File No. 811-2552
                                                                File No. 2-21867

                       SECURITIES AND EXCHANGE COMMISSION

                           Washington, D. C.   20549

                                   Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933     X

                        Pre-Effective Amendment No. ____
                        Post-Effective Amendment No. 119

                                     and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940                                                     X

                                Amendment No. 26

UNITED FUNDS, INC.
---------------------------------------------------------------------
                      (Exact Name as Specified in Charter)

6300 Lamar Avenue, Shawnee Mission, Kansas             66202-4200
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            (Address of Principal Executive Office)       (Zip Code)

Registrant's Telephone Number, including Area Code  (913) 236-2000
---------------------------------------------------------------------

Sharon K. Pappas, P. O. Box 29217, Shawnee Mission, Kansas  66201-9217
---------------------------------------------------------------------
                    (Name and Address of Agent for Service)

It is proposed that this filing will become effective

          _____  immediately upon filing pursuant to paragraph (b)
          __X__  on March 31, 1997 pursuant to paragraph (b)
          _____  60 days after filing pursuant to paragraph (a)(1)
          _____  on (date) pursuant to paragraph (a)(1)
          _____  75 days after filing pursuant to paragraph (a)(2)
          _____  on (date) pursuant to paragraph (a)(2) of Rule 485
          _____  this post-effective amendment designates a new effective date
                 for a previously filed post-effective amendment

       ==================================================================
                   DECLARATION REQUIRED BY RULE 24f-2 (a) (1)

     The issuer has registered an indefinite amount of its securities under the
Securities Act of 1933 pursuant to Rule 24f-2(a)(1).  Notice for the
Registrant's fiscal year ended December 31, 1996 was filed on February 25, 1997.

<PAGE>
                               UNITED FUNDS, INC.
                               ==================

                             Cross Reference Sheet
                             =====================

Part A of
Form N-1A
Item No.                      Prospectus Caption
---------                     ------------------

 1 ........................   Cover Page
 2(a) .....................   Expenses
  (b) .....................   An Overview of the Funds
  (c) .....................   An Overview of the Funds
 3(a) .....................   Financial Highlights
  (b) .....................   *
  (c) .....................   Performance
  (d)......................   Performance; About Your Account
 4(a) .....................   About the Investment Principles of the Funds;
                              About the Management and Expenses of the Funds
  (b) .....................   About the Investment Principles of the Funds
  (c) .....................   An Overview of the Funds; About the Investment
                              Principles of the Funds
 5(a) .....................   About the Management and Expenses of the Funds
  (b)......................   Inside Back Cover; About the Management and
                              Expenses of the Funds
  (c) .....................   About the Management and Expenses of the Funds
  (d) .....................   Inside Back Cover; About the Management and
                              Expenses of the Funds
  (e) .....................   Inside Back Cover; About the Management and
                              Expenses of the Funds
  (f) .....................   About the Management and Expenses of the Funds
  (g)(i)...................   *
  (g)(ii)..................   About the Management and Expenses of the Funds
 5A........................   **
 6(a) .....................   About the Management and Expenses of the Funds
  (b) .....................   *
  (c) .....................   *
  (d) .....................   About the Management and Expenses of the Fund
  (e) .....................   About Your Account
  (f)......................   About Your Account
  (g) .....................   About Your Account
  (h) .....................   About the Management and Expenses of the Funds
 7(a) .....................   Inside Back Cover; About Your Account
  (b) .....................   About Your Account
  (c) .....................   About Your Account
  (d) .....................   About Your Account
  (e) .....................   *
  (f) .....................   About the Management and Expenses of the Funds
 8(a) .....................   About Your Account
  (b) .....................   *
  (c) .....................   About Your Account
  (d) .....................   About Your Account
 9 ........................   *

Part B of
Form N-1A
Item No.                      SAI Caption
---------                     -----------

10(a) .....................   Cover Page
  (b) .....................   *
11 ........................   Cover Page
12                            *
13(a) .....................   Goals and Investment Policies
  (b) .....................   Goals and Investment Policies
  (c) .....................   Goals and Investment Policies
  (d) .....................   Goals and Investment Policies
14(a) .....................   Directors and Officers
  (b) .....................   Directors and Officers
  (c) .....................   Directors and Officers
15(a) .....................   *
  (b) .....................   *
  (c) .....................   Directors and Officers
16(a)(i) ..................   Investment Management and Other Services
  (a)(ii) .................   Investment Management and Other Services
  (a)(iii) ................   Investment Management and Other Services
  (b) .....................   Investment Management and Other Services
  (c) .....................   *
  (d) .....................   Investment Management and Other Services
  (e) .....................   *
  (f) .....................   Investment Management and Other Services
  (g) .....................   *
  (h) .....................   Investment Management and Other Services
  (i) .....................   *
17(a) .....................   Portfolio Transactions and Brokerage
  (b) .....................   *
  (c) .....................   Portfolio Transactions and Brokerage
  (d) .....................   *
  (e) .....................   Portfolio Transactions and Brokerage
18(a) .....................   Other Information
  (b) .....................   *
19(a) .....................   Purchase, Redemption and Pricing of Shares
  (b) .....................   Purchase, Redemption and Pricing of Shares
  (c) .....................   Purchase, Redemption and Pricing of Shares
20 ........................   Taxes
21(a) .....................   Investment Management and Other Services
  (b) .....................   Investment Management and Other Services
  (c) .....................   *
22(a) .....................   *
  (b)(i) ..................   Performance Information
  (b)(ii) .................   Performance Information
  (b)(iii) ................   *
  (b)(iv) .................   Performance Information
23 ........................   Financial Statements

-------------------------------------------------------------------------
 *Not Applicable or Negative Answer
**Contained in the Annual Report to Shareholders

<PAGE>
Please read this Prospectus before investing, and keep it on file for future
reference.  It sets forth concisely the information about the Funds that you
ought to know before investing.

   Additional information has been filed with the Securities and Exchange
Commission and is contained in a Statement of Additional Information ("SAI")
dated March 31, 1997.  The SAI is available free upon request to the Funds or
Waddell & Reed, Inc., the Funds' underwriter, at the address or telephone number
below.  The SAI is incorporated by reference into this Prospectus and you will
not be aware of all facts unless you read both this Prospectus and the SAI.    

United Funds, Inc.
Class A Shares
United Funds, Inc. (the "Corporation") is a management investment company that
has four separate funds (the "Funds"), each of which is designed for investors
with different goals.

United Bond Fund seeks a reasonable return with more emphasis on preservation of
capital.

United Income Fund seeks the maintenance of current income subject to market
conditions.

United Accumulative Fund seeks capital growth of your investment with current
income a secondary consideration.

United Science and Technology Fund seeks long-term capital growth through
investment in a portfolio emphasizing science and technology securities.

This Prospectus describes one class of shares of each of the Funds -- Class A
shares.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

Prospectus
   March 31, 1997    

UNITED FUNDS, INC.
6300 Lamar Avenue
P. O. Box 29217
Shawnee Mission, Kansas 66201-9217
913-236-2000

<PAGE>
Table of Contents

   AN OVERVIEW OF THE FUNDS..........................................3

EXPENSES.............................................................5

FINANCIAL HIGHLIGHTS.................................................6

PERFORMANCE.........................................................14
 Explanation of Terms ..............................................14

ABOUT WADDELL & REED................................................15

ABOUT THE INVESTMENT PRINCIPLES OF THE FUNDS........................16
 Investment Goals and Principles ...................................16
   Risk Considerations .............................................17
 Securities and Investment Practices ...............................19

ABOUT YOUR ACCOUNT..................................................33
 Ways to Set Up Your Account .......................................33
 Buying Shares .....................................................34
 Minimum Investments ...............................................37
 Adding to Your Account ............................................37
 Selling Shares ....................................................37
 Shareholder Services ..............................................37
   Personal Service ................................................40
   Reports .........................................................40
   Exchanges .......................................................40
   Automatic Transactions ..........................................40
 Distributions and Taxes ...........................................41
   Distributions ...................................................41
   Taxes ...........................................................42

ABOUT THE MANAGEMENT AND EXPENSES OF THE FUNDS......................44
 WRIMCO and Its Affiliates .........................................45
 Breakdown of Expenses .............................................47
   Management Fee ..................................................47
   Other Expenses ..................................................48

APPENDIX A..........................................................49
 DESCRIPTION OF BOND RATINGS .......................................49
 DESCRIPTION OF PREFERRED STOCK RATINGS                             53

<PAGE>
An Overview of the Funds

The Funds:  This Prospectus describes the Class A shares of four separate series
(each a "Fund" and, collectively, the "Funds") of an open-end, management
investment company.  Each Fund has different goals and policies.  Each of the
Funds is a diversified Fund.

Goals and Strategies:

United Bond Fund seeks a reasonable return with more emphasis on preservation of
capital.  This Fund invests primarily in debt securities, including convertible
securities and debt securities with warrants attached.

United Income Fund seeks to maintain current income, subject to market
conditions.  This Fund invests primarily in common stocks, or securities
convertible into common stocks, of companies that have the potential for capital
growth or that may be expected to resist market decline.

United Accumulative Fund seeks capital growth, with current income a secondary
goal.  This Fund invests primarily in common stocks or securities convertible
into common stocks.

United Science and Technology Fund seeks long-term capital growth.  This Fund
invests primarily in science and technology securities.

See "About the Investment Principles of the Funds" for further information.

Management:  Waddell & Reed Investment Management Company ("WRIMCO") provides
investment advice to each of the Funds and manages each Fund's investments.
WRIMCO is a wholly-owned subsidiary of Waddell & Reed, Inc.  WRIMCO, Waddell &
Reed, Inc. and its predecessors have provided investment management services to
registered investment companies since 1940.  See "About the Management and
Expenses of the Funds" for further information about management fees.

Distributor:  Waddell & Reed, Inc. acts as principal underwriter and distributor
of the shares of the Funds.

Purchases:  You may buy Class A shares of the Funds through Waddell & Reed, Inc.
and its account representatives.  The price to buy a Class A share of a Fund is
the net asset value of a Class A share plus a sales charge.  See "About Your
Account" for information on how to purchase Class A shares.

Redemptions:  You may redeem your shares at net asset value.  When you sell your
shares, they may be worth more or less than what you paid for them.  See "About
Your Account" for a description of redemption and reinvestment procedures.

Who May Want to Invest:  The Funds offer a variety of investment goals that are
compatible with different investment decisions.  You should consider whether a
Fund, or group of Funds, fits with your particular investment objectives.

Risk Considerations:  Because the Funds own different types of investments,
their performance will be affected by a variety of factors.  The value of each
Fund's investments and the income generated will vary from day to day, generally
reflecting changes in interest rates, market conditions and other company and
economic news.  Performance will also depend on WRIMCO's skill in selecting
investments.  See "Securities and Investment Practices" for information about
the risks associated with the Funds' respective investments.

<PAGE>
Expenses
                                                         United
                           United    United    United Science and
                            Bond     Income AccumulativeTechnology
                            Fund      Fund      Fund      Fund
                            ----      ----      ----      ----

Shareholder Transaction Expenses
are charges you pay when you buy or sell shares of a fund.

 Maximum sales
  load on purchases
  (as a percentage
  of offering price)         5.75%     5.75%     5.75%     5.75%

 Maximum sales load
  on reinvested
  dividends                 None      None      None      None

 Deferred sales load        None      None      None      None

 Redemption fees            None      None      None      None

 Exchange fee               None      None      None      None

Annual Fund Operating Expenses
(as a percentage of average net assets).

    
   
 Management fees             0.44%     0.56%     0.56%     0.61%
 12b-1 fees                  0.14%     0.15%     0.13%     0.15%
 Other expenses1             0.20%     0.16%     0.14%     0.23%
 Total Fund
 operating
 expenses2                   0.78%     0.87%     0.83%     0.99%    

Example:  You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return3 and (2) redemption at the end of each time period:
   
1 Year                    $ 65      $ 66      $ 65      $ 67
3 Years                   $ 81      $ 84      $ 82      $ 87
5 Years                   $ 98      $103      $101      $109
10 Years                  $149      $159      $154      $172    


The purpose of this table is to assist you in understanding the various costs
and expenses that a shareholder of the Class A shares of each Fund will bear
directly or indirectly.  The example should not be considered a representation
of past or future expenses; actual expenses may be greater or lesser than those
shown.  For a more complete discussion of certain expenses and fees, see
"Breakdown of Expenses."

                    
   1Expense information has been restated to reflect the current shareholder
servicing fee which became effective April 1, 1996.    
2Retirement plan accounts may be subject to a $2 fee imposed by the plan
 custodian for use of the Flexible Withdrawal Service.
3Use of an assumed annual return of 5% is for illustration purposes only and not
 a representation of a Fund's future performance, which may be greater or
 lesser.

<PAGE>
Financial Highlights

United Bond Fund
       

        The following information has been audited by Deloitte & Touche LLP,
independent accountants, with respect to the fiscal year ended December 31,
1996, and by Price Waterhouse LLP, independent accountants, with respect to all
other fiscal years, and should be read in conjunction with the financial
statements and notes thereto, together with the report of Deloitte & Touche LLP,
included in the SAI.    

     For a Class A share outstanding throughout each period.*
<TABLE>
                                                For the fiscal year ended December 31,
                        -----------------------------------------------------------------------------------------------
                         1996      1995      1994      1993      1992      1991      1990      1989      1988      1987
                         ----      ----      ----      ----      ----      ----      ----      ----      ----      ----
<S>                     <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
Net asset value,
  beginning of
  period ............   $6.34     $5.62     $6.39     $6.31     $6.32     $5.80     $6.07     $6.03     $6.11     $6.42
                        -----     -----     -----     -----     -----     -----     -----     -----     -----     -----
Income from investment
  operations:
  Net investment
    income ..........    0.39      0.40      0.39      0.41      0.45      0.47      0.50      0.55      0.54      0.56
  Net realized and
    unrealized gain
    (loss) on
    investments .....   (0.20)     0.72     (0.75)     0.41      0.00      0.56     (0.26)     0.07     (0.02)    (0.28)
                        -----     -----     -----     -----     -----     -----     -----     -----     -----     -----
Total from investment
  operations ........    0.19      1.12     (0.36)     0.82      0.45      1.03      0.24      0.62      0.52      0.28
                        -----     -----     -----     -----     -----     -----     -----     -----     -----     -----
Less distributions:
  Dividends from net
    investment
    income ..........   (0.39)    (0.40)    (0.39)    (0.41)    (0.46)    (0.47)    (0.50)    (0.56)    (0.54)    (0.55)
  Distributions from
    capital gains ...   (0.00)    (0.00)    (0.02)    (0.33)    (0.00)    (0.04)    (0.01)    (0.02)    (0.06)    (0.04)
                        -----     -----     -----     -----     -----     -----     -----     -----     -----     -----
Total distributions .   (0.39)    (0.40)    (0.41)    (0.74)    (0.46)    (0.51)    (0.51)    (0.58)    (0.60)    (0.59)
                        -----     -----     -----     -----     -----     -----     -----     -----     -----     -----
Net asset value,
  end of period .....   $6.14     $6.34     $5.62     $6.39     $6.31     $6.32     $5.80     $6.07     $6.03     $6.11
                        =====     =====     =====     =====     =====     =====     =====     =====     =====     =====
Total return** ......    3.20%    20.50%    -5.76%    13.19%     7.50%    18.78%     4.24%    10.61%     8.99%     4.50%
Net assets, end of
  period (000
  omitted) ..........$518,873  $563,445  $517,836  $641,668  $589,946  $524,404  $439,487  $403,010  $335,337  $319,273
Ratio of expenses to
  average net assets     0.77%     0.74%     0.72%     0.65%     0.64%     0.65%     0.67%     0.64%     0.65%     0.64%
Ratio of net investment
  income to average
  net assets ........    6.34%     6.54%     6.60%     6.14%     7.29%     7.96%     8.54%     8.97%     9.00%     8.83%
Portfolio turnover
  rate ..............   55.74%    66.38%   127.11%   175.39%   115.17%   318.76%   294.66%   353.57%   179.07%   232.65%

 *On June 17, 1995, the Fund began offering Class Y shares to the public.  Fund shares outstanding prior to that date were
  designated Class A shares.

**Total return calculated without taking into account the sales load deducted on an initial purchase.
</TABLE>
<PAGE>
United Income Fund
       

        The following information has been audited by Deloitte & Touche LLP,
independent accountants, with respect to the fiscal year ended December 31,
1996, and by Price Waterhouse LLP, independent accountants, with respect to all
other fiscal years, and should be read in conjunction with the financial
statements and notes thereto, together with the report of Deloitte & Touche LLP,
included in the SAI.    

For a Class A share outstanding throughout each period.*
<TABLE>
                                                    For the fiscal year ended December 31,
                        ------------------------------------------------------------------------------------------------
                          1996      1995      1994      1993      1992      1991      1990      1989      1988      1987
                          ----      ----      ----      ----      ----      ----      ----      ----      ----      ----
<S>                     <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
Net asset value,
  beginning of
  period ..........     $28.96    $23.34    $24.77    $22.05    $20.44    $16.46    $18.69    $16.76    $15.08    $17.03
                        ------    ------    ------    ------    ------    ------    ------    ------    ------    ------
Income from investment
  operations:
  Net investment income   0.33      0.36      0.36      0.40      0.46      0.51      0.61      0.65      0.60      0.72
  Net realized and
    unrealized gain
    (loss) on
    investments ...       5.53      6.53     (0.80)     3.11      1.96      4.29     (1.61)     3.89      2.35      0.59
                        ------    ------    ------    ------    ------    ------    ------    ------    ------    ------
Total from investment
  operations ......       5.86      6.89     (0.44)     3.51      2.42      4.80     (1.00)     4.54      2.95      1.31
                        ------    ------    ------    ------    ------    ------    ------    ------    ------    ------
Less distributions:
  Dividends from net
    investment income    (0.32)    (0.35)    (0.36)    (0.40)    (0.46)    (0.53)    (0.63)    (0.65)    (0.67)    (0.66)
  Distributions from
    capital gains .      (1.59)    (0.92)    (0.63)    (0.39)    (0.35)    (0.29)    (0.60)    (1.96)    (0.60)    (2.60)
                        ------    ------    ------    ------    ------    ------    ------    ------    ------    ------
Total distributions      (1.91)    (1.27)    (0.99)    (0.79)    (0.81)    (0.82)    (1.23)    (2.61)    (1.27)    (3.26)
                        ------    ------    ------    ------    ------    ------    ------    ------    ------    ------
Net asset value,
  end of period ...     $32.91    $28.96    $23.34    $24.77    $22.05    $20.44    $16.46    $18.69    $16.76    $15.08
                        ======    ======    ======    ======    ======    ======    ======    ======    ======    ======
Total return** ....      20.36%    29.60%    -1.82%    16.05%    11.96%    29.64%    -5.45%    27.49%    19.83%     7.17%
Net assets, end of
  period (000
  omitted) ........ $4,850,419$3,975,717$3,144,904$3,060,073$2,537,161$2,150,986$1,578,543$1,550,387$1,149,934  $964,521
Ratio of expenses to
  average net assets      0.86%     0.83%     0.74%     0.66%     0.65%     0.66%     0.68%     0.64%     0.67%    0.63%
Ratio of net investment
  income to average
  net assets ......       1.03%     1.31%     1.45%     1.70%     2.19%     2.71%     3.44%     3.41%     3.65%    3.99%
Portfolio turnover
  rate ............      22.24%    17.59%    18.54%    21.70%    19.25%    24.68%    30.94%    60.77%    48.64%   58.46%
Average commission
  rate paid .......      $0.0496

 *On June 17, 1995, the Fund began offering Class Y shares to the public.  Fund
  shares outstanding prior to that date were designated Class A shares.
**Total return calculated without taking into account the sales load deducted on an initial purchase.
</TABLE>
<PAGE>
United Accumulative Fund
       

        The following information has been audited by Deloitte & Touche LLP,
independent accountants, with respect to the fiscal year ended December 31,
1996, and by Price Waterhouse LLP, independent accountants, with respect to all
other fiscal years, and should be read in conjunction with the financial
statements and notes thereto, together with the report of Deloitte & Touche LLP,
included in the SAI.    

For a Class A share outstanding throughout each period.*
<TABLE>
                                                    For the fiscal year ended December 31,
                         ------------------------------------------------------------------------------------------------
                           1996      1995      1994      1993      1992      1991      1990      1989      1988      1987
                           ----      ----      ----      ----      ----      ----      ----      ----      ----      ----
<S>                       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
Net asset value,
  beginning of
  period ............     $7.78     $6.58     $7.19     $7.50     $7.15     $6.03     $7.12     $6.43     $5.75     $7.78
                          -----     -----     -----     -----     -----     -----     -----     -----     -----     -----
Income from investment
  operations:
  Net investment income    0.11      0.11      0.13      0.11      0.16      0.19      0.28      0.31      0.26      0.25
  Net realized and
    unrealized gain
    (loss) on
    investments .....      0.82      2.12     (0.13)     0.55      0.85      1.22     (0.99)     1.43      0.71      0.19
                          -----     -----     -----     -----     -----     -----     -----     -----     -----     -----
Total from investment
  operations ........      0.93      2.23      0.00      0.66      1.01      1.41     (0.71)     1.74      0.97      0.44
                          -----     -----     -----     -----     -----     -----     -----     -----     -----     -----
Less distributions:
  Dividends from net
    investment
    income ..........     (0.11)    (0.11)    (0.13)    (0.11)    (0.16)    (0.20)    (0.29)    (0.29)    (0.29)    (0.32)
  Distributions from
    capital gains ...     (0.85)    (0.92)    (0.48)    (0.84)    (0.50)    (0.09)    (0.09)    (0.76)    (0.00)    (2.15)
  Distribution in excess
    of capital gains      (0.00)    (0.00)    (0.00)    (0.02)    (0.00)    (0.00)    (0.00)    (0.00)    (0.00)    (0.00)
                          -----     -----     -----     -----     -----     -----     -----     -----     -----     -----
Total distributions .     (0.96)    (1.03)    (0.61)    (0.97)    (0.66)    (0.29)    (0.38)    (1.05)    (0.29)    (2.47)
                          -----     -----     -----     -----     -----     -----     -----     -----     -----     -----
Net asset value,
  end of period .....     $7.75     $7.78     $6.58     $7.19     $7.50     $7.15     $6.03     $7.12     $6.43     $5.75
                          =====     =====     =====     =====     =====     =====     =====     =====     =====     =====
Total return** ......     12.18%    34.21%     0.04%     9.06%    14.20%    23.68%   -10.17%    27.56%    17.05%     4.53%
Net assets, end of
  period (000
  omitted) ..........$1,285,227$1,206,128  $967,020$1,033,774  $992,924  $904,635  $767,218  $877,109  $737,231  $696,359
Ratio of expenses to
  average net assets       0.83%     0.80%     0.71%     0.65%     0.62%     0.63%     0.64%     0.60%     0.63%     0.59%
Ratio of net investment
  income to average
  net assets ........      1.34%     1.42%     1.76%     1.34%     2.13%     2.79%     4.12%     4.19%     4.09%     3.17%
Portfolio turnover
  rate ..............    240.37%   229.03%   205.40%   230.29%   194.41%   241.11%   288.64%   338.24%   245.42%   316.74%
Average commission
  rate paid .........     $0.0575

 *On June 17, 1995, the Fund began offering Class Y shares to the public.  Fund shares outstanding prior to that date were
  designated Class A shares.
**Total return calculated without taking into account the sales load deducted on an initial purchase.
</TABLE>
<PAGE>
United Science and Technology Fund
       

        The following information has been audited by Deloitte & Touche LLP,
independent accountants, with respect to the fiscal year ended December 31,
1996, and by Price Waterhouse LLP, independent accountants, with respect to all
other fiscal years, and should be read in conjunction with the financial
statements and notes thereto, together with the report of Deloitte & Touche LLP,
included in the SAI.    

For a Class A share outstanding throughout each period.*
<TABLE>
                                                         For the fiscal year ended December 31,
                       -------------------------------------------------------------------------------------------------
                          1996      1995      1994      1993      1992      1991      1990      1989      1988      1987
                          ----      ----      ----      ----      ----      ----      ----      ----      ----      ----
<S>                     <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
Net asset value,
  beginning of
  period ..........     $22.89    $15.21    $14.83    $14.64    $15.42    $10.27    $11.72     $9.91     $9.28    $10.00
                        ------    ------    ------    ------    ------    ------    ------    ------    ------    ------
Income from investment
  operations:
  Net investment
    income (loss)        (0.07)    (0.01)     0.00      0.01      0.03      0.10      0.24      0.20      0.20      0.19
  Net realized and
    unrealized gain
    (loss) on
    investments ...       2.00      8.40      1.40      1.21     (0.66)     5.90     (0.65)     2.50      0.64      1.06
                        ------    ------    ------    ------    ------    ------    ------    ------    ------    ------
Total from investment
  operations ......       1.93      8.39      1.40      1.22     (0.63)     6.00     (0.41)     2.70      0.84      1.25
                        ------    ------    ------    ------    ------    ------    ------    ------    ------    ------
Less distributions:
  Dividends from net
    investment
    income .........     (0.00)    (0.00)    (0.00)    (0.01)    (0.03)    (0.10)    (0.25)    (0.19)    (0.21)    (0.25)
  Distributions from
    capital gains ..     (1.47)    (0.71)    (1.02)    (0.95)    (0.12)    (0.75)    (0.79)    (0.70)    (0.00)    (1.72)
  Distribution in excess
    of capital gains     (0.00)    (0.00)    (0.00)    (0.07)    (0.00)    (0.00)    (0.00)    (0.00)    (0.00)    (0.00)
                        ------    ------    ------    ------    ------    ------    ------    ------    ------    ------
Total distributions      (1.47)    (0.71)    (1.02)    (1.03)    (0.15)    (0.85)    (1.04)    (0.89)    (0.21)    (1.97)
                        ------    ------    ------    ------    ------    ------    ------    ------    ------    ------
Net asset value,
  end of period ....    $23.35    $22.89    $15.21    $14.83    $14.64    $15.42    $10.27    $11.72     $9.91     $9.28
                        ======    ======    ======    ======    ======    ======    ======    ======    ======    ======
Total return** .....      8.35%    55.37%     9.78%     8.51%    -4.03%    59.25%    -3.51%    27.40%    9.05%     12.43%
Net assets, end of
  period (000
  omitted) .........  $980,547  $820,783  $496,503  $446,611  $428,806  $405,380  $239,077  $247,584  $214,693  $214,828
Ratio of expenses to
  average net assets      0.98%     0.93%     0.96%     0.91%     0.87%     0.85%     0.90%     0.84%     0.89%     0.81%
Ratio of net investment
  income to average
  net assets .......     -0.33%    -0.07%     0.00%     0.06%     0.24%     0.75%     2.06%     1.73%     1.94%     1.65%
Portfolio turnover
  rate .............     33.90%    32.89%    64.39%    68.38%    45.79%    59.24%    63.86%    83.19%    60.67%    85.35%
Average commission
  rate paid ........     $0.0538
 *On June 17, 1995, the Fund began offering Class Y shares to the public.  Fund shares outstanding prior to that date were
  designated Class A shares.
**Total return calculated without taking into account the sales load deducted on an initial purchase.
</TABLE>
<PAGE>
Performance

     Mutual fund performance is commonly measured as total return.  The Funds
may also advertise their performance by showing yield and performance rankings.
Performance information is calculated and presented separately for each class of
Fund shares.

Explanation of Terms

        Total Return is the overall change in value of an investment in a Fund
over a given period, assuming reinvestment of any dividends and other
distributions.  A cumulative total return reflects actual performance over a
stated period of time.  An average annual total return is a hypothetical rate of
return that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period.  Average annual
total returns smooth out variations in performance; they are not the same as
actual year-by-year results.  Non-standardized total return may not reflect
deduction of the applicable sales charge or may be for periods other than those
required to be presented or may otherwise differ from standardized total return.
Total return quotations that do not reflect the applicable sales charge will
reflect a higher rate of return.    

     Yield refers to the income generated by an investment in the Fund over a
given period of time, expressed as an annual percentage rate.  A Fund's yield is
based on a 30-day period ending on a specific date and is computed by dividing
the Fund's net investment income per share earned during the period by the
Fund's maximum offering price per share on the last day of the period.

     Performance Rankings are comparisons of a Fund's performance to the
performance of other selected mutual funds, selected recognized market
indicators such as the Standard & Poor's 500 Stock Index and the Dow Jones
Industrial Average, or non-market indices or averages of mutual fund industry
groups.  A Fund may quote its performance rankings and/or other information as
published by recognized independent mutual fund statistical services or by
publications of general interest.  In connection with a ranking, the Fund may
provide additional information, such as the particular category to which it
relates, the number of funds in the category, the criteria upon which the
ranking is based, and the effect of sales charges, fee waivers and/or expense
reimbursements.

     All performance information that each Fund advertises or includes in
information provided to present or prospective shareholders is historical in
nature and is not intended to represent or guarantee future results.  The value
of a Fund's shares when redeemed may be more or less than their original cost.

     Each Fund's recent performance and holdings will be detailed twice a year
in that Fund's annual and semiannual reports, which are sent to all Fund
shareholders.

<PAGE>
About Waddell & Reed

        Since 1937, Waddell & Reed has been helping people make the most of
their financial future by helping them take advantage of various financial
services.  Today, Waddell & Reed has over 2500 account representatives located
throughout the United States.  Your primary contact in your dealings with
Waddell & Reed will be your local account representative.  However, the Waddell
& Reed shareholder services department, which is part of the Waddell & Reed
headquarters operations in Overland Park, Kansas, is available to assist you and
your Waddell & Reed account representative.  You may speak with a customer
service representative by calling the telephone number listed on the inside back
cover.    

<PAGE>
About the Investment Principles of the Funds

Investment Goals and Principles

     The goals of each Fund are set forth below.  There is no assurance that a
Fund will achieve its goals; some risks are inherent in all securities to
varying degrees.

     United Bond Fund.  The goal of United Bond Fund is a reasonable return with
more emphasis on preservation of capital.  The Fund seeks to achieve this goal
by investing in debt securities, which may include convertible securities and
debt securities with warrants attached.  In selecting debt securities for the
portfolio of the Fund, WRIMCO considers yield and relative safety and, in the
case of convertible securities, the possibility of capital growth.

     The Fund may purchase securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities ("U.S. Government Securities").
The Fund will invest in U.S. Government Securities that are not backed by the
full faith and credit of the United States only when WRIMCO is satisfied that
the credit risk is acceptable.  Among the U.S. Government Securities that the
Fund may purchase are mortgage-backed securities of the Government National
Mortgage Association ("Ginnie Mae").  These mortgage-backed securities include
pass-through securities, participation certificates and collateralized mortgage
obligations ("CMOs").

     United Bond Fund may not purchase any securities other than debt securities
if after such purchase more than 10% of its total assets would consist of other
than debt securities.  This 10% limit does not include premiums paid or received
by the Fund in connection with options transactions, the value of options or
futures contracts held by the Fund, margin deposits as to options and futures
contracts, or non-debt securities held as a result of conversion or exercise of
a warrant.

     United Income Fund.  The goal of United Income Fund is the maintenance of
current income, subject to market conditions.  The Fund seeks to achieve this
goal by investing in common stocks, or securities convertible into common
stocks, of companies that have the potential for capital growth or that may be
expected to resist market decline.  At least 65% of United Income Fund's total
assets will be invested during normal market conditions in income-producing
securities.  When investment conditions are such that stocks with high yields
are less attractive than other common stocks, the Fund may hold lower-yielding
common stocks because of their prospects for appreciation.  When investment
conditions are such that the return on debt securities and preferred stocks is
more attractive than the return on common stocks, or when WRIMCO believes a
temporary defensive position is desirable, the Fund may seek to achieve its goal
by investing up to all of its assets in debt securities and preferred stocks.

     United Accumulative Fund.  The goal of United Accumulative Fund is capital
growth, with current income a secondary goal.  The Fund seeks to achieve these
goals by investing in common stocks or securities convertible into common
stocks.  As a temporary defensive measure at times when WRIMCO believes that
such securities do not offer a good investment opportunity, the Fund may hold up
to all of its assets in cash or fixed-income securities (i.e., debt securities
or preferred stock) or in common stocks that WRIMCO chooses because they are
less volatile rather than for their growth potential.

     United Science and Technology Fund.  The goal of United Science and
Technology Fund is long-term capital growth.  The Fund seeks to achieve this
goal by concentrating its investments in science and technology securities.
Science and technology securities are securities of companies whose products,
processes or services, in WRIMCO's opinion, are being or are expected to be
significantly benefited by the utilization or commercial application of
scientific or technological discoveries or developments in such areas as
aerospace, communications and electronic equipment, computer systems, computer
software and services, electronics, electronic media, business machines, office
equipment and supplies, biotechnology, medical and hospital supplies and
services, medical devices and drugs.  Certain risks are associated with science
and technology securities, including the impact of governmental regulation and
rapid obsolescence of issuers' products or processes.

     Under normal economic and market conditions, United Science and Technology
Fund will not invest in any securities other than science securities or
technology securities if, after such investment, more than 20% of its total
assets would be invested in such other securities.  The Fund may own common
stock, preferred stock, debt securities and convertible securities.  At times,
as a temporary defensive measure, the Fund may invest up to all of its assets in
U.S. Government Securities or other debt securities.

Risk Considerations

     There are risks inherent in any investment.  The Funds are subject to
varying degrees of market risk, financial risk and, in some cases, prepayment
risk.  Market risk is the potential for fluctuations in the price of the
security because of market factors.  Because of market risks, you should
anticipate that the share prices of the Funds will fluctuate.  Financial risk is
based on the financial situation of the issuer.  The financial risk of a Fund
depends on the credit quality of the underlying securities.  Prepayment risk is
the possibility that, during periods of falling interest rates, a debt security
with a high stated interest rate will be prepaid prior to its expected maturity
date.

     Certain types of instruments in which the Funds may invest, and certain
strategies WRIMCO may employ in pursuit of a Fund's goal(s), involve special
risks.  United Bond Fund invests primarily in debt securities, including, among
others, U.S. Government Securities and non-investment grade debt securities
(commonly called "junk bonds").  The market risk to which the Fund is subject is
the possibility that the price of its debt securities will fall because of
changing interest rates.  The financial risk to which the Fund is subject is the
possibility that an issuer will fail to make timely payments of interest or
principal to the Fund.  The Fund is also subject to prepayment risk.  Although
investments in U.S. Government Securities provide substantial protection against
financial risk, they do not protect investors against price changes due to
market risk.  Lower-quality debt securities involve greater risk of default or
price changes due to changes in the issuer's creditworthiness.  The market
prices of these securities may fluctuate more than high-quality securities and
may decline significantly in periods of general economic difficulty.

     United Income Fund and United Accumulative Fund invest primarily in equity
securities.  These Funds are subject to greater market risk than funds investing
solely in debt securities.  The market risk to which these Funds are subject is
the possibility of a change in the price of securities caused by stock market
price changes.  The financial risk to which these Funds are subject is the
possibility that the price of a security will fall because of poor earnings
performance by the issuer.

     United Science and Technology Fund may invest in equity securities and debt
securities.  This Fund is subject to differing market risks, financial risks and
prepayment risks depending on the types of securities in which it invests.  For
equity securities, market risk is the possibility of change in price caused by
stock market price changes; for debt securities, market risk is the possibility
that the price will fall because of changing interest rates.  For equity
securities, financial risk is the possibility that the price of the security
will fall because of poor earnings performance by the issuer.  For debt
securities, financial risk is the possibility that a bond issuer will fail to
make timely payments of interest or principal to the Fund.  The Fund is also
subject to prepayment risk.

     A Fund may use various techniques to increase or decrease its exposure to
changing security prices, interest rates or other factors that affect security
values.  These techniques may involve derivative instruments, including options,
futures contracts, options on futures contracts, indexed securities, stripped
securities and mortgage-backed securities.  If WRIMCO judges market conditions
incorrectly or employs a strategy that does not correlate well with a Fund's
investments, these techniques could result in a loss, regardless of whether the
intent was to reduce risk or increase return.  These techniques may increase the
volatility of a Fund and may involve a small investment of cash relative to the
risk assumed.  In addition, these techniques could result in a loss if the
counterparty to the transaction does not perform as promised or if there is not
a liquid secondary market to close out a position that a Fund has entered into.
See "Risks of Derivative Instruments" for further information on the risks of
investing in these instruments.

Securities and Investment Practices

        The following pages contain more detailed information about types of
instruments in which the Funds may invest and strategies WRIMCO may employ in
pursuit of the Funds' investment goal(s).  A summary of risks associated with
these instrument types and investment practices is included as well.    

        WRIMCO might not buy all of these instruments or use all of these
techniques to the full extent permitted by a Fund's investment policies and
restrictions unless it believes that doing so will help a Fund achieve its
goal(s).    

        Certain of the investment policies and restrictions of each Fund are
also stated below.  A fundamental policy of a Fund may not be changed without
the approval of the shareholders of that Fund.  Operating policies may be
changed by the Board of Directors without the approval of the affected
shareholders.  The goal(s) of a Fund and the type of securities in which a Fund
may invest are fundamental policies.  Unless otherwise indicated, the types of
other assets in which a Fund may invest, the proportions of its assets that a
Fund may invest in each such type and other policies are operating policies.    

     Policies and limitations are typically considered at the time of purchase;
the sale of instruments is usually not required in the event of a subsequent
change in circumstances.

     Please see the SAI for further information concerning the following
instruments and associated risks and the Funds' investment policies and
restrictions.

     Equity Securities.  Equity securities represent an ownership interest in an
issuer.  This ownership interest often gives an investor the right to vote on
measures affecting the issuer's organization and operations.  Although common
stocks and other equity securities have a history of long-term growth in value,
their prices tend to fluctuate in the short term, particularly those of smaller
companies.  The equity securities in which a Fund invests may include preferred
stock that converts to common stock either automatically or after a specified
period of time or at the option of the issuer.

     Debt Securities.  Bonds and other debt instruments are used by issuers to
borrow money from investors.  The issuer pays the investor a fixed or variable
rate of interest, and must repay the amount borrowed at maturity.  Some debt
securities, such as zero coupon bonds, do not pay current interest, but are
purchased at a discount from their face value.  The debt securities in which a
Fund invests may include debt securities whose performance is linked to a
specified equity security or securities index.

     Debt securities have varying levels of sensitivity to changes in interest
rates and varying degrees of quality.  As a general matter, however, when
interest rates rise, the values of fixed-rate debt securities fall and,
conversely, when interest rates fall, the values of fixed-rate debt securities
rise.  The values of floating and adjustable-rate debt securities are not as
sensitive to changes in interest rates as the values of fixed-rate debt
securities.  Longer-term bonds are generally more sensitive to interest rate
changes than shorter-term bonds.

     Lower-quality debt securities are considered to be speculative and involve
greater risk of default or price changes due to changes in the issuer's
creditworthiness.  The market prices of these securities may fluctuate more than
high-quality securities and may decline significantly in periods of general
economic difficulty.  While the market for high-yield, high-risk corporate debt
securities has been in existence for many years and has weathered previous
economic downturns, the 1980s brought a dramatic increase in the use of such
securities to fund highly leveraged corporate acquisitions and restructurings.
Past experience may not provide an accurate indication of the future performance
of the high-yield, high-risk bond market, especially during periods of economic
recession.  The market for lower-rated debt securities may be thinner and less
active than that for higher-rated debt securities, which can adversely affect
the prices at which the former are sold.  Adverse publicity and changing
investor perceptions may decrease the values and liquidity of lower-rated debt
securities, especially in a thinly-traded market.

     Valuation becomes more difficult and judgment plays a greater role in
valuing lower-rated debt securities than with respect to securities for which
more external sources of quotations and last sale information are available.
Since the risk of default is higher for lower-rated debt securities, WRIMCO's
research and credit analysis are an especially important part of managing
securities of this type held by a Fund.  WRIMCO continuously monitors the
issuers of lower-rated debt securities in a Fund's portfolio in an attempt to
determine if the issuers will have sufficient cash flow and profits to meet
required principal and interest payments.  A Fund may choose, at its expense or
in conjunction with others, to pursue litigation or otherwise to exercise its
rights as a security holder to seek to protect the interests of security holders
if it determines this to be in the best interest of the Fund's shareholders.

     U.S. Government Securities are high-quality instruments issued or
guaranteed as to principal or interest by the U.S. Treasury or by an agency or
instrumentality of the U.S. Government.  Not all U.S. Government Securities are
backed by the full faith and credit of the United States.  Some are backed by
the right of the issuer to borrow from the U.S. Treasury; others are backed by
discretionary authority of the U.S. Government to purchase the agencies'
obligations; while others are supported only by the credit of the
instrumentality.  In the case of securities not backed by the full faith and
credit of the United States, the investor must look principally to the agency
issuing or guaranteeing the obligation for ultimate repayment.

     Zero coupon bonds do not make interest payments; instead, they are sold at
a deep discount from their face value and are redeemed at face value when they
mature.  Because zero coupon bonds do not pay current income, their prices can
be very volatile when interest rates change.  In calculating its dividends, a
Fund takes into account as income a portion of the difference between a zero
coupon bond's purchase price and its face value.

        Subject to its investment restrictions, a Fund may invest in debt
securities rated in any rating category of the established rating services,
including securities rated in the lowest category (D by Standard & Poor's, a
division of The McGraw-Hill Companies, ("S&P") and C by Moody's Investors
Service, Inc. ("MIS")).  In addition, a Fund will treat unrated securities
judged by WRIMCO to be of equivalent quality to a rated security to be
equivalent to securities having that rating.  The rating categories of S&P and
MIS are described in Appendix A.  While credit ratings are only one factor
WRIMCO relies on in evaluating high-yield debt securities, certain risks are
associated with credit ratings.  Credit ratings evaluate the safety of principal
and interest payments, not market value risk. Credit ratings for individual
securities may change from time to time, and a Fund may retain a portfolio
security whose rating has been changed.    

     Policies and Restrictions:  At least 65% of the total assets of United Bond
Fund will be invested during normal market conditions in bonds.

     United Income Fund, United Accumulative Fund and United Science and
Technology Fund do not intend to invest in non-investment grade debt securities
if, as a result of such investment, more than 5% of that Fund's assets would
consist of such investments.

     United Bond Fund does not currently intend to invest more than 20% of its
assets in non-investment grade debt securities.

        Debt Holdings, by Ratings.  During the fiscal year ended December 31,
1996, the percentage of the assets of United Bond Fund invested in debt
securities in each of the rating categories of S&P and the corporate debt
securities not rated by an established rating service, determined on a dollar-
weighted average, were as follows:

        Percentage of
Rated  Assets of United
by S&P    Bond Fund
------ ----------------
AAA          37.9%
AA            9.9
A            18.4
BBB          18.6
BB           11.3
B             1.6
CCC           0.0
CC            0.0
C             0.0
D             0.0
Unrated       1.2
    

     The percentage of assets in each category was calculated on the basis of a
monthly dollar-weighted average.  The monthly dollar-weighted average was
calculated using the market value of the securities in United Bond Fund's
portfolio at the end of each month in the thirteen-month period ended with its
last fiscal year, averaged over its last fiscal year.  The rating used for each
security is that security's rating as of the end of each month and, as ratings
may change over time, does not necessarily indicate past or future ratings of
any particular security or the ratings of securities in the Fund's portfolio in
general.  Asset composition of the Fund by rating categories at any particular
time does not necessarily indicate future asset composition by rating
categories.

     Preferred Stock is also rated by S&P and MIS, as described in Appendix A.
The Funds may invest in preferred stock rated in any rating category by an
established rating service and unrated preferred stock judged by WRIMCO to be of
equivalent quality.

     Convertible Securities.  A convertible security is a bond, debenture, note,
preferred stock or other security that may be converted into or exchanged for a
prescribed amount of common stock of the same or a different issuer within a
particular period of time at a specified price or formula.  A convertible
security entitles the holder to receive interest paid or accrued on debt or the
dividend paid on preferred stock until the convertible security matures or is
redeemed, converted or exchanged.  Convertible securities generally have higher
yields than common stocks of the same or similar issuers, but lower yields than
comparable nonconvertible securities, are less subject to fluctuation in value
than the underlying stock because they have fixed income characteristics, and
provide the potential for capital appreciation if the market price of the
underlying common stock increases.

     The value of a convertible security is influenced by changes in interest
rates, with investment value declining as interest rates increase and increasing
as interest rates decline.  The credit standing of the issuer and other factors
also may have an effect on the convertible security's investment value.

     Policies and Restrictions:  Each Fund may invest in convertible securities
as long as WRIMCO determines that it is consistent with the Fund's goal(s) and
investment policies.

     Foreign Securities and foreign currencies can involve significant risks in
addition to the risks inherent in U.S. investments.  The value of securities
denominated in or indexed to foreign currencies, and of dividends and interest
from such securities, can change significantly when foreign currencies
strengthen or weaken relative to the U.S. dollar.  Foreign securities markets
generally have less trading volume and less liquidity than U.S. markets, and
prices on some foreign markets can be highly volatile.  Many foreign countries
lack uniform accounting and disclosure standards comparable to those applicable
to U.S. companies, and it may be more difficult to obtain reliable information
regarding an issuer's financial condition and operations.  In addition, the
costs of foreign investing, including withholding taxes, brokerage commissions
and custodial costs, are generally higher than for U.S. investments.

     Foreign markets may offer less protection to investors than U.S. markets.
Foreign issuers, brokers and securities markets may be subject to less
governmental supervision.  Foreign security trading practices, including those
involving the release of assets in advance of payment, may involve increased
risks in the event of a failed trade or the insolvency of a broker-dealer, and
may involve substantial delays.  It may also be difficult to enforce legal
rights in foreign countries.

     Investing abroad also involves different political and economic risks.
Foreign investments may be affected by actions of foreign governments adverse to
the interests of U.S. investors, including the possibility of expropriation or
nationalization of assets, confiscatory taxation, restrictions on U.S.
investment or on the ability to repatriate assets or convert currency into U.S.
dollars, or other government intervention.  There may be a greater possibility
of default by foreign governments or foreign government-sponsored enterprises.
Investments in foreign countries also involve a risk of local political,
economic or social instability, military action or unrest, or adverse diplomatic
developments.  There is no assurance that WRIMCO will be able to anticipate
these potential events or counter their effects.

     The considerations noted above generally are intensified for investments in
developing countries.  A developing country is a nation that, in WRIMCO's
opinion, is likely to experience long-term gross domestic product growth above
that expected to occur in the United States, the United Kingdom, France,
Germany, Italy, Japan and Canada.  Developing countries may have relatively
unstable governments, economies based on only a few industries and securities
markets that trade a small number of securities.

     Certain foreign securities impose restrictions on transfer within the
United States or to U.S. persons.  Although securities subject to transfer
restrictions may be marketable abroad, they may be less liquid than foreign
securities of the same class that are not subject to such restrictions.

     Policies and Restrictions:  As a fundamental policy, each Fund may purchase
an unlimited amount of foreign securities; however, as an operating policy, a
Fund may not invest more than 20% of its net assets in foreign securities.  The
Funds will not speculate in foreign currencies, but may briefly hold foreign
currencies in connection with the purchase or sale of foreign securities.

     As a fundamental policy, less than 5% of the total assets of the
Corporation may be invested in securities issued by foreign governments.

     Options, Futures and Other Strategies.  A Fund may use certain options to
attempt to enhance income or yield or may attempt to reduce the overall risk of
its investments by using certain options, futures contracts and certain other
strategies described herein.  The strategies described below may be used in an
attempt to manage certain risks of a Fund's investments that can affect
fluctuation in its net asset value.

     Except as to covered call writing, United Income Fund, United Accumulative
Fund and United Science and Technology Fund intend to limit purchase and sale of
options and futures contracts to buying and selling futures contracts on
broadly-based stock indices ("Stock Index Futures") and options thereon for the
purposes of hedging not more than 10% of their respective total assets.

     A Fund's ability to use these strategies may be limited by market
conditions, regulatory limits and tax considerations.  A Fund might not use any
of these strategies, and there can be no assurance that any strategy that is
used will succeed.  The risks associated with such strategies are described
below.  Also see the SAI for more information on these instruments and
strategies and their risk considerations.

     Options.  The Funds may engage in certain strategies involving options to
attempt to enhance a Fund's income or yield or to attempt to reduce the overall
risk of its investments.  A call option gives the purchaser the right to buy,
and obligates the writer to sell, the underlying investment at the agreed upon
exercise price during the option period.  A put option gives the purchaser the
right to sell, and obligates the writer to buy, the underlying investment at the
agreed upon exercise price during the option period.  Purchasers of options pay
an amount, known as a premium, to the option writer in exchange for the right
under the option contract.

     Options offer large amounts of leverage, which will result in a Fund's net
asset value being more sensitive to changes in the value of the related
investment.  There is no assurance that a liquid secondary market will exist for
exchange-listed options.  The market for options that are not listed on an
exchange may be less active than the market for exchange-listed options.  A Fund
will be able to close a position in an option it has written only if there is a
market for the put or call.  If a Fund is not able to enter into a closing
transaction on an option it has written, it will be required to maintain the
securities, or cash in the case of an option on an index, subject to the call or
the collateral underlying the put until a closing purchase transaction can be
entered into or the option expires.  Because index options are settled in cash,
a Fund cannot provide in advance for its potential settlement obligations on a
call it has written on an index by holding the underlying securities.  The Fund
bears the risk that the value of the securities it holds will vary from the
value of the index.

     Policies and Restrictions:  As a fundamental policy, United Bond Fund may
buy and sell put and call options on debt securities.  As a fundamental policy,
calls on securities that are written by the Fund must be covered (i.e., the Fund
must own the securities that are subject to the call or other investments
acceptable for escrow arrangements).

     Each Fund will write a put only when it has determined that it would be
willing to purchase the underlying security at the exercise price.

     United Income Fund, United Accumulative Fund and United Science and
Technology Fund may write listed covered calls on securities on up to 25% of the
respective total assets of each Fund and may purchase calls and write and
purchase puts on securities.  Each of these Funds must purchase and sell put and
call options on securities that are issued by the Options Clearing Corporation,
except that each Fund may write unlisted put options and purchase unlisted put
and call options on U.S. Government Securities and may purchase optional
delivery standby commitments.

     As a fundamental policy, United Income Fund, United Accumulative Fund and
United Science and Technology Fund may, for non-speculative purposes, write and
purchase options on stock indices that are not limited to stocks of any industry
or group of industries ("broadly-based stock indices").  Each of these Funds may
write and purchase only listed options on broadly-based stock indices.

     Futures Contracts and Options on Futures Contracts.  When a Fund purchases
a futures contract, it incurs an obligation to take delivery of a specified
amount of the obligation underlying the contract at a specified time in the
future for a specified price.  When a Fund sells a futures contract, it incurs
an obligation to deliver the specified amount of the underlying obligation at a
specified time in return for an agreed-upon price.

     When a Fund writes an option on a futures contract, it becomes obligated,
in return for the premium paid, to assume a position in a futures contract at a
specified exercise price at any time during the term of the option.  If a Fund
has written a call, it assumes a short futures position.  If it has written a
put, it assumes a long futures position.  When the Fund purchases an option on a
futures contract, it acquires a right in return for the premium it pays to
assume a position in a futures contract (a long position if the option is a call
and a short position if the option is a put).

     Policies and Restrictions:  United Bond Fund may buy and sell interest rate
futures contracts relating to debt securities ("Debt Futures") and options on
Debt Futures for the purpose of hedging the value of its securities portfolio
against future changes in interest rates.  It is a fundamental policy that
United Bond Fund's use of options and futures contracts is limited to those
relating to debt securities and Debt Futures.

     As a fundamental policy, United Income Fund, United Accumulative Fund and
United Science and Technology Fund may buy and sell Debt Futures, Stock Index
Futures and options on Debt Futures and Stock Index Futures.

        Indexed Securities.  Each Fund may purchase indexed securities, which
are securities the value of which varies in relation to the value of other
securities, securities indices, currencies, precious metals or other
commodities, or other financial indicators, as long as WRIMCO determines that it
is consistent with the Fund's goal(s) and investment policies. Indexed
securities typically, but not always, are debt securities or deposits whose
value at maturity or coupon rate is determined by reference to a specific
instrument or statistic.  The performance of indexed securities depends to a
great extent on the performance of the security, currency, or other instrument
to which they are indexed, and may also be influenced by interest rate changes
in the United States and abroad.  At the same time, indexed securities are
subject to the credit risks associated with the issuer of the security, and
their values may decline substantially if the issuer's creditworthiness
deteriorates. Indexed securities may be more volatile than the underlying
instruments.

     Mortgage-Backed and Other Asset-Backed Securities are bonds backed by
specific types of assets.  Mortgage-backed securities represent direct or
indirect interests in pools of underlying mortgage loans that are secured by
real property.  U.S. Government mortgage-backed securities are issued or
guaranteed as to principal and interest (but not as to market value) by the
Government National Mortgage Association, Fannie Mae (formerly the Federal
National Mortgage Association), Federal Home Loan Mortgage Corporation or other
government-sponsored enterprises.  Other mortgage-backed securities are
sponsored or issued by private entities, including investment banking firms and
mortgage originators.

     Mortgage-backed securities may be composed of one or more classes and may
be structured either as pass-through securities or collateralized debt
obligations.  Multiple-class mortgage-backed securities are referred to in this
prospectus as "CMOs"  Some CMOs are directly supported by other CMOs, which in
turn are supported by mortgage pools.  Investors typically receive payments out
of the interest and principal on the underlying mortgages.  The portions of
these payments that investors receive, as well as the priority of their rights
to receive payments, are determined by the specific terms of the CMO class.

