Twentieth Century
Investors, Inc.
Equity Funds
Annual Report
OCTOBER 31,
1995
[company logo]
<PAGE>
TABLE OF CONTENTS
Our Message to You............................................................1
Investment Philosophy.........................................................2
Period Overview...............................................................3
Investment Review
Select Investors .........................................................4
Heritage Investors........................................................7
Growth Investors.........................................................10
Ultra Investors .........................................................13
Vista Investors..........................................................16
Giftrust Investors.......................................................19
Balanced Investors.......................................................22
Schedules of Investments
Select Investors ........................................................25
Heritage Investors.......................................................27
Growth Investors.........................................................29
Ultra Investors .........................................................31
Vista Investors..........................................................33
Giftrust Investors.......................................................35
Balanced Investors.......................................................36
Statements of Assets and Liabilities.........................................42
Statements of Operations.....................................................44
Statements of Changes in Net Assets..........................................46
Notes to Financial Statements................................................48
Proxy Voting Results.........................................................57
Financial Highlights.........................................................58
Independent Accountants' Report .............................................60
INDICES USED FOR PERFORMANCE COMPARISON
THE S&P 500 INDEX is an index created by Standard &Poor's Corporation that is
considered to represent the performance of the stock market generally. It is not
an investment product available for purchase.
NASDAQ COMPOSITE INDEX is a market capitalization price-only index that reflects
the aggregate performance of domestic common stocks traded on the regular NASDAQ
market, as well as national market system-traded foreign common stocks and ADRs.
It is not an investment product available for purchase.
<PAGE>
October 31, 1995
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OUR MESSAGE TO YOU
As the year ended October 31, 1995 closes, there is considerable good news
to report. Common stocks in general, and technology-related stocks in
particular, soared to record highs, leading to strong fund performance. On
September 25, the shareholders of Select Investors and Heritage Investors voted
to amend the funds' investment policies to allow greater flexibility and higher
long-term growth potential. For more information on this issue, please see the
fund reviews for Select and Heritage which begin on pages 4 and 7, respectively.
[photo of James E. Stowers and James E. Stowers III]
Since our acquisition of The Benham Group, a highly respected fund family
specializing in fixed income investments, was finalized in June, we have been
conducting a sizable behind-the-scenes effort to create a seamless transition to
a single company. We have taken a number of steps to integrate our
investment-management resources and internal systems without disruption to the
service you receive.
As we integrate business processes and policies of the two companies, we
have identified ways we believe the combined organization will be able to offer
shareholders improved service, as well as a richly diversified family of funds.
More information will be provided as we approach full integration of the
companies in the fall of 1996.
We are also keeping a close eye on current events in Washington. The resolve
with which Congress is tackling deficit-reduction issues is encouraging, since a
balanced budget may shift considerable monies away from debt service and toward
public and private investment. We are also hopeful that Washington will find
ways to enhance the incentives for retirement savings by expanding the scope and
attractiveness of the Individual Retirement Account (IRA). Finally, we are
optimistic about passage of legislation to lower capital gains taxes, which
would raise after-tax returns for millions of mutual fund shareholders.
This past year has seen exceptionally positive fund performance, and we
expect growth stocks will continue to perform well if current economic trends
persist. But our investment process is long term. We believe Twentieth Century's
stock funds will produce attractive returns over the long term, but in the short
run, particular investment environments can lead to greatly different
performances for individual funds. This is why we recommend that investors
diversify their investments across funds that are consistent with their risk
tolerance and investment objectives.
Sincerely,
/s/James E. Stowers /s/James E. Stowers III
James E. Stowers James E. Stowers III
Chairman of the Board and Founder President
1
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INVESTMENT PHILOSOPHY
The philosophy behind Twentieth Century's growth funds focuses on three
important principles. Chiefly, the funds seek to own highly successful
companies, which we define as those whose earnings and revenues are growing at
accelerating rates. We attempt to keep the funds fully invested, regardless of
short-term market activity. Experience has shown that the greatest market gains
occur in unpredictable spurts and that missing those opportunities significantly
limits potential for gain. Finally, Twentieth Century funds are managed by
teams, rather than by one "star." We believe this allows us to make better, more
consistent management decisions.
In addition to these principles, each fund has its own characteristics:
SELECT INVESTORS seeks large, established companies that show accelerating
growth rates; also, at least 80% of the fund's equity assets must be in invested
stocks that pay regular dividends. These dividends, and the established nature
of the companies in which Select invests, help lessen the fund's short-term
price fluctuations.
HERITAGE INVESTORS seeks firms showing accelerating growth rates, and at
least 80% of its equity assets must be in stocks paying regular dividends. This
fund generally owns smaller and mid-sized stocks. While Heritage's dividend
requirement should make the fund less volatile than funds without dividends, it
should also display somewhat more price variability -- and greater long-term
growth potential -- than Select.
GROWTH INVESTORS invests in larger, more established firms that exhibit
accelerating growth. Because the value of established firms tends to change
relatively slowly, Growth can ordinarily be expected to show more moderate price
fluctuations than the funds that invest in smaller or mid-sized firms.
ULTRA INVESTORS generally invests in mid-sized and larger companies that
exhibit accelerating growth. It will typically have significant price
fluctuations.
VISTA INVESTORS invests mainly in smaller or medium-sized firms with
accelerating growth. Although Vista has been one of Twentieth Century's more
volatile funds over the short term, it has also offered high long-term potential
for investment growth.
GIFTRUST INVESTORS ordinarily invests in the smallest stocks with
accelerating growth of any Twentieth Century fund. Shares of Giftrust can only
be given as a gift, and all investments must remain in the fund for a minimum of
10 years. Giftrust is a volatile investment with high long-term growth
potential.
BALANCED INVESTORS seeks to provide long-term growth with moderate
volatility. The fund keeps about 60% of its assets in the stocks of large,
established firms with accelerating growth rates, some of which pay dividends.
The remaining assets are held in quality, intermediate-term bonds.
2
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October 31, 1995
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PERIOD OVERVIEW
The 12 months ended October 31, 1995, were marked by a number of positive
trends in both the U.S. economy and the domestic financial markets. As a result,
the period was rewarding for holders of U.S. equities and debt instruments.
As we enter the fourth quarter, corporate profitability is slowing but still
growing. In fact, despite its moderate pace, U.S. economic growth exceeds that
of our major trading partners. This growth has been accompanied by docile
inflationary trends and gains in workplace productivity. We think that, going
forward, a firm political commitment to a balanced budget would give the Federal
Reserve the freedom to further reduce interest rates to stimulate the economy. A
lower interest rate environment could both mitigate recessionary fears and
further stabilize the dollar.
Despite more moderate economic growth, some areas of the economy are still
showing rapidly accelerating earnings and revenues. Our portfolios remain
concentrated in the technology sector and in companies that we believe are using
technology most effectively. Spending on technology has grown very quickly as
firms seek new ways to increase the attractiveness of their products or services
while still lowering their costs. In our view, this is not a temporary
phenomenon. Demand for U.S. technology is global, the customer base for
technology products continues to broaden, and a large number of everyday
products are incorporating an increasing amount of electronic technology.
Historically, technology spending ran in cycles that corresponded to the U.S.
economic cycle. Now that the larger technology firms have branched out across
the globe, this trend is becoming muted. In our view, technology issues will be
among the leading growth stocks of the 1990s.
Currently, we are also investing in the healthcare field. The best
biotechnology, pharmaceutical and medical devices companies are developing
innovative products and getting faster FDA approval for them. That fact has led
to strong earnings growth in these areas, despite the successful cost-cutting
efforts of managed-care corporations. The companies with the best business
prospects, however, still seem to be the ones that maintain reasonable cost
controls or help other corporations achieve them.
Selected financial services companies continue to benefit from the shift to
an older, more savings-conscious population. Consolidation and the application
of technology are equally beneficial trends. We believe that more widespread use
of on-line services and a likely slowing of borrowing activities by households
will lead to continued consolidation and increased competition among financial
services companies.
Outside the United States, the performance of the major international
markets has been mixed. We see only lackluster economic growth in Western
Europe. But in Japan, efforts to reform the banking system give us confidence in
a possible economic recovery there in 1996. With interest rates trending lower
in many major international markets, we think the fundamental backdrop for
international equities is improving. Within the boundaries of its investment
strategy and risk profile, each Twentieth Century growth equity fund is seeking
appropriate ways to achieve international exposure.
3
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SELECT INVESTORS
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MANAGEMENT Q & A
A discussion with Chuck Duboc, a portfolio manager on the Select Investors
management team.
Q. HOW DID SELECT INVESTORS PERFORM OVER THE PERIOD?
A. Select posted a total return of 15.02% for the year ended October 31, 1995.
For the same period, the S&P 500 returned 26.36%.
Q. ON SEPTEMBER 25, 1995, SELECT SHAREHOLDERS VOTED TO APPROVE A CHANGE IN THE
FUND'S FUNDAMENTAL INVESTMENT POLICIES. WHAT WAS THE NATURE OF THAT CHANGE?
A. Prior to the vote, all stocks chosen for Select had to pay regular
dividends. This change allows Select to invest as much as 20% of its total
equity assets in stocks that don't pay dividends.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (as of October 31, 1995)
SELECT INVESTORS S&P 500 Index
6 Months 8.75% 14.40%
1 Year 15.02% 26.36%
5 Year 10.98% 17.22%
10 Year 12.70% 15.44%
20 Year 19.09% 14.32%
- --------------------------------------------------------------------------------
[mountain graph. graph data described below]
$10,000 OVER A 20-YEAR PERIOD (as of October 31, 1995)
VALUE ON 10/31/95: $329,470 SELECT INVESTORS
- ------------------ $145,426 S & P 500 INDEX
$10,000 lump sum investment made on 10/31/75
SELECT S & P
--------------------------- ---------------------------
DATE ACCT VALUE CUM RETURN ACCT VALUE CUM RETURN
- -------- ---------- ---------- ---------- ----------
10/31/75 $10,000 -- $10,000 --
10/31/76 $11,474 14.74% $12,006 20.06%
10/31/77 $14,332 43.32% $11,264 12.64%
10/31/78 $19,481 94.81% $11,973 19.73%
10/31/79 $25,722 157.22% $13,806 38.06%
10/31/80 $46,448 364.48% $18,239 82.39%
10/31/81 $48,654 386.54% $18,339 83.39%
10/31/82 $62,023 520.23% $21,333 113.33%
10/31/83 $90,803 808.03% $27,282 172.82%
10/31/84 $82,386 723.86% $29,001 190.01%
10/31/85 $99,657 896.57% $34,611 246.11%
10/31/86 $135,666 1256.66% $46,083 360.83%
10/31/87 $140,378 1303.78% $49,006 390.06%
10/31/88 $150,651 1406.51% $56,276 462.76%
10/31/89 $199,760 1897.60% $71,060 610.60%
10/31/90 $195,694 1856.94% $65,718 557.18%
10/31/91 $248,647 2386.47% $87,733 777.33%
10/31/92 $253,041 2430.41% $96,446 864.46%
10/31/93 $309,240 2992.40% $110,803 1008.03%
10/31/94 $286,447 2764.47% $115,091 1050.91%
10/31/95 $329,470 3194.70% $145,426 1354.26%
Past performance is not predictive of future performance.
- --------------------------------------------------------------------------------
----------------
QUICK
FUND
FACTS
----------------
SELECT
INVESTORS
----------------
STRATEGY:
Growth over time through investments
in larger companies, 80% of which pay
dividends.
INCEPTION DATE:
October 31, 1958
SIZE:
$4.01 billion
(as of October 31, 1995)
INVESTMENT APPROACH:
Conservative Growth
----------------
4
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October 31, 1995
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SELECT INVESTORS
Q. WHAT IS THE REASON FOR THIS CHANGE IN POLICY?
A. Formerly, Select's investment policy required the fund to own only stocks of
firms that offered payment of a regular dividend. As a matter of practice,
we have also favored large, well-established firms in recent years. At one
time, there were many businesses that defined their success by the ability
to meet all of these criteria. But in recent years, more companies have
tended to narrow their focus on either producing reliable dividends or
continually reinvesting in growth. So while there are still very good
businesses that meet all these criteria, they tend to be limited in number.
The change gives us a broader menu from which to choose stocks, including
many of the nondividend-paying companies that are growing faster than those
that pay dividends. In the current market environment, many of the fastest
growing companies do not pay dividends.
Q. WILL THE NEW POLICY GREATLY CHANGE SELECT'S PERFORMANCE?
A. Select has had a difficult time keeping up with the performance of the S&P
500 index over the last 10 years. The fund's dividend requirement often led
to a portfolio of some of the best known and most frequently followed
companies on Wall Street. Those companies tend to trade very efficiently,
and often don't provide the explosive gains available to some of the more
mid-sized, growth-oriented firms in the index. The change in policy should
give Select the opportunity to invest in some faster growing companies,
allowing the fund to better match the performance of the S&P 500 in the
future. But it is important to recognize that Select will continue to be our
most conservative growth fund. This change is not part of an effort to make
Select a clone of Ultra or Growth. Rather, it is designed to modestly
increase the growth potential of the fund without greatly increasing its
risk profile.
Q. HAS SELECT INVESTED THE FULL 20% OF ASSETS IN NONDIVIDEND-PAYING STOCKS?
A. Currently, we have about 5% of the fund in stocks that don't pay dividends.
We are taking our time about adding those issues. While there are plenty of
solid growth prospects among large nondividend-paying companies, many of
them have already posted outstanding earnings acceleration in 1995 and we
don't want to jump into these stocks at the tail end of a market rally.
Also, we've begun to notice that many large, dividend-paying issues, which
were tripped up by one problem or another during the past year, are
beginning to show signs that their earnings acceleration is back on track.
MCI Communications, for example, has struggled through the long-distance
telephone wars. But its efforts seem to be working. In the latter half of
1995, it began to show some renewed acceleration.
- --------------------------------------------------------------------------------
TOP FIVE INDUSTRIES (as of October 31, 1995)
- --------------------------------------------------------------------------------
% of fund's
investments in
% of fund these industries
investments 12 months ago
Electrical & Electronic Components 14.4% 7.7%
Computer Systems 7.9% 6.0%
Pharmaceuticals 6.7% 2.1%
Financial Services 6.3% 2.1%
Computer Software & Services 6.0% 2.5%
- --------------------------------------------------------------------------------
5
<PAGE>
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SELECT INVESTORS
Q. THERE ARE MANY WELL-KNOWN TECHNOLOGY FIRMS IN THE FUND'S TOP-10 HOLDINGS.
DOES THAT MEAN THAT THE FUND'S NEW NONDIVIDEND-PAYING STOCKS ARE ALSO COMING
FROM THE TECHNOLOGY FIELD?
A. Actually, the large technology-related firms in the top-10 list are all
dividend-paying companies. We have added some companies that don't pay
dividends, notably Microsoft. But we are also looking at a few healthcare
and retail firms that are non-dividend payers. We think there are many
long-term opportunities in each of these fields, and we expect to increase
our positions in the months ahead.
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TOP TEN HOLDINGS* (as of October 31, 1995)
- --------------------------------------------------------------------------------
*The composition of the portfolio may change over time.
% of fund's
investments in
% of fund these stocks
investments 12 months ago
International Business
Machines Corp. 4.1% 4.3%
Intel Corp. 3.8% --
Hewlett-Packard Co. 3.1% 1.6%
Texas Instruments Inc. 2.8% --
Xerox Corp. 2.6% 2.3%
Micron Technology, Inc. 2.5% --
Teva Pharmaceuticals
Industries Ltd. 2.4% 0.7%
Schweizerischer 2.3% --
First Data Corp. 2.3% --
Tyco International, Ltd. 2.0% --
- --------------------------------------------------------------------------------
Q. IS SELECT INVESTING IN INTERNATIONAL STOCKS RIGHT NOW?
A. Select currently has about 21% of assets in foreign stocks -- that's up from
about 8% six months ago. We are seeing growth opportunities among
dividend-paying companies overseas. Most are multinational companies that
have the flexibility to benefit from economic recoveries in the U.S.,
Europe, and Japan. Multinational firms also have a risk profile that we
think is appropriate for this fund. Teva Pharmaceuticals, for example, is an
Israeli company. But about 85% of its revenues come from the United States.
Because of that, the company is protected in large part from political or
market events in Israel.
- --------------------------------------------------------------------------------
INVESTMENTS BY COUNTRY
expressed as a percentage of total value of investments
- --------------------------------------------------------------------------------
% of fund
investments
Canada 2.2%
Germany 2.8%
Israel 2.5%
Italy 1.3%
Japan 4.8%
Mexico 0.5%
Spain 0.6%
Sweden 1.5%
Switzerland 2.3%
United Kingdom 2.7%
United States 78.8%
----------
100.0%
==========
Select Investors schedule of investments begins on page 25.
[company logo]
6
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October 31, 1995
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HERITAGE INVESTORS
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MANAGEMENT Q & A
A discussion with Nancy Prial, a portfolio manager on the Heritage Investors
management team.
Q. HOW DID HERITAGE PERFORM OVER THE PERIOD?
A. Heritage had a 21.04% return for the year, compared with a 26.36% return for
its benchmark, the S&P 500 index. While Heritage had difficulty keeping up
with the S&P 500 over the first six months of the period, its 14.52% gain
over the more recent six-month period surpassed the index's 14.40% gain.
Q. ON SEPTEMBER 25, 1995, HERITAGE SHAREHOLDERS VOTED TO APPROVE A CHANGE IN
THE FUND'S FUNDAMENTAL INVESTMENT POLICIES. WHAT WAS THE NATURE OF THAT
CHANGE?
A. Heritage's original investment policy stated that all stocks chosen for the
portfolio must pay regular dividends. The change allows Heritage to invest
as much as 20% of its total equity assets in stocks that don't pay
dividends.
- --------------------------------------------------------------------------------
ANNUAL TOTAL RETURNS (as of October 31, 1995)
HERITAGE INVESTORS S&P 500 Index
6 Months 14.52% 14.40%
1 Year 21.04% 26.36%
5 Year 17.60% 17.22%
Inception 16.23% 15.37%
- --------------------------------------------------------------------------------
[mountain graph. graph data described below]
$10,000 OVER LIFE OF FUND (as of October 31, 1995)
VALUE ON 10/31/95: $33,168 HERITAGE INVESTORS
- ------------------ $31,263 S & P 500 INDEX
$10,000 lump sum investment on 11/10/87
HERITAGE S & P
-------------------------- --------------------------
DATE ACCT VALUE CUM RETURN ACCT VALUE CUM RETURN
- -------- ---------- ---------- ---------- ----------
11/10/87 $10,000 -- $10,000 --
10/31/88 $12,576 25.76% $12,098 20.98%
10/31/89 $16,684 66.84% $15,276 52.76%
10/31/90 $14,744 47.44% $14,128 41.28%
10/31/91 $19,648 96.48% $18,860 88.60%
10/31/92 $21,544 115.44% $20,733 107.33%
10/31/93 $27,717 177.17% $23,820 138.20%
10/31/94 $27,403 174.03% $24,742 147.42%
10/31/95 $33,168 231.68% $31,263 212.63%
Past performance is not predictive of future performance.
- --------------------------------------------------------------------------------
----------------
QUICK
FUND
FACTS
----------------
HERITAGE
INVESTORS
----------------
STRATEGY:
Growth over time through
investments in smaller
companies, 80% of which
pay dividends.
INCEPTION DATE:
November 10, 1987
SIZE:
$1.01 billion
(as of October 31, 1995)
INVESTMENT APPROACH:
Growth
----------------
7
<PAGE>
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HERITAGE INVESTORS
Q. HOW CAN THIS CHANGE BENEFIT HERITAGE?
A. The change gives us much more flexibility. While there are many small and
mid-sized stocks that offer both earnings acceleration and regular
dividends, we also found many businesses that met all of our criteria except
the dividend requirement. This change gives us a chance to incorporate these
stocks into the fund's portfolio.
Q. CAN YOU EXPLAIN HERITAGE'S INVESTMENT CRITERIA?
A. In general, the most important quality that stocks in the Twentieth Century
growth portfolios, including Heritage, share is acceleration in earnings and
revenues. This criterion is as important to Heritage as it is to any other
Twentieth Century growth fund. In addition, Heritage focuses primarily on
smaller-sized stocks, but it has always looked to dampen volatility,
primarily by searching for stocks that provide a regular investment return
by paying dividends. We have often found in the past that the stocks that
best combined accelerating earnings, small size, and dividends came from
out-of-the-way areas of the market. One example is International Imaging
Materials, which has a flourishing business providing printer ribbons for
special applications. We discovered that these less-followed areas of the
market also contain many accelerating firms that we think show only moderate
stock-price fluctuations -- even if they do not pay dividends. The policy
change gives us a chance to pursue these opportunities.
- --------------------------------------------------------------------------------
TOP FIVE INDUSTRIES (as of October 31, 1995)
- --------------------------------------------------------------------------------
% of fund's
investments in
% of fund these industries
investments 12 months ago
Electrical & Electronic Components 17.9% 4.9%
Computer Software & Services 9.4% 7.7%
Medical Equipment & Supplies 6.6% 0.9%
Communications Equipment 6.4% 5.2%
Industrial Equipment & Machinery 6.4% 10.1%
- --------------------------------------------------------------------------------
Q. HAS HERITAGE INVESTED THE FULL 20% IN NONDIVIDEND-PAYING STOCKS?
A. The fund now has about 11% of its assets in stocks that don't pay dividends,
and we expect that the weighting may go up to 17% or 18% of assets by the
end of the next reporting period. We have been quick to take advantage of
our new flexibility because we are finding that some of the dividend-paying
stocks we have favored, especially the industrial-related stocks, are no
longer offering the earnings acceleration we require.
Q. WHAT KINDS OF NONDIVIDEND-PAYING STOCKS ARE YOU BUYING?
A. Since technology firms are, overall, the fastest-growing companies in the
market right now, we have picked up a few technology stocks, especially in
the semiconductor field. However, we are also actively looking in areas
outside of technology. One of the fund's better-known non-technology
holdings is Tele-Communications International (TCI). TCI is a cable company
that is expanding into Europe and Japan, which have had only very limited
cable access in the past.
8
<PAGE>
October 31, 1995
- --------------------------------------------------------------------------------
HERITAGE INVESTORS
Q. WHAT OTHER TYPES OF STOCKS IS THE FUND INVESTING IN NOW?
A. Because advances in the healthcare field have heightened demand for medical
devices, we are seeing some earnings acceleration in that sector. Also, we are
seeking companies in a variety of industries that are not especially sensitive
to the fortunes of the economy. Park Electrochemical, for example, creates
chemical products used by the semiconductor, plumbing, and aerospace industries.
Given the broad demand for its products, Park should do relatively well no
matter what the economy may do.
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS* (as of October 31, 1995)
- --------------------------------------------------------------------------------
*The composition of the portfolio may change over time.
