<PAGE>
UNITED
INTERNATIONAL
GROWTH FUND,
INC.
SEMIANNUAL
REPORT
------------------------------------------
For the six months ended December 31, 1995
<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.
<PAGE>
PRESIDENT'S LETTER
- -----------------------------------------------------------------
DECEMBER 31, 1995
Dear Shareholder:
As President of your Fund, I would like to thank you for your continued
confidence in our products and services. We strive to provide the best service
possible to our shareholders: from the Fund's manager, to Waddell & Reed's
customer service representatives, to your personal account representative and
the Waddell & Reed office nearest you.
While personalized service has become increasingly rare in the investment
industry, we remain committed to locally based account representatives who
provide the personal service you need. They are ready to assist you through
regular reviews of your financial plan and to answer any financial questions you
may have. Your account representative is anxious to help you plan for your
retirement, fund a child's education or make plans for other long-term financial
goals.
We want to help you open the door to a better financial future. We will
continue to help you meet your specific financial needs through quality
investment products and personalized service that makes the investment process
more convenient and accessible for you.
Should you have any questions about your account or other financial issues,
contact your personal account representative or your local Waddell & Reed
office. They're ready to help you make the most of your financial future.
Respectfully,
Keith A. Tucker
President
<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 - Class A Shares
PER SHARE DATA
For the Six Months Ended December 31, 1995
------------------------------------------
DIVIDEND PAID $0.040
======
CAPITAL GAINS DISTRIBUTION $0.595
=====
NET ASSET VALUE ON
12/31/95 $8.23 adjusted to:$8.83 (A)
6/30/95 8.68
-----
CHANGE PER SHARE $0.15
=====
(A)This number includes the capital gains distribution of $0.595 paid in
December 1995 added to the actual net asset value on December 31, 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 12-31-95 1.88% 8.09%
5-year period ended 12-31-95 12.35% 13.69%
10-year period ended 12-31-95 11.35% 12.01%
*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 December 31, 1995, United International Growth Fund, Inc. had net assets
totaling $701,716,429 invested in a diversified portfolio of:
92.57% Common Stocks
6.24% Cash and Cash Equivalents and Open
Forward Currency Contracts
1.19% Preferred Stock
As a shareholder of United International Growth Fund, Inc., for every $100 you
had invested on December 31, 1995, your Fund owned $6.24 in cash and cash
equivalents and open forward currency contracts; the remainder was invested as
follows:
Basic Techno- Public
IndustriesConsumerFinanciallogicalUtilities Total
Sweden $ 7.62 $ .33 $ 6.02 $ 3.10 $--- $17.07
United Kingdom2.52 6.87 .84 1.84 --- 12.07
Japan 1.63 3.42 --- 2.34 --- 7.39
Germany 4.52 1.94 .58 --- --- 7.04
Finland 4.00 --- --- 2.89 --- 6.89
Mexico 3.47 .65 1.24 1.50 --- 6.86
Spain 2.29 --- 2.13 .63 .59 5.64
France 1.40 1.61 1.36 1.05 --- 5.42
Hong Kong 3.75 --- 1.29 --- --- 5.04
Norway 2.16 --- 2.07 --- --- 4.23
Switzerland .56 --- 3.55 --- --- 4.11
Australia --- 2.13 1.73 --- --- 3.86
Other 2.11 4.73 .46 .84 --- 8.14
Total $36.03 $21.68 $21.27 $14.19 $.59 $93.76
- ----------------------------------------------------------------
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
December 31, 1995 market value as percent of total net assets
- ---------------------------------------------------------------------------
United
Sweden Kingdom Japan Germany Finland Mexico
- ---------------------------------------------------------------------------
Banks and
Savings and Loans 5.44% .67% .58% .61%
- ---------------------------------------------------------------------------
Multi-Industry 2.56 2.52 .17 1.19
- ---------------------------------------------------------------------------
Building .82 .80 1.92% .50
- ---------------------------------------------------------------------------
Retailing 4.41 1.94 .09
- ---------------------------------------------------------------------------
Telecommunications 1.16% 2.89 1.50
- ---------------------------------------------------------------------------
Consumer Electronics
and Appliances 2.80
- ---------------------------------------------------------------------------
Automotive 3.58 .58
- ---------------------------------------------------------------------------
Machinery .34 2.81 .61
- ---------------------------------------------------------------------------
Drugs and
Hospital Supply 2.84 .72
- ---------------------------------------------------------------------------
Engineering and
Construction .74 .35 1.78
- ---------------------------------------------------------------------------
Insurance .58
- ---------------------------------------------------------------------------
