NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
A. SIGNIFICANT ACCOUNTING POLICIES -- ISI Strategy Fund, Inc. (the "Fund"), which was organized
as a Maryland Corporation on June 12, 1997 and began operations and offering shares of beneficial ownership
September 16, 1997, is registered under the Investment Company Act of 1940, as amended, as a diversified,
open-end management investment company. It seeks to maximize total return through a combination of long-term
growth of capital and current income by actively allocating the Funds' assets between common stocks of US
issuers and US Treasury securities.
The Fund consists of one share class, ISI Shares, which has a 4.45% maximum sales charge and a 0.25%
When preparing the Fund's financial statements, management makes estimates and assumptions in accordance
with accounting principles generally accepted in the United States. These estimates affect 1) the assets and
liabilities that we report at the date of the financial statements; 2) the contingent assets and liabilities that we
disclose at the date of the financial statements, and 3) the revenues and expenses that we report for the period.
Our estimates could be different from the actual results. The Fund's significant accounting policies are:
VALUATION OF SECURITIES -- The Fund values a portfolio security that is primarily traded on a national
exchange by using the last sales price reported for the day. If there are no sales or the security is not traded on an
exchange, the Fund values the security at the average of the last bid and asked prices in the over-the-counter
market. When a market quotation is not readily available, the Investment Advisor, under the direction of the
Board of Directors, determines a fair value using the policies and procedures that the Board of Directors
establishes and monitors. At November 30, 2000 there were no securities valued using fair value procedures.
The Fund values short-term obligations with maturities of 60 days or less at amortized cost.