<PAGE>
UNITED
INTERNATIONAL
GROWTH FUND,
INC.
ANNUAL
REPORT
---------------------------------------
For the fiscal year ended June 30, 1994
<PAGE>
FUND MANAGER'S LETTER
JUNE 30, 1994
Dear Shareholder:
This report relates to the operation of United International Growth Fund,
Inc. for the fiscal year ended June 30, 1994. The following discussion, graphs
and tables provide you with information regarding the Fund's performance during
that period.
During the Fund's past fiscal year the economic recovery trend present in
the United States began to spread to other countries. Investors worldwide
reacted to signs of economic improvement by anticipating an upturn in inflation,
thereby causing global interest rates to rise sharply.
The rise in global interest rates led us to reduce the Fund's holdings of
interest sensitive stocks and increase the Fund's holdings of economic sensitive
and growth stocks. We increased the Fund's holdings in Europe and Scandinavia
at the middle of the year and began purchasing Japanese securities toward the
end of the period.
The strategies and techniques we applied resulted in the direction of the
Fund's performance during its past fiscal year remaining fairly consistent with
that of the indexes charted on the following page. Those indexes reflect the
performance of the international securities market as charted by the Morgan
Stanley E.A.FE. Index (Europe, Australia, Far East Index) and the universe of
funds with similar investment objectives (the Lipper International Fund Universe
Average). The Fund's performance was positively impacted by its exposure to
European, Scandinavian and Japanese securities.
We anticipate that the global economic recovery will continue. In seeking
to achieve the Fund's goals, we expect to continue the strategies we have
employed in the recent past by increasing the Fund's holdings in worldwide
growth stocks.
We appreciate your continued confidence.
Respectfully,
Mark Yockey
Manager, United International Growth Fund
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
UNITED INTERNATIONAL GROWTH FUND, INC.,
THE MORGAN STANLEY E.A.FE. INDEX
AND THE LIPPER INTERNATIONAL FUND UNIVERSE AVERAGE
The line graph which appears here is the paper version which was filed on Form
SE on August 25, 1994.
<PAGE>
SHAREHOLDER SUMMARY
- -----------------------------------------------------------------
UNITED INTERNATIONAL GROWTH FUND, INC.
PORTFOLIO STRATEGY:
Normally at least 80% in OBJECTIVE: Long-term appreciation
foreign securities. Not of capital with current
more than 75% in securities income as a secondary
in any one country. consideration.
Maximum of 15% in currency STRATEGY: Invests in securities
exchange contracts (common stocks and/or
debt securities) issued
Cash Reserves by companies or
governments of any
nation.
The use of cash reserves (often invested
in money market securities) for defensive
purposes is a strategy that may be
utilized by the International Growth Fund
from time to time.
Moving into cash reserve positions at
times thought to be near a major stock
market peak allows the Fund the
opportunity to capture profits and
attempts to cushion the impact of market
declines. The added flexibility provided
by our CASH RESERVES STRATEGY has from
time to time been an important element in
our past success and, when deemed
appropriate, may be used in the
management of the portfolio in the
future.
FOUNDED: 1970
DIVIDENDS: PAID SEMIANNUALLY (June and
December
PERFORMANCE SUMMARY
PER SHARE DATA
For the Fiscal Year Ended June 30, 1994
---------------------------------------
DIVIDEND PAID $0.04
=====
CAPITAL GAINS DISTRIBUTION $0.50
=====
NET ASSET VALUE ON
6/30/94 $8.98 adjusted to:$9.48(A)
6/30/93 $7.16
-----
CHANGE PER SHARE $2.32
=====
(A)This number includes the capital gains distribution of $0.50 paid in December
1993 added to the actual net asset value on June 30, 1994.
Past performance is not necessarily indicative of future results.
TOTAL RETURN HISTORY
Average Annual Total Return
---------------------------
With Without
Period Sales Load* Sales Load**
- ------ ----------- ------------
1-year period ended 6-30-94 25.65% 33.31%
5-year period ended 6-30-94 10.13% 11.44%
10-year period ended 6-30-94 14.50% 15.18%
*Performance data quoted represents past performance and is based on deduction
of 5.75% sales load on the initial purchase in each of the three periods.
**Performance data quoted in this column represents past performance without
taking into account the sales load deducted on an initial purchase.
Investment return and principal value will fluctuate and an investor's shares,
when redeemed, may be worth more or less than their original cost.
<PAGE>
PORTFOLIO HIGHLIGHTS
On June 30, 1994, United International Growth Fund, Inc. had net assets totaling
$572,456,063 invested in a diversified portfolio of:
91.61% Common Stocks
2.91% Preferred Stocks
5.48% Cash and Cash Equivalents and Open Forward
Currency Contracts
As a shareholder of United International Growth Fund, Inc., for every $100 you
had invested on June 30, 1994, your Fund owned $5.48 in cash and cash
equivalents and open forward currency contracts; the remainder was invested as
follows:
Energy &
Basic Techno-Public Energy-
IndustriesConsumerFinanciallogicalUtilities Related Total
Sweden $ 9.48 $ .39 $ 2.39 $ 2.52 $14.78
Japan 10.11 2.10 1.30 13.51
Finland 5.19 .23 4.64 10.06
United Kingdom2.41 4.96 1.41 8.78
France 3.56 1.23 1.65 .92 7.36
Germany 3.78 2.09 $.69 6.56
Mexico 4.20 .39 1.93 .04 6.56
Spain 3.56 1.56 5.12
Australia .40 1.20 1.83 3.43
Hong Kong 2.04 .63 .43 .07 3.17
Norway 2.22 .30 .26 2.78
Switzerland 1.92 .26 .41 2.59
Other 5.52 1.84 1.51 .79 $.16 9.82
Total $54.39 $16.95 $12.05 $10.28 $.69 $.16 $94.52
<PAGE>
- -----------------------------------------------------------------
These STOCK CATEGORIES are provided as a reference only. Not all categories or
subcategories will be represented in a portfolio at all times. Refer to the
following pages for a more detailed portfolio listing.
