Advance Capital I, Inc.
Supplement Dated March 9, 1999
to the Prospectus Dated October 28, 1998
Advance Capital I, Inc.
Supplement Dated March 9, 1999
Advance Capital I, Inc. Bond Fund shareholders, at a Special
Meeting held on March 8, 1999, voted to change the investment
objectives and policies of the Fund. The BOND FUND seeks to provide
investors with the highest level of current income without undue
risk of principal. The Fund seeks to achieve these objectives by
investing in a broad range of fixed income investments, including
investment grade corporate bonds, securities issued or guaranteed by
the U.S. government and high yield bonds. The value of the debt
securities may be affected by changing credit ratings or changes in
interest rates. In addition, certain industry events or changes in
market sentiment can also affect the value of the securities in the
portfolio.
The average weighted maturity of the portfolio securities in the
BOND FUND will typically be between 5 and 25 years. The BOND FUND
seeks to maximize income with respect to a portion of its assets.
Such maximum return is ordinarily associated with high yield, high
risk bonds and similar securities in the lower rating categories of
the recognized rating agencies. Such high yield, high risk or "junk
bonds" generally involve greater price volatility as well as risk of
principal and income than do bonds in the higher rating categories.
High yield bonds are considered predominately speculative. See
INVESTMENT RISKS OF LOWER RATED SECURITIES. There is no assurance
that the Fund will achieve its investment objectives.
The Bond Fund will invest at least 65 percent of its assets
in corporate or U.S. Government bonds. The Fund can invest as much
as 45 percent of the portfolio in lower rated, high-yielding securities
and as much as 25 percent of the portfolio in mortgage backed securities
guaranteed by the U.S. government. The Fund may also invest in the
following types of securities: preferred stocks, mortgage or asset backed
securities not issued or guaranteed by the U.S. government or its agencies
and money market instruments (See OTHER INVESTMENT POLICIES for definitions
of these types of securities). At no time will more than 50 percent of
the assets be invested in obligations issued or guaranteed by the U.S.
Government.
The Bond Fund will not invest in investment grade corporate or U.S.
Government issued or guaranteed bonds, preferred stocks or mortgage or
asset backed securities not guaranteed by the U.S. government or its
agencies that are rated lower than Baa3 by Moody's or BBB- by S&P at the
time of purchase. The Fund may invest as much as 45 percent of the
portfolio in lower rated, high-yielding securities, rated between Ba1
and B2 by Moody's or between BB+ and B by S&P, which may provide poor
protection for payment of principal and interest. These bonds are
commonly referred to as high yield or "junk bonds". If the quality
rating criteria are met at the time of investment, a later decline in
the rating by either or both of the rating agencies shall not be a
violation of the investment policies of the Bond Fund. In the event
that a security held by the Bond Fund is downgraded below B3 by Moody's
and B- by S&P, the Fund may continue to hold such security until such
time as the investment adviser deems it advantageous to dispose of the
security. See "Investment Risks of Lower Rated Securities". The
Investment Adviser supplements the rating and the maturity information
for the Bond Fund in a manner similar to that for the Retirement Income
Fund. Unrated obligations will be considered, if based on the Investment
Adviser's analysis of the financial merits of the obligations, it
concludes they are of comparable investment quality to the rated
instruments. No more than 5 percent of the portfolio may consist of
unrated obligations. When, in the opinion of the Investment Adviser,
a defensive investment posture is warranted, the Bond Fund may invest
temporarily and without limitation in high-grade, short-term money
market instruments.
The Bond Fund has a flexible investment policy which allows the
Investment Adviser to adjust the maturity and the quality of the
securities held in the portfolio. The average weighted maturity will
be adjusted according to the interest rate outlook in a manner similar
to the Retirement Income Fund as described above. The mix of the
quality of the securities held in the portfolio will similarly be
adjusted by the Investment Adviser. The degree to which the Bond
Fund holds high yield, high risk securities will be based on the
Adviser's forecast of the economy and its judgment concerning the
comparative value of high yield, high risk securities and higher
quality issues. Any adjustment in the maturity or the quality of
the Bond Fund holdings may cause an increase in portfolio turnover
and may result in an increase in expenses to the Fund.
