Supplement to Statement of Additional Information of
Gradison-McDonald Established Value Fund and Gradison-
McDonald Opportunity Value Fund of Gradison Growth Trust
Dated August 1, l995.
Gradison-McDonald [Graphic of children's blocks]
Opportunity Value Fund
March 31, l996
Gradison-McDonald Opportunity Value Fund seeks long-term
capital appreciation by investing in the common stocks of
smaller companies that it considers to be relatively
undervalued. While smaller companies are frequently
considered by investment professionals to be more volatile,
they are also viewed as more responsive to profit
opportunities than their larger brethren. The Fund generally
invests in companies with capitalizations of less than $500
million at the time of purchase.
Gradison-McDonald uses a disciplined stock selection
process that requires that the companies selected for
investment meet a number of objectively measured criteria
including rising earnings, earnings growth rates, price-to-
earnings ratios, and other similar factors.
Under normal circumstances, at least 70% of the Fund's
assets will be invested in common stocks while up to 30%
may, at the discretion of the adviser, be invested in short-
term liquid reserves to reduce fluctuations in
the Fund's net asset value.
Ten Largest Stock Positions On March 31, l996
1. HealthSouth Rehab. Rehabilitation.
2. Input/Output Inc. Data Acquisition
3. Comair Holdings PASSENGER AIR TRANSP
4. Adaptec Inc;. Computers
5. Kent Electronics Electronic Conn.
6. Community Health Serv. HOSPITAL
7. Oakwood Homes Manufactured Housing
8. Mueller Industries Inc. METAL FABRICAT.
9.. Universal Health Serv. Acute Care Hosp.
10. Advanta Corp. Financial Services
These are the top ten positions of 63 issues representing
20.3% of the portfolio and are subject to change.
Where the Fund is Invested
The chart below indicates distribution of the Fund's stock
investments on March 31, l996. On that date, the Fund
maintained 29% liquid reserves.
[Graphic of Pie Chart showing 27% interest sensitive, 19%
technology, 18% services, 17% cyclicals, 8% consumer
durables, 7% consumer non-durables, 4% transportation.]
Value of $1,000 Since Inception
Line chart stating "The value of a $1,000 investment made in
the fund at inception with all dividends and capital gain
distributions reinvested" with these plot points 8/83 -
$1,000, 12/83 - $889,12/84 - $861, 12/85 -$ 1,102, 12/86 -
$1,247, 12/87 - $1,180, 12/88 - $1,458, 12/89 - $1,796,
12/90 - $1,561, 12/91 - $2,122, 12/92 - $2,426, 12/93 -
$2,694, 12/94 - $2,635, 12/95 - $3,341, 3/96 - $3,503.
The performance quoted above and on the next page represents
past performance. The investment return and principal 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. Total return includes changes in
share value and reinvestment of all distributions. Past
performance does not ensure future results.
Average Annual Total Return
Chart stating periods ended 3/31/96, 1 year - +28.00%, 3
years - + 11.84%, 5 years - +13.29%, 10 years - +10.15%,
Since inception (8/16/83) - +10.43%
Portfolio Manager Profiles
William J. Leugers, Jr.[Graphic - photo of W.J. Leugers]
Executive Vice President/Portfolio Manager
Gradison-McDonald Asset Management
With more than 27 years of investment experience, the last
13 as portfolio manager of the Gradison-McDonald
Established Value and Opportunity Value Funds, Bill Leugers
has worked closely with academicians at a leading university
in the development of the quantitative models which are used
extensively in the management of these funds. Bill's B.S.
degree in Business and his M.B.A. in Finance are from Xavier
University.
Daniel R. Shick [Graphic - photo of D.R. Shick]
Senior Vice President/Portfolio Manager
Gradison-McDonald Asset Management
Dan Shick''s entire 20+ year investment career has been with
the Asset Management Division. For most for those years, he
has been responsible for managing the firm's largest
individual and institutional accounts. In recent years, Dan
has shared portfolio management responsibilities for the
Established Value and Opportunity Value funds with Bill
Leugers. Both his B.B.A. degree in Economics and his M.B.A.
in Finance are from the University of Cincinnati.