     For example, interest-only ("IO") classes are entitled to receive all or a
portion of the interest, but none (or only a nominal amount) of the principal
payments, from the underlying mortgage assets.  If the mortgage assets
underlying an IO experience greater than anticipated principal prepayments, then
the total amount of interest payments allocable to the IO class, and therefore
the yield to investors, generally will be reduced. In some instances, an
investor in an IO may fail to recoup all of his or her initial investment, even
if the security is government guaranteed or considered to be of the highest
quality.  Conversely, principal-only ("PO") classes are entitled to receive all
or a portion of the principal payments, but none of the interest, from the
underlying mortgage assets.  PO classes are purchased at substantial discounts
from par, and the yield to investors will be reduced if principal payments are
slower than expected.  IOs, POs and other CMOs involve special risks, and
evaluating them requires special knowledge.

     When interest rates go down and homeowners refinance their mortgages,
mortgage-backed bonds may be paid off more quickly than investors expect.  When
interest rates rise, mortgage-backed bonds may be paid off more slowly than
originally expected.  Changes in the rate or "speed" of these prepayments can
cause the value of mortgage-backed securities to fluctuate rapidly.

     Other asset-backed securities are similar to mortgage-backed securities,
except that the underlying assets are different.  These underlying assets may be
nearly any type of financial asset or receivable, such as motor vehicle
installment sales contracts, home equity loans, leases of various types of real
and personal property and receivables from credit cards.

     The yield characteristics of mortgage-backed and asset-backed securities
differ from those of traditional debt securities.  Among the major differences
are that interest and principal payments are made more frequently and that
principal may be prepaid at any time because the underlying mortgage loans or
other assets generally may be prepaid at any time.  Generally, prepayments on
fixed-rate mortgage loans will increase during a period of falling interest
rates and decrease during a period of rising interest rates.  Mortgage- and
asset-backed securities may also decrease in value as a result of increases in
interest rates and, because of prepayments, may benefit less than other bonds
from declining interest rates.  Reinvestments of prepayments may occur at lower
interest rates than the original investment, thus adversely affecting a Fund's
yield.  Actual prepayment experience may cause the yield of a mortgage-backed
security to differ from what was assumed when the Fund purchased the security.

     The market for privately issued mortgage-backed and asset-backed securities
is smaller and less liquid than the market for U.S. Government mortgage-backed
securities.  CMO classes may be specially structured in a manner that provides
any of a wide variety of investment characteristics, such as yield, effective
maturity and interest rate sensitivity.  As market conditions change, however,
and especially during periods of rapid or unanticipated changes in market
interest rates, the attractiveness of some CMO classes and the ability of the
structure to provide the anticipated investment characteristics may be
significantly reduced.  These changes can result in volatility in the market
value, and in some instances reduced liquidity, of the CMO class.

     Policies and Restrictions:  Each Fund may invest in mortgage-backed, asset-
backed and stripped securities as long as WRIMCO determines that it is
consistent with the Fund's goal(s) and investment policies.    

     Risks of Derivative Instruments.  The use of options, futures contracts and
options on futures contracts and the investment in indexed securities, stripped
securities and mortgage-backed securities involves special risks, including (i)
possible imperfect or no correlation between price movements of the portfolio
investments (held or intended to be purchased) involved in the transaction and
price movements of the instruments involved in the transaction, (ii) possible
lack of a liquid secondary market for any particular instrument at a particular
time, (iii) the need for additional portfolio management skills and techniques,
(iv) losses due to unanticipated market price movements, (v) the fact that,
while such strategies can reduce the risk of loss, they can also reduce the
opportunity for gain, or even result in losses, by offsetting favorable price
movements in investments involved in the transaction, (vi) incorrect forecasts
by WRIMCO concerning interest rates or direction of price fluctuations of the
investment involved in the transaction, which may result in the strategy being
ineffective, (vii) loss of premiums paid by a Fund on options it purchases, and
(viii) the possible inability of a Fund to purchase or sell a portfolio security
at a time when it would otherwise be favorable for it to do so, or the possible
need for a Fund to sell a portfolio security at a disadvantageous time, due to
the need for the Fund to maintain "cover" or to segregate securities in
connection with such transactions and the possible inability of a Fund to close
out or liquidate its position.

     For a hedging strategy to be completely effective, the price change of the
hedging instrument must equal the price change of the investment being hedged.
The risk of imperfect correlation of these price changes increases as the
composition of a Fund's portfolio diverges from instruments underlying a hedging
instrument.  Such equal price changes are not always possible because the
investment underlying the hedging instruments may not be the same investment
that is being hedged.  WRIMCO will attempt to create a closely correlated hedge
but hedging activity may not be completely successful in eliminating market
value fluctuation.

     WRIMCO may use derivative instruments, including securities with embedded
derivatives, for hedging purposes to adjust the risk characteristics of a Fund's
portfolio of investments and may use some of these instruments to adjust the
return characteristics of a Fund's portfolio of investments.  An embedded
derivative is a derivative that is part of another financial instrument.
Embedded derivatives typically, but not always, are debt securities whose return
of principal or interest, in part, is determined by something that is not
intrinsic to the security itself.  The use of derivative techniques for
speculative purposes can increase investment risk.  If WRIMCO judges market
conditions incorrectly or employs a strategy that does not correlate well with a
Fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return.  These techniques may
increase the volatility of a Fund and may involve a small investment of cash
relative to the magnitude of the risk assumed.  In addition, these techniques
could result in a loss if the counterparty to the transaction does not perform
as promised or if there is not a liquid secondary market to close out a position
that a Fund has entered into.

     The ordinary spreads between prices in the cash and futures markets, due to
the differences in the natures of those markets, are subject to distortion.  Due
to the possibility of distortion, a correct forecast of general interest rate or
stock market trends by WRIMCO may still not result in a successful transaction.
WRIMCO may be incorrect in its expectations as to the extent of various interest
rate movements or stock market movements or the time span within which the
movements take place.

     Options and futures transactions may increase portfolio turnover rates,
which results in correspondingly greater commission expenses and transactions
costs and may result in certain tax consequences.

     New financial products and risk management techniques continue to be
developed.  Each Fund may use these instruments and techniques to the extent
consistent with its goal(s), investment policies and regulatory requirements
applicable to investment companies.

     When-Issued and Delayed-Delivery Transactions are trading practices in
which payment and delivery for the securities take place at a future date.  The
market value of a security could change during this period, which could affect a
Fund's yield.

     When purchasing securities on a delayed-delivery basis, a Fund assumes the
rights and risks of ownership, including the risk of price and yield
fluctuations.  When a Fund has sold a security on a delayed-delivery basis, a
Fund does not participate in further gains or losses with respect to the
security.  If the other party to a delayed-delivery transaction fails to deliver
or pay for the securities, a Fund could miss a favorable price or yield
opportunity, or could suffer a loss.

     Policies and Restrictions:  Each Fund may purchase securities in which it
may invest on a when-issued or delayed-delivery basis or sell them on a delayed-
delivery basis.

     Repurchase Agreements.  In a repurchase agreement, a Fund buys a security
at one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults or
becomes insolvent.

     Policies and Restrictions:  Each Fund may purchase securities subject to
repurchase agreements if, as a result, no more than 10% of its net assets would
consist of illiquid investments (which include repurchase agreements not
terminable within seven days).

        Restricted Securities and Illiquid Investments.  Restricted securities
are securities that are subject to legal or contractual restrictions on resale.
Restricted securities may be illiquid due to restrictions on their resale.
Certain restricted securities may be determined to be liquid in accordance with
guidelines adopted by the Corporation's Board of Directors.    

     Illiquid investments may be difficult to sell promptly at an acceptable
price.  Difficulty in selling securities may result in a loss or may be costly
to a Fund.

     Policies and Restrictions:  United Accumulative Fund and United Income Fund
may purchase restricted securities.  United Income Fund does not intend to
invest more than 10% of its assets in restricted securities.

     A Fund may not purchase a security if as a result more than 10% of its net
assets would consist of illiquid investments.

     Diversification.  Diversifying a Fund's investment portfolio can reduce the
risks of investing.  This may include limiting the amount of money invested in
any one issuer or, on a broader scale, in any one industry.

        Policies and Restrictions:  As a fundamental policy, no Fund may invest
in a security if, as a result, it would own more than 10% of the outstanding
voting securities of an issuer or any class of its securities, or if more than
5% of the Fund's total assets would be invested in securities of that
issuer.    

     As a fundamental policy, no Fund other than United Science and Technology
Fund may buy a security if, as a result, 25% or more of the Fund's total assets
would then be invested in securities of companies in any one industry.

     Lending.  Securities loans may be made on a short-term or long-term basis
for the purpose of increasing a Fund's income.  This practice could result in a
loss or a delay in recovering a Fund's securities.  Loans will be made only to
parties deemed by WRIMCO to be creditworthy.

     Policies and Restrictions:  As a fundamental policy, a Fund will not lend
more than 10% of its assets at any one time, and such loans must be on a
collateralized basis in accordance with applicable regulatory requirements.

     Other Instruments may include warrants and securities of closed-end
investment companies.  As a shareholder in an investment company, a Fund would
bear its pro rata share of that investment company's expenses, which could
result in duplication of certain fees, including management and administrative
fees.

     Policies and Restrictions:  As a fundamental policy, each Fund may purchase
shares of other investment companies that do not redeem their shares, but not
more than 10% of the total assets of the Corporation may be invested in such
shares.  Each Fund does not currently intend to invest more than 5% of its
assets in the shares of other investment companies.

        As a fundamental policy, a Fund may not invest any of its assets in
companies, including predecessors, with less than three years' continuous
operation.  As a fundamental policy, United Bond Fund may invest in
warrants.    

<PAGE>
About Your Account

     The different ways to set up (register) your account are listed below.

                          Ways to Set Up Your Account

-------------------------------------------------

Individual or Joint Tenants
For your general investment needs

Individual accounts are owned by one person.  Joint accounts have two or more
owners (tenants).

-------------------------------------------------

Business or Organization
For investment needs of corporations, associations, partnerships, institutions
or other groups

-------------------------------------------------

Retirement
To shelter your retirement savings from taxes

Retirement plans allow individuals to shelter investment income and capital
gains from current taxes.  In addition, contributions to these accounts may be
tax deductible.
   
_ Individual Retirement Accounts (IRAs) allow anyone of legal age and under 70
  1/2 with earned income to invest up to $2,000 per tax year.  For 1997, the
  maximum for an investor and his or her spouse is $4,000 ($2,000 for each
  spouse) or, if less, the couple's combined earned income for the taxable
  year.    

_ Rollover IRAs retain special tax advantages for certain distributions from
  employer-sponsored retirement plans.

_ Simplified Employee Pension Plans (SEP - IRAs) provide small business owners
  or those with self-employed income (and their eligible employees) with many
  of the same advantages as a Keogh, but with fewer administrative
  requirements.

_ Keogh Plans allow self-employed individuals to make tax-deductible
  contributions for themselves up to 25% of their annual earned income, with a
  maximum of $30,000 per year.

_ 401(k) Programs allow employees of corporations of all sizes to contribute a
  percentage of their wages on a tax-deferred basis.  These accounts need to be
  established by the administrator or trustee of the plan.

_ 403(b) Custodial Accounts are available to employees of public school systems
  or certain types of charitable organizations.

_ 457 Accounts allow employees of state and local governments and certain
  charitable organizations to contribute a portion of their compensation on a
  tax-deferred basis.
     
_ Savings Incentive Match Plans for Employees (SIMPLE Plans) can be established
  by small employers to contribute to their employees' retirement accounts and
  involve fewer administrative requirements than 401(k) or other qualified
  plans generally.    

-------------------------------------------------

Gifts or Transfers to a Minor

To invest for a child's education or other future needs

        These custodial accounts provide a way to give money to a child and
obtain tax benefits.  An individual can give up to $10,000 a year per child
without paying Federal transfer tax.  Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act ("UGMA") or the Uniform
Transfers to Minors Act ("UTMA").    

-------------------------------------------------

Trust
For money being invested by a trust

The trust must be established before an account can be opened, or you may use a
trust form made available by Waddell & Reed.  Contact your Waddell & Reed
account representative for the form.

-------------------------------------------------

Buying Shares

        You may buy shares of the Funds through Waddell & Reed, Inc. and its
account representatives.  To open your account you must complete and sign an
application.  Your Waddell & Reed, Inc. account representative can help you with
any questions you might have.  The Prospectus has been made available on a
diskette that can be used with certain software programs that have a reader,
i.e., a voice capability feature which can convert the data on the diskette into
an oral format.    

     The price to buy a share of each Fund, called the offering price, is
calculated every business day.

     The offering price of a Class A share (price to buy one Class A share) is
each Fund's Class A net asset value ("NAV") plus the sales charge shown in the
table below.

                 Sales
          Sales  Charge
         Charge    as
           as   Approx.
         PercentPercent
           of      of
Size of Offering Amount
Purchase  Price Invested
-----------------------
Under
$100,000  5.75%  6.10%

$100,000
to less
than
$200,000  4.75    4.99

$200,000
to less
than
$300,000  3.50    3.63

$300,000
to less
than
$500,000  2.50    2.56

$500,000
to less
than
$1,000,0001.50    1.52

$1,000,000
to less
than
$2,000,0001.00    1.01

$2,000,000
and over  0.00    0.00

     A Fund's Class A NAV is the value of a single Class A share.  The Class A
NAV is computed by adding with respect to that class the value of a Fund's
investments, cash and other assets, subtracting its liabilities, and then
dividing the result by the number of Class A shares outstanding.

        The securities in each Fund's portfolio that are listed or traded on an
exchange are valued primarily using market quotations or, if market quotations
are not available, at their fair value in a manner determined in good faith by
or at the direction of the Board of Directors.  Bonds are generally valued
according to prices quoted by a third-party pricing service.  Short-term debt
securities are valued at amortized cost, which approximates market value.  Other
assets are valued at their fair value by or at the direction of the Board of
Directors.    

        A Fund is open for business each day the New York Stock Exchange (the
"NYSE") is open.  The Funds normally calculate their NAVs as of the later of the
close of business of the NYSE, normally 4 p.m. Eastern time, or the close of the
regular session of any other securities or commodities exchange on which an
option or future held by a Fund is traded.    

     When you place an order to buy shares, your order will be processed at the
next offering price calculated after your order is received and accepted.  Note
the following:

  Orders are accepted only at the home office of Waddell & Reed, Inc.
  All of your purchases must be made in U.S. dollars.
  If you buy shares by check, and then sell those shares by any method other
  than by exchange to another Fund in the United Group, the payment may be
  delayed for up to ten days to ensure that your previous investment has
  cleared.

        When you sign your account application, you will be asked to certify
that your Social Security or other taxpayer identification number is correct and
whether you are subject to  backup withholding for failing to report income to
the Internal Revenue Service.    

     Waddell & Reed, Inc. reserves the right to reject any purchase orders,
including purchases by exchange, and it and the Funds reserve the right to
discontinue offering Fund shares for purchase.

        Lower sales charges are available by combining additional purchases of
Class A shares of any of the funds in the United Group, to the extent otherwise
permitted, except United Municipal Bond Fund, Inc., United Cash Management,
Inc., United Government Securities Fund, Inc. and United Municipal High Income
Fund, Inc., with the NAV of Class A shares already held ("rights of
accumulation") and by grouping all purchases of Class A shares made during a
thirteen-month period ("Statement of Intention").  Class A shares of Income
Fund, Accumulative Fund or Science and Technology Fund or of another fund
purchased through a contractual plan may not be included unless the plan has
been completed.  Purchases by certain related persons may be grouped.  Any
person who was a holder of an uncompleted (i) United Income Investment Program,
(ii) United Periodic Investment Plan to Acquire United Accumulative Fund Shares
of United Funds, Inc., or (iii) United Periodic Investment Plan to Acquire
United Science Fund Shares of United Funds, Inc. (each a "Plan") on May 30,
1996, with a face amount of less than $12,000, may purchase Class A shares of
the Fund corresponding to such Plan (i.e., United Income Fund, United
Accumulative Fund or United Science and Technology Fund, respectively) at net
asset value ("NAV") plus a maximum sales charge of 2%, up to the amount
representing the unpaid balance of such Plan, if the purchase order is so
designated.  Additional information and applicable forms are available from
Waddell & Reed account representatives.

     Fund Class A shares may be purchased at NAV by the Directors and officers
of the Corporation, employees of Waddell & Reed, Inc., employees of their
affiliates, account representatives of Waddell & Reed, Inc. and the spouse,
children, parents, children's spouses and spouse's parents of each such
Director, officer, employee and account representative.  Any holder of an
uncompleted Plan on May 30, 1996, with a face amount of $12,000 or more, may
purchase Class A shares of the Fund corresponding to such Plan at NAV, up to the
amount representing the unpaid balance of the Plan, if the purchase order is so
designated.  In addition, any person who was a holder of a Plan on May 30, 1996
may purchase Class A shares of the Fund corresponding to such Plan at NAV up to
the amount representing partial Plan withdrawals outstanding on May 30, 1996,
provided the purchase order is so designated.  Purchases of Class A shares in
certain retirement plans and certain trusts for these persons may also be made
at NAV.  Purchases of Class A shares in a 401(k) plan having 100 or more
eligible employees and purchases of Class A shares in a 457 plan having 100 or
more eligible employees may be made at NAV.  Shares may also be issued at NAV in
a merger, acquisition or exchange offer made pursuant to a plan of
reorganization to which the Fund is a party.    

Minimum Investments

To Open an Account         $500

For certain exchanges      $100

For certain retirement accounts and accounts opened with Automatic Investment 
Service
                           $50

For certain retirement accounts and accounts opened through payroll deductions 
for or
by employees of WRIMCO, Waddell & Reed, Inc. and their affiliates     $25

To Add to an Account

For certain exchanges      $100

For Automatic Investment Service   $25

Adding to Your Account

     Subject to the minimums described under "Minimum Investments," you can make
additional investments of any amount at any time.

     To add to your account, make your check payable to Waddell & Reed, Inc.
Mail the check along with:

  the detachable form that accompanies the confirmation of a prior purchase by
  you or your year-to-date statement; or
   
  a letter stating your account number, the account registration and that you
  wish to purchase Class A shares of the Fund.    

     Mail to Waddell & Reed, Inc. at the address printed on your confirmation or
year-to-date statement.

Selling Shares

     You can arrange to take money out of your Fund account at any time by
selling (redeeming) some or all of your shares.

     The redemption price (price to sell one Class A share) is the Fund's Class
A NAV.

     To sell shares, your request must be made in writing.

     Complete an Account Service Request form, available from your Waddell &
Reed account representative, or write a letter of instruction with:

  the name on the account registration;
  the Fund's name;
  the Fund account number;
  the dollar amount or number of shares to be redeemed; and
  any other applicable requirements listed in the table below.

     Deliver the form or your letter to your Waddell & Reed account
representative, or mail it to:

Waddell & Reed, Inc.
P. O. Box 29217
Shawnee Mission, Kansas
66201-9217

     Unless otherwise instructed, Waddell & Reed, Inc. will send a check to the
address on the account.

                    Special Requirements for Selling Shares

  Account Type         Special Requirements
Individual or    The written instructions must
Joint Tenant     be signed by all persons
                 required to sign for
                 transactions, exactly as their
                 names appear on the account.
Sole             The written instructions must
Proprietorship   be signed by the individual
                 owner of the business.
UGMA, UTMA       The custodian must sign the
                 written instructions
                 indicating capacity as
                 custodian.
Retirement       The written instructions must
Account          be signed by a properly
                 authorized person.
Trust            The trustee must sign the
                 written instructions
                 indicating capacity as
                 trustee.  If the trustee's
                 name is not in the account
                 registration, provide a
                 currently certified copy of
                 the trust document.
Business or      At least one person authorized
Organization     by corporate resolution to act
                 on the account must sign the
                 written instructions.
Conservator,     The written instructions must
Guardian or      be signed by the person
Other Fiduciary  properly authorized by court
                 order to act in the particular
                 fiduciary capacity.

        When you place an order to sell shares, your shares will be sold at the
next NAV calculated after receipt of a written request for redemption in good
order by Waddell & Reed, Inc. at its home office.  Note the following:    

  If more than one person owns the shares, each owner must sign the written
  request.
  If you hold a certificate, it must be properly endorsed and sent to the
  Corporation.
  If you recently purchased the shares by check, a Fund may delay payment of
  redemption proceeds.  You may arrange for the bank upon which the purchase
  check was drawn to provide to the Fund telephone or written assurance,
  satisfactory to the Fund, that the check has cleared and been honored.  If no
  such assurance is given, payment of the redemption proceeds on these shares
  will be delayed until the earlier of 10 days or the date the Fund is able to
  verify that your purchase check has cleared and been honored.
  Redemptions may be suspended or payment dates postponed on days when the NYSE
  is closed (other than weekends or holidays), when trading on the NYSE is
  restricted or as permitted by the Securities and Exchange Commission.
  Payment is normally made in cash, although under extraordinary conditions
  redemptions may be made in portfolio securities.

     Each Fund reserves the right to require a signature guarantee on certain
redemption requests.  This requirement is designed to protect you and Waddell &
Reed, Inc. from fraud.  A Fund may require a signature guarantee in certain
situations such as:

  the request for redemption is made by a corporation, partnership or
  fiduciary;
  the request for redemption is made by someone other than the owner of record;
  or
  the check is being made payable to someone other than the owner of record.

     Each Fund will accept a signature guarantee from a national bank, a
federally chartered savings and loan or a member firm of a national stock
exchange or other eligible guarantor in accordance with procedures of the Fund's
transfer agent.  A notary public cannot provide a signature guarantee.

     You may reinvest in a Fund without charge all or part of the amount you
redeemed by sending to the Fund the amount you want to reinvest.  The reinvested
amounts must be received by the Fund within thirty days after the date of your
redemption.  You may do this only once as to Class A shares of the Fund.

        Under the terms of the 401(k) prototype plan which Waddell & Reed, Inc.
has available, the plan may have the right to make a loan to a plan participant
by redeeming Fund shares held by the plan.  Principal and interest payments on
the loan made in accordance with the terms of the plan may be reinvested by the
plan, without payment of a sales charge, in Class A shares of any of the funds
in the United Group in which the plan may invest.    

Shareholder Services

     Waddell & Reed provides a variety of services to help you manage your
account.

Personal Service

     Your local Waddell & Reed account representative is available to provide
personal service.  Additionally, the Waddell & Reed Customer Services staff is
available to respond promptly to your inquiries and requests.

Reports

     Statements and reports sent to you include the following:
   
  confirmation statements (after every purchase, other than those purchases
  made through Automatic Investment Service, and after every exchange, transfer
  or redemption)    
  year-to-date statements (quarterly)
  annual and semiannual reports (every six months)

        To reduce expenses, only one copy of annual and semiannual reports of
each Fund will be mailed to your household, even if you have more than one
account with a Fund.  Call the telephone number listed on the inside back cover
if you need copies of annual or semiannual reports or historical account
information.    

Exchanges

     You may sell your Class A shares and buy Class A shares of other funds in
the United Group without payment of an additional sales charge.  You may
exchange only into funds that are legally registered for sale in your state of
residence.  Note that exchanges out of a Fund may have tax consequences for you.
Before exchanging into a fund, read its prospectus.

     The Funds reserve the right to terminate or modify these exchange
privileges at any time, upon notice in certain instances.

Automatic Transactions

     Flexible withdrawal service lets you set up monthly, quarterly, semiannual
or annual redemptions from your account.

     Regular Investment Plans allow you to transfer money into your Fund
account, or between Fund accounts, automatically.  While Regular Investment
Plans do not guarantee a profit and will not protect you against loss in a
declining market, they can be an excellent way to invest for retirement, a home,
educational expenses and other long-term financial goals.

     Certain restrictions and fees imposed by the plan custodian may also apply
for retirement accounts.  Speak with your Waddell & Reed account representative
for more information.

            Regular Investment Plans

Automatic Investment Service
To move money from your bank account to an existing Fund account

        Minimum     Frequency
        $25         Monthly

Funds Plus Service
To move money from United Cash Management, Inc. to a Fund whether in the same or
a different account

        Minimum     Frequency
        $100        Monthly

   Distributions and Taxes    

Distributions

        The Funds distribute substantially all of their net investment income
and net capital gains to shareholders each year.  Ordinarily, dividends are
distributed from a Fund's net investment income, which includes accrued
interest, earned discount, dividends and other income earned on portfolio assets
less expenses, at the following times:  United Accumulative Fund and United
Science and Technology Fund, semiannually in June and December; United Income
Fund, quarterly in March, June, September and December; and United Bond Fund,
monthly.  Net capital gains (and any net gains from foreign currency
transactions) ordinarily are distributed in December.  Each Fund may make
additional distributions if necessary to avoid Federal income or excise taxes on
certain undistributed income and capital gains.    

     Distribution Options.  When you open an account, specify on your
application how you want to receive your distributions.  Each Fund offers three
options:

1. Share Payment Option.  Your dividend and capital gains distributions will be
   automatically paid in additional Class A shares of the Fund.  If you do not
   indicate a choice on your application, you will be assigned this option.

2. Income-Earned Option.  Your capital gains distributions will be automatically
   paid in Class A shares, but you will be sent a check for each dividend
   distribution.

3. Cash Option.  You will be sent a check for your dividend and capital gains
   distributions.

     For retirement accounts, all distributions are automatically paid in Class
A shares.

Taxes

     Each Fund, which is treated as a separate corporation for Federal income
tax purposes, has qualified and intends to continue to qualify for treatment as
a regulated investment company under the Internal Revenue Code of 1986, as
amended, so that it will be relieved of Federal income tax on that part of its
investment company taxable income (consisting generally of net investment
income, net short-term capital gains and net gains from certain foreign currency
transactions) and net capital gains (the excess of net long-term capital gain
over net short-term capital loss) that are distributed to its shareholders.

     There are certain tax requirements that all Funds must follow in order to
avoid Federal taxation.  In its effort to adhere to these requirements, each
Fund may have to limit its investment activity in some types of instruments.

     As with any investment, you should consider how your investment in a Fund
will be taxed.  If your account is not a tax-deferred retirement account, you
should be aware of the following tax implications:

        Taxes on distributions.  Dividends from a Fund's investment company
taxable income generally are taxable to you as ordinary income whether received
in cash or paid in additional Fund shares.  Distributions of a Fund's net
capital gains, when designated as such, are taxable to you as long-term capital
gains, whether received in cash or paid in additional Fund shares and regardless
of the length of time you have owned your shares.  Each Fund notifies you after
each calendar year-end as to the amounts of dividends and other distributions
paid (or deemed paid) to you for that year.    

     A portion of the dividends paid by a Fund, whether received in cash or paid
in additional Fund shares, may be eligible for the dividends-received deduction
allowed to corporations.  The eligible portion may not exceed the aggregate
dividends received by a Fund from U.S. corporations.  However, dividends
received by a corporate shareholder and deducted by it pursuant to the
dividends-received deduction are subject indirectly to the alternative minimum
tax.

     Withholding.  Each Fund is required to withhold 31% of all dividends,
capital gains distributions and redemption proceeds payable to individuals and
certain other noncorporate shareholders who do not furnish the Fund with a
correct taxpayer identification number.  Withholding at that rate from dividends
and capital gains distributions also is required for such shareholders who
otherwise are subject to backup withholding.

        Taxes on transactions.  Your redemption of Fund shares will result in
taxable gain or loss to you, depending on whether the redemption proceeds are
more or less than your adjusted basis for the redeemed shares (which normally
includes any sales charge paid).  An exchange of Fund shares for shares of any
other fund in the United Group generally will have similar tax consequences.
However, special rules apply when you dispose of Fund shares through a
redemption or exchange within ninety days after your purchase thereof and
subsequently reacquire Fund shares or acquire shares of another fund in the
United Group without paying a sales charge due to the thirty-day reinvestment
privilege or exchange privilege.  See "About Your Account."  In these cases, any
gain on the disposition of the original Fund shares would be increased, or loss
decreased, by the amount of the sales charge you paid when those shares were
acquired, and that amount will increase the adjusted basis of the shares
subsequently acquired.  In addition, if you purchase shares of a Fund within
thirty days before or after redeeming other shares of a Fund (regardless of
class) at a loss, part or all of that loss will not be deductible and will
increase the basis of the newly-purchased shares.

     The foregoing is only a summary of some of the important Federal tax
considerations generally affecting each Fund and its shareholders; see the SAI
for a more detailed discussion.  There may be other Federal, state or local tax
considerations applicable to a particular investor.  You are urged to consult
your own tax adviser.    

<PAGE>
About the Management and Expenses of the Funds

     United Funds, Inc. is a mutual fund:  an investment that pools
shareholders' money and invests it toward a specified goal.  In technical terms,
the Corporation is an open-end management investment company organized as a
corporation under Maryland law on February 21, 1974, as successor to a Delaware
corporation which commenced operations in 1940.

     The Corporation is governed by a Board of Directors, which has overall
responsibility for the management of its affairs.  The majority of directors are
not affiliated with Waddell & Reed, Inc.

        The Corporation has four series of shares (the "Funds"), each of which
operates as a separate mutual fund with separate assets and liabilities.  Each
Fund is a diversified fund.  In addition to the Class A shares offered by this
Prospectus, the Corporation has issued and outstanding Class Y shares which are
offered by Waddell & Reed, Inc. through a separate prospectus.  Class Y shares
are designed for institutional investors.  Class Y shares are not subject to a
sales charge on purchases and are not subject to redemption fees.  Class Y
shares are not subject to a Rule 12b-1 fee.  Additional information about Class
Y shares may be obtained by calling 913-236-2000 or by writing to Waddell &
Reed, Inc. at the address on the inside back cover of this Prospectus.    

     The Corporation does not hold annual meetings of shareholders; however,
certain significant corporate matters, such as the approval of a new investment
advisory agreement or a change in a fundamental investment policy, which require
shareholder approval will be presented to shareholders at a meeting called by
the Board of Directors for such purpose.

     Special meetings of shareholders may be called for any purpose upon receipt
by a Fund of a request in writing signed by shareholders holding not less than
25% of all shares entitled to vote at such meeting, provided certain conditions
stated in the Bylaws of the Corporation are met.  There will normally be no
meeting of the shareholders for the purpose of electing directors until such
time as less than a majority of directors holding office have been elected by
shareholders, at which time the directors then in office will call a
shareholders' meeting for the election of directors.  To the extent that Section
16(c) of the Investment Company Act of 1940, as amended (the "1940 Act"),
applies to the Corporation, the directors are required to call a meeting of
shareholders for the purpose of voting upon the question of removal of any
director when requested in writing to do so by the shareholders of record of not
less than 10% of a Fund's outstanding shares.

     Each share (regardless of class) has one vote.  All shares of a Fund (and
classes thereof) vote together as a single class, except as to any matter for
which a separate vote of any Fund or class is required by the 1940 Act, and
except as to any matter which affects the interests of one or more particular
Fund or classes, in which case only the shareholders of the affected Fund or
class are entitled to vote, each as a separate class.  Shares are fully paid and
nonassessable when purchased.

WRIMCO and Its Affiliates

     The Funds are managed by WRIMCO, subject to the authority of the
Corporation's Board of Directors.  WRIMCO provides investment advice to each of
the Funds and supervises each Fund's investments.  Waddell & Reed, Inc. and its
predecessors have served as investment manager to each of the registered
investment companies in the United Group of Mutual Funds, except United Asset
Strategy Fund, Inc., since 1940 or the inception of the company, whichever was
later, and to TMK/United Funds, Inc. since that Fund's inception, until January
8, 1992, when it assigned its duties as investment manager and assigned its
professional staff for investment management services to WRIMCO.  WRIMCO has
also served as investment manager for Waddell & Reed Funds, Inc. since its
inception in September 1992 and United Asset Strategy Fund, Inc. since it
commenced operations in March 1995.

     James C. Cusser is primarily responsible for the day-to-day management of
the portfolio of United Bond Fund.  Mr. Cusser has held his Fund
responsibilities since September 1992.  He is Vice President of WRIMCO, Vice
President of the Fund and Vice President of other investment companies for which
WRIMCO serves as investment manager.  Mr. Cusser has served as the portfolio
manager for the Fund and other investment companies managed by WRIMCO since
August 1992 and has been an employee of WRIMCO since August 1992.  From January
1987 to August 1992, Mr. Cusser was Vice President of Kidder, Peabody & Co., New
York.

     Russell E. Thompson is primarily responsible for the day-to-day management
of the portfolio of United Income Fund.  Mr. Thompson has held his Fund
responsibilities since February 1979.  He is Senior Vice President of WRIMCO and
Senior Vice President of Waddell & Reed Asset Management Company, an affiliate
of WRIMCO.  He is Vice President of the Fund and Vice President of other
investment companies for which WRIMCO serves as investment manager.  Mr.
Thompson has served as the portfolio manager for investment companies managed by
Waddell & Reed, Inc. and its successor, WRIMCO, since January 1976 and has been
an employee of Waddell & Reed, Inc. and its successor, WRIMCO, since March 1971.

     Antonio Intagliata is primarily responsible for the day-to-day management
of the portfolio of United Accumulative Fund.  Mr. Intagliata has held his Fund
responsibilities since November 1979.  He is Senior Vice President of WRIMCO,
Vice President of the Fund and Vice President of other investment companies for
which WRIMCO serves as investment manager.  Mr. Intagliata has served as the
portfolio manager for investment companies managed by Waddell & Reed, Inc. and
its successor, WRIMCO, since February 1979 and has been an employee of Waddell &
Reed, Inc. and its successor, WRIMCO, since June 1973.

     Abel Garcia is primarily responsible for the day-to-day management of the
portfolio of United Science and Technology Fund.  Mr. Garcia has held his Fund
responsibilities since January 1984.  He is Vice President of WRIMCO, Vice
President of Waddell & Reed Asset Management  Company, an affiliate of WRIMCO,
and Vice President of the Fund.  Mr. Garcia has been an employee of Waddell &
Reed, Inc. and its successor, WRIMCO, since August 1983.

     Other members of WRIMCO's investment management department provide input on
market outlook, economic conditions, investment research and other
considerations relating to a Fund's investments.

        Waddell & Reed, Inc. serves as the Corporation's underwriter and as
underwriter for each of the other funds in the United Group of Mutual Funds and
Waddell & Reed Funds, Inc. and acts as the principal underwriter and distributor
for variable life insurance and variable annuity policies issued by United
Investors Life Insurance Company for which TMK/United Funds, Inc. is the
underlying investment vehicle.    

     Waddell & Reed Services Company acts as transfer agent ("Shareholder
Servicing Agent") for the Corporation and processes the payments of dividends.
Waddell & Reed Services Company also acts as agent ("Accounting Services Agent")
in providing bookkeeping and accounting services and assistance to the
Corporation and pricing daily the value of shares of the Funds.

     WRIMCO and Waddell & Reed Services Company are subsidiaries of Waddell &
Reed, Inc.  Waddell & Reed, Inc. is a direct subsidiary of Waddell & Reed
Financial Services, Inc., a holding company, and an indirect subsidiary of
United Investors Management Company, a holding company, and Torchmark
Corporation, a holding company.

     WRIMCO places transactions for the portfolio of each Fund and in doing so
may consider sales of shares of the Funds and other Funds it manages as a factor
in the selection of brokers to execute portfolio transactions.

Breakdown of Expenses

     Like all mutual funds, the Funds pay fees related to their daily
operations.  Expenses paid out of each Fund's assets are reflected in its share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.

     Each Fund pays a management fee to WRIMCO for providing investment advice
and supervising its investments.  Each Fund also pays other expenses, which are
explained below.

Management Fee

     The management fee of each Fund is calculated by adding a group fee to a
specific fee.  It is accrued and paid to WRIMCO daily.

     The specific fee is computed on each Fund's net asset value as of the close
of business each day at the annual rate of .03 of 1% of the net assets of United
Bond Fund, .15 of 1% of the net assets of United Income Fund and United
Accumulative Fund and .20 of 1% of the net assets of United Science and
Technology Fund.  The group fee is a pro rata participation based on the
relative net asset size of each Fund in the group fee computed each day on the
combined net asset values of all the funds in the United Group at the annual
rates shown in the following table:

Group Fee Rate

               Annual
Group Net      Group
Asset Level    Fee Rate
(all dollars   For Each
in millions)   Level
------------   --------

From $0
to $750       .51 of 1%

From $750
to $1,500     .49 of 1%

From $1,500
to $2,250     .47 of 1%

From $2,250
to $3,000     .45 of 1%

From $3,000
to $3,750     .43 of 1%

From $3,750
to $7,500     .40 of 1%

From $7,500
to $12,000    .38 of 1%

Over $12,000  .36 of 1%

     Growth in assets of the United Group assures a lower group fee rate.

        The combined net asset values of all of the funds in the United Group
were approximately $15.1 billion as of December 31, 1996.    

     Management fees for each Fund as a percent of each Fund's net assets for
the fiscal year ended December 31, 1996 were as follows:  United Bond Fund
0.44%, United Income Fund 0.56%, United Accumulative Fund 0.56%, United Science
and Technology Fund 0.61%.

Other Expenses

     While the management fee is a significant component of each Fund's annual
operating costs, the Funds have other expenses as well.

     Each Fund pays the Accounting Services Agent a monthly fee based on the
average net assets of the Fund for accounting services.  With respect to its
Class A shares, each Fund pays the Shareholder Servicing Agent a monthly fee for
each Class A shareholder account that was in existence at any time during the
month, and a fee for each account on which a dividend or distribution had a
record date during the month.

     Each Fund has adopted a Service Plan pursuant to Rule 12b-1 of the 1940 Act
with respect to its Class A shares.  Under the Plan, each Fund may pay monthly a
fee to Waddell & Reed, Inc. in an amount not to exceed .25% of the Fund's
average annual net assets of its Class A shares.  The fee is to be paid to
reimburse Waddell & Reed, Inc. for amounts it expends in connection with the
provision of personal services to Fund Class A shareholders and/or maintenance
of Class A shareholder accounts.  In particular, the Service Plan and a related
Service Agreement between each Fund and Waddell & Reed, Inc. contemplate that
these expenditures may include costs and expenses incurred by Waddell & Reed,
Inc. and its affiliates in compensating, training and supporting registered
account representatives, sales managers and/or other appropriate personnel in
providing personal services to Fund Class A shareholders and/or maintaining
Class A shareholder accounts; increasing services provided to Fund Class A
shareholders by office personnel located at field sales offices; engaging in
other activities useful in providing personal services to Fund Class A
shareholders and/or the maintenance of Class A shareholder accounts; and in
compensating broker-dealers who may regularly sell Fund Class A shares, and
other third parties, for providing Class A shareholder services and/or
maintaining Class A shareholder accounts.

     A Fund cannot precisely predict what its portfolio turnover rate will be,
but each Fund may have a high portfolio turnover.  United Accumulative Fund may
engage in short-term trading and have a corresponding high turnover rate.  A
higher turnover will increase transaction and commission costs and could
generate taxable income or loss.

<PAGE>
APPENDIX A

     The following are descriptions of some of the ratings of securities which a
Fund may use.  A Fund may also use ratings provided by other nationally
recognized statistical rating organizations in determining the securities
eligible for investment.

DESCRIPTION OF BOND RATINGS

        Standard & Poor's, a division of the McGraw-Hill Companies.  An S&P
corporate or municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.  This
assessment of creditworthiness may take into consideration obligors such as
guarantors, insurers or lessees.    

     The debt rating is not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or suitability for
a particular investor.

     The ratings are based on current information furnished to S&P by the issuer
or obtained by S&P from other sources it considers reliable.  S&P does not
perform an audit in connection with any rating and may, on occasion, rely on
unaudited financial information.  The ratings may be changed, suspended or
withdrawn as a result of changes in, or unavailability of, such information, or
based on other circumstances.

     The ratings are based, in varying degrees, on the following considerations:

1. Likelihood of default -- capacity and willingness of the obligor as to the
   timely payment of interest and repayment of principal in accordance with the
   terms of the obligation;

2. Nature of and provisions of the obligation;

3. Protection afforded by, and relative position of, the obligation in the event
   of bankruptcy, reorganization or other arrangement under the laws of
   bankruptcy and other laws affecting creditors' rights.

     AAA -- Debt rated AAA has the highest rating assigned by S&P.  Capacity to
pay interest and repay principal is extremely strong.

     AA -- Debt rated AA also qualifies as high quality debt.  Capacity to pay
interest and repay principal is very strong, and debt rated AA differs from AAA
issues only in small degree.

     A -- Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.

     BBB -- Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal.  Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.

     BB, B, CCC, CC, C - Debt rated BB, B, CCC, CC and C is regarded as having
predominantly speculative characteristics with respect to capacity to pay
interest and repay principal in accordance with the terms of the obligation.  BB
indicates the lowest degree of speculation and C the highest degree of
speculation.  While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major exposures
to adverse conditions.

     BB -- Debt rated BB has less near-term vulnerability to default than other
speculative issues.  However, it faces major ongoing uncertainties or exposure
to adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments.  The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating.

     B -- Debt rated B has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments.  Adverse
business, financial or economic conditions will likely impair capacity or
willingness to pay interest and repay principal.  The B rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
BB or BB- rating.

     CCC -- Debt rated CCC has a currently indefinable vulnerability to default,
and is dependent upon favorable business, financial and economic conditions to
meet timely payment of interest and repayment of principal.  In the event of
adverse business, financial or economic conditions, it is not likely to have the
capacity to pay interest and repay principal.  The CCC rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
B or B- rating.

     CC -- The rating CC is typically applied to debt subordinated to senior
debt that is assigned an actual or implied CCC rating.

     C -- The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating.  The C rating may be
used to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued.

     CI -- The rating CI is reserved for income bonds on which no interest is
being paid.

     D -- Debt rated D is in payment default.  It is used when interest payments
or principal payments are not made on a due date even if the applicable grace
period has not expired, unless S&P believes that such payments will be made
during such grace periods.  The D rating will also be used upon a filing of a
bankruptcy petition if debt service payments are jeopardized.

     Plus (+) or Minus (-) -- To provide more detailed indications of credit
quality, the ratings from AA to CCC may be modified by the addition of a plus or
minus sign to show relative standing within the major rating categories.

     NR -- Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.

     Debt Obligations of issuers outside the United States and its territories
are rated on the same basis as domestic corporate and municipal issues.  The
ratings measure the creditworthiness of the obligor but do not take into account
currency exchange and related uncertainties.

     Bond Investment Quality Standards:  Under present commercial bank
regulations issued by the Comptroller of the Currency, bonds rated in the top
four categories (AAA, AA, A, BBB, commonly known as "investment grade" ratings)
are generally regarded as eligible for bank investment.  In addition, the laws
of various states governing legal investments may impose certain rating or other
standards for obligations eligible for investment by savings banks, trust
companies, insurance companies and fiduciaries generally.

     Moody's Investors Service, Inc.  A brief description of the applicable MIS
rating symbols and their meanings follows:

     Aaa -- Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge."  Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure.  While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.

     Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards.  Together with the Aaa group they comprise what are generally known
as high grade bonds.  They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuations of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.

     A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations.  Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment sometime in the future.

     Baa -- Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time.  Some bonds lack outstanding
investment characteristics and in fact have speculative characteristics as well.

     NOTE:  Bonds within the above categories which possess the strongest
investment attributes are designated by the symbol "1" following the rating.

     Ba -- Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured.  Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during good and bad times over the future.  Uncertainty of position
characterizes bonds in this class.

     B -- Bonds which are rated B generally lack characteristics of the
desirable investment.  Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.

     Caa -- Bonds which are rated Caa are of poor standing.  Such issues may be
in default or there may be present elements of danger with respect to principal
or interest.

     Ca -- Bonds which are rated Ca represent obligations which are speculative
in a high degree.  Such issues are often in default or have other marked
shortcomings.

     C -- Bonds which are rated C are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.

DESCRIPTION OF PREFERRED STOCK RATINGS

        Standard & Poor's, a division of The McGraw-Hill Companies.  An S&P
preferred stock rating is an assessment of the capacity and willingness of an
issuer to pay preferred stock dividends and any applicable sinking fund
obligations.  A preferred stock rating differs from a bond rating inasmuch as it
is assigned to an equity issue, which issue is intrinsically different from, and
subordinated to, a debt issue.  Therefore, to reflect this difference, the
preferred stock rating symbol will normally not be higher than the debt rating
symbol assigned to, or that would be assigned to, the senior debt of the same
issuer.    

     The preferred stock ratings are based on the following considerations:

1. Likelihood of payment -- capacity and willingness of the issuer to meet the
   timely payment of preferred stock dividends and any applicable sinking fund
   requirements in accordance with the terms of the obligation;

2. Nature of, and provisions of, the issue;

3. Relative position of the issue in the event of bankruptcy, reorganization, or
   other arrangement under the laws of bankruptcy and other laws affecting
   creditors' rights.

     AAA -- This is the highest rating that may be assigned by S&P to a
preferred stock issue and indicates an extremely strong capacity to pay the
preferred stock obligations.

     AA -- A preferred stock issue rated AA also qualifies as a high-quality
fixed income security.  The capacity to pay preferred stock obligations is very
strong, although not as overwhelming as for issues rated AAA.

     A -- An issue rated A is backed by a sound capacity to pay the preferred
stock obligations, although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions.

     BBB -- An issue rated BBB is regarded as backed by an adequate capacity to
pay the preferred stock obligations.  Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to make payments for a preferred
stock in this category than for issues in the 'A' category.

     BB, B, CCC -- Preferred stock rated BB, B, and CCC are regarded, on
balance, as predominantly speculative with respect to the issuer's capacity to
pay preferred stock obligations.  BB indicates the lowest degree of speculation
and CCC the highest degree of speculation.  While such issues will likely have
some quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.

     CC -- The rating CC is reserved for a preferred stock issue in arrears on
dividends or sinking fund payments but that is currently paying.

     C -- A preferred stock rated C is a non-paying issue.

     D -- A preferred stock rated D is a non-paying issue with the issuer in
default on debt instruments.

     NR -- This indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.

     Plus (+) or minus (-) -- To provide more detailed indications of preferred
stock quality, the rating from AA to CCC may be modified by the addition of a
plus or minus sign to show relative standing within the major rating categories.

     A preferred stock rating is not a recommendation to purchase, sell or hold
a security inasmuch as it does not comment as to market price or suitability for
a particular investor.  The ratings are based on current information furnished
to S&P by the issuer or obtained by S&P from other sources it considers
reliable.  S&P does not perform an audit in connection with any rating and may,
on occasion, rely on unaudited financial information.  The ratings may be
changed, suspended or withdrawn as a result of changes in, or unavailability of,
such information, or based on other circumstances.

     Moody's Investors Service, Inc.  Because of the fundamental differences
between preferred stocks and bonds, a variation of MIS' familiar bond rating
symbols is used in the quality ranking of preferred stock.  The symbols are
designed to avoid comparison with bond quality in absolute terms.  It should
always be borne in mind that preferred stock occupies a junior position to bonds
within a particular capital structure and that these securities are rated within
the universe of preferred stocks.

     Note:  MIS applies numerical modifiers 1, 2 and 3 in each rating
classification; the modifier 1 indicates that the security ranks in the higher
end of its generic rating category; the modifier 2 indicates a mid-range ranking
and the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.

     Preferred stock rating symbols and their definitions are as follows:

     aaa -- An issue which is rated aaa is considered to be a top-quality
preferred stock.  This rating indicates good asset protection and the least risk
of dividend impairment within the universe of preferred stocks.

     aa -- An issue which is rated aa is considered a high-grade preferred
stock.  This rating indicates that there is a reasonable assurance the earnings
and asset protection will remain relatively well-maintained in the foreseeable
future.

     a -- An issue which is rated a is considered to be an upper-medium grade
preferred stock.  While risks are judged to be somewhat greater than in the aaa
and aa classification, earnings and asset protection are, nevertheless, expected
to be maintained at adequate levels.

     baa -- An issue which is rated baa is considered to be a medium-grade
preferred stock, neither highly protected nor poorly secured.  Earnings and
asset protection appear adequate at present but may be questionable over any
great length of time.

     ba -- An issue which is rated ba is considered to have speculative elements
and its future cannot be considered well assured.  Earnings and asset protection
may be very moderate and not well safeguarded during adverse periods.
Uncertainty of position characterizes preferred stocks in this class.

     b -- An issue which is rated b generally lacks the characteristics of a
desirable investment.  Assurance of dividend payments and maintenance of other
terms of the issue over any long period of time may be small.

     caa -- An issue which is rated caa is likely to be in arrears on dividend
payments.  This rating designation does not purport to indicate the future
status of payments.

     ca -- An issue which is rated ca is speculative in a high degree and is
likely to be in arrears on dividends with little likelihood of eventual
payments.

     c -- This is the lowest rated class of preferred or preference stock.
Issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

<PAGE>
United Funds, Inc.

Custodian                     Underwriter
  UMB Bank, n.a.                Waddell & Reed, Inc.
  Kansas City, Missouri         6300 Lamar Avenue
                                P. O. Box 29217
Legal Counsel                   Shawnee Mission, Kansas
  Kirkpatrick & Lockhart LLP       66201-9217
  1800 Massachusetts Avenue, N. W.      (913) 236-2000
     Washington, D. C.  20036   (800) 366-5465    

Independent Accountants       Shareholder Servicing Agent
     Deloitte & Touche LLP      Waddell & Reed    
  Kansas City, Missouri            Services Company
                                6300 Lamar Avenue
Investment Manager              P. O. Box 29217
  Waddell & Reed Investment     Shawnee Mission, Kansas
     Management Company            66201-9217
  6300 Lamar Avenue             (913) 236-2000
     P. O. Box 29217            (800) 366-5465    
  Shawnee Mission, Kansas
     66201-9217               Accounting Services Agent
  (913) 236-2000                Waddell & Reed
     (800) 366-5465                Services Company    
                                6300 Lamar Avenue
                                P. O. Box 29217
                                Shawnee Mission, Kansas
                                    66201-9217
                                (913) 236-2000
                                   (800) 366-5465    

Our INTERNET address is:
  http://www.waddell.com

<PAGE>
United Funds, Inc.
Class A Shares
PROSPECTUS
   March 31, 1997    

The United Group of Mutual Funds
United Asset Strategy Fund, Inc.
United Cash Management, Inc.
United Continental Income Fund, Inc.
United Funds, Inc.
  United Bond Fund
  United Income Fund
  United Accumulative Fund
  United Science and Technology Fund
United Gold & Government Fund, Inc.
United Government Securities Fund, Inc.
United High Income Fund, Inc.
United High Income Fund II, Inc.
United International Growth Fund, Inc.
United Municipal Bond Fund, Inc.
United Municipal High Income Fund, Inc.
United New Concepts Fund, Inc.
United Retirement Shares, Inc.
United Vanguard Fund, Inc.

   NUP2000(3-97)    

printed on recycled paper

<PAGE>
Please read this Prospectus before investing, and keep it on file for future
reference.  It sets forth concisely the information about the Funds that you
ought to know before investing.

   Additional information has been filed with the Securities and Exchange
Commission and is contained in a Statement of Additional Information ("SAI")
dated March 31, 1997.  The SAI is available free upon request to the Funds or
Waddell & Reed, Inc., the Funds' underwriter, at the address or telephone number
below.  The SAI is incorporated by reference into this Prospectus and you will
not be aware of all facts unless you read both this Prospectus and the SAI.    

United Funds, Inc.
Class Y Shares
United Funds, Inc. (the "Corporation") is a management investment company that
has four separate funds (the "Funds"), each of which is designed for investors
with different goals.

United Bond Fund seeks a reasonable return with more emphasis on preservation of
capital.

United Income Fund seeks the maintenance of current income subject to market
conditions.

United Accumulative Fund seeks capital growth of your investment with current
income a secondary consideration.

United Science and Technology Fund seeks long-term capital growth through
investment in a portfolio emphasizing science and technology securities.

This Prospectus describes one class of shares of each of the Funds -- Class Y
Shares.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

Prospectus
   March 31, 1997    

UNITED FUNDS, INC.
6300 Lamar Avenue
P. O. Box 29217
Shawnee Mission, Kansas
66201-9217
913-236-2000
   800-366-5465    

<PAGE>
Table of Contents
   

AN OVERVIEW OF THE FUNDS.............................................3

EXPENSES.............................................................5

FINANCIAL HIGHLIGHTS.................................................6

PERFORMANCE.........................................................10
 Explanation of Terms ..............................................10

ABOUT WADDELL & REED................................................11

ABOUT THE INVESTMENT PRINCIPLES OF THE FUNDS........................12
 Investment Goals and Principles ...................................12
   Risk Considerations .............................................13
 Securities and Investment Practices ...............................15

ABOUT YOUR ACCOUNT..................................................29
 Buying Shares .....................................................29
 Minimum Investments ...............................................31
 Adding to Your Account ............................................31
 Selling Shares ....................................................31
 Telephone Transactions ............................................33
 Shareholder Services ..............................................33
   Personal Service ................................................33
   Reports .........................................................33
   Exchanges .......................................................33
 Distributions and Taxes ...........................................34
   Distributions ...................................................34
   Taxes ...........................................................34

ABOUT THE MANAGEMENT AND EXPENSES OF THE FUNDS......................36
 WRIMCO and Its Affiliates .........................................37
 Breakdown of Expenses .............................................39
   Management Fee ..................................................39
   Other Expenses ..................................................40

APPENDIX A..........................................................41
 DESCRIPTION OF BOND RATINGS .......................................41
 DESCRIPTION OF PREFERRED STOCK RATINGS ............................45

<PAGE>
An Overview of the Funds

The Funds:  This Prospectus describes the Class Y shares of four separate series
(each a "Fund" and, collectively, the "Funds") of an open-end, management
investment company.  Each Fund has different goals and policies.  Each of the
Funds is a diversified Fund.

