UNITED
INTERNATIONAL
GROWTH FUND,
INC.
ANNUAL
REPORT
---------------------------------------
For the fiscal year ended June 30, 1995
<PAGE>
FUND MANAGER'S LETTER
JUNE 30, 1995
Dear Shareholder:
This report relates to the operation of United International Growth Fund, Inc.
for the fiscal year ended June 30, 1995. 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, stock markets and global currencies were
very volatile. The international markets seemed to reflect alternating
concerns that economic growth was too strong at some times and too weak at
other times. Markets in some countries, such as Spain and the United Kingdom,
suffered due to political uncertainties.
As the global economy generally slowed, we increased the Fund's exposure to
interest-sensitive stocks in Europe. We continued throughout the year to focus
the Fund's European holdings in Scandinavia, Germany and the United Kingdom.
The equity market in Japan suffered from economic imbalances between stock
values and corporate profits, so we limited our holdings there.
The strategies and techniques we applied resulted in somewhat better
performance by the Fund during its past fiscal year than 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, particularly
Scandinavian, securities and its relative under-exposure to securities in the
Far East.
We anticipate that interest rates in many countries may continue to fall, which
in turn should lead to generally stronger worldwide economic activity. In
seeking to achieve the Fund's goals, we expect to continue the strategies we
have employed in the recent past. Our mission is to invest the Fund's assets
in a diversified portfolio of international holdings that have the potential
for superior investment performance over the long term.
We appreciate your continued confidence in our management of the Fund.
Respectfully,
Mark L. 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
Average Annual Total Return*
1 year 5 years 10 years
1.77% 8.66% 13.78%
Lipper
United International
InternationalMSCI Fund
Growth EAFE Universe
Fund Index Average
------------------ ----------
06/30/85 Purchase 9,425 10,000 10,000
06/30/86 14,403 18,899 16,643
06/30/87 19,910 29,921 23,641
06/30/88 19,581 31,137 23,167
06/30/89 19,587 34,103 25,654
06/30/90 22,612 35,214 31,084
06/30/91 20,238 31,152 27,972
06/30/92 24,608 30,950 30,715
06/30/93 25,251 37,226 33,156
06/30/94 33,664 43,555 40,368
06/30/95 36,351 44,276 40,846
- ---------- Lipper International Fund Universe Average -- $40,846
+++++ MSCI EAFE Index -- $44,276
===== United International Growth Fund** -- $36,351
Past performance is not predictive of future performance. Indexes are
unmanaged.
*Performance data quoted represents past performance and is based on deduction
of a 5.75% sales load on the initial purchase in each of the three periods.
Investment return and principal value will fluctuate and an investor's
shares, when redeemed, may be worth more or less than their original cost.
**The value of the investment in the Fund is impacted by the sales load at the
time of the investment and by the ongoing expenses of the Fund.
Effective July 4, 1995, existing shares of United International Growth Fund,
Inc. were reclassified as Class A shares and the Fund began offering Class Y
shares. Class Y shares are offered through a Prospectus separate from the
Class A Prospectus to certain institutional investors and are not subject to a
sales charge, redemption fee or Rule 12b-1 fee.
<PAGE>
SHAREHOLDER SUMMARY
- -----------------------------------------------------------------
UNITED INTERNATIONAL GROWTH FUND, INC.
PORTFOLIO STRATEGY:
Normally at least 80% in OBJECTIVE: Long-term appreciation of
foreign securities. Not capital with realization of
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. (May purchase
securities subject to
repurchase agreements.
May invest in certain
options.
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
SCHEDULED DIVIDEND FREQUENCY: SEMIANNUALLY (June and
December)
PERFORMANCE SUMMARY
PER SHARE DATA
For the Fiscal Year Ended June 30, 1995
---------------------------------------
DIVIDENDS PAID $0.04
=====
CAPITAL GAINS DISTRIBUTION $0.93
=====
NET ASSET VALUE ON
6/30/95 $8.68 adjusted to:$9.61(A)
6/30/94 8.98
-----
CHANGE PER SHARE $0.63
=====
(A)This number includes the capital gains distribution of $0.93 paid in
December 1994 added to the actual net asset value on June 30, 1995.