BASIC INDUSTRIES
Airlines
Automotive
Building
Chemicals Major
Electrical Equipment
Engineering and Construction
Machinery
Manufacturers
Metals and Mining
Multi-Industry
Paper
Precious Metals
Railroad Equipment
Railroads
Shipping
Steel
Tire and Rubber
Trucking
CONSUMER
Beverages
Consumer Electronics and Appliances
Food and Related
Hospital Management
Household Products
Leisure Time
Packaging and Containers
Publishing and Advertising
Retailing
Services, Consumer and Business
Textiles and Apparel
Tobacco
ENERGY AND ENERGY-RELATED
Canadian Oil
Coal
Domestic Oil
International Oil
Oil Services
Propane
FINANCIAL
Banks and Savings and Loans
Financial
Insurance
PUBLIC UTILITIES
Electric
Gas
Pipelines
TECHNOLOGICAL
Aerospace
Biotechnology and Medical Services
Chemicals Specialty and Miscellaneous Technology
Computers and Office Equipment
Drugs and Hospital Supply
Electronics
Telecommunications
<PAGE>
Table I: Portfolio Diversification by Nation and Industry
June 30, 1994 market value as percent of total net assets
- --------------------------------------------------------------------------------
United
Sweden Japan Finland Kingdom France Germany Mexico
- --------------------------------------------------------------------------------
Building .51% 0.65% 1.69% .45% 2.18% 1.10% 1.65%
- --------------------------------------------------------------------------------
Banks and Savings
and Loans 1.77 1.41 1.01 1.20
- --------------------------------------------------------------------------------
Multi-Industry 2.28 .20 .12 1.32 2.23
- --------------------------------------------------------------------------------
Retailing 2.72 .90 2.09 .39
- --------------------------------------------------------------------------------
Telecommunications1.32 4.64 .04
- --------------------------------------------------------------------------------
Automotive 3.12 1.20 1.38 .09
- --------------------------------------------------------------------------------
Engineering and
Construction .65 .64 .34 .32
- --------------------------------------------------------------------------------
Machinery .36 1.90 2.25
- --------------------------------------------------------------------------------
Steel 1.34 2.35
- --------------------------------------------------------------------------------
Electrical
Equipment 3.62
- --------------------------------------------------------------------------------
Packaging and
Containers 1.39
- --------------------------------------------------------------------------------
Consumer Electronics
and Appliances .32 1.59
- --------------------------------------------------------------------------------
Publishing and
Advertising .07
- --------------------------------------------------------------------------------
Food and Related .57
- --------------------------------------------------------------------------------
Insurance .62 .23 .64
- --------------------------------------------------------------------------------
Paper 1.48
- --------------------------------------------------------------------------------
Airlines
- --------------------------------------------------------------------------------
Electronics 1.30
- --------------------------------------------------------------------------------
Shipping .51 .74
- --------------------------------------------------------------------------------
Financial .73
- --------------------------------------------------------------------------------
Tire and Rubber
- --------------------------------------------------------------------------------
Trucking 1.07
- --------------------------------------------------------------------------------
Drugs and Hospital
Supply .80
- --------------------------------------------------------------------------------
Chemicals - Major .99
- --------------------------------------------------------------------------------
Chemicals Specialty
and Miscellaneous
Technology .92
- --------------------------------------------------------------------------------
Leisure Time .33
- --------------------------------------------------------------------------------
Metals and Mining
- --------------------------------------------------------------------------------
Public Utilities -
Electric .69
- --------------------------------------------------------------------------------
Household Products .51
- --------------------------------------------------------------------------------
Computers and
Office Equipment .40
- --------------------------------------------------------------------------------
Textiles and Apparel
- --------------------------------------------------------------------------------
Hospital Management .28
- --------------------------------------------------------------------------------
International Oil
- --------------------------------------------------------------------------------
Total 14.78% 13.51% 10.06% 8.78% 7.36% 6.56% 6.56
- --------------------------------------------------------------------------------
<PAGE>
Table I: Portfolio Diversification by Nation and Industry
June 30, 1994, market value as percent of total net assets
- --------------------------------------------------------------------------------
Aus- Hong Switz- Argen-
Spain tralia Kong Norway erland tina Denmark
- --------------------------------------------------------------------------------
Building 1.40% 1.00% .79% .33% 1.34%
- --------------------------------------------------------------------------------
Banks and Savings
and Loans 1.83% .26% .41 .17 .27
- --------------------------------------------------------------------------------
Multi-Industry .49 .40 .70 .27
- --------------------------------------------------------------------------------
Retailing .66
- --------------------------------------------------------------------------------
Telecommunications .07
- --------------------------------------------------------------------------------
Automotive .37
- --------------------------------------------------------------------------------
Engineering and
Construction 1.67 .14 .25
- --------------------------------------------------------------------------------
Machinery .16
- --------------------------------------------------------------------------------
Steel
- --------------------------------------------------------------------------------
Electrical Equipment .20
- --------------------------------------------------------------------------------
Packaging and
Containers .66 .16
- --------------------------------------------------------------------------------
Consumer Electronics
and Appliances .21
- --------------------------------------------------------------------------------
Publishing and
Advertising 1.20 .26
- --------------------------------------------------------------------------------
Food and Related .24 .26 .67
- --------------------------------------------------------------------------------
Insurance
- --------------------------------------------------------------------------------
Paper
- --------------------------------------------------------------------------------
Airlines 1.34
- --------------------------------------------------------------------------------
Electronics
- --------------------------------------------------------------------------------
Shipping
- --------------------------------------------------------------------------------
Financial .43
- --------------------------------------------------------------------------------
Tire and Rubber .88
- --------------------------------------------------------------------------------
Trucking
- --------------------------------------------------------------------------------
Drugs and
Hospital Supply
- --------------------------------------------------------------------------------
Chemicals - Major
- --------------------------------------------------------------------------------
Chemicals Specialty
and Miscellaneous
Technology
- --------------------------------------------------------------------------------
Leisure Time .30
- --------------------------------------------------------------------------------
Metals and Mining .72
- --------------------------------------------------------------------------------
Public Utilities -
Electric
- --------------------------------------------------------------------------------
Household Products
- --------------------------------------------------------------------------------
Computers and
Office Equipment
- --------------------------------------------------------------------------------
Textiles and Apparel
- --------------------------------------------------------------------------------
Hospital Management
- --------------------------------------------------------------------------------
International Oil .16
- --------------------------------------------------------------------------------
Total 5.12% 3.43% 3.17% 2.78% 2.59% 1.97% 1.61%
- --------------------------------------------------------------------------------
<PAGE>
Table I: Portfolio Diversification by Nation and Industry
June 30, 1994, market value as percent of total net assets
- --------------------------------------------------------------------------------
Nether-
Austria Italy Brazil Canada China lands
- --------------------------------------------------------------------------------
Building
- --------------------------------------------------------------------------------
