The following is a supplement dated January 5, l998 to the
Statement of Additional Information of the Established Value Fund
and the Opportunity Value Fund of the Gradison Growth Trust dated
August 1, l997.
(Excerpt from the Winter l998 issue of "Your Future.")
MEET THE MANAGERS OF
GRADISON'S ESTABLISHED VALUE FUND
SEASONED MANAGEMENT
Listed in Forbes August 1996 Honor Roll of mutual funds, the
Gradison Established Value Fund is co-managed by two seasoned
veterans, Bill Leugers, Jr. and Dan Shick. With over 25 years of
investment management experience each, Bill and Dan have
successfully guided investors' funds through all market
conditions.
When asked what he feels his experience brings to the management
team of the Fund, Bill replied, "I've learned to take a
disciplined, objective, value-oriented approach to constructing
and maintaining an investment portfolio. Therefore, my investment
philosophy doesn't change during upswings or downswings in the
market."
Bill and Dan have worked together for several years and share the
same investment philosophy. In a recent interview published in
The New York Times, Dan described this philosophy. He stated, "I
think our performance is a tribute to our stock selection
capability, and to our overriding objective of delivering
competitive returns with reduced volatility and risk. It's not
enough to pay attention only to return, without any attention to
risk. That will put you in a position where you don't want to
be."
VALUE APPROACH TO STOCK SELECTION
Bill and Dan employ a unique quantitative, value-oriented model
for selecting the securities that make-up the Established Value
Fund. Their Disciplined Equity Approach (DEA) of investment
selection, which both managers helped formulate in 1982, seeks to
purchase common stocks for long-term appreciation, and does not
try to time the market. The DEA model focuses on companies that
show above-average earnings growth potential but whose stock is
considered to be undervalued, on a price/earnings and market-to-
book basis. This value approach to stock selection has been the
cornerstone of the Fund's portfolio selection process since its
inception.
Bill and Dan's stock selections are quantitatively analyzed based
on: (1) companies with high earnings growth rates whose stocks
prices have relatively low market-to-book values, and (2)
companies whose stock prices are relatively low compared to their
underlying assets yet have shown above average earnings growth.
LET'S ASK THE PROFESSIONALS
How does a manager attempt to craft a portfolio that will keep
pace with the market while avoiding risky investments that tend
to be more volatile? Bill explains that he and Dan are committed
to their long-standing hallmark of discipline, "When most stocks
appear overpriced, we're not afraid to put a portion of our
portfolio on the sidelines and wait for more promising
opportunities to arise."
Dan added, "If there is a market downturn, since a portion of the
Fund's assets are held in cash, the effect of the downturn on the
Fund would be reduced. Perhaps then certain investments would
appear more attractive, based on our analytical observation."
For more complete information, including expenses, you may obtain
a prospectus for the Established Value Fund, or any other
Gradison Mutual Fund, by calling 513/579-5700 or 800/869-5999.
Investment returns and principal of the Established Value Fund
will fluctuate so that you may have a gain or loss when you sell
your shares. Always read the prospectus carefully before you
invest.
Caption:
WILLIAM J. LEUGERS, JR. (PICTURED)
MANAGING DIRECTOR, GRADISON - MCDONALD INVESTMENTS
WITH MORE THAN 28 YEARS OF INVESTMENT EXPERIENCE, THE LAST 14 AS
PORTFOLIO MANAGER OF THE GRADISON 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 SCHICK (PICTURED)
MANAGING DIRECTOR, GRADISON - MCDONALD INVESTMENTS
DAN SHICK'S ENTIRE 25 YEAR INVESTMENT CAREER HAS BEEN WITH THE
ASSET MANAGEMENT DIVISION. FOR MOST OF 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 THE B.B.A. DEGREE
IN ECONOMICS AND HIS M.B.A. IN FINANCE ARE FROM THE UNIVERSITY OF
CINCINNATI.