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 6-30-95 1.77% 7.98%
5-year period ended 6-30-95 8.66% 9.96%
10-year period ended 6-30-95 13.78% 14.45%
*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, 1995, United International Growth Fund, Inc. had net assets
totaling $679,349,311 invested in a diversified portfolio of:
95.76% Common Stocks and Rights
2.19% Cash and Cash Equivalents and Open
Forward Currency Contracts
2.05% Preferred Stocks
As a shareholder of United International Growth Fund, Inc., for every $100 you
had invested on June 30, 1995, your Fund owned $2.19 in cash and cash
equivalents and open forward currency contracts; the remainder was invested as
follows:
Basic Techno- Public
IndustriesConsumer logicalFinancialUtilities Total
Sweden $8.59 $0.30 $2.27 $2.36 $--- $13.52
Finland 6.22 --- 6.93 --- --- 13.15
United Kingdom2.48 7.31 1.91 --- --- 11.70
Germany 5.14 2.31 --- --- 1.31 8.76
France 2.74 1.64 0.88 2.58 --- 7.84
Mexico 3.90 1.14 1.44 0.98 --- 7.46
Norway 4.76 0.23 --- 0.28 --- 5.27
Spain 2.82 --- 0.33 1.76 0.22 5.13
Hong Kong 3.94 --- --- 1.05 --- 4.99
Australia 0.28 2.09 --- 1.46 --- 3.83
Switzerland 0.90 --- --- 2.65 --- 3.55
Japan 0.82 0.58 1.62 --- --- 3.02
Other 2.62 6.31 0.55 --- 0.11 9.59
Total $45.21 $21.91 15.93 13.12 1.64 97.81
<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, 1995 market value as percent of total net assets
- ---------------------------------------------------------------------------
United
Sweden Finland Kingdom Germany France Mexico
- ---------------------------------------------------------------------------
Building 1.09% 2.72% 0.28% 0.84% 1.92% 0.82%
- ---------------------------------------------------------------------------
Telecommunications 6.93 1.44
- ---------------------------------------------------------------------------
Multi-Industry 2.39 1.69 0.10 1.26
- ---------------------------------------------------------------------------
Banks and Savings
and Loans 1.93 0.37 0.59
- ---------------------------------------------------------------------------
Retailing 4.77 1.95 0.83 0.07
- ---------------------------------------------------------------------------
Machinery 1.29 3.30
- ---------------------------------------------------------------------------
Engineering and
Construction 0.69 0.58 0.51 0.90 1.52
- ---------------------------------------------------------------------------
Automotive 3.66 0.10
- ---------------------------------------------------------------------------
Consumer Electronics
and Appliances 0.30 0.03
- ---------------------------------------------------------------------------
Insurance 0.43 2.21
- ---------------------------------------------------------------------------
Airlines
- ---------------------------------------------------------------------------
Electronics 1.91
- ---------------------------------------------------------------------------
Drugs and Hospital
Supply 2.27
- ---------------------------------------------------------------------------
Leisure Time 0.78 0.78
- ---------------------------------------------------------------------------
Publishing and
Advertising
- ---------------------------------------------------------------------------
Services, Consumer
and Business 0.26 0.36
- ---------------------------------------------------------------------------
Public Utilities -
Electric 1.31
- ---------------------------------------------------------------------------
Paper 1.63
- ---------------------------------------------------------------------------
Food and Related 0.65
- ---------------------------------------------------------------------------
Financial 0.39
- ---------------------------------------------------------------------------
Shipping 0.29
- ---------------------------------------------------------------------------
Electrical Equipment
- ---------------------------------------------------------------------------
Chemicals Specialty
and Miscellaneous
Technology 0.88
- ---------------------------------------------------------------------------
Packaging and
Containers 0.85
- ---------------------------------------------------------------------------
Metals and Mining 0.72
- ---------------------------------------------------------------------------
Beverages 0.63
- ---------------------------------------------------------------------------
Tire and Rubber
- ---------------------------------------------------------------------------
Manufacturers 0.47
- ---------------------------------------------------------------------------
Tobacco 0.44
- ---------------------------------------------------------------------------
Household Products
- ---------------------------------------------------------------------------
Steel 0.30
- ---------------------------------------------------------------------------
Total 13.52% 13.15% 11.70% 8.76% 7.84% 7.46%
- ---------------------------------------------------------------------------
<PAGE>
Table I: Portfolio Diversification by Nation and Industry
June 30, 1995, market value as percent of total net assets
- ---------------------------------------------------------------------------
Hong Aus- Switz-
Norway Spain Kong tralia erland Japan
- ---------------------------------------------------------------------------
Building 1.40% 1.13% 0.28%
- ---------------------------------------------------------------------------
Telecommunications 0.33 1.32%
- ---------------------------------------------------------------------------
Multi-Industry 0.78% 0.66 2.42 0.28% 0.09
- ---------------------------------------------------------------------------
Banks and Savings
and Loans 0.28 1.76 1.46 2.65
- ---------------------------------------------------------------------------
Retailing 0.46
- ---------------------------------------------------------------------------
Machinery 0.46
- ---------------------------------------------------------------------------
Engineering and
Construction 0.76
- ---------------------------------------------------------------------------
Automotive
- ---------------------------------------------------------------------------
Consumer Electronics
and Appliances
- ---------------------------------------------------------------------------
Insurance
- ---------------------------------------------------------------------------
Airlines 2.52
- ---------------------------------------------------------------------------
Electronics 0.30
- ---------------------------------------------------------------------------
Drugs and
Hospital Supply
- ---------------------------------------------------------------------------