% of fund's
investments in
% of fund these stocks
investments 12 months ago
HBO & Co. 2.5% 2.7%
Tektronix, Inc. 2.4% 1.7%
Mentor Corp. 2.1% --
Micron Technology, Inc. 2.0% --
Omnicare, Inc. 2.0% --
Linear Technology Corp. 2.0% 0.9%
SAP AG Preferred 1.9% 1.3%
Advantest Corporation 1.7% --
Perkin-Elmer Corp. 1.7% --
Liz Claiborne, Inc. 1.7% --
- --------------------------------------------------------------------------------
Q. DOES HERITAGE OWN ANY INTERNATIONAL STOCKS?
A. Overall, Heritage has about an 18% stake in international stocks. We are
especially interested in Japan right now, where we are finding many
companies, particularly in the technology field, that are growing rapidly
and paying a dividend. When making purchases overseas, we typically prefer
somewhat larger businesses that are easier to research and trade. But we
look for some uncommon names overseas as well. For example, while Heritage
owns Swedish electronics products giant Ericsson, we also own shares of an
emerging Norwegian telecommunications firm called Nera.
- --------------------------------------------------------------------------------
INVESTMENTS BY COUNTRY
expressed as a percentage of
total value of investments
% of fund
investments
Finland 1.1%
Germany 1.9%
Israel 0.9%
Japan 9.5%
Netherlands 1.1%
Norway 1.1%
Sweden 1.5%
United Kingdom 1.1%
United States 81.8%
-------------
100.0%
=============
Heritage Investors schedule of investments begins on page 27.
[company logo]
9
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GROWTH INVESTORS
- --------------------------------------------------------------------------------
MANAGEMENT Q & A
A discussion with Derek Felske, a portfolio manager on the Growth Investors
management team.
Q. HOW DID GROWTH INVESTORS PERFORM FOR THE PERIOD?
A. Growth Investors enjoyed a strong, 22.31% gain for the period ended October
31, 1995. That compares with a 26.36% gain for the fund's benchmark, the S&P
500.
The bulk of the fund's performance came in the last six months of the
period, when its 15.87% gain outpaced the 14.40% gain of the S&P 500.
Q. WHY DID GROWTH UNDERPERFORM THE INDEX FOR THE YEAR?
A. The main reason is that, at the very beginning of the period, we had only
modest weightings in the large technology-related stocks that performed best
over the year. Concerns about the quality of Intel's Pentium chips, for
example, convinced us to be cautious about our holdings in semiconductor
stocks. That situation has now changed.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (as of October 31, 1995)
GROWTH INVESTORS S&P 500 Index
6 Months 15.87% 14.40%
1 Year 22.31% 26.36%
5 Year 18.32% 17.22%
10 Year 16.45% 15.44%
20 Year 21.74% 14.32%
- --------------------------------------------------------------------------------
[mountain graph. graph data described below]
$10,000 OVER A 20-YEAR PERIOD - GROWTH INVESTORS (as of October 31, 1995)
VALUE ON 10/31/95: $511,621 GROWTH INVESTORS
- ----------------- $145,426 S & P 500 INDEX
$10,000 lump sum investment on 10/31/75
GROWTH S & P
------------------------- --------------------------
DATE ACCT VALUE CUM RETURN ACCT VALUE CUM RETURN
- -------- ---------- ---------- ---------- ----------
10/31/75 $10,000 -- $10,000 --
10/31/76 $14,457 44.57% $12,006 20.06%
10/31/77 $16,473 64.73% $11,264 12.64%
10/31/78 $22,899 128.99% $11,973 19.73%
10/31/79 $36,028 260.28% $13,806 38.06%
10/31/80 $74,494 644.94% $18,239 82.39%
10/31/81 $82,506 725.06% $18,339 83.39%
10/31/82 $80,208 702.08% $21,333 113.33%
10/31/83 $108,217 982.17% $27,282 172.82%
10/31/84 $95,664 856.64% $29,001 190.01%
10/31/85 $111,595 1015.95% $34,611 246.11%
10/31/86 $155,230 1452.30% $46,083 360.83%
10/31/87 $169,703 1597.03% $49,006 390.06%
10/31/88 $175,106 1651.06% $56,276 462.76%
10/31/89 $249,953 2399.53% $71,060 610.60%
10/31/90 $220,647 2106.47% $65,718 557.18%
10/31/91 $354,456 3444.56% $87,733 777.33%
10/31/92 $375,615 3656.15% $96,446 864.46%
10/31/93 $407,481 3974.81% $110,803 1008.03%
10/31/94 $418,300 4083.00% $115,091 1050.91%
10/31/95 $511,621 5016.21% $145,426 1354.26%
Past performance is not predictive of future performance.
- --------------------------------------------------------------------------------
----------------
QUICK
FUND
FACTS
----------------
GROWTH
INVESTORS
----------------
STRATEGY:
Growth over time through investments
in larger companies regardless of dividend potential.
INCEPTION DATE:
October 31, 1958
SIZE:
$5.13 billion
(as of October 31, 1995)
INVESTMENT APPROACH:
Growth
----------------
10
<PAGE>
October 31, 1995
- --------------------------------------------------------------------------------
GROWTH INVESTORS
Q. WHAT CAUSED GROWTH TO OUTPERFORM THE INDEX IN THE MOST RECENT SIX MONTHS?
A. The markets have been led by an outstanding rebound in the technology
sector. Technology stocks have struggled in recent years, but for most of
1995 they produced major positive earnings surprises and, as a result,
greatly increased in investor popularity. Following its investment strategy,
Growth held a substantial stake in fast-growing technology-related
businesses. The holdings contributed significantly to the fund's returns.
Q. WHAT TYPE OF TECHNOLOGY STOCKS DID THE FUND FAVOR?
A. The fund's largest single-sector weighting was in electrical and electronic
components, in particular the stocks of companies that produce
semiconductors. Semiconductors are at the heart of thousands of products
today -- from watches to cameras to entire industrial manufacturing plants.
Worldwide demand for semiconductors is increasing faster than the chips can
be made, and growth in this industry has been remarkable. Also, within the
technology field, semiconductor manufacturers as a group have become very
large firms, making them appropriate choices for a fund that focuses on
large-sized companies.
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS* (as of October 31, 1995)
- --------------------------------------------------------------------------------
*The composition of the portfolio may change over time.
% of fund's
investments in
% of fund these stocks
investments 12 months ago
Cisco Systems Inc. 3.5% --
Intel Corp. 3.2% --
Sybase, Inc. 2.3% --
Micron Technology, Inc. 2.2% --
Applied Materials, Inc. 2.1% --
Texas Instruments Inc. 2.1% --
Merrill Lynch & Co., Inc. 2.0% --
Bay Networks, Inc. 2.0% 0.3%
Medtronic, Inc. 1.9% 1.1%
Citicorp 1.9% 2.9%
- --------------------------------------------------------------------------------
Q. ARE THERE AREAS BESIDES TECHNOLOGY THAT ARE OF INTEREST FOR THE FUND?
A. Growth typically invests in large-sized companies with accelerating
earnings. Right now, technology firms in general offer the best earnings
growth, but we do see a few opportunities in other areas. Financial services
stocks, for example, are operating in a very beneficial climate. Inflation
and interest rates are low, and there have been a number of mergers and
acquisitions in the field that have produced significant share-price gains.
We are also seeing many financial services firms learn how to use technology
to its fullest in improving their efficiency and productivity.
- --------------------------------------------------------------------------------
TOP FIVE INDUSTRIES (as of October 31, 1995)
- --------------------------------------------------------------------------------
% of fund's
investments in
% of fund these industries
investments 12 months ago
Electrical & Electronic Components 15.9% 1.8%
Financial Services 10.8% 4.4%
Communications Equipment 7.6% 10.7%
Computer Peripherals 7.1% --
Computer Software & Services 7.0% 4.1%
- --------------------------------------------------------------------------------
11
<PAGE>
- --------------------------------------------------------------------------------
GROWTH INVESTORS
Q. ARE OTHER BUSINESSES USING TECHNOLOGY TO THEIR BENEFIT?
A. We believe this is an important trend in the economy right now, and we are
looking for businesses that can translate the new technology they are
purchasing into real increases in their earnings. Boston Chicken is a good
example. Managers in the Boston Chicken organization compile databases about
their customers and their eating patterns. These databases help determine
which products sell the most at which times of the day or year. This
knowledge helps managers prepare a more effective cooking schedule that
results in shorter wait times and less waste produced.
Q. HOW MUCH OF GROWTH'S PORTFOLIO IS INVESTED OVERSEAS RIGHT NOW?
A. Currently, 18% of Growth's assets are in foreign stocks. Many international
companies are currently showing growth rates that are competitive with, or
that exceed, some of the larger U.S. stocks.
Q. WHICH INTERNATIONAL MARKETS ARE YOU MOST INTERESTED IN?
A. Europe and Japan both offer some interesting investment opportunities. But
our largest foreign stake, at 13.8% of assets, is in Japan. Many large
companies in Japan are among the most competitive in their respective
industries. Japan has been hobbled by an extended recession, a banking
emergency, and an unfavorable currency situation. (The yen has increased in
value, making Japanese products more expensive overseas.) Yet despite these
various circumstances, some of the country's largest and best firms have
maintained consistent earnings. As these circumstances finally work
themselves out, we are beginning to see some firms, such as retailer Aoyama
Trading, post renewed earnings acceleration.
- --------------------------------------------------------------------------------
INVESTMENTS BY COUNTRY
expressed as a percentage of total value of investments
- --------------------------------------------------------------------------------
% of fund
investments
Germany 0.8%
Japan 13.8%
Mexico 0.3%
Sweden 1.7%
United Kingdom 1.4%
United States 82.0%
------------
100.0%
============
Growth Investors schedule of investments begins on page 29.
[company logo]
12
<PAGE>
October 31, 1995
- --------------------------------------------------------------------------------
ULTRA INVESTORS
- --------------------------------------------------------------------------------
MANAGEMENT Q & A
A discussion with Jim Stowers III, President of Twentieth Century and a
portfolio manager on the Ultra Investors management team.
Q. HOW DID ULTRA INVESTORS PERFORM OVER THE PERIOD?
A. Ultra enjoyed a very strong one-year period. Its 36.89% return outpaced both
the 26.36% return for the S&P 500 and the 33.26% gain for the NASDAQ
Composite Index.
For the most recent six months, Ultra outpaced the indices by an even wider
margin.
Q. ULTRA HAD A VERY LARGE WEIGHTING IN A VARIETY OF TECHNOLOGY INDUSTRIES OVER
THE PERIOD. DOES THAT EXPLAIN THE FUND'S OUTPERFORMANCE?
A. Technology stocks have led the market for much of 1995, and for that reason
technology stocks have been a primary factor in Ultra's performance over the
period. However, technology is not a narrow market sector, and not all
technology stocks perform alike. Ultra's hunt for accelerating earnings and
its preference for mid- and larger-sized stocks led it to emphasize some of
the (continued on the next page)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (as of October 31, 1995)
ULTRA INVESTORS S&P 500 Index NASDAQ
6 Months 30.62% 14.40% 22.76%
1 Year 36.89% 26.36% 33.26%
5 Year 30.32% 17.22% 25.72%
10 Year 21.59% 15.44% 13.48%
- --------------------------------------------------------------------------------
[mountain graph. graph data described below]
$10,000 OVER A 10-YEAR PERIOD (as of October 31, 1995)
VALUE ON 10/31/95: $70,637 ULTRA INVESTORS
- ----------------- $42,017 S & P 500 INDEX
$35,416 NASDAQ
<TABLE>
<CAPTION>
$10,000 lump sum investment on 10/31/85
ULTRA S & P NASDAQ
------------------------- -------------------------- -------------------------
DATE ACCT VALUE CUM RETURN ACCT VALUE CUM RETURN ACCT VALUE CUM RETURN
- -------- ---------- ---------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
10/31/85 $10,000 -- $10,000 -- $10,000 --
10/31/86 $12,723 27.23% $13,315 33.15% $12,332 23.32%
10/31/87 $12,311 23.11% $14,159 41.59% $11,051 10.51%
10/31/88 $14,715 47.15% $16,259 62.59% $13,074 30.74%
10/31/89 $20,657 106.57% $20,531 105.31% $15,575 55.75%
10/31/90 $18,793 87.93% $18,988 89.88% $11,275 12.75%
10/31/91 $37,872 278.72% $25,348 153.48% $18,561 85.61%
10/31/92 $37,701 277.01% $27,865 178.65% $20,687 106.87%
10/31/93 $52,699 426.99% $32,014 220.14% $26,638 166.38%
10/31/94 $51,601 416.01% $33,252 232.52% $26,577 165.77%
10/31/95 $70,637 606.37% $42,017 320.17% $35,416 254.16%
</TABLE>
Past performance is not predictive of future performance.
Source: Lipper Analytical Services, Inc.
- --------------------------------------------------------------------------------
QUICK
FUND
FACTS
----------------
ULTRA
INVESTORS
----------------
STRATEGY:
Aggressively seeks growth
by investing in fast-growing
medium-sized
and larger companies.
INCEPTION DATE:
November 2, 1981
SIZE:
$14.38 billion
(as of October 31, 1995)
INVESTMENT APPROACH:
Aggressive Growth
----------------
13
<PAGE>
- --------------------------------------------------------------------------------
ULTRA INVESTORS
better-performing areas of the broad technology field -- for example,
well-known semiconductor and networking stocks. Stocks like semiconductor
producer Intel and networking firm Cisco Systems used their fast-growing
profits to take market share away from smaller competitors. Cisco claimed
that its business is growing 2% per week. That helped lead to good stock
performance.
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS* (as of October 31, 1995)
- --------------------------------------------------------------------------------
*The composition of the portfolio may change over time.
% of fund's
investments in
% of fund these stocks
investments 12 months ago
3Com Corp. 4.1% 2.3
Cisco Systems Inc. 3.3% 0.2
Bay Networks, Inc. 3.1% 1.0
Texas Instruments Inc. 3.0% --
Oracle Systems Corp. 2.8% 4.1
Intel Corp. 2.7% --
Pfizer Inc. 2.6% --
Amgen Inc. 2.6% --
Applied Materials, Inc. 2.4% 2.1%
Microsoft Corp. 2.3% 2.9%
- --------------------------------------------------------------------------------
Q. DO YOU BELIEVE IT IS TIME FOR ULTRA TO LIGHTEN ITS WEIGHTING IN TECHNOLOGY?
A. A lot of investors are concerned that technology will not continue to be as
popular as it has been in 1995, and that this is a good time to move out of
the sector. However, this way of thinking is antithetical to the Twentieth
Century growth investment discipline. We believe that, over time, investors
will favor the firms that display the greatest earnings and revenue
acceleration. We recognize that technology stocks have made extraordinary
total returns over this period, and we don't necessarily expect this rapid
pace to continue. But the fact is that, on the whole, technology-related
firms, and there are many different types of these, currently offer better
earnings acceleration than firms in other areas of the economy. We strongly
believe, from past experience, that sticking close to our growth discipline
is more effective than trying to determine what "the market" will do.
Q. IS ULTRA ONLY INVESTING IN TECHNOLOGY?
A. We are interested in any area showing rapid earnings and revenue
acceleration. While many technology firms are highly successful by this
measure, we continually scan the entire equity market for opportunities. One
area we are beginning to see some promise in is the healthcare sector,
especially in pharmaceutical and biotechnology stocks. These companies have
had a lot of trouble developing their businesses, primarily due to a host of
regulatory challenges. Now that some of these problems are righting
themselves, the firms are just beginning to meet pent-up demand for
healthcare products. These firms did particularly well over the last two
months of the reporting period -- just as some technology stocks began to
lose their acceleration.
- --------------------------------------------------------------------------------
TOP FIVE INDUSTRIES (as of October 31, 1995)
- --------------------------------------------------------------------------------
% of fund's
investments in
% of fund these industries
investments 12 months ago
Computer Peripherals 16.9% 7.4%
Electrical & Electronic Components 15.2% 8.5%
Computer Software & Services 15.0% 13.5%
Pharmaceuticals 8.9% 2.5%
Computer Systems 8.2% 8.5%
- --------------------------------------------------------------------------------
14
<PAGE>
October 31, 1995
- --------------------------------------------------------------------------------
ULTRA INVESTORS
Q. ULTRA'S POSITION IN INTERNATIONAL STOCKS IS A MODEST 4.4% OF ASSETS. WHY?
A. There are many good opportunities overseas for earnings growth, but right
now we are most interested in domestic firms that are looking overseas for
new growth potential. Currently, for example, about 50% of Compaq Computer's
earnings come from outside North America. Popular Illinois-based
telecommunications provider Motorola gets about 44% of its earnings from
overseas. Because of our ownership of these companies, we feel that Ultra
has sufficient international exposure.
- --------------------------------------------------------------------------------
INVESTMENTS BY COUNTRY
expressed as a percentage of total value of investments
% of fund
investments
Canada 0.2%
Finland 0.3%
Hong Kong 0.1%
Italy 0.2%
Japan 2.1%
Netherlands 0.3%
Sweden 0.8%
United Kingdom 0.4%
United States 95.6%
----------
100.0%
==========
- --------------------------------------------------------------------------------
Q. WITH THE ECONOMY GROWING SLOWLY, WHERE DO YOU EXPECT TO FIND EARNINGS GROWTH
IN THE NEXT YEAR?
A. We have no way of knowing what the economy will do over the next 12 months,
and we can't predict the future. One major business trend we are keeping an
eye on, however, is companies that are learning to use technology to
substantially increase their profitability and productivity. We are already
seeing this in, for example, the financial services area, which would
include credit card businesses, brokerage firms, and investment houses,
among others. As an industry, financial services firms have spent enormous
sums of money on new technology. They're using database systems to deliver
fast, accurate accounting to millions of customers. They're buying software
capable of storing and analyzing vast amounts of company, economic, and
customer data. And they're using networks to quickly inform and educate
their work forces. We don't know which firms or which sectors are going to
come out on top at this point, but we do suspect that this trend will lead
to earnings growth -- and therefore investment opportunities -- down the
road.
Ultra Investors schedule of investments begins on page 31.
[company logo]
15
<PAGE>
- --------------------------------------------------------------------------------
VISTA INVESTORS
- --------------------------------------------------------------------------------
MANAGEMENT Q & A
A discussion with Glenn Fogle, a portfolio manager on the Vista Investors
management team.
Q. HOW DID VISTA INVESTORS PERFORM OVER THE 12-MONTH PERIOD ENDED OCTOBER 31,
1995?
A. Vista Investors enjoyed an outstanding gain over the past year. Its 44.20%
gain outpaced both the S&P 500's 26.36% return and the NASDAQ Composite
Index's 33.26% return.
Q. WHAT FACTORS CONTRIBUTED MOST TO THE FUND'S SUCCESS?
A. Vista's heavy weighting in a variety of technology firms helped returns
considerably. It was also important that the fund held a few of the larger,
better-known stocks in the technology field. While nearly all technology
stocks did well over the period, many of the best performing issues were
larger firms that are fairly well-known to investors. For example, top
holding LSI Logic, which is an integrated circuit manufacturer with more
than $5.5 billion in stock outstanding, climbed 120% during the year.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (as of October 31, 1995)
VISTA INVESTORS S&P 500 Index NASDAQ
6 Months 33.08% 14.40% 22.76%
1 Year 44.20% 26.36% 33.26%
5 Year 25.39% 17.22% 25.72%
10 Year 18.38% 15.44% 13.48%
- --------------------------------------------------------------------------------
[mountain graph. graph data described below]
$10,000 OVER A 10-YEAR PERIOD (as of October 31, 1995)
VALUE ON 10/31/95: $54,033 VISTA
- ----------------- $42,017 S & P 500
$35,416 NASDAQ
<TABLE>
<CAPTION>
$10,000 lump sum investment on 10/31/85
VISTA S & P NASDAQ
----------------------- ------------------------ ------------------------
DATE ACCT VALUE CUM RETURN ACCT VALUE CUM RETURN ACCT VALUE CUM RETURN
- -------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
10/31/85 $10,000 -- $10,000 -- $10,000 --
10/31/86 $14,701 47.01% $13,315 33.15% $12,332 23.32%
10/31/87 $13,568 35.68% $14,159 41.59% $11,051 10.51%
10/31/88 $15,116 51.16% $16,259 62.59% $13,074 30.74%
10/31/89 $22,401 124.01% $20,531 105.31% $15,575 55.75%
10/31/90 $17,432 74.32% $18,988 89.88% $11,275 12.75%
10/31/91 $29,229 192.29% $25,348 153.48% $18,561 85.61%
10/31/92 $30,561 205.61% $27,865 178.65% $20,687 106.87%
10/31/93 $35,975 259.75% $32,014 220.14% $26,638 166.38%
10/31/94 $37,471 274.71% $33,252 232.52% $26,577 165.77%
10/31/95 $54,033 440.33% $42,017 320.17% $35,416 254.16%
</TABLE>
Past performance is not predictive of future performance.
Source: Lipper Analytical Services, Inc.
- --------------------------------------------------------------------------------
QUICK
FUND
FACTS
----------------
VISTA
INVESTORS
----------------
STRATEGY:
Aggressively seeks growth by investing in
fast-growing small
and medium-sized companies.
INCEPTION DATE:
November 25, 1983
SIZE:
$1.68 billion
(as of October 31, 1995)
INVESTMENT APPROACH:
Aggressive Growth
----------------
16
<PAGE>
October 31, 1995
- --------------------------------------------------------------------------------
VISTA INVESTORS
Q. THE FUND HAS A HEAVY WEIGHTING--MORE THAN 50% OF ASSETS--IN TECHNOLOGY
STOCKS. WHY IS THIS CONCENTRATION SO HIGH?
A. It's important to remember that while technology sounds like a single
sector, it actually incorporates many types of businesses. Macromedia
develops software tools for interactive multimedia applications. Pairgain
Technologies, on the other hand, creates equipment designed to improve the
performance of copper telephone wires. Although these two firms have very
different businesses, both are considered "technology" companies. These
firms have another thing in common; there is a global demand for their
products. This is true, in general, of the technology firms we have owned.
We don't own technology-related stocks merely because we like the technology
sector. We own these stocks because they currently boast the fastest
earnings growth available in the market. Those earnings are driven by high
demand for technology-related products. And the demand for electronic
equipment and software isn't likely to disappear overnight.
TOP TEN HOLDINGS* (as of October 31, 1995)
- --------------------------------------------------------------------------------
*The composition of the portfolio may change over time.
% of fund's
investments in
% of fund these stocks
investments 12 months ago
LSI Logic Corp. 5.2% 4.3%
Maxim Integrated Products, Inc. 4.7% 3.9%
KLA Instruments Corp. 4.1% 6.0%
Macromedia, Inc. 3.9% --
STERIS Corp. 3.0% 1.4%
Sunglass Hut International, Inc. 2.9% --
Atmel Corp. 2.8% 4.1%
Foundation Health Corp. 2.8% --
Seagate Technology 2.7% --
HFS, Inc. 2.7% --
- --------------------------------------------------------------------------------
Q. HAVE TECHNOLOGY STOCKS BECOME TOO POPULAR, TOO FAST?
A. Technology stocks have climbed in price very quickly, and at some point the
market may need to step back and digest these gains. But as long as the
earnings for these companies continue to accelerate, we will continue to own
them. As we look at the financial statements of the companies we own and the
continuing demand for their products, we see no reason to believe that
earnings will greatly disappoint us.
Q. Within the technology umbrella, you seem to have increased Vista's software
position the most. Why?
A. There are some interesting stories right now in the software field. The
software industry is booming as businesses and individuals strive to take
advantage of computing to lower their costs or improve the quality of their
work. HBO & Company, for example, has developed software that hospitals and
health facilities use to treat their patients more knowledgeably and
efficiently.