Banks and Savings
and Loans .34% .60%
- --------------------------------------------------------------------------------
Multi-Industry
- --------------------------------------------------------------------------------
Retailing
- --------------------------------------------------------------------------------
Telecommunications .59%
- --------------------------------------------------------------------------------
Automotive .25
- --------------------------------------------------------------------------------
Engineering and
Construction 1.23
- --------------------------------------------------------------------------------
Machinery .76
- --------------------------------------------------------------------------------
Steel .34%
- --------------------------------------------------------------------------------
Electrical Equipment
- --------------------------------------------------------------------------------
Packaging and
Containers
- --------------------------------------------------------------------------------
Consumer Electronics
and Appliances .07
- --------------------------------------------------------------------------------
Publishing and
Advertising .60
- --------------------------------------------------------------------------------
Food and Related
- --------------------------------------------------------------------------------
Insurance
- --------------------------------------------------------------------------------
Paper
- --------------------------------------------------------------------------------
Airlines
- --------------------------------------------------------------------------------
Electronics
- --------------------------------------------------------------------------------
Shipping
- --------------------------------------------------------------------------------
Financial
- --------------------------------------------------------------------------------
Tire and Rubber .27%
- --------------------------------------------------------------------------------
Trucking
- --------------------------------------------------------------------------------
Drugs and
Hospital Supply
- --------------------------------------------------------------------------------
Chemicals - Major
- --------------------------------------------------------------------------------
Chemicals Specialty
and Miscellaneous
Technology
- --------------------------------------------------------------------------------
Leisure Time
- --------------------------------------------------------------------------------
Metals and Mining
- --------------------------------------------------------------------------------
Public Utilities -
Electric
- --------------------------------------------------------------------------------
Household Products
- --------------------------------------------------------------------------------
Computers and
Office Equipment
- --------------------------------------------------------------------------------
Textiles and Apparel 0.40%
- --------------------------------------------------------------------------------
Hospital Management
- --------------------------------------------------------------------------------
International Oil
- --------------------------------------------------------------------------------
Total 1.57% 1.52% 1.35% .40% .34% .27%
- --------------------------------------------------------------------------------
<PAGE>
Table I: Portfolio Diversification by Nation and Industry
June 30, 1994, market value as percent of total net assets
- --------------------------------------------------------------------------------
Singa-
pore Chile Turkey Portugal Malaysia Total
- --------------------------------------------------------------------------------
Building 13.09%
- --------------------------------------------------------------------------------
Banks and Savings
and Loans .13% 9.40%
- --------------------------------------------------------------------------------
Multi-Industry 8.01%
- --------------------------------------------------------------------------------
Retailing 6.76%
- --------------------------------------------------------------------------------
Telecommunications 6.66%
- --------------------------------------------------------------------------------
Automotive 0.15% 6.56%
- --------------------------------------------------------------------------------
Engineering and
Construction .21% 5.45%
- --------------------------------------------------------------------------------
Machinery 5.43%
- --------------------------------------------------------------------------------
Steel 4.03%
- --------------------------------------------------------------------------------
Electrical Equipment 3.82%
- --------------------------------------------------------------------------------
Packaging and
Containers 2.21%
- --------------------------------------------------------------------------------
Consumer Electronics
and Appliances 2.19%
- --------------------------------------------------------------------------------
Publishing and
Advertising 2.13%
- --------------------------------------------------------------------------------
Food and Related 1.74%
- --------------------------------------------------------------------------------
Insurance 1.49%
- --------------------------------------------------------------------------------
Paper 1.48%
- --------------------------------------------------------------------------------
Airlines 1.34%
- --------------------------------------------------------------------------------
Electronics 1.30%
- --------------------------------------------------------------------------------
Shipping 1.25%
- --------------------------------------------------------------------------------
Financial 1.16%
- --------------------------------------------------------------------------------
Tire and Rubber 1.15%
- --------------------------------------------------------------------------------
Trucking 1.07%
- --------------------------------------------------------------------------------
Drugs and
Hospital Supply .20% 1.00%
- --------------------------------------------------------------------------------
Chemicals - Major .99%
- --------------------------------------------------------------------------------
Chemicals Specialty
and Miscellaneous
Technology .92%
- --------------------------------------------------------------------------------
Leisure Time .10% .73%
- --------------------------------------------------------------------------------
Metals and Mining .72%
- --------------------------------------------------------------------------------
Public Utilities -
Electric .69%
- --------------------------------------------------------------------------------
Household Products .51%
- --------------------------------------------------------------------------------
Computers and
Office Equipment .40%
- --------------------------------------------------------------------------------
Textiles and Apparel .40%
- --------------------------------------------------------------------------------
Hospital Management .28%
- --------------------------------------------------------------------------------
International Oil .16%
- --------------------------------------------------------------------------------
Total .21% .20% .15% .13% .10% 94.52%
- --------------------------------------------------------------------------------
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
JUNE 30, 1994
Shares Value
COMMON STOCKS
Argentina - 1.97%
Astra Cia Argentina De Petro ........... 455,083 $ 902,885
Banco Frances del Rio de la
Plata, SA, ADR ........................ 45,500 1,018,063
Ciadea, S.A.* .......................... 194,022 2,139,287
Colorin S.A.* .......................... 696,330 893,391
Compania Naviera Perez Companc S.A.,
Class B ............................... 320,000 1,520,320
Corcemar S.A. .......................... 64,371 519,410
IRSA Inversiones Y Representaciones S.A.* 131,165 453,569
Molinos Rio de la Plata S.A.* .......... 292,316 3,838,401
Total ................................. 11,285,326
Australia - 3.43%
Advance Bank Australia Ltd. ............ 695,136 4,585,812
Australian Consolidated Press Group
Limited ............................... 250,000 759,750
Bank of Melbourne Ltd. ................. 23,103 82,524
Futuris Corporation LTD ................ 2,400,000 2,239,200
News Corporation Limited ............... 603,180 3,675,779
Pacific Magazines & Printing, Limited .. 300,000 629,700
West Australian Newspapers Holdings,
Limited ............................... 594,000 1,853,280
Westpac Banking Corp. .................. 1,787,894 5,810,656
Total ................................. 19,636,701
Austria - 1.23%
Universale-Bau, Aktiengesellschaft ..... 50,000 3,739,100
VA Technologie Aktiengesellschaft* ..... 40,000 3,295,760
Total ................................. 7,034,860
Brazil - 0.59%
Telecomunicacoes Brasileiras S/A -
Telebras, ADR ......................... 87,500 3,390,625
Canada - 0.40%
Suzy Shier Limited* .................... 379,900 2,299,915
Chile - 0.20%
Laboratorio Chile S.A., ADS* ........... 80,000 1,120,000
China - 0.34%
Maanshan Iron & Steel Company Limited,
ADS (A)* .............................. 70,380 1,929,116
See Notes to Schedule of Investments on page 13.