Leisure Time 0.23 0.43
- ---------------------------------------------------------------------------
Publishing and
Advertising 1.20
- ---------------------------------------------------------------------------
Services, Consumer
and Business 0.18
- ---------------------------------------------------------------------------
Public Utilities -
Electric 0.22
- ---------------------------------------------------------------------------
Paper
- ---------------------------------------------------------------------------
Food and Related
- ---------------------------------------------------------------------------
Financial 1.05
- ---------------------------------------------------------------------------
Shipping 1.00
- ---------------------------------------------------------------------------
Electrical Equipment 0.39 0.73
- ---------------------------------------------------------------------------
Chemicals Specialty
and Miscellaneous
Technology
- ---------------------------------------------------------------------------
Packaging and
Containers
- ---------------------------------------------------------------------------
Metals and Mining
- ---------------------------------------------------------------------------
Beverages
- ---------------------------------------------------------------------------
Tire and Rubber 0.62
- ---------------------------------------------------------------------------
Manufacturers
- ---------------------------------------------------------------------------
Tobacco
- ---------------------------------------------------------------------------
Household Products 0.40
- ---------------------------------------------------------------------------
Steel
- ---------------------------------------------------------------------------
Total 5.27% 5.13% 4.99% 3.83% 3.55% 3.02%
- ---------------------------------------------------------------------------
<PAGE>
Table I: Portfolio Diversification by Nation and Industry
June 30, 1995, market value as percent of total net assets
- ---------------------------------------------------------------------------
Nether- Thai- Argen- Port-
Denmark lands Korea land tina ugal
- ---------------------------------------------------------------------------
Building 1.48% 0.16% 0.24%
- ---------------------------------------------------------------------------
Telecommunications 0.37%
- ---------------------------------------------------------------------------
Multi-Industry
- ---------------------------------------------------------------------------
Banks and
Savings and Loans
- ---------------------------------------------------------------------------
Retailing 0.68%
- ---------------------------------------------------------------------------
Machinery
- ---------------------------------------------------------------------------
Engineering and
Construction
- ---------------------------------------------------------------------------
Automotive 0.13 0.14
- ---------------------------------------------------------------------------
Consumer Electronics
and Appliances 1.54 1.57%
- ---------------------------------------------------------------------------
Insurance
- ---------------------------------------------------------------------------
Airlines
- ---------------------------------------------------------------------------
Electronics 0.18
- ---------------------------------------------------------------------------
Drugs and
Hospital Supply
- ---------------------------------------------------------------------------
Leisure Time
- ---------------------------------------------------------------------------
Publishing and
Advertising 0.59
- ---------------------------------------------------------------------------
Services, Consumer
and Business 0.93
- ---------------------------------------------------------------------------
Public Utilities -
Electric
- ---------------------------------------------------------------------------
Paper
- ---------------------------------------------------------------------------
Food and Related 0.81
- ---------------------------------------------------------------------------
Financial
- ---------------------------------------------------------------------------
Shipping
- ---------------------------------------------------------------------------
Electrical Equipment
- ---------------------------------------------------------------------------
Chemicals Specialty
and Miscellaneous
Technology
- ---------------------------------------------------------------------------
Packaging and
Containers
- ---------------------------------------------------------------------------
Metals and Mining
- ---------------------------------------------------------------------------
Beverages
- ---------------------------------------------------------------------------
Tire and Rubber
- ---------------------------------------------------------------------------
Manufacturers
- ---------------------------------------------------------------------------
Tobacco
- ---------------------------------------------------------------------------
Household Products
- ---------------------------------------------------------------------------
Steel
- ---------------------------------------------------------------------------
Total 2.41% 2.22% 1.75% 1.69% 0.38% 0.37%
- ---------------------------------------------------------------------------
<PAGE>
Table I: Portfolio Diversification by Nation and Industry
June 30, 1995, market value as percent of total net assets
- ---------------------------------------------------------------------------
Indo- Sing-
China Italy nesia Brazil apore Total
- ---------------------------------------------------------------------------
Building 0.09% 12.45%
- ---------------------------------------------------------------------------
Telecommunications 10.39%
- ---------------------------------------------------------------------------
Multi-Industry 9.67%
- ---------------------------------------------------------------------------
Banks and
Savings and Loans 9.04%
- ---------------------------------------------------------------------------
Retailing 8.76%
- ---------------------------------------------------------------------------
Machinery 0.10% 5.15%
- ---------------------------------------------------------------------------
Engineering and
Construction 0.03 0.09% 5.08%
- ---------------------------------------------------------------------------
Automotive 4.03%
- ---------------------------------------------------------------------------
Consumer Electronics
and Appliances 3.44%
