ESC STRATEGIC FUNDS, INC.
Supplement dated September 16, 1998
to Prospectus dated July 17, 1998
Information regarding ESC Strategic Income Fund ("Fund") in the prospectus of
ESC Strategic Funds, Inc. dated July 17, 1998 ("Prospectus") is modified in its
entirety to reflect the following changes in the Fund's investment policies and
management.
Effective September 30, 1998, the investment policies of ESC Strategic Income
Fund are changed to give the Fund the flexibility to invest up to 100% of its
assets in debt instruments of U.S. and foreign issuers that are rated below
investment grade - i.e., below BBB by S & P or Baa by Moody's. The Fund may
invest without limit in debt securities rated as low as C by Moody's or S & P,
or in unrated debt securities that are deemed of comparable quality by the
Fund's Manager. The Fund may also hold securities that are in default (rated D
by S&P), though such holdings are expected to be minimal. Securities rated below
BBB and Baa, or securities deemed of comparable quality by the Fund's Manager,
are commonly known as "junk bonds." Although such securities typically have
higher yields than higher quality securities, they entail greater risks of
untimely payment of principal and interest, as well as default and other risks.
Effective September 30, 1998, the Fund's sole Manager is Cincinnati Asset
Management, Inc. Thus, as of that date and for the reasonably foreseeable
future, the Fund does not follow the Multi-Manager Strategy (see "Management
Strategies" in the Prospectus).
The Fund's investment objectives continue as before. The Fund's primary
investment objective is a high level of current income, with a secondary
objective of total return.
Investors in ESC Strategic Income Fund should review the Prospectus descriptions
of the risks of lower-rated and non-investment grade securities. (See "Risks of
Lower Rated and Non-Investment Grade Securities and Sovereign Debt Obligations"
and "APPENDIX - Description of Bond Ratings".)
