NATIONS FUND, INC.
NATIONS EQUITY INCOME FUND
Supplement dated January 19, 1999
to Prospectuses dated August 1, 1998
The combined prospectuses for the Primary A, Primary B, Investor A and
Investor B Shares of Nations Equity Income Fund are hereby supplemented by:
1. Deleting the first and second paragraphs under the heading "How Objectives
Are Pursued--Nations Equity Income Fund" and inserting in their place the
following:
The investment program of the Fund is based on several
premises. First, that dividends are normally a more stable and
predictable source of return than capital appreciation. While the price
of a company's stock generally increases and decreases in response to
short-term earnings and market fluctuations, its dividends are
generally less volatile. Second, diversifying equity holdings in a
manner that includes every major economic sector contributes to reduced
volatility, without a commensurate reduction in investment return.
Collectively, these traits may be combined in such a fashion as to
produce a Fund with less volatility and which provides higher income
than that of the stocks in the S&P 500 Composite Stock Price Index
("S&P 500 Index").1
Typically, the Fund will own equity securities of 100-150
large capitalization, high quality companies. The Adviser considers
large capitalization companies to be those with a market capitalization
of $5 billion or more. The Fund's portfolio will seek to provide a
yield which exceeds that produced by the stocks in the S&P 500 Index.
Stocks are selected from a broad universe of such companies. The stock
selection process is quantitatively based, using fundamental measures
of valuation and growth. The process takes into account value factors
such as book value, earnings yield and cash flow, which measure a
stock's intrinsic worth versus its market price, as well as momentum
characteristics such as price momentum, earnings growth and earning
acceleration, which measure a stock relative to others in the industry.
2. Striking the reference to Nations Equity Income Fund in the paragraph
referencing the day-to-day management responsibilities of the Value Management
Team of TradeStreet and including Nations Equity Income Fund in the paragraph
referencing the funds managed by the Structured Products Management Team of
TradeStreet under the heading "How The Funds Are Managed--Investment Adviser."
1 "Standard & Poor's" and "Standard & Poor's 500" are trademarks of The
McGraw-Hill Companies, Inc.