- --------------------------------------------------------------------------------
TOP FIVE INDUSTRIES (as of October 31, 1995)
% of fund's
investments in
% of fund these industries
investments 12 months ago
Electrical & Electronic Components 18.7% 20.1%
Industrial Equipment & Machinery 16.7% 11.7%
Computer Software & Services 11.9% 3.8%
Business Services & Supplies 8.6% 4.1%
Healthcare 6.8% 11.8%
- --------------------------------------------------------------------------------
17
<PAGE>
- --------------------------------------------------------------------------------
VISTA INVESTORS
Q. DO YOU CURRENTLY SEE ACCELERATING GROWTH IN ANY FIELD OTHER THAN TECHNOLOGY?
A. Technology-related businesses are doing best, but there are opportunities in
other areas. The healthcare field, for example, is doing much better now
than it was six months ago. The government's efforts to reform the industry
hurt the stock performance of many health-related companies, but meanwhile
businesses have been delivering real earnings growth. Thermo Cardiosystems,
for example, makes artificial hearts that may, in some cases, be a more
successful alternative to an actual heart transplant. Demand for this
product is growing quickly, and Thermo Cardiosystems' stock is benefiting
from that.
Q. IS THE FUND INTERESTED IN INTERNATIONAL STOCKS RIGHT NOW?
A. We have a small percentage of assets (5.4%) in international stocks right
now, and we are not actively trying to increase that. We haven't had any
trouble finding domestic stocks that meet our criteria, and we don't feel
that we would necessarily improve this fund's performance by investing
heavily overseas.
- --------------------------------------------------------------------------------
INVESTMENTS BY COUNTRY
expressed as a percentage of total value of investments
% of fund
investments
Canada 3.1%
Netherlands 2.3%
United States 94.6%
-----------
100.0%
===========
Vista Investors schedule of investments begins on page 33.
[company logo]
18
<PAGE>
October 31, 1995
- --------------------------------------------------------------------------------
GIFTRUST INVESTORS
- --------------------------------------------------------------------------------
MANAGEMENT Q & A
A discussion with Glenn Fogle, a portfolio manager on the Giftrust Investors
management team.
Q. HOW HAS GIFTRUST INVESTORS PERFORMED OVER THE PERIOD?
A. Giftrust has achieved a total return of 32.52% over the past year, compared
with a 26.36% total return for the S&P 500 and a 33.26% gain for the NASDAQ
Composite Index.
Q. GIFTRUST HAS A LARGE WEIGHTING IN TECHNOLOGY STOCKS, ESPECIALLY SOFTWARE
STOCKS. WHY?
A. We have seen a number of new opportunities in the software field. It's
interesting to note, too, that the software stocks we have chosen operate in
highly diverse fields. One of the fund's holdings, Hummingbird
Communications, produces software that helps connect large mainframe
databases and individual personal computer terminals more efficiently.
Another, ArcSys, provides [continued on the next page]
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (as of October 31, 1995)
GIFTRUST INVESTORS S&P 500 Index NASDAQ
6 Months 23.16% 14.40% 22.76%
1 Year 32.52% 26.36% 33.26%
5 Year 37.11% 17.22% 25.72%
10 Year 25.29% 15.44% 13.48%
- --------------------------------------------------------------------------------
[mountain graph. graph data described below]
$10,000 OVER A 10-YEAR PERIOD (as of October 31, 1995)
VALUE ON 10/31/95: $95,335 GIFTRUST
- ----------------- $42,017 S & P 500
$35,416 NASDAQ
<TABLE>
<CAPTION>
$10,000 lump sum investment on 10/31/85
GIFTRUST S & P NASDAQ
------------------------- ------------------------- -------------------------
DATE ACCT VALUE CUM RETURN ACCT VALUE CUM RETURN ACCT VALUE CUM RETURN
- -------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
10/31/85 $10,000 -- $10,000 -- $10,000 --
10/31/86 $14,669 46.69% $13,315 33.15% $12,332 23.32%
10/31/87 $14,080 40.80% $14,159 41.59% $11,051 10.51%
10/31/88 $16,373 63.73% $16,259 62.59% $13,074 30.74%
10/31/89 $24,531 145.31% $20,531 105.31% $15,575 55.75%
10/31/90 $19,677 96.77% $18,988 89.88% $11,275 12.75%
10/31/91 $35,233 252.33% $25,348 153.48% $18,561 85.61%
10/31/92 $38,872 288.72% $27,865 178.65% $20,687 106.87%
10/31/93 $60,582 505.82% $32,014 220.14% $26,638 166.38%
10/31/94 $71,942 619.42% $33,252 232.52% $26,577 165.77%
10/31/95 $95,335 853.35% $42,017 320.17% $35,416 254.16%
</TABLE>
Past performance is not predictive of future performance.
Source: Lipper Analytical Services, Inc.
- --------------------------------------------------------------------------------
QUICK
FUND
FACTS
----------------
GIFTRUST
INVESTORS
----------------
STRATEGY:
Aggressively seeks growth by investing
in fast-growing
smaller companies.
INCEPTION DATE:
November 25, 1983
SIZE:
$561 million
(as of October 31, 1995)
INVESTMENT APPROACH:
Aggressive Growth
----------------
19
<PAGE>
- --------------------------------------------------------------------------------
GIFTRUST INVESTORS
software used to design computer chips. A third, CBT Group, creates
computer-based training programs. Each of these firms has a very different
customer base. It is hard to imagine a single event that could hurt each of
these businesses equally. We aren't investing in technology stocks simply
because we like technology as a sector, but because there are so many
individual firms that are finding new ways to do things better, faster and
less expensively. And these firms are being rewarded with the kind of
remarkable customer demand that drives up earnings.
Q. DID GIFTRUST INVEST IN ANY COMPANIES ON THEIR INITIAL PUBLIC OFFERINGS
(IPOS)?
A. Because investor demand for common stocks over the period was so high, many
successful private businesses decided it was a good time to offer stock to
the public. We found several exciting opportunities among these offerings.
These holdings contributed a great deal to the performance of the fund.
Security Dynamics, for example, creates computer database protection
products popular among U.S. and foreign corporations. The stock had a very
successful public offering and has continued to perform well.
Q. HOW DOES THE FUND CHOOSE IPOS?
A. We focus on finding businesses that already have a vibrant, successful
record which we believe will persist. We tend to use an IPO as a starting
point for buying shares of a company, and we generally continue to add to
our positions after the offering. Some investors are known to "flip" IPOs --
that is, buy offerings they believe will make a rapid gain in the first day
of trading, and then sell them almost immediately. We do not buy IPOs with
the intention of flipping them. We would prefer to own companies that we
believe can make a meaningful contribution to fund performance over time. In
Security Dynamics' case, for example, the gains the stock made on its first
day of trading were only the tip of a larger iceberg.
TOP TEN HOLDINGS* (as of October 31, 1995)
- --------------------------------------------------------------------------------
*The composition of the portfolio may change over time.
% of fund's
investments in
% of fund these stocks
investments 12 months ago
Tencor Instruments 3.6% 4.2%
Security Dynamics
Technologies Inc. 3.2% --
Ultratech Stepper, Inc. 3.2% 3.2%
Robotic Vision Systems, Inc. 2.8% --
Hummingbird Communications Ltd. 2.7% --
Shiva Corp. 2.7% --
Cyberoptics Corporation 2.5% --
Asyst Technologies, Inc. 2.5% --
Atmel Corp. 2.4% 3.2%
Pinnacle Systems, Inc. 2.4% --
- --------------------------------------------------------------------------------
Q. IN THE PAST, GIFTRUST HAS GENERALLY HELD THE SMALLEST COMPANIES OF ANY
TWENTIETH CENTURY EQUITY FUND. WILL THAT CONTINUE TO BE TRUE IN THE FUTURE?
A. While Giftrust will continue to hold a number of small companies, investors
may also find more larger and better-known names in the fund's port-
20
<PAGE>
October 31, 1995
- --------------------------------------------------------------------------------
GIFTRUST INVESTORS
folio going forward. There are a few reasons for that. Giftrust has never
actually been restricted to small stocks, but it has generally held them
because of its modest asset base. Now that the fund has grown to $561
million in assets, it has become impractical to keep it fully invested in
very small stocks, so we are selectively buying some middle- and large-sized
stocks that we believe have the same earnings-acceleration characteristics
we look for in the small stocks we own.
Q. ARE THERE MANY STOCKS THAT MEET THIS DESCRIPTION?
A. In the current market there are. For example, Applied Materials is a market
leader in semiconductor manufacturing equipment, with more than $8 billion
in stock outstanding. Its innovative tools are so popular that the firm has
been one of the fastest-growing companies in Giftrust's portfolio.
- --------------------------------------------------------------------------------
TOP FIVE INDUSTRIES (as of October 31, 1995)
% of fund's
investments in
% of fund these industries
investments 12 months ago
Computer Software & Services 20.3% 10.4%
Industrial Equipment
& Machinery 19.4% 14.8%
Electrical
& Electronic Components 13.3% 14.2%
Computer Peripherals 11.2% 8.6%
Control & Measurement 6.3% 3.8%
- --------------------------------------------------------------------------------
Q. WHAT MIGHT THIS SHIFT TO SOME LARGER COMPANIES MEAN TO FUND PERFORMANCE?
A. Because we continue to demand exacting growth-acceleration characteristics
in the fund's holdings, we do not expect the fund's performance profile to
change greatly. In fact, we are enthusiastic about providing Giftrust
greater flexibility. For example, Giftrust's performance over the past year
could have been even higher if we had included some of the fast-growing
larger companies available in the market. Because of their high visibility
and powerful competitive position, some of these larger firms posted the
most exciting stock-price gains.
Q. WHAT IS YOUR APPROACH TO INTERNATIONAL INVESTING CURRENTLY?
A. About 7% of fund assets are in international stocks right now. We see many
opportunities overseas, but they are not necessarily any more attractive to
us currently than our domestic stock choices. We are waiting to find foreign
companies that offer better earnings acceleration than our domestic
portfolio before we invest more heavily.
- --------------------------------------------------------------------------------
INVESTMENTS BY COUNTRY
expressed as a percentage of
total value of investments
- --------------------------------------------------------------------------------
% of fund
investments
Australia 1.0%
Canada 3.8%
Hong Kong 1.0%
Ireland 1.5%
United States 92.7%
---------
100.0%
=========
Giftrust Investors schedule of investments begins on page 35.
[company logo]
21
<PAGE>
- --------------------------------------------------------------------------------
BALANCED INVESTORS
- --------------------------------------------------------------------------------
MANAGEMENT Q & A
A discussion with Chuck Duboc, a portfolio manager on the Balanced Investors
management team.
Q. HOW DID BALANCED INVESTORS PERFORM OVER THE ONE-YEAR PERIOD?
A. The prior-year period was highly beneficial for Balanced. Its performance
was aided by a solid bond market rally, which stemmed from a period of
sharply declining interest rates and by a bull market in the fast-growing
stocks that Balanced favors. Balanced achieved a 16.36% return, as compared
with a 26.36% return for its benchmark, the S&P 500. In making comparisons
with the S&P stock index, it is important to note that Balanced maintains
about a 40% position in moderate-performing bonds, while the index has no
bonds.
Q. WHY IS THE S&P 500 THE BENCHMARK FOR THE FUND?
A. The S&P is a suitable benchmark for the equity portion of the fund. The fact
that Balanced maintains a bond component will make it perform differ-
[continued on the next page]
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (as of October 31, 1995)
BALANCED INVESTORS S&P 500 Index
6 Months 11.43% 14.40%
1 Year 16.36% 26.36%
5 Year 13.51% 17.22%
Inception 11.95% 14.23%
- --------------------------------------------------------------------------------
[mountain graph. graph data described below]
$10,000 OVER LIFE OF FUND (as of October 31, 1995)
VALUE ON 10/31/95: $22,118 BALANCED
- ----------------- $25,484 S & P 500
$10,000 lump sum investment on 10/20/88
BALANCED S & P
------------------------- -------------------------
DATE ACCT VALUE CUM RETURN ACCT VALUE CUM RETURN
- -------- ---------- ---------- ---------- ----------
10/20/88 $10,000 $10,000
10/31/88 $9,912 -0.88% $9,862 -1.38%
10/31/89 $11,989 19.89% $12,453 24.53%
10/31/90 $11,736 17.36% $11,516 15.16%
10/31/91 $16,775 67.75% $15,374 53.74%
10/31/92 $16,882 68.82% $16,901 69.01%
10/31/93 $19,186 91.86% $19,417 94.17%
10/31/94 $19,008 90.08% $20,168 101.68%
10/31/95 $22,118 121.18% $25,484 154.84%
Past performance is not predictive of future performance.
- --------------------------------------------------------------------------------
QUICK
FUND
FACTS
----------------
BALANCED
INVESTORS
----------------
STRATEGY:
A mix of growth stocks and
intermediate bonds, with approximately
60% allocated to stocks.
INCEPTION DATE:
October 20, 1988
SIZE:
$816 million
(as of October 31, 1995)
INVESTMENT APPROACH:
Conservative Growth
----------------
22
<PAGE>
October 31, 1995
- --------------------------------------------------------------------------------
BALANCED INVESTORS
ently from any equity-only index. Still, comparing the fund to the S&P 500
allows investors to see how the bond portion of the fund moderates fund
volatility over time. Balanced will likely not go up as much when the equity
markets soar, but its more stable bonds should help limit losses when the
equity markets stumble.
Q. HOW DID THE STOCK PORTION OF THE PORTFOLIO PERFORM?
A. The fund's stock holdings returned 18.67% over the period. While the large
stocks Balanced owned did not soar as high as many mid-sized firms, the fund
nonetheless owned a number of big-name success stories, such as Micron
Technology, which more than tripled over the course of the year. Technology
firms led the way for Balanced, as they did for many funds over the period.
But the fund also held some healthcare and financial services stocks that
contributed to performance.
- --------------------------------------------------------------------------------
TOP TEN EQUITY HOLDINGS* (as of October 31, 1995)
- --------------------------------------------------------------------------------
*The composition of the portfolio may change over time.
% of fund's equity
% of fund's investments in
equity these stocks
investments 12 months ago
Hewlett-Packard Co. 3.7% 2.0%
International Business
Machines Corp. 3.7% 4.4%
Compaq Computer Corp. 3.2% 3.2%
Vodafone Group Plc ADR 3.1% 3.0%
Texas Instruments Inc. 3.0% --
Intuit Inc. 2.6% --
Foundation Health Corp. 2.5% --
Columbia/HCA Healthcare Corp. 2.4% 2.6%
Tele-Communications, Inc. 2.4% --
Amgen Inc. 2.3% 2.3%
- --------------------------------------------------------------------------------
Q. HOW DO YOU CHOOSE THE STOCKS FOR THE PORTFOLIO?
A. In the equity portion of Balanced, we try to compile some of the best ideas
from other Twentieth Century funds, usually Growth, Select, and Ultra. As a
result, Balanced will often hold a number of large, well-established firms
(the influence of Growth and Select). Many of the portfolio's top-10 stocks
should be familiar names to most investors. But we also add in some
faster-growing companies (generally from Ultra) to boost the fund's overall
performance potential.
Q. HOW DO YOU CHOOSE THE BONDS FOR THE FIXED INCOME PORTION OF THE PORTFOLIO?
A. We manage the bond portion of the portfolio in a very neutral manner. In
other words, because we use bonds to smooth out the volatility of our stock
holdings, we look for bonds that are relatively stable performers
themselves. We may own bonds of any investment-grade quality, but we usually
prefer higher-rated bonds. Currently, for example, more than one-third of
the bond portfolio is in bonds rated AAA, the highest credit rating
available. We take a similarly restrained view toward interest rates. The
fund's average portfolio maturity is a modest 5.4 years. In general, we
choose bonds we think will perform like Treasury notes with five-year
maturities.
23
<PAGE>
BALANCED INVESTORS
Q. HOW DID THE BOND PORTION OF THE PORTFOLIO PERFORM?
A. While 1994 was a poor year for bonds, 1995 has been very good. Declining
interest rates aided aggressive, long-term bonds the most, but there was
also a solid rally among five-year Treasuries, especially over the past six
months, which spelled good news for fund performance. The bond portion of
the portfolio provided a total return of 12.61% for the year.
Q. DOES BALANCED HAVE ANY INTERNATIONAL STOCKS?
A. About 10% of the fund's equity portion is invested in international stocks.
Most of this, about 3.3% of the equity stake, is invested in Japan. Japan
has suffered through several years of poor economic conditions and a weak
equity market. But some of the more resourceful Japanese firms are
discovering ways to overcome these challenges. We believe many earnings
acceleration opportunities are opening up in Japan.
INVESTMENTS BY COUNTRY
expressed as a percentage of total value of investments
- -----------------------------
% of fund
investments
Canada 1.7%
Germany 1.2%
Hong Kong 0.4%
Japan 3.3%
Mexico 0.4%
Sweden 1.1%
United Kingdom 2.4%
United States 89.5%
------
100.0%
======
- --------------------------------------------------------------------------------
QUALITY DIVERSIFICATION (as of October 31, 1995)
- ------------------------------------------------
(Moody's ratings)% of fixed income investments
AAA 36.2%
AA 22.4%
A 33.8%
BBB 7.6%
------
100.0%
AVERAGE PORTFOLIO MATURITIES (as of October 31, 1995)
- -----------------------------------------------------
Years 5.4
Average years to maturity indicates the average time until the principal on the
Fund's bonds is expected to be repaid, weighted by dollar amount.
DURATION (as of October 31, 1995)
- ---------------------------------
Years 4.1
Duration is a measure of the sensitivity of a portfolio to changes in interest
rates. As the duration of a fund increases, the impact of a change in interest
rates on the value of its portfolio also increases.
- --------------------------------------------------------------------------------
TOP FIVE INDUSTRIES (as of October 31, 1995)
- --------------------------------------------------------------------------------
% of fund's equity
% of fund's investments in
equity these industries
investments 12 months ago
Computer Systems 11.2% 9.7%
Computer Software & Services 10.3% 10.6%
Electrical & Electronic Components 10.1% 1.7%
Communications Services 7.2% 9.4%
Communications Equipment 6.3% 5.3%
- --------------------------------------------------------------------------------
Balanced Investors schedule of investments begins on page 36.
[company logo]
24
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS October 31, 1995
SELECT INVESTORS
- --------------------------------------------------------------------------------
Value
Shares ($ In Thousands)
- --------------------------------------------------------------------------------
COMMON STOCKS
AEROSPACE & DEFENSE -- 4.7%
497,600 AlliedSignal, Inc. $ 21,148
1,000,000 Lockheed Martin Corp. 68,125
600,000 Textron Inc. 41,250
654,200 United Technologies Corp. 58,060
-------
188,583
-------
AIRLINES -- 1.7%
1,050,000 Delta Air Lines, Inc. 68,906
-------
AUTOMOBILES & AUTO PARTS -- 0.7%
4,250,000 Nissan Motor
Company ORD 28,681
-------
BANKING -- 2.1%
600,000 BankAmerica Corp. 34,500
1,202,900 Bank of New York
Co., Inc. 50,522
-------
85,022
-------
BROADCASTING -- 0.9%
1,050,000 Grupo Televisa ADR 17,981
1,350,000 Tokyo Broadcasting
System ORD 19,805
-------
37,786
-------
CHEMICALS & RESINS -- 2.8%
5,500,000 Cookson Group Plc ORD 25,486
600,000 du Pont (E.I.)
de Nemours & Co. 37,425
1,200,000 Veba AG ORD 49,235
-------
112,146
-------
COMMUNICATIONS EQUIPMENT -- 1.7%
700,000 DSC Communications Corp.1 25,944
650,000 Motorola, Inc. 42,656
-------
68,600
-------
COMMUNICATIONS SERVICES -- 3.3%
650,000 Compania De Telefonia
Espana SA ADR 24,456
2,250,000 MCI Communications Corp. 56,109
19,000,000 Societa Finanziaria
Telefonica p.a. ORD 53,936
-------
134,501
-------
COMPUTER PERIPHERALS -- 0.7%
350,000 Cisco Systems Inc.1 27,147
-------
COMPUTER SOFTWARE & SERVICES-- 6.0%
1,150,000 Autodesk Inc.++ 38,884
1,387,402 First Data Corp. 91,742
1,110,900 General Motors
Corp. Cl "E" 52,351
570,000 Microsoft Corp.1 57,036
-------
240,013
-------
COMPUTER SYSTEMS -- 7.9%
2,300,000 Fujitsu Limited ORD 27,444
1,350,000 Hewlett-Packard Co. 125,044
1,700,000 International Business
Machines Corp. 165,325
-------
317,813
-------
CONSTRUCTION -- 1.1%
800,000 Fluor Corp. 45,200
-------
DIVERSIFIED COMPANIES -- 2.6%
200,000 ITT Corp. 24,500
1,300,000 Tyco International, Ltd. 78,975
-------
103,475
-------
ELECTRICAL & ELECTRONIC
COMPONENTS -- 14.4%
46,600 Asea "A" Shares ORD 4,674
573,400 Asea "B" Shares ORD 56,644
2,200,000 Intel Corp. 153,862
800,000 Kyocera Corp. ORD 65,568
1,429,100 Micron Technology, Inc.++ 100,930
120,000 Siemens AG ORD 62,875
533,400 Sony Corp. ORD 23,998
1,650,000 Texas Instruments Inc.++ 112,612
-------
581,163
-------
ENERGY (PRODUCTION
& MARKETING) -- 3.9%
2,005,200 Apache Corp. 51,133
189,625 British Petroleum
Co. p.l.c. ADR 16,734
502,600 Kerr-McGee Corp. 27,706
600,000 Texaco Inc. 40,875
1,150,000 Union Texas
Petroleum Holdings, Inc. 20,700
-------
157,148
-------
ENERGY (SERVICES) -- 3.0%
1,750,000 Halliburton Co. 72,625
750,000 Schlumberger Ltd. 46,688
-------
119,313
-------
FINANCIAL SERVICES -- 5.5%
1,750,000 Salomon, Inc. 63,219
See Notes to Financial Statements
25
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS (CONTINUED) October 31, 1995
SELECT INVESTORS (CONTINUED
- --------------------------------------------------------------------------------
Value
Shares/Principal Amount ($ In Thousands)
- --------------------------------------------------------------------------------
230,000 Schweizerischer ORD $ 94,319
1,100,000 Student Loan Marketing
Association 64,762
-------
222,300
-------
FOOD & BEVERAGE -- 2.7%
1,400,000 ConAgra, Inc. 54,075
1,550,000 Seagram Company,
Ltd. ORD 55,800
-------
109,875
-------
HEALTHCARE -- 3.5%
1,150,000 Baxter International, Inc. 44,419
1,400,000 Columbia/HCA
Healthcare Corp. 68,775
550,000 United HealthCare Corp. 29,219
-------
142,413
-------
INDUSTRIAL EQUIPMENT
& MACHINERY -- 2.4%
600,000 Applied Materials, Inc.1++ 30,113
1,900,000 Dresser Industries, Inc. 39,425
760,000 Ingersoll-Rand Co. 26,885
-------
96,423
-------
INSURANCE -- 4.9%
275,000 Chubb Corp. (The) 24,716
662,000 Cigna Corp. 65,621
415,000 General Re Corp. 60,123
700,000 Transamerica Corporation 47,425
-------
197,885
-------
METALS & MINING -- 0.9%
1,000,000 Inco Ltd. ADR 34,375
-------
OFFICE EQUIPMENT -- 2.6%
800,000 Xerox Corp. 103,800
-------
PAPER & FOREST PRODUCTS -- 1.0%
575,000 Champion International Corp. 30,762
313,000 Rayonier Inc. 11,738
-------
42,500
-------
PHARMACEUTICALS -- 6.7%
2,473,400 Ivax Corp. 56,270
875,000 Pfizer, Inc. 50,203
1,250,000 Smithkline Beecham
Plc ADR 64,844
2,500,000 Teva Pharmaceuticals
Industries Ltd. ADR 98,125
-------
269,442
-------
RETAIL (APPAREL) -- 2.3%
2,000,000 Limited, Inc. (The) 36,750
1,000,000 NIKE, Inc. 56,750
-------
93,500
-------
RETAIL (GENERAL MERCHANDISE) -- 2.8%
850,000 Dillard Department
Stores, Inc. 23,056
800,000 Federated Department
Stores, Inc.1 20,300
750,000 May Department
Stores Co. (The) 29,438
1,200,000 Sears, Roebuck & Co. 40,800
-------
113,594
-------
MISCELLANEOUS -- 2.8%
400,000 Asatsu ORD 13,810
300,000 Burlington Northern, Inc.1 25,162
757,700 Mallinckrodt Group Inc. 26,330
1,400,000 Newell Co. 33,775
2,500,000 Tokyu Corp. ORD 15,918
-------
114,995
-------
TOTAL COMMON STOCKS-- 95.6% 3,856,599
(Cost $3,322,086) ---------
CONVERTIBLE PREFERRED STOCKS
FINANCIAL SERVICES -- 0.8%
950,000 Time Warner Financing
Trust PERCS $1.24
(Cost $ 30,931) 30,400
-------
TEMPORARY CASH INVESTMENTS
$ 40,000 par value FHLMC Discount
Note, 5.69%, 12-31-95 39,685
$ 50,000 par value FNMA Discount
Note, 5.57%, 11-3-95 49,985
Repurchase Agreement (Goldman
Sachs & Co., Inc.), 5.75%, due 11-1-95;
collateralized by $735 par value
U.S. Treasury Bonds,
13.375%, due 8-15-01
(Delivery value $ 1,000) 1,000
56,100,000 Units of Participation
in Provident Institutional Funds
(TempCash Portfolio) 56,100
-------
TOTAL TEMPORARY CASH INVESTMENTS -- 3.6% 146,770
(Cost $146,773) -------
TOTAL INVESTMENT SECURITIES-- 100.0% $ 4,033,769
(Cost $3,499,790) =========
See Notes to Financial Statements
26
<PAGE>
HERITAGE INVESTORS
- --------------------------------------------------------------------------------
Value
Shares ($ In Thousands)
- --------------------------------------------------------------------------------
COMMON STOCKS
AEROSPACE & DEFENSE -- 1.2%
200,000 Sundstrand Corporation$ 12,250
-------
AUTOMOBILES & AUTO PARTS -- 0.8%
300,000 NGK Spark Plug Co.