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
JUNE 30, 1994
Shares Value
COMMON STOCKS (Continued)
Denmark - 1.61%
Danske Traelast* ....................... 80,000 $ 4,401,440
Girobank ............................... 40,000 1,559,080
Thorkild Kristensen* .................. 58,450 3,234,565
Total ................................. 9,195,085
Finland - 10.06%
Enso-Gutzeit Oy ........................ 1,120,000 8,464,960
Metsa Serla Oy, Class B ................ 251,000 9,676,050
Nokia Corporation ...................... 326,000 26,551,396
Pohjola Insurance Company Ltd. ......... 91,700 1,034,468
Raision Tehtaat Oy AB .................. 8,200 757,737
Sampo Ins Co Ltd., A Shares ............ 6,000 260,778
Tampella Oy* ........................... 3,526,667 10,862,134
Total ................................. 57,607,523
France - 7.36%
Compagnies Europeennes Reunies S.A. .... 333,333 6,366,994
Credit Lyonnais SA ..................... 66,675 5,797,791
Epeda Bertrand Faure ................... 10,000 1,525,870
Europe 1 Communication ................. 6,000 1,875,168
Guyenne et Gascogne .................... 19,500 5,126,375
Lapeyre ................................ 202,985 11,310,730
Poliet Ex Lambert Freres ............... 14,900 1,166,908
Societe Industrielle de Transports
Automobiles S.A. ...................... 42,100 5,262,963
Union Des Assurances Federales ........ 35,000 3,680,460
Total ................................. 42,113,259
Germany - 4.75%
AVA Allgemeine Handelsgesellschaft der
Verbraucher AG ........................ 4,258 1,556,363
Buderus Aktiengesellschaft ............. 2,000 757,498
FAG Kugelfischer AG* ................... 8,000 1,179,728
GILDEMEISTER Aktiengesellschaft* ....... 5,690 724,337
Kolbenschmidt AG* ...................... 4,000 541,968
Mannesman AG ........................... 31,000 7,892,600
TRAUB AG* .............................. 30,000 4,253,820
Veba AG ................................ 12,500 3,926,925
Vereinigter Baubeschlag-Handel
Aktiengesellschaft..................... 8,100 4,716,662
WERU AG ............................... 1,900 1,622,446
Total ................................. 27,172,347
See Notes to Schedule of Investments on page 13.
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
JUNE 30, 1994
Shares Value
COMMON STOCKS (Continued)
Hong Kong - 3.17%
China Overseas Land & Investment, Ltd. . 5,000,000 $ 1,130,000
Dongfang Electrical Machinery
Co., Ltd.* ............................ 3,000,000 1,143,000
Guangdong Corporation Limited ......... 7,000,000 4,025,000
Guangzhou Investment .................. 9,000,000 2,529,000
International Tak Cheung (Holdings) LTD . 2,230,000 807,260
M. C. Packaging (Hong Kong) LTD ........ 2,500,000 897,500
New World Development Company Ltd. .... 750,000 2,085,750
Oriental Press Group Limited ........... 2,000,000 1,500,000
Peregrine Investments Holdings,
Ltd. .................................. 1,500,000 2,464,500
Prod-Art Technology Holdings Limited ... 4,682,000 379,242
Wo Kee Hong (Holdings) Limited ......... 2,850,000 1,214,100
Total ................................. 18,175,352
Italy - 1.52%
Arnoldo Mondadori Editore S.p.A. ....... 320,000 3,406,720
Banco di Sardegna Non-Convertible,
RISP .................................. 142,200 1,450,724
Fiat Impresit Sistemi
Ambientali S.p.A. ..................... 600,000 1,437,000
Instituto Mobiliare Italiano SpA ....... 300,000 2,030,400
Merloni Elettrodomestici .............. 247,500 376,200
Total ............................... 8,701,044
Japan - 13.51%
AICHI STEEL WORKS LTD.* ................ 209,000 1,461,119
Alps Electric .......................... 100,000 1,440,800
Amway Japan ............................ 75,000 2,907,150
Asahi Glass ............................ 300,000 3,713,700
Hitachi ................................ 1,100,000 11,496,100
Kawasaki Steel Corporation ............. 750,000 3,180,750
Kobe Steel, Ltd. ....................... 500,000 1,603,000
Matsushita Electric Industrial ......... 200,000 3,673,200
Mitsubishi Heavy Industries, Ltd. ...... 250,000 2,001,500
Mitsubishi Kasei Corporation ........... 500,000 2,663,500
Mitsubishi Motors ...................... 400,000 3,977,600
NEC .................................... 600,000 7,427,400
NKK .................................... 1,200,000 3,225,600
Nakakita Seisakusho Company, Ltd.* ..... 200,000 1,156,600
Navix Line ............................. 1,100,000 4,240,500
NIPPON STEEL CORPORATION ............... 500,000 1,745,000
Nissan Diesel Motor* ................... 500,000 2,932,500
OKi Electric Industry* ................. 300,000 2,416,800
Omron .................................. 300,000 5,388,000
Sharp .................................. 300,000 5,448,900
Sumitomo Chemical ...................... 550,000 2,979,900
Sumitomo Metal Industries, Ltd.* ....... 750,000 2,259,750
Total ................................. 77,339,369
See Notes to Schedule of Investments on page 13.
