UAM FUNDS, INC.
The DSI Portfolios
Supplement Dated April 1, 1998
To The Statement of Additional Information
Dated January 22, 1998
The following information is in addition to the types of
investments that the portfolios may currently invest, as described
in the Statement of Additional Information under the heading
INVESTMENT OBJECTIVES AND POLICIES
STRIPPED SECURITIES
DSI Limited Maturity Bond Portfolio and DSI Balanced
Portfolio may buy stripped securities, which are securities
created by financial institutions who purchase blocks of
outstanding coupon-bearing U.S. Treasury securities, strip the
semi-annual coupons from the principal and sell the coupons and
the principal separately. The Portfolios may also buy U.S.
Treasury STRIPS, which are a kind of stripped security created
by the U.S. Treasury under the Separate Trading of Registered
Interest and Principal of Securities program. Under the STRIPS
program, the U.S. Treasury individually numbers and separately
issues the interest and principal components of its securities.
Financial institutions are then free to trade the components
independently. The interest and principal components of
STRIPS are obligations of the U.S. Treasury.
A principal only stripped security does not pay
interest. An interest only stripped security does not pay
interest. Instead, it is issued at a substantial discount to its face
value, i.e., what it will be worth it maturity. The difference
between a security's issue or purchase price and its face value
represents the imputed return an investor will earn if the security
is held until maturity.
Stripped securities may offer investors the opportunity to
earn higher yields than those available on U.S. Treasury
securities of similar maturity. However, stripped securities
prices may exhibit greater price volatility than ordinary debt
securities because a stripped security will have a longer duration
than an ordinary debt security with the same maturity.