Goals and Strategies:  United Bond Fund seeks a reasonable return with more
emphasis on preservation of capital.  This Fund invests primarily in debt
securities, including convertible securities and debt securities with warrants
attached.

United Income Fund seeks to maintain current income, subject to market
conditions.  This Fund invests primarily in common stocks, or securities
convertible into common stocks, of companies that have the potential for capital
growth or that may be expected to resist market decline.

United Accumulative Fund seeks capital growth, with current income a secondary
goal.  This Fund invests primarily in common stocks or securities convertible
into common stocks.

United Science and Technology Fund seeks long-term capital growth.  This Fund
invests primarily in science and technology securities.

See "About the Investment Principles of the Funds" for further information.

Management:  Waddell & Reed Investment Management Company ("WRIMCO") provides
investment advice to each of the Funds and manages each Fund's investments.
WRIMCO is a wholly-owned subsidiary of Waddell & Reed, Inc.  WRIMCO, Waddell &
Reed, Inc. and its predecessors have provided investment management services to
registered investment companies since 1940.  See "About the Management and
Expenses of the Funds" for further information about management fees.

Distributor:  Waddell & Reed, Inc. acts as principal underwriter and distributor
of the shares of the Funds.

Purchases:  You may buy Class Y shares of the Funds through Waddell & Reed, Inc.
and its account representatives.  The price to buy a Class Y share of a Fund is
the net asset value of a Class Y share.  There is no sales charge incurred upon
purchase of Class Y shares of a Fund.  See "About Your Account" for information
on how to purchase Class Y shares.

Redemptions:  You may redeem your shares at net asset value.  When you sell your
shares, they may be worth more or less than what you paid for them.  See "About
Your Account" for a description of redemption and reinvestment procedures.

Who May Want to Invest:  The Funds offer a variety of investment goals that are
compatible with different investment decisions.  You should consider whether a
Fund, or group of Funds, fits with your particular investment objectives.

Risk Considerations:  Because the Funds own different types of investments,
their performance will be affected by a variety of factors.  The value of each
Fund's investments and the income generated will vary from day to day, generally
reflecting changes in interest rates, market conditions and other company and
economic news.  Performance will also depend on WRIMCO's skill in selecting
investments.  See "Securities and Investment Practices" for information about
the risks associated with the Funds' respective investments.

<PAGE>
Expenses
                                                         United
                           United    United    United Science and
                            Bond     Income AccumulativeTechnology
                            Fund      Fund      Fund      Fund
                            ----      ----      ----      ----

Shareholder Transaction Expenses
are charges you pay when you buy or sell shares of a fund.

Maximum sales
load on
purchases                   None      None      None      None
Deferred sales
load                        None      None      None      None
Redemption fees             None      None      None      None
Exchange fee                None      None      None      None

Annual Fund Operating Expenses
(as a percentage of average net assets)

    
   
   Management
   fees                      0.44%     0.56%     0.56%     0.61%
   12b-1 fees               None      None      None      None
   Other expenses            0.19%     0.17%     0.19%     0.20%
   Total Fund
   operating
   expenses                  0.63%     0.73%     0.75%     0.81%4    

Example:  You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return5 and (2) redemption at the end of each time period:
   
 1 Year                     $ 6       $ 7       $ 8       $  8
 3 Years                    $20       $23       $24       $ 26
 5 Years                    $35       $41       $42       $ 45
10 Years                    $79       $91       $93     $100    

The purpose of this table is to assist you in understanding the various costs
and expenses that a shareholder of the Class Y shares of each Fund will bear
directly or indirectly.  The example should not be considered a representation
of past or future expenses; actual expenses may be greater or lesser than those
shown.  For a more complete discussion of certain expenses and fees, see
"Breakdown of Expenses."

                    
   4 Expense ratios are based on the management fees and other Fund-level
expenses of the applicable Fund for the fiscal year ended December 31, 1996, and
the expenses attributable to a Fund's Class Y shares that are anticipated for
the current year based on annualization of the Class Y expenses incurred during
the fiscal year ended December 31, 1996.  Actual expenses may be greater or
lesser than those shown.    
5Use of an assumed annual return of 5% is for illustration purposes only and not
 a representation of a Fund's future performance, which may be greater or
 lesser.

<PAGE>
Financial Highlights
UNITED BOND FUND
       

        The following information has been audited by Deloitte & Touche LLP,
independent accountants, with respect to the fiscal year ended December 31, 1996
and by Price Waterhouse LLP, independent accountants, with respect to all other
periods, and should be read in conjunction with the financial statements and
notes thereto, together with the report of Deloitte & Touche LLP, included in
the SAI.    

            For a Class Y share outstanding throughout each period:

                            For the        For the
                          fiscal year     period from
                              ended       6/19/95* to
                           12/31/96       12/31/95
                          ----------      -----------
Net asset value,
  beginning of period        $6.34          $6.11
                             -----           ----
Income from investment
 operations:
 Net investment income         0.40           0.21
 Net realized and
   unrealized gain (loss)
   on investments ..          (0.20)          0.22
                              ----           ----
Total from investment
 operations  .......           0.20           0.43
                              ----           ----
Less distributions:
 Dividends from net
   investment income          (0.40)         (0.20)
 Distribution from
   capital gains ...          (0.00)         (0.00)
                              ----           ----
Total distributions           (0.40)         (0.20)
                              ----           ----
Net asset value,
 end of period  ....          $6.14          $6.34
                              ====           ====
Total return .......           3.35%          7.20%
Net assets, end of
 period (000
 omitted)  .........        $11,779         $3,032
Ratio of expenses to
 average net assets            0.62%          0.63%**
Ratio of net investment
 income to average
 net assets  .......           6.52%          6.41%**
Portfolio turnover
 rate  .............          55.74%         66.38%**

  *Commencement of operations.
 **Annualized.

<PAGE>
Financial Highlights

UNITED INCOME FUND
   
     The following information has been audited by Deloitte & Touche LLP,
independent accountants, with respect to the fiscal year ended December 31, 1996
and by Price Waterhouse LLP, independent accountants, with respect to all other
periods, and should be read in conjunction with the financial statements and
notes thereto, together with the report of Deloitte & Touche LLP, included in
the SAI.    

            For a Class Y share outstanding throughout each period:    

                            For the        For the
                          fiscal year     period from
                              ended       6/19/95* to
                           12/31/96       12/31/95
                          ----------      -----------
Net asset value,
 beginning of period         $28.96         $27.73
                             -----          -----
Income from investment
 operations:
 Net investment income         0.36           0.21
 Net realized and
   unrealized gain
   on investments ..           5.54           2.14
                             -----          -----
Total from investment
 operations  .......           5.90           2.35
                             -----          -----
Less distributions:
 Dividends from net
   investment income          (0.36)         (0.20)
 Distribution from
   capital gains ...          (1.59)         (0.92)
                             -----          -----
Total distributions           (1.95)         (1.12)
                             -----          -----
Net asset value,
 end of period  ....         $32.91         $28.96
                             =====          =====
Total return .......          20.53%          8.45%
Net assets, end of
 period (000
 omitted)  .........       $151,344       $107,703
Ratio of expenses to
 average net assets            0.73%          0.74%**
Ratio of net investment
 income to average
 net assets  .......           1.17%          1.36%**
Portfolio turnover
 rate  .............          22.24%         17.59%**
Average commission
 rate paid  ........          $0.0496

  *Commencement of operations.
 **Annualized.

<PAGE>
Financial Highlights

UNITED ACCUMULATIVE FUND
       

        The following information has been audited by Deloitte & Touche LLP,
independent accountants, with respect to the fiscal year ended December 31, 1996
and by Price Waterhouse LLP, independent accountants, with respect to all other
periods, and should be read in conjunction with the financial statements and
notes thereto, together with the report of Deloitte & Touche LLP, included in
the SAI.    

            For a Class Y share outstanding throughout each period:    

                            For the        For the
                          fiscal year     period from
                              ended       7/11/95* to
                           12/31/96       12/31/95
                          ----------      -----------
Net asset value,
 beginning of period          $7.78          $7.84
                              ----           ----
Income from investment
 operations:
 Net investment income         0.12           0.05
 Net realized and
   unrealized gain
   on investments ..           0.82           0.87
                              ----           ----
Total from investment
 operations  .......           0.94           0.92
                              ----           ----
Less distributions:
 Dividends from net
   investment income          (0.12)         (0.06)
 Distribution from
   capital gains ...          (0.85)         (0.92)
                              ----           ----
Total distributions           (0.97)         (0.98)
                              ----           ----
Net asset value,
 end of period  ....          $7.75          $7.78
                              ====           ====
Total return .......          12.27%         11.92%
Net assets, end of
 period (000
 omitted)  .........         $2,640           $655
Ratio of expenses to
 average net assets            0.74%          0.76%**
Ratio of net investment
 income to average
 net assets  .......           1.45%          1.24%**
Portfolio turnover
 rate  .............         240.37%        229.03%**
Average commission
 rate paid  ........          $0.0575

  *Commencement of operations.
 **Annualized.
<PAGE>
   
Financial Highlights

UNITED SCIENCE AND TECHNOLOGY FUND

     The following information has been audited by Deloitte & Touche LLP,
independent accountants, and should be read in conjunction with the financial
statements and notes thereto, together with the report of Deloitte & Touche LLP,
included in the SAI.

             For a Class Y share outstanding throughout the period:

                            For the
                          period from
                          2/27/96* to
                           12/31/96
                          ----------
Net asset value,
 beginning of period         $24.05
                             -----
Income from investment
 operations:
 Net investment loss          (0.02)
 Net realized and
   unrealized gain
   on investments ..           0.82
                             -----
Total from investment
 operations  .......           0.80
                             -----
Less distributions:
 Dividends from net
   investment income          (0.00)
 Distribution from
   capital gains ...          (1.47)
                             -----
Total distributions           (1.47)
                             -----
Net asset value,
 end of period  ....         $23.38
                             =====
Total return .......           3.25%
Net assets, end of
 period (000
 omitted)  .........         $3,090
Ratio of expenses to
 average net assets            0.80%**
Ratio of net investment
 income to average
 net assets  .......          -0.12%**
Portfolio turnover
 rate  .............          33.90%**
Average commission
 rate paid  ........          $0.0538

  *Commencement of operations.
 **Annualized.    

<PAGE>
Performance

     Mutual fund performance is commonly measured as total return.  The Funds
may also advertise their performance by showing yield and performance rankings.
Performance information is calculated and presented separately for each class of
Fund shares.

Explanation of Terms

        Total Return is the overall change in value of an investment in a Fund
over a given period, assuming reinvestment of any dividends and other
distributions.  A cumulative total return reflects actual performance over a
stated period of time.  An average annual total return is a hypothetical rate of
return that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period.  Average annual
total returns smooth out variations in performance; they are not the same as
actual year-by-year results.  Non-standardized total return may be for periods
other than those required to be presented or may otherwise differ from
standardized total return.    

     Yield refers to the income generated by an investment in the Fund over a
given period of time, expressed as an annual percentage rate.  A Fund's yield is
based on a 30-day period ending on a specific date and is computed by dividing
the Fund's net investment income per share earned during the period by the
Fund's maximum offering price per share on the last day of the period.

     Performance Rankings are comparisons of a Fund's performance to the
performance of other selected mutual funds, selected recognized market
indicators such as the Standard & Poor's 500 Stock Index and the Dow Jones
Industrial Average, or non-market indices or averages of mutual fund industry
groups.  A Fund may quote its performance rankings and/or other information as
published by recognized independent mutual fund statistical services or by
publications of general interest.  In connection with a ranking, the Fund may
provide additional information, such as the particular category to which it
relates, the number of funds in the category, the criteria upon which the
ranking is based, and the effect of sales charges, fee waivers and/or expense
reimbursements.

     All performance information that each Fund advertises or includes in
information provided to present or prospective shareholders is historical in
nature and is not intended to represent or guarantee future results.  The value
of a Fund's shares when redeemed may be more or less than their original cost.

     Each Fund's recent performance and holdings will be detailed twice a year
in that Fund's annual and semiannual reports, which are sent to all Fund
shareholders.

<PAGE>
About Waddell & Reed

        Since 1937, Waddell & Reed has been helping people make the most of
their financial future by helping them take advantage of various financial
services.  Today, Waddell & Reed has over 2500 account representatives located
throughout the United States.  Your primary contact in your dealings with
Waddell & Reed will be your local account representative.  However, the Waddell
& Reed shareholder services department, which is part of the Waddell & Reed
headquarters operations in Overland Park, Kansas, is available to assist you and
your Waddell & Reed account representative.  You may speak with a customer
service representative by calling the telephone number listed on the inside back
cover.    

<PAGE>
About the Investment Principles of the Funds

Investment Goals and Principles

     The goals of each Fund are set forth below.  There is no assurance that a
Fund will achieve its goals; some risks are inherent in all securities to
varying degrees.

     United Bond Fund.  The goal of United Bond Fund is a reasonable return with
more emphasis on preservation of capital.  The Fund seeks to achieve this goal
by investing in debt securities, which may include convertible securities and
debt securities with warrants attached.  In selecting debt securities for the
portfolio of the Fund, WRIMCO considers yield and relative safety and, in the
case of convertible securities, the possibility of capital growth.

     The Fund may purchase securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities ("U.S. Government Securities").
The Fund will invest in U.S. Government Securities that are not backed by the
full faith and credit of the United States only when WRIMCO is satisfied that
the credit risk is acceptable.  Among the U.S. Government Securities that the
Fund may purchase are mortgage-backed securities of the Government National
Mortgage Association ("Ginnie Mae").  These mortgage-backed securities include
pass-through securities, participation certificates and collateralized mortgage
obligations ("CMOs").

     United Bond Fund may not purchase any securities other than debt securities
if after such purchase more than 10% of its total assets would consist of other
than debt securities.  This 10% limit does not include premiums paid or received
by the Fund in connection with options transactions, the value of options or
futures contracts held by the Fund, margin deposits as to options and futures
contracts, or non-debt securities held as a result of conversion or exercise of
a warrant.

     United Income Fund.  The goal of United Income Fund is the maintenance of
current income, subject to market conditions.  The Fund seeks to achieve this
goal by investing in common stocks, or securities convertible into common
stocks, of companies that have the potential for capital growth or that may be
expected to resist market decline.  At least 65% of United Income Fund's total
assets will be invested during normal market conditions in income-producing
securities.  When investment conditions are such that stocks with high yields
are less attractive than other common stocks, the Fund may hold lower-yielding
common stocks because of their prospects for appreciation.  When investment
conditions are such that the return on debt securities and preferred stocks is
more attractive than the return on common stocks, or when WRIMCO believes a
temporary defensive position is desirable, the Fund may seek to achieve its goal
by investing up to all of its assets in debt securities and preferred stocks.

     United Accumulative Fund.  The goal of United Accumulative Fund is capital
growth, with current income a secondary goal.  The Fund seeks to achieve these
goals by investing in common stocks or securities convertible into common
stocks.  As a temporary defensive measure at times when WRIMCO believes that
such securities do not offer a good investment opportunity, the Fund may hold up
to all of its assets in cash or fixed-income securities (i.e., debt securities
or preferred stock) or in common stocks that WRIMCO chooses because they are
less volatile rather than for their growth potential.

     United Science and Technology Fund.  The goal of United Science and
Technology Fund is long-term capital growth.  The Fund seeks to achieve this
goal by concentrating its investments in science and technology securities.
Science and technology securities are securities of companies whose products,
processes or services, in WRIMCO's opinion, are being or are expected to be
significantly benefited by the utilization or commercial application of
scientific or technological discoveries or developments in such areas as
aerospace, communications and electronic equipment, computer systems, computer
software and services, electronics, electronic media, business machines, office
equipment and supplies, biotechnology, medical and hospital supplies and
services, medical devices and drugs.  Certain risks are associated with science
and technology securities, including the impact of governmental regulation and
rapid obsolescence of issuers' products or processes.

     Under normal economic and market conditions, United Science and Technology
Fund will not invest in any securities other than science securities or
technology securities if, after such investment, more than 20% of its total
assets would be invested in such other securities.  The Fund may own common
stock, preferred stock, debt securities and convertible securities.  At times,
as a temporary defensive measure, the Fund may invest up to all of its assets in
U.S. Government Securities or other debt securities.

Risk Considerations

     There are risks inherent in any investment.  The Funds are subject to
varying degrees of market risk, financial risk and, in some cases, prepayment
risk.  Market risk is the potential for fluctuations in the price of the
security because of market factors.  Because of market risks, you should
anticipate that the share prices of the Funds will fluctuate.  Financial risk is
based on the financial situation of the issuer.  The financial risk of a Fund
depends on the credit quality of the underlying securities.  Prepayment risk is
the possibility that, during periods of falling interest rates, a debt security
with a high stated interest rate will be prepaid prior to its expected maturity
date.

     Certain types of instruments in which the Funds may invest, and certain
strategies WRIMCO may employ in pursuit of a Fund's goal(s), involve special
risks.  United Bond Fund invests primarily in debt securities, including, among
others, U.S. Government Securities and non-investment grade debt securities
(commonly called "junk bonds").  The market risk to which the Fund is subject is
the possibility that the price of its debt securities will fall because of
changing interest rates.  The financial risk to which the Fund is subject is the
possibility that an issuer will fail to make timely payments of interest or
principal to the Fund.  The Fund is also subject to prepayment risk.  Although
investments in U.S. Government Securities provide substantial protection against
financial risk, they do not protect investors against price changes due to
market risk.  Lower-quality debt securities involve greater risk of default or
price changes due to changes in the issuer's creditworthiness.  The market
prices of these securities may fluctuate more than high-quality securities and
may decline significantly in periods of general economic difficulty.

     United Income Fund and United Accumulative Fund invest primarily in equity
securities.  These Funds are subject to greater market risk than funds investing
solely in debt securities.  The market risk to which these Funds are subject is
the possibility of a change in the price of securities caused by stock market
price changes.  The financial risk to which these Funds are subject is the
possibility that the price of a security will fall because of poor earnings
performance by the issuer.

     United Science and Technology Fund may invest in equity securities and debt
securities.  This Fund is subject to differing market risks, financial risks and
prepayment risks depending on the types of securities in which it invests.  For
equity securities, market risk is the possibility of change in price caused by
stock market price changes; for debt securities, market risk is the possibility
that the price will fall because of changing interest rates.  For equity
securities, financial risk is the possibility that the price of the security
will fall because of poor earnings performance by the issuer.  For debt
securities, financial risk is the possibility that a bond issuer will fail to
make timely payments of interest or principal to the Fund.  The Fund is also
subject to prepayment risk.

     A Fund may use various techniques to increase or decrease its exposure to
changing security prices, interest rates or other factors that affect security
values.  These techniques may involve derivative instruments, including options,
futures contracts, options on futures contracts, indexed securities, stripped
securities and mortgage-backed securities.  If WRIMCO judges market conditions
incorrectly or employs a strategy that does not correlate well with a Fund's
investments, these techniques could result in a loss, regardless of whether the
intent was to reduce risk or increase return.  These techniques may increase the
volatility of a Fund and may involve a small investment of cash relative to the
risk assumed.  In addition, these techniques could result in a loss if the
counterparty to the transaction does not perform as promised or if there is not
a liquid secondary market to close out a position that a Fund has entered into.
See "Risks of Derivative Instruments" for further information on the risks of
investing in these instruments.

Securities and Investment Practices

        The following pages contain more detailed information about types of
instruments in which the Funds may invest and strategies WRIMCO may employ in
pursuit of the Funds' investment goal(s).  A summary of risks associated with
these instrument types and investment practices is included as well.

     WRIMCO might not buy all of these instruments or use all of these
techniques to the full extent permitted by a Fund's investment policies and
restrictions unless it believes that doing so will help a Fund achieve its
goal(s).

     Certain of the investment policies and restrictions of each Fund are also
stated below.  A fundamental policy of a Fund may not be changed without the
approval of the shareholders of that Fund.  Operating policies may be changed by
the Board of Directors without the approval of the affected shareholders.  The
goal(s) of a Fund and the type of securities in which a Fund may invest are
fundamental policies.  Unless otherwise indicated, the types of other assets in
which a Fund may invest, the proportions of its assets that a Fund may invest in
each such type and other policies are operating policies.    

     Policies and limitations are typically considered at the time of purchase;
the sale of instruments is usually not required in the event of a subsequent
change in circumstances.

     Please see the SAI for further information concerning the following
instruments and associated risks and the Funds' investment policies and
restrictions.

     Equity Securities.  Equity securities represent an ownership interest in an
issuer.  This ownership interest often gives an investor the right to vote on
measures affecting the issuer's organization and operations.  Although common
stocks and other equity securities have a history of long-term growth in value,
their prices tend to fluctuate in the short term, particularly those of smaller
companies.  The equity securities in which a Fund invests may include preferred
stock that converts to common stock either automatically or after a specified
period of time or at the option of the issuer.

     Debt Securities.  Bonds and other debt instruments are used by issuers to
borrow money from investors.  The issuer pays the investor a fixed or variable
rate of interest, and must repay the amount borrowed at maturity.  Some debt
securities, such as zero coupon bonds, do not pay current interest, but are
purchased at a discount from their face value.  The debt securities in which a
Fund invests may include debt securities whose performance is linked to a
specified equity security or securities index.

     Debt securities have varying levels of sensitivity to changes in interest
rates and varying degrees of quality.  As a general matter, however, when
interest rates rise, the values of fixed-rate debt securities fall and,
conversely, when interest rates fall, the values of fixed-rate debt securities
rise.  The values of floating and adjustable-rate debt securities are not as
sensitive to changes in interest rates as the values of fixed-rate debt
securities.  Longer-term bonds are generally more sensitive to interest rate
changes than shorter-term bonds.

     Lower-quality debt securities are considered to be speculative and involve
greater risk of default or price changes due to changes in the issuer's
creditworthiness.  The market prices of these securities may fluctuate more than
high-quality securities and may decline significantly in periods of general
economic difficulty.  While the market for high-yield, high-risk corporate debt
securities has been in existence for many years and has weathered previous
economic downturns, the 1980s brought a dramatic increase in the use of such
securities to fund highly leveraged corporate acquisitions and restructurings.
Past experience may not provide an accurate indication of the future performance
of the high-yield, high-risk bond market, especially during periods of economic
recession.  The market for lower-rated debt securities may be thinner and less
active than that for higher-rated debt securities, which can adversely affect
the prices at which the former are sold.  Adverse publicity and changing
investor perceptions may decrease the values and liquidity of lower-rated debt
securities, especially in a thinly-traded market.

     Valuation becomes more difficult and judgment plays a greater role in
valuing lower-rated debt securities than with respect to securities for which
more external sources of quotations and last sale information are available.
Since the risk of default is higher for lower-rated debt securities, WRIMCO's
research and credit analysis are an especially important part of managing
securities of this type held by a Fund.  WRIMCO continuously monitors the
issuers of lower-rated debt securities in a Fund's portfolio in an attempt to
determine if the issuers will have sufficient cash flow and profits to meet
required principal and interest payments.  A Fund may choose, at its expense or
in conjunction with others, to pursue litigation or otherwise to exercise its
rights as a security holder to seek to protect the interests of security holders
if it determines this to be in the best interest of the Fund's shareholders.

     U.S. Government Securities are high-quality instruments issued or
guaranteed as to principal or interest by the U.S. Treasury or by an agency or
instrumentality of the U.S. Government.  Not all U.S. Government Securities are
backed by the full faith and credit of the United States.  Some are backed by
the right of the issuer to borrow from the U.S. Treasury; others are backed by
discretionary authority of the U.S. Government to purchase the agencies'
obligations; while others are supported only by the credit of the
instrumentality.  In the case of securities not backed by the full faith and
credit of the United States, the investor must look principally to the agency
issuing or guaranteeing the obligation for ultimate repayment.

     Zero coupon bonds do not make interest payments; instead, they are sold at
a deep discount from their face value and are redeemed at face value when they
mature.  Because zero coupon bonds do not pay current income, their prices can
be very volatile when interest rates change.  In calculating its dividends, a
Fund takes into account as income a portion of the difference between a zero
coupon bond's purchase price and its face value.

        Subject to its investment restrictions, a Fund may invest in debt
securities rated in any rating category of the established rating services,
including securities rated in the lowest category (D by Standard & Poor's, a
division of The McGraw-Hill Companies, ("S&P") and C by Moody's Investors
Service, Inc. ("MIS")).  In addition, a Fund will treat unrated securities
judged by WRIMCO to be of equivalent quality to a rated security to be
equivalent to securities having that rating.  The rating categories of S&P and
MIS are described in Appendix A.  While credit ratings are only one factor
WRIMCO relies on in evaluating high-yield debt securities, certain risks are
associated with credit ratings.  Credit ratings evaluate the safety of principal
and interest payments, not market value risk. Credit ratings for individual
securities may change from time to time, and a Fund may retain a portfolio
security whose rating has been changed.    

     Policies and Restrictions:  At least 65% of the total assets of United Bond
Fund will be invested during normal market conditions in bonds.

     United Income Fund, United Accumulative Fund and United Science and
Technology Fund do not intend to invest in non-investment grade debt securities
if, as a result of such investment, more than 5% of that Fund's assets would
consist of such investments.

     United Bond Fund does not currently intend to invest more than 20% of its
assets in non-investment grade debt securities.

        Debt Holdings, by Ratings.  During the fiscal year ended December 31,
1996, the percentage of the assets of United Bond Fund invested in debt
securities in each of the rating categories of S&P and the corporate debt
securities not rated by an established rating service, determined on a dollar-
weighted average, were as follows:

        Percentage of
Rated  Assets of United
by S&P    Bond Fund
------ ----------------
AAA          37.9%
AA            9.9
A            18.4
BBB          18.6
BB           11.3
B             1.6
CCC           0.0
CC            0.0
C             0.0
D             0.0
Unrated       1.2    

     The percentage of assets in each category was calculated on the basis of a
monthly dollar-weighted average.  The monthly dollar-weighted average was
calculated using the market value of the securities in United Bond Fund's
portfolio at the end of each month in the thirteen-month period ended with its
last fiscal year, averaged over its last fiscal year.  The rating used for each
security is that security's rating as of the end of each month and, as ratings
may change over time, does not necessarily indicate past or future ratings of
any particular security or the ratings of securities in the Fund's portfolio in
general.  Asset composition of the Fund by rating categories at any particular
time does not necessarily indicate future asset composition by rating
categories.

     Preferred Stock is also rated by S&P and MIS, as described in Appendix A.
The Funds may invest in preferred stock rated in any rating category by an
established rating service and unrated preferred stock judged by WRIMCO to be of
equivalent quality.

     Convertible Securities.  A convertible security is a bond, debenture, note,
preferred stock or other security that may be converted into or exchanged for a
prescribed amount of common stock of the same or a different issuer within a
particular period of time at a specified price or formula.  A convertible
security entitles the holder to receive interest paid or accrued on debt or the
dividend paid on preferred stock until the convertible security matures or is
redeemed, converted or exchanged.  Convertible securities generally have higher
yields than common stocks of the same or similar issuers, but lower yields than
comparable nonconvertible securities, are less subject to fluctuation in value
than the underlying stock because they have fixed income characteristics, and
provide the potential for capital appreciation if the market price of the
underlying common stock increases.

     The value of a convertible security is influenced by changes in interest
rates, with investment value declining as interest rates increase and increasing
as interest rates decline.  The credit standing of the issuer and other factors
also may have an effect on the convertible security's investment value.

     Policies and Restrictions:  Each Fund may invest in convertible securities
as long as WRIMCO determines that it is consistent with the Fund's goal(s) and
investment policies.

     Foreign Securities and foreign currencies can involve significant risks in
addition to the risks inherent in U.S. investments.  The value of securities
denominated in or indexed to foreign currencies, and of dividends and interest
from such securities, can change significantly when foreign currencies
strengthen or weaken relative to the U.S. dollar.  Foreign securities markets
generally have less trading volume and less liquidity than U.S. markets, and
prices on some foreign markets can be highly volatile.  Many foreign countries
lack uniform accounting and disclosure standards comparable to those applicable
to U.S. companies, and it may be more difficult to obtain reliable information
regarding an issuer's financial condition and operations.  In addition, the
costs of foreign investing, including withholding taxes, brokerage commissions
and custodial costs, are generally higher than for U.S. investments.

     Foreign markets may offer less protection to investors than U.S. markets.
Foreign issuers, brokers and securities markets may be subject to less
governmental supervision.  Foreign security trading practices, including those
involving the release of assets in advance of payment, may involve increased
risks in the event of a failed trade or the insolvency of a broker-dealer, and
may involve substantial delays.  It may also be difficult to enforce legal
rights in foreign countries.

     Investing abroad also involves different political and economic risks.
Foreign investments may be affected by actions of foreign governments adverse to
the interests of U.S. investors, including the possibility of expropriation or
nationalization of assets, confiscatory taxation, restrictions on U.S.
investment or on the ability to repatriate assets or convert currency into U.S.
dollars, or other government intervention.  There may be a greater possibility
of default by foreign governments or foreign government-sponsored enterprises.
Investments in foreign countries also involve a risk of local political,
economic or social instability, military action or unrest, or adverse diplomatic
developments.  There is no assurance that WRIMCO will be able to anticipate
these potential events or counter their effects.

     The considerations noted above generally are intensified for investments in
developing countries.  A developing country is a nation that, in WRIMCO's
opinion, is likely to experience long-term gross domestic product growth above
that expected to occur in the United States, the United Kingdom, France,
Germany, Italy, Japan and Canada.  Developing countries may have relatively
unstable governments, economies based on only a few industries and securities
markets that trade a small number of securities.

     Certain foreign securities impose restrictions on transfer within the
United States or to U.S. persons.  Although securities subject to transfer
restrictions may be marketable abroad, they may be less liquid than foreign
securities of the same class that are not subject to such restrictions.

     Policies and Restrictions:  As a fundamental policy, each Fund may purchase
an unlimited amount of foreign securities; however, as an operating policy, a
Fund may not invest more than 20% of its net assets in foreign securities.  The
Funds will not speculate in foreign currencies, but may briefly hold foreign
currencies in connection with the purchase or sale of foreign securities.

     As a fundamental policy, less than 5% of the total assets of the
Corporation may be invested in securities issued by foreign governments.

     Options, Futures and Other Strategies.  A Fund may use certain options to
attempt to enhance income or yield or may attempt to reduce the overall risk of
its investments by using certain options, futures contracts and certain other
strategies described herein.  The strategies described below may be used in an
attempt to manage certain risks of a Fund's investments that can affect
fluctuation in its net asset value.

     Except as to covered call writing, United Income Fund, United Accumulative
Fund and United Science and Technology Fund intend to limit purchase and sale of
options and futures contracts to buying and selling futures contracts on
broadly-based stock indices ("Stock Index Futures") and options thereon for the
purposes of hedging not more than 10% of their respective total assets.

     A Fund's ability to use these strategies may be limited by market
conditions, regulatory limits and tax considerations.  A Fund might not use any
of these strategies, and there can be no assurance that any strategy that is
used will succeed.  The risks associated with such strategies are described
below.  Also see the SAI for more information on these instruments and
strategies and their risk considerations.

     Options.  The Funds may engage in certain strategies involving options to
attempt to enhance a Fund's income or yield or to attempt to reduce the overall
risk of its investments.  A call option gives the purchaser the right to buy,
and obligates the writer to sell, the underlying investment at the agreed upon
exercise price during the option period.  A put option gives the purchaser the
right to sell, and obligates the writer to buy, the underlying investment at the
agreed upon exercise price during the option period.  Purchasers of options pay
an amount, known as a premium, to the option writer in exchange for the right
under the option contract.

     Options offer large amounts of leverage, which will result in a Fund's net
asset value being more sensitive to changes in the value of the related
investment.  There is no assurance that a liquid secondary market will exist for
exchange-listed options.  The market for options that are not listed on an
exchange may be less active than the market for exchange-listed options.  A Fund
will be able to close a position in an option it has written only if there is a
market for the put or call.  If a Fund is not able to enter into a closing
transaction on an option it has written, it will be required to maintain the
securities, or cash in the case of an option on an index, subject to the call or
the collateral underlying the put until a closing purchase transaction can be
entered into or the option expires.  Because index options are settled in cash,
a Fund cannot provide in advance for its potential settlement obligations on a
call it has written on an index by holding the underlying securities.  The Fund
bears the risk that the value of the securities it holds will vary from the
value of the index.

     Policies and Restrictions:  As a fundamental policy, United Bond Fund may
buy and sell put and call options on debt securities.  As a fundamental policy,
calls on securities that are written by the Fund must be covered (i.e., the Fund
must own the securities that are subject to the call or other investments
acceptable for escrow arrangements).

     Each Fund will write a put only when it has determined that it would be
willing to purchase the underlying security at the exercise price.

     United Income Fund, United Accumulative Fund and United Science and
Technology Fund may write listed covered calls on securities on up to 25% of the
respective total assets of each Fund and may purchase calls and write and
purchase puts on securities.  Each of these Funds must purchase and sell put and
call options on securities that are issued by the Options Clearing Corporation,
except that each Fund may write unlisted put options and purchase unlisted put
and call options on U.S. Government Securities and may purchase optional
delivery standby commitments.

     As a fundamental policy, United Income Fund, United Accumulative Fund and
United Science and Technology Fund may, for non-speculative purposes, write and
purchase options on stock indices that are not limited to stocks of any industry
or group of industries ("broadly-based stock indices").  Each of these Funds may
write and purchase only listed options on broadly-based stock indices.

     Futures Contracts and Options on Futures Contracts.  When a Fund purchases
a futures contract, it incurs an obligation to take delivery of a specified
amount of the obligation underlying the contract at a specified time in the
future for a specified price.  When a Fund sells a futures contract, it incurs
an obligation to deliver the specified amount of the underlying obligation at a
specified time in return for an agreed-upon price.

     When a Fund writes an option on a futures contract, it becomes obligated,
in return for the premium paid, to assume a position in a futures contract at a
specified exercise price at any time during the term of the option.  If a Fund
has written a call, it assumes a short futures position.  If it has written a
put, it assumes a long futures position.  When the Fund purchases an option on a
futures contract, it acquires a right in return for the premium it pays to
assume a position in a futures contract (a long position if the option is a call
and a short position if the option is a put).

     Policies and Restrictions:  United Bond Fund may buy and sell interest rate
futures contracts relating to debt securities ("Debt Futures") and options on
Debt Futures for the purpose of hedging the value of its securities portfolio
against future changes in interest rates.  It is a fundamental policy that
United Bond Fund's use of options and futures contracts is limited to those
relating to debt securities and Debt Futures.

     As a fundamental policy, United Income Fund, United Accumulative Fund and
United Science and Technology Fund may buy and sell Debt Futures, Stock Index
Futures and options on Debt Futures and Stock Index Futures.

        Indexed Securities.  Each Fund may purchase indexed securities, which
are securities the value of which varies in relation to the value of other
securities, securities indices, currencies, precious metals or other
commodities, or other financial indicators, as long as WRIMCO determines that it
is consistent with the Fund's goal(s) and investment policies. Indexed
securities typically, but not always, are debt securities or deposits whose
value at maturity or coupon rate is determined by reference to a specific
instrument or statistic.  The performance of indexed securities depends to a
great extent on the performance of the security, currency, or other instrument
to which they are indexed, and may also be influenced by interest rate changes
in the United States and abroad.  At the same time, indexed securities are
subject to the credit risks associated with the issuer of the security, and
their values may decline substantially if the issuer's creditworthiness
deteriorates. Indexed securities may be more volatile than the underlying
instruments.

     Mortgage-Backed and Other Asset-Backed Securities are bonds backed by
specific types of assets.  Mortgage-backed securities represent direct or
indirect interests in pools of underlying mortgage loans that are secured by
real property.  U.S. Government mortgage-backed securities are issued or
guaranteed as to principal and interest (but not as to market value) by the
Government National Mortgage Association, Fannie Mae (formerly the Federal
National Mortgage Association), Federal Home Loan Mortgage Corporation or other
government-sponsored enterprises.  Other mortgage-backed securities are
sponsored or issued by private entities, including investment banking firms and
mortgage originators.

     Mortgage-backed securities may be composed of one or more classes and may
be structured either as pass-through securities or collateralized debt
obligations.  Multiple-class mortgage-backed securities are referred to in this
prospectus as "CMOs"  Some CMOs are directly supported by other CMOs, which in
turn are supported by mortgage pools.  Investors typically receive payments out
of the interest and principal on the underlying mortgages.  The portions of
these payments that investors receive, as well as the priority of their rights
to receive payments, are determined by the specific terms of the CMO class.

     For example, interest-only ("IO") classes are entitled to receive all or a
portion of the interest, but none (or only a nominal amount) of the principal
payments, from the underlying mortgage assets.  If the mortgage assets
underlying an IO experience greater than anticipated principal prepayments, then
the total amount of interest payments allocable to the IO class, and therefore
the yield to investors, generally will be reduced. In some instances, an
investor in an IO may fail to recoup all of his or her initial investment, even
if the security is government guaranteed or considered to be of the highest
quality.  Conversely, principal-only ("PO") classes are entitled to receive all
or a portion of the principal payments, but none of the interest, from the
underlying mortgage assets.  PO classes are purchased at substantial discounts
from par, and the yield to investors will be reduced if principal payments are
slower than expected.  IOs, POs and other CMOs involve special risks, and
evaluating them requires special knowledge.

     When interest rates go down and homeowners refinance their mortgages,
mortgage-backed bonds may be paid off more quickly than investors expect.  When
interest rates rise, mortgage-backed bonds may be paid off more slowly than
originally expected.  Changes in the rate or "speed" of these prepayments can
cause the value of mortgage-backed securities to fluctuate rapidly.

     Other asset-backed securities are similar to mortgage-backed securities,
except that the underlying assets are different.  These underlying assets may be
nearly any type of financial asset or receivable, such as motor vehicle
installment sales contracts, home equity loans, leases of various types of real
and personal property and receivables from credit cards.

     The yield characteristics of mortgage-backed and asset-backed securities
differ from those of traditional debt securities.  Among the major differences
are that interest and principal payments are made more frequently and that
principal may be prepaid at any time because the underlying mortgage loans or
other assets generally may be prepaid at any time.  Generally, prepayments on
fixed-rate mortgage loans will increase during a period of falling interest
rates and decrease during a period of rising interest rates.  Mortgage- and
asset-backed securities may also decrease in value as a result of increases in
interest rates and, because of prepayments, may benefit less than other bonds
from declining interest rates.  Reinvestments of prepayments may occur at lower
interest rates than the original investment, thus adversely affecting a Fund's
yield.  Actual prepayment experience may cause the yield of a mortgage-backed
security to differ from what was assumed when the Fund purchased the security.

     The market for privately issued mortgage-backed and asset-backed securities
is smaller and less liquid than the market for U.S. Government mortgage-backed
securities.  CMO classes may be specially structured in a manner that provides
any of a wide variety of investment characteristics, such as yield, effective
maturity and interest rate sensitivity.  As market conditions change, however,
and especially during periods of rapid or unanticipated changes in market
interest rates, the attractiveness of some CMO classes and the ability of the
structure to provide the anticipated investment characteristics may be
significantly reduced.  These changes can result in volatility in the market
value, and in some instances reduced liquidity, of the CMO class.

     Policies and Restrictions:  Each Fund may invest in mortgage-backed, asset-
backed and stripped securities as long as WRIMCO determines that it is
consistent with the Fund's goal(s) and investment policies.    

     Risks of Derivative Instruments.  The use of options, futures contracts and
options on futures contracts and the investment in indexed securities, stripped
securities and mortgage-backed securities involves special risks, including (i)
possible imperfect or no correlation between price movements of the portfolio
investments (held or intended to be purchased) involved in the transaction and
price movements of the instruments involved in the transaction, (ii) possible
lack of a liquid secondary market for any particular instrument at a particular
time, (iii) the need for additional portfolio management skills and techniques,
(iv) losses due to unanticipated market price movements, (v) the fact that,
while such strategies can reduce the risk of loss, they can also reduce the
opportunity for gain, or even result in losses, by offsetting favorable price
movements in investments involved in the transaction, (vi) incorrect forecasts
by WRIMCO concerning interest rates or direction of price fluctuations of the
investment involved in the transaction, which may result in the strategy being
ineffective, (vii) loss of premiums paid by a Fund on options it purchases, and
(viii) the possible inability of a Fund to purchase or sell a portfolio security
at a time when it would otherwise be favorable for it to do so, or the possible
need for a Fund to sell a portfolio security at a disadvantageous time, due to
the need for the Fund to maintain "cover" or to segregate securities in
connection with such transactions and the possible inability of a Fund to close
out or liquidate its position.

     For a hedging strategy to be completely effective, the price change of the
hedging instrument must equal the price change of the investment being hedged.
The risk of imperfect correlation of these price changes increases as the
composition of a Fund's portfolio diverges from instruments underlying a hedging
instrument.  Such equal price changes are not always possible because the
investment underlying the hedging instruments may not be the same investment
that is being hedged.  WRIMCO will attempt to create a closely correlated hedge
but hedging activity may not be completely successful in eliminating market
value fluctuation.

     WRIMCO may use derivative instruments, including securities with embedded
derivatives, for hedging purposes to adjust the risk characteristics of a Fund's
portfolio of investments and may use some of these instruments to adjust the
return characteristics of a Fund's portfolio of investments.  An embedded
derivative is a derivative that is part of another financial instrument.
Embedded derivatives typically, but not always, are debt securities whose return
of principal or interest, in part, is determined by something that is not
intrinsic to the security itself.  The use of derivative techniques for
speculative purposes can increase investment risk.  If WRIMCO judges market
conditions incorrectly or employs a strategy that does not correlate well with a
Fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return.  These techniques may
increase the volatility of a Fund and may involve a small investment of cash
relative to the magnitude of the risk assumed.  In addition, these techniques
could result in a loss if the counterparty to the transaction does not perform
as promised or if there is not a liquid secondary market to close out a position
that a Fund has entered into.

     The ordinary spreads between prices in the cash and futures markets, due to
the differences in the natures of those markets, are subject to distortion.  Due
to the possibility of distortion, a correct forecast of general interest rate or
stock market trends by WRIMCO may still not result in a successful transaction.
WRIMCO may be incorrect in its expectations as to the extent of various interest
rate movements or stock market movements or the time span within which the
movements take place.

     Options and futures transactions may increase portfolio turnover rates,
which results in correspondingly greater commission expenses and transactions
costs and may result in certain tax consequences.

     New financial products and risk management techniques continue to be
developed.  Each Fund may use these instruments and techniques to the extent
consistent with its goal(s), investment policies and regulatory requirements
applicable to investment companies.

     When-Issued and Delayed-Delivery Transactions are trading practices in
which payment and delivery for the securities take place at a future date.  The
market value of a security could change during this period, which could affect a
Fund's yield.

     When purchasing securities on a delayed-delivery basis, a Fund assumes the
rights and risks of ownership, including the risk of price and yield
fluctuations.  When a Fund has sold a security on a delayed-delivery basis, a
Fund does not participate in further gains or losses with respect to the
security.  If the other party to a delayed-delivery transaction fails to deliver
or pay for the securities, a Fund could miss a favorable price or yield
opportunity, or could suffer a loss.

     Policies and Restrictions:  Each Fund may purchase securities in which it
may invest on a when-issued or delayed-delivery basis or sell them on a delayed-
delivery basis.

     Repurchase Agreements.  In a repurchase agreement, a Fund buys a security
at one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults or
becomes insolvent.

     Policies and Restrictions:  Each Fund may purchase securities subject to
repurchase agreements if, as a result, no more than 10% of its net assets would
consist of illiquid investments (which include repurchase agreements not
terminable within seven days).

        Restricted Securities and Illiquid Investments.  Restricted securities
are securities that are subject to legal or contractual restrictions on resale.
Restricted securities may be illiquid due to restrictions on their resale.
Certain restricted securities may be determined to be liquid in accordance with
guidelines adopted by the Corporation's Board of Directors.    

     Illiquid investments may be difficult to sell promptly at an acceptable
price.  Difficulty in selling securities may result in a loss or may be costly
to a Fund.

     Policies and Restrictions:  United Accumulative Fund and United Income Fund
may purchase restricted securities.  United Income Fund does not intend to
invest more than 10% of its assets in restricted securities.

     A Fund may not purchase a security if as a result more than 10% of its net
assets would consist of illiquid investments.

     Diversification.  Diversifying a Fund's investment portfolio can reduce the
risks of investing.  This may include limiting the amount of money invested in
any one issuer or, on a broader scale, in any one industry.

        Policies and Restrictions:  As a fundamental policy, no Fund may invest
in a security if, as a result, it would own more than 10% of the outstanding
voting securities of an issuer or any class of its securities, or if more than
5% of the Fund's total assets would be invested in securities of that
issuer.    

     As a fundamental policy, no Fund other than United Science and Technology
Fund may buy a security if, as a result, 25% or more of the Fund's total assets
would then be invested in securities of companies in any one industry.

     Lending.  Securities loans may be made on a short-term or long-term basis
for the purpose of increasing a Fund's income.  This practice could result in a
loss or a delay in recovering a Fund's securities.  Loans will be made only to
parties deemed by WRIMCO to be creditworthy.

     Policies and Restrictions:  As a fundamental policy, a Fund will not lend
more than 10% of its assets at any one time, and such loans must be on a
collateralized basis in accordance with applicable regulatory requirements.

     Other Instruments may include warrants and securities of closed-end
investment companies.  As a shareholder in an investment company, a Fund would
bear its pro rata share of that investment company's expenses, which could
result in duplication of certain fees, including management and administrative
fees.

     Policies and Restrictions:  As a fundamental policy, each Fund may purchase
shares of other investment companies that do not redeem their shares, but not
more than 10% of the total assets of the Corporation may be invested in such
shares.  Each Fund does not currently intend to invest more than 5% of its
assets in the shares of other investment companies.

        As a fundamental policy, a Fund may not invest any of its assets in
companies, including predecessors, with less than three years' continuous
operation.  As a fundamental policy, United Bond Fund may invest in
warrants.    

<PAGE>
About Your Account

     Class Y shares are designed for institutional investors.  Class Y shares
are available for purchase by:

  participants of employee benefit plans established under section 403(b) or
  section 457, or qualified under section 401, including 401(k) plans, of the
  Internal Revenue Code of 1986, as amended (the "Code"), when the plan has 100
  or more eligible employees and holds the shares in an omnibus account on the
  Fund's records;

  banks, trust institutions, investment fund administrators and other third
  parties investing for their own accounts or for the accounts of their
  customers where such investments for customer accounts are held in an omnibus
  account on the Fund's records;

  government entities or authorities and corporations whose investment within
  the first twelve months after initial investment is $10 million or more; and

  certain retirement plans and trusts for employees and account representatives
  of Waddell & Reed, Inc. and its affiliates.

Buying Shares

     You may buy shares of the Funds through Waddell & Reed, Inc. and its
account representatives.  To open your account you must complete and sign an
application.  Your Waddell & Reed, Inc. account representative can help you with
any questions you might have.

     The price to buy a share of each Fund, called the offering price, is
calculated every business day.

     The offering price of a Class Y share (price to buy one Class Y share) is
each Fund's Class Y net asset value ("NAV").

     To purchase by wire, you must first obtain an account number by calling 1-
800-366-2520, then mail a completed application to Waddell & Reed, Inc., P.O.
Box 29217, Shawnee Mission, Kansas 66201-9217 or fax it to 913-236-5044.
Instruct your bank to wire the amount you wish to invest to UMB Bank, n.a., ABA
Number 101000695, W&R Underwriter Account Number 0007978, FBO Customer Name and
Account Number.

     To purchase by check, make your check payable to Waddell & Reed, Inc.  Mail
the check, along with your completed account application, to Waddell & Reed,
Inc., P.O. Box 29217, Shawnee Mission, Kansas 66201-9217.

     A Fund's Class Y NAV is the value of a single Class Y share.  The Class Y
NAV is computed by adding with respect to that class the value of a Fund's
investments, cash and other assets, subtracting its liabilities, and then
dividing the result by the number of Class Y shares outstanding.

        The securities in each Fund's portfolio that are listed or traded on an
exchange are valued primarily using market quotations or, if market quotations
are not available, at their fair value in a manner determined in good faith by
or at the direction of the Board of Directors.  Bonds are generally valued
according to prices quoted by a third-party pricing service.  Short-term debt
securities are valued at amortized cost, which approximates market value.  Other
assets are valued at their fair value by or at the direction of the Board of
Directors.

     A Fund is open for business each day the New York Stock Exchange (the
"NYSE") is open.  The Funds normally calculate their NAVs as of the later of the
close of business of the NYSE, normally 4 p.m. Eastern time, or the close of the
regular session of any other securities or commodities exchange on which an
option or future held by a Fund is traded.    

     When you place an order to buy shares, your order will be processed at the
next offering price calculated after your order is received and accepted.  Note
the following:

  Orders are accepted only at the home office of Waddell & Reed, Inc.
  All of your purchases must be made in U.S. dollars.
  If you buy shares by check, and then sell those shares by any method other
  than by exchange to another Fund in the United Group, the payment may be
  delayed for up to ten days to ensure that your previous investment has
  cleared.
  The Funds do not issue certificates representing Class Y shares of the Funds.

        When you sign your account application, you will be asked to certify
that your Social Security or other taxpayer identification number is correct and
whether you are subject to  backup withholding for failing to report income to
the Internal Revenue Service.    

     Waddell & Reed, Inc. reserves the right to reject any purchase orders,
including purchases by exchange, and it and the Funds reserve the right to
discontinue offering Fund shares for purchase.

Minimum Investments

To Open an Account

For a government entity or authority or for a corporation:  $10 million (within 
first
twelve months)

For other investors:     Any amount

Adding to Your Account

     You can make additional investments of any amount at any time.

     To add to your account by wire:  Instruct your bank to wire the amount you
wish to invest, along with the account number and registration, to UMB Bank,
n.a., ABA Number 101000695, W&R Underwriter Account Number 0007978, FBO Customer
Name and Account Number.

        To add to your account by mail:  Make your check payable to Waddell &
Reed, Inc.  Mail the check along with a letter stating your account number, the
account registration and that you wish to purchase Class Y shares of a Fund
to:    

Waddell & Reed, Inc.
P. O. Box 29217
Shawnee Mission, Kansas
66201-9217

Selling Shares

     You can arrange to take money out of your Fund account at any time by
selling (redeeming) some or all of your shares.

     The redemption price (price to sell one Class Y share) is the Fund's Class
Y NAV.

     To sell shares by telephone or fax:  If you have elected this method in
your application or by subsequent authorization, call 1-800-366-5465 or fax your
request to 913-236-5044 and give your instructions to redeem shares and make
payment by wire to your pre-designated bank account or by check to you at the
address on the account.

     To sell shares by written request:  Complete an Account Service Request
form, available from your Waddell & Reed account representative, or write a
letter of instruction with:

  the name on the account registration;
  the Fund's name;
  the Fund account number;
  the dollar amount or number of shares to be redeemed; and
  any other applicable requirements listed in the table below.

     Deliver the form or your letter to your Waddell & Reed account
representative, or mail it to:

Waddell & Reed, Inc.
P. O. Box 29217
Shawnee Mission, Kansas
66201-9217

     Unless otherwise instructed, Waddell & Reed, Inc. will send a check to the
address on the account.

                    Special Requirements for Selling Shares
  Account Type         Special Requirements
Retirement       The written instructions must
Account          be signed by a properly
                 authorized person.
Trust            The trustee must sign the
                 written instructions
                 indicating capacity as
                 trustee.  If the trustee's
                 name is not in the account
                 registration, provide a
                 currently certified copy of
                 the trust document.
Business or      At least one person authorized
Organization     by corporate resolution to act
                 on the account must sign the
                 written instructions.

        When you place an order to sell shares, your shares will be sold at the
next NAV calculated after receipt of a written request for redemption in good
order by Waddell & Reed, Inc. at its home office.  Note the following:    

  If more than one person owns the shares, each owner must sign the written
  request.
  If you recently purchased the shares by check, a Fund may delay payment of
  redemption proceeds.  You may arrange for the bank upon which the purchase
  check was drawn to provide to the Fund telephone or written assurance,
  satisfactory to the Fund, that the check has cleared and been honored.  If no
  such assurance is given, payment of the redemption proceeds on these shares
  will be delayed until the earlier of 10 days or the date the Fund is able to
  verify that your purchase check has cleared and been honored.
  Redemptions may be suspended or payment dates postponed on days when the NYSE
  is closed (other than weekends or holidays), when trading on the NYSE is
  restricted or as permitted by the Securities and Exchange Commission.
  Payment is normally made in cash, although under extraordinary conditions
  redemptions may be made in portfolio securities.

     Each Fund reserves the right to require a signature guarantee on certain
redemption requests.  This requirement is designed to protect you and Waddell &
Reed, Inc. from fraud.  A Fund may require a signature guarantee in certain
situations such as:

  the request for redemption is made by a corporation, partnership or
  fiduciary;
  the request for redemption is made by someone other than the owner of record;
  or
  the check is being made payable to someone other than the owner of record.

     Each Fund will accept a signature guarantee from a national bank, a
federally chartered savings and loan or a member firm of a national stock
exchange or other eligible guarantor in accordance with procedures of the Fund's
transfer agent.  A notary public cannot provide a signature guarantee.