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
JUNE 30, 1994
Shares Value
COMMON STOCKS (Continued)
Malaysia - 0.10%
Berjaya Sports Toto Bhd ................ 400,000 $ 598,800
Mexico - 6.56%
Cemex, S.A., CPO Shares ................ 808,750 5,160,634
Cifra, S.A. de C.V., C ................. 950,000 2,211,600
Desc-Sociedad de Fomento Industrial,
S.A. de C.V., B ....................... 847,000 5,467,385
Desc-Sociedad de Fomento Industrial,
S.A. de C.V., C ...................... 228,918 1,484,304
Grupo Carso, S.A. de C.V., Class 1* .... 636,500 5,759,689
Grupo Financiero Banamex Accival,
S.A. de C.V., C ....................... 659,000 4,166,198
Grupo Financiero Bancomer, S.A. de
C.V., B, CPO Shares ................... 5,279,600 4,434,864
Grupo Financiero Bancomer, S.A. de
C.V., C .............................. 500,000 560,000
Grupo Financiero InverMexico,
S.A. de C.V., B ...................... 1,000,000 1,709,000
Grupo Financiero InverMexico,
S.A. de C.V., L ....................... 100,000 170,900
Grupo Iusacell, S.A. de C.V., D, ADS* .. 3,000 79,125
Grupo Iusacell, S.A. de C.V., L, ADS* .. 7,000 182,000
Grupo Mexicano de Desarrollo, S.A.,
B, ADS*................................ 175,000 2,340,625
Grupo Mexicano de Desarrollo, S.A.,
L, ADS* ............................... 129,000 1,951,125
Grupo Tribasa, S.A.de C.V., ADS* ....... 84,000 1,858,500
Total ................................. 37,535,949
Netherlands - 0.27%
Pirelli Tyre Holding* .................. 175,000 1,561,000
Norway - 2.78%
Den Norske Luftfartselskap A/S,
Class B* .............................. 280,000 7,643,720
Elkem Metals, Class A* ................ 300,500 4,123,161
Kverneland ............................ 85,000 969,850
Schibsted A/S .......................... 145,000 1,727,820
Sparebkn Nor Grundfondsbevis ........... 80,000 1,467,520
Total ................................. 15,932,071
Portugal - 0.13%
Espirito Santo Financial Holding
SA, ADS ............................... 27,400 739,800
Singapore - 0.21%
L&M Group Investments Ltd. ............. 1,630,000 1,227,390
See Notes to Schedule of Investments on page 13.
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
JUNE 30, 1994
Shares Value
COMMON STOCKS (Continued)
Spain - 5.12%
Centros Commerciales Pryca, S.A. ....... 280,100 $ 3,750,259
Conserva Campofrio, S.A. ............... 23,850 1,401,044
Corporation Financiero Alba, S.A. ...... 67,250 2,821,810
Cristaleria Espanola, S.A. ............. 70,450 3,789,224
Cubiertas y Mzov ....................... 124,525 9,547,705
Grupo Uralita* ......................... 415,000 4,812,340
Inmobiliaria Metropolitana Vasco
Central, S.A. ......................... 70,000 2,477,930
Sotogrande S.A.* ....................... 234,000 722,826
Total ................................. 29,323,138
Sweden - 14.78%
ASTRA AB, Class A ...................... 226,665 4,586,340
Avesta Sheffield AB* ................... 1,130,000 7,670,440
Bilspedition AB* ....................... 1,475,000 5,255,425
Bylock & Nordsjofrakt AB, Class B ...... 100,000 861,500
Catena, Class A ........................ 450,000 4,112,100
Enator AB, Class B ..................... 510,000 2,263,380
Forsheda AB, Class B ................... 125,000 1,794,875
Garphyttan Industrier AB ............... 13,700 346,953
Hoganas AB* ............................ 300,000 3,739,800
Kinnevik ............................... 250,000 4,928,000
Marieberg Tidnings AB, Series A ........ 20,000 396,840
Rottneros AB* .......................... 3,000,000 2,916,000
Skandia Enskilda Banken, Class A* ...... 1,020,000 6,071,040
Skane-Gripen AB, Class B ............... 245,000 1,822,800
Stena Line AB, Class B ................. 449,500 2,928,043
Svenska Handelsbanken, Class A* ........ 300,000 4,033,500
Telefonaktiebolaget LM Ericcson,
Class B................................ 151,100 7,574,341
Trelleborg AB, Series B* .............. 300,000 4,033,500
Trygg-Hansa S Holding AB ............... 300,000 3,524,400
AB Volvo .............................. 180,000 15,743,340
Total ................................. 84,602,617
Switzerland - 2.59%
ASG Arbonia-Foster-Holding AG* ......... 255 1,424,634
BIL GT Group ........................... 5,000 2,354,705
Forbo Holding SA ....................... 4,900 4,519,682
Prodega AG ............................ 5,200 1,501,308
Societe Internationale Pirelli SA* ..... 40,000 5,009,360
Total ................................. 14,809,689
See Notes to Schedule of Investments on page 13.
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
JUNE 30, 1994
Shares Value
COMMON STOCKS (Continued)
Turkey - 0.15%
Tofas, Turk Otomobil Fabrikasi
Anonim Sirketi, ADS (A) ............... 115,000 $ 848,125
United Kingdom - 8.78%
AMEC ................................... 2,250,000 3,681,000
BET Plc ................................ 1,200,000 2,110,800
BTR PLC ............................... 1,000,000 5,463,000
Barclays Bank PLC ...................... 506,666 4,058,395
Body Shop (The) ........................ 310,000 1,152,890
HSBC Holdings plc ...................... 379,317 4,027,967
House of Fraser PLC* ................... 1,000,000 2,855,000
Next plc ............................... 3,000,000 10,833,000
Pentos Plc ............................. 1,225,000 481,425
Pilkington PLC ......................... 3,080,645 7,938,822
Takare PLC ............................. 490,000 1,610,630
Taylor Woodrow ......................... 1,250,000 2,546,250
United Biscuits (Holdings) Public
Limited Co. ........................... 667,822 3,236,265
WEW Group PLC .......................... 485,000 269,175
Total ................................. 50,264,619
TOTAL COMMON STOCKS - 91.61% $524,443,720
(Cost: $458,975,649)
PREFERRED STOCKS
Austria - 0.34%
Creditanstalt Bank Verein .............. 30,000 1,921,050
Brazil - 0.76%
Iochpe-Maxion S.A. ..................... 8,341,000 4,328,979
Germany - 1.81%
Hornbach-Baumarkt AG ................... 10,000 10,398,280
TOTAL PREFERRED STOCKS - 2.91% $ 16,648,309
(Cost: $9,000,477)
See Notes to Schedule of Investments on page 13.
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
JUNE 30, 1994
Face
Amount in
Thousands Value
UNREALIZED GAIN ON OPEN FORWARD CURRENCY
CONTRACT - 0.03%
British Pounds, 12-29-94 (B) ............ P19,500$ 179,400
TOTAL SHORT-TERM SECURITIES - 3.70% $ 21,151,365
(Cost: $21,151,365)
TOTAL INVESTMENT SECURITIES - 98.25% $562,422,794
(Cost: $489,127,491)
CASH AND OTHER ASSETS, NET
OF LIABILITIES - 1.75% 10,033,269
NET ASSETS - 100.00% $572,456,063
See Notes to Schedule of Investments on page 13.
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
JUNE 30, 1994
Notes to Schedule of Investments
*No income dividends were paid during the preceding 12 months.