Profile of Gradison-McDonald Family of Funds
Grid from less potential risk, less potential reward to more
potential risk, more potential reward from left to right;
Money market Funds, Government Income Fund, Intermediate
Municipal Income Fund, Ohio Tax-Free Income Fund,
Established Value Fund, Growth & Income Fund, Opportunity
Value Fund, International Fund.
Gradison-McDonald Asset Management combines the
extensive investment experience of Gradison &
Company, founded in 1925, with McDonald & Company
which was founded in 1924. The two firms merged
in 1991. As Registered Investment Advisers since
1974 and mutual fund advisers since 1976,
Gradison-McDonald currently manages in excess of
$3 billion in mutual funds and individually
managed accounts.
A prospectus for the Opportunity Value Fund or any other
Gradison-McDonald Fund may be obtained by calling (513) 579-
5700 or (800) 869-5999. The prospectus contains more
complete information. Read it carefully before you invest.
McDonald & Company Securities, Inc. - Distributor
Gradison-McDonald [graphic of medal]
Established Value Fund
March 31, l996
Gradison-McDonald Established Value Fund seeks long-term
capital growth by investing primarily in the common stocks
of large, established U.S. companies selected from among the
500 stocks that make up the Standard & Poor's 500 Composite
Stock Price Index. The Fund may also invest in other large
companies with market capitalizations of $500 million or
more.
Gradison-McDonald uses a disciplined stock selection
process that requires that the companies selected for
investment meet several objectively measured criteria
including the companies' relative book values, their price-
to-earnings ratios, and other similar factors.
Under normal circumstances, at least 70% of the Fund's
assets will be invested in common stocks while up to 30%
may, at the discretion of the adviser, be invested in short-
term liquid reserves to reduce fluctuations in the Fund's
net asset value.
Ten Largest Stock Positions On March 31, l996
1. Sun Microsystems COMPUTERS
2. Loral Corporation DEFENSE ELECTRONICS
3. Compaq Computer Corp. COMPUTERS
4. Travelers, Inc. FINANCIAL SERVICES
5. Lockheed Martin AEROSPACE DEFENSE
6. Hercules, Inc. CHEMICALS
7. Intel Corp. MICROPROCESSORS
8. Household Inter. FINANCIAL SERVICES
9. B.F. Goodrich AEROSPACE & COM. PRODUCTS
10. Raytheon Co. AEROSPACE DEFENSE
These are the top ten positions of 49 issues representing
23.8% of the portfolio and are subject to change.
Where the Fund is Invested
The chart below indicates distribution of the Fund's stock
investments on March 31, l996. On that date, the Fund
Maintained 26% liquid reserves.
[Graphic of Pie Chart showing 40% Technology, 18% Cyclical,
14% Interest Rate Sensitive, 8% Transportation, 8% Consumer
Durables, 7% Services, 3% Consumer Non-Durable, 2% Natural Resources]]
Value of $1,000 Since Inception
Line chart stating "The value of a $1,000 investment made in
the fund at inception with all dividends and capital gain
distributions reinvested" with these plot points 8/83 -
$1,000, 12/83 - $1,074,12/84 - $1,123, 12/85 - $1,446, 12/86
- - $1,769, 12/87 - $1,989, 12/88 - $2,289, 12/89 - $2,657,
12/90 - $2,441, 12/91 - $2,984, 12/92 - $3,289, 12/93 -
$3,972, 12/94 - $3,985, 12/95 - $5,038, 3/96 - $5,354.
The performance quoted above and on the next page represents
past performance. The investment return and principal 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. Total return includes changes in
share value and reinvestment of all distributions. Past
performance does not ensure future results.