Telephone Transactions

     The Corporation and its agents will not be liable for following
instructions communicated by telephone that they reasonably believe to be
genuine.  The Corporation will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine.  If the Corporation fails to
do so, the Corporation may be liable for losses due to unauthorized or
fraudulent instructions.  Current procedures relating to instructions
communicated by telephone include tape recording instructions, requiring
personal identification and providing written confirmations of transactions
effected pursuant to such instructions.

Shareholder Services

     Waddell & Reed provides a variety of services to help you manage your
account.

Personal Service

     Your local Waddell & Reed account representative is available to provide
personal service.  Additionally, the Waddell & Reed Customer Services staff is
available to respond promptly to your inquiries and requests.

Reports

     Statements and reports sent to you include the following:

  confirmation statements (after every purchase, exchange, transfer or
  redemption)
  year-to-date statements (quarterly)
  annual and semiannual reports (every six months)

Exchanges

     You may sell your Class Y shares and buy Class Y shares of other funds in
the United Group.  You may exchange only into funds that are legally registered
for sale in your state of residence.  Note that exchanges out of a Fund may have
tax consequences for you.  Before exchanging into a fund, read its prospectus.

     The Funds reserve the right to terminate or modify these exchange
privileges at any time, upon notice in certain instances.

   Distributions and Taxes    

Distributions

        The Funds distribute substantially all of their net investment income
and net capital gains to shareholders each year.  Ordinarily, dividends are
distributed from a Fund's net investment income, which includes accrued
interest, earned discount, dividends and other income earned on portfolio assets
less expenses, at the following times:  United Accumulative Fund and United
Science and Technology Fund, semiannually in June and December; United Income
Fund, quarterly in March, June, September and December; and United Bond Fund,
monthly.  Net capital gains (and any net gains from foreign currency
transactions) ordinarily are distributed in December.  Each Fund may make
additional distributions if necessary to avoid Federal income or excise taxes on
certain undistributed income and capital gains.    

     Distribution Options.  When you open an account, specify on your
application how you want to receive your distributions.  Each Fund offers three
options:

1.Share Payment Option.  Your dividend and capital gains distributions will be
  automatically paid in additional Class Y shares of the Fund.  If you do not
  indicate a choice on your application, you will be assigned this option.

2.Income-Earned Option.  Your capital gains distributions will be automatically
  paid in Class Y shares, but you will be sent a check for each dividend
  distribution.

3.Cash Option.  You will be sent a check for your dividend and capital gains
  distributions.

     For retirement accounts, all distributions are automatically paid in Class
Y shares.

Taxes

     Each Fund, which is treated as a separate corporation for Federal income
tax purposes, has qualified and intends to continue to qualify for treatment as
a regulated investment company under the Code so that it will be relieved of
Federal income tax on that part of its investment company taxable income
(consisting generally of net investment income, net short-term capital gains and
net gains from certain foreign currency transactions) and net capital gains (the
excess of net long-term capital gain over net short-term capital loss) that are
distributed to its shareholders.

     There are certain tax requirements that all Funds must follow in order to
avoid Federal taxation.  In its effort to adhere to these requirements, each
Fund may have to limit its investment activity in some types of instruments.

     As with any investment, you should consider how your investment in a Fund
will be taxed.  If your account is not a tax-deferred retirement account, you
should be aware of the following tax implications:

        Taxes on distributions.  Dividends from a Fund's investment company
taxable income are generally taxable to you as ordinary income whether received
in cash or paid in additional Fund shares.  Distributions of a Fund's net
capital gains, when designated as such, are taxable to you as long-term capital
gains, whether received in cash or paid in additional Fund shares and regardless
of the length of time you have owned your shares.  Each Fund notifies you after
each calendar year-end as to the amounts of dividends and other distributions
paid (or deemed paid) to you for that year.    

     A portion of the dividends paid by a Fund, whether received in cash or paid
in additional Fund shares, may be eligible for the dividends-received deduction
allowed to corporations.  The eligible portion may not exceed the aggregate
dividends received by a Fund from U.S. corporations.  However, dividends
received by a corporate shareholder and deducted by it pursuant to the
dividends-received deduction are subject indirectly to the alternative minimum
tax.

     Withholding.  Each Fund is required to withhold 31% of all dividends,
capital gains distributions and redemption proceeds payable to individuals and
certain other noncorporate shareholders who do not furnish the Fund with a
correct taxpayer identification number.  Withholding at that rate from dividends
and capital gains distributions also is required for such shareholders who
otherwise are subject to backup withholding.

     Taxes on transactions.  Your redemption of Fund shares will result in
taxable gain or loss to you, depending on whether the redemption proceeds are
more or less than your adjusted basis for the redeemed shares.  An exchange of
Fund shares for shares of any other fund in the United Group generally will have
similar tax consequences.  In addition, if you purchase Fund shares within
thirty days before or after redeeming other Fund shares (regardless of class) at
a loss, part or all of that loss will not be deductible and will increase the
basis of the newly-purchased shares.

        The foregoing is only a summary of some of the important Federal tax
considerations generally affecting each Fund and its shareholders; see the SAI
for a more detailed discussion.  There may be other Federal, state or local tax
considerations applicable to a particular investor.  You are urged to consult
your own tax adviser.    

<PAGE>
About the Management and Expenses of the Funds

     United Funds, Inc. is a mutual fund:  an investment that pools
shareholders' money and invests it toward a specified goal.  In technical terms,
the Corporation is an open-end management investment company organized as a
corporation under Maryland law on February 21, 1974, as successor to a Delaware
corporation which commenced operations in 1940.

     The Corporation is governed by a Board of Directors, which has overall
responsibility for the management of its affairs.  The majority of directors are
not affiliated with Waddell & Reed, Inc.

        The Corporation has four series of shares (the "Funds"), each of which
operates as a separate mutual fund with separate assets and liabilities.  Each
Fund is a diversified fund.  In addition to the Class Y shares offered by this
Prospectus, the Corporation has issued and outstanding Class A shares which are
offered by Waddell & Reed, Inc. through a separate prospectus.  Class A shares
are subject to a sales charge on purchases but are not subject to redemption
fees.  Class A shares are subject to a Rule 12b-1 fee at an annual rate of up to
0.25% of each Fund's average net assets attributable to Class A shares.
Additional information about Class A shares may be obtained by calling the
telephone number listed on the inside back cover or by writing to Waddell &
Reed, Inc. at the address on the inside back cover of this Prospectus.    

     The Corporation does not hold annual meetings of shareholders; however,
certain significant corporate matters, such as the approval of a new investment
advisory agreement or a change in a fundamental investment policy, which require
shareholder approval will be presented to shareholders at a meeting called by
the Board of Directors for such purpose.

     Special meetings of shareholders may be called for any purpose upon receipt
by a Fund of a request in writing signed by shareholders holding not less than
25% of all shares entitled to vote at such meeting, provided certain conditions
stated in the Bylaws of the Corporation are met.  There will normally be no
meeting of the shareholders for the purpose of electing directors until such
time as less than a majority of directors holding office have been elected by
shareholders, at which time the directors then in office will call a
shareholders' meeting for the election of directors.  To the extent that Section
16(c) of the Investment Company Act of 1940, as amended (the "1940 Act"),
applies to the Corporation, the directors are required to call a meeting of
shareholders for the purpose of voting upon the question of removal of any
director when requested in writing to do so by the shareholders of record of not
less than 10% of a Fund's outstanding shares.

     Each share (regardless of class) has one vote.  All shares of a Fund (and
classes thereof) vote together as a single class, except as to any matter for
which a separate vote of any Fund or class is required by the 1940 Act, and
except as to any matter which affects the interests of one or more particular
Fund or classes, in which case only the shareholders of the affected Fund or
class are entitled to vote, each as a separate class.  Shares are fully paid and
nonassessable when purchased.

WRIMCO and Its Affiliates

     The Funds are managed by WRIMCO, subject to the authority of the
Corporation's Board of Directors.  WRIMCO provides investment advice to each of
the Funds and supervises each Fund's investments.  Waddell & Reed, Inc. and its
predecessors have served as investment manager to each of the registered
investment companies in the United Group of Mutual Funds, except United Asset
Strategy Fund, Inc., since 1940 or the inception of the company, whichever was
later, and to TMK/United Funds, Inc. since that Fund's inception, until January
8, 1992, when it assigned its duties as investment manager and assigned its
professional staff for investment management services to WRIMCO.  WRIMCO has
also served as investment manager for Waddell & Reed Funds, Inc. since its
inception in September 1992 and United Asset Strategy Fund, Inc. since it
commenced operations in March 1995.

     James C. Cusser is primarily responsible for the day-to-day management of
the portfolio of United Bond Fund.  Mr. Cusser has held his Fund
responsibilities since September 1992.  He is Vice President of WRIMCO, Vice
President of the Fund and Vice President of other investment companies for which
WRIMCO serves as investment manager.  Mr. Cusser has served as the portfolio
manager for the Fund and other investment companies managed by WRIMCO since
August 1992 and has been an employee of WRIMCO since August 1992.  From January
1987 to August 1992, Mr. Cusser was Vice President of Kidder, Peabody & Co., New
York.

     Russell E. Thompson is primarily responsible for the day-to-day management
of the portfolio of United Income Fund.  Mr. Thompson has held his Fund
responsibilities since February 1979.  He is Senior Vice President of WRIMCO and
Senior Vice President of Waddell & Reed Asset Management Company, an affiliate
of WRIMCO.  He is Vice President of the Fund and Vice President of other
investment companies for which WRIMCO serves as investment manager.  Mr.
Thompson has served as the portfolio manager for investment companies managed by
Waddell & Reed, Inc. and its successor, WRIMCO, since January 1976 and has been
an employee of Waddell & Reed, Inc. and its successor, WRIMCO, since March 1971.

     Antonio Intagliata is primarily responsible for the day-to-day management
of the portfolio of United Accumulative Fund.  Mr. Intagliata has held his Fund
responsibilities since November 1979.  He is Senior Vice President of WRIMCO,
Vice President of the Fund and Vice President of other investment companies for
which WRIMCO serves as investment manager.  Mr. Intagliata has served as the
portfolio manager for investment companies managed by Waddell & Reed, Inc., and
its successor, WRIMCO, since February 1979 and has been an employee of Waddell &
Reed, Inc. and its successor, WRIMCO, since June 1973.

     Abel Garcia is primarily responsible for the day-to-day management of the
portfolio of United Science and Technology Fund.  Mr. Garcia has held his Fund
responsibilities since January 1984.  He is Vice President of WRIMCO, Vice
President of Waddell & Reed Asset Management Company, an affiliate of WRIMCO,
and Vice President of the Fund.  Mr. Garcia has been an employee of Waddell &
Reed, Inc. and its successor, WRIMCO, since August 1983.

     Other members of WRIMCO's investment management department provide input on
market outlook, economic conditions, investment research and other
considerations relating to a Fund's investments.

        Waddell & Reed, Inc. serves as the Corporation's underwriter and as
underwriter for each of the other funds in the United Group of Mutual Funds and
Waddell & Reed Funds, Inc. and acts as the principal underwriter and distributor
for variable life insurance and variable annuity policies issued by United
Investors Life Insurance Company for which TMK/United Funds, Inc. is the
underlying investment vehicle.    

     Waddell & Reed Services Company acts as transfer agent ("Shareholder
Servicing Agent") for the Corporation and processes the payments of dividends.
Waddell & Reed Services Company also acts as agent ("Accounting Services Agent")
in providing bookkeeping and accounting services and assistance to the
Corporation and pricing daily the value of shares of the Funds.

     WRIMCO and Waddell & Reed Services Company are subsidiaries of Waddell &
Reed, Inc.  Waddell & Reed, Inc. is a direct subsidiary of Waddell & Reed
Financial Services, Inc., a holding company, and an indirect subsidiary of
United Investors Management Company, a holding company, and Torchmark
Corporation, a holding company.

     WRIMCO places transactions for the portfolio of each Fund and in doing so
may consider sales of shares of the Funds and other Funds it manages as a factor
in the selection of brokers to execute portfolio transactions.

Breakdown of Expenses

     Like all mutual funds, the Funds pay fees related to their daily
operations.  Expenses paid out of each Fund's assets are reflected in its share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.

     Each Fund pays a management fee to WRIMCO for providing investment advice
and supervising its investments.  Each Fund also pays other expenses, which are
explained below.

Management Fee

     The management fee of each Fund is calculated by adding a group fee to a
specific fee.  It is accrued and paid to WRIMCO daily.

     The specific fee is computed on each Fund's net asset value as of the close
of business each day at the annual rate of .03 of 1% of the net assets of United
Bond Fund, .15 of 1% of the net assets of United Income Fund and United
Accumulative Fund and .20 of 1% of the net assets of United Science and
Technology Fund.  The group fee is a pro rata participation based on the
relative net asset size of each Fund in the group fee computed each day on the
combined net asset values of all the funds in the United Group at the annual
rates shown in the following table:

Group Fee Rate

               Annual
Group Net      Group
Asset Level    Fee Rate
(all dollars   For Each
in millions)   Level
------------   --------

From $0
to $750       .51 of 1%

From $750
to $1,500     .49 of 1%

From $1,500
to $2,250     .47 of 1%

From $2,250
to $3,000     .45 of 1%

From $3,000
to $3,750     .43 of 1%

From $3,750
to $7,500     .40 of 1%

From $7,500
to $12,000    .38 of 1%

Over $12,000  .36 of 1%

     Growth in assets of the United Group assures a lower group fee rate.

        The combined net asset values of all of the funds in the United Group
were approximately $15.1 billion as of December 31, 1996.    

        For the fiscal year ended December 31, 1996, management fees for each
Fund as a percent of each Fund's net assets were as follows:  United Bond Fund
0.44%, United Income Fund 0.56%, United Accumulative Fund 0.56%, United Science
and Technology Fund 0.61%.    

Other Expenses

     While the management fee is a significant component of each Fund's annual
operating costs, the Funds have other expenses as well.

     Each Fund pays the Accounting Services Agent a monthly fee based on the
average net assets of the Fund for accounting services.  With respect to its
Class Y shares, each Fund pays the Shareholder Servicing Agent a monthly fee
based on the average daily net assets of the class for the preceding month.

     Each Fund also pays other expenses, such as fees and expenses of certain
directors, audit and outside legal fees, costs of materials sent to
shareholders, taxes, brokerage commissions, interest, insurance premiums,
custodian fees, fees payable by the Fund under federal or other securities laws
and to the Investment Company Institute, and extraordinary expenses including
litigation and indemnification relative to litigation.

     A Fund cannot precisely predict what its portfolio turnover rate will be,
but each Fund may have a high portfolio turnover.  United Accumulative Fund may
engage in short-term trading and have a corresponding high turnover rate.  A
higher turnover will increase transaction and commission costs and could
generate taxable income or loss.

<PAGE>
                                   APPENDIX A

     The following are descriptions of some of the ratings of securities which a
Fund may use.  A Fund may also use ratings provided by other nationally
recognized statistical rating organizations in determining the securities
eligible for investment.

DESCRIPTION OF BOND RATINGS

        Standard & Poor's, a division of the McGraw-Hill Companies.  An S&P
corporate or municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.  This
assessment of creditworthiness may take into consideration obligors such as
guarantors, insurers or lessees.    

     The debt rating is not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or suitability for
a particular investor.

     The ratings are based on current information furnished to  S&P by the
issuer or obtained by S&P from other sources it considers reliable.  S&P does
not perform an audit in connection with any rating and may, on occasion, rely on
unaudited financial information.  The ratings may be changed, suspended or
withdrawn as a result of changes in, or unavailability of, such information, or
based on other circumstances.

     The ratings are based, in varying degrees, on the following considerations:

1.Likelihood of default -- capacity and willingness of the obligor as to the
  timely payment of interest and repayment of principal in accordance with the
  terms of the obligation;

2.Nature of and provisions of the obligation;

3.Protection afforded by, and relative position of, the obligation in the event
  of bankruptcy, reorganization or other arrangement under the laws of
  bankruptcy and other laws affecting creditors' rights.

     AAA -- Debt rated AAA has the highest rating assigned by S&P.  Capacity to
pay interest and repay principal is extremely strong.

     AA -- Debt rated AA also qualifies as high quality debt.  Capacity to pay
interest and repay principal is very strong, and debt rated AA differs from AAA
issues only in small degree.

     A -- Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.

     BBB -- Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal.  Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.

     BB, B, CCC, CC, C - Debt rated BB, B, CCC, CC and C is regarded as having
predominantly speculative characteristics with respect to capacity to pay
interest and repay principal in accordance with the terms of the obligation.  BB
indicates the lowest degree of speculation and C the highest degree of
speculation.  While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major exposures
to adverse conditions.

     BB -- Debt rated BB has less near-term vulnerability to default than other
speculative issues.  However, it faces major ongoing uncertainties or exposure
to adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments.  The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating.

     B -- Debt rated B has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments.  Adverse
business, financial or economic conditions will likely impair capacity or
willingness to pay interest and repay principal.  The B rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
BB or BB- rating.

     CCC -- Debt rated CCC has a currently indefinable vulnerability to default,
and is dependent upon favorable business, financial and economic conditions to
meet timely payment of interest and repayment of principal.  In the event of
adverse business, financial or economic conditions, it is not likely to have the
capacity to pay interest and repay principal.  The CCC rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
B or B- rating.

     CC -- The rating CC is typically applied to debt subordinated to senior
debt that is assigned an actual or implied CCC rating.

     C -- The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating.  The C rating may be
used to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued.

     CI -- The rating CI is reserved for income bonds on which no interest is
being paid.

     D -- Debt rated D is in payment default.  It is used when interest payments
or principal payments are not made on a due date even if the applicable grace
period has not expired, unless S&P believes that such payments will be made
during such grace periods.  The D rating will also be used upon a filing of a
bankruptcy petition if debt service payments are jeopardized.

     Plus (+) or Minus (-) -- To provide more detailed indications of credit
quality, the ratings from AA to CCC may be modified by the addition of a plus or
minus sign to show relative standing within the major rating categories.

     NR -- Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.

     Debt Obligations of issuers outside the United States and its territories
are rated on the same basis as domestic corporate and municipal issues.  The
ratings measure the creditworthiness of the obligor but do not take into account
currency exchange and related uncertainties.

     Bond Investment Quality Standards:  Under present commercial bank
regulations issued by the Comptroller of the Currency, bonds rated in the top
four categories (AAA, AA, A, BBB, commonly known as "investment grade" ratings)
are generally regarded as eligible for bank investment.  In addition, the laws
of various states governing legal investments may impose certain rating or other
standards for obligations eligible for investment by savings banks, trust
companies, insurance companies and fiduciaries generally.

     Moody's Investors Service, Inc.  A brief description of the applicable MIS
rating symbols and their meanings follows:

     Aaa -- Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge."  Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure.  While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.

     Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards.  Together with the Aaa group they comprise what are generally known
as high grade bonds.  They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuations of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.

     A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations.  Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment sometime in the future.

     Baa -- Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time.  Some bonds lack outstanding
investment characteristics and in fact have speculative characteristics as well.

     NOTE:  Bonds within the above categories which possess the strongest
investment attributes are designated by the symbol "1" following the rating.

     Ba -- Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured.  Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during good and bad times over the future.  Uncertainty of position
characterizes bonds in this class.

     B -- Bonds which are rated B generally lack characteristics of the
desirable investment.  Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.

     Caa -- Bonds which are rated Caa are of poor standing.  Such issues may be
in default or there may be present elements of danger with respect to principal
or interest.

     Ca -- Bonds which are rated Ca represent obligations which are speculative
in a high degree.  Such issues are often in default or have other marked
shortcomings.

     C -- Bonds which are rated C are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.

DESCRIPTION OF PREFERRED STOCK RATINGS

        Standard & Poor's, a division of the McGraw-Hill Companies.  An S&P
preferred stock rating is an assessment of the capacity and willingness of an
issuer to pay preferred stock dividends and any applicable sinking fund
obligations.  A preferred stock rating differs from a bond rating inasmuch as it
is assigned to an equity issue, which issue is intrinsically different from, and
subordinated to, a debt issue.  Therefore, to reflect this difference, the
preferred stock rating symbol will normally not be higher than the debt rating
symbol assigned to, or that would be assigned to, the senior debt of the same
issuer.    

     The preferred stock ratings are based on the following considerations:

1.Likelihood of payment - capacity and willingness of the issuer to meet the
  timely payment of preferred stock dividends and any applicable sinking fund
  requirements in accordance with the terms of the obligation;

2.Nature of, and provisions of, the issue;

3.Relative position of the issue in the event of bankruptcy, reorganization, or
  other arrangement under the laws of bankruptcy and other laws affecting
  creditors' rights.

     AAA -- This is the highest rating that may be assigned by S&P to a
preferred stock issue and indicates an extremely strong capacity to pay the
preferred stock obligations.

     AA -- A preferred stock issue rated AA also qualifies as a high-quality
fixed income security.  The capacity to pay preferred stock obligations is very
strong, although not as overwhelming as for issues rated AAA.

     A -- An issue rated A is backed by a sound capacity to pay the preferred
stock obligations, although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions.

     BBB -- An issue rated BBB is regarded as backed by an adequate capacity to
pay the preferred stock obligations.  Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to make payments for a preferred
stock in this category than for issues in the 'A' category.

     BB, B, CCC -- Preferred stock rated BB, B, and CCC are regarded, on
balance, as predominantly speculative with respect to the issuer's capacity to
pay preferred stock obligations.  BB indicates the lowest degree of speculation
and CCC the highest degree of speculation.  While such issues will likely have
some quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.

     CC -- The rating CC is reserved for a preferred stock issue in arrears on
dividends or sinking fund payments but that is currently paying.

     C -- A preferred stock rated C is a non-paying issue.

     D -- A preferred stock rated D is a non-paying issue with the issuer in
default on debt instruments.

     NR -- This indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.

     Plus (+) or minus (-) -- To provide more detailed indications of preferred
stock quality, the rating from AA to CCC may be modified by the addition of a
plus or minus sign to show relative standing within the major rating categories.

     A preferred stock rating is not a recommendation to purchase, sell, or hold
a security inasmuch as it does not comment as to market price or suitability for
a particular investor.  The ratings are based on current information furnished
to S&P by the issuer or obtained by S&P from other sources it considers
reliable.  S&P does not perform an audit in connection with any rating and may,
on occasion, rely on unaudited financial information.  The ratings may be
changed, suspended, or withdrawn as a result of changes in, or unavailability
of, such information, or based on other circumstances.

     Moody's Investors Service, Inc.  Because of the fundamental differences
between preferred stocks and bonds, a variation of MIS' familiar bond rating
symbols is used in the quality ranking of preferred stock.  The symbols are
designed to avoid comparison with bond quality in absolute terms.  It should
always be borne in mind that preferred stock occupies a junior position to bonds
within a particular capital structure and that these securities are rated within
the universe of preferred stocks.

     Note:  MIS applies numerical modifiers 1, 2 and 3 in each rating
classification; the modifier 1 indicates that the security ranks in the higher
end of its generic rating category; the modifier 2 indicates a mid-range ranking
and the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.

     Preferred stock rating symbols and their definitions are as follows:

     aaa -- An issue which is rated aaa is considered to be a top-quality
preferred stock.  This rating indicates good asset protection and the least risk
of dividend impairment within the universe of preferred stocks.

     aa -- An issue which is rated aa is considered a high-grade preferred
stock.  This rating indicates that there is a reasonable assurance the earnings
and asset protection will remain relatively well-maintained in the foreseeable
future.

     a -- An issue which is rated a is considered to be an upper-medium grade
preferred stock.  While risks are judged to be somewhat greater than in the aaa
and aa classification, earnings and asset protection are, nevertheless, expected
to be maintained at adequate levels.

     baa -- An issue which is rated baa is considered to be a medium-grade
preferred stock, neither highly protected nor poorly secured.  Earnings and
asset protection appear adequate at present but may be questionable over any
great length of time.

     ba -- An issue which is rated ba is considered to have speculative elements
and its future cannot be considered well assured.  Earnings and asset protection
may be very moderate and not well safeguarded during adverse periods.
Uncertainty of position characterizes preferred stocks in this class.

     b -- An issue which is rated b generally lacks the characteristics of a
desirable investment.  Assurance of dividend payments and maintenance of other
terms of the issue over any long period of time may be small.

     caa -- An issue which is rated caa is likely to be in arrears on dividend
payments.  This rating designation does not purport to indicate the future
status of payments.

     ca -- An issue which is rated ca is speculative in a high degree and is
likely to be in arrears on dividends with little likelihood of eventual
payments.

     c -- This is the lowest rated class of preferred or preference stock.
Issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

<PAGE>
United Funds, Inc.

Custodian                     Underwriter
  UMB Bank, n.a.                Waddell & Reed, Inc.
  Kansas City, Missouri         6300 Lamar Avenue
                                P. O. Box 29217
Legal Counsel                   Shawnee Mission, Kansas
  Kirkpatrick & Lockhart LLP       66201-9217
  1800 Massachusetts Avenue, N. W.      (913) 236-2000
     Washington, D. C.  20036   (800) 366-5465    

Independent Accountants       Shareholder Servicing Agent
     Deloitte & Touche LLP      Waddell & Reed    
  Kansas City, Missouri            Services Company
                                6300 Lamar Avenue
Investment Manager              P. O. Box 29217
  Waddell & Reed Investment     Shawnee Mission, Kansas
     Management Company            66201-9217
  6300 Lamar Avenue             (913) 236-2000
     P. O. Box 29217            (800) 366-5465    
  Shawnee Mission, Kansas
     66201-9217               Accounting Services Agent
  (913) 236-2000                Waddell & Reed
     (800) 366-5465                Services Company    
                                6300 Lamar Avenue
                                P. O. Box 29217
                                Shawnee Mission, Kansas
                                    66201-9217
                                (913) 236-2000
                                   (800) 366-5465    

Our INTERNET address is:
  http://www.waddell.com

<PAGE>
United Funds, Inc.
Class Y Shares
PROSPECTUS
   March 31, 1997    

The United Group of Mutual Funds
United Asset Strategy Fund, Inc.
United Cash Management, Inc.
United Continental Income Fund, Inc.
United Funds, Inc.
  United Bond Fund
  United Income Fund
  United Accumulative Fund
  United Science and Technology Fund
United Gold & Government Fund, Inc.
United Government Securities Fund, Inc.
United High Income Fund, Inc.
United High Income Fund II, Inc.
United International Growth Fund, Inc.
United Municipal Bond Fund, Inc.
United Municipal High Income Fund, Inc.
United New Concepts Fund, Inc.
United Retirement Shares, Inc.
United Vanguard Fund, Inc.


printed on recycled paper

   NUP2000-Y(3-97)    

<PAGE>
                               UNITED FUNDS, INC.

                               6300 Lamar Avenue

                                P. O. Box 29217

                      Shawnee Mission, Kansas  66201-9217

                                 (913) 236-2000

                                March 31, 1997    


                      STATEMENT OF ADDITIONAL INFORMATION


        This Statement of Additional Information (the "SAI") is not a
prospectus.  Investors should read this SAI in conjunction with a prospectus
("Prospectus") for the Class A shares or the Class Y shares, as applicable, of
United Funds, Inc. (the "Corporation") dated March 31, 1997, which may be
obtained from the Corporation or its underwriter, Waddell & Reed, Inc., at the
address or telephone number shown above.    



                               TABLE OF CONTENTS


     Performance Information ...............................    2

     Goals and Investment Policies .........................    5

     Investment Management and Other Services ..............   31

     Purchase, Redemption and Pricing of Shares ............   36

     Directors and Officers ................................   50

     Payments to Shareholders ..............................   56

     Taxes .................................................   58

     Portfolio Transactions and Brokerage ..................   62

     Other Information .....................................   65

     Financial Statements ..................................   67

<PAGE>
                            PERFORMANCE INFORMATION

     Waddell & Reed, Inc., the Corporation's underwriter, or the Corporation
may, from time to time, publish for one or more of the four Funds total return
information, yield information and/or performance rankings in advertisements and
sales materials.

Total Return

     An average annual total return quotation is computed by finding the average
annual compounded rates of return over the one-, five-, and ten-year periods
that would equate the initial amount invested to the ending redeemable value.
Standardized total return information is calculated by assuming an initial
$1,000 investment and, for Class A shares, from which the maximum sales load of
5.75% is deducted.  All dividends and distributions are assumed to be reinvested
in shares of the applicable class at net asset value for the class as of the day
the dividend or distribution is paid.  No sales load is charged on reinvested
dividends or distributions on Class A shares.  The formula used to calculate the
total return for a particular class of a Fund is:

              n
      P(1 + T)  =   ERV

     Where :  P =   $1,000 initial payment
              T =   Average annual total return
              n =   Number of years
            ERV =   Ending redeemable value of the $1,000 investment for the
                    periods shown.

     Non-standardized performance information may also be presented.  For
example, a Fund may also compute total return for its Class A shares without
deduction of the sales load in which case the same formula noted above will be
used but the entire amount of the $1,000 initial payment will be assumed to have
been invested.  If the sales charge applicable to Class A shares were reflected,
it would reduce the performance quoted for that class.

        The average annual total return quotations for Class A shares with sales
load deducted as of December 31, 1996, which is the most recent balance sheet
included in this SAI, for the periods shown were as follows:

                          One-year      Five-year    Ten-year
                        period from    period from  period from
                         1-1-96 to      1-1-92 to    1-1-87 to
                          12-31-96       12-31-96    12-31-96
                        -----------    -----------  -----------
United Bond Fund            -2.74%          6.09%       7.68%
United Income Fund          13.44          13.40       14.17
United Accumulative Fund     5.73          12.07       11.86
United Science and
  Technology Fund            2.12          12.65       15.85

     The average annual total return quotations for Class A shares without sales
load deducted as of December 31, 1996, which is the most recent balance sheet
included in this SAI, for the periods shown were as follows:

                          One-year      Five-year    Ten-year
                        period from    period from  period from
                         1-1-96 to      1-1-92 to    1-1-87 to
                          12-31-96       12-31-96    12-31-96
                        -----------    -----------  -----------
United Bond Fund             3.20%          7.35%       8.32%
United Income Fund          20.36          14.76       14.85
United Accumulative Fund    12.18          13.41       12.52
United Science and
  Technology Fund            8.35          13.99       16.53    

     Prior to October 1, 1993, United Science and Technology Fund was named
United Science and Energy Fund, and its investment policies related to
investments in science and energy securities rather than science and technology
securities.

     Prior to June 17, 1995, each Fund offered only one class of shares to the
public.  Shares outstanding on that date were designated as Class A shares.
Since that date, Class Y shares of the Funds have been available for certain
institutional investors.

        The total return quotations for Class Y shares as of December 31, 1996,
which is the most recent balance sheet included in this SAI, for the periods
shown were as follows:

                          One year
                           period             Period from
                           ended             inception* to
                     December 31, 1996:    December 31, 1996

United Bond Fund             3.35%                6.52%
United Income Fund          20.53                19.04
United Accumulative Fund    12.27                16.72
United Science and
  Technology Fund                                 3.25

*United Income Fund and United Bond Fund commenced selling Class Y shares on
 June 19, 1995 and United Accumulative Fund commenced selling Class Y shares on
 July 11, 1995 and United Science and Technology Fund commenced selling Class Y
 shares on February 27, 1996.    

     A Fund may also quote unaveraged or cumulative total return for a class
which reflects the change in value of an investment in that class over a stated
period of time.  Cumulative total returns will be calculated according to the
formula indicated above but without averaging the rate for the number of years
in the period.

Yield

     A yield quoted for a class of a Fund is computed by dividing the net
investment income per share of that class earned during the period for which the
yield is shown by the maximum offering price per share of that class on the last
day of that period according to the following formula:

                              6
    Yield = 2((((a - b)/cd)+1)  -1)

Where, with respect to a particular class of a Fund:
       a =  dividends and interest earned during the period.
       b =  expenses accrued for the period (net of reimbursements).
       c =  the average daily number of shares of the class outstanding during
            the period that were entitled to receive dividends.
       d =  the maximum offering price per share of the class on the last day
            of the period.

        The yield for United Bond Fund Class A shares computed according to the
formula for the 30-day period ended on December 31, 1996, the date of the most
recent balance sheet included in this SAI, is 5.70%.  The yield for United Bond
Fund Class Y shares computed according to the formula for the 30-day period
ended on December 31, 1996, the date of the most recent balance sheet included
in this SAI, is 6.17%.    

     Change in yields primarily reflect different interest rates received by a
Fund as its portfolio securities change.  Yield is also affected by portfolio
quality, portfolio maturity, type of securities held and operating expenses of
the applicable class.

Performance Rankings

     Waddell & Reed, Inc. or the Corporation also may, from time to time,
publish in advertisements or sales material performance rankings as published by
recognized independent mutual fund statistical services such as Lipper
Analytical Services, Inc., or by publications of general interest such as
Forbes, Money, The Wall Street Journal, Business Week, Barron's, Fortune or
Morningstar Mutual Fund Values.  Each class of a Fund may also compare its
performance to that of other selected mutual funds or selected recognized market
indicators such as the Standard & Poor's 500 Stock Index and the Dow Jones
Industrial Average.  Performance information may be quoted numerically or
presented in a table, graph or other illustration.

     All performance information that a Fund advertises or includes in sales
material is historical in nature and is not intended to represent or guarantee
future results.  The value of a Fund's shares when redeemed may be more or less
than their original cost.

                         GOALS AND INVESTMENT POLICIES

     The goals and investment policies of United Bond Fund, United Income Fund,
United Accumulative Fund and United Science and Technology Fund (each a "Fund"
and, collectively, the "Funds") are described in the Prospectus, which refers to
the following investment methods and practices.

United Science and Technology Fund

        As described in the Prospectus, the portfolio of United Science and
Technology Fund emphasizes science and technology securities.  Science and
technology securities are securities of companies whose products, processes or
services, in the opinion of Waddell & Reed Investment Management Company, the
Fund's investment manager ("WRIMCO"), are being or are expected to be
significantly benefited by the utilization or commercial application of
scientific or technological discoveries or developments in such areas as
aerospace, communications and electronic equipment, computer systems, computer
software and services, electronics, electronic media, business machines, office
equipment and supplies, biotechnology, medical and hospital supplies and
services, medical devices and drugs.    

United Bond Fund

        This Fund may not purchase any securities other than debt securities if
immediately after such purchase more than 10% of the value of the Fund's total
assets would consist of such other securities.  This 10% limit does not include
(i) any securities required to be sold as promptly as practicable after
conversion of convertible debt securities or exercise of warrants, as set forth
below, or (ii) premiums paid or received by the Fund as to those put and call
options that this Fund is permitted to use, the value of any put or call options
or futures contracts held by it or the amount of initial or variation margin
deposits as to those puts, calls or futures contracts that it is permitted to
use.  The debt securities that the Fund may purchase may include convertible
debt securities and debt securities with warrants attached.  The Fund may
convert convertible debt securities and exercise warrants provided that, if as a
result of conversion or exercise and/or as a result of warrants becoming
separately salable more than 10% of the value of the Fund's total assets
consists of non-debt securities, sufficient non-debt securities will be sold as
promptly as practical to reduce the percentage of such non-debt securities held
by the Fund to 10% or less of its total assets, less the amounts set forth in
(ii) above.  Any such sale shall be made with due regard for losses that might
result from an unduly hasty disposition.  A debt security may not be purchased
if, at the time of purchase, it is in default in the payment of interest or if
there is less than $1,000,000 principal amount outstanding.    

     In selecting debt securities for the portfolio of this Fund, consideration
will be given to their yield; this yield would include the yield to maturity in
the case of debt securities purchased at a discount.  Consideration will also be
given to the relative safety of debt securities purchased and, in the case of
convertible debt securities, the possibility of capital growth.

     Among the other debt securities in which the Fund may invest are deposits
in banks (represented by certificates of deposit or other evidence of deposit
issued by such banks) of varying maturities.  The Federal Deposit Insurance
Corporation insures the principal of certain such deposits ("Insured Deposits"),
currently to the extent of $100,000 per bank.  Insured Deposits are not
marketable, and the Fund will invest in them only within the 10% limit mentioned
below under "Illiquid Investments" unless such obligations are payable at
principal amount plus accrued interest on demand or within seven days after
demand.

       

Securities - General

     The main types of securities in which the Funds may invest include common
stock, preferred stock, debt securities and convertible securities, as described
in the Prospectus.  These securities may include the following securities from
time to time.

     Each of the Funds may purchase debt securities whose principal amount at
maturity is dependent upon the performance of a specified equity security.  The
issuer of such debt securities, typically an investment banking firm, is
unaffiliated with the issuer of the equity security to whose performance the
debt security is linked.  Equity-linked debt securities differ from ordinary
debt securities in that the principal amount received at maturity is not fixed,
but is based on the price of the linked equity security at the time the debt
security matures.  The performance of equity-linked debt securities depends
primarily on the performance of the linked equity security and may also be
influenced by interest rate changes.  In addition, although the debt securities
are typically adjusted for diluting events such as stock splits, stock dividends
and certain other events affecting the market value of the linked equity
security, the debt securities are not adjusted for subsequent issuances of the
linked equity security for cash.  Such an issuance could adversely affect the
price of the debt security.  In addition to the equity risk relating to the
linked equity security, such debt securities are also subject to credit risk
with regard to the issuer of the debt security.  In general, however, such debt
securities are less volatile than the equity securities to which they are
linked.

     Each of the Funds may also invest in a type of convertible preferred stock
that pays a cumulative, fixed dividend that is senior to, and expected to be in
excess of, the dividends paid on the common stock of the issuer.  At the
mandatory conversion date, the preferred stock is converted into not more than
one share of the issuer's common stock at the "call price" that was established
at the time the preferred stock was issued.  If the price per share of the
related common stock on the mandatory conversion date is less than the call
price, the holder of the preferred stock will nonetheless receive only one share
of common stock for each share of preferred stock (plus cash in the amount of
any accrued but unpaid dividends).  At any time prior to the mandatory
conversion date, the issuer may redeem the preferred stock upon issuing to the
holder a number of shares of common stock equal to the call price of the
preferred stock in effect on the date of redemption divided by the market value
of the common stock, with such market value typically determined one or two
trading days prior to the date notice of redemption is given.  The issuer must
also pay the holder of the preferred stock cash in an amount equal to any
accrued but unpaid dividends on the preferred stock.  This convertible preferred
stock is subject to the same market risk as the common stock of the issuer,
except to the extent that such risk is mitigated by the higher dividend paid on
the preferred stock.  The opportunity for equity appreciation afforded by an
investment in such convertible preferred stock, however, is limited, because in
the event the market value of the issuer's common stock increases to or above
the call price of the preferred stock, the issuer may (and would be expected to)
call the preferred stock for redemption at the call price.  This convertible
preferred stock is also subject to credit risk with regard to the ability of the
issuer to pay the dividend established upon issuance of the preferred stock.
Generally, convertible preferred stock is less volatile than the related common
stock of the issuer.

Specific Securities and Investment Practices

U.S. Government Securities

     Securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities ("U.S. Government Securities") include Treasury Bills (which
mature within one year of the date they are issued), Treasury Notes (which have
maturities of one to ten years) and Treasury Bonds (which generally have
maturities of more than ten years).  All such Treasury securities are backed by
the full faith and credit of the United States.

        U.S. Government agencies and instrumentalities that issue or guarantee
securities include, but are not limited to, the Federal Housing Administration,
Fannie Mae (formerly, the Federal National Mortgage Association), Farmers Home
Administration, Export-Import Bank of the United States, Small Business
Administration, Government National Mortgage Association ("Ginnie Mae"), General
Services Administration, Central Bank for Cooperatives, Federal Home Loan Banks,
Federal Home Loan Mortgage Corporation ("Freddie Mac"), Farm Credit Banks,
Maritime Administration, the Tennessee Valley Authority, the Resolution Funding
Corporation and the Student Loan Marketing Association.

     Securities issued or guaranteed by U.S. Government agencies and
instrumentalities are not always supported by the full faith and credit of the
United States.  Some, such as securities issued by the Federal Home Loan Banks,
are backed by the right of the agency or instrumentality to borrow from the
Treasury.  Others, such as securities issued by Fannie Mae, are supported only
by the credit of the instrumentality and by a pool of mortgage assets.  If the
securities are not backed by the full faith and credit of the United States, the
owner of the securities must look principally to the agency issuing the
obligation for repayment and may not be able to assert a claim against the
United States in the event that the agency or instrumentality does not meet its
commitment.  United Bond Fund will invest in securities of agencies and
instrumentalities only if WRIMCO is satisfied that the credit risk involved is
acceptable.

     U.S. Government Securities may include mortgage-backed securities issued by
U.S. Government agencies or instrumentalities including, but not limited to, the
Ginnie Mae, Freddie Mac and Fannie Mae.  These mortgage-backed securities
include pass-through securities and participation certificates.  Another type of
mortgage-backed security is a collateralized mortgage obligation ("CMO").  See
"Mortgage-Backed Securities."  Timely payment of principal and interest on
Ginnie Mae pass-throughs is guaranteed by the full faith and credit of the
United States.  Freddie Mac and Fannie Mae are both instrumentalities of the
U.S. Government, but their obligations are not backed by the full faith and
credit of the United States.  It is possible that the availability and the
marketability (i.e., liquidity) of the securities discussed in this section
could be adversely affected by actions of the U.S. Government to tighten the
availability of its credit.    

Zero Coupon Bonds

     A broker-dealer creates a derivative zero by separating the interest and
principal components of a U.S. Treasury security and selling them as two
individual securities.  CATS (Certificates of Accrual on Treasury Securities),
TIGRs (Treasury Investment Growth Receipts), and TRs (Treasury Receipts) are
examples of derivative zeros.

     The Federal Reserve Bank creates STRIPS (Separate Trading of Registered
Interest and Principal of Securities) by separating the interest and principal
components of an outstanding U.S. Treasury bond and selling them as individual
securities.  Bonds issued by the Resolution Funding Corporation (REFCORP) and
the Financing Corporation (FICO) can also be separated in this fashion.
Original issue zeros are zero coupon securities originally issued by the U.S.
Government, a government agency, or a corporation in zero coupon form.

   Mortgage-Backed Securities

     Mortgage-backed securities represent direct or indirect participations in,
or are secured by and payable from, mortgage loans secured by real property and
include single- and multi-class pass-through securities and collateralized
mortgage obligations.  Multi-class pass-through securities and collateralized
mortgage obligations are collectively referred to in this SAI as CMOs.  The U.S.
Government mortgage-backed securities in which the Fund may invest include
mortgage-backed securities issued or guaranteed as to the payment of principal
and interest (but not as to market value) by Ginnie Mae, Fannie Mae, or Freddie
Mac.  Other mortgage-backed securities are issued by private issuers, generally
originators of and investors in mortgage loans, including savings associations,
mortgage bankers, commercial banks, investment bankers and special purpose
entities.  Payments of principal and interest (but not the market value) of such
private mortgage-backed securities may be supported by pools of mortgage loans
or other mortgage-backed securities that are guaranteed, directly or indirectly,
by the U.S. Government or one of its agencies or instrumentalities, or they may
be issued without any government guarantee of the underlying mortgage assets but
with some form of non-government credit enhancement.  These credit enhancements
do not protect investors from changes in market value.

     Each Fund may purchase mortgage-backed securities issued by both government
and non-government entities such as banks, mortgage lenders, or other financial
institutions.  Other types of mortgage-backed securities will likely be
developed in the future, and a Fund may invest in them if WRIMCO determines they
are consistent with the Fund's goal(s) and investment policies.

Stripped Mortgage-Backed Securities

     Stripped mortgage-backed securities are created when a U.S. Government
agency or a financial institution separates the interest and principal
components of a mortgage-backed security and sells them as individual
securities.  The holder of the "principal-only" security ("PO") receives the
principal payments made by the underlying mortgage-backed security, while the
holder of the "interest-only" security ("IO") receives interest payments from
the same underlying security.

Asset-Backed Securities

     Asset-backed securities have structural characteristics similar to
mortgage-backed securities, as discussed above.  However, the underlying assets
are not first lien mortgage loans or interests therein, but include assets such
as motor vehicle installment sales contracts, other installment sale contracts,
home equity loans, leases of various types of real and personal property and
receivables from revolving credit (credit card) agreements.  Such assets are
securitized through the use of trusts or special purpose corporations.  Payments
or distributions of principal and interest may be guaranteed up to a certain
amount and for a certain time period by a letter of credit or pool insurance
policy issued by a financial institution unaffiliated with the issuer, or other
credit enhancements may be present.  The value of asset-backed securities may
also depend on the creditworthiness of the servicing agent for the loan pool,
the originator of the loans, or the financial institution providing the credit
enhancement.  Each Fund may invest in asset-backed securities as long as WRIMCO
determines that it is consistent with the Fund's goal(s) and investment
policies.

     Special Characteristics of Mortgage-Backed and Asset-Backed Securities.
The yield characteristics of mortgage- and asset-backed securities differ from
those of traditional debt securities.  Among the major differences are that
interest and principal payments are made more frequently, usually monthly, and
that principal may be prepaid at any time because the underlying mortgage loans
or other obligations generally may be prepaid at any time.  Prepayments on a
pool of mortgage loans are influenced by a variety of economic, geographic,
social and other factors, including changes in mortgagors' housing needs, job
transfers, unemployment, mortgagors' net equity in the mortgaged properties and
servicing decisions.  Generally, however, prepayments on fixed-rate mortgage
loans will increase during a period of falling interest rates and decrease
during a period of rising interest rates.  Similar factors apply to prepayments
on asset-backed securities, but the receivables underlying asset-backed
securities generally are of a shorter maturity and thus are likely to experience
substantial prepayments.  Such securities, however, often provide that for a
specified time period the issuers will replace receivables in the pool that are
repaid with comparable obligations.  If the issuer is unable to do so, repayment
of principal on the asset-backed securities may commence at an earlier date.

     The rate of interest on mortgage-backed securities is lower than the
interest rates paid on the mortgages included in the underlying pool due to the
annual fees paid to the servicer of the mortgage pool for passing through
monthly payments to certificateholders and to any guarantor, and due to any
yield retained by the issuer.  Actual yield to the holder may vary from the
coupon rate, even if adjustable, if the mortgage-backed securities are purchased
or traded in the secondary market at a premium or discount.  In addition, there
is normally some delay between the time the issuer receives mortgage payments
from the servicer and the time the issuer makes the payments on the mortgage-
backed securities, and this delay reduces the effective yield to the holder of
such securities.

     Yields on pass-through securities are typically quoted by investment
dealers and vendors based on the maturity of the underlying instruments and the
associated average life assumption.  The average life of pass-through pools
varies with the maturities of the underlying mortgage loans.  A pool's term may
be shortened by unscheduled or early payments of principal on the underlying
mortgages.  Because prepayment rates of individual pools vary widely, it is not
possible to predict accurately the average life of a particular pool.  In the
past, a common industry practice has been to assume that prepayments on pools of
fixed rate 30-year mortgages would result in a 12-year average life for the
pool.  At present, mortgage pools, particularly those with loans with other
maturities or different characteristics, are priced on an assumption of average
life determined for each pool.  In periods of declining interest rates, the rate
of prepayment tends to increase, thereby shortening the actual average life of a
pool of mortgage-related securities.  Conversely, in periods of rising interest
rates, the rate of prepayment tends to decrease, thereby lengthening the actual
average life of the pool.  However, these effects may not be present, or may
differ in degree, if the mortgage loans in the pools have adjustable interest
rates or other special payment terms, such as a prepayment charge.  Actual
prepayment experience may cause the yield of mortgage-backed securities to
differ from the assumed average life yield.    

Variable or Floating Rate Instruments

        Variable or floating rate instruments (including notes purchased
directly from issuers) bear variable or floating interest rates and may carry
rights that permit holders to demand payment of the unpaid principal balance
plus accrued interest from the issuers or certain financial intermediaries on
dates prior to their stated maturities.  Floating rate securities have interest
rates that change whenever there is a change in a designated base rate while
variable rate instruments provide for a specified periodic adjustment in the
interest rate.  These formulas are designed to result in a market value for the
instrument that approximates its par value.    

Indexed Securities

        Each Fund may purchase securities the value of which varies in relation
to the value of other securities, securities indices, currencies, precious
metals or other commodities, or other financial indicators, as long as WRIMCO
determines that it is consistent with the Fund's goal(s) and investment
policies.  Indexed securities typically, but not always, are debt securities or
deposits whose value at maturity or coupon rate is determined by reference to a
specific instrument or statistic.  Gold-indexed securities, for example,
typically provide for a maturity value that depends on the price of gold,
resulting in a security whose price tends to rise and fall together with gold
prices.  Currency-indexed securities typically are short-term to intermediate-
term debt securities whose maturity values or interest rates are determined by
reference to the values of one or more specified foreign currencies, and may
offer higher yields than U.S. dollar-denominated securities of equivalent
issuers.  Currency-indexed securities may be positively or negatively indexed;
that is, their maturity value may increase when the specified currency value
increases, resulting in a security that performs similarly to a foreign-
denominated instrument, or their maturity value may decline when foreign
currencies increase, resulting in a security whose price characteristics are
similar to a put on the underlying currency.  Currency-indexed securities may
also have prices that depend on the values of a number of different foreign
currencies relative to each other.    

     Recent issuers of indexed securities have included banks, corporations and
certain U.S. Government agencies.  Certain indexed securities that are not
traded on an established market may be deemed illiquid.

Foreign Securities and Currency

     As a fundamental policy, each of the Funds may purchase an unlimited amount
of foreign securities, but less than 5% of the combined total assets of all of
the Funds will consist of securities of foreign governments.  As an operating
policy, not more than 20% of the net assets of each Fund will be invested in
foreign securities.  WRIMCO believes that there are investment opportunities as
well as risks in investing in foreign securities.  Individual foreign economies
may differ favorably or unfavorably from the U.S. economy or each other in such
matters as gross national product, rate of inflation, capital reinvestment,
resource self-sufficiency and balance of payments position.  Individual foreign
companies may also differ favorably or unfavorably from domestic companies in
the same industry.  Foreign currencies may be stronger or weaker than the U.S.
dollar or than each other.  WRIMCO believes that the Funds' ability to invest
assets abroad might enable them to take advantage of these differences and
strengths where they are favorable.

     Further, an investment in foreign securities may be affected by changes in
currency rates and in exchange control regulations (i.e., currency blockage).  A
Fund may bear a transaction charge in connection with the exchange of currency.
There may be less publicly available information about a foreign company than
about a domestic company.  Foreign companies are not generally subject to
uniform accounting, auditing and financial reporting standards comparable to
those applicable to domestic companies.  Most foreign stock markets have
substantially less volume than the New York Stock Exchange (the "NYSE") and
securities of some foreign companies are less liquid and more volatile than
securities of comparable domestic companies.  There is generally less government
regulation of stock exchanges, brokers and listed companies than in the United
States.  In addition, with respect to certain foreign countries, there is a
possibility of expropriation or confiscatory taxation, political or social
instability or diplomatic developments that could adversely affect investments
in securities of issuers located in those countries.  If it should become
necessary, a Fund would normally encounter greater difficulties in commencing a
lawsuit against the issuer of a foreign security than it would against a U.S.
issuer.

Restricted Securities

     United Accumulative Fund and United Income Fund may purchase restricted
securities.  United Income Fund does not intend to invest more than 10% of its
assets in restricted securities.  Restricted securities are subject to legal or
contractual restrictions on resale because they are not registered under the
Securities Act of 1933, as amended (the "1933 Act").  Restricted securities
generally can be sold in privately negotiated transactions, pursuant to an
exemption from registration under the 1933 Act, or in a registered public
offering.  Where registration is required, a Fund may be obligated to pay all or
part of the registration expense and a considerable period may elapse between
the time it decides to seek registration and the time the Fund may be permitted
to sell a security under an effective registration statement.  If, during such a
period, adverse market conditions were to develop, a Fund might obtain a less
favorable price than prevailed when it decided to seek registration of the
security.

     There are risks associated with investment in restricted securities in that
there can be no assurance of a ready market for resale.  Also, the contractual
restrictions on resale might prevent a Fund from reselling the securities at a
time when such sale would be desirable.  Restricted securities in which a Fund
seeks to invest need not be listed or admitted to trading on an exchange and may
be less liquid than listed securities.  See "Illiquid Investments."

Lending Securities

     One of the ways in which a Fund may try to realize income is by lending
securities.  If a Fund does this, the borrower pays the Fund an amount equal to
the dividends or interest on the securities that the Fund would have received if
it had not loaned the securities.  The Funds also receive additional
compensation.

     Any securities loan that a Fund makes must be collateralized in accordance
with applicable regulatory requirements (the "Guidelines").  This policy can
only be changed by shareholder vote.  Under the present Guidelines, the
collateral must consist of cash, U.S. Government Securities or bank letters of
credit, at least equal in value to the market value of the securities loaned on
each day that the loan is outstanding.  If the market value of the loaned
securities exceeds the value of the collateral, the borrower must add more
collateral so that it at least equals the market value of the securities loaned.
If the market value of the securities decreases, the borrower is entitled to
return of the excess collateral.

     There are two methods of receiving compensation for making loans.  The
first is to receive a negotiated loan fee from the borrower.  This method is
available for all three types of collateral.  The second method, which is not
available when letters of credit are used as collateral, is for a Fund to
receive interest on the investment of the cash collateral or to receive interest
on the U.S. Government Securities used as collateral.  Part of the interest
received in either case may be shared with the borrower.