(A) As of June 30, 1994, the following restricted securities were owned in the
International Growth Fund:
Acquisition Acquisition Market
Security Date Shares Cost Value
---------------- --------------------------------------------
Tofas, Turk
Otomobil
Fabrikasi Anonim
Sirketi, ADS 3/3/94 75,000$1,237,500$ 553,125
3/8/94 20,000 327,500 147,500
3/9/94 20,000 265,000 147,500
Maanshan Iron &
Steel Company
Limited, ADS 10/14/93 70,380 2,078,517 1,929,116
--------------------
$3,908,517$2,777,241
====================
The total market value of restricted securities represents approximately
0.49% of the total net assets in the International Growth Fund at June 30,
1994.
(B) Principal amounts are denominated in the indicated foreign currency where
applicable (P - British Pound).
See Note 1 to financial statements for security valuation and other significant
accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and
depreciation of investments owned for Federal income tax purposes.
<PAGE>
UNITED INTERNATIONAL GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1994
Assets
Investment securities -- at value (Notes 1 and 3) . $562,422,794
Cash ............................................ 16,416
Receivables:
Investment securities sold ...................... 12,210,553
Dividends and interest .......................... 2,237,135
Fund shares sold ................................ 1,689,665
Prepaid insurance premium ......................... 30,441
------------
Total assets .................................. 578,607,004
------------
Liabilities
Payable for investment securities purchased ...... 5,084,179
Payable for Fund shares redeemed ............ ..... 713,421
Accrued transfer agency and dividend disbursing .. 117,077
Accrued service fee .............................. 106,146
Accrued accounting services fee ................... 5,833
Other ............................................ 124,285
------------
Total liabilities ............................. 6,150,941
------------
Total net assets ............................. $572,456,063
============
Net Assets
$1.00 par value capital stock, authorized --
300,000,000; shares outstanding -- 63,782,659
Capital stock ................................... $ 63,782,659
Additional paid-in capital ...................... 378,487,329
Accumulated undistributed income:
Accumulated undistributed net investment income . 1,452,615
Accumulated net realized gain on
investment transactions ....................... 55,438,157
Net unrealized appreciation in value
of investments at end of period ............... 73,295,303
------------
Net assets applicable to outstanding
units of capital ............................. $572,456,063
============
Net asset value per share (net assets divided by
shares outstanding) .............................. $8.98
Sales load (offering price x 5.75%) ................ .55
-----
Offering price per share (net asset value
divided by 94.25%) ............................... $9.53
=====
On sales of $100,000 or more the sales load
is reduced as set forth in the Prospectus.
See notes to financial statements.
<PAGE>
UNITED INTERNATIONAL GROWTH FUND, INC.
STATEMENT OF OPERATIONS
For the Fiscal Year Ended JUNE 30, 1994
Investment Income
Income:
Dividends (net of foreign withholding
taxes of $986,095) ............................ $ 8,030,240
Interest ........................................ 519,894
------------
Total income .................................. 8,550,134
------------
Expenses (Note 2):
Investment management fee ....................... 3,451,650
Transfer agency and dividend disbursing ......... 980,548
Custodian fees .................................. 690,995
Service fee ..................................... 411,578
Accounting services fee ......................... 63,333
Audit fees ...................................... 29,311
Legal fees ...................................... 7,380
Other ........................................... 153,508
------------
Total expenses ................................ 5,788,303
------------
Net investment income ........................ 2,761,831
------------
Realized and Unrealized Gain on Investments
Realized net gain on securities .................. 70,675,621
Realized net gain on forward currency contracts ... 805,983
------------
Realized net gain on investments ................ 71,481,604
------------
Unrealized appreciation in value of securities
during the period................................ 38,829,585
Unrealized depreciation on open forward
currency contracts during the period ............ (1,312,448)
------------
Unrealized appreciation on investments .......... 37,517,137
------------
Net gain on investments ....................... 108,998,741
------------
Net increase in net assets resulting from
operations ................................. $111,760,572
============
See notes to financial statements.
<PAGE>
UNITED INTERNATIONAL GROWTH FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the fiscal year ended
June 30,
-------------------------
1994 1993
------------ ------------
Increase in Net Assets
Operations:
Net investment income ...............$ 2,761,831 $ 3,379,206
Realized net gain on investments .... 71,481,604 6,585,093
Unrealized appreciation
(depreciation) .................... 37,517,137 (1,362,743)
------------ ------------
Net increase in net assets
resulting from operations ........ 111,760,572 8,601,556
------------ ------------
Dividends to shareholders from:*
Net investment income................ (2,383,629) (3,253,570)
Realized gains on securities
transactions ....................... (25,486,802) (2,180,166)
------------ ------------
(27,870,431) (5,433,736)
------------ ------------
Capital share transactions:
Proceeds from sale of shares
(18,563,121 and 6,682,190
shares, respectively) ............. 167,996,208 45,742,504
Proceeds from reinvestment
of dividends and/or capital
gains distribution (3,149,966 and
788,115 shares, respectively) ...... 27,280,780 5,264,217
Payments for shares redeemed
(4,880,995 and 5,930,817
shares, respectively) ............. (43,092,631) (40,327,132)
------------ ------------
Net increase in net assets
resulting from capital share
transactions...................... 152,184,357 10,679,589
------------ ------------
Total increase ................... 236,074,498 13,847,409
Net Assets
Beginning of period .................. 336,381,565 322,534,156
------------ ------------
End of period, including undistributed
net investment income of $1,452,615
and $1,074,413, respectively.........$572,456,063 $336,381,565
============ ============
*See "Financial Highlights" on page 17.
See notes to financial statements.
<PAGE>
UNITED INTERNATIONAL GROWTH FUND, INC.
FINANCIAL HIGHLIGHTS
For a Share of Capital Stock Outstanding
Throughout Each Period:
For the fiscal year ended June 30,
-----------------------------------
1994 1993 1992 1991 1990
----- ----- ----- ----- -----
Net asset value,
beginning of
period ........... $7.16 $7.10 $5.94 $6.77 $6.21
----- ----- ----- ----- -----
Income from investment
operations:
Net investment
income .......... .04 .07 .08 .12 .12
Net realized and
unrealized gain
(loss) on
investments ..... 2.32 .11 1.20 (0.83) .83
----- ----- ----- ----- -----
Total from investment
operations ...... 2.36 .18 1.28 (0.71) .95
----- ----- ----- ----- -----
Less distributions:
Dividends from net
investment
income .......... (0.04) (0.07) (0.09) (0.12) (0.13)
Distribution from
capital gains ... (0.50) (0.05) (0.03) 0.00 (0.26)
----- ----- ----- ----- -----
Total distributions (0.54) (0.12) (0.12) (0.12) (0.39)
----- ----- ----- ----- -----
Net asset value,
end of period .... $8.98 $7.16 $7.10 $5.94 $6.77
===== ===== ===== ===== =====
Total return* ...... 33.31% 2.62% 21.59% -10.50% 15.44%
Net assets, end of
period (000
omitted) .........$572,456$336,382$322,534$259,322$291,691
Ratio of expenses
to average net
assets ........... 1.20% 1.18% 1.18% 1.20% 1.17%
Ratio of net
investment income
to average net
assets ........... 0.57% 1.07% 1.17% 1.89% 1.81%
Portfolio turnover
rate ............. 83.76% 94.22%112.82% 118.05%196.43%
*Total return calculated without taking into account the sales load deducted on
an initial purchase.