Ltd. ORD 4,108
125,000 Superior Industries
International, Inc. 3,516
-------
7,624
-------
BANKING -- 1.8%
240,000 First of America Bank Corp. 10,230
200,000 State Street Boston Corp. 7,775
-------
18,005
-------
BROADCASTING -- 2.9%
950,000 Comcast Corp. 16,922
550,000 Tele-Communications
International, Inc.1 12,444
-------
29,366
-------
BUSINESS SERVICES & SUPPLIES-- 3.9%
100,000 Alco Standard Corp. 8,850
375,000 National Data Corp. 9,937
235,000 Norrell Corp. 7,197
300,000 Paychex, Inc. 13,069
-------
39,053
-------
COMMUNICATIONS EQUIPMENT -- 6.4%
550,000 Allen Group Inc. (The) 13,475
450,000 ECI Telecom Ltd. ADR1 8,578
700,000 Ericsson (L.M.)
Telephone Co. ADR 15,006
300,000 First Chicago Nextel Decs 5,288
300,000 Nera AS ADR1 10,594
200,000 Nokia Corp. ADR 11,150
-------
64,091
-------
COMPUTER PERIPHERALS -- 2.0%
50,000 Bay Networks, Inc.1++ 3,319
160,000 Cirrus Logic, Inc.1++ 6,730
125,000 Madge Networks N.V.1 5,234
280,000 National Computer
Systems, Inc. 5,250
-------
20,533
-------
COMPUTER SOFTWARE & SERVICES -- 7.5%
166,000 Analysts International Corp. 4,918
325,000 Autodesk Inc.++ 10,989
350,000 HBO & Co. 24,719
300,000 Mentor Graphics Corp.1 6,338
160,000 Progress Software Corp.1 10,420
200,000 Sybase, Inc.1++ 7,862
325,000 System Software
Associates, Inc. 10,055
-------
75,301
-------
CONTROL & MEASUREMENT -- 6.1%
400,000 LTX Corporation1 4,900
485,000 Perkin-Elmer Corp. 17,036
400,000 Tektronix, Inc. 23,700
315,000 Varian Associates, Inc. 16,183
-------
61,819
-------
ELECTRICAL & ELECTRONIC
COMPONENTS -- 17.0%
480,000 AVX Technology 14,940
310,000 Advantest Corporation ORD 17,585
300,000 Alps Electric Co., Ltd. ORD 3,081
225,000 BMC Industries, Inc. 8,691
400,000 Belden Inc. 9,650
186,800 Cohu, Inc. 5,767
450,000 Dallas Semiconductor Corp. 9,562
285,000 Hoya Corp. ORD 8,362
130,000 Lattice Semiconductor Corp.1 5,086
450,000 Linear Technology Corp. 19,744
290,000 Micron Technology, Inc.++ 20,481
375,000 Omron Corporation ORD 8,766
340,000 Park Electrochemical Corp. 10,625
400,000 Pioneer Standard Electronics, Inc.5,475
200,000 SCI Systems, Inc.1 7,050
600,000 Tokin Corporation ORD 9,272
425,000 Yamaha Corp. ORD 6,775
-------
170,912
-------
ENERGY (PRODUCTION & MARKETING) -- 3.1%
95,000 Anadarko Petroleum Corp. 4,121
400,000 Sonat Offshore Drilling, Inc. 12,700
550,000 Tidewater, Inc. 14,506
-------
31,327
-------
FINANCIAL SERVICES -- 5.5%
250,000 Daiwa Securities Co.,
Ltd. ORD 2,934
190,000 Franklin Resources, Inc. 9,642
300,000 Invesco PLC ADR 11,475
150,000 Kokusai Securities Co.,
Ltd. ORD 1,878
230,000 Legg Mason, Inc. 6,612
See Notes to Financial Statements
27
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) October 31, 1995
HERITAGE INVESTORS (CONTINUED)
- --------------------------------------------------------------------------------
Value
Shares ($ In Thousands)
- --------------------------------------------------------------------------------
500,000 Lehman Brothers
Holding, Inc. $ 10,875
350,000 Mitsubishi Trust
& Banking Corp. ORD 4,895
350,000 North America
Mortgage Company 7,219
-------
55,530
-------
FOOD & BEVERAGE -- 1.4%
450,000 Hudson Foods, Inc. 6,356
325,000 Richfood Holdings, Inc. 8,166
-------
14,522
-------
HEALTHCARE -- 1.0%
300,000 Manor Care, Inc. 9,825
-------
INDUSTRIAL EQUIPMENT & MACHINERY -- 6.4%
250,000 Case Equipment Corp. 9,531
200,000 Harnischfeger Industries, Inc. 6,300
70,000 KLA Instruments Corp.1++ 3,010
260,000 Measurex Corp. 7,995
300,000 Precision Castparts Corp. 10,725
230,000 Roper Industries, Inc. 8,165
185,000 SMCCorp. ORD 13,009
375,000 Titan Wheel
International, Inc. 5,437
-------
64,172
-------
INSURANCE -- 2.6%
70,000 Loews Corp. 10,264
220,000 Sunamerica, Inc. 13,695
50,000 The PMI Group, Inc. 2,400
-------
26,359
-------
LEISURE -- 2.4%
100,000 Gaylord Entertainment Co. 2,575
350,000 Jostens, Inc. 7,919
750,000 Konica Corp. ORD 5,025
150,000 La Quinta Inns, Inc. 3,862
100,000 Sony Music
Entertainment ORD 4,284
-------
23,665
-------
MEDICAL EQUIPMENT & SUPPLIES-- 6.6%
390,000 Guidant Corp. 12,480
510,000 Invacare Corp. 12,750
950,000 Mentor Corp. 21,138
560,000 Omnicare, Inc. 20,300
-------
66,668
-------
PAPER & FOREST PRODUCTS -- 0.8%
240,000 James River Corp. of Virginia 7,710
-------
PHARMACEUTICALS -- 0.7%
210,000 A.L. Pharma Inc. 5,040
100,000 Mylan Laboratories, Inc. 1,900
-------
6,940
-------
PUBLISHING -- 1.0%
350,000 New York Times Co. Cl A 9,712
-------
RESTAURANTS -- 2.4%
380,000 Apple South, Inc. 7,885
400,000 Applebee's International Inc. 11,175
275,000 Wendy's International, Inc. 5,466
-------
24,526
-------
RETAIL (APPAREL) -- 3.9%
250,000 Aoki International ORD 5,501
200,000 Gucci Group ADR1 6,000
350,000 Intimate Brands, Inc.1 5,862
600,000 Liz Claiborne, Inc. 17,025
190,000 Talbots, Inc. 4,608
-------
38,996
-------
RETAIL (GENERAL MERCHANDISE) -- 1.1%
235,000 Dillard Department
Stores, Inc. 6,374
400,000 Shopko Stores, Inc. 4,300
-------
10,674
-------
RETAIL (SPECIALTY) -- 3.6%
500,000 Circuit City Stores, Inc. 16,688
255,000 Fastenal Co. 8,877
200,000 Lowe's Companies, Inc. 5,400
205,000 Staples, Inc.1 5,484
-------
36,449
-------
MISCELLANEOUS -- 0.6%
100,000 Airborne Freight Corp. 2,625
125,000 Century Telephone
Enterprises, Inc. 3,625
6,000 International Imaging
Materials, Inc.1 154
-------
6,404
-------
TOTAL COMMON STOCKS-- 92.7% 932,433
(Cost $ 763,707) -------
See Notes to Financial Statements
28
<PAGE>
- --------------------------------------------------------------------------------
Value
Shares/Principal Amount ($ In Thousands)
- --------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS
COMPUTER SOFTWARE & SERVICES -- 1.9%
125,000 SAP AG Preferred ORD $ 19,169
(Cost $ 5,798) -------
CONVERTIBLE BONDS
ELECTRICAL & ELECTRONIC
COMPONENTS -- 0.9%
$5,000 Integrated Device Technology
5.50%, 6-1-02 4,775
1,200 LSI Logic Corporation
5.50%, 3-15-01+ 4,697
-------
9,472
-------
PUBLISHING -- 0.9%
9,000 Scholastic Corp.
5.00%, 8-15-05+ 8,955
-------
TOTAL CONVERTIBLE BONDS-- 1.8% 18,427
(Cost $18,867) -------
TEMPORARY CASH INVESTMENTS -- 3.6%
Repurchase Agreement (Goldman
Sachs & Co., Inc.), 5.75%, due 11-1-95;
collateralized by $27,520 par value
U.S. Treasury Bonds, 9.00% - 13.375%,
due 8-15-01 through 11-15-18
(Delivery value $36,206) 36,200
(Cost $36,200) -------
TOTAL INVESTMENT SECURITIES-- 100.0% $ 1,006,229
(Cost $824,572) =========
GROWTH INVESTORS
- --------------------------------------------------------------------------------
Value
Shares/Principal Amount ($ In Thousands)
- --------------------------------------------------------------------------------
COMMON STOCKS
AEROSPACE & DEFENSE -- 3.2%
1,450,000 Boeing Co. $ 95,156
800,000 Loral Corp. 23,700
600,000 McDonnell-Douglas Corp. 49,050
-------
167,906
-------
AIRLINES -- 0.4%
1,049,900 Southwest Airlines Co. 20,998
-------
AUTOMOBILES & AUTO PARTS -- 0.6%
1,800,000 Honda Motor Co. Ltd. ORD 31,336
-------
BANKING -- 4.5%
300,000 Bankers Trust New York Corp. $ 19,125
1,500,000 Citicorp 97,313
880,000 Morgan (J.P.) & Co. Inc. 67,870
1,000,000 Sumitomo Bank ORD 17,703
150,000 Wells Fargo & Co. 31,519
-------
233,530
-------
BIOTECHNOLOGY -- 0.9%
550,000 Chiron Corp.1 50,188
-------
COMMUNICATIONS EQUIPMENT -- 7.6%
2,000,000 ADC Telecommunications,
Inc.1 80,000
4,000,000 Ericsson (L.M.)
Telephone Co. ADR 85,750
1,280,300 Glenayre Technologies, Inc.1 82,739
1,100,000 Motorola, Inc. 72,188
1,300,000 QUALCOMM Inc.1++ 50,131
1,800,000 Tamura Electric Works ORD1++ 27,463
-------
398,271
-------
COMMUNICATIONS SERVICES -- 5.1%
1,285,400 AT&T Corp. 82,266
1,165,200 AirTouch Communications1 33,208
2,800,000 Nextel Communications Inc.1 39,025
1,800,000 Vodafone Group Plc ADR 73,575
1,175,000 Worldcom Inc.1 38,481
-------
266,555
-------
COMPUTER PERIPHERALS -- 7.1%
1,551,800 Bay Networks, Inc.1++ 103,001
1,000,000 Cirrus Logic, Inc.1++ 42,062
2,340,000 Cisco Systems Inc.1 181,496
4,750,000 Oki Electric Industries ORD1 43,995
-------
370,554
-------
COMPUTER SOFTWARE & SERVICES-- 7.0%
300,000 Cerner Corp.1 7,725
747,000 Computer Sciences Corp.1 49,956
600,000 Filenet Corp.1++ 27,188
250,000 First Data Corp. 16,531
855,000 Microsoft Corp.1 85,553
600,000 Oracle Systems Corp.1 26,213
3,044,200 Sybase, Inc.1++ 119,675
1,300,000 Symantec Corp.1 31,606
-------
364,447
-------
COMPUTER SYSTEMS -- 4.7%
1,300,000 Compaq Computer Corp.1 72,475
1,500,000 Fujitsu Limited ORD 17,898
2,500,000 Hitachi Limited ORD 25,674
800,000 International Business
Machines Corp. 77,800
See Notes to Financial Statements
29
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) October 31, 1995
GROWTH INVESTORS (CONTINUED)
- --------------------------------------------------------------------------------
Value
Shares ($ In Thousands)
- --------------------------------------------------------------------------------
3,700,000 NEC Corporation ORD $ 48,853
-------
242,700
-------
ELECTRICAL & ELECTRONIC
COMPONENTS -- 15.9%
950,000 Cypress Semiconductor Corp.1++ 33,488
2,400,000 Intel Corp. 167,850
432,400 Kemet Corp.1 14,810
975,000 LSI Logic Corp.1++ 45,947
1,858,500 Linear Technology Corp. 81,542
700,000 Matsushita Communications
Industrial Co., Ltd. ORD 15,746
1,600,400 Micron Technology, Inc.++ 113,028
2,700,000 Mitsubishi Electric Corp. ORD 20,175
1,500,000 Mitsumi Electric Co.,
Ltd ORD 36,236
100,000 Molex Inc. 3,325
825,000 Rohm Co., Ltd. ORD 50,108
1,611,800 Texas Instruments Inc.++ 110,005
4,400,000 Toshiba Corporation ORD 31,888
724,500 VLSI Technology, Inc.1 17,026
1,900,000 Xilinx, Inc.1 87,519
-------
828,693
-------
FINANCIAL SERVICES -- 10.8%
350,000 Alex Brown Inc. 17,106
500,000 American Express
Credit Corp. 20,313
1,200,200 Countrywide Credit
Industries, Inc. 26,554
1,200,000 Dean Witter, Discover & Co. 59,700
631,300 Donaldson, Lufkin
& Jenrette, Inc.1 18,781
450,000 Federal Home Loan
Mortgage Corp. 31,163
490,300 Federal National
Mortgage Association 51,420
600,000 Mercury Finance Co. 11,550
1,900,000 Merrill Lynch & Co., Inc. 105,450
500,000 Mitsubishi Trust
& Banking Corp. ORD 6,993
945,300 Morgan Stanley Group Inc. 82,241
3,100,000 Nomura Securities Co. Ltd. ORD 56,697
1,700,000 Schwab (Charles) Corp. 38,888
700,000 Travelers Corp. 35,350
-------
562,206
-------
HEALTHCARE -- 0.5%
300,000 Beverly Enterprises, Inc.1 3,525
697,100 Health Care & Retirement Corp.1 20,477
-------
24,002
-------
INDUSTRIAL EQUIPMENT
& MACHINERY -- 6.4%
2,200,000 Applied Materials, Inc.1++$ 110,412
450,000 Lam Research Corp.1++ 27,394
125,000 Mannesmann AGORD 41,116
3,000,000 Nikon Corporation ORD 42,838
900,000 Teradyne, Inc.1 30,038
1,900,000 Tokyo Electron Limited ORD 82,508
-------
334,306
-------
LEISURE -- 4.4%
819,600 Acclaim Entertainment, Inc.1 19,414
2,000,000 Circus Circus Enterprises, Inc.1 53,250
700,000 Electronic Arts, Inc.1 25,681
712,500 Marriott International 26,273
1,600,000 Mirage Resorts, Inc.1 52,400
500,000 Nintendo Co., Ltd ORD 36,774
300,000 Viacom Inc.1 15,000
-------
228,792
-------
MEDICAL EQUIPMENT & SUPPLIES-- 1.9%
1,700,000 Medtronic, Inc. 98,175
-------
OFFICE EQUIPMENT -- 2.2%
2,800,000 Canon Inc. ORD 47,924
1,500,000 Ricoh Co. Ltd ORD 16,138
3,500,000 Sanyo Electric
Company Ltd. ORD 18,143
250,000 Xerox Corp. 32,437
-------
114,642
-------
PAPER & FOREST PRODUCTS -- 1.3%
500,000 Boise Cascade Corp. 18,125
400,000 Champion
International Corp. 21,400
1,250,000 Kimberly-Clark
De Mexico SA DE CV ORD 16,304
700,000 Stone Container Corp. 11,550
-------
67,379
-------
PHARMACEUTICALS -- 1.7%
1,500,000 Merck & Co., Inc. 86,250
-------
RESTAURANTS -- 0.8%
1,000,000 Boston Chicken, Inc.1 33,812
500,000 Buffets, Inc.1 6,313
-------
40,125
-------
RETAIL (APPAREL) -- 2.2%
1,600,000 Aoyama Trading Co.,
Ltd. ORD 43,190
833,600 Gap, Inc. 32,823
500,000 Nautica Enterprises Inc.1 17,188
See Notes to Financial Statements
30
<PAGE>
- --------------------------------------------------------------------------------
Value
Shares ($ In Thousands)
- --------------------------------------------------------------------------------
450,000 Nine West Group Inc.1 $ 20,025
-------
113,226
-------
RETAIL (GENERAL MERCHANDISE) -- 2.0%
350,200 Harcourt General Inc. 13,877
1,800,000 Sears, Roebuck & Co. 61,200
1,333,700 Wal-Mart Stores, Inc. 28,841
-------
103,918
-------
RETAIL (SPECIALTY) -- 4.6%
800,000 Autozone, Inc.1 19,800
500,000 Best Buy Co., Inc.1 10,375
705,500 Borders Group, Inc.1 12,082
350,000 CDW Computer
Centers, Inc.1 17,194
1,800,000 Circuit City Stores, Inc. 60,075
775,000 Lowe's Companies, Inc. 20,925
1,300,000 Office Depot, Inc.1 37,213
1,222,200 Tandy Corp. 60,346
-------
238,010
-------
MISCELLANEOUS -- 0.4%
500,000 Thermo Electron Corp.1 23,000
-------
TOTAL COMMON STOCKS-- 96.2% 5,009,209
(Cost $4,146,454) ---------
TEMPORARY CASH INVESTMENTS
$104,000 par value FHLMC Discount Notes,
5.55%-5.62%, 11-16-95 through 12-7-95 103,597
$ 50,000 par value FNMA Discount Note,
5.58%, 11-15-95 49,892
Repurchase Agreement (Boatmen's First
National Bank), 4.75%, due 11-1-95;
collateralized by $ 6,400 par value
FNMA 6.05%, due 6-23-98
(Delivery value $ 6,401) 6,400
Repurchase Agreement (Goldman Sachs
& Co., Inc.), 5.75%, due 11-1-95;
collateralized by $390 par value
U.S. Treasury Bonds,
8.75%, due 5-15-20
(Delivery value $500) 500
37,300,000 Units of Participation
in Provident Institutional Funds
(TempCash Portfolio) 37,300
-------
TOTAL TEMPORARY CASH INVESTMENTS -- 3.8% 197,689
(Cost $197,689) -------
TOTAL INVESTMENT SECURITIES-- 100.0% $ 5,206,898
(Cost $4,344,143) =========
ULTRA INVESTORS
- --------------------------------------------------------------------------------
Value
Shares ($ In Thousands)
- --------------------------------------------------------------------------------
COMMON STOCKS
AIRLINES -- 0.3%
300,000 Northwest Airlines Corp.1 $ 12,056
600,000 ValuJet Inc.1 31,200
-------
43,256
-------
BANKING -- 2.4%
1,000,000 Bank of Boston Corp. 44,500
1,200,000 Chemical Banking Corp. 68,250
3,550,000 Citicorp 230,306
-------
343,056
-------
BIOTECHNOLOGY -- 4.5%
7,850,000 Amgen Inc.1 377,291
2,325,000 Biogen Inc.1++ 142,987
2,170,000 Genzyme Corp.1++ 126,131
-------
646,409
-------
BROADCASTING -- 0.8%
1,000,000 British Sky Broadcasting
Group PLC ADR 35,750
1,200,000 Carlton Communications
Plc ORD 18,295
175,000 Clear Channel
Communications, Inc.1 14,350
1,200,000 Infinity Broadcasting Corp.1 39,000
100,000 Lin Television Corp.1 2,850
-------
110,245
-------
COMMUNICATIONS EQUIPMENT -- 7.2%
3,400,000 DSC Communications Corp.1 126,013
1,200,000 Motorola, Inc. 78,750
865,000 Nokia Corp. ADR 48,224
1,600,000 Picturetel Corp.1++ 105,400
2,950,000 QUALCOMM Inc.1++ 113,759
2,400,000 StrataCom, Inc.1++ 147,900
1,000,000 Tamura Electric Works ORD1++ 15,257
14,000,000 Telcom Italia MobileORD1 23,599
1,200,000 Tellabs, Inc.1++ 40,950
3,450,000 U.S. Robotics Corp.1++ 320,850
-------
1,020,702
---------
COMMUNICATIONS SERVICES -- 1.8%
792,900 AirTouch Communications1 22,598
See Notes to Financial Statements
31
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) October 31, 1995
ULTRA INVESTORS (CONTINUED)
- --------------------------------------------------------------------------------
Value
Shares ($ In Thousands)
- --------------------------------------------------------------------------------
1,000,000 Mobile Telecommunication
Technologies Corp.1 $ 28,500
2,840,000 Paging Network, Inc.1 65,675
4,350,000 Worldcom Inc.1 142,462
-------
259,235
-------
COMPUTER PERIPHERALS -- 16.9%
2,015,000 Adaptec, Inc.1 89,919
2,670,000 Ascend Communications, Inc.1++ 172,883
6,750,000 Bay Networks, Inc.1++ 448,031
1,300,000 Cabletron Systems, Inc.1 102,213
2,150,000 Cascade Communications1++ 152,650
3,000,000 Cirrus Logic, Inc.1++ 126,188
6,000,000 Cisco Systems Inc.1 465,375
549,500 Electronics for Imaging, Inc.1 45,471
1,900,000 Fore Systems, Inc.1++ 100,938
700,000 Network Equipment
Technologies, Inc.1++ 22,838
1,450,000 Network General Corp.1++ 59,994
2,700,000 S3 Incorporated1++ 45,900
12,400,000 3Com Corp.1++ 582,025
-------
2,414,425
---------
COMPUTER SOFTWARE & SERVICES -- 15.0%
2,300,000 Adobe Systems Inc.++ 131,387
2,750,000 America Online Inc.1++ 220,172
1,800,000 BMC Software, Inc.1++ 64,350
1,350,000 Cadence Design Systems, Inc.1 43,537
1,400,000 Cheyenne Software, Inc.1 29,225
850,000 Computer Associates
International, Inc. 46,750
600,000 HBO & Co. 42,375
6,450,000 Informix Corp.1++ 188,259
3,500,000 Intuit Inc.1++ 252,875
3,300,000 Microsoft Corp.1 330,206
115,000 NETCOM On-Line
Communication
Services, Inc.1 6,663
9,000,000 Oracle Systems Corp.1 393,188