     The letters of credit that a Fund may accept as collateral are agreements
by banks (other than the borrowers of the Fund's securities), entered into at
the request of the borrower and for its account and risk, under which the banks
are obligated to pay to the Fund, while the letter is in effect, amounts
demanded by the Fund if the demand meets the terms of the letter.  The Fund's
right to make this demand secures the borrower's obligations to it.  The terms
of any such letters and the creditworthiness of the banks providing them (which
might include the Fund's custodian bank) must be satisfactory to the Fund.
Under the Fund's current securities lending procedures, each Fund may lend
securities only to creditworthy broker-dealers and financial institutions deemed
creditworthy by WRIMCO.  Each Fund will make loans only under rules of the NYSE,
which presently require the borrower to give the securities back to the Fund
within five business days after the Fund gives notice to do so.  If a Fund loses
its voting rights on securities loaned, it will have the securities returned to
it in time to vote them if a material event affecting the investment is to be
voted on.  A Fund may pay reasonable finder's, administrative and custodian fees
in connection with loans of securities.

     There may be risks of delay in receiving additional collateral from the
borrower if the market value of the securities loaned goes up, risks of delay in
recovering the securities loaned or even loss of rights in the collateral should
the borrower of the securities fail financially.

     Some, but not all, of these rules are necessary to meet requirements of
certain laws relating to securities loans.  These rules will not be changed
unless the change is permitted under these requirements.  These requirements do
not cover the present rules, which may be changed without shareholder vote, as
to: (i) whom securities may be loaned; (ii) the investment of cash collateral;
or (iii) voting rights.

Repurchase Agreements

     Each of the Funds may purchase securities subject to repurchase agreements
if as a result no more than 10% of its net assets would consist of illiquid
investments (which include repurchase agreements not terminable within seven
days).  See "Illiquid Investments."  A repurchase agreement is an instrument
under which a Fund purchases a security and the seller (normally a commercial
bank or broker-dealer) agrees, at the time of purchase, that it will repurchase
the security at a specified time and price.  The amount by which the resale
price is greater than the purchase price reflects an agreed-upon market interest
rate effective for the period of the agreement.  The return on the securities
subject to the repurchase agreement may be more or less than the return on the
repurchase agreement.

     The majority of the repurchase agreements in which a Fund would engage are
overnight transactions, and the delivery pursuant to the resale typically will
occur within one to five days of the purchase.  The primary risk is that a Fund
may suffer a loss if the seller fails to pay the agreed-upon amount on the
delivery date and that amount is greater than the resale price of the underlying
securities and other collateral held by the Fund.  In the event of bankruptcy or
other default by the seller, there may be possible delays and expenses in
liquidating the underlying securities or other collateral, decline in their
value and loss of interest.  The return on such collateral may be more or less
than that from the repurchase agreement.  The Funds' repurchase agreements will
be structured so as to fully collateralize the loans, i.e., the value of the
underlying securities, which will be held by the Funds' custodian bank or by a
third party that qualifies as a custodian under Section 17(f) of the Investment
Company Act of 1940, as amended (the "1940 Act"), is and, during the entire term
of the agreement, will remain at least equal to the value of the loan, including
the accrued interest earned thereon.  Repurchase agreements are entered into
only with those entities approved by WRIMCO on the basis of criteria established
by the Board of Directors.

When-Issued and Delayed-Delivery Transactions

     Each Fund may purchase any securities in which it may invest on a when-
issued or delayed-delivery basis or sell them on a delayed-delivery basis.  The
securities so purchased or sold by a Fund are subject to market fluctuation;
their value may be less or more when delivered than the purchase price paid or
received.  For example, delivery to a Fund and payment by a Fund in the case of
a purchase by it, or delivery by a Fund and payment to it in the case of a sale
by a Fund, may take place a month or more after the date of the transaction.
The purchase or sale price are fixed on the transaction date.  A Fund will enter
into when-issued or delayed-delivery transactions in order to secure what is
considered to be an advantageous price and yield at the time of entering into
the transaction.  No interest accrues to a Fund until delivery and payment is
completed.  When a Fund makes a commitment to purchase securities on a when-
issued or delayed-delivery basis, it will record the transaction and thereafter
reflect the value of the securities in determining its net asset value per
share.  The securities so sold by a Fund on a delayed-delivery basis are also
subject to market fluctuation; their value when a Fund delivers them may be more
than the purchase price the Fund receives.  When a Fund makes a commitment to
sell securities on a delayed basis, it will record the transaction and
thereafter value the securities at the sales price in determining the Fund's net
asset value per share.

     Ordinarily a Fund purchases securities on a when-issued or delayed-delivery
basis with the intention of actually taking delivery of the securities.
However, before the securities are delivered to the Fund and before it has paid
for them (the "settlement date"), the Fund could sell the securities if WRIMCO
decided it was advisable to do so for investment reasons.  The Fund will hold
aside or segregate cash or other securities, other than those purchased on a
when-issued or delayed-delivery basis, at least equal to the amount it will have
to pay on the settlement date; these other securities may, however, be sold at
or before the settlement date to pay the purchase price of the when-issued or
delayed-delivery securities.

Warrants

       

     Warrants are options to purchase equity securities at specific prices valid
for a specific period of time.  Their prices do not necessarily move parallel to
the prices of the underlying securities.  Warrants have no voting rights,
receive no dividends and have no rights with respect to the assets of the
issuer.  Warrants are highly volatile and, therefore, more susceptible to a
sharp decline in value than the underlying security might be.  They are also
generally less liquid than an investment in the underlying shares.

       

Illiquid Investments

     Each Fund has an operating policy, which may be changed without shareholder
approval, which provides that the Fund may not invest more than 10% of its net
assets in illiquid investments.  Investments currently considered to be illiquid
include:  (i) repurchase agreements not terminable within seven days; (ii)
securities for which market quotations are not readily available; (iii) OTC
options and their underlying collateral; (iv) Insured Deposits; (v) restricted
securities not determined to be liquid pursuant to guidelines established by the
Corporation's Board of Directors and (vi) non-government stripped fixed-rate
mortgage-backed securities.  The assets used as cover for over-the-counter
("OTC") options written by a Fund will be considered illiquid unless the OTC
options are sold to qualified dealers who agree that the Fund may repurchase any
OTC option it writes at a maximum price to be calculated by a formula set forth
in the option agreement.  The cover for an OTC option written subject to this
procedure will be considered illiquid only to the extent that the maximum
repurchase price under the formula exceeds the intrinsic value of the option.

Options, Futures and Other Strategies

     General.  As discussed in the Prospectus, WRIMCO may use certain options to
attempt to enhance income or yield or may attempt to reduce overall risk of its
investments by using certain options and futures contracts (sometimes referred
to as "futures").  Options and futures are sometimes referred to collectively as
"Financial Instruments."  A Fund's ability to use a particular Financial
Instrument may be limited by its investment limitations or operating policies.
See "Operating Restrictions of United Income Fund, United Accumulative Fund and
United Science and Technology Fund," "Investment Restrictions," "Additional
Investment Restrictions of United Bond Fund" and "Additional Investment
Restrictions of United Income Fund, United Accumulative Fund and United Science
and Technology Fund."

     Hedging strategies can be broadly categorized as "short hedges" and "long
hedges."  A short hedge is a purchase or sale of a Financial Instrument intended
partially or fully to offset potential declines in the value of one or more
investments held in a Fund's portfolio.  Thus, in a short hedge a Fund takes a
position in a Financial Instrument whose price is expected to move in the
opposite direction of the price of the investment being hedged.

     Conversely, a long hedge is a purchase or sale of a Financial Instrument
intended partially or fully to offset potential increases in the acquisition
cost of one or more investments that a Fund intends to acquire.  Thus, in a long
hedge a Fund takes a position in a Financial Instrument whose price is expected
to move in the same direction as the price of the prospective investment being
hedged.  A long hedge is sometimes referred to as an anticipatory hedge.  In an
anticipatory hedge transaction, a Fund does not own a corresponding security
and, therefore, the transaction does not relate to a security the Fund owns.
Rather, it relates to a security that the Fund intends to acquire.  If a Fund
does not complete the hedge by purchasing the security it anticipated
purchasing, the effect on the Fund's portfolio is the same as if the transaction
were entered into for speculative purposes.

     Financial Instruments on securities generally are used to attempt to hedge
against price movements in one or more particular securities positions that a
Fund owns or intends to acquire.  Financial Instruments on indices, in contrast,
generally are used to attempt to hedge against price movements in market sectors
in which a Fund has invested or expects to invest.  Financial Instruments on
debt securities may be used to hedge either individual securities or broad debt
market sectors.

        The use of Financial Instruments is subject to applicable regulations of
the Securities and Exchange Commission (the "SEC"), the several exchanges upon
which they are traded and the Commodity Futures Trading Commission (the "CFTC").
In addition, a Fund's ability to use Financial Instruments will be limited by
tax considerations.  See "Taxes."    

     In addition to the instruments, strategies and risks described below and in
the Prospectus, WRIMCO expects to discover additional opportunities in
connection with options, futures contracts, options on futures contracts and
other similar or related techniques.  These new opportunities may become
available as WRIMCO develops new techniques, as regulatory authorities broaden
the range of permitted transactions and as new options, futures contracts,
options on futures contracts or other techniques are developed.  WRIMCO may
utilize these opportunities to the extent that they are consistent with the
Funds' goal(s) and permitted by the Funds' investment limitations and applicable
regulatory authorities.  The Funds' Prospectus or SAI will be supplemented to
the extent that new products or techniques involve materially different risks
than those described below or in the Prospectus.

     Special Risks.  The use of Financial Instruments involves special
considerations and risks, certain of which are described below.  Risks
pertaining to particular Financial Instruments are described in the sections
that follow.

     (1)  Successful use of most Financial Instruments depends upon WRIMCO's
ability to predict movements of the overall securities and interest rate
markets, which requires different skills than predicting changes in the prices
of individual securities.  There can be no assurance that any particular
strategy will succeed.

     (2)  There might be imperfect correlation, or even no correlation, between
price movements of a Financial Instrument and price movements of the investments
being hedged.  For example, if the value of a Financial Instrument used in a
short hedge increased by less than the decline in value of the hedged
investment, the hedge would not be fully successful.  Such a lack of correlation
might occur due to factors unrelated to the value of the investments being
hedged, such as speculative or other pressures on the markets in which Financial
Instruments are traded.  The effectiveness of hedges using Financial Instruments
on indices will depend on the degree of correlation between price movements in
the index and price movements in the securities being hedged.

     Because there are a limited number of types of exchange-traded options and
futures contracts, it is likely that the standardized contracts available will
not match a Fund's current or anticipated investments exactly.  A Fund may
invest in options and futures contracts based on securities with different
issuers, maturities, or other characteristics from the securities in which it
typically invests, which involves a risk that the options or futures position
will not track the performance of the Fund's other investments.

     Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a Fund's
investments well.  Options and futures prices are affected by such factors as
current and anticipated short-term interest rates, changes in volatility of the
underlying instrument, and the time remaining until expiration of the contract,
which may not affect security prices the same way.  Imperfect correlation may
also result from differing levels of demand in the options and futures markets
and the securities markets, from structural differences in how options and
futures and securities are traded, or from imposition of daily price fluctuation
limits or trading halts.  A Fund may purchase or sell options and futures
contracts with a greater or lesser value than the securities it wishes to hedge
or intends to purchase in order to attempt to compensate for differences in
volatility between the contract and the securities, although this may not be
successful in all cases.  If price changes in a Fund's options or futures
positions are poorly correlated with its other investments, the positions may
fail to produce anticipated gains or result in losses that are not offset by
gains in other investments.

     (3)  If successful, the above-discussed strategies can reduce risk of loss
by wholly or partially offsetting the negative effect of unfavorable price
movements.  However, such strategies can also reduce opportunity for gain by
offsetting the positive effect of favorable price movements.  For example, if a
Fund entered into a short hedge because WRIMCO projected a decline in the price
of a security in the Fund's portfolio, and the price of that security increased
instead, the gain from that increase might be wholly or partially offset by a
decline in the price of the Financial Instrument.  Moreover, if the price of the
Financial Instrument declined by more than the increase in the price of the
security, the Fund could suffer a loss.  In either such case, the Fund would
have been in a better position had it not attempted to hedge at all.

     (4)  As described below, a Fund might be required to maintain assets as
"cover," maintain segregated accounts or make margin payments when it takes
positions in Financial Instruments involving obligations to third parties (i.e.,
Financial Instruments other than purchased options).  If a Fund were unable to
close out its positions in such Financial Instruments, it might be required to
continue to maintain such assets or accounts or make such payments until the
position expired or matured.  These requirements might impair a Fund's ability
to sell a portfolio security or make an investment at a time when it would
otherwise be favorable to do so, or require that a Fund sell a portfolio
security at a disadvantageous time.  A Fund's ability to close out a position in
a Financial Instrument prior to expiration or maturity depends on the existence
of a liquid secondary market or, in the absence of such a market, the ability
and willingness of the other party to the transaction ("counterparty") to enter
into a transaction closing out the position.  Therefore, there is no assurance
that any position can be closed out at a time and price that is favorable to the
Fund.

        Cover.  Transactions using Financial Instruments, other than purchased
options, expose the Fund to an obligation to another party.  A Fund will not
enter into any such transactions unless it owns either (1) an offsetting
("covered") position in securities or other options or futures contracts, or (2)
cash and liquid assets with a value marked-to-market daily, sufficient to cover
its potential obligations to the extent not covered as provided in (1) above.
Each Fund will comply with SEC guidelines regarding cover for these instruments
and will, if the guidelines so require, set aside cash or liquid assets in a
segregated account with its custodian in the prescribed amount as determined
daily.    

     Assets used as cover or held in a segregated account cannot be sold while
the position in the corresponding Financial Instrument is open, unless they are
replaced with other appropriate assets.  As a result, the commitment of a large
portion of a Fund's assets for use as cover or segregated accounts could impede
portfolio management or the Fund's ability to meet redemption requests or other
current obligations.

     Options.  As discussed in the Prospectus, and under "Operating Restrictions
of United Income Fund, United Accumulative Fund and United Science and
Technology Fund," "Additional Investment Restrictions of United Bond Fund" and
"Additional Investment Restrictions of United Income Fund, United Accumulative
Fund and United Science and Technology Fund," certain of the Funds may purchase
and/or write (sell) call and put options on equity and debt securities and
broadly-based stock indices.

     The purchase of call options serves as a long hedge, and the purchase of
put options serves as a short hedge.  Writing put or call options can enable a
Fund to enhance income or yield by reason of the premiums paid by the purchasers
of such options.  However, if the market price of the security underlying a put
option declines to less than the exercise price on the option, minus the premium
received, the Fund would expect to suffer a loss.

     Writing call options can also serve as a limited short hedge, because
declines in the value of the hedged investment would be offset to the extent of
the premium received for writing the option.  However, if the security
appreciates to a price higher than the exercise price of the call option, it can
be expected that the option will be exercised and the Fund will be obligated to
sell the security at less than its market value.  If the call option is an OTC
option, the securities or other assets used as cover would be considered
illiquid to the extent described under "Illiquid Investments."

     Writing put options can serve as a limited long hedge because increases in
the value of the hedged investment would be offset to the extent of the premium
received for writing the option.  However, if the security depreciates to a
price lower than the exercise price of the put option, it can be expected that
the put option will be exercised and a Fund will be obligated to purchase the
security at more than its market value.  A Fund will write a put only when it
has determined that it would be willing to purchase the underlying security at
the exercise price.  If the put option is an OTC option, the securities or other
assets used as cover would be considered illiquid to the extent described under
"Illiquid Investments."

     The value of an option position will reflect, among other things, the
current market value of the underlying investment, the time remaining until
expiration, the relationship of the exercise price to the market price of the
underlying investment, the historical price volatility of the underlying
investment and general market conditions.  Options that expire unexercised have
no value.

     A Fund may effectively terminate its right or obligation under an option by
entering into a closing transaction.  For example, a Fund may terminate its
obligation under a call or put option that it had written by purchasing an
identical call or put option; this is known as a closing purchase transaction.
Conversely, a Fund may terminate a position in a put or call option it had
purchased by writing an identical put or call option; this is known as a closing
sale transaction.  Closing transactions permit a Fund to realize profits or
limit losses on an option position prior to its exercise or expiration.

     A type of put which the Funds may purchase is an "optional delivery standby
commitment" which is entered into by parties selling debt securities to a Fund.
An optional delivery standby commitment gives a Fund purchasing the security the
right to sell the security back to the seller on specified terms.  This right is
provided as an inducement to purchase the security.

     Risks of Options on Securities.  Certain of the Funds may purchase or write
both exchange-traded and OTC options.  Exchange markets for options on debt
securities exist, but these instruments are primarily traded on the OTC market.

     Exchange-traded options in the United States are issued by a clearing
organization affiliated with the exchange on which the option is listed that, in
effect, guarantees completion of every exchange-traded option transaction.  In
contrast, OTC options are contracts between a Fund and its counterparty (usually
a securities dealer or a bank) with no clearing organization guarantee.  Thus,
when a Fund purchases an OTC option, it relies on the contra party from whom it
purchased the option to make or take delivery of the underlying investment upon
exercise of the option.  Failure by the counterparty to do so would result in
the loss of any premium paid by the Fund as well as the loss of any expected
benefit of the transaction.

     A Fund's ability to establish and close out positions in exchange-listed
options depends on the existence of a liquid market.  Each Fund intends to
purchase or write only those exchange-trade options for which there appears to
be a liquid secondary market.  However, there can be no assurance that such a
market will exist at any particular time.  Closing transactions can be made for
OTC options only by negotiating directly with the counterparty, or by a
transaction in the secondary market if any such market exists.  Although a Fund
will enter into OTC options only with major dealers in unlisted options, there
is no assurance that the Fund will in fact be able to close out an OTC option
position at a favorable price prior to expiration.  WRIMCO will evaluate the
ability to enter into closing purchase transactions on unlisted options prior to
writing them.  In the event of insolvency of the counterparty, the Fund might be
unable to close out an OTC option position at any time prior to its expiration.

     If a Fund were unable to effect a closing transaction for an option it had
purchased, it would have to exercise the option to realize any profit.  The
inability to enter into a closing purchase transaction for a covered call option
written by a Fund could cause material losses because the Fund would be unable
to sell the investment used as cover for the written option until the option
expires or is exercised.

     Options on Stock Indices.  United Accumulative Fund, United Income Fund and
United Science and Technology Fund are permitted to write and purchase options
on broadly-based stock indices, subject to the limitations set forth under
"Operating Restrictions of United Income Fund, United Accumulative Fund and
United Science and Technology Fund" and "Additional Investment Restrictions of
United Income Fund, United Accumulative Fund and United Science and Technology
Fund."   Broadly-based stock indices are indices that are not limited to stocks
of any particular industry or industries.  A Fund may purchase calls on stock
indices to hedge against anticipated increases in the price of securities it
wishes to acquire and may purchase puts on stock indices to hedge against
anticipated declines in the market value of portfolio securities.

     Puts and calls on stock indices are similar to puts and calls on securities
or futures contracts except that all settlements are in cash and gain or loss
depends on changes in the broad-based index in question rather than on price
movements in individual securities or futures contracts.  When a Fund writes a
call on a stock index, it receives a premium and agrees that, prior to the
expiration date, the purchaser of the call, upon exercise of the call, will
receive from the Fund an amount of cash if the closing level of the stock index
upon which the call is based is greater than the exercise price of the call.
The amount of cash is equal to the difference between the closing price of the
index and the exercise price of the call times a specified multiple (the
"multiplier"), which determines the total dollar value for each point of such
difference.  When a Fund buys a call on a stock index, it pays a premium and has
the same rights as to such call as are indicated above.  When a Fund buys a put
on a stock index, it pays a premium and has the right, prior to the expiration
date, to require the seller of the put, upon the Fund's exercise of the put, to
deliver to the Fund an amount of cash if the closing level of the stock index
upon which the put is based is less than the exercise price of the put, which
amount of cash is determined by the multiplier, as described above for calls.
When a Fund writes a put on a stock index, it receives a premium and the
purchaser of the put has the right, prior to the expiration date, to require the
Fund to deliver to it an amount of cash equal to the difference between the
closing level of the stock index and the exercise price times the multiplier is
the closing level is less than the exercise price.

     Risks of Options on Stock Indices.  The risks of investment in options on
stock indices may be greater than options on securities.  Because index options
are settled in cash, when a Fund writes a call on a stock index it cannot
provide in advance for its potential settlement obligations by acquiring and
holding the underlying securities.  A Fund can offset some of the risk of its
writing a call index option by holding a diversified portfolio of stocks similar
to those on which the underlying index is based.  However, a Fund cannot, as a
practical matter, acquire and hold a portfolio containing exactly the same
stocks as underlie the index and, as a result, bears a risk that the value of
the securities held will vary from the value of the index.

     Even if a Fund could assemble a stock portfolio that exactly reproduced the
composition of the underlying index, it still would not be fully covered from a
risk standpoint because of the "timing risk" inherent in writing index options.
When an index option is exercised, the amount of cash that the holder is
entitled to receive is determined by the difference between the exercise price
and the closing index level on the date when the option is exercised.  As with
other kinds of options, a Fund as the call writer will not learn that it has
been assigned until the next business day at the earliest.  The time lag between
exercise and notice of assignment poses no risk for the writer of a covered call
on a specific underlying security, such as a common stock, because there the
writer's obligation is to deliver the underlying security, not to pay its value
as of a fixed time in the past.  So long as the writer already owns the
underlying security, it can satisfy its settlement obligations by simply
delivering it, and the risk that its value may have declined since the exercise
date is borne by the exercising holder.  In contrast, even if the writer of an
index call holds stocks that exactly match the composition of the underlying
index, it will not be able to satisfy its assignment obligations by delivering
those stocks against payment of the exercise price.  Instead, it will be
required to pay cash in an amount based on the closing index value on the
exercise date.  By the time it learns that it has been assigned, the index may
have declined, with a corresponding decline in the value of its portfolio.  This
"timing risk" is an inherent limitation on the ability of index call writers to
cover their risk exposure by holding stock positions.

     If a Fund has purchased an index option and exercises it before the closing
index value for that day is available, it runs the risk that the level of the
underlying index may subsequently change.  If such a change causes the exercised
option to fall out-of-the-money, the Fund exercising the option will be required
to pay the difference between the closing index value and the exercise price of
the option (times the applicable multiplier) to the assigned writer.

     Futures Contracts and Options on Futures Contracts.  Subject to the
limitations set forth under "Additional Investment Restrictions of United Bond
Fund," United Bond Fund may purchase and sell futures contracts on debt
securities ("Debt Futures") and options thereon.  Subject to the limitations set
forth under "Operating Restrictions of United Income Fund, United Accumulative
Fund and United Science and Technology Fund," and "Additional Investment
Restrictions of United Accumulative Fund, United Income Fund and United Science
and Technology Fund," United Income Fund, United Accumulative Fund and United
Science and Technology Fund may purchase and sell Debt Futures, futures
contracts on broadly-based stock indices ("Stock Index Futures") and options
thereon.  A Fund will not purchase or sell futures contracts and options thereon
for speculative purposes but rather only for the purpose of hedging against
changes in the market value of its portfolio securities or changes in the market
value of securities that WRIMCO anticipates that it may wish to include in the
portfolio of a Fund.

     The purchase of futures or call options on futures can serve as a long
hedge, and the sale of futures or the purchase of put options on futures can
serve as a short hedge.  Writing call options on futures contracts can serve as
a limited short hedge, using a strategy similar to that used for writing call
options on securities or indices.  Similarly, writing put options on futures
contracts can serve as a limited long hedge.

     Futures strategies also can be used to manage the average duration of a
Fund's fixed-income portfolio.  If WRIMCO wishes to shorten the average duration
of a Fund's fixed-income portfolio, the Fund may sell a debt futures contract or
a call option thereon, or purchase a put option on that futures contract.  If
WRIMCO wishes to lengthen the average duration of a Fund's fixed-income
portfolio, the Fund may buy a debt futures contract or a call option thereon, or
sell a put option thereon.

     No price is paid upon entering into a futures contract.  Instead, at the
inception of a futures contract a Fund is required to deposit "initial margin"
consisting of cash or U.S. Government Securities in an amount generally equal to
10% or less of the contract value.  Margin must also be deposited when writing a
call or put option on a futures contract, in accordance with applicable exchange
rules.  Unlike margin in securities transactions, initial margin on futures
contracts does not represent a borrowing, but rather is in the nature of a
performance bond or good-faith deposit that is returned to the Fund at the
termination of the transaction if all contractual obligations have been
satisfied.  Under certain circumstances, such as periods of high volatility, the
Fund may be required by an exchange to increase the level of its initial margin
payment, and initial margin requirements might be increased generally in the
future by regulatory action.

     Subsequent "variation margin" payments are made to and from the futures
broker daily as the value of the futures position varies, a process known as
"marking-to-market."  Variation margin does not involve borrowing, but rather
represents a daily settlement of the Fund's obligations to or from a futures
broker.  When a Fund purchases an option on a future, the premium paid plus
transaction costs is all that is at risk.  In contrast, when a Fund purchases or
sells a futures contract or writes a call or put option thereon, it is subject
to daily variation margin calls that could be substantial in the event of
adverse price movements.  If the Fund has insufficient cash to meet daily
variation margin requirements, it might need to sell securities at a time when
such sales are disadvantageous.

     Purchasers and sellers of futures contracts and options on futures can
enter into offsetting closing transactions, similar to closing transactions on
options, by selling or purchasing, respectively, an instrument identical to the
instrument purchased or sold.  Positions in futures and options on futures may
be closed only on an exchange or board of trade that provides a secondary
market.  Each Fund intends to enter into futures and options on futures only on
exchanges or boards of trade where there appears to be a liquid secondary
market.  However, there can be no assurance that such a market will exist for a
particular contract at a particular time.  In such event, it may not be possible
to close a futures contract or options position.

     Under certain circumstances, futures exchanges may establish daily limits
on the amount that the price of a futures or related option can vary from the
previous day's settlement price; once that limit is reached, no trades may be
made that day at a price beyond the limit.  Daily price limits do not limit
potential losses because prices could move to the daily limit for several
consecutive days with little or no trading, thereby preventing liquidation of
unfavorable positions.

     If a Fund were unable to liquidate a futures contract or options on futures
position due to the absence of a liquid secondary market or the imposition of
price limits, it could incur substantial losses.  The Fund would continue to be
subject to market risk with respect to the position.  In addition, except in the
case of purchased options, the Fund would continue to be required to make daily
variation margin payments and might be required to maintain the position being
hedged by the future or option or to maintain cash or securities in a segregated
account.

     As an operating policy, to the extent that a Fund enters into futures
contracts or options on futures contracts, in each case other than for bona fide
hedging purposes (as defined by the CFTC), the aggregate initial margin and
premiums required to establish those positions (excluding the amount by which
options are "in-the-money" at the time of purchase) will not exceed 5% of the
liquidation value of the Fund's portfolio, after taking into account unrealized
profits and unrealized losses on any contracts the Fund has entered into.  (In
general, a call option on a futures contract is "in-the-money" if the value of
the underlying futures contract exceeds the strike, i.e., exercise, price of the
call; a put option on a futures contract is "in-the-money" if the value of the
underlying futures contract is exceeded by the strike price of the put.)  This
policy does not limit to 5% the percentage of a Fund's assets that are at risk
in futures contracts and options on futures contracts.

     Risk of Futures Contracts and Options Thereon.  The ordinary spreads
between prices in the cash and futures markets (including the options on futures
market), due to differences in the natures of those markets, are subject to the
following factors, which may create distortions.  First, all participants in the
futures market are subject to margin deposit and maintenance requirements.
Rather than meeting additional margin deposit requirements, investors may close
futures contracts through offsetting transactions, which could distort the
normal relationship between the cash and futures markets.  Second, the liquidity
of the futures market depends on participants entering into offsetting
transactions rather than making or taking delivery.  To the extent participants
decide to make or take delivery, liquidity in the futures market could be
reduced, thus producing distortion.  Third, from the point of view of
speculators, the deposit requirements in the futures market are less onerous
than margin requirements in the securities market.  Therefore, increased
participation by speculators in the futures market may cause temporary price
distortions.  Due to the possibility of distortion, a correct forecast of
general interest or stock market trends by WRIMCO may still not result in a
successful transaction.  WRIMCO may be incorrect in its expectations as to the
extent of various interest rate movements or stock market movements or the time
span within which the movements take place.

     Stock Index Futures.  The risk of imperfect correlation between movements
in the price of a Stock Index Future and movements in the price of the
securities that are the subject of the hedge increases as the composition of a
Fund's portfolio diverges from the securities included in the applicable index.
The price of the Stock Index Future may move more than or less than the price of
the securities being hedged.  If the price of the Stock Index Future moves less
than the price of the securities that are the subject of the hedge, the hedge
will not be fully effective but, if the price of the securities being hedged has
moved in an unfavorable direction, the Fund would be in a better position than
if it had not hedged at all.  If the price of the securities being hedged has
moved in a favorable direction, this advantage will be partially offset by the
futures contract.  If the price of the futures contract moves more than the
price of the securities, the Fund will experience either a loss or a gain on the
futures contract that will not be completely offset by movements in the price of
the securities that are the subject of the hedge.  To compensate for the
imperfect correlation of movements in the price of the securities being hedged
and movements in the price of the Stock Index Futures, a Fund may buy or sell
Stock Index Futures in a greater dollar amount than the dollar amount of the
securities being hedged if the historical volatility of the prices of such
securities being hedged is less than the historical volatility of the prices of
the securities included in the index.  It is also possible that, where a Fund
has sold futures contracts to hedge against decline in the market, the market
may advance and the value of the securities held in the portfolio may decline.
If this occurred, a Fund would lose money on the futures contract and also
experience a decline in value of its portfolio securities.  However, while this
could occur for a very brief period or to a very small degree, over time the
value of a diversified portfolio of securities will tend to move in the same
direction as the market indices on which the futures contracts are based.

     Where Stock Index Futures are purchased to hedge against a possible
increase in the price of securities before a Fund is able to invest in them in
an orderly fashion, it is possible that the market may decline instead.  If the
Fund then concludes not to invest in them at that time because of concern as to
possible further market decline or for other reasons, it will realize a loss on
the futures contract that is not offset by a reduction in the price of the
securities it had anticipated purchasing.

     Combined Positions.  A Fund may purchase and write options in combination
with each other, or in combination with futures contracts, to adjust the risk
and return characteristics of its overall position.  For example, a Fund may
purchase a put option and write a call option on the same underlying instrument,
in order to construct a combined position whose risk and return characteristics
are similar to selling a futures contract.  Another possible combined position
would involve writing a call option at one strike price and buying a call option
at a lower price, in order to reduce the risk of the written call option in the
event of a substantial price increase.  Because combined options positions
involve multiple trades, they result in higher transaction costs and may be more
difficult to open and close out.

     Turnover.  A Fund's options and futures activities may affect its turnover
rate and brokerage commission payments.  The exercise of calls or puts written
by a Fund, and the sale or purchase of futures contracts, may cause it to sell
or purchase related investments, thus increasing its turnover rate.  Once a Fund
has received an exercise notice on an option it has written, it cannot effect a
closing transaction in order to terminate its obligation under the option and
must deliver or receive the underlying securities at the exercise price.  The
exercise of puts purchased by a Fund may also cause the sale of related
investments, also increasing turnover; although such exercise is within the
Fund's control, holding a protective put might cause it to sell the related
investments for reasons that would not exist in the absence of the put.  A Fund
will pay a brokerage commission each time it buys or sells a put or call or
purchases or sells a futures contract.  Such commissions may be higher than
those that would apply to direct purchases or sales.

Operating Restrictions of United Income Fund, United Accumulative Fund and
United Science and Technology Fund

     The following operating restrictions pertaining to investments in options
and futures may be revised by the Board of Directors depending on its judgments
regarding the ability of WRIMCO to make use of these instruments to the benefit
of these Funds and in order to conform to rules and regulations of the CFTC, the
SEC, various state securities commissions, Federal tax law and regulations, and
the rules of the exchanges on which the investments are traded.

     (i)  Options on stock indices, futures contracts and options on futures
          contracts will be used only for risk management ("hedging") purposes
          within the meaning of applicable regulations.  A Fund will not hedge
          more than 10% of its total assets.

    (ii)  Only options on securities that are issued by the Options Clearing
          Corporation may be purchased or sold, except for options on U.S.
          Government Securities and except for optional delivery standby
          commitments; only options on stock indices, options on futures
          contracts and futures contracts that are listed on a national
          securities or commodities exchange may be purchased or sold; to the
          extent options transactions involving unlisted options are illiquid,
          such options and the underlying collateral will be subject to an
          operating policy of the Funds that limits investment in illiquid
          securities to 10% of the net assets of each Fund.

   (iii)  The aggregate premiums paid for the purchase of permitted options that
          are held by a Fund at any one time, adjusted for the portion of any
          premium attributable to a difference between the "strike price" of the
          option and the market value of the underlying security or futures
          contract at the time of purchase, may not exceed 20% of the total net
          assets of that Fund.

    (iv)  The aggregate margin deposits and premiums required on all futures
          contracts and options thereon held or outstanding at any one time by
          any Fund may not exceed 5% of the total assets of that Fund adjusted
          for unrealized gains or losses of the Fund on such options and futures
          contracts.

     (v)  The aggregate amount of the obligations underlying the puts written by
          a Fund that are outstanding at any one time may not exceed 25% of the
          net assets of that Fund computed at the time of sale.

Investment Restrictions

     Certain of the Funds' investment restrictions are described in the
Prospectus.  The following are fundamental policies and together with certain
restrictions described in the Prospectus cannot be changed without shareholder
approval.  Under these additional restrictions, the Funds may not:

     (i)  Buy real estate nor any nonliquid interests in real estate investment
          trusts;

    (ii)  Buy shares of other investment companies that redeem their shares.  A
          Fund can buy shares of investment companies that do not redeem their
          shares if it does so in a regular transaction in the open market and
          then does not have more than one-tenth (i.e., 10%) of the total assets
          of the four Funds in these shares;

   (iii)  Lend money or other assets, other than through certain limited types
          of loans; the Funds may buy debt securities that have been sold to the
          public; the Funds may buy other obligations customarily acquired by
          institutional investors; they may also lend their portfolio securities
          (see "Lending Securities" above) and enter into repurchase agreements
          (see "Repurchase Agreements" above);

    (iv)  Invest for the purpose of exercising control or management of other
          companies;

     (v)  Buy or continue to hold securities if the Corporation's Directors or
          officers or certain others own a certain percentage of the same
          securities; if any one of these people owns more than one two-
          hundredths (i.e., .5 of 1%) of the shares of a company and if the
          people who own that much or more own one twentieth (i.e., 5%) of that
          company's shares, the Funds cannot buy that company's shares or
          continue to own them;

    (vi)  Participate on a joint, or a joint and several, basis in any trading
          account in any securities;

   (vii)  Sell securities short, buy securities on margin or engage in arbitrage
          transactions; however, a Fund may make margin deposits in connection
          with its use of any financial instrument permitted by its fundamental
          policies;

  (viii)  Engage in the underwriting of securities, that is, the selling of
          securities for others; also, United Bond Fund and United Science and
          Technology Fund do not invest in restricted securities; restricted
          securities are securities that cannot freely be sold for legal
          reasons;

    (ix)  Buy a security if, as a result, it would own more than ten percent of
          the issuer's voting securities or any class of its securities, or if
          more than five percent of its total assets would be invested in
          securities of that issuer; United Income Fund, United Accumulative
          Fund and United Bond Fund may not buy securities of companies in any
          one industry if more than 25% of that Fund's total assets would then
          be invested in companies in that industry;

     (x)  Buy securities of companies less than three years old, that is, which
          have not been in continuous operation for at least three years,
          including the operation of predecessor companies; buy securities that
          do not have readily available market quotations, other than commercial
          paper; or

    (xi)  Purchase warrants, except United Bond Fund may purchase warrants to
          the extent described above under "Warrants."

Additional Investment Restrictions of United Bond Fund

     (i)  United Bond Fund may not buy commodities or commodity contracts;
          however, it may buy and sell any of the financial instruments it is
          permitted to by fundamental policy, whether or not any such financial
          instrument is considered to be a commodity or commodity contract;

    (ii)  United Bond Fund may not borrow money or mortgage or pledge any
          assets; this does not prohibit the escrow arrangements contemplated by
          the writing of covered call options;

   (iii)  United Bond Fund may write (i.e., sell) call options, but only if (i)
          the investments to which the call relates are either debt securities
          or Debt Futures; and (ii) either (a) the calls are covered, i.e., the
          Fund owns the related investments (or other investments acceptable for
          escrow arrangements) while the call is outstanding, or (b) the related
          investments are Debt Futures.

    (iv)  United Bond Fund may purchase calls but only if the related
          investments are either debt securities or Debt Futures.

     (v)  United Bond Fund may purchase put options but only if the investments
          to which the put relates are debt securities or Debt Futures.  The
          Fund may purchase puts as to related investments it owns ("protective
          puts") or as to related investments it does not own ("nonprotective
          puts").

    (vi)  United Bond Fund may write (i.e., sell) puts but only if the related
          investments are debt securities or Debt Futures.

     In order to comply with certain state regulations, United Bond Fund has
adopted an operating policy that provides that the aggregate premiums paid for
all such options held by the Fund at any one time, adjusted for the portion of
the premium attributable to the difference between the option strike price and
the market value of the underlying security or futures contract at the time of
purchase, may not exceed 20% of the Fund's total net assets.

Additional Investment Restrictions of United Accumulative Fund, United Income
Fund and United Science and Technology Fund

     (i)  The Funds may not purchase or write puts, calls or combinations
          thereof; however call options may be written on securities if (i) such
          calls are listed on a domestic securities exchange; (ii) when any such
          call is written and at all times prior to a closing purchase
          transaction as to such call, or its lapse or exercise, a Fund owns the
          securities that are subject to the call or has the right to acquire
          such securities without the payment of further consideration; and
          (iii) when any such call is written, not more than 25% of any one
          Fund's total assets would be subject to calls.  In addition, the Funds
          may purchase calls and write and purchase put options on securities in
          which the Funds may invest and may, for non-speculative purposes,
          write and purchase options on broadly-based stock indices.

    (ii)  The Funds may not buy or sell commodities or commodities contracts
          except that each Fund may, for non-speculative purposes, buy or sell
          Stock Index Futures, Debt Futures and options on Stock Index Futures
          and Debt Futures.

   (iii)  The Funds may not borrow money or pledge any of their assets but may
          enter into escrow and collateral arrangements in connection with
          investment in options and futures contracts.

Portfolio Turnover

     A portfolio turnover rate is, in general, the percentage computed by taking
the lesser of purchases or sales of portfolio securities for a year and dividing
it by the monthly average of the market value of such securities during the
year, excluding certain short-term securities.  A Fund's turnover rate may vary
greatly from year to year as well as within a particular year and may be
affected by cash requirements for the redemption of its shares.

     The portfolio turnover rates for each of the Funds for the fiscal years
ended December 31, 1996 and December 31, 1995 were as follows:

                                    1996      1995
                                    ----      ----
United Bond Fund                  55.74%    66.38%
United Income Fund                 22.24     17.59
United Accumulative Fund          240.37    229.03
United Science and
  Technology Fund                  33.90 32.89    

     A high turnover rate will increase transaction costs and commission costs
that will be borne by the Funds and could generate taxable income or loss.

                    INVESTMENT MANAGEMENT AND OTHER SERVICES

The Management Agreement

     The Corporation has an Investment Management Agreement (the "Management
Agreement") with Waddell & Reed, Inc.  On January 8, 1992, subject to the
authority of the Corporation's Board of Directors, Waddell & Reed, Inc. assigned
the Management Agreement and all related investment management duties (and
related professional staff) to WRIMCO, a wholly-owned subsidiary of Waddell &
Reed, Inc.  Under the Management Agreement, WRIMCO is employed to supervise the
investments of the Funds and provide investment advice to the Funds.  The
address of WRIMCO and Waddell & Reed, Inc. is 6300 Lamar Avenue, P.O. Box 29217,
Shawnee Mission, Kansas  66201-9217.  Waddell & Reed, Inc. is the Corporation's
underwriter.

     The Management Agreement permits Waddell & Reed, Inc. or an affiliate of
Waddell & Reed, Inc. to enter into a separate agreement for transfer agency
services ("Shareholder Servicing Agreement") and a separate agreement for
accounting services ("Accounting Services Agreement") with the Corporation.  The
Management Agreement contains detailed provisions as to the matters to be
considered by the Corporation's Board of Directors prior to approving any
Shareholder Servicing Agreement or Accounting Services Agreement.

Torchmark Corporation and United Investors Management Company

     WRIMCO is a wholly-owned subsidiary of Waddell & Reed, Inc.  Waddell &
Reed, Inc. is a wholly-owned subsidiary of Waddell & Reed Financial Services,
Inc., a holding company.  Waddell & Reed Financial Services, Inc. is a wholly-
owned subsidiary of United Investors Management Company.  United Investors
Management Company is a wholly-owned subsidiary of Torchmark Corporation.
Torchmark Corporation is a publicly-held company.  The address of Torchmark
Corporation and United Investors Management Company is 2001 Third Avenue South,
Birmingham, Alabama 35233.

        Waddell & Reed, Inc. and its predecessors served as investment manager
to each of the registered investment companies in the United Group of Mutual
Funds, except United Asset Strategy Fund, Inc., since 1940 or the company's
inception date, whichever was later, and to TMK/United Funds, Inc. since that
fund's inception, until January 8, 1992, when it assigned its duties as
investment manager for these funds (and the related professional staff) to
WRIMCO.  WRIMCO has also served as investment manager for Waddell & Reed Funds,
Inc. since its inception in September 1992 and United Asset Strategy Fund, Inc.
since it commenced operations in March 1995.  Waddell & Reed, Inc. serves as
principal underwriter for the investment companies in the United Group of Mutual
Funds and Waddell & Reed Funds, Inc. and acts as principal underwriter and
distributor for variable life insurance and variable annuity policies issued by
United Investors Life Insurance Company for which TMK/United Funds, Inc. is the
underlying investment vehicle.    

Shareholder Services

     Under the Shareholder Servicing Agreement entered into between the
Corporation and Waddell & Reed Services Company (the "Agent"), a subsidiary of
Waddell & Reed, Inc., the Agent performs shareholder servicing functions,
including the maintenance of shareholder accounts, the issuance, transfer and
redemption of shares, distribution of dividends and payment of redemptions, the
furnishing of related information to the Corporation and handling of shareholder
inquiries.  A new Shareholder Servicing Agreement, or amendments to the existing
one, may be approved by the Corporation's Board of Directors without shareholder
approval.

Accounting Services

     Under the Accounting Services Agreement entered into between the
Corporation and the Agent, the Agent provides each Fund with bookkeeping and
accounting services and assistance, including maintenance of the Corporation's
records, pricing of the Corporation's shares, and preparation of prospectuses
for existing shareholders, proxy statements and certain reports.  A new
Accounting Services Agreement, or amendments to an existing one, may be approved
by the Corporation's Board of Directors without shareholder approval.

Payments by the Corporation for Management, Accounting and Shareholder Services

        Under the Management Agreement, for WRIMCO's management services, the
Corporation pays WRIMCO a fee as described in the Prospectus.

     The management fees paid to WRIMCO for each Fund during the last three
fiscal years were as follows:

                                    1996        1995         1994
                                    ----        ----         ----
United Bond Fund ........    $ 2,344,627 $ 2,407,401  $ 2,552,094
United Income Fund ......     25,277,033  20,740,095   15,069,003
United Accumulative Fund       6,879,322   6,103,149    4,773,506
United Science and Technology
  Fund  .................      5,667,206   4,025,985    2,777,832
                             -----------  ----------  -----------
  Total  ................    $40,168,188 $33,276,630  $25,172,435
                             =========== =====================    

     For purposes of calculating the daily fee the Corporation does not include
money owed to it by Waddell & Reed, Inc. for shares which it has sold but not
yet paid the Corporation.  The Corporation accrues and pays this fee daily.

        Under the Shareholder Servicing Agreement, with respect to Class A
shares, each Fund pays the Agent a monthly fee of $1.3125 ($1.0208 prior to
April 1, 1996) for each shareholder account that was in existence at any time
during the prior month, plus $0.30 for each account on which a dividend or
distribution, of cash or shares, had a record date in that month.  For Class Y
shares, each Fund pays the Agent a monthly fee equal to one-twelfth of .15 of 1%
of the average daily net assets of that class for the preceding month.  The
Corporation also pays certain out-of-pocket expenses of the Agent, including
long distance telephone communications costs; microfilm and storage costs for
certain documents; forms, printing and mailing costs; and costs of legal and
special services not provided by Waddell & Reed, Inc., WRIMCO or the Agent.    

     Under the Accounting Services Agreement, each Fund pays the Agent a monthly
fee of one-twelfth of the annual fee shown in the following table.

                               Accounting Services Fee

             Average
         Net Asset Level              Annual Fee
     (all dollars in millions)     Rate for Each Fund
     ------------------------      ------------------

     From $     0 to $    10       $      0
     From $    10 to $    25       $ 10,000
     From $    25 to $    50       $ 20,000
     From $    50 to $   100       $ 30,000
     From $   100 to $   200       $ 40,000
     From $   200 to $   350       $ 50,000
     From $   350 to $   550       $ 60,000
     From $   550 to $   750       $ 70,000
     From $   750 to $1,000        $ 85,000
          $ 1,000 and Over         $100,000

        Fees paid to the Agent for the fiscal years ended December 31, 1996,
1995 and 1994 were as follows:

                               1966        1995         1994
                               ----        ----         ----
United Bond Fund ........   $61,667    $ 65,000     $ 66,667
United Income Fund ......   100,000     100,000      100,000
United Accumulative Fund    100,000      96,250       92,500
United Science and Technology
  Fund  .................    88,750      71,667       60,000
         

     Since the Corporation pays a management fee for investment supervision and
an accounting services fee for accounting services as discussed above, WRIMCO
and the Agent, respectively, pay all of their own expenses in providing these
services.  Amounts paid by the Corporation under the Shareholder Servicing
Agreement are described above.  Waddell & Reed, Inc. and affiliates pay the
Corporation's Directors and officers who are affiliated with WRIMCO and its
affiliates.  The Corporation pays the fees and expenses of the Corporation's
other Directors.

        Waddell & Reed, Inc., under an agreement separate from the Management
Agreement, Shareholder Servicing Agreement and Accounting Services Agreement,
acts as the Corporation's underwriter, i.e., sells its shares on a continuous
basis.  Waddell & Reed, Inc. is not required to sell any particular number of
shares, and sells shares only for purchase orders received.  Under this
agreement, Waddell & Reed, Inc. pays the costs of sales literature, including
the costs of shareholder reports used as sales literature, and the costs of
printing the prospectus furnished to it by the Corporation.  The aggregate
dollar amounts of underwriting commissions for Class A shares for the fiscal
years ended December 31, 1996, 1995 and 1994 were $26,543,939, $18,952,707 and
$19,687,406, respectively, and the amounts retained by Waddell & Reed, Inc. were
$11,396,996, $8,341,305 and $8,600,788, respectively.    

     A major portion of the sales charge for Class A shares is paid to account
representatives and managers of Waddell & Reed, Inc.  Waddell & Reed, Inc. may
compensate its account representatives as to purchases for which there is no
sales charge.

     The Corporation pays all of its other expenses.  These include the costs of
materials sent to shareholders, audit and outside legal fees, taxes, brokerage
commissions, interest, insurance premiums, custodian fees, fees payable by the
Corporation under Federal or other securities laws and to the Investment Company
Institute and nonrecurring and extraordinary expenses, including litigation and
indemnification relating to litigation.

     Under a Service Plan for Class A shares (the "Plan") adopted by the
Corporation pursuant to Rule 12b-1 under the 1940 Act, each Fund may pay Waddell
& Reed, Inc., the principal underwriter for the Corporation, a fee not to exceed
 .25% of each Fund's average annual net assets attributable to Class A shares,
paid monthly, to reimburse Waddell & Reed, Inc. for its costs and expenses in
connection with the provision of personal services to Class A shareholders of
the Funds and/or maintenance of Class A shareholder accounts.

        The Plan and a related Service Agreement between the Corporation and
Waddell & Reed, Inc. contemplate that Waddell & Reed, Inc. may be reimbursed for
amounts it expends in compensating, training and supporting registered account
representatives, sales managers and/or other appropriate personnel in providing
personal services to Class A shareholders of each Fund and/or maintaining Class
A shareholder accounts; increasing services provided to Class A shareholders of
each Fund by office personnel located at field sales offices; engaging in other
activities useful in providing personal service to Class A shareholders of each
Fund and/or maintenance of Class A shareholder accounts; and in compensating
broker-dealers who may regularly sell Class A shares of each Fund, and other
third parties, for providing shareholder services and/or maintaining shareholder
accounts with respect to Class A shares.  For its fiscal year ended December 31,
1996, service fees paid (or accrued) with respect to Class A shares were as
follows:

                                    1996
                                    ----
United Bond Fund.........     $  749,534
United Income Fund ......      6,498,915
United Accumulative Fund       1,606,204
United Science and Technology
  Fund ..................  1,405,418    

     The Plan and the Service Agreement were approved by the Corporation's Board
of Directors, including the Directors who are not interested persons of the
Corporation and who have no direct or indirect financial interest in the
operations of the Plan or any agreement referred to in the Plan (hereafter, the
"Plan Directors").  The Plan was also approved by the affected shareholders of
each Fund.

     Among other things, the Plan provides that (i) Waddell & Reed, Inc. will
provide to the Directors of the Corporation at least quarterly, and the
Directors will review, a report of amounts expended under the Plan and the
purposes for which such expenditures were made, (ii) the Plan will continue in
effect only so long as it is approved at least annually, and any material
amendments thereto will be effective only if approved, by the Directors
including the Plan Directors acting in person at a meeting called for that
purpose, (iii) amounts to be paid by a Fund under the Plan may not be materially
increased without the vote of the holders of a majority of the outstanding Class
A shares of that Fund, and (iv) while the Plan remains in effect, the selection
and nomination of the Directors who are Plan Directors will be committed to the
discretion of the Plan Directors.

Custodial and Auditing Services

        The custodian for the four Funds is UMB Bank, n.a., Kansas City,
Missouri.  In general, the custodian is responsible for holding each Fund's cash
and securities.  Deloitte & Touche LLP, Kansas City, Missouri, the Corporation's
independent accountants, audits each Fund's financial statements.    

                   PURCHASE, REDEMPTION AND PRICING OF SHARES

Determination of Offering Price

     The net asset value of each class of the shares of a Fund is the value of
the assets of that class, less the class's liabilities, divided by the total
number of outstanding shares of that class.
   
     Class A shares of the Funds are sold at their next determined net asset
value plus the sales charge described in the Prospectus.  The price makeup as of
December 31, 1996 was as follows:

United Bond Fund

     Net asset value per Class A share (Class A
       net assets divided by Class A shares
       outstanding)  .............................   $6.14
     Add:  selling commission (5.75% of offering
       price)  ...................................     .37
                                                     -----
     Maximum offering price per Class A share
       (Class A net asset value divided by 94.25%)   $6.51
                                                     =====

United Income Fund

     Net asset value per Class A share (Class A
       net assets divided by Class A shares
       outstanding)  .............................  $32.91
     Add:  selling commission (5.75% of offering
       price)  ...................................    2.01
                                                    ------
     Maximum offering price per Class A share
       (Class A net asset value divided by 94.25%)  $34.92
                                                    ======

United Accumulative Fund

     Net asset value per Class A share (Class A
       net assets divided by Class A shares
       outstanding)  .............................   $7.75
     Add:  selling commission (5.75% of offering
       price)  ...................................     .47
                                                     -----
     Maximum offering price per Class A share
       (Class A net asset value divided by 94.25%)   $8.22
                                                     =====

United Science and Technology Fund

     Net asset value per Class A share (Class A
       net assets divided by Class A shares
       outstanding)  .............................  $23.35
     Add:  selling commission (5.75% of offering
       price)  ...................................    1.42
                                                    ------
     Maximum offering price per Class A share
       (Class A net asset value divided by 94.25%)  $24.77
                                                    ======    

     The offering price of a Class A share is its net asset value next
determined following acceptance of a purchase order plus the sales charge.  The
offering price of a Class Y share is its net asset value next determined
following acceptance of a purchase order.  The number of shares you receive for
your purchase depends on the next offering price after Waddell & Reed, Inc.
receives and accepts your order at its principal business office at the address
shown on the cover of this SAI.  You will be sent a document called a
confirmation after your purchase which will indicate how many shares you have
purchased.  Shares are normally issued for cash only.

     Waddell & Reed, Inc. need not accept any purchase order, and it or the
Corporation may determine to discontinue offering Corporation shares for
purchase.

        The net asset value and offering price per share are ordinarily computed
once on each day that the NYSE is open for trading as of the later of the close
of the regular session of the NYSE or the close of the regular session of any
other securities or commodities exchange on which an option or future held by
the Fund is traded.  The NYSE annually announces the days on which it will not
be open for trading.  The most recent announcement indicates that it will not be
open on the following days:  New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
However, it is possible that the NYSE may close on other days.  The net asset
value will change every business day, since the value of the assets and the
number of shares outstanding change every business day.    