- ---------------------------------------------------------------------------
Insurance 2.64%
- ---------------------------------------------------------------------------
Airlines 2.52%
- ---------------------------------------------------------------------------
Electronics 2.39%
- ---------------------------------------------------------------------------
Drugs and
Hospital Supply 2.27%
- ---------------------------------------------------------------------------
Leisure Time 2.22%
- ---------------------------------------------------------------------------
Publishing and
Advertising 0.19% 1.98%
- ---------------------------------------------------------------------------
Services, Consumer
and Business 1.73%
- ---------------------------------------------------------------------------
Public
Utilities -
Electric 0.11% 1.64%
- ---------------------------------------------------------------------------
Paper 1.63%
- ---------------------------------------------------------------------------
Food and Related 1.46%
- ---------------------------------------------------------------------------
Financial 1.44%
- ---------------------------------------------------------------------------
Shipping 1.29%
- ---------------------------------------------------------------------------
Electrical
Equipment 0.16 1.28%
- ---------------------------------------------------------------------------
Chemicals Specialty
and Miscellaneous
Technology 0.88%
- ---------------------------------------------------------------------------
Packaging and
Containers 0.85%
- ---------------------------------------------------------------------------
Metals and Mining 0.72%
- ---------------------------------------------------------------------------
Beverages 0.63%
- ---------------------------------------------------------------------------
Tire and Rubber 0.62%
- ---------------------------------------------------------------------------
Manufacturers 0.47%
- ---------------------------------------------------------------------------
Tobacco 0.44%
- ---------------------------------------------------------------------------
Household Products 0.40%
- ---------------------------------------------------------------------------
Steel 0.30%
- ---------------------------------------------------------------------------
Total 0.27% 0.19% 0.12% 0.10% 0.09% 97.81%
- ---------------------------------------------------------------------------
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
JUNE 30, 1995
Shares Value
COMMON STOCKS AND RIGHTS
Argentina - 0.38%
Ciadea, S.A.* .......................... 194,022 $ 941,101
Colorin S.A., Series B* ................ 1,002,652 270,743
Corcemar S.A., Series B1* .............. 302,820 1,332,541
Total ................................. 2,544,385
Australia - 3.83%
Advance Bank Australia Ltd. ............ 476,036 3,075,749
Futuris Corporation LTD ................ 2,579,300 1,925,034
John Fairfax Holdings Ltd. ............. 1,500,000 2,750,795
News Corporation Limited ............... 563,180 3,146,422
News Corporation Limited, ADR .......... 100,000 2,262,500
Publishing & Broadcasting PBL .......... 1,000,000 2,942,711
Westpac Banking Corp. .................. 1,887,894 6,830,345
Woolworths Ltd. ........................ 1,500,000 3,113,303
Total ................................. 26,046,859
China - 0.27%
Harbin Power Equipment Company
Limited, H Shares* .................... 3,378,000 1,080,481
Shandong Huaneng Power Development Co.
Ltd., Series N, ADS* .................. 100,000 762,500
Total ................................. 1,842,981
Denmark - 2.41%
Copenhagen Airports A/S ................ 82,000 6,304,187
Danske Traelast ......................... 85,000 5,904,965
Thorkild Kristensen .................... 68,450 4,146,564
Total ................................. 16,355,716
Finland - 13.15%
Enso-Gutzeit Oy ........................ 1,220,000 11,049,380
Kymmene Oy ............................. 200,000 6,225,134
Metra Corporation B .................... 90,000 3,959,747
Metsa-Serla Oy, Series B ............... 276,000 12,272,408
Nokia Corporation, Series K ............ 792,200 47,090,756
Tampella OY* ........................... 3,456,667 8,736,720
Total ................................. 89,334,145
France - 7.84%
But S.A. ............................... 1,000 222,621
Cerus* ................................. 40,923 659,654
Credit Lyonnais SA* .................... 43,375 2,498,088
Europe 1 Communication ................. 1,562 371,238
Guyenne et Gascogne .................... 19,500 5,627,358
Lapeyre S.A. ........................... 197,985 13,018,617
Pechiney International ................. 195,000 4,923,938
See Notes to Schedule of Investments on page 14.
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
JUNE 30, 1995
Shares Value
COMMON STOCKS AND RIGHTS (Continued)
France (Continued)
Societe Industrielle de Transports
Automobiles S.A. ...................... 42,100 $ 5,987,880
Television-Francais 1-TF1 S.A. ......... 50,000 4,921,361
UNION DES ASSURANCES DE PARIS ......... 200,000 5,243,955
UNION DES ASSURANCES FEDERALES ........ 79,500 9,783,254
Total ................................. 53,257,964
Germany - 6.81%
APCOA Parking Aktiengesellschaft* ...... 47,000 2,470,286
DURR Beteiligungs AG ................... 2,000 708,502
FAG Kugelfischer AG .................... 45,000 6,132,519
GILDEMEISTER Aktiengesellschaft* ....... 47,800 3,870,445
Mannesman AG ........................... 40,200 12,279,135
TRAUB AG (A)* .......................... 47,000 6,286,148
VEBA AG ................................ 22,500 8,840,912
Vereinigter Baubeschlag-Handel
Aktiengesellschaft..................... 15,900 5,690,067
Total ................................. 46,278,014
Hong Kong - 4.99%
Dongfang Electrical Machinery
Co., Ltd. ............................. 7,056,000 2,644,473
First Pacific Company Limited .......... 8,114,000 7,183,037
Great Eagle Holdings Limited ........... 1,300,000 2,772,106
Guangdong Corporation Limited ..........10,000,000 5,460,208
Guangzhou Investment Company Ltd. ......21,400,000 3,816,589
Hutchison Whampoa Limited .............. 780,000 3,770,064
Luks Industrial Company Limited ........11,200,000 1,201,375
Peregrine Investments Holdings, Ltd. ... 5,000,000 7,107,964
Total ................................. 33,955,816
Indonesia - 0.12%
PT Bukaka Teknik Utama, F* ............. 100,000 193,085
PT Semen Cibinong, F ................... 200,000 628,648
Total ................................. 821,733
Italy - 0.19%
Arnoldo Mondadori Editore S.p.A. ....... 205,000 1,311,098
See Notes to Schedule of Investments on page 14.