Electronics 1.84 .46
- ---------------------------------------------------------------------------
Leisure Time 1.10
- ---------------------------------------------------------------------------
Financial .17 .63
- ---------------------------------------------------------------------------
Publishing and
Advertising .33
- ---------------------------------------------------------------------------
Services, Consumer
and Business .24 .17
- ---------------------------------------------------------------------------
Shipping
- ---------------------------------------------------------------------------
Food and Related .55
- ---------------------------------------------------------------------------
Electrical Equipment .71
- ---------------------------------------------------------------------------
Paper 1.12
- ---------------------------------------------------------------------------
Chemicals Specialty
and Miscellaneous
Technology
- ---------------------------------------------------------------------------
Manufacturers .66
- ---------------------------------------------------------------------------
Public Utilities -
Electric
- ---------------------------------------------------------------------------
Packaging and
Containers .57
- ---------------------------------------------------------------------------
Beverages .56
- ---------------------------------------------------------------------------
Tire and Rubber
- ---------------------------------------------------------------------------
Household Products .45
- ---------------------------------------------------------------------------
Computers and
Office Products .26
- ---------------------------------------------------------------------------
Total 17.07% 12.07% 7.39% 7.04% 6.89% 6.86%
- ---------------------------------------------------------------------------
<PAGE>
Table I: Portfolio Diversification by Nation and Industry
December 31, 1995 market value as percent of total net assets
- ---------------------------------------------------------------------------
Hong Switzer- Aus-
Spain France Kong Norway land tralia
- ---------------------------------------------------------------------------
Banks and
Savings and Loans 2.13% .77% 3.55% 1.73%
- ---------------------------------------------------------------------------
Multi-Industry 1.30 2.61% .84
- ---------------------------------------------------------------------------
Building .52 1.40% .71
- ---------------------------------------------------------------------------
Retailing .73 .76
- ---------------------------------------------------------------------------
Telecommunications
- ---------------------------------------------------------------------------
Consumer Electronics
and Appliances .12
- ---------------------------------------------------------------------------
Automotive
- ---------------------------------------------------------------------------
Machinery .06
- ---------------------------------------------------------------------------
Drugs and
Hospital Supply
- ---------------------------------------------------------------------------
Engineering and
Construction .47
- ---------------------------------------------------------------------------
Insurance 1.36 1.30
- ---------------------------------------------------------------------------
Electronics .63
- ---------------------------------------------------------------------------
Leisure Time .76 .50
- ---------------------------------------------------------------------------
Financial 1.29
- ---------------------------------------------------------------------------
Publishing and
Advertising .87
- ---------------------------------------------------------------------------
Services, Consumer
and Business
- ---------------------------------------------------------------------------
Shipping 1.26
- ---------------------------------------------------------------------------
Food and Related
- ---------------------------------------------------------------------------
Electrical Equipment .43
- ---------------------------------------------------------------------------
Paper
- ---------------------------------------------------------------------------
Chemicals Specialty
and Miscellaneous
Technology 1.05
- ---------------------------------------------------------------------------
Manufacturers
- ---------------------------------------------------------------------------
Public Utilities -
Electric .59
- ---------------------------------------------------------------------------
Packaging and
Containers
- ---------------------------------------------------------------------------
Beverages
- ---------------------------------------------------------------------------
Tire and Rubber .56
- ---------------------------------------------------------------------------
Household Products
- ---------------------------------------------------------------------------
Computers and
Office Products
- ---------------------------------------------------------------------------
Total 5.64% 5.42% 5.04% 4.23% 4.11% 3.86%