Average Annual Total Return
Chart stating periods ended 3/31/96, 1 year - +24.84%, 3
years - + 14.23%, 5 years - +14.15%, 10 years - +12.23%,
Since inception (8/16/83) - +14.20%
Portfolio Manager Profiles
William J. Leugers, Jr. [graphic - photo of W.J.
Leugers]
Executive Vice President/Portfolio Manager
Gradison-McDonald Asset Management
With more than 27 years of investment experience, the last
13 as portfolio manager of the Gradison-McDonald
Established Value and Opportunity Value Funds, Bill Leugers
has worked closely with academicians at a leading university
in the development of the quantitative models which are used
extensively in the management of these funds. Bill's B.S.
degree in Business and his M.B.A. in Finance are from Xavier
University.
Daniel R. Shick [graphic - photo of D.R. Shick]
Senior Vice President/Portfolio Manager
Gradison-McDonald Asset Management
Dan Shick's entire 20+ year investment career has been with
the Asset Management Division. For most for those years, he
has been responsible for managing the firm's largest
individual and institutional accounts. In recent years, Dan
has shared portfolio management responsibilities for the
Established Value and Opportunity Value funds with Bill
Leugers. Both his B.B.A. degree in Economics and his M.B.A.
in Finance are from the University of Cincinnati.
Profile of Gradison-McDonald Family of Funds
Grid from less potential risk, less potential reward to more
potential risk, more potential reward from left to right;
Money market Funds, Government Income Fund, Intermediate
Municipal Income Fund, Ohio Tax-Free Income Fund,
Established Value Fund, Growth & Income Fund, Opportunity
Value Fund, International Fund.
Gradison-McDonald Asset Management combines the
extensive investment experience of Gradison &
Company, founded in 1925, with McDonald & Company
which was founded in 1924. The two firms merged
in 1991. As Registered Investment Advisers since
1974 and mutual fund advisers since 1976,
Gradison-McDonald currently manages in excess of
$3 billion in mutual funds and individually
managed accounts.
A prospectus for the Established Value Fund or any other
Gradison-McDonald Fund may be obtained by calling (513) 579-
5700 or (800) 869-5999. The prospectus contains more
complete information. Read it carefully before you invest.
McDonald & Company Securities, Inc. - Distributor
Supplement to Statement of Additional Information of
Gradison-McDonald Growth and Income Fund of Gradison Growth
Trust Dated August 1, l995.
Gradison-McDonald [graphic: photo of eyeglasses]
Growth & Income Fund
March 31, 1996
Gradison-McDonald Growth and Income Fund seeks long-term
growth, current income and growth of income by investing in
high quality common stocks of large U.S. corporations that
are determined to be relatively undervalued and which
generally have above average dividend returns.
Particular emphasis is placed on the identification of
dividend paying common stocks of companies with higher
historic growth rates and returns on shareholder equity than
the average of companies that make up the Standard and
Poor's 500 Composite Stock Price Index. Gradison-McDonald
believes that a portfolio of quality common stocks with
above average dividend yield and below average price-to-
earnings ratio are factors that provide the opportunity for
price appreciation and current income while generally
tending to moderate risk.
Under normal circumstances, it is the policy of the
Gradison-McDonald Growth & Income Fund to maintain a fully
invested position at all times.
Ten Largest Stock Positions
1. H.J Heinz Food Producer
2. Mobil Corp. INTERNATIONAL OIL
3. Minn. Mining & Mfg. INDUS./CONS. PROD.
4. Norwest Corp. Financial Services
5. Pitney-Bowes, Inc. BUSINESS EQUIPMENT
6. Bristol-Myers Squibb PHARMACEUTICALS
7. Motorola, Inc. COMMUNICATIONS EQUIPMENT
8. J.P. Morgan Financial Services
9. Exxon Corporation International Oil
10.General Electric Co. ELECTRONICS
These are the top ten positions of 24 issues representing
36.2% of the portfolio and are subject to change.
Where the Fund is Invested
The chart below indicates distribution of the Fund's stock
investments on March 31, l996. On that date, the Fund
maintained 3% liquid reserves.