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
JUNE 30, 1995
Shares Value
COMMON STOCKS AND RIGHTS (Continued)
Japan - 3.02%
Amway Japan ............................ 75,000 $ 2,743,687
Dai-ni Denden Corporation .............. 700 5,617,182
Hitachi ................................ 500,000 4,985,839
Japan Airport Terminal Co. ............. 100,000 1,180,080
Kyocera Corporation .................... 25,000 2,059,240
Nakakita Seisakusho Company, Ltd. ...... 151,000 580,906
Nippon Telegraph & Telephone
Corporation ........................... 400 3,351,428
Total ................................. 20,518,362
Korea - 1.75%
LG Electronics Inc., GDS (B)* .......... 100,000 1,200,000
Samsung Electronics Co., Ltd., GDR (B)* 200,600 10,657,878
Total ................................. 11,857,878
Mexico - 7.46%
bufete industrial, s.a., ADR ........... 337,500 5,484,375
Cemex, S.A., CPO Shares, Series A ...... 923,750 3,133,360
Corporacion GEO, S.A. de C.V., Class B* 210,000 617,568
Desc-Sociedad de Fomento Industrial,
S.A. de C.V., Class B* ................ 1,047,000 3,476,040
Desc-Sociedad de Fomento Industrial,
S.A. de C.V., Class C* ............... 478,918 1,570,851
Empresas ICA Sociedad Controladora,
S.A. de C.V., ADS ..................... 176,000 1,804,000
Empresas La Moderna, S.A. de C.V., ADS* 200,000 3,000,000
Farmacies Benavides, S.A. de C.V.,
Class B* ............................. 350,000 471,520
Fomento Economico Mexicano,
S.A. de C.V., Class B ................. 1,860,000 4,315,200
Grupo Carso, S.A. de C.V., Series 1A* .. 636,500 3,482,928
Grupo Financiero Banamex Accival, S.A.
de C.V., B CPO Shares ................. 1,659,000 2,511,062
Grupo Financiero Banamex Accival,
S.A. de C.V., L ....................... 82,950 126,084
Grupo Financiero Bancomer, S.A. de
C.V., B CPO Shares* ...................13,279,600 3,867,020
Grupo Financiero InverMexico,
S.A. de C.V., B Shares ................ 500,000 165,600
Grupo Mexicano de Desarrollo, S.A.,
B, ADS*................................ 235,800 913,725
Grupo Mexicano de Desarrollo, S.A.,
L, ADS* ............................... 198,119 891,536
Grupo Tribasa, S.A. de C.V., ADS* ...... 359,000 3,051,500
Hylsamex, S.A. de C.V., ADS (B)* ....... 110,000 2,007,500
Telefonos de Mexico, S.A. de C.V.,
ADR ................................... 329,500 9,761,437
Total ................................. 50,651,306
See Notes to Schedule of Investments on page 14.
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
JUNE 30, 1995
Shares Value
COMMON STOCKS AND RIGHTS (Continued)
Netherlands - 2.22%
Philips Electronics N.V. Ord ........... 75,000 $ 3,175,218
Philips Electronics N.V. NY Shares ..... 170,000 7,267,500
Vendex International N.V., BDR* ........ 176,000 4,656,986
Total ................................. 15,099,704
Norway - 5.27%
Den Norske Luftfartselskap A/S,
Series B .............................. 398,000 17,117,585
Kvaerner a.s., Series A ................ 150,000 6,816,522
Kverneland Gruppen A/S ................. 200,000 3,034,975
Kverneland Gruppen A/S, Rights* ........ 200,000 42,198
Orkla A ................................ 118,700 5,317,082
Schibsted A/S .......................... 124,000 1,569,748
Sparebkn Nor Grundfondsbevis ........... 80,000 1,934,594
Total ................................. 35,832,704
Portugal - 0.37%
Portugal Telecom, S.A., ADS* ........... 132,000 2,508,000
Singapore - 0.09%
L&M Group Investments Ltd. ............. 918,000 601,052
Spain - 5.13%
Corporacion Bancaria de Espana, S.A. ... 323,000 11,933,333
Corporation Financiero Alba, S.A. ...... 87,250 4,502,064
Cubiertas y Mzov S.A. .................. 82,367 5,134,125
Grupo Uralita S.A.* .................... 480,000 5,785,759
Iberdrola .............................. 200,000 1,505,882
Inmobiliaria Metropolitana Vasco
Central, S.A. ......................... 125,000 3,715,170
Telefonica de Espana, S.A. ............. 175,000 2,253,870
Total ................................. 34,830,203
Sweden - 13.52%
ASTRA AB, Class A ...................... 500,165 15,414,516
Bergman & Beving, Series B ............. 138,600 3,196,486
Catena, Series A ....................... 700,000 4,035,967
Forsheda AB, Class B ................... 125,000 3,020,111
Hoganas AB ............................. 240,000 4,678,427
Kinnevik AB, Series B .................. 400,000 12,190,267
NCC AB, Series B ....................... 475,000 3,716,796
Skandia Enskilda Banken, Class A ....... 1,720,000 8,925,252
Skandia Group Insurance Company Ltd. ... 150,000 2,903,425
Skane-Gripen AB, Class B ............... 230,000 2,020,729
Sparbanken Sverige AB, Series A ........ 500,000 4,186,972
Stena Line AB, Class B ................. 404,500 1,987,933
Svenska Cellulosa Aktiebolag ........... 200,000 3,706,500
AB Volvo .............................. 1,150,000 21,864,919
Total ................................. 91,848,300
See Notes to Schedule of Investments on page 14.