1,450,000 Parametric Technology Corp.1 96,878
1,225,000 Peoplesoft, Inc.1 105,656
1,000,000 Quarterdeck Office
Systems, Inc.1++ 21,438
1,125,000 Softkey International Inc.1++ 35,508
575,000 Sterling Software, Inc.1 26,522
1,800,000 Synopsys, Inc.1 67,050
600,000 UUNET Technologies Inc.1 36,225
250,000 Wonderware Corp.1 7,969
-------
2,146,233
---------
COMPUTER SYSTEMS -- 8.2%
700,000 Compaq Computer Corp.1 39,025
7,000,000 Dell Computer Corp.1++ 325,937
1,600,000 Hewlett-Packard Co. 148,200
3,000,000 International Business
Machines Corp. 291,750
1,000,000 NEC Corporation ORD 13,204
800,000 Silicon Graphics Inc.1 26,600
4,150,000 Sun Microsystems, Inc.1 324,219
-------
1,168,935
---------
ELECTRICAL & ELECTRONIC
COMPONENTS -- 15.2%
700,000 Alliance Semiconductor Corp.1 21,438
2,100,000 Altera Corp.1 127,181
1,275,000 Analog Devices, Inc.1 46,059
700,000 Arrow Electronics, Inc.1 35,525
1,650,000 Atmel Corp.1++ 51,666
650,000 Avnet, Inc. 32,744
790,100 Cypress Semiconductor Corp.1++ 27,851
600,000 Fanuc Ltd. ORD 25,996
2,440,000 Integrated Device
Technology, Inc.1++ 46,513
5,500,000 Intel Corp. 384,656
950,000 Komag, Inc.1++ 54,209
4,292,100 LSI Logic Corp.1++ 202,265
4,621,600 Micron Technology, Inc.++ 326,400
1,425,000 Oak Technology, Inc.1++ 78,375
300,000 Phillips N.V. ADR 11,588
300,000 Read-Rite Corp.1 10,481
1,600,000 Rohm Co., Ltd. ORD 97,178
1,000,000 Sharp Corp. ORD 13,888
1,575,000 Silicon Valley Group, Inc.1++ 50,794
387,900 Sony Corp. ORD 17,452
850,000 TDK Corporation ORD 43,811
6,300,000 Texas Instruments Inc.++ 429,975
650,000 VLSI Technology, Inc.1 15,275
488,100 Xilinx, Inc.1 22,483
-------
2,173,803
---------
ENERGY (PRODUCTION & MARKETING) -- 0.3%
300,000 Baker Hughes Inc. 5,888
850,000 Triton Energy Corp. 39,631
-------
45,519
-------
FINANCIAL SERVICES -- 1.9%
1,750,000 American Express Credit Corp. 71,094
2,300,000 Green Tree Financial Corp. 61,237
550,000 Household International, Inc. 30,937
1,600,000 MBNA Corp. 59,000
900,000 Merrill Lynch & Co., Inc. 49,950
-------
272,218
-------
See Notes to Financial Statements
32
<PAGE>
- --------------------------------------------------------------------------------
Value
Shares ($ In Thousands)
- --------------------------------------------------------------------------------
FOOD & BEVERAGE -- 0.3%
1,000,000 Starbucks Corp.1++ $ 39,313
-------
HEALTHCARE -- 2.1%
1,340,000 Columbia/HCA Healthcare Corp. 65,828
1,735,000 Healthsouth Rehabilitation Corp.145,327
600,000 OrNda HealthCorp1 10,650
1,400,000 Oxford Health Plans, Inc.1++ 109,900
1,725,000 Phycor, Inc.1++ 63,178
-------
294,883
-------
INDUSTRIAL EQUIPMENT
& MACHINERY -- 4.8%
6,700,000 Applied Materials, Inc.1++ 336,256
700,000 KLA Instruments Corp.1++ 30,100
1,834,300 Lam Research Corp.1++ 111,663
1,550,000 Nikon Corporation ORD 22,133
375,000 Novellus Systems, Inc.1++ 25,781
950,000 Tencor Instruments1++ 40,612
2,640,000 Teradyne, Inc.1 88,110
800,000 Tokyo Electron Limited ORD 34,740
-------
689,395
-------
INSURANCE -- 0.3%
1,200,000 HealthCare COMPARE
Corp.1++ 44,550
-------
MEDICAL EQUIPMENT & SUPPLIES -- 0.8%
1,640,000 Boston Scientific Corp.1 69,085
1,000,000 St. Jude Medical, Inc.1 53,188
-------
122,273
-------
PHARMACEUTICALS -- 8.9%
1,400,000 Abbott Laboratories 55,650
3,250,000 Astra "A" Shares ORD 119,599
3,450,000 Johnson & Johnson 281,175
5,200,000 Merck & Co., Inc. 299,000
6,600,000 Pfizer Inc. 378,675
2,000,000 Schering-Plough Corp. 107,250
45,354 U.S. Bioscience, Inc.1 204
775,000 Watson Pharmaceuticals1 34,875
-------
1,276,428
---------
RETAIL (SPECIALTY) -- 1.0%
1,575,000 General Nutrition
Companies, Inc.1 38,981
665,000 Micro Warehouse, Inc.1 29,759
1,725,000 Staples, Inc.1 46,144
575,000 Viking Office Products, Inc.1 25,623
-------
140,507
-------
MISCELLANEOUS -- 1.7%
2,250,000 Bombardier, Inc. ORD 27,438
2,150,000 CUC International Inc.1 74,444
800,000 Canon Inc. ORD 13,693
1,660,000 Hutchinson Whampoa
Limited ORD $ 9,146
50,000 PolyGram N.V. ADR 3,100
500,000 PolyGram N.V. ORD 31,183
465,000 Scholastic Corp.1 28,772
1,150,000 Viacom Inc.1 57,500
-------
245,276
-------
TOTAL COMMON STOCKS-- 94.4% 13,496,661
(Cost $8,328,221) ----------
TEMPORARY CASH INVESTMENTS
$56,940 par value FFCB Discount Notes,
5.58%-5.61%, 11-17-95 through 12-7-95 56,704
$64,000 par value FHLB Discount Notes,
5.53%-5.61%, 11-15-95 through 11-28-95 63,821
$269,000 par value FHLMC Discount Notes,
5.58%-5.69%, 11-15-95 through 12-31-95 267,865
$341,445 par value FNMA Discount Notes,
5.58%-5.62%, 11-16-95 through 12-29-95 340,249
17,000,000 Units of Participation
in Provident Institutional Funds
(Fed-Fund Portfolio) 17,000
40,500,000 Units of Participation
in Provident Institutional Funds
(T-Fund Portfolio) 40,500
14,400,000 Units of Participation
in Provident Institutional Funds
(Temp Fund Portfolio) 14,400
-------
TOTAL TEMPORARY CASH INVESTMENTS -- 5.6% 800,539
(Cost $800,545) -------
TOTAL INVESTMENT SECURITIES -- 100.0% $ 14,297,200
(Cost $9,128,766) ==========
VISTA INVESTORS
- --------------------------------------------------------------------------------
Value
Shares ($ In Thousands)
- --------------------------------------------------------------------------------
COMMON STOCKS
BUSINESS SERVICES & SUPPLIES -- 8.6%
1,250,000 Corporate Express, Inc.1 $ 32,500
300,000 Corrections Corp. of America1 16,350
725,000 HFS, Inc.1 44,406
1,200,000 Medaphis Corp.1 38,100
190,000 Quintiles Transnational Corp.1 12,113
-------
143,469
-------
See Notes to Financial Statements
33
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) October 31, 1995
VISTA INVESTORS (CONTINUED)
- --------------------------------------------------------------------------------
Value
Shares ($ In Thousands)
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT -- 3.9%
540,000 Boca Research, Inc.1++ $ 13,568
94,500 C-COR Electronics, Inc.1++ 2,197
550,000 Pairgain Technologies, Inc.1 23,375
380,000 StrataCom, Inc.1++ 23,417
100,000 Tellabs, Inc.1++ 3,413
-------
65,970
-------
COMPUTER PERIPHERALS -- 5.4%
650,000 Diamond Multimedia Corp.1 19,338
1,550,000 S3 Incorporated1++ 26,350
1,000,000 Seagate Technology1 44,750
-------
90,438
-------
COMPUTER SOFTWARE & SERVICES -- 11.9%
940,000 Ceridian Corp.1 40,890
600,000 Cognos Incorporated ADR1 19,275
250,000 Davidson & Associates, Inc.1 8,969
520,000 HBO & Co. 36,725
1,800,000 Macromedia, Inc.1++ 66,150
937,000 PCDocs Group
International, Inc. ADR1++ 15,109
400,000 Softkey International Inc.1++ 12,625
-------
199,743
-------
CONSUMER PRODUCTS -- 1.0%
800,000 Thermolase Corp.1 16,300
-------
ELECTRICAL & ELECTRONIC
COMPONENTS -- 18.7%
1,500,000 Atmel Corp.1++ 46,969
627,500 International Rectifier Corp.1 28,316
407,900 Kemet Corp.1 13,970
100,000 Komag, Inc.1++ 5,706
1,850,000 LSI Logic Corp.1++ 87,181
1,050,000 Maxim Integrated
Products, Inc.1 78,422
750,000 Microchip Technology, Inc.1++ 29,719
450,000 Read-Rite Corp.1 15,722
56,900 Sanmina Corp.1 3,087
100,000 Vishay Intertechnology, Inc. 3,525
-------
312,617
-------
ENVIRONMENTAL SERVICES -- 2.1%
800,000 USA Waste Services, Inc.1 16,800
450,000 United Waste Systems, Inc.1 17,775
-------
34,575
-------
HEALTHCARE -- 6.8%
1,100,000 Foundation Health Corp.1 $ 46,612
800,000 Genzyme Tissue Repair1++ 14,350
400,000 Health Management
Associates, Inc.1 8,600
675,000 Healthsource, Inc.1 35,775
440,000 Owen Healthcare Inc.1 8,112
-------
113,449
-------
INDUSTRIAL EQUIPMENT
& MACHINERY -- 16.7%
800,000 ASM Lithography ADR1 39,400
330,000 Applied Materials, Inc.1++ 16,562
190,000 Cognex Corp.1 11,400
600,000 Credence Systems Corp.1++ 22,500
1,150,000 FSI International, Inc.1++ 27,456
1,600,000 KLA Instruments Corp.1++ 68,800
640,000 Kulicke & Soffa
Industries, Inc.1 22,640
780,000 Tencor Instruments1++ 33,345
940,000 Ultratech Stepper, Inc.1++ 37,600
-------
279,703
-------
LEISURE -- 2.0%
300,000 Discreet Logic Inc. ADR1 17,250
380,000 Harveys Casino Resorts++ 6,127
275,000 Movie Gallery, Inc.1 10,519
-------
33,896
-------
MEDICAL EQUIPMENT & SUPPLIES -- 6.2%
600,000 IDEXX Laboratories, Inc.1 24,300
1,500,000 STERIS Corp.1++ 50,437
300,000 Summit Technology, Inc.1 13,312
340,000 Thermo Cardiosystems, Inc.1 16,490
-------
104,539
-------
PAPER & FOREST PRODUCTS -- 1.8%
700,000 Bowater Inc. 30,975
-------
PHARMACEUTICALS -- 1.6%
750,000 Dura Pharmaceuticals, Inc.1++ 22,125
500,000 Noven Pharmaceuticals, Inc.1 5,094
-------
27,219
-------
RETAIL (SPECIALTY) -- 5.6%
225,000 Just For Feet, Inc.1++ 5,358
1,600,000 OfficeMax, Inc.1 39,600
1,800,000 Sunglass Hut
International, Inc.1 48,825
-------
93,783
-------
MISCELLANEOUS -- 0.7%
200,000 Oakley, Inc.1 6,900
See Notes to Financial Statements
34
<PAGE>
- --------------------------------------------------------------------------------
Value
Shares ($ In Thousands)
- --------------------------------------------------------------------------------
300,000 Olympic Financial Ltd.1 $ 5,438
-------
12,338
-------
TOTAL COMMON STOCKS-- 93.0% 1,559,014
(Cost $999,200) ---------
TEMPORARY CASH INVESTMENTS
$55,000 par value FHLMC Discount Notes,
5.56%-5.63%, 11-15-95 through 12-4-95 54,763
61,800,000 Units of Participation in
Provident Institutional Funds
(Fed-Fund Portfolio) 61,800
-------
TOTAL TEMPORARY
CASH INVESTMENTS-- 7.0% 116,563
(Cost $116,563) -------
TOTAL INVESTMENT SECURITIES-- 100.0% $ 1,675,577
(Cost $1,115,763) =========
GIFTRUST INVESTORS
- --------------------------------------------------------------------------------
Value
Shares ($ In Thousands)
- --------------------------------------------------------------------------------
COMMON STOCKS
BIOTECHNOLOGY -- 1.2%
130,000 Matrix Pharmaceutical, Inc.1 $ 1,917
190,000 Myriad Genetics, Inc.1 5,154
-------
7,071
-------
BUSINESS SERVICES & SUPPLIES -- 1.6%
250,000 APAC Teleservices, Inc.1 6,313
60,000 Sitel Corporation1 1,365
60,000 Wackenhut Corp.1 1,230
-------
8,908
-------
COMMUNICATIONS EQUIPMENT -- 4.8%
48,600 C-COR Electronics, Inc.1++ 1,130
255,000 ITITechnologies, Inc.1 6,439
300,000 Microwave Power
Devices, Inc.1 2,550
70,000 Premisys
Communications, Inc.1 6,239
218,900 TSX Corp.1 4,296
215,000 VideoServer, Inc.1 6,692
-------
27,346
-------
COMPUTER PERIPHERALS -- 11.2%
200,000 Cirrus Logic, Inc.1++$ 8,413
500,000 Data Translation, Inc.1++ 7,813
440,000 Pinnacle Systems, Inc.1++ 13,750
570,000 Security Dynamics
Technologies Inc.1++ 18,383
250,000 Shiva Corp.1 15,031
-------
63,390
-------
COMPUTER SOFTWARE & SERVICES -- 20.3%
270,000 ArcSys, Inc.1 11,408
165,000 Astea International, Inc.1 2,929
250,000 Atria Software, Inc.1 9,000
4,887 Aura Systems, Inc.1 24
187,500 CBT Group Plc ADR1 8,437
320,000 Cellular Technical
Services Co., Inc.1 5,360
150,000 Computron Software, Inc.1 2,587
99,700 CyCare Systems, Inc.1 3,091
125,000 Datalogix International, Inc.1 1,250
240,000 EPIC Design Technology1 10,920
230,000 HCIA1 6,152
350,000 Hummingbird
Communications Ltd. ADR1 15,050
400,000 JetForm Corp. ORD1 6,425
125,000 Mcafee Associates, Inc.1 7,312
190,000 Pure Software, Inc.1 7,054
275,000 7th Level, Inc.1 4,125
300,000 Veritas Software Corporation1 9,562
160,000 Wind River Systems1 4,340
-------
115,026
-------
CONTROL & MEASUREMENT -- 6.3%
425,000 Cyberoptics Corporation1++ 14,131
700,000 Robotic Vision Systems, Inc.1++ 15,969
300,000 Wireless Telecom Group Inc.++ 5,475
-------
35,575
-------
ELECTRICAL & ELECTRONIC
COMPONENTS -- 13.3%
190,000 ANADIGICS, Inc.1 4,156
440,000 Atmel Corp.1++ 13,777
341,300 Burr-Brown Corp.1 10,836
300,000 DSP Communications, Inc.1 10,912
100,000 Micrel Inc.1 2,312
150,000 Microchip Technology, Inc.1++ 5,944
150,000 Paradigm Technology, Inc.1 3,319
150,000 Read-Rite Corp.1 5,241
230,000 SDL Inc.1 5,980
230,000 Semtech Corporation1++ 5,922
300,000 Triquint Semiconductor, Inc.1 6,881
-------
75,280
-------
See Notes to Financial Statements
35
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) October 31, 1995
GIFTRUST INVESTORS (CONTINUED)
- --------------------------------------------------------------------------------
Value
Shares/Principal Amount ($ In Thousands)
- --------------------------------------------------------------------------------
FINANCIAL SERVICES -- 1.3%
262,500 Rent-Way, Inc.1++ $ 2,576
270,000 Renters Choice, Inc.1 4,590
-------
7,166
-------
HEALTHCARE -- 5.7%
250,000 American Oncology
Resources, Inc.1 8,750
40,000 Community Health
Systems, Inc.1 1,270
225,000 Curative Technologies, Inc.1 3,516
250,000 OccuSystems, Inc.1 5,125
317,500 Physician Reliance
Network, Inc.1 10,557
100,000 United Dental Care Inc.1 3,050
-------
32,268
-------
INDUSTRIAL EQUIPMENT
& MACHINERY -- 19.4%
270,000 Aetrium Inc.1 5,805
220,000 Applied Materials, Inc.1++ 11,041
330,000 Asyst Technologies, Inc.1++ 14,066
475,000 Brooks Automation, Inc.1++ 8,669
600,000 Mattson Technology1 13,725
345,000 Opal, Inc.1 5,218
350,000 Pri Automation, Inc.1++ 13,081
480,000 Tencor Instruments1++ 20,520
450,000 Ultratech Stepper, Inc.1++ 18,000
-------
110,125
-------
LEISURE -- 1.0%
300,000 Studio Plus Hotels,Inc.1++ 5,738
-------
MEDICAL EQUIPMENT & SUPPLIES-- 2.3%
500,000 Bio-Vascular, Inc.1++ 7,063
375,000 ResMed,Inc. ADR1++ 5,813
-------
12,876
-------
PHARMACEUTICALS -- 1.0%
550,000 Chantal Pharmaceuticals
Corporation1 5,706
-------
RETAIL (APPAREL) -- 1.0%
150,000 Tommy Hilfiger Corp. ADR1 5,719
-------
TOTAL COMMON STOCKS-- 90.4% 512,194
(Cost $367,056) -------
TEMPORARY CASH INVESTMENTS
Repurchase Agreement (Goldman Sachs
Co., Inc.), 5.75%, due 11-1-95; collateralized
by $21,325 par value U.S. Treasury Bonds,
11.125%, due 8-15-03
(Delivery value $27,904) $ 27,900
26,400,000 Units of Participation in
Provident Temporary Investments, Inc.
(Temp Fund Portfolio) 26,400
-------
TOTAL TEMPORARY CASH INVESTMENTS -- 9.6% 54,300
(Cost $54,300) -------
TOTAL INVESTMENT SECURITIES-- 100.0% $ 566,494
(Cost $421,356) =======
BALANCED INVESTORS
- --------------------------------------------------------------------------------
Value
Shares ($ In Thousands)
- --------------------------------------------------------------------------------
COMMON STOCKS
AEROSPACE & DEFENSE -- 2.7%
80,000 AlliedSignal, Inc. $ 3,400
80,000 Boeing Co. 5,250
105,000 Lockheed Martin Corp. 7,153
67,000 United Technologies Corp. 5,946
-------
21,749
-------
AUTOMOBILES & AUTO PARTS -- 0.6%
660,000 Nissan Motor
Company ORD 4,454
-------
BANKING -- 2.5%
90,000 BankAmerica Corp. 5,175
115,000 Citicorp 7,461
58,000 First Interstate Bancorp 7,482
-------
20,118
-------
BIOTECHNOLOGY -- 1.3%
219,800 Amgen Inc.1 10,564
-------
BROADCASTING -- 0.9%
193,200 Grupo Televisa ADR 3,309
167,500 Liberty Media
Corp. Class "A"1 4,135
-------
7,444
-------
See Notes to Financial Statements
36
<PAGE>
- --------------------------------------------------------------------------------
Value
Shares ($ In Thousands)
- --------------------------------------------------------------------------------
BUSINESS SERVICES & SUPPLIES-- 0.9%
120,000 HFS, Inc.1 $ 7,350
-------
CHEMICALS & RESINS -- 1.1%
76,000 du Pont (E.I.)
de Nemours & Co. 4,740
100,000 Veba AG ORD 4,103
-------
8,843
-------
COMMUNICATIONS EQUIPMENT -- 3.5%
275,000 DSC Communications Corp.1 10,192
420,000 Ericsson (L.M.)
Telephone Co. ADR 9,004
140,000 Motorola, Inc. 9,188
-------
28,384
-------
COMMUNICATIONS SERVICES -- 4.0%
95,000 AirTouch Communications1 2,707
345,000 Nextel Communications Inc.1 4,808
625,000 Tele-Communications, Inc.1 10,664
345,000 Vodafone Group Plc ADR 14,102
-------
32,281
-------
COMPUTER SOFTWARE & SERVICES-- 5.8%
145,000 Autodesk, Inc.++ 4,903
68,193 First Data Corp. 4,509
160,000 General Motors
Corp. Cl "E" 7,540
160,000 Intuit Inc.1++ 11,560
77,000 Microsoft Corp.1 7,705
235,000 Oracle Systems Corp.1 10,267
-------
46,484
-------
COMPUTER SYSTEMS -- 6.3%
255,000 Compaq Computer Corp.1 14,216
275,000 Fujitsu Limited ORD 3,281
180,000 Hewlett-Packard Co. 16,673
170,000 International Business
Machines Corp. 16,533
-------
50,703
-------
DIVERSIFIED COMPANIES -- 0.4%
24,000 ITT Corp. 2,940
-------
ELECTRICAL & ELECTRONIC
COMPONENTS -- 5.6%
150,000 Intel Corp. 10,491
85,000 Kyocera Corp. ORD 6,967
180,000 Lattice Semiconductor Corp.1 7,042
30,000 Micron Technology, Inc.++ 2,119
10,000 Siemens AG ORD 5,240
200,000 Texas Instruments Inc.++ 13,650
-------
45,509
-------
ENERGY (PRODUCTION
& MARKETING) -- 2.8%
63,253 British Petroleum
Co. p.l.c. ADR 5,582
320,000 Enron Oil & Gas Co. 6,400
23,000 Mobil Corp. 2,317
127,000 Texaco Inc. 8,652
-------
22,951
-------
ENERGY (SERVICES) -- 1.2%
240,000 Halliburton Co. 9,960
-------
FINANCIAL SERVICES -- 1.0%
450,000 Nomura Securities Co.