- ---------------------------------------------------------------------------
<PAGE>
Table I: Portfolio Diversification by Nation and Industry
December 31, 1995 market value as percent of total net assets
- ---------------------------------------------------------------------------
Thai- Nether-
Denmark Korea land lands Italy Ireland
- ---------------------------------------------------------------------------
Banks and
Savings and Loans .46%
- ---------------------------------------------------------------------------
Multi-Industry
- ---------------------------------------------------------------------------
Building 1.30%
- ---------------------------------------------------------------------------
Retailing
- ---------------------------------------------------------------------------
Telecommunications .53%
- ---------------------------------------------------------------------------
Consumer Electronics
and Appliances 1.63% .89%
- ---------------------------------------------------------------------------
Automotive .10%
- ---------------------------------------------------------------------------
Machinery
- ---------------------------------------------------------------------------
Drugs and
Hospital Supply
- ---------------------------------------------------------------------------
Engineering and
Construction
- ---------------------------------------------------------------------------
Insurance
- ---------------------------------------------------------------------------
Electronics .19
- ---------------------------------------------------------------------------
Leisure Time
- ---------------------------------------------------------------------------
Financial
- ---------------------------------------------------------------------------
Publishing and
Advertising .69
- ---------------------------------------------------------------------------
Services, Consumer
and Business .89
- ---------------------------------------------------------------------------
Shipping
- ---------------------------------------------------------------------------
Food and Related .63
- ---------------------------------------------------------------------------
Electrical Equipment
- ---------------------------------------------------------------------------
Paper
- ---------------------------------------------------------------------------
Chemicals Specialty
and Miscellaneous
Technology
- ---------------------------------------------------------------------------
Manufacturers
- ---------------------------------------------------------------------------
Public Utilities -
Electric
- ---------------------------------------------------------------------------
Packaging and
Containers
- ---------------------------------------------------------------------------
Beverages
- ---------------------------------------------------------------------------
Tire and Rubber
- ---------------------------------------------------------------------------
Household Products
- ---------------------------------------------------------------------------
Computers and
Office Products
- ---------------------------------------------------------------------------
Total 2.19% 1.63% 1.42% 1.08% 0.53% 0.46%
- ---------------------------------------------------------------------------
<PAGE>
Table I: Portfolio Diversification by Nation and Industry
December 31, 1995 market value as percent of total net assets
- ---------------------------------------------------------------------------
Argen- Philip-
Indonesia tina pines Total
- ---------------------------------------------------------------------------
Banks and
Savings and Loans 15.94%
- ---------------------------------------------------------------------------
Multi-Industry .20% 11.39%
- ---------------------------------------------------------------------------
Building .21 .20% 8.38%
- ---------------------------------------------------------------------------
Retailing 7.93%
- ---------------------------------------------------------------------------
Telecommunications .12% 6.20%
- ---------------------------------------------------------------------------
Consumer Electronics
and Appliances 5.44%
- ---------------------------------------------------------------------------
Automotive .10 4.36%
- ---------------------------------------------------------------------------
Machinery 3.82%
- ---------------------------------------------------------------------------
Drugs and
Hospital Supply 3.56%
- ---------------------------------------------------------------------------
Engineering and
Construction 3.34%
- ---------------------------------------------------------------------------
Insurance 3.24%
- ---------------------------------------------------------------------------
Electronics 3.12%
- ---------------------------------------------------------------------------
Leisure Time 2.36%
- ---------------------------------------------------------------------------
Financial 2.09%
- ---------------------------------------------------------------------------