[Graphic of Pie Chart showing 22% technology, 20% consumer
non-durables, 17% services, 14% cyclicals, 13% interest
sensitive, 10% natural resources, 3% chemicals, 1% consumer
durables]
Value of $1,000 Since Inception
Line chart stating "The value of a $1,000 investment made in
the fund at inception with all dividends and capital gain
distributions reinvested" with these plot points 2/95 -
$1,000, 3/95 - $1,013, 6/95 - $1,061, 9/95 - $1,116, 12/95 -
$1,200, 3/96 - $1,247
The performance quoted above and on the next page represents
past performance. The investment return and principal 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. Total return includes changes in
share value and reinvestment of all distributions. Past
performance does not ensure future results.
Average Annual Total Return
Chart stating periods ended 3/31/96, Most recent quarter
(not annualized) - 3.84%, 1 year - 23.09%, Since inception
(2/28/95) - 22.46%
Portfolio Manager Profile
Julian C. Ball, CFA, CPA [Graphic: photo of Julian Ball]
Vice President/Portfolio Manager
Gradison-McDonald Asset Management
Julian Ball joined Gradison-McDonald Asset Management in
1994 to assume responsibility for its new Growth & Income
Fund following fifteen years of portfolio management
experience with Duff & Phelps Investment Management Company.
Julian holds both a Bachelor of Business Administration
degree in Accounting from Kent State University and a Juris
Doctorate degree from Cleveland Marshall College of Law. He
is both a Chartered Financial Analyst and a Certified Public
Accountant, and maintains membership in the Cleveland
Society of Security Analysts where he is a past president,
the Association of Investment Management and Research, the
Ohio Society of CPAs, and the Cleveland Bar Association.
Profile of GRADISON McDONALD Family of Funds
Grid from less potential risk, less potential reward to more
potential risk, more potential reward from left to right;
Money market Funds, Government Income Fund, Intermediate
Municipal Income Fund, Ohio Tax-Free Income Fund,
Established Value Fund, Growth & Income Fund, Opportunity
Value Fund, International Fund.
Gradison-McDonald Asset Management combines the
extensive investment experience of Gradison &
Company, founded in 1925, with McDonald & Company
which was founded in 1924. The two firms merged
in 1991. As Registered Investment Advisers since
1974 and mutual fund advisers since 1976,
Gradison-McDonald currently manages in excess of
$3 billion in mutual funds and individually
managed accounts.
A prospectus for the Growth and Income Fund or any other
Gradison-McDonald Fund may be obtained by calling (513) 579-
5700 or (800) 869-5999. The prospectus contains more
complete information. Read it carefully before you invest.
McDonald & Company Securities, Inc. - Distributor
Supplement to Statement of Additional Information of
Gradison-McDonald International Fund of Gradison Growth
Trust Dated December 15, l995,
Gradison-McDonald [graphic: photo of foreign currency]
International Fund
March 31, 1996
Gradison-McDonald International Fund seeks growth by
investing in common stocks of companies based outside of the
United States. The Fund invests approximately 70% of its
assets in developed markets and approximately 30% in
emerging markets. Gradison-McDonald believes that this
hybrid strategy offers risk/reward trade-offs favorable to
investors. Of course, international investing, particularly
in emerging markets, involves greater risks as compared to
U.S. investing, such as political instability and currency
fluctuation.
Gradison-McDonald has chosen Blairlogie Capital Management
located in Edinburgh, Scotland, as sub-adviser to the Fund.
Based on their research, they have determined that the most
important factor in international investing is the country
decision. They, therefore, follow a highly disciplined
methodology that first identifies the countries that they
believe offer the most favorable investment potential and
then selects the individual investments in those countries.
It is generally the policy of Gradison-McDonald
International Fund to maintain as fully invested a position
as practicable at all times.