See notes to financial statements.
<PAGE>
UNITED INTERNATIONAL GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1994
NOTE 1 -- Significant Accounting Policies
United International Growth Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements. The policies are in conformity with generally accepted accounting
principles.
A. Security valuation -- Each stock and convertible bond is valued at the
latest sale price thereof on the last business day of the fiscal period as
reported by the principal securities exchange on which the issue is traded
or, if no sale is reported for a stock, the average of the latest bid and
asked prices. Bonds, other than convertible bonds, are valued using a
pricing system provided by a major dealer in bonds. Convertible bonds are
valued using this pricing system only on days when there is no sale
reported. Stocks which are traded over-the-counter are priced using NASDAQ
(National Association of Securities Dealers Automated Quotations) which
provides information on bid and asked or closing prices quoted by major
dealers in such stocks. Securities for which quotations are not readily
available are valued as determined in good faith in accordance with
procedures established by and under the general supervision of the Fund's
Board of Directors. Short-term debt securities are valued at amortized
cost, which approximates market.
B. Security transactions and related investment income -- Security
transactions are accounted for on the trade date (date the order to buy or
sell is executed). Securities gains and losses are calculated on the
identified cost basis. Original issue discount (as defined in the Internal
Revenue Code), premiums on the purchase of bonds and post-1984 market
discount are amortized for both financial and tax reporting purposes over
the remaining lives of the bonds. Dividend income is recorded on the ex-
dividend date except that certain dividends from foreign securities are
recorded as soon as the Fund is informed of the ex-dividend date. Interest
income is recorded on the accrual basis. See Note 3 -- Investment
Securities Transactions.
C. Foreign currency translations -- All assets and liabilities expressed in
foreign currencies are converted into U.S. dollars at the mean of the bid
and asked prices of such currencies against U.S. dollars at the end of the
respective period. The cost of portfolio securities is translated at the
rates of exchange prevailing when acquired. Income is translated at rates
of exchange prevailing when accrued or received. The resulting transaction
exchange gains or losses have been included in the results of operations
with the type of transaction giving rise to the gain or loss.
D. Forward foreign currency exchange contracts -- A forward foreign currency
exchange contract (Forward Contract) is an obligation to purchase or sell a
specific currency at a future date at a fixed price. Forward Contracts are
"marked-to-market" daily at the applicable translation rates and the
resulting unrealized gains or losses are reflected in the Fund's financial
statements. Gains or losses are realized by the Fund at the time the
forward contract is extinguished. Contracts may be extinguished by either
entry into a closing transaction or by delivery of the currency. Risks may
arise from the possibility that the other party will not complete the
obligations of the contract and from unanticipated movements in the value
of the foreign currency relative to the U.S. dollar.
E. Federal income taxes -- It is the Fund's policy to distribute all of its
taxable income and capital gains to its shareholders and otherwise qualify
as a regulated investment company under the Internal Revenue Code. In
addition, the Fund intends to pay distributions as required to avoid
imposition of excise tax. Accordingly, provision has not been made for
Federal income taxes. See Note 4 -- Federal Income Tax Matters.
F. Dividends and distributions -- Dividends and distributions to shareholders
are recorded by the Fund on the record date. During the fiscal year ended
June 30, 1994, the Fund adopted Statement of Position 93-2 Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. Accordingly,
permanent book and tax basis differences relating to future shareholder
distributions have been reclassified to additional paid-in capital. As of
July 1, 1993, the cumulative effect of such differences totaling $189,111
was reclassified from accumulated undistributed net realized gain on
investment transactions to additional paid-in capital. Net investment
income, net realized gains and net assets were not affected by this change.
NOTE 2 -- Investment Management and Payments to Affiliated Persons
The Fund pays a fee for investment management services. The fee is
computed daily based on the net asset value at the close of business. The fee
consists of two elements: (i) a "Specific" fee computed on net asset value as of
the close of business each day at the annual rate of .30% of net assets and (ii)
a "Group" fee computed each day on the combined net asset values of all of the
funds in the United Group of mutual funds (approximately $10.5 billion of
combined net assets at June 30, 1994) at annual rates of .51% of the first $750
million of combined net assets, .49% on that amount between $750 million and
$1.5 billion, .47% between $1.5 billion and $2.25 billion, .45% between $2.25
billion and $3 billion, .43% between $3 billion and $3.75 billion, .40% between
$3.75 billion and $7.5 billion, .38% between $7.5 billion and $12 billion, and
.36% of that amount over $12 billion. The Fund accrues and pays this fee daily.
Pursuant to assignment of the Investment Management Agreement between the
Fund and Waddell & Reed, Inc. ("W&R"), Waddell & Reed Investment Management
Company ("WRIMCO"), a wholly-owned subsidiary of W&R, serves as the Fund's
investment manager.
The Fund has an Accounting Services Agreement with Waddell & Reed Services
Company ("WARSCO"), a wholly-owned subsidiary of W&R. Under the agreement,
WARSCO acts as the agent in providing accounting services and assistance to the
Fund and pricing daily the value of shares of the Fund. For these services, the
Fund pays WARSCO a monthly fee of one-twelfth of the annual fee shown in the
following table.
Accounting Services Fee
Average
Net Asset Level Annual Fee
(all dollars in millions) Rate for Each Level
------------------------- -------------------
From $ 0 to $ 10 $ 0
From $ 10 to $ 25 $ 10,000
From $ 25 to $ 50 $ 20,000
From $ 50 to $ 100 $ 30,000
From $ 100 to $ 200 $ 40,000
From $ 200 to $ 350 $ 50,000
From $ 350 to $ 550 $ 60,000
From $ 550 to $ 750 $ 70,000
From $ 750 to $1,000 $ 85,000
$1,000 and Over $100,000
At present, the Fund operates under state expense requirements which limit
the amount of aggregate annual expenses, adjusted for certain excess custodian
fees, that the Fund may incur during its fiscal year. The Manager will
reimburse the Fund for any expenses in excess of the limitation. No such
reimbursement was required for the period ended June 30, 1994.
