are maintained at the offices of the
Registrant, 580 Walnut Street, Cincinnati, Ohio 45202, except as indicated
below opposite the applicable reference to the aforesaid Rules.

Rule In Possession of:
---- -----------------

31a-1(b)(1), 31a-1(b)(2)(i)(a)-(f), Star Bank, N.A., Star Bank Center
31a-1(b)(2)(ii), 31a-1(b)(5) and Cincinnati, Ohio 45202 for GM-E/O
31a-1(b)(8) and the Fund and Chase Manhattan
Bank, N.A. Chase Metro Tech
Center, Brooklyn New York, 11245,
for the Gradison-McDonald
International Fund.

Item 31. MANAGEMENT SERVICES

Not applicable.

Item 32. UNDERTAKINGS

The Registrant hereby undertakes to file a post-effective amendment
with respect to the Gradison-McDonald International Fund series, using
reasonable current financial statements, which need not be audited, within four
to six months from the effective dated of this Amendment.

The Registrant hereby undertakes to provide, without cost, a copy of
its most recent annual report upon request.

Insofar as indemnification for liability arising under the Securities
Act of l933 may be permitted to trustees, officers and controlling persons of
the Registrant pursuant to the foregoing provisions or otherwise, the
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 the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the 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 whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.

C-7

<PAGE> 81

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment
to Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Cincinnati and State of Ohio on the
29th day of August 1995.

GRADISON GROWTH TRUST
(Registrant)

By /S/ BRADLEY E. TURNER.*
---------------------------
Bradley E. Turner President

Pursuant to the requirements of the Securities Act of 1933, this
Amendment to Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.

Registrant hereby certifies that this Amendment to Registration
Statement meets all of the requirements for effectiveness pursuant to paragraph
(b) of Rule 485.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
*/S/ DONALD E. WESTON Chairman of the Board August __, l995
(Principal Executive Officer)

*/S/ BRADLEY E. TURNER President "

*/S/ PATRICIA JAMIESON Treasurer "
(Principal Financial and
Accounting Officer)

*/S/ THEODORE EMMERICH Trustee "

*/S/ JEROME SCHNEE Trustee "

*/S/ DANIEL J. CASTELLINI Trustee "

*/S/ RICHARD RANKIN Trustee "

</TABLE>
*By: /S/ Richard M. Wachterman
-------------------------
Richard M. Wachterman, Attorney-in-fact

S-1
<PAGE> 82

Exhibit List

Exhibit Number Description
-------------- -----------

11 Consent of Arthur Andersen LLP

<PAGE> 1

Exhibit 11

Consent of Independent Public Accountants
-----------------------------------------

As independent public accountants, we hereby consent to the use of our report
dated May 25, l995 and to all references to our Firm included in or made a
part of this registration statement, post-effective amendment no. 16.

/S/ Arthur Andersen LLP

Cincinnati, Ohio,
August 28, l995

<ARTICLE> 6
<CIK> 0000720492
<NAME> GRADISON GROWTH TRUST
<SERIES>
<NUMBER> 1
<NAME> GRADISON-MCDONALD ESTABLISHED VALUE FUND
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> 11-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-START> MAY-01-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 218,812,735
<INVESTMENTS-AT-VALUE> 280,861,432
<RECEIVABLES> 611,244
<ASSETS-OTHER> 54,865
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 281,472,676
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,157,834
<TOTAL-LIABILITIES> 4,157,834
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 208,174,852
<SHARES-COMMON-STOCK> 11,862,814
<SHARES-COMMON-PRIOR> 11,250,059
<ACCUMULATED-NII-CURRENT> 592,222
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6,549,936
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 62,048,697
<NET-ASSETS> 277,369,707
<DIVIDEND-INCOME> 3,937,169
<INTEREST-INCOME> 3,418,779
<OTHER-INCOME> 0
<EXPENSES-NET> 2,866,247
<NET-INVESTMENT-INCOME> 4,489,701
<REALIZED-GAINS-CURRENT> 7,099,956
<APPREC-INCREASE-CURRENT> 11,638,554
<NET-CHANGE-FROM-OPS> 23,228,211
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,392,688
<DISTRIBUTIONS-OF-GAINS> 7,525,690
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,449,070
<NUMBER-OF-SHARES-REDEEMED> 7,377,921
<SHARES-REINVESTED> 541,606
<NET-CHANGE-IN-ASSETS> 24,078,124
<ACCUMULATED-NII-PRIOR> 499,209
<ACCUMULATED-GAINS-PRIOR> 6,600,356
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,951,674
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,489,701
<AVERAGE-NET-ASSETS> 274,218,362
<PER-SHARE-NAV-BEGIN> 22.515
<PER-SHARE-NII> 0.376
<PER-SHARE-GAIN-APPREC> 1.520
<PER-SHARE-DIVIDEND> 0.370
<PER-SHARE-DISTRIBUTIONS> 0.660
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.381
<EXPENSE-RATIO> 1.20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0000720492
<NAME> GRADISON GROWTH TRUST
<SERIES>
<NUMBER> 2
<NAME> GRADISON-MCDONALD OPPORTUNITY VALUE FUND
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> 11-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-START> MAY-01-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 71,418,616
<INVESTMENTS-AT-VALUE> 84,757,209
<RECEIVABLES> 72,047
<ASSETS-OTHER> 21,857
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 84,851,113
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 112,690
<TOTAL-LIABILITIES> 112,690
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 68,901,132
<SHARES-COMMON-STOCK> 4,681,737
<SHARES-COMMON-PRIOR> 4,539,794
<ACCUMULATED-NII-CURRENT> 139,200
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,359,488
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 13,338,603
<NET-ASSETS> 84,738,423
<DIVIDEND-INCOME> 585,825
<INTEREST-INCOME> 1,096,476
<OTHER-INCOME> 0
<EXPENSES-NET> 1,043,030
<NET-INVESTMENT-INCOME> 639,271
<REALIZED-GAINS-CURRENT> 2,529,940
<APPREC-INCREASE-CURRENT> (1,671,004)
<NET-CHANGE-FROM-OPS> 1,498,207
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 573,964
<DISTRIBUTIONS-OF-GAINS> 2,002,612
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,552,279
<NUMBER-OF-SHARES-REDEEMED> 2,551,892
<SHARES-REINVESTED> 141,556
<NET-CHANGE-IN-ASSETS> 1,441,804
<ACCUMULATED-NII-PRIOR> 72,770
<ACCUMULATED-GAINS-PRIOR> 1,833,283
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 683,260
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,043,030
<AVERAGE-NET-ASSETS> 83,176,246
<PER-SHARE-NAV-BEGIN> 18.348
<PER-SHARE-NII> 0.136
<PER-SHARE-GAIN-APPREC> 0.176
<PER-SHARE-DIVIDEND> 0.120
<PER-SHARE-DISTRIBUTIONS> 0.440
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.100
<EXPENSE-RATIO> 1.37
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>