Ltd. ORD 8,230
-------
FOOD & BEVERAGE -- 0.4%
50,000 Coca-Cola
Company (The) 3,594
-------
HEALTHCARE -- 3.6%
85,000 Baxter International, Inc. 3,283
220,000 Columbia/HCA
Healthcare Corp. 10,808
268,000 Foundation Health Corp.1 11,357
68,000 United HealthCare Corp. 3,612
-------
29,060
-------
INDUSTRIAL EQUIPMENT
& MACHINERY-- 0.4%
235,000 Nikon Corporation ORD 3,356
-------
INSURANCE -- 0.9%
77,000 Cigna Corp. 7,633
-------
LEISURE -- 1.6%
155,000 Electronic Arts, Inc.1 5,687
100,000 Harrah's Entertainment1 2,475
See Notes to Financial Statements
37
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) October 31, 1995
BALANCED INVESTORS (CONTINUED)
- --------------------------------------------------------------------------------
Value
Shares ($ In Thousands)
- --------------------------------------------------------------------------------
200,000 Promus Companies Inc.1 $ 4,400
-------
12,562
-------
MEDICAL EQUIPMENT
& SUPPLIES -- 1.7%
105,000 Nellcor Inc.1 6,064
145,000 St. Jude Medical, Inc.1 7,712
-------
13,776
-------
METALS & MINING -- 0.3%
125,000 Placer Dome Inc. ADR 2,734
-------
PAPER & FOREST PRODUCTS -- 0.5%
75,000 Champion International Corp. 4,012
-------
PHARMACEUTICALS -- 2.0%
40,000 Bristol-Myers Squibb Co. 3,050
47,000 Johnson & Johnson 3,830
150,000 Pfizer, Inc. 8,606
6,590 U.S. Bioscience, Inc.1 30
-------
15,516
-------
RESTAURANTS -- 0.4%
175,000 Wendy's International, Inc. 3,478
-------
RETAIL (APPAREL) -- 1.7%
215,000 Limited, Inc. (The) 3,951
170,000 NIKE, Inc. 9,647
-------
13,598
-------
RETAIL (GENERAL
MERCHANDISE) -- 0.5%
125,000 Sears, Roebuck & Co. 4,250
-------
RETAIL (SPECIALTY) -- 0.8%
265,000 OfficeMax, Inc.1 6,559
-------
TRANSPORTATION -- 0.4%
530,000 Hutchinson Whampoa
Limited ORD 2,920
-------
TOTAL COMMON STOCKS-- 55.8% 451,012
(Cost $358,979) -------
- --------------------------------------------------------------------------------
Value
Principal Amount ($ In Thousands)
- --------------------------------------------------------------------------------
FIXED INCOME SECURITIES
U.S. TREASURY SECURITIES
$20,000 U.S. Treasury Notes,
8.00%, 1-15-97 $ 20,556
10,000 U.S. Treasury Notes,
8.875%, 11-15-97 10,616
6,000 U.S. Treasury Notes,
5.875%, 8-15-98 6,029
15,000 U.S. Treasury Notes,
5.875%, 6-30-00 15,050
5,000 U.S. Treasury Notes,
6.25%, 8-31-00 5,104
6,000 U.S. Treasury Notes,
6.375%, 8-15-02 6,160
26,000 U.S. Treasury Notes,
6.50%, 8-15-05 26,929
-------
TOTAL U.S. TREASURY SECURITIES -- 11.2% 90,44
(Cost $91,797) ------
MORTGAGE-BACKED SECURITIES*
191 FHLMC Series 1096-CPAC
REMIC, 7.00%, 11-15-95 190
3,474 FHLMC Series 1239-EPAC
REMIC, 6.80%, 4-15-96 3,473
1,580 FHLMC Series 106-EPAC
REMIC, 6.95%, 9-15-96 1,583
2,000 FHLMC Series 77-HPAC
REMIC, 8.50%, 2-15-06 2,125
774 FNMA 89 Series 66 EPAC
REMIC, 8.00%, 5-1-96 774
1,545 FNMA 89 Series 85 DPAC
REMIC, 7.60%, 5-25-96 1,553
3,927 FNMA 90 Series 98 HPAC
REMIC, 7.50%, 8-25-96 3,956
2,897 FNMA 89 Series 39 BPAC
PO REMIC, 5.76%**, 12-25-96 2,826
8,897 FNMA Pool #50985,
6.00%, 3-1-00 8,715
-------
TOTAL MORTGAGE-BACKED SECURITIES -- 3.1% 25,195
(Cost $25,220) -------
CORPORATE BONDS
AUTOMOBILES & AUTO PARTS -- 3.2%
5,000 Ford Motor Credit Co.,
9.50%, 4-15-00 5,619
6,000 Ford Motor Credit Co.,
MTN, 6.85%, 8-15-00 6,135
See Notes to Financial Statements
38
<PAGE>
- --------------------------------------------------------------------------------
Value
Principal Amount ($ In Thousands)
- --------------------------------------------------------------------------------
$ 1,000 Ford Motor Credit Co.,
6.75%, 5-15-05 $ 1,004
5,000 General Motors Acceptance
Corp., MTN, 7.125%, 6-1-99 5,138
7,000 General Motors Acceptance
Corp., MTN, 6.375%, 10-12-99 7,009
1,000 General Motors Acceptance
Corp., MTN, 6.25%, 1-6-00 996
-------
25,901
-------
BANKING -- 4.4%
5,000 Abbey National First Capital,
B.V. 8.20%, 10-15-04 5,519
5,000 First Union Corp.,
8.77%, 11-15-04 5,469
5,000 First Union Corp.,
7.05%, 8-1-05 5,094
5,000 First USA Bank,
5.75%, 1-15-99 4,912
4,000 KeyCorp, MTN,
7.30%, 2-3-03 4,165
5,000 Norwest Bank,
6.50%, 6-1-05 4,987
5,000 Republic of New York
Corp., 7.25%, 7-15-02 5,231
-------
35,377
-------
COMMUNICATIONS SERVICES -- 0.8%
3,000 GTE South, 7.25%, 8-1-02 3,154
3,000 TKR Cable I Inc.,
10.50%, 10-30-07 3,367
-------
6,521
-------
DIVERSIFIED COMPANIES -- 0.6%
5,000 Hanson Overseas BV,
5.50%, 1-15-96 5,000
-------
FINANCIAL SERVICES -- 3.2%
3,000 Greyhound Financial Corp.,
6.75%, 3-25-99 3,049
5,000 Household Finance Co.,
8.95%, 9-15-99 5,463
10,900 Lehman Brothers Holdings
Inc., MTN, 9.17%, 2-28-02 12,140
3,000 Merrill Lynch & Co. Inc.,
6.25%, 1-15-06 2,880
2,000 Standard Credit Card Trust
Series 1995-2A, 8.625%, 1-7-00 2,080
-------
25,612
-------
FOOD & BEVERAGE -- 0.6%
$5,000 Nabisco Inc., 8.00%, 1-15-00$ 5,294
-------
INDUSTRIAL EQUIPMENT
& MACHINERY -- 0.6%
4,400 Caterpillar Financial
Services Corp., MTN,
7.46%, 10-15-97 4,526
-------
INSURANCE -- 1.9%
5,000 American General Corp.,
7.70%, 10-15-99 5,250
5,000 American General Corp.,
6.75%, 6-15-05 5,044
5,000 London Insurance Group,
6.875%, 9-15-05 5,025
-------
15,319
-------
PHARMACEUTICALS -- 1.4%
10,000 Lilly (Eli) & Co.,
8.375%, 2-7-05 11,350
-------
RETAIL (GENERAL MERCHANDISE) -- 2.5%
3,000 Sears, Roebuck & Co., MTN,
5.86%, 1-22-99 2,970
4,500 Sears, Roebuck & Co., MTN,
8.23%, 10-21-04 4,995
4,000 Wal-Mart Stores Inc.,
6.75%, 5-15-02 4,105
8,000 Wal-Mart Stores Inc.,
7.50%, 5-15-04 8,570
-------
20,640
-------
UTILITIES (ELECTRIC) -- 3.3%
4,931 Connecticut Light
& Power Co.,
7.625%, 4-1-97 5,054
5,000 Duke Power Co.,
8.00%, 11-1-99 5,338
4,000 Florida Power & Light Co.,
5.50%, 7-1-99 3,940
2,000 Kansas Power & Light Co.,
8.875%, 3-1-00 2,207
5,000 Public Service Electric & Gas
Co., 7.125%, 11-1-97 5,100
2,000 Texas Utilities Electric Co.,
8.125%, 2-1-02 2,162
3,000 Texas Utilities Electric Co.,
8.25%, 4-1-04 3,307
-------
27,108
-------
See Notes to Financial Statements
39
<PAGE>
SCHEDULES OF INVESTMENTS (CONTINUED) October 31, 1995
BALANCED INVESTORS (CONTINUED)
- --------------------------------------------------------------------------------
Value
Shares/Principal Amount ($ In Thousands)
- --------------------------------------------------------------------------------
UTILITIES (NATURAL GAS) -- 0.7%
$5,000 Consolidated Natural
Gas Co., 7.375%, 4-1-05 $ 5,344
-------
TOTAL CORPORATE BONDS-- 23.2% 187,992
(Cost $182,003) -------
SOVEREIGN GOVERNMENTS -- 0.8%
6,000 Hydro-Quebec, MTN,
7.02%, 3-23-05 6,105
(Cost $5,569) -------
TEMPORARY CASH INVESTMENTS
Repurchase Agreement (Goldman
Sachs & Co., Inc.), 5.75%,
due 11-1-95; collateralized
by $31,270 par value U.S.
Treasury Bonds, 8.00%_ 11.125%,
due 8-15-03 through 11-15-21
(Delivery value $40,907) 40,900
7,100,000 Units of Participation
in Provident Institutional Funds
(Temp Fund Portfolio) 7,100
-------
TOTAL TEMPORARY
CASH INVESTMENTS-- 5.9% 48,000
(Cost $48,000) -------
TOTAL INVESTMENT SECURITIES-- 100.0% $ 808,748
(Cost $711,568) =======
See Notes to Financial Statements
40
<PAGE>
NOTES TO SCHEDULES OF INVESTMENTS
ADR = American Depositary Receipt
FFCB = Federal Farm Credit Banks
FHLB = Federal Home Loan Banks
FHLMC = Federal Home Loan Mortgage Corporation
FNMA = Federal National Mortgage Association
MTN = Medium Term Note
ORD = Foreign Ordinary Shares
1 Non-income producing.
* Expected remaining maturity indicated and used for purposes of calculating
the weighted average portfolio maturity.
** Rate disclosed for this security represents effective yield to maturity at
purchase.
+ The following securities were purchased under rule 144A of the 1933
Securities Act and, unless registered under the Act or exempted from
registration, may only be sold to qualified institutional investors
<TABLE>
<CAPTION>
October 31, 1995
---------------------------
Fund/ Acquisition Cost Per Share/ Market Percentage of
Issuer Date Principal Unit Value Net Assets
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HERITAGE
LSI Logic Corporation
Convertible Bond, 7-12-95 to
5.50%, 3-15-01 9-27-95 $400.68 $4,697 0.5%
Scholastic Corp.
Convertible Bond, 8-4-95 to
5.00%, 8-15-05 8-29-95 $100.65 8,955 0.9%
------ -----
$13,652 1.4%
====== =====
- -----------------------------------------------------------------------------------------------------
</TABLE>
++ Affiliated Company: represents ownership of at least 5% of the voting
securities of the issuer and is, therefore, an affiliate as defined in the
Investment Company Act of 1940. See Note 4 in Notes to Financial Statements
for a summary of transactions for each issuer who is or was an affiliate at
or during the period ended October 31, 1995.
41
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
October 31, 1995 Select Investors Heritage Investors Growth Investors
($ In Thousands, Except Per-Share Amounts)
<S> <C> <C> <C>
ASSETS
Investment securities, at value (identified
cost of $3,499,790, $824,572, $4,344,143,
$9,128,766, $1,115,763, $421,356 and
$711,568, respectively) (Notes 3 and 4)........ $4,033,769 $1,006,229 $5,206,898
Cash.................................................... 8,442 1,443 4,801
Receivable for forward foreign currency
exchange contracts held (Note 5)............... 845 380 2,985
Receivable for investments sold......................... 58,240 13,958 39,612
Dividends and interest receivable....................... 1,916 691 2,964
--------- --------- ---------
4,103,212 1,022,701 5,257,260
--------- --------- ---------
LIABILITIES
Disbursements in excess of demand
deposit cash................................... 5,925 1,025 4,187
Payable for investments purchased....................... 77,121 12,289 115,368
Payable for capital shares redeemed..................... 8,126 184 3,352
Accrued management fees (Note 2)........................ 3,462 854 4,333
Other liabilities....................................... 140 26 126
--------- --------- ---------
94,774 14,378 127,366
--------- --------- ---------
NET ASSETS APPLICABLE
TO OUTSTANDING SHARES................................... $4,008,438 $1,008,323 $5,129,894
========= ========= =========
($ In Thousands, Except Per-Share Amounts)
CAPITAL SHARES, $.01 PAR VALUE
Authorized.............................................. 150,000 120,000 230,000
========= ========= =========
Outstanding............................................. 101,434 85,837 214,805
========= ========= =========
NET ASSET VALUE PER SHARE............................... $ 39.52 $ 11.75 $ 23.88
========= ========= =========
NET ASSETS CONSIST OF:
Capital (par value and paid-in surplus)................. $2,990,843 $ 770,600 $3,612,563
Undistributed net investment income.................... 20,688 3,755 11,867
Accumulated undistributed net realized
gain from security and foreign
currency transactions.......................... 462,093 51,932 639,741
Net unrealized appreciation on investments
and translation of assets and liabilities in
foreign currencies (Notes 3 and 5)............. 534,814 182,036 865,723
--------- --------- ---------
$4,008,438 $1,008,323 $5,129,894
========= ========= =========
See Notes to Financial Statements
</TABLE>
42
<PAGE>
<TABLE>
<CAPTION>
Ultra Investors Vista Investors Giftrust Investors Balanced Investors
($ In Thousands, Except Per-Share Amounts)
<S> <C> <C> <C> <C>
ASSETS
Investment securities, at value (identified
cost of $3,499,790, $824,572, $4,344,143,
$9,128,766, $1,115,763, $421,356 and
$711,568, respectively) (Notes 3 and 4) ....... $14,297,200 $ 1,675,577 $ 566,494 $ 808,748
Cash ................................................... 9,556 1,232 546 1,994
Receivable for forward foreign currency
exchange contracts held (Note 5) .............. 874 -- -- 90
Receivable for investments sold ........................ 137,601 21,165 6,019 9,857
Dividends and interest receivable ...................... 3,843 204 136 5,954
--------- --------- --------- ---------
14,449,074 1,698,178 573,195 826,643
========= ========= ========= =========
LIABILITIES
Disbursements in excess of demand
deposit cash .................................. 9,946 1,332 55 983
Payable for investments purchased ...................... 41,100 17,646 11,590 9,175
Payable for capital shares redeemed .................... 10,146 1,897 -- 214
Accrued management fees (Note 2) ....................... 11,733 1,334 438 656
Other liabilities ...................................... 247 52 -- 45
--------- ---------- --------- ---------
73,172 22,261 12,083 11,073
Net Assets Applicable --------- ---------- --------- ---------
to Outstanding Shares .................................. $14,375,902 $1,675, 917 $ 561,112 $ 815,570
========= ========== ========= =========
($ In Thousands, Except Per-Share Amounts)
Capital Shares, $.01 par value
Authorized ............................................. 600,000 160,000 40,000 60,000
========= ========= ========= =========
Outstanding ............................................ 512,810 106,542 21,896 46,083
========= ========= ========= =========
NET ASSET VALUE PER SHARE .............................. $ 28.03 $ 15.73 $ 25.63 $ 17.70
========= ========= ========= =========
Net assets consist of:
Capital (par value and paid-in surplus) ................ $ 8,536,646 $ 1,006,324 $ 367,919 $ 669,793
Undistributed net investment income ................... -- -- -- 2,054
Accumulated undistributed net realized
gain from security and foreign
currency transactions ......................... 669,968 109,778 48,055 46,454
Net unrealized appreciation on investments
and translation of assets and liabilities in
foreign currencies (Notes 3 and 5) ............ 5,169,288 559,815 145,138 97,269
--------- --------- --------- ---------
$14,375,902 $ 1,675,917 $ 561,112 $ 815,570
========= ========= ========= =========
See Notes to Financial Statements
</TABLE>
43
<PAGE>
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended October 31, 1995 Select Investors Heritage Investors Growth Investors
($ In Thousands)
<S> <C> <C> <C>
INVESTMENT INCOME (LOSS)
Income:
Dividends (net of foreign taxes withheld
of $1,446, $156, $1,612, $2,764, $0, $0
and $194, respectively) ........................ $ 70,142 $ 10,789 $ 54,450
Interest ............................................... 8,029 2,149 8,941
--------- --------- ---------
78,171 12,938 63,391
--------- --------- ---------
Expenses:
Management fees (Note 2) ........................... 40,919 8,901 45,714
Directors' fees and expenses ....................... 51 11 56
--------- --------- ---------
40,970 8,912 45,770
--------- --------- ---------
NET INVESTMENT INCOME (LOSS) ........................... 37,201 4,026 17,621
--------- --------- ---------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND FOREIGN
CURRENCY (NOTES 3 AND 5)
Net realized gain (loss) during the year on:
Investments ........................................ 463,201 52,537 642,609
Foreign currency transactions ...................... (7,315) 748 (527)
--------- --------- ---------
455,886 53,285 642,082
--------- --------- ---------
Change in net unrealized appreciation
during the year on:
Investments ....................................... 75,634 109,891 273,272
Translation of assets and liabilities in
foreign currencies ............................. 707 396 2,944
--------- --------- ---------
76,341 110,287 276,216
--------- --------- ---------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY ....................... 532,227 163,572 918,298
--------- --------- ---------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS .............................. $ 569,428 $ 167,598 $ 935,919
========= ========= =========
See Notes to Financial Statements
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
Ultra Investors Vista Investors Giftrust Investors Balanced Investors
($ In Thousands)
<S> <C> <C> <C> <C>
INVESTMENT INCOME (LOSS)
Income:
Dividends (net of foreign taxes withheld
of $1,446, $156, $1,612, $2,764, $0, $0
and $194, respectively) ........................ $ 49,864 $ 316 $ 181 $ 5,522
Interest ............................................... 27,303 3,608 907 23,509
--------- --------- --------- ---------
77,167 3,924 1,088 29,031
--------- --------- --------- ---------
Expenses:
Management fees (Note 2) ........................... 113,284 11,105 3,840 7,303
Directors' fees and expenses ....................... 137 13 4 9
--------- --------- --------- ---------
113,421 11,118 3,844 7,312
--------- --------- --------- ---------
NET INVESTMENT INCOME (LOSS) ........................... (36,254) (7,194) (2,756) 21,719
--------- --------- --------- ---------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND FOREIGN
CURRENCY (NOTES 3 AND 5)
Net realized gain (loss) during the year on:
Investments ........................................ 673,603 111,473 50,818 47,338
Foreign currency transactions ...................... (54,478) -- -- 180
--------- --------- --------- ---------
619,125 111,473 50,818 47,518
--------- --------- --------- ---------
Change in net unrealized appreciation during the year on:
Investments ....................................... 3,145,771 328,626 66,656 45,053
Translation of assets and liabilities in
foreign currencies ............................ 823 -- -- 84
--------- --------- --------- ---------
3,146,594 328,626 66,656 45,137
--------- --------- --------- ---------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY ....................... 3,765,719 440,099 117,474 92,655
--------- --------- --------- ---------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS .............................. $ 3,729,465 $ 432,905 $ 114,718 $ 114,374
========= ========= ========= =========
See Notes to Financial Statements
</TABLE>
45
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
Years Ended October 31, 1995
and October 31, 1994 Select Investors Heritage Investors Growth Investors
($ In Thousands)
INCREASE (DECREASE)
IN NET ASSETS 1995 1994 1995 1994 1995 1994
-------------------- -------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment income(loss) .................. $ 37,201 $ 45,489 $ 4,206 $ 5,413 $ 17,621 $ 11,305
Net realized gain on investments
and foreign currency transactions ... 455,886 305,635 53,285 43,922 642,082 602,570
Change in net unrealized appreciation
(depreciation) on investments and
translation of assets and liabilities
in foreign currencies ............... 76,341 (729,042) 110,287 (62,173) 276,216 (499,268)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net assets
resulting from operations ........... 569,428 (377,918) 167,598 (12,838) 935,919 114,607
--------- --------- --------- --------- --------- ---------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ................... (31,233) (48,659) (2,831) (4,316) (9,560) (10,274)
From net realized gains
from security transactions .......... (305,635) (503,107) (43,922) (31,979) (602,573) (501,734)
In excess of net realized gains
from security transactions .......... (13,877) -- (2,558) (392) (7,489) (325)
--------- --------- --------- --------- --------- ---------
(Decrease) in net assets from
distributions ....................... (350,745) (551,766) (49,311) (36,687) (619,622) (512,333)
--------- --------- --------- --------- --------- ---------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold .................... 388,235 672,274 257,588 414,873 734,417 657,123
Proceeds from reinvestment of distributions .. 339,791 534,286 48,601 36,086 607,262 502,439
Payments for shares redeemed ................. (1,216,114) (1,158,996) (312,916) (206,175) (891,558) (1,039,547)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net assets from
capital share transactions .......... (488,088) 47,564 (6,727) 244,784 450,121 120,015
--------- --------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN NET ASSETS ........ (269,405) (882,120) 111,560 195,259 766,418 (277,711)
NET ASSETS
Beginning of year ............................ 4,277,843 5,159,963 896,763 701,504 4,363,476 4,641,187
--------- --------- --------- --------- --------- ---------
End of year .................................. $4,008,438 $4,277,843 $1,008,323 $896,763 $5,129,894 $4,363,476
========= ========= ========= ========= ========= =========
Undistributed net investment income .......... $20,688 $36,129 $ 3,755 $ 4,177 $ 11,867 $ 11,142
========= ========= ========= ========= ========= =========
TRANSACTIONS IN SHARES OF THE FUNDS:
(In thousands)
Sold ......................................... 10,704 17,279 23,942 39,647 34,079 28,835
Issued in reinvestment of distributions ...... 10,375 13,661 5,317 3,566 32,932 22,849
Redeemed ..................................... (33,197) (30,161) (30,345) (19,884) (42,012) (45,548)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) ...................... (12,118) 779 (1,086) 23,329 24,999 6,136
========= ========= ========= ========= ========= =========
</TABLE>
See Notes to Financial Statements
46
<PAGE>
<TABLE>
<CAPTION>
Ultra Investors Vista Investors Giftrust Investors Balanced Investors
($ In Thousands)
INCREASE (DECREASE)
IN NET ASSETS 1995 1994 1995 1994 1995 1994 1995 1994
------------------ ------------------- --------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment income(loss)..........$(36,254) $(13,162) $(7,194) $(6,031) $(2,756) $(1,322) $21,719 $18,219
Net realized gain on investments
and foreign currency transactions.. 619,125 639,217 111,473 1,747 50,818 14,785 47,518 38,685
Change in net unrealized appreciation
(depreciation) on investments and
translation of assets and liabilities
in foreign currencies.............3,146,594 (784,386) 328,626 32,314 66,656 28,334 45,137 (62,981)
--------- --------- --------- --------- --------- --------- --------- ---------
Net increase (decrease) in net assets
resulting from operations.........3,729,465 (158,331) 432,905 28,030 114,718 41,797 114,374 (6,077)
--------- --------- --------- --------- --------- --------- --------- ---------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income.......... -- -- -- -- -- -- (21,381) (17,943)
From net realized gains
from security transactions....... (308,428) -- (1,747) (112,032) (14,781) (15,983) (12,064) --
In excess of net realized gains
from security transactions....... -- -- (414) (810) -- -- -- --
--------- --------- --------- --------- --------- --------- --------- ---------
(Decrease) in net assets from
distributions.................... (308,428) -- (2,161) (112,842) (14,781) (15,983) (33,445) (17,943)
--------- --------- --------- --------- --------- --------- --------- ---------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold...........3,318,033 4,680,990 1,139,754 359,417 183,953 73,429 185,512 205,971
Proceeds from reinvestment of
distributions.................... 301,508 -- 2,085 108,165 14,781 15,983 32,925 17,616
Payments for shares redeemed.......(3,008,949)(2,215,803) (689,009) (437,897) (3,160) (3,622) (187,662) (201,399)
--------- --------- --------- --------- --------- --------- --------- ---------
Net increase (decrease) in net assets from
capital share transactions....... 610,592 2,465,187 452,830 29,685 195,574 85,790 30,775 22,188
--------- --------- --------- --------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN
NET ASSETS....................... 4,031,629 2,306,856 883,574 (55,127) 295,511 111,604 111,704 (1,832)
NET ASSETS
Beginning of year..................10,344,273 8,037,417 792,343 847,470 265,601 153,997 703,866 705,698
--------- --------- --------- --------- --------- --------- --------- ---------
End of year.......................$14,375,902$10,344,273 $1,675,917 $792,343 $561,112 $265,601 $815,570 $703,866
========= ========= ========= ========= ========= ========= ========= =========
Undistributed net investment income -- -- -- -- -- -- $2,054 $1,820
========= ========= ========= ========= ========= ========= ========= =========
TRANSACTIONS IN SHARES OF THE FUNDS:
(In thousands)
Sold.............................. 143,246 222,975 88,066 35,848 8,277 4,206 11,370 12,946
Issued in reinvestment of
distributions.................. 15,606 -- 203 10,677 816 953 2,073 1,123
Redeemed.......................... (134,889) (106,081) (54,178) (43,339) (153) (213) (11,520) (12,619)
--------- --------- --------- --------- --------- --------- --------- ---------
Net increase (decrease)........... 23,963 116,894 34,091 3,186 8,940 4,946 1,923 1,450
========= ========= ========= ========= ========= ========= ========= =========
See Notes to Financial Statements
</TABLE>
47
<PAGE>
NOTES TO FINANCIAL STATEMENTS October 31, 1995
1. Organization and Summary of Significant Accounting Policies
Organization--
Twentieth Century Investors, Inc. (the Corporation) is registered under
the Investment Company Act of 1940 as an open-end diversified management
investment company. Sixteen series of shares are currently issued, seven of
which invest primarily in common stocks: Select Investors, Heritage
Investors, Growth Investors, Ultra Investors, Vista Investors, Giftrust
Investors and Balanced Investors (the Funds). The following significant
accounting policies are in accordance with accounting policies generally
accepted in the investment company industry.