Publishing and
Advertising 1.89%
- ---------------------------------------------------------------------------
Services, Consumer
and Business 1.30%
- ---------------------------------------------------------------------------
Shipping 1.26%
- ---------------------------------------------------------------------------
Food and Related 1.18%
- ---------------------------------------------------------------------------
Electrical Equipment 1.14%
- ---------------------------------------------------------------------------
Paper 1.12%
- ---------------------------------------------------------------------------
Chemicals Specialty
and Miscellaneous
Technology 1.05%
- ---------------------------------------------------------------------------
Manufacturers 0.66%
- ---------------------------------------------------------------------------
Public Utilities -
Electric 0.59%
- ---------------------------------------------------------------------------
Packaging and
Containers 0.57%
- ---------------------------------------------------------------------------
Beverages 0.56%
- ---------------------------------------------------------------------------
Tire and Rubber 0.56%
- ---------------------------------------------------------------------------
Household Products 0.45%
- ---------------------------------------------------------------------------
Computers and
Office Products 0.26%
- ---------------------------------------------------------------------------
Total 0.41% 0.30% 0.12% 93.76%
- ---------------------------------------------------------------------------
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
DECEMBER 31, 1995
Shares Value
COMMON STOCKS
Argentina - 0.30%
Ciadea, S.A.* .......................... 135,136 $ 702,567
Corcemar S.A., Series B1* .............. 302,820 1,377,555
Total ................................. 2,080,122
Australia - 3.86%
Advance Bank Australia Ltd. ............ 476,036 3,814,368
John Fairfax Holdings Ltd. ............. 1,500,000 3,121,860
News Corporation Limited ............... 563,180 3,005,632
Publishing & Broadcasting PBL .......... 1,000,000 3,486,076
Westpac Banking Corp. .................. 1,887,894 8,363,498
Woolworths Ltd. ........................ 2,200,000 5,298,242
Total ................................. 27,089,676
Denmark - 2.19%
Copenhagen Airports A/S ................ 82,000 6,261,684
Danske Traelast ......................... 82,500 5,571,815
Thorkild Kristensen .................... 66,450 3,530,437
Total ................................. 15,363,936
Finland - 6.89%
Enso-Gutzeit Oy ........................ 1,180,000 7,866,486
Kymmene Oy ............................. 200,000 5,287,235
Metra Corporation B .................... 60,000 2,468,909
Metsa-Serla Oy, Series B ............... 266,000 8,193,835
Nokia Corporation, Series K ............ 512,200 20,252,040
Tampella OY* ........................... 3,406,667 4,307,181
Total ................................. 48,375,686
France - 5.42%
But S.A. ............................... 15,000 811,059
Guyenne et Gascogne .................... 18,780 5,115,548
Lapeyre S.A. ........................... 197,985 9,856,833
Societe Industrielle de Transports
Automobiles S.A. ...................... 42,100 7,378,882
Television Francais 1-TF1 S.A. ......... 50,000 5,356,050
UNION DES ASSURANCES FEDERALES ........ 79,800 9,525,199
Total ................................. 38,043,571
See Notes to Schedule of Investments on page 13.
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
DECEMBER 31, 1995
Shares Value
COMMON STOCKS (Continued)
Germany - 5.85%
adidas AG* ............................. 100,000 $ 5,264,993
Depfa Bank ............................. 105,000 4,078,452
DURR Beteiligungs AG ................... 4,000 1,199,442
Fag Kugelfischer AG .................... 40,000 5,160,390
GILDEMEISTER Aktiengesellschaft* ....... 59,750 5,416,667
Mannesmann AG .......................... 31,700 10,095,809
TRAUB AG (A)* .......................... 47,000 4,244,421
Vereinigter Baubeschlag-Handel
Aktiengesellschaft..................... 20,000 5,578,801
Total ................................. 41,038,975
Hong Kong - 5.04%
Dongfang Electrical Machinery
Co., Ltd. ............................. 9,106,000 2,443,576
First Pacific Company Limited ..........11,094,000 12,338,623
Guangdong Corporation Limited ..........10,000,000 6,013,579
Guangzhou Investment Company Ltd. ......26,000,000 4,976,398
Harbin Power Equipment Company Limited,
H Shares .............................. 3,758,000 554,041
Peregrine Investments Holdings, Ltd. ... 7,000,000 9,052,700
Total ................................. 35,378,917
Indonesia - 0.41%
PT Bimantara Citra, F* ................. 1,700,000 1,412,639
PT Semen Cibinong, F ................... 600,000 1,495,736
Total ................................. 2,908,375
Ireland - 0.46%
Allied Irish Banks plc ................. 600,000 3,257,449
Italy - 0.53%
Telecom Italia Mobile Risp* ............ 3,500,000 3,685,372
See Notes to Schedule of Investments on page 13.