Advance Capital I, Inc.
Supplement Dated March 9, 1999
to the Statement of Additional Information Dated October 28, 1998
Advance Capital I, Inc.
Supplement Dated March 9, 1999
Advance Capital I, Inc. Bond Fund shareholders, at a Special
Meeting held on March 8, 1999, voted to change the investment
objectives and policies of the Fund. The BOND FUND seeks to provide
investors with the highest level of current income without undue
risk of principal. The Fund seeks to achieve these objectives by
investing in a broad range of fixed income investments, including
investment grade corporate bonds, securities issued or guaranteed by
the U.S. government and high yield bonds. The value of the debt
securities may be affected by changing credit ratings or changes in
interest rates. In addition, certain industry events or changes in
market sentiment can also affect the value of the securities in the
portfolio.
The average weighted maturity of the portfolio securities in the
BOND FUND will typically be between 5 and 25 years. The BOND FUND
seeks to maximize income with respect to a portion of its assets.
Such maximum return is ordinarily associated with high yield, high
risk bonds and similar securities in the lower rating categories of
the recognized rating agencies. Such high yield, high risk or "junk
bonds" generally involve greater price volatility as well as risk of
principal and income than do bonds in the higher rating categories.
High yield bonds are considered predominately speculative. See
INVESTMENT RISKS OF LOWER RATED SECURITIES. There is no assurance
that the Fund will achieve its investment objectives.
The Bond Fund will invest at least 65 percent of its assets
in corporate or U.S. Government bonds. The Fund can invest as much
as 45 percent of the portfolio in lower rated, high-yielding securities
and as much as 25 percent of the portfolio in mortgage backed securities
guaranteed by the U.S. government. The Fund may also invest in the
following types of securities: preferred stocks, mortgage or asset backed
securities not issued or guaranteed by the U.S. government or its agencies
and money market instruments (See OTHER INVESTMENT POLICIES for definitions
of these types of securities). At no time will more than 50 percent of
the assets be invested in obligations issued or guaranteed by the U.S.
Government.
The Bond Fund will not invest in investment grade corporate or U.S.
Government issued or guaranteed bonds, preferred stocks or mortgage or
asset backed securities not guaranteed by the U.S. government or its
agencies that are rated lower than Baa3 by Moody's or BBB- by S&P at the
time of purchase. The Fund may invest as much as 45 percent of the
portfolio in lower rated, high-yielding securities, rated between Ba1
and B2 by Moody's or between BB+ and B by S&P, which may provide poor
protection for payment of principal and interest. These bonds are
commonly referred to as high yield or "junk bonds". If the quality
rating criteria are met at the time of investment, a later decline in
the rating by either or both of the rating agencies shall not be a
violation of the investment policies of the Bond Fund. In the event
that a security held by the Bond Fund is downgraded below B3 by Moody's
and B- by S&P, the Fund may continue to hold such security until such
time as the investment adviser deems it advantageous to dispose of the
security. See "Investment Risks of Lower Rated Securities". The
Investment Adviser supplements the rating and the maturity information
for the Bond Fund in a manner similar to that for the Retirement Income
Fund. Unrated obligations will be considered, if based on the Investment
Adviser's analysis of the financial merits of the obligations, it
concludes they are of comparable investment quality to the rated
instruments. No more than 5 percent of the portfolio may consist of
unrated obligations. When, in the opinion of the Investment Adviser,
a defensive investment posture is warranted, the Bond Fund may invest
temporarily and without limitation in high-grade, short-term money
market instruments.
The Bond Fund has a flexible investment policy which allows the
Investment Adviser to adjust the maturity and the quality of the
securities held in the portfolio. The average weighted maturity will
be adjusted according to the interest rate outlook in a manner similar
to the Retirement Income Fund as described above. The mix of the
quality of the securities held in the portfolio will similarly be
adjusted by the Investment Adviser. The degree to which the Bond
Fund holds high yield, high risk securities will be based on the
Adviser's forecast of the economy and its judgment concerning the
comparative value of high yield, high risk securities and higher
quality issues. Any adjustment in the maturity or the quality of
the Bond Fund holdings may cause an increase in portfolio turnover
and may result in an increase in expenses to the Fund.