Security Valuations--
Portfolio securities traded primarily on a principal securities exchange
are valued at the last reported sales price, or the mean between the latest
bid and asked prices where no last sales price is available. Securities
traded over-the-counter are valued at the mean of the latest bid and asked
prices or, in the case of certain foreign securities, at the last reported
sales price. Debt securities not traded on a principal securities exchange
are valued through valuations obtained from a commercial pricing service or
at the mean of the most recent bid and asked prices. Short-term securities
are valued at amortized cost which approximates value. When valuations are
not readily available, securities are valued at fair value as determined in
good faith by the board of directors.
Security Transactions--
Security transactions are accounted for on the date purchased or sold.
Net realized gains and losses are determined on the identified cost basis,
which is also used for federal income tax purposes.
Investment Income--
Dividend income less foreign taxes withheld (if any) is recorded as of
the ex-dividend date or upon receipt of ex-dividend notification in the case
of certain foreign securities. Interest income is recognized on the accrual
basis and includes amortization of discounts and premiums.
Foreign Currency Transactions--
The accounting records of the Funds are maintained in U.S. dollars. All
assets and liabilities initially expressed in foreign currencies are
converted into U.S. dollars at prevailing exchange rates. Purchases and sales
of investment securities, dividend and interest income, and certain expenses
are translated at the rates of exchange prevailing on the respective dates of
such transactions.
The Funds do not isolate that portion of the results of operations
resulting from changes in the foreign exchange rates on investments from the
fluctuations arising from changes in the market prices of securities held.
Such fluctuations are included with the net realized and unrealized gain or
loss on investments.
Net realized foreign currency exchange gains or losses arise from sales
of portfolio securities, sales of foreign currencies, and the difference
between asset and liability amounts initially stated in foreign currencies
and the U.S. dollar value of the amounts actually received or paid. Net
unrealized foreign currency exchange gains or losses arise from changes in
the value of portfolio securities and other assets and liabilities at the end
of the reporting period, resulting from changes in the exchange rates.
Forward Foreign Currency Exchange Contracts--
The Funds may enter into forward foreign currency exchange contracts for
the purpose of settling specific purchases or sales of securities denominated
in a foreign currency or to hedge the Funds' exposure to foreign currency
exchange rate fluctuations. The net U.S. dollar value of foreign currency
underlying all contractual commitments held by the Funds and the resulting
unrealized appreciation or depreciation are determined daily using prevailing
exchange rates.
48
<PAGE>
1. Organization and Summary of Significant Accounting Policies (CONTINUED)
Repurchase Agreements--
Securities pledged as collateral for repurchase agreements are held by
the Federal Reserve Bank and are designated as being held on the Funds'
behalf by its custodian under a book-entry system. The Funds monitor the
adequacy of the collateral daily and can require the seller to provide
additional collateral in the event the market value of the securities pledged
falls below the carrying value of the repurchase agreement.
Income Tax Status--
It is the policy of the Funds to distribute all taxable income and
capital gains to shareholders and to otherwise qualify as a regulated
investment company under provisions of the Internal Revenue Code.
Accordingly, no provision has been made for federal or state taxes.
Distributions to Shareholders--
Distributions to shareholders are recorded on the ex-dividend date.
Distributions from net investment income are declared and paid annually, with
the exception of Balanced Investors which is declared and paid quarterly.
Distributions from net realized gains are declared and paid annually.
The character of distributions made during the year from net investment
income or net realized gains may differ from their ultimate characterization
for federal income tax purposes. These differences are primarily due to
differing treatments for foreign currency transactions and wash sales.
Supplementary Information--
Certain officers and directors of the Corporation are also officers
and/or directors, and, as a group, controlling stockholders of Twentieth
Century Companies, Inc., the parent of the Corporation's investment manager,
Investors Research Corporation (IRC).
2. Management Agreement
The Management Agreement with IRC provides for a monthly management fee
computed by multiplying the applicable fee for each Fund by the average daily
closing value of such Fund's net assets during the previous month. The
Agreement further provides that all expenses of the Funds, except brokerage
commissions, taxes, interest, expenses of those directors who are not
considered "interested persons" as defined in the Investment Company Act of
1940 (including counsel fees) and extraordinary expenses, will be paid by
IRC. The agreement may be terminated by either party upon 60 days' written
notice.
The current annual management fee for each Fund is 1%.
49
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) October 31, 1995
<TABLE>
<CAPTION>
3. Investment Transactions
Investment transactions (excluding short-term investments) for the year ended October 31, 1995, were as follows:
SELECT HERITAGE GROWTH ULTRA VISTA GIFTRUST BALANCED
-------------------------------($ In Thousands)--------------------------------
PURCHASES
<S> <C> <C> <C> <C> <C> <C> <C>
Common Stocks $4,172,955 $1,034,435 $6,235,740 $9,550,719 $1,301,350 $532,222 $373,061
Preferred Stocks 30,931 1,848 1,673 -- -- -- --
U.S. Treasury & Agency Obligations -- -- -- -- -- -- 117,975
Other Debt Obligations -- 25,367 -- -- -- -- 105,863
PROCEEDS FROM SALES
Common Stocks $5,048,666 $1,093,624 $6,265,674 $9,450,984 $ 953,759 $398,902 $401,648
Preferred Stocks -- 25,767 1,832 -- -- -- --
U.S. Treasury & Agency Obligations -- -- -- -- -- -- 96,425
Other Debt Obligations -- 12,960 -- -- -- -- 107,883
</TABLE>
<TABLE>
<CAPTION>
On October 31, 1995, the composition of unrealized appreciation and (depreciation) of investment securities based on the
aggregate cost of investments for federal income tax purposes was as follows:
APPRECIATION (DEPRECIATION) NET FEDERAL TAX COST
--------------------------------------($ In Thousands)--------------------------
<S> <C> <C> <C> <C>
Select $ 605,226 $(72,007) $ 533,219 $3,500,550
Heritage 197,064 (16,674) 180,390 825,839
Growth 950,956 (107,058) 843,898 4,363,000
Ultra 5,233,906 (78,174) 5,155,732 9,141,468
Vista 567,918 (11,818) 556,100 1,119,477
Giftrust 158,939 (13,804) 145,135 421,359
Balanced 107,165 (10,259) 96,906 711,842
</TABLE>
4. Affiliated Company Transactions
<TABLE>
<CAPTION>
A summary of transactions for each issuer who is or was an affiliate at or during the year ended October 31, 1995, follows:
OCTOBER 31, 1995
SHARE REALIZED ----------------
CLASS OF SHARES/ BALANCE PURCHASE PURCHASE SALES SALES GAIN SHARE MARKET
ISSUER 10/31/94 SHARES COST SHARES COST (LOSS) INCOME BALANCE VALUE
----------------------------------------($ In Thousands)-------------------------------
SELECT INVESTORS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Applied Materials, Inc. -- 600,000* $ 30,001 -- -- -- -- 600,000 $ 30,113
Autodesk, Inc. 800,000 1,150,000 42,997 800,000 $ 30,537 $(3,049) $420 1,150,000 38,884
Micron Technology, Inc. -- 1,750,000* 66,556 320,900 17,991 5,231 130 1,429,100 100,930
Texas Instruments Inc. -- 1,650,000* 108,009 -- -- -- 332 1,650,000 112,612
------- ------ ----- --- -------
$247,563 $ 48,528 $2,182 $882 $282,539
======= ====== ===== === =======
</TABLE>
50
<PAGE>
4. Affiliated Company Transactions (CONTINUED)
<TABLE>
<CAPTION>
OCTOBER 31, 1995
SHARE REALIZED ----------------
CLASS OF SHARES/ BALANCE PURCHASE PURCHASE SALES SALES GAIN SHARE MARKET
ISSUER 10/31/94 SHARES COST SHARES COST (LOSS) INCOME BALANCE VALUE
-----------------------------------($ In Thousands)-------------------------------------
HERITAGE INVESTORS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Adobe Systems Inc. -- 250,000 $ 8,302 250,000 $ 8,302 $5,027 $ 28 -- --
Autodesk, Inc. 450,000 135,000 4,967 260,000 9,252 135 124 325,000 $ 10,989
Bay Networks, Inc. -- 50,000 2,577 -- -- -- -- 50,000 3,319
Cirrus Logic, Inc. -- 160,000 8,287 -- -- -- -- 160,000 6,730
Dell Computer Corp. -- 315,787* -- 315,787 11,080 5,826 -- -- --
Innovex -- 510,000* 7,905 510,000 7,905 (617) 8 -- --
KLA Instruments Corp. -- 70,000* 2,800 -- -- -- -- 70,000 3,010
Micron Technology, Inc. -- 460,000* 18,949 170,000 9,315 3,557 30 290,000 20,481
Sybase, Inc. -- 200,000 7,325 -- -- -- -- 200,000 7,862
------ ------ ------ ---
$ 61,112 $ 45,854 $13,928 $190 $ 52,391
====== ====== ====== ===
GROWTH INVESTORS
Applied Materials, Inc. -- 2,200,000* $ 99,328 -- -- -- -- 2,200,000 $110,412
Bay Networks, Inc. 550,000 1,340,000 42,454 338,200 $ 8,971 $ 4,338 -- 1,551,800 103,001
Cirrus Logic, Inc. -- 1,000,000 49,431 -- -- -- -- 1,000,000 42,062
Cypress
Semiconductor Corp. -- 950,000 35,088 -- -- -- -- 950,000 33,488
Filenet Corp. -- 600,000 21,592 -- -- -- -- 600,000 27,188
LSI Logic Corp. -- 975,000 44,982 -- -- -- -- 975,000 45,947
Lam Research Corp. -- 450,000 25,668 -- -- -- -- 450,000 27,394
Micron Technology, Inc. -- 3,054,000* 116,626 1,453,600 50,172 59,083 $234 1,600,400 113,028
QUALCOMM Inc. -- 1,300,000 60,354 -- -- -- -- 1,300,000 50,131
Sybase, Inc. -- 3,944,200 146,439 900,000 42,243 (18,902) -- 3,044,200 119,675
Tamura Electric
Works ORD -- 1,800,000 24,137 -- -- -- -- 1,800,000 27,463
Texas Instruments Inc. -- 2,025,800* 112,167 414,000 25,645 6,338 555 1,611,800 110,005
------- ------- ------ --- -------
$778,266 $127,031 $50,857 $789 $809,794
======= ======= ====== === =======
ULTRA INVESTORS
Adobe Systems Inc. 1,550,000 2,250,000 $122,974 1,500,000 $ 74,832 $ 2,410 $416 2,300,000 $131,387
America Online Inc. 656,000 2,550,000* 41,398 456,000 19,094 1,748 -- 2,750,000 220,172
Applied Materials,Inc. 4,200,000 4,091,700* 61,234 1,591,700 22,281 49,602 -- 6,700,000 336,256
Ascend
Communications, Inc. -- 2,770,000 66,090 100,000 2,588 3,616 -- 2,670,000 172,883
Atmel Corp. 620,000 1,150,000* 20,158 120,000 3,375 559 -- 1,650,000 51,666
BMC Software, Inc. -- 3,750,000* 116,100 1,950,000 64,256 3,708 -- 1,800,000 64,350
Bay Networks, Inc. 4,000,000 2,750,000 126,434 -- -- -- -- 6,750,000 448,031
Biogen Inc. -- 2,325,000 121,042 -- -- -- -- 2,325,000 142,987
Broderbund
Software, Inc. 950,000 1,160,000* 10,500 2,110,000 56,802 77,713 -- -- --
Cascade Communications 240,000 1,910,000* 51,850 -- -- -- -- 2,150,000 152,650
Cirrus Logic, Inc. -- 3,000,000* 79,512 -- -- -- -- 3,000,000 126,188
Cordis Corp. 875,000 250,000 17,157 1,125,000 56,880 16,346 -- -- --
</TABLE>
51
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) October 31, 1995
4. Affiliated Company Transactions (CONTINUED)
<TABLE>
<CAPTION>
OCTOBER 31, 1995
SHARE REALIZED ----------------
CLASS OF SHARES/ BALANCE PURCHASE PURCHASE SALES SALES GAIN SHARE MARKET
ISSUER 10/31/94 SHARES COST SHARES COST (LOSS) INCOME BALANCE VALUE
---------------------------------($ In Thousands)---------------------------------------
ULTRA INVESTORS (CONT.)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cypress
Semiconductor Corp. 1,500,000 1,600,000 $ 73,251 2,309,900 $ 85,315 $ (4,591) -- 790,100 $27,851
Cyrix Corp. 1,800,000 -- -- 1,800,000 56,885 (18,775) -- -- --
Dell Computer Corp. 3,250,000 3,950,000* 19,414 200,000 7,852 2,226 -- 7,000,000 325,937
FTP Software, Inc. 80,000 1,620,000 43,963 1,700,000 45,863 (2,558) -- -- --
Fore Systems, Inc. 450,000 1,850,000* 42,818 400,000 10,064 1,737 -- 1,900,000 100,938
Genzyme Corp. -- 2,170,000 93,014 -- -- -- -- 2,170,000 126,131
Gymboree Corp. 1,050,000 325,000 9,982 1,375,000 40,374 (8,161) -- -- --
HealthCare
COMPARE Corp. 1,900,000 605,000 18,181 1,305,000 35,860 5,096 -- 1,200,000 44,550
Heart Technology, Inc. 940,000 260,000 5,841 1,200,000 28,927 (7,692) -- -- --
Informix Corp. 1,850,000 4,600,000* 51,580 -- -- -- -- 6,450,000 188,259
Integrated Device
Technology, Inc. 300,000 4,193,600* 77,950 2,053,600 52,833 11,856 -- 2,440,000 46,513
Integrated Silicon
Solution, Inc. -- 700,000 38,939 700,000 38,939 (7,973) -- -- --
Intuit Inc. -- 3,500,000* 126,818 -- -- -- -- 3,500,000 252,875
KLA Instruments Corp. 430,000 430,000* -- 160,000 3,337 2,423 -- 700,000 30,100
Komag, Inc. -- 1,150,000 73,968 200,000 13,910 (2,683) -- 950,000 54,209
LSI Logic Corp. 1,750,000 2,542,100* 23,208 -- -- -- -- 4,292,100 202,265
Lam Research Corp. 800,000 1,309,300 56,792 275,000 7,458 3,648 -- 1,834,300 111,663
Lotus Development Corp. -- 2,850,000 121,568 2,850,000 121,568 (7,569) -- -- --
Micron Technology,Inc. 1,000,000 5,619,000* 210,232 1,997,400 108,493 32,043 $539 4,621,600 326,400
Network Equipment
Technologies, Inc. -- 900,000 22,101 200,000 5,356 1,282 -- 700,000 22,838
Network General Corp. -- 1,450,000 57,081 -- -- -- -- 1,450,000 59,994
Novellus Systems, Inc. 758,000 142,000 6,331 525,000 21,881 8,170 -- 375,000 25,781
Oak Technology, Inc. -- 1,425,000 63,230 -- -- -- -- 1,425,000 78,375
Oxford Health
Plans, Inc. 1,275,000 1,004,700* 6,891 879,700 40,762 18,121 -- 1,400,000 109,900
Phycor, Inc. -- 1,725,000* 37,993 -- -- -- -- 1,725,000 63,178
Picturetel Corp. -- 1,600,000 48,228 -- -- -- -- 1,600,000 105,400
PLATINUM
technology, inc. 1,000,000 -- -- 1,000,000 16,262 99 -- -- --
QUALCOMM Inc. 500,000 2,600,000 73,635 150,000 4,815 (781) -- 2,950,000 113,759
Quarterdeck Office
Systems, Inc. -- 1,200,000 13,450 200,000 3,595 (181) -- 1,000,000 21,438
S3 Incorporated -- 2,700,000* 45,831 -- -- -- -- 2,700,000 45,900
Silicon Valley Group, Inc. -- 1,575,000 58,551 -- -- -- -- 1,575,000 50,794
Softkey International, Inc. -- 1,525,000 42,074 400,000 12,028 580 -- 1,125,000 35,508
Starbucks Corp. -- 1,950,000 72,464 950,000 39,836 (4,928) -- 1,000,000 39,313
</TABLE>
52
<PAGE>
4. Affiliated Company Transactions (CONTINUED)
<TABLE>
<CAPTION>
October 31, 1995
SHARE REALIZED ----------------
CLASS OF SHARES/ BALANCE PURCHASE PURCHASE SALES SALES GAIN SHARE MARKET
ISSUER 10/31/94 SHARES COST SHARES COST (LOSS) INCOME BALANCE VALUE
---------------------------------($ In Thousands)---------------------------------------
ULTRA INVESTORS (CONT.)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Storage
Technology Corp. 3,500,000 -- -- 3,500,000 $127,942 $(52,366) -- -- --
StrataCom, Inc. 350,000 2,050,000* $ 52,828 -- -- -- -- 2,400,000 $147,900
Sybase, Inc. 3,950,000 640,000** -- 4,590,000 89,376 26,791 -- -- --
3Com Corp. 6,000,000 6,400,000* 16,400 -- -- -- -- 12,400,000 582,025
Tamura Electric
Works ORD -- 1,000,000 13,791 -- -- -- -- 1,000,000 15,257
Tellabs, Inc. 1,498,000 1,200,000* -- 1,498,000 31,943 27,567 -- 1,200,000 40,950
Tencor Instruments -- 1,100,000* 39,497 150,000 5,652 (390) -- 950,000 40,612
Texas Instruments, Inc. -- 6,300,000* 430,962 -- -- -- $1,575 6,300,000 429,975
U.S. Robotics Corp. -- 3,450,000* 159,000 -- -- -- -- 3,450,000 320,850
Wall Data, Inc. -- 702,300 30,876 702,300 30,876 (17,318) -- -- --
------- ------ ------ ----- -------
$3,213,182 $1,388,110 $161,375 $2,530 $6,034,008
========= ========= ======= ===== =========
VISTA INVESTORS
Applied Materials, Inc. -- 330,000* $17,864 -- -- -- -- 330,000 $16,562
Atmel Corp. 875,000 800,000* 3,192 175,000 $4,029 $1,692 -- 1,500,000 46,969
Boca Research, Inc. -- 540,000 12,301 -- -- -- -- 540,000 13,568
C-COR Electronic Inc. 170,000 250,000* 2,113 325,500 7,948 (340) -- 94,500 2,197
Credence Systems Corp. -- 600,000 20,721 -- -- -- -- 600,000 22,500
DSP Group, Inc. -- 367,000 7,214 367,000 7,214 (990) -- -- --
Dura
Pharmaceuticals, Inc. -- 750,000 19,168 -- -- -- -- 750,000 22,125
FSI International, Inc. -- 1,150,000* 23,038 -- -- -- -- 1,150,000 27,456
Genzyme Tissue Repair -- 800,000 9,806 -- -- -- -- 800,000 14,350
Harveys Casino Resorts 550,000 -- -- 170,000 2,722 506 $85 380,000 6,127
In Focus Systems, Inc. 300,000 200,000 5,138 500,000 11,653 1,116 -- -- --
Integrated Process
Equipment Corp. -- 800,000 18,173 800,000 18,173 15,006 -- -- --
Integrated Silicon
Solution, Inc. -- 450,000 11,498 450,000 11,498 3,517 -- -- --
Intersolv, Inc. -- 525,000 9,505 525,000 9,110 1,597 -- -- --
Just For Feet, Inc. -- 825,000* 16,662 600,000 12,833 4,922 -- 225,000 5,358
KLA Instruments Corp. 900,000 800,000* -- 100,000 2,623 2,371 -- 1,600,000 68,800
Komag, Inc. -- 310,000 21,863 210,000 15,144 (3,034) -- 100,000 5,706
Landry's Seafood
Restaurants, Inc. -- 900,000* 16,326 900,000 16,326 (351) -- -- --
LSI Logic Corp. 800,000 1,050,000* 5,243 -- -- -- -- 1,850,000 87,181
Macromedia, Inc. -- 1,800,000* 27,226 -- -- -- -- 1,800,000 66,150
Microchip
Technology Inc. 862,500 681,250* 9,431 793,750 12,149 8,846 -- 750,000 29,719
MicroTouch Systems, Inc. -- 500,000 18,014 500,000 18,014 (6,384) -- -- --
</TABLE>
53
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) October 31, 1995
4. Affiliated Company Transactions (CONTINUED)
<TABLE>
<CAPTION>
OCTOBER 31, 1995
SHARE REALIZED ----------------
CLASS OF SHARES/ BALANCE PURCHASE PURCHASE SALES SALES GAIN SHARE MARKET
ISSUER 10/31/94 SHARES COST SHARES COST (LOSS) INCOME BALANCE VALUE
--------------------------------------($ In Thousands)---------------------------------
VISTA INVESTORS (CONT.)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Novellus Systems, Inc. 500,000 50,000 $ 2,345 550,000 $ 17,614 $ 17,400 -- -- --
PC Docs Group
International, Inc. -- 937,000 11,713 -- -- -- -- 937,000 $ 15,109
Proxima Corp. 300,000 80,000 2,535 380,000 10,127 (1,494) -- -- --