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
JUNE 30, 1995
Shares Value
COMMON STOCKS AND RIGHTS (Continued)
Switzerland - 3.55%
CS Holding ............................. 100,000 $ 9,144,594
Forbo Holding SA ....................... 3,800 1,854,624
Societe Internationale Pirelli* ........ 40,000 4,237,951
Swiss Bank Corporation ................. 25,000 8,858,011
Total ................................. 24,095,180
Thailand - 1.69%
Charoen Pokphand Feedmill .............. 900,000 5,468,908
Matichon Company Ltd. .................. 807,666 4,040,784
Thai Stanley Electric Co. Ltd. ......... 206,800 716,281
Thai Stanley Electric Co. Ltd.* ........ 51,700 179,070
Univest Land Public Co. Ltd. ........... 400,000 1,069,475
Total ................................. 11,474,518
United Kingdom - 11.70%
AMEC ................................... 3,500,000 3,452,687
BET Plc ................................ 1,200,000 2,348,464
BTR PLC ................................ 1,800,000 9,150,416
Comcast UK Cable Partners* ............. 100,000 1,625,000
House of Fraser PLC .................... 2,275,000 4,597,086
MFI Furniture Group PLC ................ 450,000 834,134
Next plc ............................... 4,450,000 24,179,549
Pilkington PLC ......................... 2,080,645 5,776,847
Shandwick PLC .......................... 2,900,000 1,776,463
Storehouse PLC ......................... 650,000 2,761,354
Taylor Woodrow ......................... 1,050,000 1,921,253
THORN EMI plc .......................... 175,000 3,633,675
United Biscuits (Holdings) Public
Limited Co. ........................... 867,822 4,432,341
Vodafone Group Plc ..................... 3,500,000 13,003,265
Total ................................. 79,492,534
TOTAL COMMON STOCKS AND RIGHTS - 95.76% $650,558,452
(Cost: $569,600,878)
PREFERRED STOCKS
Brazil - 0.10%
Iochpe-Maxion S.A. ..................... 1,881,000 710,505
Germany - 1.95%
Hornbach-Baumarkt AG ................... 9,800 13,248,988
TOTAL PREFERRED STOCKS - 2.05% $ 13,959,493
(Cost: $5,024,318)
See Notes to Schedule of Investments on page 14.
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
JUNE 30, 1995
Face
Amount in
Thousands Value
UNREALIZED GAIN (LOSS) ON OPEN FORWARD
CURRENCY CONTRACT - 0.02%
Deutsche Marks, 12-18-95 (C) ........... DM50,000 $ (760,915)
French Francs, 5-10-96 (C) ............. F13,500 71,264
Swiss Francs, 12-18-95 (C) ............. SFr20,000 (82,767)
Swiss Francs, 5-2-96 (C) ............... SFr17,000 898,352
Total ................................. $ 125,934
TOTAL SHORT-TERM SECURITIES - 1.68% $ 11,393,970
(Cost: $11,393,970)
TOTAL INVESTMENT SECURITIES - 99.51% $676,037,849
(Cost: $586,019,166)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.49% 3,311,462
NET ASSETS - 100.00% $679,349,311
See Notes to Schedule of Investments on page 14.
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
JUNE 30, 1995
Notes to Schedule of Investments
*No income dividends were paid during the preceding 12 months.
(A) Affiliate as defined by the Investment Company Act of 1940 by reason of
ownership by the Fund of 5% or more of its outstanding voting securities.
(B) As of June 30, 1995, the following restricted securities were owned in the
International Growth Fund:
Acquisition Acquisition Market
Security Date Shares Cost Value
---------------- --------------------------------------------
Hylsamex, S.A. de
C.V., ADS 3/27/95 110,000 $ 1,045,000 $ 2,007,500
LG Electronics Inc.,
GDS 5/5/95 100,000 1,560,000 1,200,000
Samsung Electronics Co.,
Ltd., GDR 3/27/95
to
4/26/95 200,600 9,294,450 10,657,878
----------- -----------
$11,899,450 $13,865,378
=========== ===========
The total market value of restricted securities represents approximately
2.04% of the total net assets in the International Growth Fund at June 30,
1995.