The Fund also pays WARSCO a monthly per account charge for transfer agency
and dividend disbursement services of $1.0208 for each shareholder account which
was in existence at any time during the prior month, plus $0.30 for each account
on which a dividend or distribution of cash or shares had a record date in that
month. The Fund also reimburses W&R and WARSCO for certain out-of-pocket costs.
As principal underwriter for the Fund's shares, W&R received direct and
indirect gross sales commissions (which are not an expense of the Fund) of
$5,013,005, out of which W&R paid sales commissions of $2,788,342 and all
expenses in connection with the sale of Fund shares, except for registration
fees and related expenses.
On September 28, 1993, shareholders of the Fund approved the adoption of a
12b-1 Service Plan with a maximum fee of .25%. The Plan went into effect
October 1, 1993.
The Fund paid Directors' fees of $15,917.
W&R is an indirect subsidiary of Torchmark Corporation, a holding company,
and United Investors Management Company, a holding company, and a direct
subsidiary of Waddell & Reed Financial Services, Inc., a holding company.
NOTE 3 -- Investment Securities Transactions
Purchases of investment securities, other than U.S. Government and short-
term securities, aggregated $492,129,357 while proceeds from maturities and
sales aggregated $389,762,151. Purchases of short-term securities aggregated
$317,808,894 while proceeds from maturities and sales of short-term securities
aggregated $304,608,806. No U.S. Government securities were bought or sold
during the period.
For Federal income tax purposes, cost of investments owned at June 30, 1994
was $489,127,491, resulting in net unrealized appreciation of $73,115,903, of
which $97,953,867 related to appreciated securities and $24,837,964 related to
depreciated securities.
NOTE 4 -- Federal Income Tax Matters
For Federal income tax purposes, the Fund realized capital gain net income
of $70,169,156 during its fiscal year ended June 30, 1994, of which a portion
was paid to shareholders during the period ended June 30, 1994. Remaining
capital gain net income will be distributed to Fund shareholders.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
United International Growth Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of United International Growth Fund,
Inc. (the "Fund") at June 30, 1994, the results of its operations for the year
then ended and the changes in its net assets and the financial highlights for
the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at June 30, 1994 by correspondence with the custodian
and brokers and the application of alternative auditing procedures where
confirmations from brokers were not received, provide a reasonable basis for the
opinion expressed above.
PRICE WATERHOUSE LLP
Kansas City, Missouri
July 29, 1994
<PAGE>
INCOME TAX INFORMATION
The amounts of the dividends and long-term capital gains below, multiplied by
the number of shares owned by you on the record dates, will give you the total
amounts to be reported in your Federal income tax return for the years in which
they were received or reinvested.
PER-SHARE AMOUNTS REPORTABLE AS:
----------------------------------------------
For Individuals For Corporations
---------------- ------------------------------
Record Ordinary Long-Term Non- Long-Term
Date Total IncomeCapital GainQualifyingQualifyingCapital Gain
- --------------- ---------------------------------------------------
12-17-93$0.5240 $0.1721 $0.3519 $0.0017 $0.1704 $0.3519
6-17-94 0.0200 0.0200 0.0000 0.0002 0.0198 0.0000
------- ------- ------- ------ ------- -------
Totals $0.5440 $0.1921 $0.3519 $0.0019 $0.1902 $0.3519
======= ======= ======= ======= ======= =======
CORPORATION DEDUCTIONS -- Under Federal tax law, the amounts reportable as
Qualifying Dividends are eligible for the dividends received deduction in the
year received as provided by Section 243 of the Internal Revenue Code.
The tax status of dividends paid will be reported to you on Form 1099-DIV after
the close of the applicable calendar year.
Shareholders are advised to consult with their tax advisor concerning the tax
treatment of dividends and distributions from the Fund.
<PAGE>
To all IRA Planholders:
As required by law, income tax will automatically be withheld from any
distribution or withdrawal from an IRA unless you make a written election not to
have taxes withheld. The election may be made by submitting forms provided by
Waddell & Reed, Inc. which can be obtained from your Waddell & Reed
representative or by submitting Internal Revenue Service form W-4P. Once made,
an election can be revoked by providing written notice to Waddell & Reed, Inc.
If you elect not to have tax withheld you may be required to make payments of
estimated tax. Penalties may be imposed by the IRS if withholding and estimated
tax payments are not adequate.
DIRECTORS
Ronald K. Richey, Birmingham, Alabama, Chairman of the Board
Henry L. Bellmon, Red Rock, Oklahoma
Dodds I. Buchanan, Boulder, Colorado
Jay B. Dillingham, Kansas City, Missouri
John F. Hayes, Hutchinson, Kansas
Glendon E. Johnson, Miami, Florida
William T. Morgan, Los Angeles, California
Doyle Patterson, Kansas City, Missouri
Keith A. Tucker, Overland Park, Kansas
Frederick Vogel, III, Milwaukee, Wisconsin
Paul S. Wise, Carefree, Arizona
Leslie S. Wright, Birmingham, Alabama
OFFICERS
Keith A. Tucker, President
Robert L. Hechler, Vice President
Henry J. Herrmann, Vice President
Theodore W. Howard, Vice President and Treasurer
Rodney O. McWhinney, Vice President
Sharon K. Pappas, Vice President and Secretary
Carl E. Sturgeon, Vice President
Mark Yockey, Vice President
This report is submitted for the general information of the shareholders of
United International Growth Fund, Inc. It is not authorized for distribution to
prospective investors in the Fund unless accompanied with or preceded by the
United International Growth Fund, Inc. current prospectus.
<PAGE>
THE UNITED GROUP OF MUTUAL FUNDS
United Cash Management, Inc.
United Government Securities Fund, Inc.
United Bond Fund
United Municipal Bond Fund, Inc.
United Continental Income Fund, Inc.
United Income Fund
United Municipal High Income Fund, Inc.
United High Income Fund, Inc.
United High Income Fund II, Inc.
United Accumulative Fund
United Vanguard Fund, Inc.
United New Concepts Fund, Inc.
United Science and Technology Fund
United International Growth Fund, Inc.
United Gold & Government Fund, Inc.
United Retirement Shares, Inc.
- ------------------------------------
FOR MORE INFORMATION:
Contact your representative, or your
local office as listed on your
Account Statement, or contact:
WADDELL & REED
CUSTOMER SERVICE
6300 Lamar Avenue
P.O. Box 29217
Shawnee Mission, KS 66201-9217
(913) 236-1303
NUR1002A(6-94)
printed on recycled paper