        The securities in the portfolio of each Fund, except as otherwise noted,
that are listed or traded on a stock exchange, are valued on the basis of the
last sale on that day or, lacking any sales, at a price which is the mean
between the closing bid and asked prices.  Other securities which are traded
over-the-counter are priced using National Association of Securities Dealers
Automated Quotations system ("Nasdaq"), which provides information on bid and
asked prices quoted by major dealers in such stocks.  Bonds, other than
convertible bonds, are valued using a third-party pricing system.  Convertible
bonds are valued using this pricing system only on days when there is no sale
reported.  Short-term debt securities are valued at amortized cost, which
approximates market.  When market quotations are not readily available,
securities and other assets are valued at fair value as determined in good faith
under procedures established by and under the general supervision and
responsibility of the Board of Directors.  Foreign currency exchange rates are
generally determined prior to the close of trading of the regular session of the
NYSE.  Occasionally events affecting the value of foreign investments and such
exchange rates occur between the time at which they are determined and the close
of the regular session of trading on the NYSE, which events will not be
reflected in a computation of a Fund's net asset value on that day.  If events
materially affecting the value of such investments or currency exchange rates
occur during such time period, investments will be valued at their fair value as
determined in good faith by or under the direction of the Board of Directors.
The foreign currency exchange transactions of a Fund conducted on a spot (that
is, cash) basis are valued at the spot rate for purchasing or selling currency
prevailing on the foreign exchange market.  This rate under normal market
conditions differs from the prevailing exchange rate in an amount generally less
than one-tenth of one percent due to the costs of converting from one currency
to another.    

        Options and futures contracts purchased and held by a Fund are valued at
the last sales price thereof on the securities or commodities exchanges on which
they are traded, or, if there are no transactions, at the mean between bid and
asked prices.  Ordinarily, the close of the regular session for options trading
on national securities exchanges is 4:10 p.m. Eastern time and the close of the
regular session for commodities exchanges is 4:15 p.m. Eastern time.  Futures
contracts will be valued by reference to established futures exchanges.  The
value of a futures contract purchased by a Fund will be either the closing price
of that contract or the bid price.  Conversely, the value of a futures contract
sold by a Fund will be either the closing price or the asked price.    

     When a Fund writes a put or call, an amount equal to the premium received
is included in that Fund's Statement of Assets and Liabilities as an asset, and
an equivalent deferred credit is included in the liability section.  The
deferred credit is "marked-to-market" to reflect the current market value of the
put or call.  If a call a Fund wrote is exercised, the proceeds received on the
sale of the related investment are increased by the amount of the premium that
the Fund received.  If a Fund exercises a call it purchased, the amount paid to
purchase the related investment is increased by the amount of the premium paid.
If a put written by a Fund is exercised, the amount that Fund pays to purchase
the related investment is decreased by the amount of the premium it received.
If a Fund exercises a put it purchased, the amount that Fund receives from the
sale of the related investment is reduced by the amount of the premium it paid.
If a put or call written by a Fund expires, it has a gain in the amount of the
premium; if it enters into a closing purchase transaction, it will have a gain
or loss depending on whether the premium was more or less than the cost of the
closing transaction.

     Optional delivery standby commitments are valued at fair value under the
general supervision and responsibility of the Corporation's Board of Directors.
They are accounted for in the same manner as exchange-listed puts.

Minimum Initial and Subsequent Investments

     For Class A shares, initial investments must be at least $500 with the
exceptions described in this paragraph.  A $100 minimum initial investment
pertains to certain exchanges of shares from another fund in the United Group.
A $50 minimum initial investment pertains to purchases for certain retirement
plan accounts and to accounts for which an investor has arranged, at the time of
initial investment, to make subsequent purchases for the account by having
regular monthly withdrawals of $25 or more made from a bank account.  A minimum
initial investment of $25 is applicable to purchases made through payroll
deduction for or by employees of WRIMCO, Waddell & Reed, Inc., their affiliates
or certain retirement plan accounts.  Except with respect to certain exchanges
and automatic withdrawals from a bank account, a shareholder may make subsequent
investments of any amount.  See "Exchanges for Shares of Other Funds in the
United Group."

     For Class Y shares, investments by government entities or authorities or by
corporations must total at least $10 million within the first twelve months
after initial investment.  There is no initial investment minimum for other
Class Y investors.

Reduced Sales Charges (Applicable to Class A Shares only)

Account Grouping

     Large purchases of Class A shares are subject to lower sales charges.  The
schedule of sales charges appears in the Prospectus for Class A shares.  For the
purpose of taking advantage of the lower sales charges available for large
purchases, a purchase in any of categories 1 through 7 listed below made by an
individual or deemed to be made by an individual may be grouped with purchases
in any other of these categories:

1.   Purchases by an individual for his or her own account (includes purchases
     under the United Funds Revocable Trust Form);

2.   Purchases by that individual's spouse purchasing for his or her own account
     (includes United Funds Revocable Trust Form of spouse);

3.   Purchases by that individual or his or her spouse in their joint account;

4.   Purchases by that individual or his or her spouse for the account of their
     child under age 21;

5.   Purchase by any custodian for the child of that individual or spouse in a
     Uniform Gifts to Minors Act ("UGMA") or Uniform Transfers to Minors Act
     ("UTMA") account;

6.   Purchases by that individual or his or her spouse for his or her Individual
     Retirement Account ("IRA"), Section 457 of the Internal Revenue Code of
     1986, as amended (the "Code") salary reduction plan account provided that
     such purchases are subject to a sales charge (see "Net Asset Value
     Purchases"), tax sheltered annuity account ("TSA") or Keogh Plan account,
     provided that the individual and spouse are the only participants in the
     Keogh Plan; and

7.   Purchases by a trustee under a trust where that individual or his or her
     spouse is the settlor (the person who establishes the trust).

     Examples:

     A.   Grandmother opens a UGMA account for grandson A; Grandmother has an
          account in her own name; A's father has an account in his own name;
          the UGMA account may be grouped with A's father's account but may not
          be grouped with Grandmother's account;

     B.   H establishes a trust naming his children as beneficiaries and
          appointing himself and his bank as co-trustees; a purchase made in the
          trust account is eligible for grouping with an IRA account of W, H's
          wife;

     C.   H's will provides for the establishment of a trust for the benefit of
          his minor children upon H's death; his bank is named as trustee; upon
          H's death, an account is established in the name of the bank, as
          trustee; a purchase in the account may be grouped with an account held
          by H's wife in her own name.

     D.   X establishes a trust naming herself as trustee and R, her son, as
          successor trustee and R and S as beneficiaries; upon X's death, the
          account is transferred to R as trustee; a purchase in the account may
          not be grouped with R's individual account.  If X's spouse, Y, was
          successor trustee, this purchase could be grouped with Y's individual
          account.

     All purchases of Class A shares made for a participant in a multi-
participant Keogh plan may be grouped only with other purchases made under the
same plan; a multi-participant Keogh plan is defined as a plan in which there is
more than one participant where one or more of the participants is other than
the spouse of the owner/employer.

Example A:  H has established a Keogh plan; he and his wife W are the only
            participants in the plan; they may group their purchases made under
            the plan with any purchases in categories 1 through 7 above.

Example B:  H has established a Keogh Plan; his wife, W, is a participant and
            they have hired one or more employees who also become participants
            in the plan; H and W may not combine any purchases made under the
            plan with any purchases in categories 1 through 7 above; however,
            all purchases made under the plan for H, W or any other employee
            will be combined.

     All purchases of Class A shares made under a "qualified" employee benefit
plan of an incorporated business will be grouped.  A "qualified" employee
benefit plan is established pursuant to Section 401 of the Code.  All qualified
employee benefit plans of any one employer or affiliated employers will also be
grouped.  An affiliate is defined as an employer that directly, or indirectly,
controls or is controlled by or is under control with another employer.

Example:  Corporation X sets up a defined benefit plan; its subsidiary,
          Corporation Y, sets up a 401(k) plan; all contributions made under
          both plans will be grouped.

     All purchases of Class A shares made under a simplified employee pension
plan ("SEP"), payroll deduction plan or similar arrangement adopted by an
employer or affiliated employers (as defined above) may be grouped provided that
the employer elects to have all such purchases grouped at the time the plan is
set up.  If the employer does not make such an election, the purchases made by
individual employees under the plan may be grouped with the other accounts of
the individual employees described above in "Account Grouping."

     Account grouping as described above is available under the following
circumstances.

One-time Purchases

     A one-time purchase of Class A shares in accounts eligible for grouping may
be combined for purposes of determining the availability of a reduced sales
charge.  In order for an eligible purchase to be grouped, the investor must
advise Waddell & Reed, Inc. at the time the purchase is made that it is eligible
for grouping and identify the accounts with which it may be grouped.

Example:  H and W open an account in the Fund and invest $75,000; at the same
          time, H's parents open up three UGMA accounts for H and W's three
          minor children and invest $10,000 in each child's name; the combined
          purchase of $105,000 of Class A shares is subject to a reduced sales
          load of 4.75% provided that Waddell & Reed, Inc. is advised that the
          purchases are entitled to grouping.

Rights of Accumulation

     If Class A shares are held in any account and an additional purchase is
made in that account or in any account eligible for grouping with that account,
the additional purchase is combined with the net asset value of the existing
account as of the date the new purchase is accepted by Waddell & Reed, Inc. for
the purpose of determining the availability of a reduced sales charge.

Example:  H is a current Class A shareholder who invested in the Fund three
          years ago.  His account has a net asset value of $80,000.  His wife,
          W, now wishes to invest $20,000 in Class A shares of the Fund.  W's
          purchase will be combined with H's existing account and will be
          entitled to a reduced sales charge of 4.75%.  H's original purchase
          was subject to a full sales charge and the reduced charge does not
          apply retroactively to that purchase.

     In order to be entitled to rights of accumulation, the purchaser must
inform Waddell & Reed, Inc. that the purchaser is entitled to a reduced charge
and provide Waddell & Reed, Inc. with the name and number of the existing
account with which the purchase may be combined.

        If a purchaser holds shares which have been purchased under a
contractual plan, the shares held under such plan may be combined with the
additional purchase only if the contractual plan has been completed.    

Statement of Intention

     The benefit of a reduced sales charge for larger purchases of Class A
shares is also available under a Statement of Intention.  By signing a Statement
of Intention form, which is available from Waddell & Reed, Inc., the purchaser
indicates an intention to invest, over a 13-month period, a dollar amount which
is sufficient to qualify for a reduced sales charge.  The 13-month period begins
on the date the first purchase made under the Statement of Intention is accepted
by Waddell & Reed, Inc.  Each purchase made from time to time under the
Statement of Intention is treated as if the purchaser were buying at one time
the total amount which he or she intends to invest.  The sales charge applicable
to all purchases of Class A shares made under the terms of the Statement of
Intention will be the sales charge in effect on the beginning date of the 13-
month period.

     In determining the amount which the purchaser must invest in order to
qualify for a reduced sales charge under a Statement of Intention, the
investor's Rights of Accumulation (see above) will be taken into account; that
is, Class A shares already held in the same account in which the purchase is
being made or in any account eligible for grouping with that account, as
described above, will be included.

Example:  H signs a Statement of Intention indicating his intent to invest in
          his own name a dollar amount sufficient to entitle him to purchase
          Class A shares at the sales charge applicable to a purchase of
          $100,000.  H has an IRA account and the Class A shares held under the
          IRA in the Fund have a net asset value as of the date the Statement of
          Intention is accepted by Waddell & Reed, Inc. of $15,000; H's wife, W,
          has an account in her own name invested in another fund in the United
          Group which charges the same sales load as the Fund, with a net asset
          value as of the date of acceptance of the Statement of Intention of
          $10,000; H needs to invest $75,000 in Class A shares over the 13-month
          period in order to qualify for the reduced sales load applicable to a
          purchase of $100,000.

     A copy of the Statement of Intention signed by a purchaser will be returned
to the purchaser after it is accepted by Waddell & Reed, Inc. and will set forth
the dollar amount of Class A shares which must be purchased within the 13-month
period in order to qualify for the reduced sales charge.

     If a purchaser holds shares which have been purchased under a contractual
plan, the shares held under the plan will be taken into account in determining
the amount which must be invested under the Statement of Intention only if the
contractual plan has been completed.

     The minimum initial investment under a Statement of Intention is 5% of the
dollar amount which must be invested under the Statement of Intention.  An
amount equal to 5% of the purchase required under the Statement of Intention
will be held "in escrow."  If a purchaser does not, during the period covered by
the Statement of Intention, invest the amount required to qualify for the
reduced sales charge under the terms of the Statement of Intention, he or she
will be responsible for payment of the sales charge applicable to the amount
actually invested.  The additional sales charge owed on purchases of Class A
shares made under a Statement of Intention which is not completed will be
collected by redeeming part of the shares purchased under the Statement of
Intention and held "in escrow" unless the purchaser makes payment of this amount
to Waddell & Reed, Inc. within 20 days of Waddell & Reed, Inc.'s request for
payment.

     If the actual amount invested is higher than the amount an investor intends
to invest, and is large enough to qualify for a sales charge lower than that
available under the Statement of Intention, the lower sales charge will apply.

     A Statement of Intention does not bind the purchaser to buy, or Waddell &
Reed, Inc. to sell, the shares covered by the Statement of Intention.

     With respect to Statements of Intention for $2,000,000 or purchases
otherwise qualifying for no sales charge under the terms of the Statement of
Intention, the initial investment must be at least $200,000, and the value of
any shares redeemed during the 13-month period which were acquired under the
Statement of Intention will be deducted in computing the aggregate purchases
under the Statement of Intention.

     Statements of Intention are not available for purchases made under an SEP
where the employer has elected to have all purchases under the SEP grouped.

Other Funds in the United Group

     Reduced sales charges for larger purchases of Class A shares apply to
purchases of any of the funds in the United Group which are subject to a sales
charge.  A purchase of, or shares held in, any of the funds in the United Group
which are subject to the same sales charge as the Fund will be treated as an
investment in the Fund for the purpose of determining the applicable sales
charge.  The following funds in the United Group have shares that are subject to
a maximum 5.75% ("full") sales charge as described in the prospectus of each
Fund:  United Funds, Inc., United International Growth Fund, Inc., United
Continental Income Fund, Inc., United Vanguard Fund, Inc., United Retirement
Shares, Inc., United High Income Fund, Inc., United New Concepts Fund, Inc.,
United Gold & Government Fund, Inc., United High Income Fund II, Inc. and United
Asset Strategy Fund, Inc.  The following funds in the United Group have shares
that are subject to a "reduced" sales charge as described in the prospectus of
each fund:  United Municipal Bond Fund, Inc., United Government Securities Fund,
Inc. and United Municipal High Income Fund, Inc.  For the purposes of obtaining
the lower sales charge which applies to large purchases, purchases in a fund in
the United Group of shares that are subject to a full sales charge may not be
grouped with purchases of shares in a fund in the United Group that are subject
to a reduced sales charge; conversely, purchases of shares in a fund with a
reduced sales charge may not be grouped or combined with purchases of shares of
a fund that are subject to a full sales charge.

     United Cash Management, Inc. is not subject to a sales charge.  Purchases
in that fund are not eligible for grouping with purchases in any other fund.

        Any person who was a holder of an uncompleted (i) United Income
Investment Program, (ii) United Periodic Investment Plan to Acquire United
Accumulative Fund Shares of United Funds, Inc., or (iii) United Periodic
Investment Plan to Acquire United Science Fund Shares of United Funds, Inc.
(each a "Plan") on May 30, 1996, with a face amount of less than $12,000, may
purchase Class A shares of the Fund corresponding to such Plan (i.e., United
Income Fund, United Accumulative Fund or United Science and Technology Fund,
respectively) at net asset value ("NAV") plus a maximum sales charge of 2%, up
to the amount representing the unpaid balance of such Plan, if the purchase
order is so designated.    

Net Asset Value Purchases of Class A Shares

     As stated in the Prospectus, Class A shares of a Fund may be purchased at
net asset value by the Directors and officers of the Fund, employees of Waddell
& Reed, Inc., employees of their affiliates, account representatives of Waddell
& Reed, Inc. and the spouse, children, parents, children's spouses and spouse's
parents of each such Director, officer, employee and account representative.
"Child" includes stepchild; "parent" includes stepparent.  Purchases of Class A
shares in an IRA sponsored by Waddell & Reed, Inc. established for any of these
eligible purchasers may also be at net asset value.  Purchases of Class A shares
in any tax qualified retirement plan under which the eligible purchaser is the
sole participant may also be made at net asset value.  Trusts under which the
grantor and the trustee or a co-trustee are each an eligible purchaser are also
eligible for net asset value purchases of Class A shares.  "Employees" includes
retired employees.  A retired employee is an individual separated from service
from Waddell & Reed, Inc. or affiliated companies with a vested interest in any
Employee Benefit Plan sponsored by Waddell & Reed, Inc. or its affiliated
companies.  "Account representatives" includes retired account representatives.
A "retired account representative" is any account representative who was, at the
time of separation from service from Waddell & Reed, Inc., a Senior Account
Representative.  A custodian under UGMA or UTMA purchasing for the child or
grandchild of any employee or account representative may purchase Class A shares
at net asset value whether or not the custodian himself is an eligible
purchaser.

     Purchases of Class A shares in a 401(k) plan having 100 or more eligible
employees and purchases of Class A shares in a 457 plan having 100 or more
eligible employees may be made at net asset value.

        Any holder of an uncompleted Plan on May 30, 1996, with a face amount of
$12,000 or more, may purchase Class A shares of the Fund corresponding to such
Plan at NAV, up to the amount representing the unpaid balance of the Plan, if
the purchase order is so designated.  In addition, any person who was a holder
of a Plan on May 30, 1996 may purchase Class A shares of the Fund corresponding
to such Plan at NAV up to the amount representing partial Plan withdrawals
outstanding on May 30, 1996, provided the purchase order is so designated.    

Reasons for Differences in Public Offering Price of Class A Shares

     As described herein and in the Prospectus for the Class A shares, there are
a number of instances in which a Fund's Class A shares are sold or issued on a
basis other than the maximum public offering price, that is, the net asset value
plus the highest sales charge.  Some of these relate to lower or eliminated
sales charges for larger purchases of Class A shares, whether made at one time
or over a period of time as under a Statement of Intention or right of
accumulation.  See the table of sales charges in the Prospectus.  The reasons
for these quantity discounts are, in general, that (i) they are traditional and
have long been permitted in the industry and are therefore necessary to meet
competition as to sales of shares of other funds having such discounts, (ii)
certain quantity discounts are required by rules of the National Association of
Securities Dealers, Inc. (as are elimination of sales charges on the
reinvestment of dividends and distributions), and (iii) they are designed to
avoid an unduly large dollar amount of sales charges on substantial purchases in
view of reduced selling expenses.  Quantity discounts are made available to
certain related persons for reasons of family unity and to provide a benefit to
tax-exempt plans and organizations.

     The reasons for the other instances in which there are reduced or
eliminated sales charges for Class A shares are as follows.  Exchanges at net
asset value are permitted because a sales charge has already been paid on the
shares exchanged.  Sales of Class A shares without sales charge are permitted to
Directors, officers and certain others due to reduced or eliminated selling
expenses and since such sales may aid in the development of a sound employee
organization, encourage incentive, responsibility and interest in the United
Group and an identification with its aims and policies.  Limited reinvestments
of redemptions of Class A shares at no sales charge are permitted to attempt to
protect against mistaken or not fully informed redemption decisions.  Class A
shares may be issued at no sales charge in plans of reorganization due to
reduced or eliminated sales expenses and since, in some cases, such issuance is
exempted by the 1940 Act from the otherwise applicable restrictions as to what
charge must be imposed.  In no case in which there is a reduced or eliminated
sales charge are the interests of existing Class A shareholders adversely
affected since, in each case, the Fund receives the net asset value per share of
all shares sold or issued.

Flexible Withdrawal Service for Class A Shareholders

        If you qualify, you may arrange to receive through the Flexible
Withdrawal Service (the "Service") regular monthly, quarterly, semiannual or
annual payments by redeeming on a regular basis Class A shares that you own of a
Fund or of any of the funds in the United Group.  It would be a disadvantage to
an investor to make additional purchases of shares while a withdrawal program is
in effect because it would result in duplication of sales charges.  Applicable
forms to start the Service are available through Waddell & Reed, Inc.

     To qualify for the Service, you must have invested at least $10,000 in
Class A shares which you still own of any of the funds in the United Group; or,
you must own Class A shares having a value of at least $10,000.  The value for
this purpose is the value at the offering price.

     You can choose to have your shares redeemed to receive:

     1.  a monthly, quarterly, semiannual or annual payment of $50 or more;

     2.  a monthly payment, which will change each month, equal to one-twelfth
of a percentage of the value of the shares in the Account (you select the
percentage); or

     3.  a monthly or quarterly payment, which will change each month or
quarter, by redeeming a number of shares fixed by you (at least five
shares).    

     Shares are redeemed on the 20th day of the month in which the payment is to
be made, or on the prior business day if the 20th is not a business day.
Payments are made within five days of the redemption.

     Retirement plan accounts may be subject to a fee imposed by the plan
custodian for use of their service.

     If you have a share certificate for the shares you want to make available
for the Service, you must enclose the certificate with the form initiating the
Service.

        The dividends and distributions on shares you have made available for
the Service are paid in additional Class A shares.  All payments under the
Service are made by redeeming Class A shares, which may involve a gain or loss
for tax purposes.  To the extent that payments exceed dividends and
distributions, the number of Class A shares you own will decrease.  When all of
the shares in your account are redeemed, you will not receive any further
payments.  Thus, the payments are not an annuity or income or return on your
investment.    

        You may, at any time, change the manner in which you have chosen to have
shares redeemed to any of the other choices originally available to you.  You
may at any time redeem part or all of the shares in your account; if you redeem
all of the shares, the Service is terminated.  The Corporation can also
terminate the Service by notifying you in writing.    

     After the end of each calendar year, information on shares redeemed will be
sent to you to assist you in completing your Federal income tax return.

Exchanges for Shares of Other Funds in the United Group

Class A Share Exchanges

        Once a sales charge has been paid on shares of a fund in the United
Group, these shares and any shares added to them from dividends or distributions
paid in shares may be freely exchanged for Class A shares of another fund in the
United Group.  The shares you exchange must be worth at least $100 or you must
already own shares of the fund in the United Group into which you want to
exchange.    

     You may exchange Class A shares you own in another fund in the United Group
for Class A shares of a Fund without charge if (i) a sales charge was paid on
these shares, or (ii) the shares were received in exchange for shares for which
a sales charge was paid, or (iii) the shares were acquired from reinvestment of
dividends and distributions paid on such shares.  There may have been one or
more such exchanges so long as a sales charge was paid on the shares originally
purchased.  Also, shares acquired without a sales charge because the purchase
was $2 million or more will be treated the same as shares on which a sales
charge was paid.

        United Municipal Bond Fund, Inc., United Government Securities Fund,
Inc. and United Municipal High Income Fund, Inc. shares are the exceptions and
special rules apply.  Class A shares of any of these funds may be exchanged for
Class A shares of the Funds only if (i) you received those shares as a result of
one or more exchanges of shares on which a sales charge was originally paid, or
(ii) the shares have been held from the date of the original purchase for at
least six months.    

     Subject to the above rules regarding sales charges, you may have a specific
dollar amount of Class A shares of United Cash Management, Inc. automatically
exchanged each month into Class A shares of a Fund or any other fund in the
United Group.  The Class A shares of United Cash Management, Inc. which you
designate for automatic exchange must be worth at least $100 or you must own
Class A shares of the fund in the United Group into which you want to exchange.
The minimum value of shares which you may designate for automatic exchange
monthly is $100, which may be allocated among the Class A shares of different
funds in the United Group so long as each fund receives a value of at least $25.
Minimum initial investment and minimum balance requirements apply to such
automatic exchange service.

     You may redeem your Class A shares of a Fund and use the proceeds to
purchase Class Y shares of that Fund if you meet the criteria for purchasing
Class Y shares.

Class Y Share Exchanges

     Class Y shares of a Fund may be exchanged for Class Y shares of any other
fund in the United Group.

General Exchange Information

     When you exchange shares, the total shares you receive will have the same
aggregate net asset value as the total shares you exchange.  The relative values
are those next figured after your exchange request is received in good order.

     These exchange rights and other exchange rights concerning the other funds
in the United Group can in most instances be eliminated or modified at any time
and any such exchange may not be accepted.

Retirement Plans

     As described in the Prospectus for Class A shares, your account may be set
up as a funding vehicle for a retirement plan.  For individual taxpayers meeting
certain requirements, Waddell & Reed, Inc. offers prototype documents for the
following retirement plans.  All of these plans involve investment in shares of
a Fund (or shares of certain other funds in the United Group).

        Individual Retirement Accounts (IRAs).  Investors having earned income
may set up a plan that is commonly called an IRA.  Under an IRA, an investor can
contribute each year up to 100% of his or her earned income, up to an annual
maximum of $2,000.  For tax years after 1996, the annual maximum is $4,000
($2,000 for each spouse) or, if less, the couple's combined earned income for
the taxable year, even if one spouse had no earned income.  The contributions
are deductible unless the investor (or, if married, either spouse) is an active
participant in a qualified retirement plan or if, notwithstanding that the
investor or one or both spouses so participate, their adjusted gross income does
not exceed certain levels.

     An investor may also use an IRA to receive a rollover contribution that is
either (a) a direct rollover distribution from an employer's plan or (b) a
rollover of an eligible distribution paid to the investor from an employer's
plan or another IRA.  To the extent a rollover contribution is made to an IRA,
the distribution will not be subject to Federal income tax until distributed
from the IRA.  A direct rollover generally applies to any distribution from an
employer's plan (including a custodial account under Section 403(b)(7) of the
Code, but not an IRA) other than certain periodic payments, required minimum
distributions and other specified distributions.  In a direct rollover, the
eligible rollover distribution is paid directly to the IRA, not to the investor.
If, instead, an investor receives payment of an eligible rollover distribution,
all or a portion of that distribution generally may be rolled over to an IRA
within 60 days after receipt of the distribution.  Because mandatory Federal
income tax withholding applies to any eligible rollover distribution which is
not paid in a direct rollover, investors should consult their tax advisers or
pension consultants as to the applicable tax rules.  If you already have an IRA,
you may have the assets in that IRA transferred directly to an IRA offered by
Waddell & Reed, Inc.

     Simplified Employee Pension (SEP) plans.  Employers can make contributions
to SEP-IRAs established for employees.  An employer may contribute up to 15% of
compensation or $24,000, whichever is less, per year for each employee.    

     Keogh Plans.  Keogh plans, which are available to self-employed
individuals, are defined contribution plans that may be either a money purchase
plan or a profit sharing plan.  As a general rule, an investor under a defined
contribution Keogh plan can contribute each year up to 25% of his or her annual
earned income, with an annual maximum of $30,000.

     457 Plans.  If an investor is an employee of a state or local government or
of certain types of charitable organizations, he or she may be able to enter
into a deferred compensation arrangement in accordance with Section 457 of the
Code.

     TSAs - Custodial Accounts and Title I Plans.  If an investor is an employee
of a public school system or of certain types of charitable organizations, he or
she may be able to enter into a deferred compensation arrangement through a
custodian account under Section 403(b) of the Code.  Some organizations have
adopted Title I plans, which are funded by employer contributions in addition to
employee deferrals.

     401(k) Plans.  With a 401(k) plan, employees can make tax-deferred
contributions into a plan to which the employer may also contribute, usually on
a matching basis.  An employee may defer each year up to 25% of compensation,
subject to certain annual maximums, which may be increased each year based on
cost-of-living adjustments.

     More detailed information about these arrangements and applicable forms are
available from Waddell & Reed, Inc.  These plans may involve complex tax
questions as to premature distributions and other matters.  Investors should
consult their tax adviser or pension consultant.

Redemptions

     The Prospectus gives information as to redemption procedures.  Redemption
payments are made within seven days unless delayed because of emergency
conditions determined by the SEC, when the NYSE is closed other than for
weekends or holidays, or when trading on the NYSE is restricted.  Payment is
made in cash, although under extraordinary conditions redemptions may be made in
portfolio securities.  Payment for redemptions of shares of the Corporation may
be made in portfolio securities when the Corporation's Board of Directors
determines that conditions exist making cash payments undesirable.  Securities
used for payment of redemptions are valued at the value used in figuring net
asset value.  There would be brokerage costs to the redeeming shareholder in
selling such securities.  The Corporation, however, has elected to be governed
by Rule 18f-1 under the 1940 Act, pursuant to which it is obligated to redeem
shares solely in cash up to the lesser of $250,000 or 1% of its net asset value
during any 90-day period for any one shareholder.

Reinvestment Privilege

     The Prospectus for Class A shares discusses the reinvestment privilege for
Class A shares under which, if you redeem your Class A shares and then decide it
was not a good idea, you may reinvest.  If Class A shares of a Fund are then
being offered, you can put all or part of your redemption payment back into
Class A shares of that Fund without any sales charge at the net asset value next
determined after you have returned the amount.  Your written request to do this
must be received within 30 days after your redemption request was received.  You
can do this only once as to Class A shares of that Fund.  You do not use up this
privilege by redeeming Class A shares to invest the proceeds at net asset value
in a Keogh plan or an IRA.

                             DIRECTORS AND OFFICERS

     The day-to-day affairs of the Corporation are handled by outside
organizations selected by the Board of Directors.  The Board of Directors has
responsibility for establishing broad corporate policies for the Corporation and
for overseeing overall performance of the selected experts.  It has the benefit
of advice and reports from independent counsel and independent auditors.

     The principal occupation during at least the past five years of each
Director and officer is given below.  Each of the persons listed through and
including Mr. Wise is a member of the Corporation's Board of Directors.  The
other persons are officers but not members of the Board of Directors.  For
purposes of this section, the term "Fund Complex" includes each of the
registered investment companies in the United Group of Mutual Funds, TMK/United
Funds, Inc. and Waddell & Reed Funds, Inc.  Each of the Corporation's Directors
is also a Director of each of the other funds in the Fund Complex and each of
its officers, with the exception of Mr. Garcia, is also an officer of one or
more of the funds in the Fund Complex.

   RONALD K. RICHEY*
2001 Third Avenue South
Birmingham, Alabama 35233
     Chairman of the Board of Directors of the Fund and each of the other funds
in the Fund Complex; Chairman of the Board of Directors of Waddell & Reed
Financial Services, Inc., United Investors Management Company and United
Investors Life Insurance Company; Chairman of the Board of Directors and Chief
Executive Officer of Torchmark Corporation; Chairman of the Board of Directors
of Vesta Insurance Group, Inc.; formerly, Chairman of the Board of Directors of
Waddell & Reed, Inc.  Father of Linda Graves, Director of the Fund and each of
the other funds in the Fund Complex.

KEITH A. TUCKER*
     President of the Fund and each of the other funds in the Fund Complex;
President, Chief Executive Officer and Director of Waddell & Reed Financial
Services, Inc.; Chairman of the Board of Directors of WRIMCO, Waddell & Reed,
Inc., Waddell & Reed Services Company, Waddell & Reed Asset Management Company
and Torchmark Distributors, Inc., an affiliate of Waddell & Reed, Inc.; Vice
Chairman of the Board of Directors, Chief Executive Officer and President of
United Investors Management Company; Vice Chairman of the Board of Directors of
Torchmark Corporation; Director of Southwestern Life Corporation; formerly,
partner in Trivest, a private investment concern; formerly, Director of Atlantis
Group, Inc., a diversified company.

HENRY L. BELLMON
Route 1
P. O. Box 26
Red Rock, Oklahoma  74651
     Rancher; Professor, Oklahoma State University; formerly, Governor of
Oklahoma.

DODDS I. BUCHANAN
905 13th Street
Boulder, Colorado  80302
     Advisory Director, The Hand Companies, an actuarial consulting company;
President, Buchanan Ranch Corporation; formerly, Professor and Chairman of
Marketing, College of Business, University of Colorado.

LINDA GRAVES*
1 South West Cedar Crest Road
Topeka, Kansas 66606
     First Lady of Kansas; formerly, partner, Levy and Craig, P.C., a law firm.
Daughter of Ronald K. Richey, Chairman of the Board of the Fund and each of the
other funds in the Fund Complex.

JOHN F. HAYES*
20 West 2nd Avenue
P. O. Box 2977
Hutchinson, Kansas  67504-2977
     Director of Central Bank and Trust; Director of Central Kansas Bankshares;
Director of Central Properties, Inc.; Chairman, Gilliland & Hayes, P.A., a law
firm; formerly, President, Gilliland & Hayes, P.A.

GLENDON E. JOHNSON
7300 Corporate Center Drive
P. O. Box 020270
Miami, Florida  33126-1208
     Director and Chief Executive Officer of John Alden Financial Corporation
and subsidiaries.

WILLIAM T. MORGAN*
928 Glorietta Blvd.
Coronado, California  92118
     Retired; formerly, Chairman of the Board of Directors and President of the
Fund and each fund in the Fund Complex then in existence.  (Mr. Morgan retired
as Chairman of the Board of Directors and President of the funds in the Fund
Complex then in existence on April 30, 1993); formerly, President, Director and
Chief Executive Officer of WRIMCO and Waddell & Reed, Inc.; formerly, Chairman
of the Board of Directors of Waddell & Reed Services Company; formerly, Director
of Waddell & Reed Asset Management Company, United Investors Management Company
and United Investors Life Insurance Company, affiliates of Waddell & Reed, Inc.

WILLIAM L. ROGERS
1999 Avenue of the Stars
Los Angeles, California  90067
     Principal, Colony Capital, Inc., a real estate related investment company;
formerly, partner in Trivest, a private investment concern.

FRANK J. ROSS, JR.*
700 West 47th Street
Kansas City, Missouri  64112
     Partner, Polsinelli, White, Vardeman & Shalton, a law firm.

ELEANOR B. SCHWARTZ
5100 Rockhill Road
Kansas City, Missouri  64113
     Chancellor, University of Missouri-Kansas City; formerly, Interim
Chancellor, University of Missouri-Kansas City.

FREDERICK VOGEL III
1805 West Bradley Road
Milwaukee, Wisconsin  53217
     Retired.

PAUL S. WISE
P. O. Box 5248
8648 Silver Saddle Drive
Carefree, Arizona  85377
     Director of Potash Corporation of Saskatchewan.

Robert L. Hechler
     Vice President and Principal Financial Officer of the Fund and each of the
other funds in the Fund Complex; Vice President, Chief Operations Officer,
Director and Treasurer of Waddell & Reed Financial Services, Inc.; Executive
Vice President, Principal Financial Officer, Director and Treasurer of WRIMCO;
President, Chief Executive Officer, Principal Financial Officer, Director and
Treasurer of Waddell & Reed, Inc.; Director and Treasurer of Waddell & Reed
Asset Management Company; President, Director and Treasurer of Waddell & Reed
Services Company; Vice President, Treasurer and Director of Torchmark
Distributors, Inc.

Henry J. Herrmann
     Vice President of the Fund and each of the other funds in the Fund Complex;
Vice President, Chief Investment Officer and Director of Waddell & Reed
Financial Services, Inc.; Director of Waddell & Reed, Inc.; President, Chief
Executive Officer, Chief Investment Officer and Director of WRIMCO and Waddell &
Reed Asset Management Company; Senior Vice President and Chief Investment
Officer of United Investors Management Company.

Theodore W. Howard
     Vice President, Treasurer and Principal Accounting Officer of the Fund and
each of the other funds in the Fund Complex; Vice President of Waddell & Reed
Services Company.

Sharon K. Pappas
     Vice President, Secretary and General Counsel of the Fund and each of the
other funds in the Fund Complex; Vice President, Secretary and General Counsel
of Waddell & Reed Financial Services, Inc.; Senior Vice President, Secretary and
General Counsel of WRIMCO and Waddell & Reed, Inc.; Director, Senior Vice
President, Secretary and General Counsel of Waddell & Reed Services Company;
Director, Secretary and General Counsel of Waddell & Reed Asset Management
Company; Vice President, Secretary and General Counsel of Torchmark
Distributors, Inc.; formerly, Assistant General Counsel of WRIMCO, Waddell &
Reed Financial Services, Inc., Waddell & Reed, Inc., Waddell & Reed Asset
Management Company and Waddell & Reed Services Company.    

James C. Cusser
        Vice President of the Corporation and three other funds in the Fund
Complex; Vice President of WRIMCO; formerly, Vice President of Kidder Peabody &
Company.    

Abel Garcia
     Vice President of the Corporation; Senior Vice President of WRIMCO; Vice
President of Waddell & Reed Asset Management Company; formerly, Vice President
of Waddell & Reed, Inc.

John M. Holliday
     Vice President of the Corporation and nine other funds in the Fund Complex;
Senior Vice President of WRIMCO and of Waddell & Reed Asset Management Company;
formerly, Senior Vice President of Waddell & Reed, Inc.

Antonio Intagliata
        Vice President of the Corporation; Senior Vice President of WRIMCO;
formerly, Senior Vice President of Waddell & Reed, Inc.    

Carl E. Sturgeon
     Vice President of the Corporation and eleven other funds in the Fund
Complex; Vice President of WRIMCO; formerly, Vice President of Waddell & Reed,
Inc.

Russell E. Thompson
     Vice President of the Corporation and two other funds in the Fund Complex;
Senior Vice President of WRIMCO; Vice President of Waddell and Reed Asset
Management Company; formerly, Senior Vice President of Waddell & Reed, Inc.

     The address of each person is 6300 Lamar Avenue, P. O. Box 29217, Shawnee
Mission, Kansas  66201-9217 unless a different address is given.

        As of the date of this SAI, six of the Corporation's Directors may be
deemed to be "interested persons" as defined in the 1940 Act of its underwriter,
Waddell & Reed, Inc., or of WRIMCO.  The Directors who may be deemed to be
"interested persons" are indicated as such by an asterisk.

     The Board of Directors has created an honorary position of Director
Emeritus, which position a director may elect after resignation from the Board
provided the director has attained the age of 75 and has served as a director of
the funds in the United Group for a total of at least five years.  A Director
Emeritus receives fees in recognition of his past services whether or not
services are rendered in his capacity as Director Emeritus, but has no authority
or responsibility with respect to management of the Corporation.  Messrs. Leslie
S. Wright, Doyle Patterson and Jay B. Dillingham retired as Directors of the
Corporation and of each of the funds in the Fund Complex effective April 1,
1996, January 1, 1997 and January 14, 1997, respectively and each has elected a
position as Director Emeritus.  During the Corporation's fiscal year ended
December 31, 1996, Mr. Wright received total compensation for his service as a
Director of $44,000 from the Fund Complex and the Corporation and aggregate
compensation from the Corporation of $19,692.  During the Corporation's fiscal
year ended December 31, 1996, Mr. Patterson received total compensation for his
service as a Director of $48,000 from the Fund Complex and the Corporation and
aggregate compensation from the Corporation of $21,482.  During the
Corporation's fiscal year ended December 31, 1996, Mr. Dillingham received total
compensation for his service as a Director of $49,000 from the Fund Complex and
the Corporation and aggregate compensation from the Corporation of $21,929.    

     As of April 1, 1996, the funds in the United Group, TMK/United Funds, Inc.
and Waddell & Reed Funds, Inc. pay to each Director a total of $44,000 per year,
plus $1,000 for each meeting of the Board of Directors attended (prior to April
1, 1996, the funds in the United Group (with the exception of United Asset
Strategy Fund, Inc.), TMK/United Funds, Inc. and Waddell & Reed Funds, Inc. paid
to each Director a fee of $40,000 per year, plus $1,000 for each meeting of the
Board of Directors attended) and $500 for each committee meeting attended which
is not in conjunction with a Board of Directors meeting, other than Directors
who are affiliates of Waddell & Reed, Inc.  The fees to the Directors who
receive them are divided among the funds in the United Group , TMK/United Funds,
Inc. and Waddell & Reed Funds, Inc. based on their relative size.

        During the Corporation's fiscal year ended December 31, 1996, the
Corporation's Directors received the following fees for service as a director:

                               Compensation Table

                                                         Total
                         Aggregate                    Compensation
                        Compensation                From Corporation
                            From                        and Fund
Director                Corporation                     Complex*
--------                ------------                  ------------
Ronald K. Richey         $     0                       $     0
Keith A Tucker                 0                             0
Henry L. Bellmon          21,929                        49,000
Dodds I. Buchanan         21,929                        49,000
Linda Graves              21,929                        49,000
John F. Hayes             21,929                        49,000
Glendon E. Johnson        21,482                        48,000
William T. Morgan         21,929                        49,000
William L. Rogers          4,914                        11,000
Frank J. Ross, Jr.         4,914                        11,000
Eleanor B. Schwartz       21,482                        48,000
Frederick Vogel III       21,929                        49,000
Paul S. Wise              21,929                        49,000
*No Fund within the Fund Complex has a bonus, profit sharing or retirement
 plan.    

     The officers are paid by WRIMCO or its affiliates.

Shareholdings

        As of February 28, 1997, all of the Corporation's Directors and officers
as a group owned less than 1% of the outstanding shares of the Corporation.  As
of such date no person owned of record or was known by the Corporation to own
beneficially 5% or more of the Corporation's outstanding shares.    

                            PAYMENTS TO SHAREHOLDERS

General

        There are two sources for the payments a Fund makes to you as a
shareholder of a class of shares of a Fund, other than payments when you redeem
your shares.  The first source is a Fund's net investment income, which is
derived from the dividends, interest and earned discount on the securities it
holds, less expenses (which will vary by class).  The second source is net
realized capital gains, which are derived from a Fund's proceeds received from
the sale of securities at a price higher than the Fund's basis (usually cost) in
such securities attributable to that difference less losses from sales of
securities at a price lower than the Fund's basis therein; these gains can be
either long-term or short-term, depending on how long the Fund has owned the
securities before it sells them.

     The payments made to shareholders from net investment income, net short-
term capital gains and realized gains from certain foreign currency transactions
are called dividends.  A Fund would not pay dividends if its expenses were
greater than its income.

     A Fund pays distributions from net capital gain (the excess of net long-
term capital gain over net short-term capital loss).  A Fund may or may not have
such gain, depending on whether securities are sold and at what price.  If a
Fund has net capital gain, it will pay distributions once each year in the
latter part of the fourth calendar quarter except to the extent it has prior
year net capital losses to offset the gains.  It is the policy of each Fund to
make annual capital gains distributions to the extent that net capital gains are
realized in excess of available capital loss carryovers.    

     Income and expenses are earned and incurred separately by each of the four
Funds, and gains and losses on portfolio transactions of each Fund are
attributable to that Fund.  For example, capital losses realized by one Fund
would not affect capital gains realized by another Fund.

Choices you have on your Dividends and Distributions

     On your application form, you can give instructions that (i) you want cash
for your dividends and distributions, (ii) you want your dividends and
distributions paid in shares of a Fund of the same class as that with respect to
which they were paid, or (iii) you want cash for your dividends and want your
distributions paid in shares of a Fund of the same class as that with respect to
which they were paid.  You can change your instructions at any time.  If you
give no instructions, your dividends and distributions will be paid in shares of
that Fund of the same class as that with respect to which they were paid.  All
payments in shares are at net asset value without any sales charge.  The net
asset value used for this purpose is that computed as of the record date for the
dividend or distribution, although this could be changed by the Directors.  The
record date is the date used to determine which shareholders are entitled to
receive a dividend or distribution; investors who own shares on that date are so
entitled.

     Even if you get dividends and distributions on Class A shares in cash, you
can thereafter reinvest them (or distributions only) in Class A shares of that
Fund at net asset value (i.e., no sales charge) next determined after receipt by
Waddell & Reed, Inc. of the amount clearly identified as a reinvestment.  The
reinvestment must be within 45 days after the payment.

                                     TAXES

General

        In order to continue to qualify for treatment as a regulated investment
company ("RIC") under the Code, a Fund (each Fund is treated as a separate
entity for these purposes) must distribute to its shareholders for each taxable
year at least 90% of its investment company taxable income (consisting generally
of taxable net investment income, net short-term capital gains and net gains
from certain foreign currency transactions) ("Distribution Requirement"), and
must meet several additional requirements.  With respect to each Fund, these
requirements include the following:  (1) the Fund must derive at least 90% of
its gross income each taxable year from dividends, interest, payments with
respect to securities loans and gains from the sale or other disposition of
securities or foreign currencies, or other income (including gains from options
or futures contracts) derived with respect to its business of investing in
securities or those currencies ("Income Requirement"); (2) the Fund must derive
less than 30% of its gross income each taxable year from the sale or other
disposition of securities, or any of the following that were held for less than
three months--options, futures contracts or foreign currencies that are not
directly related to the Fund's principal business of investing in securities (or
options and futures contracts with respect to securities) ("Short-Short
Limitation"); (3) at the close of each quarter of the Fund's taxable year, at
least 50% of the value of its total assets must be represented by cash and cash
items, U.S. Government Securities, securities of other RICs and other securities
that are limited, in respect of any one issuer, to an amount that does not
exceed 5% of the value of the Fund's total assets and that does not represent
more than 10% of the issuer's outstanding voting securities; and (4) at the
close of each quarter of the Fund's taxable year, not more than 25% of the value
of its total assets may be invested in securities (other than U.S. Government
Securities or the securities of other RICs) of any one issuer.    

        Dividends and distributions declared by the Fund in October, November or
December of any year and payable to the shareholders of record on a date in any
of those months are deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if they are paid by the Fund during the
following January.  Accordingly, those dividends and distributions will be taxed
to the shareholders for the year in which that December 31 falls.    

        If shares of a Fund are sold at a loss after being held for six months
or less, the loss will be treated as long-term, instead of short-term, capital
loss to the extent of any distributions received on those shares.  Investors
also should be aware that if shares are purchased shortly before the record date
for a dividend or distribution, the investor will receive some portion of the
purchase price back as a taxable dividend or distribution.    

        Each Fund will be subject to a nondeductible 4% excise tax ("Excise
Tax") to the extent it fails to distribute by the end of any calendar year
substantially all of its ordinary income for that year and capital gains net
income for the one-year period ending on October 31 of that year, plus certain
other amounts. It is the policy of each Fund to make sufficient distributions
each year to avoid imposition of the Excise Tax.  The Code permits each Fund to
defer into the next calendar year net capital losses incurred between November 1
and the end of the current calendar year.    

Income from Foreign Securities

     Dividends and interest received by a Fund may be subject to income,
withholding or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities.  Tax conventions between certain
countries and the United States may reduce or eliminate these foreign taxes,
however, and many foreign countries do not impose taxes on capital gains in
respect of investments by foreign investors.

     Each of the Funds may invest in the stock of "passive foreign investment
companies" ("PFICs").  A PFIC is a foreign corporation that, in general, meets
either of the following tests: (1) at least 75% of its gross income is passive
or (2) an average of at least 50% of its assets produce, or are held for the
production of, passive income.  Under certain circumstances, a Fund will be
subject to Federal income tax on a portion of any "excess distribution" received
on the stock of a PFIC or of any gain on disposition of the stock (collectively
"PFIC income"), plus interest thereon, even if the Fund distributes the PFIC
income as a taxable dividend to its shareholders.  The balance of the PFIC
income will be included in the Fund's investment company taxable income and,
accordingly, will not be taxable to it to the extent that income is distributed
to its shareholders.

        If a Fund invests in a PFIC and elects to treat the PFIC as a "qualified
electing fund" ("QEF"), then in lieu of the foregoing tax and interest
obligation, the Fund will be required to include in income each year its pro
rata share of the QEF's annual ordinary earnings and net capital gain -- which
would have to be distributed to satisfy the Distribution Requirement and avoid
imposition of the Excise Tax -- even if those earnings and gain were not
distributed to the Fund by the QEF.  In most instances it will be very
difficult, if not impossible, to make this election because of certain
requirements thereof.    

     The "Tax Simplification and Technical Corrections Bill of 1993," passed in
May 1994 by the House of Representatives, would substantially modify the
taxation of U.S. shareholders of foreign corporations, including eliminating the
provision described above dealing with PFICs and replacing them (and other
provisions) with a regulatory scheme involving entities called "passive foreign
corporations."  Three similar bills were passed by Congress in 1991 and 1992 and
vetoed.  It is unclear at this time whether, and in what form, the proposed
modifications may be enacted into law.

        Pursuant to proposed regulations, open-end RICs, such as the Funds,
would be entitled to elect to "mark-to-market" their stock in certain PFICs.
"Marking-to-market," in this context, means recognizing as gain for each taxable
year the excess, as of the end of that year, of the fair market value of such a
PFIC's stock over the adjusted basis in that stock (including mark-to-market
gain for each prior year for which an election was in effect).    

Foreign Currency Gains and Losses

     Gains or losses (1) from the disposition of foreign currencies, (2) from
the disposition of debt securities denominated in foreign currency that are
attributable to fluctuations in the value of the foreign currency between the
date of acquisition of the security and the date of disposition, and (3) that
are attributable to fluctuations in exchange rates that occur between the time
the Fund accrues interest, dividends or other receivables or accrues expenses or
other liabilities denominated in a foreign currency and the time the Fund
actually collects the receivables or pays the liabilities, generally are treated
as ordinary income or loss.  These gains or losses, referred to under the Code
as "section 988" gains or losses, may increase or decrease the amount of a
Fund's investment company taxable income to be distributed to its shareholders.

   Income from Options, Futures Contracts and Currencies    

        The use of hedging and option income strategies, such as writing
(selling) and purchasing options and futures contracts, involves complex rules
that will determine for income tax purposes the character and timing of
recognition of the gains and losses the Fund realizes in connection therewith.
Gains from the disposition of foreign currencies (except certain gains that may
be excluded by future regulations), and gains from options and futures contracts
derived by a Fund with respect to its business of investing in securities or
foreign currencies, will qualify as permissible income under the Income
Requirement.  However, income from the disposition of options and futures
contracts will be subject to the Short-Short Limitation if they are held for
less than three months.  Income from the disposition of foreign currencies that
are not directly related to a Fund's principal business of investing in
securities (or options and futures contracts with respect to securities) also
will be subject to the Short-Short Limitation if they are held for less than
three months.    

        If a Fund satisfies certain requirements, any increase in value of a
position that is part of a "designated hedge" will be offset by any decrease in
value (whether realized or not) of the offsetting hedging position during the
period of the hedge for purposes of determining whether the Fund satisfies the
Short-Short Limitation.  Thus, only the net gain (if any) from the designated
hedge will be included in gross income for purposes of that limitation.  Each
Fund intends that, when it engages in hedging transactions, they will qualify
for this treatment, but at the present time it is not clear whether this
treatment will be available for all of each Fund's hedging transactions.  To the
extent this treatment is not available, a Fund may be forced to defer the
closing out of certain options, futures contracts and forward contracts beyond
the time when it otherwise would be advantageous to do so, in order for the Fund
to continue to qualify as a RIC.    

     Any income a Fund earns from writing options is treated as short-term
capital gains.  If a Fund enters into a closing purchase transaction, it will
have a short-term capital gain or loss based on the difference between the
premium it receives for the option it wrote and the premium it pays for the
option it buys.  If an option written by a Fund lapses without being exercised,
the premium it receives also will be a short-term gain.  If such an option is
exercised and thus the Fund sells the securities subject to the option, the
premium the Fund receives will be added to the exercise price to determine the
gain or loss on the sale.  A Fund will not write so many options that it could
fail to continue to qualify as a RIC.

        Certain options and futures in which the Funds may invest will be
"section 1256 contracts."  Section 1256 contracts held by a Fund at the end of
its taxable year, other than section 1256 contracts that are part of a "mixed
straddle" with respect to which the Fund has made an election not to have the
following rules apply, are "marked-to-market" (that is, treated as sold for
their fair market value) for Federal income tax purposes, with the result that
unrealized gains or losses are treated as though they were realized.  Sixty
percent of any net gains or losses recognized on these deemed sales, and 60% of
any net realized gains or losses from any actual sales of section 1256
contracts, are treated as long-term capital gains or losses, and the balance is
treated as short-term capital gains or losses.  Section 1256 contracts also may
be marked-to-market for purposes of the Excise Tax and for other purposes.  The
Fund must distribute any such gains to its shareholders even though it may not
have closed the transactions and received cash to pay the distributions.    

     Code Section 1092 (dealing with straddles) may also affect the taxation of
options and futures contracts in which the Funds may invest.  That section
defines a "straddle" as offsetting positions with respect to personal property;
for these purposes, options and futures contracts are personal property.
Section 1092 generally provides that any loss from the disposition of a position
in a straddle may be deducted only to the extent the loss exceeds the unrealized
gain on the offsetting position(s) of the straddle.  Section 1092 also provides
certain "wash sale" rules that apply to transactions where a position is sold at
a loss and a new offsetting position is acquired within a prescribed period and
"short sale" rules applicable to straddles.  If a Fund makes certain elections,
the amount, character and timing of the recognition of gains and losses from the
affected straddle positions will be determined under rules that vary according
to the elections made.  Because only a few of the regulations implementing the
straddle rules have been promulgated, the tax consequences of straddle
transactions to the Funds are not entirely clear.

Zero Coupon and Payment-in-Kind Securities

        Certain Funds may acquire zero coupon or other securities issued with
original issue discount.  As the holder of those securities, a Fund must include
in its income the original issue discount that accrues on the securities during
the taxable year, even if the Fund receives no corresponding payment on the
securities during the year.  Similarly, a Fund must include in its gross income
securities it receives as "interest" on payment-in-kind securities.  Because
each Fund annually must distribute substantially all of its investment company
taxable income, including any accrued original issue discount and other non-cash
income, in order to satisfy the Distribution Requirement and to avoid imposition
of the Excise Tax, a Fund may be required in a particular year to distribute as
a dividend an amount that is greater than the total amount of cash it actually
receives.  Those distributions will be made from a Fund's cash assets or from
the proceeds of sales of portfolio securities, if necessary.  A Fund may realize
capital gains or losses from those sales, which would increase or decrease its
investment company taxable income and/or net capital gains.  In addition, any
such gains may be realized on the disposition of securities held for less than
three months.  Because of the Short-Short Limitation, any such gains would
reduce a Fund's ability to sell other securities, or certain options, futures
contracts or forward contracts, held for less than three months that it might
wish to sell in the ordinary course of its portfolio management.    