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
DECEMBER 31, 1995
Shares Value
COMMON STOCKS (Continued)
Japan - 7.39%
Amway Japan ............................ 75,000 $ 3,167,070
Dai-ni Denden Corporation .............. 1,050 8,135,593
Hitachi ................................ 500,000 5,036,320
Japan Airport Terminal Co. ............. 100,000 1,210,654
Kyocera Corporation .................... 43,000 3,194,286
Matsushita Electric Industrial ......... 500,000 8,135,593
Mitsubishi Heavy Industries, Ltd. ...... 300,000 2,391,283
Mitsubishi Motors ...................... 500,000 4,072,639
Sankyo Co., Ltd. ....................... 225,000 5,055,690
TDK Corp. .............................. 225,000 11,484,261
Total ................................. 51,883,389
Korea - 1.63%
Samsung Electronics Co., Ltd., GDR (B)* 190,600 11,436,000
Mexico - 6.86%
bufete industrial, s.a., ADR* .......... 337,500 5,062,500
Cemex, S.A., CPO Shares, Series A ...... 923,750 3,029,277
Controladora Comercial Mexicana, S.A.
de C.V., B Shares* .................... 1,000,000 648,088
Desc-Sociedad de Fomento Industrial,
S.A. de C.V., Class B* ................ 1,297,000 4,757,628
Desc-Sociedad de Fomento Industrial,
S.A. de C.V., Class C* ............... 228,918 815,975
Empresas ICA Sociedad Controladora,
S.A. de C.V., ADS ..................... 728,000 7,462,000
Fomento Economico Mexicano,
S.A. de C.V., Class B ................. 1,760,000 3,946,597
Grupo Carso, S.A. de C.V., Series 1A* .. 500,500 2,705,230
Grupo Financiero Banamex Accival, S.A.
de C.V., B, CPO Shares ................ 2,659,000 4,446,027
Grupo Financiero Bancomer, S.A. de
C.V., B, CPO Shares* ..................15,279,600 4,258,087
Grupo Mexicano de Desarrollo, S.A.,
B, ADS*................................ 235,800 530,550
Telefonos de Mexico, S.A. de C.V.,
ADR ................................... 329,500 10,502,813
Total ................................. 48,164,772
See Notes to Schedule of Investments on page 13.
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
DECEMBER 31, 1995
Shares Value
COMMON STOCKS (Continued)
Netherlands - 1.08%
BE Semiconductor Industries* ........... 100,000 $ 1,306,200
Philips Electronics N.V., New York
Shares ................................ 100,000 3,587,500
Philips Electronics N.V., Ordinary ..... 75,000 2,715,186
Total ................................. 7,608,886
Norway - 4.23%
Fokus Bank A.S.* ....................... 1,000,000 5,400,199
Kvaerner a.s., Series A ................ 250,000 8,842,431
Kverneland Gruppen A/S ................. 22,700 439,082
Orkla, Series A ........................ 118,700 5,903,981
UNI Storebrand AS, Series A* ........... 1,650,000 9,118,757
Total ................................. 29,704,450
Philippines - 0.12%
Pilipino Telephone Corporation* ........ 800,500 808,740
Spain - 5.64%
Amper S.A.* ............................ 376,000 4,448,145
Corporacion Bancaria de Espana, S.A. ... 363,000 14,962,902
Corporation Financiero Alba, S.A. ...... 147,250 9,068,075
Cubiertas y Mzov S.A. .................. 59,832 3,314,683
Grupo Uralita S.A. ..................... 400,951 3,635,994
Iberdrola .............................. 450,000 4,117,890
Total ................................. 39,547,689
Sweden - 17.07%
Astra AB, Class A ...................... 500,165 19,956,896
Bergman & Beving, Series B ............. 163,600 4,606,369
Catena, Series A ....................... 700,000 5,480,690
Forsheda AB, Class B ................... 98,200 1,552,511
Kinnevik AB, B Shares .................. 400,000 12,497,177
NCC AB, Series B ....................... 358,000 4,204,472
Skandia Enskilda Banken, Class A ....... 2,720,000 22,525,032
Skandia Group Insurance Company Ltd. ... 150,000 4,054,054
Sparbanken Sverige AB, Series A ........ 600,000 7,678,988
Stadshypotek, Class A* ................. 400,000 8,010,239
Svenska Cellulosa Aktiebolag ........... 100,000 1,550,854
Tidnings AB Marieberg, Series A, F ..... 100,000 2,318,753
AB Volvo .............................. 1,150,000 23,548,897
WM-data AB, Class B .................... 40,000 1,806,821
Total ................................. 119,791,753
See Notes to Schedule of Investments on page 13.