S3 Incorporated -- 1,550,000* 13,665 -- -- -- -- 1,550,000 26,350
Seitel, Inc. 200,000 -- -- 200,000 6,032 (954) -- -- --
Softkey
International, Inc. -- 700,000 18,369 300,000 8,575 979 -- 400,000 12,625
Spectrian Corp. -- 670,000 21,146 670,000 21,146 (6,819) -- -- --
STERIS Corp. -- 1,500,000* 37,148 -- -- -- -- 1,500,000 50,437
StrataCom, Inc. 190,000 190,000* -- -- -- -- -- 380,000 23,417
Tellabs, Inc. 1,095,000 750,000* -- 1,745,000 14,496 58,617 -- 100,000 3,413
Tencor Instruments 80,000 700,000* 16,051 -- -- -- -- 780,000 33,345
Ultratech Stepper, Inc. -- 940,000* 23,806 -- -- -- -- 940,000 37,600
Xylogics, Inc. -- 380,000 9,498 380,000 9,498 (2,114) -- -- --
------ ----- ----- ---- ------
$430,772 $236,924 $94,089 $ 85 $637,064
======= ======= ====== === =======
GIFTRUST INVESTORS
Applied Extrusion
Technologies, Inc. 400,000 -- -- 400,000 $4,378 $ 2,001 -- -- --
Applied Materials, Inc. -- 220,000* $12,316 -- -- -- -- 220,000 $11,041
Asyst Technologies, Inc. -- 330,000 11,874 -- -- -- -- 330,000 14,066
Atmel Corp. 240,000 275,000* 2,538 75,000 2,033 835 -- 440,000 13,777
Bio-Vascular, Inc. -- 500,000 8,188 -- -- -- -- 500,000 7,063
Brooks Automation, Inc. -- 475,000 6,920 -- -- -- -- 475,000 8,669
C-COR Electronics, Inc. 190,000 190,000* -- 331,400 5,929 1,352 -- 48,600 1,130
Cirrus Logic, Inc. -- 200,000 9,862 -- -- -- -- 200,000 8,413
Cyberoptics Corporation -- 425,000 10,533 -- -- -- -- 425,000 14,131
DSP Group, Inc. 70,000 155,000 3,513 225,000 5,000 (877) -- -- --
Data Translation, Inc. -- 500,000* 7,250 -- -- -- -- 500,000 7,813
First Team Sports, Inc. 155,000 130,000* 688 285,000 2,520 4,368 -- -- --
Hologic, Inc. 190,000 40,000 607 230,000 3,551 (644) -- -- --
In Focus Systems Inc. 234,400 15,600 434 250,000 4,692 1,845 -- -- --
Intersolv, Inc. 250,000 120,000 2,039 370,000 6,018 2,057 -- -- --
Microchip
Technology, Inc. 405,000 302,500* 3,772 557,500 6,354 9,335 -- 150,000 5,944
MicroTouch Systems, Inc. 125,000 125,000* -- 250,000 3,875 2,535 -- -- --
Pinnacle Systems, Inc. -- 440,000 9,294 -- -- -- -- 440,000 13,750
Pri Automation, Inc. 175,000 175,000 6,180 -- -- -- -- 350,000 13,081
Proxima Corporation 275,000 -- -- 275,000 4,108 2,258 -- -- --
Rent-Way, Inc. -- 262,500* 2,573 -- -- -- -- 262,500 2,576
ResMed, Inc. -- 375,000 4,108 -- -- -- -- 375,000 5,813
</TABLE>
54
<PAGE>
<TABLE>
<CAPTION>
4. Affiliated Company Transactions (CONTINUED) OCTOBER 31, 1995
SHARE REALIZED ----------------
CLASS OF SHARES/ BALANCE PURCHASE PURCHASE SALES SALES GAIN SHARE MARKET
ISSUER 10/31/94 SHARES COST SHARES COST (LOSS) INCOME BALANCE VALUE
-------------------------------------($ In Thousands)---------------------------------
GIFTRUST INVESTORS (CONT.)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Robotic Visions
Systems, Inc. -- 700,000 $ 10,493 -- -- -- -- 700,000 $ 15,969
Rock Bottom
Restaurants, Inc. -- 300,000 5,766 300,000 $ 5,766 $ (673) -- -- --
Security Dynamics
Technologies Inc. -- 570,000* 5,326 -- -- -- -- 570,000 18,383
Seitel, Inc. 290,000 -- -- 290,000 7,322 (170) -- -- --
Semtech Corporation -- 330,000 6,149 100,000 2,362 104 -- 230,000 5,922
Studio Plus Hotels, Inc. -- 300,000 5,230 -- -- -- -- 300,000 5,738
Tencor Instruments 265,000 260,000* 1,255 45,000 868 636 -- 480,000 20,520
Transworld Home
Healthcare, Inc. -- 350,000 6,359 350,000 6,359 (1,504) -- -- --
Ultratech Stepper, Inc. 225,000 225,000* -- -- -- -- -- 450,000 18,000
Wireless Telecom
Group Inc. -- 495,000* 4,270 195,000 1,900 1,492 $52 300,000 5,475
----- ----- ----- -- -----
$147,537 $73,035 $24,950 $52 $217,274
======= ====== ====== == =======
BALANCED INVESTORS
Autodesk, Inc. 200,000 75,000 $ 2,798 130,000 $ 4,693 $ (233) $60 145,000 $ 4,903
Intuit Inc. -- 160,000* 5,457 -- -- -- -- 160,000 11,560
Micron Technology, Inc. -- 30,000 1,744 -- -- -- 2 30,000 2,119
Texas Instruments, Inc. -- 200,000* 13,899 -- -- -- 37 200,000 13,650
------ ----- --- -- ------
$ 23,898 $ 4,693 $ (233) $99 $ 32,232
====== ===== === == ======
* Includes adjustments for shares received from stock split and/or stock spinoff during the year.
** Includes shares received from merger with PowerSoft in Feb. 95.
</TABLE>
55
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) October 31, 1995
5. Commitments
As of October 31, 1995, the Funds had entered into forward foreign
currency exchange contracts that obligate the Funds to deliver currencies at
specified future dates. Forward contracts involve elements of market risk in
excess of the amount reflected in the Statements of Assets and Liabilities.
The Funds bear the risk of an unfavorable change in the foreign currency
exchange rate underlying the forward contract. Additionally, losses may arise
if the counterparties do not perform under the contract terms. Outstanding
contracts as of October 31, 1995, were as follows:
<TABLE>
<CAPTION>
U.S. DOLLAR U.S. DOLLAR
CURRENCY TO VALUE AS OF CURRENCY TO VALUE AS OF UNREALIZED
FUND SETTLEMENT DATE BE DELIVERED 10/31/95 BE RECEIVED 10/31/95 GAIN
- --------------------------------------------------------($ In Thousands)-------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECT November 30, 1995 52,034,400 $ 36,992 37,178,317 $ 37,178 $ 186
German Deutschemark U.S. Dollar
November 30, 1995 10,640,578,595 104,536 105,128,475 105,128 592
Japanese Yen U.S. Dollar
November 30, 1995 35,065,800 30,952 31,019,329 31,019 67
Swiss Franc U.S. Dollar
------- ------- ---
$172,480 $173,325 $ 845
======= ======= ===
HERITAGE November 30, 1995 16,480,000 $ 11,716 11,774,877 $ 11,775 $ 59
German Deutschemark U.S. Dollar
November 30, 1995 4,866,655,148 47,812 48,132,761 48,133 321
Japanese Yen U.S. Dollar
------ ------ ---
$ 59,528 $ 59,908 $ 380
====== ====== ===
GROWTH November 30, 1995 36,481,250 $ 25,935 26,032,541 $ 26,033 $ 98
German Deutschemark U.S. Dollar
November 30, 1995 47,647,941,237 468,107 470,993,653 470,994 2,887
Japanese Yen U.S. Dollar
------- ------- -----
$494,042 $497,027 $2,985
======= ======= =====
ULTRA November 30, 1995 15,703,750,000 $154,278 155,152,398 $155,152 $ 874
Japanese Yen ======= U.S. Dollar ======= ===
BALANCED November 30, 1995 4,336,200 $ 3,083 3,098,193 $ 3,098 $ 15
German Deutschemark U.S. Dollar
November 30, 1995 1,350,653,932 13,269 13,344,405 13,344 75
Japanese Yen U.S. Dollar
------ ------ --
$ 16,352 $ 16,442 $ 90
====== ====== ==
</TABLE>
56
<PAGE>
October 31, 1995
- --------------------------------------------------------------------------------
PROXY VOTING RESULTS
A special meeting of shareholders of Select Investors and Heritage
Investors was held on September 25, 1995 to vote on an amendment of a
fundamental policy to require only 80% of each Fund's assets be invested in
dividend-paying companies. The proposal was approved by the shareholders of
each Fund, as follows:
SELECT HERITAGE
-------------------------- ---------------------------
For: 2,176,582,527 For: 489,792,649
Against: 179,322,571 Against: 56,507,804
Abstain: 106,005,841 Abstain: 15,480,952
57
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
INCOME FROM
INVESTMENT OPERATIONS DISTRIBUTIONS
------------------------------------------- --------------------------------------------
Net Realized
and Unrealized Distributions Distributions
Gains (Losses) from Net in Excess of
Net Asset Net on Investments Total Distributions Realized Net Realized
Value, Investment and Foreign from from Net Gains on Gains on
Beginning Income Currency Investment Investment Investment Investment
SELECT INVESTORS of Period (Loss) Transactions Operations Income Transactions Transactions
<S> <C> <C> <C> <C> <C> <C> <C>
Year Ended Oct. 31,
1991 $34.19 $.63 $ 8.17 $ 8.80 $(.652) $(1.551) --
1992 40.79 .53 .34 .87 (.653) (1.823) --
1993 39.18 .46 7.94 8.40 (.495) (1.313) $(.016)
1994 45.76 .40 (3.59) (3.19) (.432) (4.466) --
1995 37.67 .332 4.68 5.01 (.281) (2.750) (.125)
HERITAGE INVESTORS
Year Ended Oct. 31,
1991 $ 6.55 $.11 $ 2.04 $2.15 $(.110) -- --
1992 8.59 .10 .72 .82 (.113) -- --
1993 9.30 .07 2.43 2.50 (.093) $(.679) --
1994 11.03 .07 (.21) (.14) (.068) (.500) $(.006)
1995 10.32 .052 1.96 2.01 (.033) (.514) (.030)
GROWTH INVESTORS
Year Ended Oct. 31,
1991 $14.81 $ .04 $ 8.47 $ 8.51 $(.111) $(.891) --
1992 22.32 (.02) 1.35 1.33 (.013) -- --
1993 23.64 .06 1.94 2.00 -- (.353) $(.013)
1994 25.27 .06 .48 .54 (.056) (2.764) (.002)
1995 22.99 .082 4.08 4.16 (.051) (3.183) (.040)
[above table continued below]
DISTRIBUTIONS (cont.) RATIOS/SUPPLEMENTAL DATA
--------------- --------------------------------------------------
Ratio of Net Net
Ratio of Investment Assets
Operating Income End of
Net Asset Expenses (Loss) to Portfolio Period
Total Value, Total to Average Average Turnover (in
SELECT INVESTORS Distributions End of Period Return1 Net Assets Net Assets Rate1 thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Year Ended Oct. 31,
1991 $(2.203) $40.79 27.05% 1.00% 1.7% 84% $4,163,105
1992 (2.476) 39.18 1.76% 1.00% 1.4% 95% 4,534,264
1993 (1.824) 45.76 22.20% 1.00% 1.1% 82% 5,159,963
1994 (4.898) 37.67 (7.37%) 1.00% 1.0% 126% 4,277,843
1995 (3.156) 39.52 15.02% 1.00% .9% 106% 4,008,438
1995 average commission paid per share traded $.046
HERITAGE INVESTORS
Year Ended Oct. 31,
1991 $ (.110) $ 8.59 33.25% 1.00% 1.5% 146% $ 268,891
1992 (.113) 9.30 9.65% 1.00% 1.1% 119% 368,651
1993 (.772) 11.03 28.64% 1.00% .7% 116% 701,504
1994 (.574) 10.32 (1.13%) 1.00% .7% 136% 896,763
1995 (.577) 11.75 21.04% .99% .5% 121% 1,008,323
1995 average commission paid per share traded $.042
GROWTH INVESTORS
Year Ended Oct. 31,
1991 $(1.002) $22.32 60.64% 1.00% .2% 69% $3,193,381
1992 (.013) 23.64 5.96% 1.00% (.1%) 53% 4,471,882
1993 (.366) 25.27 8.48% 1.00% .2% 94% 4,641,187
1994 (2.822) 22.99 2.66% 1.00% .3% 100% 4,363,476
1995 (3.274) 23.88 22.31% 1.00% .4% 141% 5,129,894
1995 average commission paid per share traded $.040
1 Actual total return and portfolio turnover rate for periods indicated.
2 Computed using net investment income and average shares outstanding for the period.
See Notes to Financial Statements
</TABLE>
58
<PAGE>
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS DISTRIBUTIONS
------------------------------------------- --------------------------------------------
Net Realized
and Unrealized Distributions Distributions
Gains (Losses) from Net in Excess of
Net Asset Net on Investments Total Distributions Realized Net Realized
Value, Investment and Foreign from from Net Gains on Gains on
Beginning Income Currency Investment Investment Investment Investment
ULTRA INVESTORS of Period (Loss) Transactions Operations Income Transactions Transactions
<S> <C> <C> <C> <C> <C> <C> <C>
Year Ended Oct. 31,
1991 $ 7.73 $(.03) $7.86 $7.83 -- $(.028) --
1992 15.53 (.05) (.02) (.07) -- -- --
1993 15.46 (.09) 6.24 6.15 -- -- --
1994 21.61 (.03) (.42) (.45) -- -- --
1995 21.16 (.07)2 7.58 7.51 -- (.645) --
Vista Investors
Year Ended Oct. 31,
1991 $ 6.28 $(.02) $4.27 $4.25 -- -- --
1992 10.53 (.04) .52 .48 -- -- --
1993 11.01 (.07) 1.95 1.88 -- $ (.641) $(.006)
1994 12.24 (.08) .45 .37 -- (1.663) (.012)
1995 10.94 (.08)2 4.90 4.82 -- (.030) --
Giftrust Investors
Year Ended Oct. 31,
1991 $ 7.25 $(.06) $5.77 $5.71 -- $ (.025) --
1992 12.94 (.08) 1.41 1.33 -- (.697) --
1993 13.57 (.09) 7.18 7.09 -- (1.425) $(.007)
1994 19.23 (.10) 3.28 3.18 -- (1.911) --
1995 20.50 (.16)2 6.37 6.21 -- (1.085) --
Balanced Investors
Year Ended Oct. 31,
1991 $10.89 $.38 $4.22 $4.60 $(.384) -- --
1992 15.11 .33 (.23) .10 (.322) -- --
1993 14.89 .38 1.62 2.00 (.375) -- --
1994 16.52 .42 (.58) (.16) (.416) -- --
1995 15.94 .482 2.03 2.51 (.475) $(.274) --
[above table continued below]
DISTRIBUTIONS (cont.) RATIOS/SUPPLEMENTAL DATA
--------------- --------------------------------------------------
Ratio of Net Net
Ratio of Investment Assets
Operating Income End of
Net Asset Expenses (Loss) to Portfolio Period
Total Value, Total to Average Average Turnover (in
ULTRA INVESTORS Distributions End of Period Return1 Net Assets Net Assets Rate1 thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Year Ended Oct. 31,
1991 $(.028) $15.53 101.51% 1.00% (.5%) 42% $ 2,147,654
1992 -- 15.46 (.45%) 1.00% (.4%) 59% 4,275,200
1993 -- 21.61 39.78% 1.00% (.6%) 53% 8,037,417
1994 -- 21.16 (2.08%) 1.00% (.1%) 78% 10,344,273
1995 (.645) 28.03 36.89% 1.00% (.3%) 87% 14,375,902
1995 average commission paid per share traded $.033
VISTA INVESTORS
Year Ended Oct. 31,
1991 -- $10.53 67.67% 1.00% (.3%) 92% $ 622,140
1992 -- 11.01 4.55% 1.00% (.4%) 87% 829,678
1993 $ (.647) 12.24 17.71% 1.00% (.6%) 133% 847,470
1994 (1.675) 10.94 4.16% 1.00% (.8%) 111% 792,343
1995 (.030) 15.73 44.20% .98% (.6%) 89% 1,675,917
1995 average commission paid per share traded $.033
GIFTRUST INVESTORS
Year Ended Oct. 31,
1991 $ (.025) $12.94 79.04% 1.00% (.6%) 143% $ 54,963
1992 (.697) 13.57 10.32% 1.00% (.7%) 134% 77,518
1993 (1.432) 19.23 55.84% 1.00% (.7%) 143% 153,997
1994 (1.911) 20.50 18.75% 1.00% (.7%) 115% 265,601
1995 (1.085) 25.63 32.52% .98% (.7%) 105% 561,112
1995 average commission paid per share traded $.026
BALANCED INVESTORS
Year Ended Oct. 31,
1991 $(.384) $15.11 42.92% 1.00% 3.1% 116% $254,884
1992 (.322) 14.89 .63% 1.00% 2.4% 100% 654,123
1993 (.375) 16.52 13.64% 1.00% 2.4% 95% 705,698
1994 (.416) 15.94 (.93%) 1.00% 2.7% 94% 703,866
1995 (.749) 17.70 16.36% .98% 2.9% 85%3 815,570
1995 average commission paid per share traded $.039
1 Actual total return and portfolio turnover rate for periods indicated.
2 Computed using net investment income and average shares outstanding for the period.
3 The portfolio turnover rate of the equity and fixed income components of the portfolio was 90% and 71%, respectively.
See Notes to Financial Statements
</TABLE>
59
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
The Shareholders and Board of Directors
Twentieth Century Investors, Inc.
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of Select Investors, Heritage
Investors, Growth Investors, Ultra Investors, Vista Investors, Giftrust
Investors and Balanced Investors (seven of the sixteen funds comprising
TWENTIETH CENTURY INVESTORS, INC.) as of October 31, 1995, and the related
statements of operations, the statements of changes in net assets, and the
financial highlights for each of the periods indicated. These financial
statements and financial highlights are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
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
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 as of October 31, 1995, by correspondence with the custodian and
brokers. As to securities purchased but not received, we requested
confirmations from brokers, and when replies were not received, we performed
alternative auditing 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, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Select Investors, Heritage Investors, Growth Investors, Ultra Investors, Vista
Investors, Giftrust Investors and Balanced Investors, as of October 31, 1995,
and the results of their operations, changes in their net assets, and the
financial highlights for each of the periods indicated in conformity with
generally accepted accounting principles.
/s/Baird, Kurtz & Dobson
BAIRD, KURTZ & DOBSON
Kansas City, Missouri
November 27, 1995
60
<PAGE>
October 31, 1995
- --------------------------------------------------------------------------------
IMPORTANT NOTICE FOR ALL IRA AND 403(B) SHAREHOLDERS
As required by law, any distributions you receive from an IRA and certain
403(b) distributions [not eligible for rollover to an IRA or to another 403(b)]
are subject to federal income tax withholding at the rate of 10% of the total
amount withdrawn, unless you elect not to have withholding apply. If you don't
want us to withhold on this amount, you may send us a written notice not to have
the federal income tax withheld. Your written notice is valid for six months
from the date of receipt at Twentieth Century. Even if you plan to roll over the
amount you withdraw to another tax-deferred account, the withholding rate still
applies to the withdrawn amount, unless we have received a written notice not to
withhold federal income tax within six months prior to the withdrawal.
When you plan to withdraw, you may make your election by completing our
Conversions/Redemptions form or an IRS Form W-4P. Call Twentieth Century for
either form. Your written election is valid for only six months from the date of
receipt at Twentieth Century. You may revoke your election at any time by
sending a written notice to us.
Remember, even if you elect not to have income tax withheld, you are
liable for paying income tax on the taxable portion of your withdrawal. If you
elect not to have income tax withheld or you don't have enough income tax
withheld, you may be responsible for payment of estimated tax. You may incur
penalties under the estimated tax rules if your withholding and estimated tax
payments are not sufficient.
<PAGE>
TWENTIETH CENTURY INVESTORS, INC.
Twentieth Century
INVESTMENT MANAGER Investors, Inc.
INVESTORS RESEARCH CORPORATION
KANSAS CITY, MISSOURI Equity Funds
Annual Report
THIS REPORT AND THE FINANCIAL
STATEMENTS CONTAINED HEREIN October 31, 1995
ARE SUBMITTED FOR THE GENERAL
INFORMATION OF OUR SHAREHOLDERS.
THE REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
UNLESS PRECEDED OR ACCOMPANIED
BY AN EFFECTIVE PROSPECTUS.
[company logo]
Investments That Work(TM)
- --------------------------------------
P.O. BOX 419200
KANSAS CITY, MISSOURI
64141-6200
- --------------------------------------
Person-to-person assistance:
1-800-345-2021 OR 816-531-5575
- --------------------------------------
Automated information line:
1-800-345-8765
- --------------------------------------
Telecommunications Device for the Deaf:
1-800-634-4113 OR 816-753-1865
- --------------------------------------
Fax: 816-340-7962
- --------------------------------------
[company logo]
- --------------------------------------------------------------------------------
SH-BKT-3791
9512 Recycled
(C) 1995 TWENTIETH CENTURY SERVICES, INC.