                      PORTFOLIO TRANSACTIONS AND BROKERAGE

     One of the duties undertaken by WRIMCO pursuant to the Management Agreement
is to arrange the purchase and sale of securities for the portfolio of each
Fund.  Transactions in securities other than those for which an exchange is the
primary market are generally done with dealers acting as principals or market
makers.  Brokerage commissions are paid primarily for effecting transactions in
securities traded on an exchange and otherwise only if it appears likely that a
better price or execution can be obtained.  The individual who manages a Fund
may manage other advisory accounts with similar investment objectives.  It can
be anticipated that the manager will frequently place concurrent orders for all
or most accounts for which the manager has responsibility.  Transactions
effected pursuant to such combined orders are averaged as to price and allocated
in accordance with the purchase or sale orders actually placed for each fund or
advisory account.

     To effect the portfolio transactions of a Fund, WRIMCO is authorized to
engage broker-dealers ("brokers") which, in its best judgment based on all
relevant factors, will implement the policy of the Fund to achieve "best
execution" (prompt and reliable execution at the best price obtainable) for
reasonable and competitive commissions.  WRIMCO need not seek competitive
commission bidding but is expected to minimize the commissions paid to the
extent consistent with the interests and policies of the Fund.  Subject to
review by the Board of Directors, such policies include the selection of brokers
which provide execution and research services and other services, including
pricing or quotation services directly or through others ("brokerage services")
considered by WRIMCO to be useful or desirable for its investment management of
the Fund and/or the other funds and accounts over which WRIMCO or its affiliates
have investment discretion.

     Brokerage services are, in general, defined by reference to Section 28(e)
of the Securities Exchange Act of 1934 as including (i) advice, either directly
or through publications or writings, as to the value of securities, the
advisability of investing in, purchasing or selling securities and the
availability of securities and purchasers or sellers; (ii) furnishing analyses
and reports; or (iii) effecting securities transactions and performing functions
incidental thereto (such as clearance, settlement and custody).  "Investment
discretion" is, in general, defined as having authorization to determine what
securities shall be purchased or sold for an account, or making those decisions
even though someone else has responsibility.

     The commissions paid to brokers that provide such brokerage services may be
higher than another qualified broker would charge for effecting comparable
transactions if a good faith determination is made by WRIMCO that the commission
is reasonable in relation to the brokerage services provided.  Subject to the
foregoing considerations WRIMCO may also consider the willingness of particular
brokers and dealers to sell shares of the Fund and other funds managed by WRIMCO
and its affiliates as a factor in its selection.  No allocation of brokerage or
principal business is made to provide any other benefits to WRIMCO or its
affiliates.

     The investment research provided by a particular broker may be useful only
to one or more of the other advisory accounts of WRIMCO and its affiliates and
investment research received for the commissions of those other accounts may be
useful both to the Fund and one or more of such other accounts.  To the extent
that electronic or other products provided by such brokers to assist WRIMCO in
making investment management decisions are used for administration or other non-
research purposes, a reasonable allocation of the cost of the product
attributable to its non-research use is made by WRIMCO.

     Such investment research (which may be supplied by a third party at the
instance of a broker) includes information on particular companies and
industries as well as market, economic or institutional activity areas.  It
serves to broaden the scope and supplement the research activities of WRIMCO;
serves to make available additional views for consideration and comparisons; and
enables WRIMCO to obtain market information on the price of securities held in
the Fund's portfolio or being considered for purchase.

     In placing transactions for the portfolios, WRIMCO may consider sales of
shares of a Fund and other funds managed by WRIMCO and its affiliates as a
factor in the selection of brokers to execute portfolio transactions.  WRIMCO
intends to allocate brokerage on the basis of this factor only if the sale is $2
million or more and there is no sales charge.  This results in the consideration
only of sales which by their nature would not ordinarily be made by Waddell &
Reed, Inc.'s direct sales force and is done in order to prevent the direct sales
force from being disadvantaged by the fact that it cannot participate in Fund
brokerage.

        The table below sets forth the brokerage commissions paid by each of the
Funds during the fiscal years ended December 31, 1996, 1995 and 1994.  These
figures do not include principal transactions or spreads or concessions on
principal transactions, i.e., those in which a Fund sells securities to a
broker-dealer firm or buys from a broker-dealer firm securities owned by it.

                               1996        1995         1994
                         ----------  ----------   ----------
United Bond Fund .....   $        0  $      469   $        0
United Income Fund ...    2,444,984   1,882,280    1,730,535
United Accumulative Fund  6,157,885   4,952,823    4,787,543
United Science and
  Technology Fund  ...      438,029     321,141      516,617
                         ----------  ----------   ----------
Total ................   $9,040,898  $7,156,713   $7,034,695
                         ==========  ====================    

     The next table shows for each of the Fund's last fiscal year the
transactions, other than principal transactions, which were directed to broker-
dealers who provided research as well as execution and the brokerage commissions
paid.  These transactions were allocated to these broker-dealers by the internal
allocation procedures described above.
   
                                           Amount of    Brokerage
                                        Transactions  Commissions
                                      --------------   ----------
United Bond Fund ....................$           ---   $      ---
United Income Fund ..................  1,340,802,642    1,727,912
United Accumulative Fund ............  3,411,550,423    4,628,899
United Science and Technology Fund ..    167,432,432      246,179
                                      --------------   ----------
  Total  ............................ $4,919,785,497   $6,602,990
                                      ==============   ==========

     As of December 31, 1996, United Accumulative Fund owned securities of
Merrill Lynch & Co., Inc. and Paine Webber Group Inc. in the amounts of
$4,977,542 and $7,031,250, respectively.  Merrill Lynch & Co. and Paine Webber
Group Inc. is each a regular broker of the Fund.    

     The Corporation, WRIMCO and Waddell & Reed, Inc. have adopted a Code of
Ethics which imposes restrictions on the personal investment activities of their
employees, officers and interested directors.

Buying and Selling With Other Funds

     A Fund and one or more of the other funds in the United Group, TMK/United
Funds, Inc. and Waddell & Reed Funds, Inc. or accounts over which Waddell & Reed
Asset Management Company exercises investment discretion frequently buy or sell
the same securities at the same time.  If this happens, the amount of each
purchase or sale is divided.  This is done on the basis of the amount of
securities each fund or account wanted to buy or sell.  Sharing in large
transactions could affect the price a Fund pays or receives or the amount it
buys or sells.  However, sometimes a better-negotiated commission is available.

                               OTHER INFORMATION

The Shares of the Four Funds

     The shares of each of the four Funds represents an interest in that Fund's
securities and other assets and in its profits or losses.  Each fractional share
of a class has the same rights, in proportion, as a full share of that class.

        Each Fund offers two classes of its shares:  Class A and Class Y.  Each
class of a Fund represents an interest in the same assets of the Fund and differ
as follows:  each class of shares has exclusive voting rights on matters
pertaining to matters appropriately limited to that class; Class A shares are
subject to an initial sales charge and to an ongoing service fee; each class may
bear differing amounts of certain class-specific expenses; and each class has a
separate exchange privilege.  The Funds do not anticipate that there will be any
conflicts between the interests of holders of the different classes of shares of
the same Fund by virtue of those classes.  On an ongoing basis, the Board of
Directors will consider whether any such conflict exists and, if so, take
appropriate action.  Each share of a Fund is entitled to equal voting, dividend,
liquidation and redemption rights, except that due to the differing expenses
borne by the two classes, dividends and liquidation proceeds of Class A shares
are expected to be lower than for Class Y shares of the same Fund.    

     Each share of each Fund (regardless of class) is entitled to one vote.  On
certain matters such as the election of Directors, all shares of all of the four
Funds vote together as a single class.  On other matters affecting a particular
Fund, the shares of that Fund vote together as a separate class, such as with
respect to a change in an investment restriction of a particular Fund, except
that as to matters for which a separate vote of a class is required by the 1940
Act or which affects the interests of one or more particular classes, the
affected shareholders vote as a separate class.  In voting on a Management
Agreement, approval by the shareholders of a Fund is effective as to that Fund
whether or not enough votes are received from the shareholders of the other
Funds to approve the Management Agreement for the other Funds.

<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
DECEMBER 31, 1996

                                           Principal
                                           Amount in
                                           Thousands        Value

CORPORATE DEBT SECURITIES
Amusement and Recreation Services - 1.97%
 MGM Grand Hotel Finance Corp.,
   11.75%, 5-1-99 ........................   $10,000   $ 10,437,500

Chemicals and Allied Products - 4.26%
 Dow Capital BV,
   9.0%, 5-15-2010 .......................     5,000      5,729,700
 Dow Chemical Company (The),
   8.55%, 10-15-2009 .....................     5,000      5,569,200
 Procter & Gamble Company (The),
   8.0%, 9-1-2024 ........................    10,000     11,325,100
   Total .................................               22,624,000

Communication - 7.99%
 Bell Telephone Company of Pennsylvania (The),
   8.35%, 12-15-2030 .....................     5,000      5,875,700
 BellSouth Telecommunications, Inc.,
   5.85%, 11-15-2045 .....................     3,000      2,954,790
 Cablevision Industries Corporation,
   9.25%, 4-1-2008 .......................     5,000      5,303,050
 Centel Capital Corporation,
   9.0%, 10-15-2019 ......................     5,585      6,619,007
 Continental Cablevision, Inc.,
   8.5%, 9-15-2001 .......................     5,000      5,327,350
 Infinity Broadcasting Corporation,
   10.375%, 3-15-2002 ....................     1,750      1,846,250
 Jones Intercable, Inc.,
   9.625%, 3-15-2002 .....................     2,500      2,625,000
 Tele-Communications, Inc.,
   6.58%, 2-15-2005 ......................     7,500      7,756,575
 Turner Broadcasting System, Inc.,
   8.375%, 7-1-2013 ......................     4,000      4,083,240
   Total .................................               42,390,962

Depository Institutions - 9.79%
 AmSouth Bancorporation,
   6.75%, 11-1-2025 ......................     6,000      5,912,520
 Chevy Chase Savings Bank, F.S.B.,
   9.25%, 12-1-2005 ......................     1,500      1,530,000
 Deutsche Bank Financial Inc.,
   6.7%, 12-13-2006 ......................     4,250      4,170,780
 J.P. Morgan & Co. Incorporated,
   7.54%, 1-15-2027 ......................     4,250      4,153,483
 Kansallis-Osake-Pankki,
   10.0%, 5-1-2002 .......................     6,000      6,809,400
 NBD Bank, National Association,
   8.25%, 11-1-2024 ......................     6,000      6,757,140
 NationsBank Corporation,
   8.57%, 11-15-2024 .....................     5,000      5,722,550


                See Notes to Schedules of Investments on page .

<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
DECEMBER 31, 1996

                                           Principal
                                           Amount in
                                           Thousands        Value

CORPORATE DEBT SECURITIES (CONTINUED)
Depository Institutions (Continued)
 Riggs National Corporation,
   8.5%, 2-1-2006 ........................   $ 5,000   $  5,225,000
 SouthTrust Bank of Alabama, N.A.:
   5.58%, 2-6-2006 .......................     4,500      4,350,060
   7.69%, 5-15-2025 ......................     5,000      5,282,150
 Sovereign Bancorp, Inc.,
   8.0%, 3-15-2003 .......................     2,000      2,027,500
   Total .................................               51,940,583

Electric, Gas and Sanitary Services - 2.01%
 Arkla, Inc.,
   10.0%, 11-15-2019 .....................     8,000      8,911,680
 El Paso Electric Company,
   7.25%, 2-1-99 .........................     1,750      1,745,695
   Total .................................               10,657,375

Fabricated Metal Products - 0.58%
 Mark IV Industries, Inc.,
   8.75%, 4-1-2003 .......................     3,000      3,090,000

Food and Kindred Products - 4.31%
 Coca-Cola Enterprises Inc.:
   0.0%, 6-20-2020 .......................    60,000     11,680,200
   6.7%, 10-15-2036 ......................     5,000      5,046,000
 Nabisco, Inc.,
   6.8%, 9-1-2001 ........................     6,000      6,133,200
   Total .................................               22,859,400

General Building Contractors - 0.78%
 Del Webb Corporation,
   10.875%, 3-31-2000 ....................     4,000      4,120,000

Health Services - 0.99%
 Tenet Healthcare Corporation,
   8.625%, 12-1-2003 .....................     5,000      5,275,000

Hotels and Other Lodging Places - 1.77%
 Marriott International, Inc.,
   7.875%, 4-15-2005 .....................     5,000      5,193,550
 RHG Finance Corporation,
   8.875%, 10-1-2005 .....................     4,000      4,228,480
   Total .................................                9,422,030

Industrial Machinery and Equipment - 0.62%
 Joy Technologies Inc.,
   10.25%, 9-1-2003 ......................     3,000      3,307,500


                See Notes to Schedules of Investments on page .

<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
DECEMBER 31, 1996

                                           Principal
                                           Amount in
                                           Thousands        Value

CORPORATE DEBT SECURITIES (CONTINUED)
Insurance Carriers - 1.42%
 Penn Central Corporation (The),
   10.625%, 4-15-2000 ....................   $ 4,000   $  4,423,120
 Reliance Group Holdings, Inc.,
   9.0%, 11-15-2000 ......................     3,000      3,090,000
   Total .................................                7,513,120

Lumber and Wood Products - 0.40%
 Doman Industries Limited,
   8.75%, 3-15-2004 ......................     2,250      2,103,750

Metal Mining - 0.93%
 Noranda Inc.,
   7.0%, 7-15-2005 .......................     5,000      4,936,300

Nondepository Institutions - 15.06%
 Associates Corporation of North America,
   7.95%, 2-15-2010 ......................     7,250      7,937,082
 Banc One Credit Card Master Trust,
   Series 1994-B, Class A,
   7.55%, 12-15-99 .......................     5,000      5,071,850
 Chrysler Financial Corporation,
   12.75%, 11-1-99 .......................     9,000     10,419,930
 Countrywide Mortgage Backed Securities,
   Inc.,
   6.5%, 4-25-2024 .......................    10,000      9,752,300
 DLJ Mortgage Acceptance Corp.,
   6.5%, 4-25-2024 .......................     4,802      4,566,403
 Equicon Loan Trust,
   7.3%, 2-18-2013 .......................     4,571      4,509,447
 General Electric Capital Corporation,
   8.3%, 9-20-2009 .......................     8,000      8,920,320
 General Motors Acceptance Corporation,
   8.875%, 6-1-2010 ......................    10,000     11,572,200
 Residential Asset Securities Corporation,
   Mortgage Pass-Through Certificates,
   1995-KS3 Class D,
   8.0%, 10-25-2024 ......................     4,000      4,031,640
 Residential Funding Mortgage
   Securities, Inc.,
   8.0%, 8-25-2020 .......................     8,224      8,244,742
 WFS Financial 1996-B Owner Trust, Class A-2,
   6.2%, 5-20-99 .........................     4,884      4,898,600
   Total .................................               79,924,514


                See Notes to Schedules of Investments on page .

<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
DECEMBER 31, 1996

                                           Principal
                                           Amount in
                                           Thousands        Value

CORPORATE DEBT SECURITIES (CONTINUED)
Oil and Gas Extraction - 3.70%
 Anadarko Petroleum Corporation,
   7.25%, 3-15-2025 ......................   $ 5,000   $  5,181,650
 Oryx Energy Company:
   10.0%, 4-1-2001 .......................     3,500      3,841,915
   8.375%, 7-15-2004 .....................     3,500      3,631,355
 Seagull Energy Corporation,
   7.875%, 8-1-2003 ......................     1,250      1,260,937
 Union Texas Petroleum Holdings, Inc.,
   8.25%, 11-15-99 .......................     2,250      2,319,998
 YPF Sociedad Anoima,
   8.0%, 2-15-2004 .......................     3,500      3,377,500
   Total .................................               19,613,355

Paper and Allied Products - 1.26%
 Boise Cascade Office Products Corporation,
   9.875%, 2-15-2001 .....................     2,500      2,646,975
 Canadian Pacific Forest Products Ltd.,
   9.25%, 6-15-2002 ......................     4,000      4,063,920
   Total .................................                6,710,895

Petroleum and Coal Products - 1.06%
 Coastal Corporation (The),
   10.375%, 10-1-2000 ....................     5,000      5,612,450

Printing and Publishing - 1.81%
 News America Holdings Incorporated,
   9.125%, 10-15-99 ......................     5,000      5,335,200
 Viacom International Inc.:
   9.125%, 8-15-99 .......................     1,500      1,533,750
   10.25%, 9-15-2001 .....................     2,500      2,725,000
   Total .................................                9,593,950

Stone, Clay and Glass Products - 1.57%
 Owens-Corning Fiberglas Corporation,
   8.875%, 6-1-2002 ......................     5,000      5,421,950
 USG Corporation:
   9.25%, 9-15-2001 ......................     2,000      2,130,000
   8.5%, 8-1-2005 ........................       750        783,750
   Total .................................                8,335,700

Transportation Equipment - 1.75%
 General Motors Corporation,
   8.8%, 3-1-2021 ........................     3,250      3,704,383
 McDonnell Douglas Corporation,
   9.25%, 4-1-2002 .......................     5,000      5,584,500
   Total .................................                9,288,883


                See Notes to Schedules of Investments on page .

<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
DECEMBER 31, 1996

                                           Principal
                                           Amount in
                                           Thousands        Value

CORPORATE DEBT SECURITIES (CONTINUED)
Wholesale Trade -- Durable Goods- 2.52%
 Fisher Scientific International Inc.,
   7.125%, 12-15-2005 ....................   $ 3,500   $  3,443,860
 Motorola, Inc.,
   8.4%, 8-15-2031 .......................     8,500      9,956,815
   Total .................................               13,400,675

TOTAL CORPORATE DEBT SECURITIES - 66.55%               $353,157,942
 (Cost: $345,970,426)

OTHER GOVERNMENT SECURITIES
Canada - 4.19%
 Hydro Quebec:
   8.05%, 7-7-2024 .......................    10,000     10,995,200
   7.4%, 3-28-2025 .......................     5,000      5,592,200
 Province of Nova Scotia,
   8.25%, 11-15-2019 .....................     5,000      5,661,350
   Total .................................               22,248,750

Supranational - 1.08%
 Inter-American Development Bank,
   8.4%, 9-1-2009 ........................     5,000      5,706,650

TOTAL OTHER GOVERNMENT SECURITIES - 5.27%              $ 27,955,400
 (Cost: $26,104,636)

UNITED STATES GOVERNMENT SECURITIES
 Federal Home Loan Mortgage Corporation:
   6.83%, 7-3-2002 .......................     4,500      4,473,270
   7.5%, 2-15-2007 .......................    10,000     10,240,600
   7.5%, 11-15-2017 ......................    10,000     10,231,200
   7.5%, 4-15-2019 .......................    12,741     12,486,130
   7.95%, 12-15-2020 .....................     9,000      9,210,870
 Federal National Mortgage Association:
   7.09%, 4-1-2004 .......................     4,500      4,459,230
   7.0%, 7-25-2006 .......................    10,000     10,100,000
   7.5%, 9-1-2009 ........................     4,242      4,300,130
   7.0%, 8-25-2021 .......................    10,000      9,828,100
 Government National Mortgage Association:
   7.5%, 7-15-2023 .......................     6,504      6,545,750
   7.5%, 12-15-2023 ......................     5,559      5,594,786
   8.0%, 9-15-2025 .......................     9,726     10,051,343
   7.75%, 10-15-2031 .....................     1,998      2,023,848


                See Notes to Schedules of Investments on page .

<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
DECEMBER 31, 1996

                                           Principal
                                           Amount in
                                           Thousands        Value

UNITED STATES GOVERNMENT SECURITIES (Continued)
 Tennessee Valley Authority,
   5.98%, 4-1-2036 .......................   $ 5,000   $  5,078,200
 United States Treasury:
   5.5%, 2-28-99 .........................    10,000      9,915,600
   6.75%, 5-31-99 ........................     4,000      4,068,120
   0.0%, 5-15-2007 .......................    15,000      7,658,850

TOTAL UNITED STATES GOVERNMENT
 SECURITIES - 23.79%                                   $126,266,027
 (Cost: $125,180,107)

TOTAL SHORT-TERM SECURITIES - 3.45%                    $ 18,289,860
 (Cost: $18,289,860)

TOTAL INVESTMENT SECURITIES - 99.06%                   $525,669,229
 (Cost: $515,545,029)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.94%         4,983,182

NET ASSETS - 100.00%                                   $530,652,411


                See Notes to Schedules of Investments on page .

<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
DECEMBER 31, 1996

                                              Shares          Value

COMMON STOCKS
Apparel and Accessory Stores - 1.21%
 Gap, Inc. (The)  ........................ 2,000,000 $   60,250,000

Apparel and Other Textile Products - 0.54%
 Tommy Hilfiger Corporation*  ............   560,000     26,880,000

Building Materials and Garden Supplies - 0.77%
 Home Depot, Inc. (The)  .................   765,000     38,345,625

Business Services - 4.80%
 Computer Associates International, Inc.     562,500     27,984,375
 Electronic Data Systems Corporation  .... 1,081,000     46,753,250
 Manpower Inc.  ..........................   147,400      4,790,500
 Microsoft Corporation*  .................   800,000     66,149,600
 Oracle Systems Corporation*  ............ 1,650,000     68,783,550
 3Com Corporation*  ......................   350,000     25,659,200
   Total .................................              240,120,475

Chemicals and Allied Products - 16.57%
 ABB AG (A)  .............................    25,000     31,102,892
 Abbott Laboratories  .................... 1,100,000     55,825,000
 Air Products and Chemicals, Inc.  ....... 1,150,000     79,493,750
 Amgen Inc.*  ............................   400,000     21,774,800
 Astra AB, Class A (A)  ..................   600,000     29,445,172
 BetzDearborn Inc.  ......................   320,000     18,720,000
 Colgate-Palmolive Company  ..............   600,000     55,350,000
 Dow Chemical Company (The)  .............   575,000     45,065,625
 du Pont (E.I.) de Nemours and Company  .. 1,000,000     94,375,000
 IMC Global, Inc.  .......................   600,000     23,475,000
 Lilly (Eli) and Company  ................   300,000     21,900,000
 Merck & Co., Inc.  ......................   700,000     55,475,000
 PPG Industries, Inc.  ................... 1,250,000     70,156,250
 Pfizer Inc.  ............................   650,000     53,868,750
 Praxair, Inc.  .......................... 1,000,000     46,125,000
 Procter & Gamble Company (The)  .........   600,000     64,500,000
 Union Carbide Corporation  ..............   875,000     35,765,625
 Warner-Lambert Company  .................   350,000     26,250,000
   Total .................................              828,667,864


                See Notes to Schedules of Investments on page .

<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
DECEMBER 31, 1996

                                              Shares        Value

COMMON STOCKS (Continued)
Communication - 2.14%
 AT&T Corporation  .......................   500,000 $   21,750,000
 MCI Communications Corporation  ......... 1,875,000     61,288,125
 SBC Communications Inc.  ................   460,000     23,805,000
   Total .................................              106,843,125

Depository Institutions - 4.67%
 BankAmerica Corporation  ................   475,000     47,381,250
 Chase Manhattan Corporation (The)  ......   525,000     46,856,250
 Citicorp  ...............................   550,000     56,650,000
 First Bank System, Inc.  ................   500,000     34,125,000
 Grupo Financiero Bancomer, S.A. de
   C.V., B, CPO Shares (A)* .............. 2,000,000        800,305
 Norwest Corporation  .................... 1,100,000     47,850,000
   Total .................................              233,662,805

Electric, Gas and Sanitary Services - 0.39%
 WMX Technologies, Inc.  .................   600,000     19,575,000

Electronic and Other Electric Equipment - 11.54%
 AMP Incorporated  ....................... 1,100,000     42,212,500
 Analog Devices, Inc.*  .................. 1,230,000     41,666,250
 Duracell International Inc.  ............ 1,000,000     69,875,000
 Emerson Electric Co.  ...................   400,000     38,700,000
 General Electric Company  ............... 1,200,000    118,650,000
 Intel Corporation  ...................... 1,530,000    200,333,610
 Nokia Corporation, Series A (A)  ........   760,000     44,123,164
 TRINOVA Corporation  ....................   600,000     21,825,000
   Total .................................              577,385,524

Engineering and Management Services - 0.50%
 Fluor Corporation  ......................   400,000     25,100,000

Food and Kindred Products - 1.94%
 CPC International Inc.  .................   500,000     38,750,000
 PepsiCo, Inc.  .......................... 2,000,000     58,500,000
   Total .................................               97,250,000

Food Stores - 0.49%
 Kroger Co. (The)  .......................   525,000     24,412,500

Forestry - 1.32%
 Georgia-Pacific Corporation  ............   425,000     30,600,000
 Weyerhaeuser Company  ...................   750,000     35,531,250
   Total .................................               66,131,250


                See Notes to Schedules of Investments on page .

<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
DECEMBER 31, 1996

                                              Shares        Value

COMMON STOCKS (Continued)
Furniture and Home Furnishings Stores - 0.96%
 Circuit City Stores, Inc.  .............. 1,600,000  $  48,200,000

General Merchandise Stores - 3.82%
 Cifra, S.A. de C.V., Series C (A)*  ..... 8,000,000      9,756,098
 Dayton Hudson Corporation  ..............   949,800     37,279,650
 Kmart Corporation*  ..................... 4,000,000     41,500,000
 May Department Stores Company (The)  .... 1,000,000     46,750,000
 Penney (J.C.) Company, Inc.  ............   676,000     32,955,000
 Wal-Mart Stores, Inc.  .................. 1,000,000     22,875,000
   Total .................................              191,115,748

Health Services - 1.41%
 Columbia/HCA Healthcare Corporation  .... 1,192,500     48,594,375
 Tenet Healthcare Corporation*  .......... 1,000,000     21,875,000
   Total .................................               70,469,375

Heavy Construction, Excluding Building - 0.30%
 Foster Wheeler Corporation  .............   400,000     14,850,000

Holding and Other Investment Offices - 0.44%
 Grupo Financiero Banamex Accival,
   S.A. de C.V., L (A)* ..................   749,775      1,424,877
 Grupo Financiero Banamex Accival,
   S.A. de C.V., B, CPO shares (A)*....... 9,800,000     20,690,549
   Total .................................               22,115,426

Hotels and Other Lodging Places - 0.91%
 ITT Corporation*  ....................... 1,050,204     45,552,598

Industrial Machinery and Equipment - 13.63%
 Applied Materials, Inc.*  ............... 1,730,000     62,171,010
 Case Corporation  ....................... 1,214,600     66,195,700
 Caterpillar Inc.  ....................... 1,400,000    105,350,000
 cisco Systems, Inc.*  ................... 1,730,000    110,178,510
 Compaq Computer Corporation*  ...........   350,000     25,987,500
 Deere & Company  ........................ 2,055,000     83,484,375
 Eaton Corporation  ......................   500,000     34,875,000
 Harnischfeger Industries, Inc.  .........   600,000     28,875,000
 Hewlett-Packard Company  ................   850,000     42,712,500
 Ingersoll-Rand Company  .................   400,000     17,800,000
 Mannesmann AG (A)  ......................    65,000     28,180,046
 Parker Hannifin Corporation  ............   600,000     23,250,000
 United Technologies Corporation  ........   800,000     52,800,000
   Total .................................              681,859,641


                See Notes to Schedules of Investments on page .

<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
DECEMBER 31, 1996

                                              Shares        Value

COMMON STOCKS (Continued)
Instruments and Related Products - 1.58%
 General Motors Corporation, Class H  ....   176,100 $    9,905,625
 Guidant Corporation  ....................   260,000     14,820,000
 Medtronic, Inc.  ........................   800,000     54,400,000
   Total .................................               79,125,625

Insurance Carriers - 0.52%
 Aetna Life & Casualty Company  ..........   325,000     26,000,000

Miscellaneous Manufacturing Industries - 1.25%
 Armstrong World Industries, Inc.  .......   900,000     62,550,000

Motion Pictures - 0.97%
 Walt Disney Company (The)  ..............   700,000     48,737,500

Nondepository Institutions - 2.89%
 Federal Home Loan Mortgage Corporation  .   700,000     77,087,500
 Federal National Mortgage Association  .. 1,805,800     67,266,050
   Total .................................              144,353,550

Paper and Allied Products - 1.88%
 Champion International Corporation  .....   500,000     21,625,000
 International Paper Company  ............ 1,200,000     48,450,000
 Union Camp Corporation  .................   500,000     23,875,000
   Total .................................               93,950,000

Petroleum and Coal Products - 2.04%
 Mobil Corporation  ......................   400,000     48,900,000
 Royal Dutch Petroleum Company  ..........   300,000     51,225,000
 Tosco Corporation  ......................    25,000      1,978,125
   Total .................................              102,103,125

Primary Metal Industries - 1.13%
 Aluminum Company of America  ............   650,000     41,437,500
 Nucor Corporation  ......................   300,000     15,300,000
   Total .................................               56,737,500

Railroad Transportation - 0.60%
 Union Pacific Corporation  ..............   500,000     30,062,500

Rubber and Miscellaneous Plastics Products - 1.03%
 Goodyear Tire & Rubber Company (The)  ... 1,000,000     51,375,000

Special Trade Contractors - 1.21%
 Telefonaktiebolaget LM Ericsson,
   Class B, ADR  ......................... 2,000,000     60,374,000


                See Notes to Schedules of Investments on page .

<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
DECEMBER 31, 1996

                                              Shares        Value

COMMON STOCKS (Continued)
Transportation By Air - 2.77%
 AMR Corporation*  .......................   400,000 $   35,250,000
 Southwest Airlines Co.  ................. 1,600,000     35,400,000
 USAir Group, Inc.*  ..................... 2,900,000     67,787,500
   Total .................................              138,437,500

Transportation Equipment - 5.99%
 AlliedSignal Inc.  ......................   700,000     46,900,000
 Boeing Company (The)  ...................   635,000     67,548,125
 Chrysler Corporation  ................... 2,200,000     72,600,000
 Dana Corporation  .......................   760,000     24,795,000
 Ford Motor Company  ..................... 1,000,000     31,875,000
 General Motors Corporation  ............. 1,000,000     55,750,000
   Total .................................              299,468,125

Wholesale Trade -- Durable Goods - 0.89%
 Motorola, Inc.  .........................   725,000     44,496,875

Wholesale Trade -- Nondurable Goods - 2.02%
 Gillette Company (The)  ................. 1,000,000     77,750,000
 Safeway Inc.*  ..........................   550,000     23,512,500
   Total .................................              101,262,500

TOTAL COMMON STOCKS - 95.12%                         $4,757,820,756
 (Cost: $2,671,018,401)

                                           Principal
                                           Amount in
                                           Thousands

CORPORATE DEBT SECURITIES
Depository Institutions - 0.21%
 Morgan Guaranty Trust Company of New York,
   7.375%, 2-1-2002 ......................   $10,250     10,568,672

Nondepository Institutions - 0.23%
 General Electric Capital Corporation,
   8.3%, 9-20-2009 .......................    10,000     11,150,400

TOTAL CORPORATE DEBT SECURITIES - 0.44%              $   21,719,072
 (Cost: $19,957,223)


                See Notes to Schedules of Investments on page .

<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
DECEMBER 31, 1996

                                           Principal
                                           Amount in
                                           Thousands          Value

UNITED STATES GOVERNMENT SECURITIES
 United States Treasury:
   6.75%, 4-30-2000 ......................   $37,000 $   37,699,670
   5.75%, 8-15-2003 ......................    50,000     48,500,000
   10.375%, 11-15-2012 ...................     8,500     10,946,385
   9.0%, 11-15-2018 ......................    20,000     25,096,800

TOTAL UNITED STATES GOVERNMENT
 SECURITIES - 2.44%                                  $  122,242,855
 (Cost: $114,802,668)

TOTAL SHORT-TERM SECURITIES - 2.99%                  $  149,369,721
 (Cost: $149,369,721)

TOTAL INVESTMENT SECURITIES - 100.99%                $5,051,152,404
 (Cost: $2,955,148,013)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.99%)     (49,389,091)

NET ASSETS - 100.00%                                 $5,001,763,313


                See Notes to Schedules of Investments on page .

<PAGE>
THE INVESTMENTS OF UNITED ACCUMULATIVE FUND
DECEMBER 31, 1996

                                              Shares        Value
COMMON STOCKS
Building Materials and Garden Supplies - 1.17%
 Home Depot, Inc. (The)  .................   300,000 $   15,037,500

Business Services - 4.90%
 Automatic Data Processing, Inc.  ........   350,000     15,006,250
 Broderbund Software, Inc.*  .............   200,000      5,937,400
 Cerner Corporation*  ....................   900,000     13,837,500
 Computer Associates International, Inc.     250,000     12,437,500
 Intuit Inc.*  ...........................   150,000      4,762,500
 Physician Computer Network*  ............   400,000      3,400,000
 Shared Medical Systems Corporation  .....   125,000      6,156,250
 Summit Medical Systems, Inc.*  ..........   206,000      1,532,022
   Total .................................               63,069,422

Chemicals and Allied Products - 13.27%
 American Home Products Corporation  .....   700,000     41,037,500
 Amgen Inc.*  ............................   250,000     13,609,250
 Astra AB, Class A, ADR  .................   248,900     12,196,100
 Lilly (Eli) and Company  ................   250,000     18,250,000
 Liposome Company, Inc. (The)*  ..........   500,000      9,593,500
 Pfizer Inc.  ............................   200,000     16,575,000
 Schering-Plough Corporation  ............   350,000     22,662,500
 SmithKline Beecham plc, ADR  ............   350,000     23,800,000
 Warner-Lambert Company  .................   175,000     13,125,000
   Total .................................              170,848,850

Communication - 2.46%
 Intermedia Communications of Florida,
  Inc.*   ................................   400,000     10,274,800
 Nokia Corporation, Series A, ADS  .......   150,000      8,643,750
 360 Communications Company*  ............   550,000     12,718,750
   Total .................................               31,637,300

Depository Institutions - 17.27%
 Banc One Corporation  ...................   300,000     12,900,000
 Bank of New York Company, Inc. (The)  ...   500,000     16,875,000
 Barnett Banks, Inc.  ....................   400,000     16,450,000
 Chase Manhattan Corporation (The)  ......   400,000     35,700,000
 Dime Bancorp, Inc.*  ....................   700,000     10,325,000
 First American Corporation  .............   200,000     11,550,000
 First Bank System, Inc.  ................   200,000     13,650,000
 Glendale Federal Bank, Federal
   Savings Bank* .........................   165,400      3,845,550
 Hibernia Corporation,  Class A  .........   500,000      6,625,000
 Long Island Bancorp, Inc.  ..............   339,600     11,886,000
 Mercantile Bancorporation Inc.  .........   135,200      6,945,900
 Norwest Corporation  ....................   300,000     13,050,000
 Roosevelt Financial Group, Inc.  ........ 1,000,000     20,875,000
 SouthTrust Corporation  .................   225,000      7,846,875
 State Street Boston Corporation  ........   150,000      9,675,000
 Wells Fargo & Company  ..................    90,000     24,277,500
   Total .................................              222,476,825


                See Notes to Schedules of Investments on page .

<PAGE>
THE INVESTMENTS OF UNITED ACCUMULATIVE FUND
DECEMBER 31, 1996

                                              Shares        Value

COMMON STOCKS (Continued)
Electric, Gas and Sanitary Services - 3.69%
 Columbia Gas System, Inc. (The)  ........   150,000 $    9,543,750
 PanEnergy Corporation  ..................   500,000     22,500,000
 Sonat Inc.  .............................   300,000     15,450,000
   Total .................................               47,493,750

Engineering and Management Services - 1.45%
 Fluor Corporation  ......................   175,000     10,981,250
 Neurex Corporation*  ....................   450,000      7,677,900
   Total .................................               18,659,150

Food and Kindred Products - 2.55%
 ConAgra, Inc.  ..........................   300,000     14,925,000
 Heinz (H. J.) Company  ..................   500,000     17,875,000
   Total .................................               32,800,000

General Merchandise Stores - 4.02%
 Federated Department Stores, Inc.*  .....   425,000     14,503,125
 May Department Stores Company (The)  ....   500,000     23,375,000
 Sears, Roebuck and Co.  .................   300,000     13,837,500
   Total .................................               51,715,625

Health Services - 2.93%
 Beverly Enterprises, Inc.*  .............   711,800      9,075,450
 Columbia/HCA Healthcare Corporation  ....   550,000     22,412,500
 MedPartners, Inc.*  .....................   300,000      6,300,000
   Total .................................               37,787,950

Holding and Other Investment Offices - 3.71%
 Conseco, Inc.  ..........................   500,000     31,875,000
 Duke Realty Investments, Inc.  ..........   200,000      7,700,000
 Equity Residential Properties  ..........   200,000      8,250,000
   Total .................................               47,825,000

Instruments and Related Products - 7.60%
 Baxter International Inc.  ..............   900,000     36,900,000
 General Signal Corporation  .............   300,000     12,825,000
 Raytheon Company  .......................   500,000     24,062,500
 St. Jude Medical, Inc.*  ................   250,000     10,656,250
 Target Therapeutics, Inc.*  .............   320,600     13,445,002
   Total .................................               97,888,752


                See Notes to Schedules of Investments on page .

<PAGE>
THE INVESTMENTS OF UNITED ACCUMULATIVE FUND
DECEMBER 31, 1996

                                              Shares        Value

COMMON STOCKS (Continued)
Insurance Carriers - 14.02%
 Allstate Corporation (The)  .............   700,000 $   40,512,500
 American International Group, Inc.  .....   286,500     31,013,625
 Berkley (W. R.) Corporation  ............   325,000     16,595,150
 Berkshire Hathaway Inc.*  ...............       450     15,345,000
 Chubb Corporation (The)  ................   100,000      5,375,000
 NAC Re Corporation  .....................   350,000     11,856,250
 ReliaStar Financial Corp.  ..............   300,000     17,325,000
 TIG Holdings, Inc.  .....................   595,000     20,155,625
 Trenwick Group Inc.  ....................   275,000     12,787,500
 Western National Corporation   ..........   500,000      9,625,000
   Total .................................              180,590,650

Nondepository Institutions - 2.89%
 Federal National Mortgage Association  .. 1,000,000     37,250,000

Oil and Gas Extraction - 0.59%
 Enron Oil & Gas Company  ................   300,000      7,575,000

Petroleum and Coal Products - 4.53%
 Coastal Corporation (The)  ..............   300,000     14,662,500
 Exxon Corporation  ......................   300,000     29,400,000
 Valero Energy Corporation  ..............   500,000     14,312,500
   Total .................................               58,375,000

Railroad Transportation - 1.24%
 Illinois Central Corporation, Class A  ..   500,000     16,000,000

Security and Commodity Brokers - 1.15%
 Lehman Brothers Holdings Inc.  ..........   250,000      7,843,750
 Paine Webber Group Inc.  ................   250,000      7,031,250
   Total .................................               14,875,000

Transportation By Air - 0.97%
 Southwest Airlines Co.  .................   562,000     12,434,250

Transportation Equipment - 1.56%
 AlliedSignal Inc.  ......................   300,000     20,100,000


                See Notes to Schedules of Investments on page .

<PAGE>
THE INVESTMENTS OF UNITED ACCUMULATIVE FUND
DECEMBER 31, 1996

                                              Shares        Value

COMMON STOCKS (Continued)
Wholesale Trade -- Nondurable Goods - 4.12%
 Johnson & Johnson  ......................   700,000 $   34,825,000
 Lockheed Martin Corporation  ............   200,000     18,300,000
   Total .................................               53,125,000

TOTAL COMMON STOCKS - 96.09%                         $1,237,565,024
 (Cost: $1,165,068,670)

TOTAL SHORT-TERM SECURITIES - 4.64%                  $   59,682,244
 (Cost: $59,682,244)

TOTAL INVESTMENT SECURITIES - 100.73%                $1,297,247,268
 (Cost: $1,224,750,914)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.73%)      (9,380,476)

NET ASSETS - 100.00%                                 $1,287,866,792


                See Notes to Schedules of Investments on page .

<PAGE>
THE INVESTMENTS OF UNITED SCIENCE AND TECHNOLOGY FUND
DECEMBER 31, 1996

                                              Shares        Value

COMMON STOCKS
Business Services - 40.92%
 Alternative Resources Corporation*  .....   350,000   $  6,015,450
 America Online, Inc.*  ..................   590,000     19,617,500
 Broderbund Software, Inc.*  .............   286,600      8,508,294
 CKS Group, Inc.*  .......................   394,000     11,056,428
 CUC International Inc.*  ................   900,000     21,375,000
 Computer Associates International,
   Inc. ..................................   337,500     16,790,625
 DST Systems, Inc.*  .....................   200,000      6,275,000
 Electronic Data Systems Corporation  ....   325,000     14,056,250
 First Data Corporation  .................   300,000     10,950,000
 HBO & Company  ..........................   702,000     41,681,250
 HCIA Inc.*  .............................   385,000     13,354,495
 HPR Inc.*  ..............................   509,000      6,935,125
 IMNET Systems, Inc.*  ...................   200,000      4,800,000
 Informix Corporation*  ..................   600,000     12,262,200
 Intuit Inc.*  ...........................   288,100      9,147,175
 i2 Technologies, Inc.*  .................   100,000      3,862,500
 Macromedia, Inc.*  ......................   600,000     10,875,000
 McAfee Associates, Inc.*  ...............   235,000     10,295,820
 Microsoft Corporation*  .................   200,000     16,537,400
 Netscape Communications Corporation*  ...   100,000      5,687,500
 Objective Systems Integrators, Inc.* ....   114,800      2,719,268
 Oracle Systems Corporation*  ............   500,000     20,843,500
 Parametric Technology Corporation*  .....   800,000     41,149,600
 PeopleSoft, Inc.*  ......................   100,000      4,793,700
 Premisys Communications, Inc.*  .........   250,000      8,437,500
 Pure Atria Corporation*  ................   386,700      9,498,125
 Shared Medical Systems Corporation  .....   250,000     12,312,500
 Summit Medical Systems, Inc.*  ..........   200,000      1,487,400
 Synopsys, Inc.*  ........................   400,000     18,400,000
 TMP Worldwide Inc.*  ....................   250,000      3,234,250
 3Com Corporation*  ......................   240,000     17,594,880
 USCS International, Inc.*  ..............   226,500      3,878,812
 Xylan Corporation*  .....................   285,100      8,018,438
   Total .................................              402,450,985

Chemicals and Allied Products - 5.77%
 Abbott Laboratories  ....................   250,000     12,687,500
 Amgen Inc.*  ............................   200,000     10,887,400
 Lilly (Eli) and Company  ................   100,000      7,300,000
 Pfizer Inc.  ............................   200,000     16,575,000
 Roche Holdings AG (A)  ..................     1,200      9,338,713
   Total .................................               56,788,613


                See Notes to Schedules of Investments on page .

<PAGE>
THE INVESTMENTS OF UNITED SCIENCE AND TECHNOLOGY FUND
DECEMBER 31, 1996

                                              Shares        Value

COMMON STOCKS (Continued)
Communication - 5.48%
 Intermedia Communications of Florida,
  Inc.*  .................................   400,000   $ 10,274,800
 MFS Communications Company, Inc.*  ......   400,000     21,750,000
 Nokia Corporation, Series A, ADS  .......   300,000     17,287,500
 360 Communications Company*  ............   200,000      4,625,000
   Total .................................               53,937,300

Depository Institutions - 2.06%
 BankAmerica Corporation  ................   100,000      9,975,000
 Citicorp  ...............................   100,000     10,300,000
   Total .................................               20,275,000

Electronic and Other Electric Equipment - 16.49%
 Ascend Communications, Inc.*  ........... 1,000,000     62,125,000
 Cascade Communications Corp.*  ..........   930,600     51,415,650
 General Electric Company  ...............   140,000     13,842,500
 PairGain Technologies, Inc.*  ...........   400,000     12,174,800
 Tellabs*  ...............................   600,000     22,612,200
   Total .................................              162,170,150

Engineering and Management Services - 0.58%
 Neurex Corporation*  ....................   334,300      5,703,827

Food and Kindred Products - 0.45%
 Hershey Foods Corporation  ..............   100,000      4,375,000

Health Services - 4.39%
 Columbia/HCA Healthcare Corporation  ....   200,000      8,150,000
 Idexx Laboratories, Inc.*  ..............   300,000     10,837,500
 PhyCor, Inc.*  ..........................   400,000     11,300,000
 Renal Treatment Centers, Inc.*  .........   250,000      6,375,000
 Tenet Healthcare Corporation*  ..........   300,000      6,562,500
   Total .................................               43,225,000

Industrial Machinery and Equipment - 6.36%
 cisco Systems, Inc.*  ...................   751,200     47,841,674
 Compaq Computer Corporation*  ...........   100,000      7,425,000
 Digital Link Corporation*  ..............   300,000      7,331,100
   Total .................................               62,597,774

Instruments and Related Products - 5.43%
 Boston Scientific Corporation*  .........   250,000     15,000,000
 Medtronic, Inc.  ........................   200,000     13,600,000
 STERIS Corporation*  ....................   300,000     13,068,600
 Target Therapeutics, Inc.*  .............   279,400     11,717,198
   Total .................................               53,385,798


                See Notes to Schedules of Investments on page .

<PAGE>
THE INVESTMENTS OF UNITED SCIENCE AND TECHNOLOGY FUND
DECEMBER 31, 1996

                                              Shares        Value

COMMON STOCKS (Continued)
Oil and Gas Extraction - 0.97%
 Noble Affiliates, Inc.  .................   200,000   $  9,575,000

Petroleum and Coal Products - 1.16%
 Valero Energy Corporation  ..............   400,000     11,450,000

Wholesale Trade -- Durable Goods - 2.37%
 OmniCare, Inc.  .........................   725,000     23,290,625

Wholesale Trade -- Nondurable Goods - 1.17%
 Cardinal Health, Inc.  ..................   196,966     11,473,270

TOTAL COMMON STOCKS - 93.60%                           $920,698,342
 (Cost: $499,887,006)

PREFERRED STOCK - 0.57%
Business Services
 SAP Aktiengesellschaft (A)  .............    40,000   $  5,589,860
 (Cost: $5,901,364)

                                           Principal
                                           Amount in
                                           Thousands

SHORT-TERM SECURITIES
Commercial Paper
 Communication - 0.41%
 GTE Corporation,
   5.48%, 1-16-97 ........................    $4,060      4,050,730

 Depository Institutions - 0.34%
 U.S. Bancorp,
   Master Note............................     3,340      3,340,000

 Electric, Gas and Sanitary Services - 0.45%
 Public Service Electric & Gas Co.,
   5.57%, 2-4-97 .........................     4,485      4,461,407

 Food and Kindred Products - 1.91%
 General Mills, Inc.,
   Master Note ...........................       345        345,000
 Hercules Inc.:
   5.45%, 1-10-97 ........................     3,215      3,210,620
   5.52%, 1-28-97 ........................     3,570      3,555,220
 Quaker Oats Co.,
   5.63%, 1-23-97 ........................     6,495      6,472,654
 Ralston Purina Co.,
   5.52%, 2-7-97 .........................     5,275      5,245,073
   Total .................................               18,828,567


                See Notes to Schedules of Investments on page .

<PAGE>
THE INVESTMENTS OF UNITED SCIENCE AND TECHNOLOGY FUND
DECEMBER 31, 1996

                                           Principal
                                           Amount in
                                           Thousands        Value

SHORT-TERM SECURITIES (Continued)
Commercial Paper (Continued)
 Forestry - 0.42%
 Weyerhaeuser Co.,
   5.45%, 2-19-97 ........................   $ 4,140   $  4,109,289

 Metal Mining - 0.87%
 BHP Finance (USA) Inc.:
   5.35%, 1-28-97 ........................     6,635      6,608,377
   5.4%, 2-5-97 ..........................     1,975      1,964,631
   Total .................................                8,573,008

 Textile Mill Products - 1.76%
 Sara Lee Corporation,
   Master Note ...........................    17,255     17,255,000

 Transportation Equipment - 0.20%
 Echlin, Inc.,
   5.4%, 2-3-97 ..........................     1,965      1,955,273

Total Commercial Paper - 6.36%                           62,573,274

Municipal Obligations - 0.51%
 Indiana
 City of Whiting, Indiana, Industrial Sewage
   and Solid Waste Disposal Revenue Bonds
   (Amoco Oil Company Project), Taxable
   Series 1995,
   5.55%, 1-13-97 ........................     5,000      5,000,000

TOTAL SHORT-TERM SECURITIES - 6.87%                    $ 67,573,274
 (Cost: $67,573,274)

TOTAL INVESTMENT SECURITIES - 101.04%                  $993,861,476
 (Cost: $573,361,644)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (1.04%)     (10,224,129)

NET ASSETS - 100.00%                                   $983,637,347


                See Notes to Schedules of Investments on page .

<PAGE>
UNITED FUNDS, INC.
DECEMBER 31, 1996


Notes to Schedules of Investments
*No income dividends were paid during the preceding 12 months.

(A)  Listed on an exchange outside the United States.

See Note 1 to financial statements for security valuation and other significant
     accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and
     depreciation of investments owned for Federal income tax purposes.

<PAGE>
UNITED FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
<TABLE>
                                                                                        United
                                        United          United          United     Science and
                                          Bond          Income    Accumulative      Technology
                                          Fund            Fund            Fund            Fund
                                  ------------  --------------  --------------  --------------
<S>                               <C>           <C>             <C>             <C>
Assets
Investment securities --
  at value (Notes 1 and 3) ....   $525,669,229  $5,051,152,404  $1,297,247,268  $  993,861,476
Cash ..........................          2,169             ---          31,233           7,418
Receivables:
  Dividends and interest ......      7,703,706       7,753,902       1,382,273         254,895
  Fund shares sold ............        487,408       6,915,601         449,714       7,463,455
Prepaid insurance premium .....         15,993          57,237          34,184          12,737
                                  ------------  --------------  --------------  --------------
    Total assets ..............    533,878,505   5,065,879,144   1,299,144,672   1,001,599,981
                                  ------------  --------------  --------------  --------------
Liabilities
Payable for investment
  securities purchased ........            ---      38,622,803             ---             ---
Payable for Fund
  shares redeemed .............      2,917,604      22,934,409      10,638,028      17,355,079
Due to custodian  .............            ---           3,711             ---             ---
Accrued service fee (Note 2) ..        192,300       1,706,300         419,800         344,550
Accrued transfer agency
  and dividend disbursing
  (Note 2) ....................         68,296         565,456         130,177         187,232
Accrued accounting
  services fee (Note 2) .......          5,000           8,333           8,333           8,333
Other .........................         42,894         274,819          81,542          67,440
                                  ------------  --------------  --------------  --------------
    Total liabilities .........      3,226,094      64,115,831      11,277,880      17,962,634
                                  ------------  --------------  --------------  --------------
      Total net assets ........   $530,652,411  $5,001,763,313  $1,287,866,792  $  983,637,347
                                  ============  ==============  ==============  ==============
Net Assets
  $1.00 par value capital stock
    Capital stock .............   $ 86,368,101  $  152,004,636  $  166,148,578  $   42,131,690
    Additional paid-in
      capital .................    459,573,882   2,678,442,344     994,196,461     500,595,912
  Accumulated undistributed
    income (loss):
    Accumulated undistributed
      net investment income ...        802,660       2,937,972       1,310,231             ---
    Accumulated undistributed net
      realized gain (loss) on
      investment transactions .    (26,216,432)     72,382,654      53,715,148      20,411,017
    Net unrealized appreciation
      of investments at end
      of period ...............     10,124,200   2,095,995,707      72,496,374     420,498,728
                                  ------------  --------------  --------------  --------------
      Net assets applicable to
        outstanding units
        of capital ............   $530,652,411  $5,001,763,313  $1,287,866,792    $983,637,347
                                  ============  ==============  ==============  ==============
Net asset value per share
  (net assets divided by
  shares outstanding)
  Class A .....................          $6.14          $32.91           $7.75          $23.35
  Class Y .....................          $6.14          $32.91           $7.75          $23.38

Capital shares outstanding
  Class A .....................     84,451,146     147,405,344     165,808,020      41,999,526
  Class Y .....................      1,916,955       4,599,292         340,558         132,164

Capital shares authorized .....    400,000,000     600,000,000     600,000,000     200,000,000

                       See notes to financial statements.
</TABLE>
<PAGE>
UNITED FUNDS, INC.
STATEMENT OF OPERATIONS
For the Fiscal Year Ended DECEMBER 31, 1996
<TABLE>
                                                                                        United
                                        United          United          United     Science and
                                          Bond          Income    Accumulative      Technology
                                          Fund            Fund            Fund            Fund
                                  ------------  --------------  --------------  --------------
<S>                               <C>           <C>             <C>             <C>
Investment Income (Loss)
  Income (Note 1B):
    Dividends .................   $        ---    $ 66,534,296    $ 19,372,299     $ 1,673,423
    Interest ..................     38,151,761      19,406,967       7,360,999       4,409,509
                                  ------------  --------------  --------------  --------------
    Total income ..............     38,151,761      85,941,263      26,733,298       6,082,932
                                  ------------  --------------  --------------  --------------
  Expenses (Note 2):
    Investment
      management fee ..........      2,344,627      25,277,033       6,879,322       5,667,206
    Transfer agency and dividend
      disbursing -- Class A ...        802,643       5,752,718       1,304,462       1,677,814
    Service fee -- Class A ....        749,534       6,498,915       1,606,204       1,405,418
    Custodian fees ............         22,984         351,762          52,439          52,910
    Accounting services fee ...         61,667         100,000         100,000          88,750
    Audit fees ................         42,966          31,245          58,740          24,290
    Shareholder servicing
      fee -- Class Y ..........         11,532         188,544           4,123           3,330
    Legal fees ................          4,849          41,588          11,284           8,315
    Other .....................         83,928         599,978         168,743         199,824
                                  ------------  --------------  --------------  --------------
    Total expenses ............      4,124,730      38,841,783      10,185,317       9,127,857
                                  ------------  --------------  --------------  --------------
      Net investment
        income (loss) .........     34,027,031      47,099,480      16,547,981      (3,044,925)
                                  ------------  --------------  --------------  --------------
Realized and Unrealized
  Gain (Loss) on Investments (Notes 1 and 3)
  Realized net gain
    on securities .............      1,229,324     276,362,531     155,566,702      71,724,354
  Realized net gain (loss) on foreign
    currency transactions .....        261,674        (227,240)          5,662          11,558
                                  ------------  --------------  --------------  --------------
    Realized net gain
      on investments ..........      1,490,998     276,135,291     155,572,364      71,735,912
  Unrealized appreciation
    (depreciation) in value
    of investments during
    the period ................    (19,287,816)    518,056,427     (28,379,142)      2,339,175
                                  ------------  --------------  --------------  --------------
    Net gain (loss) on
      investments .............    (17,796,818)    794,191,718     127,193,222      74,075,087
                                  ------------  --------------  --------------  --------------
      Net increase in net assets
        resulting from operations  $16,230,213    $841,291,198    $143,741,203     $71,030,162
                                  ============  ==============  ==============  ==============

                       See notes to financial statements.
</TABLE>
<PAGE>
UNITED FUNDS, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the Fiscal Year Ended DECEMBER 31, 1996
<TABLE>
                                                                                        United
                                        United          United          United     Science and
                                          Bond          Income    Accumulative      Technology
                                          Fund            Fund            Fund            Fund
                                  ------------  --------------  --------------  --------------
<S>                               <C>           <C>             <C>             <C>
Increase (Decrease) in Net Assets
  Operations:
    Net investment
      income (loss) ...........   $ 34,027,031  $   47,099,480  $   16,547,981    $ (3,044,925)
    Realized net gain
      on investments ..........      1,490,998     276,135,291     155,572,364      71,735,912
    Unrealized appreciation
      (depreciation) ..........    (19,287,816)    518,056,427     (28,379,142)      2,339,175
                                  ------------  --------------  --------------  --------------
    Net increase in net
      assets resulting
      from operations .........     16,230,213     841,291,198     143,741,203      71,030,162
                                  ------------  --------------  --------------  --------------
  Dividends to shareholders
    from (Note 1E):*
    Net investment income
      Class A .................    (33,563,721)    (44,582,972)    (16,526,936)            ---
      Class Y .................       (498,286)     (1,535,780)        (39,149)            ---
    Realized net gain on
      investment transactions
      Class A .................            ---    (223,378,753)   (126,903,435)    (57,680,201)
      Class Y .................            ---      (6,868,127)       (256,540)       (174,464)
                                  ------------  --------------  --------------  --------------
                                   (34,062,007)   (276,365,632)   (143,726,060)    (57,854,665)
                                  ------------  --------------  --------------  --------------
  Capital share
    transactions (Note 5) .....    (17,992,840)    353,417,280      81,068,885     149,679,267
                                  ------------  --------------  --------------  --------------
    Total increase (decrease) .    (35,824,634)    918,342,846      81,084,028     162,854,764
Net Assets
  Beginning of period .........    566,477,045   4,083,420,467   1,206,782,764     820,782,583
                                  ------------  --------------  --------------  --------------
  End of period ...............   $530,652,411  $5,001,763,313  $1,287,866,792    $983,637,347
                                  ============  ==============  ==============  ==============
  Undistributed
    net investment
    income ....................       $802,660      $2,937,972      $1,310,231            $---
                                      ========      ==========      ==========            ====

                   *See "Financial Highlights" on pages  - .