(C) Principal amounts are denominated in the indicated foreign currency where
applicable (DM - Deutsche Mark, F - French Franc, SFr - Swiss Franc).
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, 1995
Assets
Investment securities -- at value (Notes 1 and 3) . $676,037,849
Cash ............................................ 16,832
Receivables:
Dividends and interest .......................... 2,974,643
Fund shares sold ................................ 2,112,993
Investment securities sold ...................... 1,838,626
Prepaid insurance premium ......................... 29,321
------------
Total assets .................................. 683,010,264
------------
Liabilities
Payable for Fund shares redeemed ............ ..... 1,631,746
Payable for investment securities purchased ...... 1,495,119
Accrued transfer agency and dividend disbursing .. 134,600
Accrued service fee .............................. 132,067
Accrued accounting services fee ................... 5,833
Other ............................................ 261,588
------------
Total liabilities ............................. 3,660,953
------------
Total net assets ............................. $679,349,311
============
Net Assets
$1.00 par value capital stock, authorized --
400,000,000; shares outstanding -- 78,241,533
Capital stock ................................... $ 78,241,533
Additional paid-in capital ...................... 491,315,560
Accumulated undistributed income:
Accumulated undistributed net investment income . 3,496,702
Accumulated net realized gain on
investment transactions ....................... 16,229,268
Net unrealized appreciation in value
of investments at end of period ............... 89,892,749
Net unrealized appreciation in value of foreign
currency exchange at end of period ............ 173,499
------------
Net assets applicable to outstanding
units of capital ............................. $679,349,311
============
Net asset value per share (net assets divided by
shares outstanding) .............................. $8.68
Sales load (offering price x 5.75%) ................ .53
-----
Offering price per share (net asset value
divided by 94.25%) ............................... $9.21
=====
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, 1995
Investment Income
Income:
Dividends (net of foreign withholding
taxes of $1,304,210) .......................... $11,759,632
Interest ........................................ 1,528,814
-----------
Total income .................................. 13,288,446
-----------
Expenses (Note 2):
Investment management fee ....................... 4,520,606
Transfer agency and dividend disbursing ......... 1,329,124
Custodian fees .................................. 857,124
Service fee ..................................... 829,339
Accounting services fee ......................... 70,000
Audit fees ...................................... 31,029
Legal fees ...................................... 22,008
Other ........................................... 215,919
-----------
Total expenses ................................ 7,875,149
-----------
Net investment income ....................... 5,413,297
-----------
Realized and Unrealized Gain (Loss) on Investments
Realized net gain on securities .................. 25,634,668
Realized net loss on forward currency contracts .. (820,950)
Realized net loss on foreign currency
transactions .................................... (361,603)
-----------
Realized net gain on investments ................ 24,452,115
-----------
Unrealized appreciation in value of securities
during the period................................ 16,776,846
Unrealized depreciation on open forward
currency contracts during the period ............ (53,466)
Unrealized appreciation in value of foreign
currency exchange at end of period .............. 47,565
-----------
Unrealized appreciation on investments .......... 16,770,945
-----------
Net gain on investments ....................... 41,223,060
-----------
Net increase in net assets resulting from
operations ................................. $46,636,357
===========
See notes to financial statements.
<PAGE>
UNITED INTERNATIONAL GROWTH FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the fiscal year ended
June 30,
-------------------------
1995 1994
------------ ------------
Increase in Net Assets
Operations:
Net investment income ...............$ 5,413,297 $ 2,761,831
Realized net gain on investments .... 24,452,115 71,481,604
Unrealized appreciation ............. 16,770,945 37,517,137
------------ ------------
Net increase in net assets
resulting from operations ........ 46,636,357 111,760,572
------------ ------------
Dividends to shareholders from:*
Net investment income................ (3,007,607) (2,383,629)
Realized gains on securities
transactions .......................(64,022,607) (25,486,802)
------------ ------------
(67,030,214) (27,870,431)
------------ ------------
Capital share transactions:
Proceeds from sale of shares
(17,238,289 and 18,563,121
shares, respectively) ............. 152,187,285 167,996,208
Proceeds from reinvestment
of dividends and/or capital
gains distribution (7,967,530 and
3,149,966 shares, respectively) .... 66,005,451 27,280,780
Payments for shares redeemed
(10,746,945 and 4,880,995
shares, respectively) .............(90,905,631) (43,092,631)
------------ ------------
Net increase in net assets
resulting from capital share
transactions...................... 127,287,105 152,184,357
------------ ------------
Total increase ................... 106,893,248 236,074,498
Net Assets
Beginning of period .................. 572,456,063 336,381,565
------------ ------------
End of period .........................$679,349,311 $572,456,063
============ ============
Undistributed net investment
income ............................ $3,496,702 $1,452,615
========== ==========
*See "Financial Highlights" on page 18.