Symbol: INTFX
[Graphic of world map with the countries invested by the
Fund highlighted. The following text reads over the map:
69% DEVELOPED MARKETS, Japan 33.0%, Great Britain 10.1%,
France 6.2%, Germany 5.8%, Italy 2.9%, Spain 2.2%, Hong Kong
2.1%, Singapore 2.0%, Netherlands 1.9%, Australia 1.4%,
Norway 0.7%, Finland 0.7%.31% EMERGING MARKETS Brazil 4.6%,
Mexico 4.0%, Malaysia, 3.5%, India 3.0%, Chile 2.5%,
Thailand 1.8%, Turkey 1.7%, South Korea 1.4%, Philippines
1.4%, Israel 1.3%, Columbia 1.1%, Portugal 1.0%, Poland
1.0%, Argentina 0.9%, South Africa 0.9%, Peru 0.8%,
Venezuela 0.1%
The table above showing the percentage of assets of the Fund
invested in securities of each country indicated as of March
31, 1996 is subject to change. On that date, the Fund
maintained 11% liquid reserves.
Value of $1,000 Since Inception
Line chart stating "The value of a $1,000 investment made in
the fund at inception with all dividends and capital gain
distributions reinvested" with these plot points 5/95 -
$1,000, 6/95 - $1,003, 9/95 - $999, 12/95 - $1,015, 3/96 -
$1,057
The performance quoted above and on the next page represents
past performance. The investment return and principal 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. Total return includes changes in
share value and reinvestment of all distributions and has
not been annualized. Past performance does not ensure future
results. Expense reimbursement increased return. See next
page.
Average Annual Total Return
Chart stating periods ended 3/31/96, Most recent quarter
(not annualized) - 4.15%, Since inception (5/31/95) - 5.69%
From the inception of the Fund (5/31/95) the investment
adviser has paid certain Fund expenses which has had the
effect of increasing the Fund's return. Without
consideration of such payments by the adviser, the
cumulative return on initial investments from inception and
most recent quarter would have been approximately +4.82% and
+3.82%, respectively. Expense reimbursement arrangements
may be terminated at any time which would result in lower
returns.
*Not annualized
Portfolio Manager Profile
Blairlogie Capital Management
Blairlogie Capital Management was founded in 1992 to
specialize in managing international investments primarily
for U.S. investors. Blairlogie's eighteen full-time
employees located in Edinburgh, Scotland, currently manage
more than $640 million in international assets.
Gavin Dobson
Chief Executive Officer
Blairlogie Capital Management
A Scottish lawyer by training, Gavin Dobson has twenty years
of international investment experience that includes
international corporate finance with Klinewert Benson in
London and President and Chief Operating Officer of Murray
Johnstone International in Chicago. In 1992, Mr. Dobson was
approached by Pacific Financial Asset Management to form an
advisory firm dedicated exclusively to international
investments. An author of numerous articles and three books
on international investing, Gavin has degrees in Economics
from Dundee University and Law from Edinburgh University.
James Smith
Chief Investment Officer
Blairlogie Capital Management
James Smith became a founding officer of Blairlogie Capital
Management in 1992 following five years with Murray
Johnstone International in Glasgow, Scotland, where he was
Senior Portfolio Manager with responsibility for
international asset allocation for North American clients
and Vice Chairman of the company's Emerging Markets Group.
Prior to that, Mr. Smith was an equity portfolio manager
with Schroders in London. James has an Economics BSc. degree
from London University and an MBA degree from Edinburgh
University, and is an Associate of the Institute of
Investment Research.
Profile of GRADISON McDONALD Family of Funds
Grid from less potential risk, less potential reward to more
potential risk, more potential reward from left to right;
Money market Funds, Government Income Fund, Intermediate
Municipal Income Fund, Ohio Tax-Free Income Fund,
Established Value Fund, Growth & Income Fund, Opportunity
Value Fund, International Fund.
A prospectus for the International Fund or any other
Gradison-McDonald Fund may be obtained by calling (513) 579-
5700 or (800) 869-5999. The prospectus contains more
complete information. Read it carefully before you invest.
McDonald & Company Securities, Inc. - Distributor
FACTSHT.EST