                       See notes to financial statements.
</TABLE>
<PAGE>
UNITED FUNDS, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the Fiscal Year Ended DECEMBER 31, 1995                          United
<TABLE>
                                                                                        United
                                        United          United          United     Science and
                                          Bond          Income    Accumulative      Technology
                                          Fund            Fund            Fund            Fund
                                  ------------  --------------  --------------  --------------
<S>                               <C>           <C>             <C>             <C>
Increase in Net Assets
  Operations:
    Net investment
      income ..................   $ 35,631,421  $   48,335,097  $   15,451,348    $   (430,999)
    Realized net gain
      on investments ..........      4,111,327     137,562,148     161,864,113      26,780,950
    Unrealized appreciation ...     61,755,254     742,707,419     140,365,483     255,993,038
                                  ------------  --------------  --------------  --------------
    Net increase in net assets
      resulting from operations    101,498,002     928,604,664     317,680,944     282,342,989
                                  ------------  --------------  --------------  --------------
  Dividends to shareholders
    from (Note 1E):*
    Net investment income
      Class A .................    (35,740,983)    (46,382,026)    (14,998,659)            ---
      Class Y .................        (90,066)       (676,269)         (4,366)            ---
    Realized net gain on
      investment transactions
      Class A .................            ---    (121,455,126)   (127,689,006)    (24,276,021)
      Class Y .................            ---      (3,204,607)        (68,073)            ---
                                  ------------  --------------  --------------  --------------
                                   (35,831,049)   (171,718,028)   (142,760,104)    (24,276,021)
                                  ------------  --------------  --------------  --------------
  Capital share
    transactions (Note 5) .....    (17,026,228)    181,629,624      64,841,625      66,213,033
                                  ------------  --------------  --------------  --------------
    Total increase ............     48,640,725     938,516,260     239,762,465     324,280,001
Net Assets
  Beginning of period .........    517,836,320   3,144,904,207     967,020,299     496,502,582
                                  ------------  --------------  --------------  --------------
  End of period ...............   $566,477,045  $4,083,420,467  $1,206,782,764    $820,782,583
                                  ============  ==============  ==============  ==============
  Undistributed net
    investment income .........       $575,962      $2,184,484      $1,322,673            $---
                                      ========      ==========      ==========            ====

                   *See "Financial Highlights" on pages  - .

                       See notes to financial statements.

<PAGE>
FINANCIAL HIGHLIGHTS OF
UNITED BOND FUND
Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

                             For the fiscal year ended December 31,
                           --------------------------------------
                               1996   1995    1994   1993    1992
                              -----  -----   -----  -----   -----
Net asset value,
 beginning of period          $6.34   $5.62  $6.39   $6.31     $6.32
                              ----   ----    ----   ----    ----
Income from investment
 operations:
 Net investment income         0.39    0.40   0.39    0.41     0.45
 Net realized and
   unrealized gain
   (loss) on
   investments .....          (0.20)  0.72   (0.75)  0.41    0.00
                              ----   ----    ----   ----    ----
Total from investment
 operations  .......           0.19   1.12   (0.36)  0.82    0.45
                              ----   ----    ----   ----    ----
Less distributions:
 Dividends from net
   investment income          (0.39)  (0.40) (0.39)  (0.41)    (0.46)
 Distribution from
   capital gains ...          (0.00) (0.00)  (0.02) (0.33)  (0.00)
                              ----   ----    ----   ----    ----
Total distributions           (0.39)  (0.40) (0.41)  (0.74)    (0.46)
                              ----   ----    ----   ----    ----
Net asset value,
 end of period  ....          $6.14  $6.34   $5.62  $6.39   $6.31
                             =====  =====   =====  =====   =====
Total return* ......           3.20% 20.50%  -5.76% 13.19%   7.50%
Net assets, end of
 period (000
 omitted)  .........       $518,873$563,445$517,836$641,668$589,946
Ratio of expenses to
 average net assets            0.77%  0.74%   0.72%  0.65%   0.64%
Ratio of net investment
 income to average
 net assets  .......           6.34%  6.54%   6.60%  6.14%   7.29%
Portfolio turnover
 rate  .............          55.74% 66.38% 127.11%175.39% 115.17%

  *Total return calculated without taking into account the sales load deducted
   on an initial purchase.
                       See notes to financial statements.

<PAGE>
FINANCIAL HIGHLIGHTS OF
UNITED BOND FUND
Class Y Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

                            For the        For the
                          fiscal year     period from
                              ended       6/19/95* to
                           12/31/96       12/31/95
                          ----------      -----------
Net asset value,
 beginning of period          $6.34          $6.11
                              ----           ----
Income from investment
 operations:
 Net investment income         0.40           0.21
 Net realized and
   unrealized gain (loss)
   on investments ..          (0.20)          0.22
                              ----           ----
Total from investment
 operations  .......           0.20           0.43
                              ----           ----
Less distributions:
 Dividends from net
   investment income          (0.40)         (0.20)
 Distribution from
   capital gains ...          (0.00)         (0.00)
                              ----           ----
Total distributions           (0.40)         (0.20)
                              ----           ----
Net asset value,
 end of period  ....          $6.14          $6.34
                              ====           ====
Total return .......           3.35%          7.20%
Net assets, end of
 period (000
 omitted)  .........        $11,779         $3,032
Ratio of expenses to
 average net assets            0.62%          0.63%**
Ratio of net investment
 income to average
 net assets  .......           6.52%          6.41%**
Portfolio turnover
 rate  .............          55.74%         66.38%**

  *Commencement of operations.
 **Annualized.

                       See notes to financial statements.

<PAGE>
FINANCIAL HIGHLIGHTS OF
UNITED INCOME FUND
Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

                             For the fiscal year ended December 31,
                            -------------------------------------
                               1996   1995    1994   1993    1992
                              -----  -----   -----  -----   -----
Net asset value,
 beginning of period         $28.96  $23.34 $24.77  $22.05     $20.44
                             -----  -----   -----  -----   -----
Income from investment
 operations:
 Net investment income         0.33    0.36   0.36    0.40     0.46
 Net realized and
   unrealized gain
   (loss) on
   investments .....           5.53   6.53   (0.80)  3.11    1.96
                             -----  -----   -----  -----   -----
Total from investment
 operations  .......           5.86   6.89   (0.44)  3.51    2.42
                             -----  -----   -----  -----   -----
Less distributions:
 Dividends from net
   investment income          (0.32)  (0.35) (0.36)  (0.40)    (0.46)
 Distribution from
   capital gains ...          (1.59) (0.92)  (0.63) (0.39)  (0.35)
                             -----  -----   -----  -----   -----
Total distributions           (1.91)  (1.27) (0.99)  (0.79)    (0.81)
                             -----  -----   -----  -----   -----
Net asset value,
 end of period  ....         $32.91 $28.96  $23.34 $24.77  $22.05
                            ====== ======  ====== ======  ======
Total return* ......          20.36% 29.60%  -1.82% 16.05%  11.96%
Net assets, end of
 period (000
 omitted)  .........       $4,850,419$3,975,717$3,144,904$3,060,073   $2,537,161
Ratio of expenses to
 average net assets            0.86%   0.83%  0.74%   0.66%    0.65%
Ratio of net investment
 income to average
 net assets  .......           1.03%  1.31%   1.45%  1.70%   2.19%
Portfolio turnover
 rate  .............          22.24% 17.59%  18.54% 21.70%  19.25%
Average commission
 rate paid  ........          $0.0496

  *Total return calculated without taking into account the sales load deducted
   on an initial purchase.
                       See notes to financial statements.

<PAGE>
FINANCIAL HIGHLIGHTS OF
UNITED INCOME FUND
Class Y Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

                            For the        For the
                          fiscal year     period from
                              ended       6/19/95* to
                           12/31/96       12/31/95
                          ----------      -----------
Net asset value,
 beginning of period         $28.96         $27.73
                             -----          -----
Income from investment
 operations:
 Net investment income         0.36           0.21
 Net realized and
   unrealized gain
   on investments ..           5.54           2.14
                             -----          -----
Total from investment
 operations  .......           5.90           2.35
                             -----          -----
Less distributions:
 Dividends from net
   investment income          (0.36)         (0.20)
 Distribution from
   capital gains ...          (1.59)         (0.92)
                             -----          -----
Total distributions           (1.95)         (1.12)
                             -----          -----
Net asset value,
 end of period  ....         $32.91         $28.96
                             =====          =====
Total return .......          20.53%          8.45%
Net assets, end of
 period (000
 omitted)  .........       $151,344       $107,703
Ratio of expenses to
 average net assets            0.73%          0.74%**
Ratio of net investment
 income to average
 net assets  .......           1.17%          1.36%**
Portfolio turnover
 rate  .............          22.24%         17.59%**
Average commission
 rate paid  ........          $0.0496

  *Commencement of operations.
 **Annualized.

                       See notes to financial statements.

<PAGE>
FINANCIAL HIGHLIGHTS OF
UNITED ACCUMULATIVE FUND
Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

                             For the fiscal year ended December 31,
                           --------------------------------------
                               1996   1995    1994   1993    1992
                              -----  -----   -----  -----   -----
Net asset value,
 beginning of period          $7.78   $6.58  $7.19   $7.50     $7.15
                              ----   ----    ----   ----    ----
Income from investment
 operations:
 Net investment
   income...........           0.11   0.11    0.13   0.11    0.16
 Net realized and
   unrealized gain
   (loss) on
   investments .....           0.82   2.12   (0.13)  0.55    0.85
                              ----   ----    ----   ----    ----
Total from investment
 operations  .......           0.93   2.23    0.00   0.66    1.01
                              ----   ----    ----   ----    ----
Less distributions:
 Dividends from net
   investment income          (0.11)  (0.11) (0.13)  (0.11)    (0.16)
 Distribution from
   capital gains ...          (0.85) (0.92)  (0.48) (0.84)  (0.50)
 Distribution in
   excess of capital
   gains............          (0.00) (0.00)  (0.00) (0.02)  (0.00)
                              ----   ----    ----   ----    ----
Total distributions           (0.96)  (1.03) (0.61)  (0.97)    (0.66)
                              ----   ----    ----   ----    ----
Net asset value,
 end of period  ....          $7.75  $7.78   $6.58  $7.19   $7.50
                              ====   ====    ====   ====    ====
Total return* ......          12.18% 34.21%   0.04%  9.06%  14.20%
Net assets, end of
 period (000
 omitted)  .........       $1,285,227$1,206,128$967,020$1,033,774     $992,924
Ratio of expenses to
 average net assets            0.83%   0.80%  0.71%   0.65%    0.62%
Ratio of net investment
 income to average
 net assets  .......           1.34%  1.42%   1.76%  1.34%   2.13%
Portfolio turnover
 rate  .............         240.37%229.03% 205.40%230.29% 194.41%
Average commission
 rate paid  ........          $0.0575

 *Total return calculated without taking into account the sales load deducted
  on an initial purchase.

                       See notes to financial statements.

<PAGE>
FINANCIAL HIGHLIGHTS OF
UNITED ACCUMULATIVE FUND
Class Y Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

                            For the        For the
                          fiscal year     period from
                              ended       7/11/95* to
                           12/31/96       12/31/95
                          ----------      -----------
Net asset value,
 beginning of period          $7.78          $7.84
                              ----           ----
Income from investment
 operations:
 Net investment income         0.12           0.05
 Net realized and
   unrealized gain
   on investments ..           0.82           0.87
                              ----           ----
Total from investment
 operations  .......           0.94           0.92
                              ----           ----
Less distributions:
 Dividends from net
   investment income          (0.12)         (0.06)
 Distribution from
   capital gains ...          (0.85)         (0.92)
                              ----           ----
Total distributions           (0.97)         (0.98)
                              ----           ----
Net asset value,
 end of period  ....          $7.75          $7.78
                              ====           ====
Total return .......          12.27%         11.92%
Net assets, end of
 period (000
 omitted)  .........         $2,640           $655
Ratio of expenses to
 average net assets            0.74%          0.76%**
Ratio of net investment
 income to average
 net assets  .......           1.45%          1.24%**
Portfolio turnover
 rate  .............         240.37%        229.03%**
Average commission
 rate paid  ........          $0.0575

  *Commencement of operations.
 **Annualized.

                       See notes to financial statements.

<PAGE>
FINANCIAL HIGHLIGHTS OF
UNITED SCIENCE AND TECHNOLOGY FUND
Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

                             For the fiscal year ended December 31,
                           --------------------------------------
                               1996   1995    1994   1993    1992
                              -----  -----   -----  -----   -----
Net asset value,
 beginning of period         $22.89  $15.21 $14.83  $14.64     $15.42
                            ------ ------  ------ ------  ------
Income from investment
 operations:
 Net investment
   income (loss) ...          (0.07) (0.01)   0.00   0.01    0.03
 Net realized and
   unrealized gain
   (loss) on
   investments .....           2.00   8.40    1.40   1.21   (0.66)
                            ------ ------  ------ ------  ------
Total from investment
 operations  .......           1.93   8.39    1.40   1.22   (0.63)
                            ------ ------  ------ ------  ------
Less distributions:
 Dividends from net
   investment income          (0.00)  (0.00) (0.00)  (0.01)    (0.03)
 Distribution from
   capital gains ...          (1.47) (0.71)  (1.02) (0.95)  (0.12)
 Distribution in
   excess of capital
   gains ...........          (0.00) (0.00)  (0.00) (0.07)  (0.00)
                            ------ ------  ------ ------  ------
Total distributions           (1.47)  (0.71) (1.02)  (1.03)    (0.15)
                            ------ ------  ------ ------  ------
Net asset value,
 end of period  ....         $23.35 $22.89  $15.21 $14.83  $14.64
                            ====== ======  ====== ======  ======
Total return* ......           8.35% 55.37%   9.78%  8.51%  -4.03%
Net assets, end of
 period (000
 omitted)  .........       $980,547$820,783$496,503$446,611$428,806
Ratio of expenses to
 average net assets            0.98%  0.93%   0.96%  0.91%   0.87%
Ratio of net investment
 income to average
 net assets  .......          -0.33% -0.07%   0.00%  0.06%   0.24%
Portfolio turnover
 rate  .............          33.90% 32.89%  64.39% 68.38%  45.79%
Average commission
 rate paid  ........          $0.0538
 *Total return calculated without taking into account the sales load deducted
  on an initial purchase.
                       See notes to financial statements.

<PAGE>
FINANCIAL HIGHLIGHTS OF
UNITED SCIENCE AND TECHNOLOGY FUND
Class Y Shares
For a Share of Capital Stock Outstanding Throughout The Period:

                            For the
                          period from
                          2/27/96* to
                           12/31/96
                          ----------
Net asset value,
 beginning of period         $24.05
                             -----
Income from investment
 operations:
 Net investment loss          (0.02)
 Net realized and
   unrealized gain
   on investments ..           0.82
                             -----
Total from investment
 operations  .......           0.80
                             -----
Less distributions:
 Dividends from net
   investment income          (0.00)
 Distribution from
   capital gains ...          (1.47)
                             -----
Total distributions           (1.47)
                             -----
Net asset value,
 end of period  ....         $23.38
                             =====
Total return .......           3.25%
Net assets, end of
 period (000
 omitted)  .........         $3,090
Ratio of expenses to
 average net assets            0.80%**
Ratio of net investment
 income to average
 net assets  .......          -0.12%**
Portfolio turnover
 rate  .............          33.90%**
Average commission
 rate paid  ........          $0.0538

  *Commencement of operations.
 **Annualized.

                       See notes to financial statements.

<PAGE>
UNITED FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996

NOTE 1 -- Significant Accounting Policies

     United Funds, Inc. (the "Corporation") is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company.
The Corporation issues four series of capital shares; each series represents
ownership of a separate mutual fund.  The assets belonging to each Fund are held
separately by the Custodian.  The capital shares of each Fund represent a pro
rata beneficial interest in the principal, net income and realized and
unrealized capital gains or losses of its respective investments and other
assets.  The following is a summary of significant accounting policies
consistently followed by the Corporation in the preparation of its financial
statements.  The policies are in conformity with generally accepted accounting
principles.

A.   Security valuation -- Each stock and convertible bond is valued at the
     latest sale price thereof on the last business day of the fiscal period as
     reported by the principal securities exchange on which the issue is traded
     or, if no sale is reported for a stock, the average of the latest bid and
     asked prices.  Bonds, other than convertible bonds, are valued using a
     pricing system provided by a pricing service or dealer in bonds.
     Convertible bonds are valued using this pricing system only on days when
     there is no sale reported.  Stocks which are traded over-the-counter are
     priced using Nasdaq (National Association of Securities Dealers Automated
     Quotations System) which provides information on bid and asked or closing
     prices quoted by major dealers in such stocks.   Securities for which
     quotations are not readily available are valued as determined in good faith
     in accordance with procedures established by and under the general
     supervision of the Corporation's Board of Directors.  Short-term debt
     securities are valued at amortized cost, which approximates market.

B.   Security transactions and related investment income -- Security
     transactions are accounted for on the trade date (date the order to buy or
     sell is executed).  Securities gains and losses are calculated on the
     identified cost basis.  Original issue discount (as defined in the Internal
     Revenue Code), premiums on the purchase of bonds and post-1984 market
     discount are amortized for both financial and tax reporting purposes over
     the remaining lives of the bonds.  Dividend income is recorded on the ex-
     dividend date except that certain dividends from foreign securities are
     recorded as soon as the Corporation is informed of the ex-dividend date.
     Interest income is recorded on the accrual basis.  See Note 3 -- Investment
     Securities Transactions.

C.   Foreign currency translations -- All assets and liabilities denominated in
     foreign currencies are translated into U.S. dollars daily.  Purchases and
     sales of investment securities and accruals of income and expenses are
     translated at the rate of exchange prevailing on the date of the
     transaction.  For assets and liabilities other than investments in
     securities, net realized and unrealized gains and losses from foreign
     currency translations arise from changes in currency exchange rates.  The
     Corporation combines fluctuations from currency exchange rates and
     fluctuations in market value when computing net realized and unrealized
     gain or loss from investments.

D.   Federal income taxes -- It is the Corporation's policy to distribute all of
     its taxable income and capital gains to its shareholders and otherwise
     qualify as a regulated investment company under Subchapter M of the
     Internal Revenue Code.  In addition, the Corporation intends to pay
     distributions as required to avoid imposition of excise tax.  Accordingly,
     provision has not been made for Federal income taxes.  See Note 4 --
     Federal Income Tax Matters.

     E.Dividends and distributions -- Dividends and distributions to
     shareholders are recorded by each Fund on the record date.  Net investment
     income distributions and capital gains distributions are determined in
     accordance with income tax regulations which may differ from generally
     accepted accounting principles.  These differences are due to differing
     treatments for items such as deferral of wash sales and post-October
     losses, foreign currency transactions, net operating losses and expiring
     capital loss carryforwards.  At December 31, 1996, United Science and
     Technology Fund reclassified $3,033,367 between additional paid-in-capital
     and undistributed net investment income.  Net investment income, net
     realized gains and net assets were not affected by this change.

     The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements.  Actual results could differ from those estimates.

NOTE 2 -- Investment Management And Payments To Affiliated Persons

     The Corporation pays a fee for investment management services.  The fee is
computed daily based on the net asset value at the close of business.  The fee
consists of two elements: (i) a "Specific" fee computed on net asset value as of
the close of business each day at the annual rate of .03% of net assets for
United Bond Fund, .15% of net assets for United Income Fund and United
Accumulative Fund, and .20% for United Science and Technology Fund; and (ii) a
"Group" fee computed each day on the combined net asset values of all of the
funds in the United Group of mutual funds (approximately $15.1 billion of
combined net assets at December 31, 1996) at annual rates of .51% of the first
$750 million of combined net assets, .49% on that amount between $750 million
and $1.5 billion, .47% between $1.5 billion and $2.25 billion, .45% between
$2.25 billion and $3 billion, .43% between $3 billion and $3.75 billion, .40%
between $3.75 billion and $7.5 billion, .38% between $7.5 billion and $12
billion, and .36% of that amount over $12 billion.  The Corporation accrues and
pays this fee daily.

     Pursuant to assignment of the Investment Management Agreement between the
Corporation and Waddell & Reed, Inc. ("W&R"), Waddell & Reed Investment
Management Company ("WRIMCO"), a wholly-owned subsidiary of W&R, serves as the
Corporation's investment manager.

     The Corporation has an Accounting Services Agreement with Waddell & Reed
Services Company ("WARSCO"), a wholly-owned subsidiary of W&R.  Under the
agreement, WARSCO acts as the agent in providing accounting services and
assistance to the Corporation and pricing daily the value of shares of the
Corporation.  For these services, each of the four Funds pays WARSCO a monthly
fee of one-twelfth of the annual fee shown in the following table.

                            Accounting Services Fee
                  Average
               Net Asset Level                Annual Fee
          (all dollars in millions)       Rate for Each Fund
          -------------------------       ------------------
          From $    0  to $   10               $      0
          From $   10  to $   25               $ 10,000
          From $   25  to $   50               $ 20,000
          From $   50  to $  100               $ 30,000
          From $  100  to $  200               $ 40,000
          From $  200  to $  350               $ 50,000
          From $  350  to $  550               $ 60,000
          From $  550  to $  750               $ 70,000
          From $  750  to $1,000               $ 85,000
               $1,000 and Over                 $100,000

     For Class A shares, the Corporation also pays WARSCO a per account charge
for transfer agency and dividend disbursement services of $1.3125 for each
shareholder account which was in existence at any time during the prior month
($1.0208 per account prior to April 1, 1996), plus $0.30 for each account on
which a dividend or distribution of cash or shares had a record date in that
month.  With respect to Class Y shares, the Corporation pays WARSCO a monthly
fee at an annual rate of .15% of the average daily net assets of the class for
the preceding month.  The Corporation also reimburses W&R and WARSCO for certain
out-of-pocket costs.

     As principal underwriter for the Corporation's shares, W&R received direct
and indirect gross sales commissions for Class A shares (which are not an
expense of the Corporation) of $26,543,939, out of which W&R paid sales
commissions of $15,146,943 and all expenses in connection with the sale of the
Corporation's shares, except for registration fees and related expenses.

     Under a Service Plan for Class A shares adopted by the Corporation pursuant
to Rule 12b-1 under the Investment Company Act of 1940, the Corporation may pay
monthly a fee to W&R in an amount not to exceed .25% of the Corporation's Class
A average annual net assets.  The fee is to be paid to reimburse W&R for amounts
it expends in connection with the provision of personal services to Fund
shareholders and/or maintenance of shareholder accounts.

     The Corporation paid Directors' fees of $275,573.

     W&R is an indirect subsidiary of Torchmark Corporation, a holding company,
and United Investors Management Company, a holding company, and a direct
subsidiary of Waddell & Reed Financial Services, Inc., a holding company.

NOTE 3 -- Investment Securities Transactions

     Investment securities transactions for the period ended December 31, 1996
are summarized as follows:

                                                                     United
                               United       United      United  Science and
                                 Bond       IncomeAccumulative   Technology
                                 Fund         Fund        Fund         Fund
                          ----------- ------------------------ ------------
Purchases of investment
 securities, excluding
 short-term and U.S.
 Government securities   $163,449,027$1,139,035,334$2,665,933,791$  378,142,051
Purchases of U.S. Government
 securities               125,145,374          ---         ---          ---
Purchases of short-term
 securities               257,590,4362,081,228,4542,057,921,1431,209,331,008
Proceeds from maturities
 and sales of investment
 securities, excluding
 short-term and U.S.
 Government securities    168,342,799  969,708,8512,709,657,580 290,614,463
Proceeds from maturities and
 sales of U.S. Government
 securities               148,368,629          ---         ---          ---
Proceeds from maturities and sales
 of short-term securities 247,302,2442,085,954,1942,068,622,3901,209,150,083

     For Federal income tax purposes, cost of investments owned at December 31,
1996 and the related appreciation (depreciation) were as follows:

                                                                  Aggregate
                                 Cost AppreciationDepreciation Appreciation
                       -------------- --------------------------------------
United Bond Fund         $515,545,029  $12,031,129$(1,906,929)   $10,124,200
United Income Fund     $2,955,148,013$2,113,212,126$(17,207,735)$2,096,004,391
United Accumulative
 Fund                  $1,224,938,232 $106,704,670$(34,395,634)  $72,309,036
United Science and
 Technology Fund         $573,361,644 $451,107,803$(30,607,971) $420,499,832

NOTE 4 -- Federal Income Tax Matters

     The Corporation's income and expenses attributed to each Fund and the gains
and losses on security transactions of each Fund have been attributed to that
Fund for Federal income tax purposes as well as for accounting purposes.  For
Federal income tax purposes, United Income Fund, United Accumulative Fund and
United Science and Technology Fund realized capital gain net income of
$276,362,531, $155,754,021 and $71,640,888, respectively, during the year ended
December 31, 1996, a portion of which was paid to shareholders during the period
ended December 31, 1996.  Remaining capital gain net income will be distributed
to each Fund's shareholders.  For Federal income tax purposes, United Bond Fund
realized capital gain net income of $1,229,324 during the year ended December
31, 1996, which was entirely offset by utilization of capital loss
carryforwards.  Remaining prior year capital loss carryforwards of United Bond
Fund aggregated $26,199,056 as of December 31, 1996, and are available to offset
future capital gain net income as follows:  $26,118,153 through December 31,
2002 and $80,903 through December 31, 2003.

NOTE 5 -- Commencement of Multiclass Operations

     On June 17, 1995, each Fund within the Corporation was authorized to offer
investors a choice of two classes of shares, Class A and Class Y, each of which
has equal rights as to assets and voting privileges with respect to each Fund.
Class Y shares are not subject to a sales charge on purchases; they are not
subject to a Rule 12b-1 Service Plan and have a separate transfer agency and
dividend disbursement services fee structure.  A comprehensive discussion of the
terms under which shares of either class are offered is contained in the
prospectus and the Statement of Additional Information for the Corporation.
United Income Fund and United Bond Fund commenced multiclass operations on June
19, 1995 and United Accumulative Fund commenced multiclass operations on July
11, 1995.  United Science and Technology Fund commenced multiclass operations on
February 27, 1996.

     Income, non-class specific expenses and realized and unrealized gains and
losses are allocated daily to each class of shares based on the value of
relative net assets as of the beginning of each day adjusted for the prior day's
capital share activity.

     Transactions in capital stock for the fiscal year ended December 31, 1996
are summarized below.
                                                                     United
                             United        United        United Science and
                               Bond        Income  Accumulative  Technology
                               Fund          Fund          Fund        Fund
                        -----------  ------------  ------------------------
Shares issued from sale
 of shares:
 Class A  ............    6,465,124    16,133,571     8,009,525  27,427,545
 Class Y  ............    1,782,344     1,298,483       379,703     139,882
Shares issued from
 reinvestment of
 dividends and/or capital
 gains distribution:
 Class A  ............    4,659,208     7,718,525    17,504,459   2,334,666
 Class Y  ............       44,921       258,999        38,631       7,370
Shares redeemed:
 Class A  ............  (15,509,353)  (13,716,661)  (14,780,542)(23,624,041)
 Class Y  ............     (388,283)     (677,004)     (161,934)    (15,088)
                          ---------    ----------      --------   ---------
Increase (decrease) in
 outstanding capital
 shares:
 Class A  ............   (4,385,021)   10,135,435    10,733,442   6,138,170
 Class Y  ............    1,438,982       880,478       256,400     132,164
                          ---------    ----------    ----------   ---------
   Total for Fund ....   (2,946,039)   11,015,913    10,989,842   6,270,334
                          =========    ==========    ==========   =========
Value issued from sale
 of shares:
 Class A  ............  $39,560,061  $509,911,318   $64,177,016$676,558,274
 Class Y  ............   10,740,902    40,986,800     3,050,529   3,450,514
Value issued from
 reinvestment of
 dividends and/or capital
 gains distribution:
 Class A  ............   28,366,563   250,527,856   133,871,990  55,192,015
 Class Y  ............      272,967     8,403,907       295,689     174,465
Value redeemed:
 Class A  ............  (94,554,914) (435,082,498) (118,996,801)(585,325,217)
 Class Y  ............   (2,378,419)  (21,330,103)   (1,329,538)   (370,784)
                        -----------  ------------   -----------------------
Increase (decrease) in
 outstanding capital:
 Class A  ............  (26,628,290)  325,356,676    79,052,205 146,425,072
 Class Y  ............    8,635,450    28,060,604     2,016,680   3,254,195
                        -----------  ------------   -----------------------
   Total for Fund .... $(17,992,840) $353,417,280   $81,068,885$149,679,267
                        ===========  ============   =======================

     Transactions in capital stock for the fiscal year ended December 31, 1995
are summarized below.
                                                                     United
                             United        United        United Science and
                               Bond        Income  Accumulative  Technology
                               Fund          Fund          Fund        Fund
                        -----------  ------------  ------------------------
Shares issued from sale
 of shares:
 Class A  ............    7,903,177    13,156,068     3,690,645  15,272,219
 Class Y  ............      494,273     3,737,901        76,842         ---
Shares issued from
 reinvestment of
 dividends and/or capital
 gains distribution:
 Class A  ............    4,996,291     5,453,592    17,417,933   1,060,921
 Class Y  ............       14,634       133,843         9,457         ---
Shares redeemed:
 Class A  ............  (16,233,171)  (16,103,667)  (12,973,028)(13,108,833)
 Class Y  ............      (30,934)     (152,930)       (2,141)        ---
                        -----------   -----------    ----------  ----------
Increase (decrease) in
 outstanding capital
 shares:
 Class A  ............   (3,333,703)    2,505,993     8,135,550   3,224,307
 Class Y  ............      477,973     3,718,814        84,158         ---
                        -----------   -----------    ----------  ----------
   Total for Fund ....   (2,855,730)    6,224,807     8,219,708   3,224,307
                          =========    ==========     =========   =========
Value issued from sale
 of shares:
 Class A  ............  $47,524,601  $358,973,863   $28,187,349$315,997,134
 Class Y  ............    3,026,041   104,695,114       600,969         ---
Value issued from
 reinvestment of
 dividends and/or capital
 gains distribution:
 Class A  ............   29,904,406   155,645,364   133,229,799  23,096,462
 Class Y  ............       90,066     3,880,877        72,439         ---
Value redeemed:
 Class A  ............  (97,382,064) (437,078,074)  (97,231,889)(272,880,563)
 Class Y  ............     (189,278)   (4,487,520)      (17,042)        ---
                        -----------  ------------   ----------- -----------
Increase (decrease) in
 outstanding capital:
 Class A  ............  (19,953,057)   77,541,153    64,185,259  66,213,033
 Class Y  ............    2,926,829   104,088,471       656,366         ---
                        -----------   -----------    ----------  ----------
   Total for fund .... $(17,026,228) $181,629,624   $64,841,625 $66,213,033
                        ===========  ============   =========== ===========

<PAGE>
INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders,
United Funds, Inc.:

We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of United Bond Fund, United Income Fund, United
Accumulative Fund, and United Science and Technology Fund (collectively the
"Funds") comprising United Funds, Inc., as of December 31, 1996, the related
statements of operations and changes in net assets for the year then ended, and
the financial highlights for the year then ended.  These financial statements
and the financial highlights are the responsibility of the Funds' management.
Our responsibility is to express an opinion on these financial statements and
the financial highlights based on our audits.  The financial statements and the
financial highlights of the Funds for each of the years in the four-year period
ended December 31, 1995 were audited by other auditors whose report, dated
February 8, 1996, expressed an unqualified opinion on those statements and
financial highlights.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements.  Our procedures included confirmation of securities owned at
December 31, 1996 by correspondence with the custodian and brokers or other
alternative procedures.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of each of the
respective funds comprising United Funds, Inc. as of December 31, 1996, the
results of their operations, the changes in their net assets, and their
financial highlights for the year then ended in conformity with generally
accepted accounting principles.



Deloitte & Touche LLP
Kansas City, Missouri
February 7, 1997

<PAGE>
                             REGISTRATION STATEMENT

                                     PART C

                               OTHER INFORMATION


24.  Financial Statements and Exhibits
     ---------------------------------

(a)  Financial Statements -- United Funds, Inc.

     Included in Part B:
     -------------------

     As of December 31, 1996
          Statement of Assets and Liabilities

     For the year ended December 31, 1996
          Statements of Operations

     For each of the two years in the period ended December 31, 1996
          Statement of Changes in Net Assets

     Schedule I -- Investment Securities as of December 31, 1996

     Report of Independent Accountants

     Included in Part C:
     -------------------

     Financial Data Schedule

     Other schedules prescribed by Regulation S-X are not filed because the
     required matter is not present or is insignificant.

(b)  Exhibits:

     (1)  Articles of Incorporation, as amended, filed April 18, 1995 as EX-
          99.B1-charter to the Post-Effective Amendment No. 117 to the
          Registration Statement on Form N-1A*

          Articles Supplementary as proposed, filed April 18, 1995 as EX-99.B1-
          ufartsup to the Post-Effective Amendment No. 117 to the Registration
          Statement on Form N-1A*

     (2)  Bylaws, as amended, attached hereto as EX-99.B2-ufbylaw

     (3)  Not applicable

     (4)  Article FIFTH and Article SEVENTH of the Articles of Incorporation, as
          amended, filed April 18, 1995 as EX-99.B1-charter to the Post-
          effective Amendment No. 117 to the Registration Statement on Form N-
          1A*; Article I, Article IV and Article VII of the Bylaws, as amended,
          attached hereto as EX-99.B2-ufbylaw

     (5)  Investment Management Agreement filed September 30, 1994 as EX-99.B5-
          UFIMA to Post-Effective Amendment No. 116 to the Registration
          Statement on Form N-1A*

          Assignment of the Investment Management Agreements filed March 28,
          1996 as EX-99.B5-ufassign to the Post-Effective Amendment No. 118 to
          the Registration Statement on Form N-1A*

     (6)  Underwriting Agreement, dated February 8, 1995, filed April 18, 1995
          as EX-99.B6-ufua to the Post-Effective Amendment No. 117 to the
          Registration Statement on Form N-1A*

     (7)  Not applicable

     (8)  Custodian Agreement, as amended filed April 18, 1995 as EX-99.B8-ufca
          to the Post-Effective Amendment No. 117 to the Registration Statement
          on Form N-1A*

     (9)  Shareholder Servicing Agreement attached hereto as EX-99.B9-ufssa

          Fund Class A application attached hereto as EX.99.B9-ufappca

          Fund Class Y application filed April 18, 1995 as EX-99.B9-ufappcy to
          the Post-Effective Amendment No. 117 to the Registration Statement on
          Form N-1A*

          Fund NAV application filed April 18, 1995 as EX-99.B9-ufappnav to the
          Post-Effective Amendment No. 117 to the Registration Statement on Form
          N-1A*

          Accounting Services Agreement filed April 18, 1995 as EX-99.B9-ufasa
          to the Post-Effective Amendment No. 117 to the Registration Statement
          on Form N-1A*

          Service Agreement filed August 11, 1993 as Exhibit (b)(15) to Post-
          Effective Amendment No. 114 to the Registration Statement on Form N-
          1A*

          Amendment to Service Agreement filed April 18, 1995 as EX-99.B9-ufsaa
          to the Post-Effective Amendment No. 117 to the Registration Statement
          on Form N-1A*

          Class Y Letter of Understanding filed March 28, 1996 as EX-99.B9-uflou
          to the Post-Effective Amendment No. 118 to the Registration Statement
          on Form N-1A*

     (10) Not applicable

     (11) Consent of Independent Accountants attached hereto as EX-99.B11-
          ufconsnt

     (12) Not applicable

     (13) Not applicable

     (14)  1.  Qualified Retirement Plan and Trust-Defined Contribution Basic
               Plan Document filed December 16, 1994 as EX-99.B14-1-03bpd to
               Pre-Effective Amendment No. 1 to the Registration Statement on
               Form N-1A of United Asset Strategy Fund, Inc.*
           2.  Qualified Retirement Plan-Summary Plan Description filed December
               16, 1994 as EX-99.B14-2-03spd to Pre-Effective Amendment No. 1 to
               the Registration Statement on Form N-1A of United Asset Strategy
               Fund, Inc.*
           3.  Employer Contribution 403(b)-Adoption Agreement filed December
               16, 1994 as EX-99.B14-3-403baa to Pre-Effective Amendment No. 1
               to the Registration Statement on Form N-1A of United Asset
               Strategy Fund, Inc.*
           4.  IRC Section 457 Deferred Compensation Plan-Adoption Agreement
               filed December 16, 1994 as EX-99.B14-4-457aa to Pre-Effective
               Amendment No. 1 to the Registration Statement on Form N-1A of
               United Asset Strategy Fund, Inc.*
           5.  IRC Section 457-Deferred Compensation Specimen Plan Document
               filed December 16, 1994 as EX-99.B14-5-457bpd to Pre-Effective
               Amendment No. 1 to the Registration Statement on Form N-1A of
               United Asset Strategy Fund, Inc.*
           6.  National Nonstandardized 401(k)Profit Sharing Plan-Adoption
               Agreement filed December 16, 1994 as EX-99.B14-6-ns401aa to Pre-
               Effective Amendment No. 1 to the Registration Statement on Form
               N-1A of United Asset Strategy Fund, Inc.*
           7.  401(k) Nonstandardized Profit Sharing Plan-Summary Plan
               Description filed December 16, 1994 as EX-99.B14-7-ns401gs to
               Pre-Effective Amendment No. 1 to the Registration Statement on
               Form N-1A of United Asset Strategy Fund, Inc.*
           8.  National Nonstandardized Money Purchase Pension Plan-Adoption
               Agreement filed December 16, 1994 as EX-99.B14-8-nsmppaa to Pre-
               Effective Amendment No. 1 to the Registration Statement on Form
               N-1A of United Asset Strategy Fund, Inc.*
           9.  National Nonstandardized Profit Sharing Plan-Adoption Agreement
               filed December 16, 1994 as EX-99.B14-9-nspspaa to Pre-Effective
               Amendment No. 1 to the Registration Statement on Form N-1A of
               United Asset Strategy Fund, Inc.*
          10.  Standardized 401(k) Profit sharing Plan-Adoption Agreement filed
               December 16, 1994 as EX-99.B14-10-s401aa to Pre-Effective
               Amendment No. 1 to the Registration Statement on Form N-1A of
               United Asset Strategy Fund, Inc.*
          11.  401(k) Standardized Profit Sharing Plan-Summary Plan Description
               filed December 16, 1994 as EX-99.B14-11-s401gis to Pre-Effective
               Amendment No. 1 to the Registration Statement on Form N-1A of
               United Asset Strategy Fund, Inc.*
          12.  Universal Simplified Employee Pension Plan-Adoption Agreement
               filed December 16, 1994 as EX-99.B14-12-sepaa to Pre-Effective
               Amendment No. 1 to the Registration Statement on Form N-1A of
               United Asset Strategy Fund, Inc.*
          13.  Universal Simplified Employee Pension Plan-Basic Plan Document
               filed December 16, 1994 as EX-99.B14-13-sepbpd to Pre-Effective
               Amendment No. 1 to the Registration Statement on Form N-1A of
               United Asset Strategy Fund, Inc.*
          14.  National Standardized Money Purchase Pension Plan-Adoption
               Agreement filed December 16, 1994 as EX-99.B14-14-smppaa to Pre-
               Effective Amendment No. 1 to the Registration Statement on Form
               N-1A of United Asset Strategy Fund, Inc.*
          15.  Standardized Money Purchase pension Plan-Summary Plan Description
               filed December 16, 1994 as EX-99.B14-15-smppgis to Pre-Effective
               Amendment No. 1 to the Registration Statement on Form N-1A of
               United Asset Strategy Fund, Inc.*
          16.  Standardized Profit Sharing Plan-Adoption Agreement filed
               December 16, 1994 as EX-99.B14-16-spspaa to Pre-Effective
               Amendment No. 1 to the Registration Statement on Form N-1A of
               United Asset Strategy Fund, Inc.*
          17.  Standardized Profit Sharing Plan-summary Plan Description field
               December 16, 1994 as EX-99.B14-17-spspgis to Pre-Effective
               Amendment No. 1 to the Registration Statement on Form N-1A of
               United Asset Strategy Fund, Inc.*
          18.  403(b)(7) Tax-sheltered Custodial Account Agreement filed
               December 16, 1994 as EX-99.B14-18-tsa to Pre-Effective Amendment
               No. 1 to the Registration Statement on Form N-1A of United Asset
               Strategy Fund, Inc.*
          19.  Title I 403(b) Plan Document filed December 16, 1994 as EX-
               99.B14-19-ttllpbd to Pre-Effective Amendment No. 1 to the
               Registration Statement on Form N-1A of United Asset Strategy
               Fund, Inc.*
          20.  Simple IRA Plan Document attached hereto as EX-99.B14-20-simple
          21.  Individual Retirement Plan attached hereto as EX-99.B14-21-
               crp00005

     (15) Service Plan, as restated, filed April 18, 1995 as EX-99.B15-ufspca to
          the Post-Effective Amendment No. 117 to the Registration Statement on
          Form N-1A*

     (16) Computation of average annual total return performance quotations (for
          Class A shares) filed by EDGAR August 11, 1993 as Exhibit (b)(16) to
          Post Effective Amendment No. 114 to the Registration Statement on Form
          N-1A*

          Computation of average annual total return performance quotations (for
          Class Y shares) attached hereto as EX-99.B16-ufaatrpq

          Computation of yield performance quotation (for Class A shares) filed
          March 28, 1996 as EX-99.B16-ufyield to Post-Effective Amendment No.
          118 to the Registration Statement on Form N-1A*

          Computation of yield performance quotation (for Class Y shares)
          attached hereto as EX-99.B16-ufyieldy

     (17) Financial Data Schedules attached hereto as EX-27.B17-uffds1, EX-
          27.B17-uffds2, EX-27.B17-uffds3, EX-27.B17-uffds4

     (18) Multiple Class Plan filed March 28, 1996 as EX-99.B18-ufmcp to Post-
          Effective Amendment No. 118 to the Registration Statement on Form N-
          1A*

25.  Persons Controlled by or under common control with Registrant
     -------------------------------------------------------------

     None

26.  Number of Holders of Securities
     -------------------------------

                                        Number of Record Holders as of
     Title of Class                           February 28, 1997
     --------------                     ------------------------------
     Class A Capital Stock                         448,776
     Class Y Capital Stock                          1,091

27.  Indemnification
     ---------------

     Reference is made to Article SEVENTH paragraph 6(b) through 6(f) of the
     Articles of Incorporation, as amended, filed April 18, 1995 as EX-99.B1-
     charter to the Post-Effective Amendment No. 117 to the Registration
     Statement on Form N-1A*; and to Article IV of the Underwriting Agreement
     filed April 18, 1995 as EX-99.B6-ufua to Post-Effective Amendment No. 117
     to the Registration Statement on Form N-1A*, both of which provide
     indemnification.  Also refer to Section 2-418 of the Maryland General
     Corporation Law regarding indemnification of directors, officers, employees
     and agents.

28.  Business and Other Connections of Investment Manager
     ----------------------------------------------------

     Waddell & Reed Investment Management Company is the investment manager of
     the Registrant.  Under the terms of an Investment Management Agreement
     between Waddell & Reed, Inc. and the Registrant, Waddell & Reed, Inc. is to
     provide investment management services to the Registrant.  Waddell & Reed,
     Inc. assigned its investment management duties under this agreement to
     Waddell & Reed Investment Management Company on January 8, 1992.  Waddell &
     Reed Investment Management Company is not engaged in any business other
     than the provision of investment management services to those registered
     investment companies described in Part A and Part B of this Post-Effective
     Amendment.

     Each director and executive officer of Waddell & Reed Investment Management
     Company has had as his sole business, profession, vocation or employment
     during the past two years only his duties as an executive officer and/or
     employee of Waddell & Reed Investment Management Company or its
     predecessors, except as to persons who are directors and/or officers of the
     Registrant and have served in the capacities shown in the Statement of
     Additional Information of the Registrant, and except for Mr. Ronald K.
     Richey.  Mr. Richey is Chairman of the Board and Chief Executive Officer of
     Torchmark Corporation, the parent company of Waddell & Reed, Inc., and
     Chairman of the Board of United Investors Management Company, a holding
     company of which Waddell & Reed, Inc. is an indirect subsidiary.  Mr.
     Richey's address is 2001 Third Avenue South, Birmingham, Alabama 35233.
     The address of the others is 6300 Lamar Avenue, Shawnee Mission, Kansas
     66202-4200.

     As to each director and officer of Waddell & Reed Investment Management
     Company, reference is made to the Prospectus and SAI of this Registrant.

29.  Principal Underwriter
     ---------------------

     (a)  Waddell & Reed, Inc. is the principal underwriter of the Registrant.
          It is also the principal underwriter to the following investment
          companies:

          United International Growth Fund, Inc.
          United Continental Income Fund, Inc.
          United Vanguard Fund, Inc.
          United Retirement Shares, Inc.
          United Municipal Bond Fund, Inc.
          United High Income Fund, Inc.
          United Cash Management, Inc.
          United Government Securities Fund, Inc.
          United New Concepts Fund, Inc.
          United Gold & Government Fund, Inc.
          United Municipal High Income Fund, Inc.
          United High Income Fund II, Inc.
          United Asset Strategy Fund, Inc.
          TMK/United Funds, Inc.
          Waddell & Reed Funds, Inc.

          and is depositor of the following unit investment trusts:

          United Periodic Investment Plans to acquire shares of United Science
          and Technology Fund

          United Periodic Investment Plans to acquire shares of United
          Accumulative Fund

          United Income Investment Programs

          United International Growth Investment Programs

          United Continental Income Investment Programs

          United Vanguard Investment Programs

     (b)  The information contained in the underwriter's application on form BD,
          under the Securities Exchange Act of 1934, is herein incorporated by
          reference.

     (c)  No compensation was paid by the Registrant to any principal
          underwriter who is not an affiliated person of the Registrant or any
          affiliated person of such affiliated person.

30.  Location of Accounts and Records
     --------------------------------

     The accounts, books and other documents required to be maintained by
     Registrant pursuant to Section 31(a) of the Investment Company Act and
     rules promulgated thereunder are under the possession of Mr. Robert L.
     Hechler and Ms. Sharon K. Pappas, as officers of the Registrant, each of
     whose business address is Post Office Box 29217, Shawnee Mission, Kansas
     66201-9217.

31.  Management Services
     -------------------

     There is no service contract other than as discussed in Part A and B of
     this Post-Effective Amendment and as listed in response to Item (b)(9) and
     Item (b)(15) hereof.

32.  Undertaking
     -----------

     (a)  Not applicable
     (b)  Not applicable
     (c)  The Fund agrees to furnish to each person to whom a prospectus is
          delivered a copy of the Fund's latest annual report to shareholders
          upon request and without charge.
     (d)  To the extent that Section 16(c) of the Investment Company Act of
          1940, as amended, applies to the Fund, the Fund agrees, if requested
          in writing by the shareholders of record of not less than 10% of the
          Fund's outstanding shares, to call a meeting of the shareholders of
          the Fund for the purpose of voting upon the question of removal of any
          director and to assist in communications with other shareholders as
          required by Section 16(c).
---------------------------------
*Incorporated herein by reference

<PAGE>
                                   SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment pursuant to
Rule 485(b) of the Securities Act of 1933, and has duly caused this Post-
Effective Amendment to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Overland Park, and State of Kansas, on the 26th
day of March, 1997.




                               UNITED FUNDS, INC.

                                  (Registrant)

                            By /s/ Keith A. Tucker*
                            ------------------------
                           Keith A. Tucker, President

     Pursuant to the requirements of the Securities Act of 1933, and/or the
Investment Company Act of 1940, this Post-Effective Amendment has been signed
below by the following persons in the capacities and on the date indicated.

     Signatures                    Title
     ----------                    -----

/s/Ronald K. Richey*          Chairman of the Board         March 26, 1997
----------------------                                      ------------------
Ronald K. Richey


/s/Keith A. Tucker*           President and Director        March 26, 1997
----------------------        (Principal Executive          ------------------
Keith A. Tucker               Officer)


/s/Theodore W. Howard*        Vice President,               March 26, 1997
----------------------        Treasurer and Principal       ------------------
Theodore W. Howard            Accounting Officer


/s/Robert L. Hechler*         Vice President and            March 26, 1997
----------------------        Principal Financial           ------------------
Robert L. Hechler             Officer


/s/Henry L. Bellmon*          Director                      March 26, 1997
----------------------                                      ------------------
Henry L. Bellmon


/s/Dodds I. Buchanan*         Director                      March 26, 1997
---------------------                                       ------------------
Dodds I. Buchanan


/s/Linda Graves*              Director                      March 26, 1997
--------------------                                        ------------------
Linda Graves


/s/John F. Hayes*             Director                      March 26, 1997
-------------------                                         ------------------
John F. Hayes


/s/Glendon E. Johnson         Director                      March 26, 1997
-------------------                                         ------------------
Glendon E. Johnson


/s/William T. Morgan*         Director                      March 26, 1997
-------------------                                         ------------------
William T. Morgan


/s/William L. Rogers*         Director                      March 26, 1997
-------------------                                         ------------------
William L. Rogers


/s/Frank J. Ross, Jr.*        Director                      March 26, 1997
-------------------                                         ------------------
Frank J. Ross, Jr.


/s/Eleanor B. Schwartz        Director                      March 26, 1997
--------------------                                        ------------------
Eleanor B. Schwartz


/s/Frederick Vogel III*       Director                      March 26, 1997
-------------------                                         ------------------
Frederick Vogel III


/s/Paul S. Wise*              Director                      March 26, 1997
-------------------                                         ------------------
Paul S. Wise


*By
    Sharon K. Pappas
    Attorney-in-Fact

ATTEST:
   Sheryl Strauss
   Assistant Secretary


</TABLE>