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,
-----------------------------------
1995 1994 1993 1992 1991
----- ----- ----- ----- -----
Net asset value,
beginning of
period ........... $8.98 $7.16 $7.10 $5.94 $6.77
----- ----- ----- ----- -----
Income from investment
operations:
Net investment
income .......... 0.07 .04 .07 .08 .12
Net realized and
unrealized gain
(loss) on
investments ..... 0.60 2.32 .11 1.20 (0.83)
----- ----- ----- ----- -----
Total from investment
operations ...... 0.67 2.36 .18 1.28 (0.71)
----- ----- ----- ----- -----
Less distributions:
Dividends from net
investment
income .......... (0.04) (0.04) (0.07) (0.09) (0.12)
Distribution from
capital gains ... (0.93) (0.50) (0.05) (0.03) (0.00)
----- ----- ----- ----- -----
Total distributions (0.97) (0.54) (0.12) (0.12) (0.12)
----- ----- ----- ----- -----
Net asset value,
end of period .... $8.68 $8.98 $7.16 $7.10 $5.94
===== ===== ===== ===== =====
Total return* ...... 7.98% 33.31% 2.62% 21.59%-10.50%
Net assets, end of
period (000
omitted) .........$679,349$572,456$336,382$322,534$259,322
Ratio of expenses
to average net
assets ........... 1.25% 1.20% 1.18% 1.18% 1.20%
Ratio of net
investment income
to average net
assets ........... 0.86% 0.57% 1.07% 1.17% 1.89%
Portfolio turnover
rate ............. 57.45% 83.76% 94.22% 112.82%118.05%
*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, 1995
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. Net investment income
distributions and capital gains distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences are due to differing treatments
for items such as deferral of wash sales and post-October losses, foreign
currency transactions, net operating losses and expiring capital loss
carryforwards. At June 30, 1995, $361,603 was reclassified between
accumulated undistributed net investment income and accumulated
undistributed net realized gain on investment transactions.
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 $12.1 billion of
combined net assets at June 30, 1995) 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, 1995.
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
$4,477,112, out of which W&R paid sales commissions of $2,567,174 and all
expenses in connection with the sale of Fund shares, except for registration
fees and related expenses.
Under a Service Plan adopted by the Fund pursuant to Rule 12b-1 under the
Investment Company Act of 1940, the Fund may pay monthly a fee to W&R in an
amount not to exceed .25% of the Fund's average annual net assets. The fee is
to be paid to reimburse W&R for amounts it expends in connection with the
provision of personal services to Fund shareholders and/or maintenance of
shareholder accounts.
The Fund paid Directors' fees of $22,227.
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 $423,065,186 while proceeds from maturities and
sales aggregated $346,981,947. Purchases of short-term securities aggregated
$506,310,955 while proceeds from maturities and sales aggregated $487,086,125.
No U.S. Government securities were bought or sold during the period.
For Federal income tax purposes, cost of investments owned at June 30,
1995 was $586,465,480 resulting in net unrealized appreciation of $89,446,435,
of which $145,934,476 related to appreciated securities and $56,488,041 related
to depreciated securities.
NOTE 4 -- Federal Income Tax Matters
For Federal income tax purposes, the Fund realized capital gain net income
of $25,206,567 during its fiscal year ended June 30, 1995, of which a portion
was paid to shareholders during the period ended June 30, 1995. Remaining
capital gain net income will be distributed to Fund shareholders.
Internal Revenue Code regulations permit the Fund to defer into its next
fiscal year net foreign currency losses, net capital losses or net long-term
capital losses incurred between each November 1 and the end of its fiscal year
("post-October losses"). From November 1, 1994 through June 30, 1995, the Fund
incurred foreign currency losses of $279,718, which have been deferred to the
fiscal year ending June 30, 1996.
<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, 1995, 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, 1995 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
August 4, 1995
<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
- --------------- ---------------------------------------------------
12-16-94 $0.948 $0.3736 $0.5744 $0.0113 $0.3623 $0.5744
6-16-95 0.020 .0200 --- --- .0200 ---
------- ------- ------- ------ ------- -------
Totals $0.968 $0.3936 $0.5744 $0.0113 $0.3823 $0.5744
======= ======= ======= ======= ======= =======
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>
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.
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
Linda Graves, Topeka, Kansas
John F. Hayes, Hutchinson, Kansas
Glendon E. Johnson, Miami, Florida
James B. Judd, Kansas City, Missouri
William T. Morgan, Los Angeles, California
Doyle Patterson, Kansas City, Missouri
Eleanor B. Schwartz, 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
Sharon K. Pappas, Vice President and Secretary
Carl E. Sturgeon, Vice President
Mark L. Yockey, Vice President
<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 Municipal High Income Fund, Inc.
United High Income Fund, Inc.
United High Income Fund II, Inc.
United Continental Income Fund, Inc.
United Retirement Shares, Inc.
United Asset Strategy Fund, Inc.
United Income Fund
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.
- ------------------------------------
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(6-95)
printed on recycled paper