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
DECEMBER 31, 1995
Shares Value
COMMON STOCKS (Continued)
Switzerland - 4.11%
CS Holding, Registered Shares .......... 115,000 $ 11,709,272
Societe Internationale Pirelli* ........ 40,000 3,916,811
Swiss Bank Corporation ................. 32,500 13,180,243
Total ................................. 28,806,326
Thailand - 1.42%
Charoen Pokphand Feedmill .............. 900,000 4,394,601
Matichon Company Ltd. .................. 807,666 4,841,507
Thai Stanley Electric Co. Ltd. ......... 258,500 718,341
Total ................................. 9,954,449
United Kingdom - 12.07%
BET Plc ................................ 1,200,000 2,367,533
BTR PLC ................................ 1,300,000 6,624,121
Comcast UK Cable Partners* ............. 100,000 1,250,000
HSBC Holdings Plc ...................... 300,000 4,686,131
INVESCO PLC, ADS ....................... 30,000 1,162,500
Kingfisher plc ......................... 750,000 6,314,975
Next plc ............................... 2,450,000 17,355,695
Pilkington PLC ......................... 1,280,645 4,018,752
Shandwick PLC .......................... 2,900,000 1,653,389
Storehouse PLC ......................... 1,400,000 7,264,163
THORN EMI plc .......................... 275,000 6,478,675
Tomkins plc ............................ 2,000,000 8,746,202
United Biscuits (Holdings) Public
Limited Co. ........................... 967,822 3,841,470
Vodafone Group Plc ..................... 3,600,000 12,918,901
Total ................................. 84,682,507
TOTAL COMMON STOCKS - 92.57% $649,611,040
(Cost: $574,794,287)
PREFERRED STOCK - 1.19%
Germany
Hornbach-Baumarkt-AG ................... 96,000 $ 8,368,201
(Cost: $4,091,881)
See Notes to Schedule of Investments on page 13.
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
DECEMBER 31, 1995
Face
Amount in
Thousands Value
UNREALIZED GAIN ON OPEN FORWARD
CURRENCY CONTRACTS - 0.18%
French Francs, 5-10-96 (C) ............. F13,500 $ 71,264
Swiss Francs, 4-2-96 (C) ............... SFr22,500 282,912
Swiss Francs, 5-2-96 (C) ............... SFr17,000 898,352
Total ................................. $ 1,252,528
TOTAL SHORT-TERM SECURITIES - 5.44% $ 38,159,568
(Cost: $38,159,568)
TOTAL INVESTMENT SECURITIES - 99.38% $697,391,337
(Cost: $617,045,736)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.62% 4,325,092
NET ASSETS - 100.00% $701,716,429
See Notes to Schedule of Investments on page 13.
<PAGE>
THE INVESTMENTS OF
UNITED INTERNATIONAL GROWTH FUND, INC.
DECEMBER 31, 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 December 31, 1995, the following restricted security was owned:
Acquisition Acquisition Market
Security Date Shares Cost Value
---------------- --------------------------------------------
Samsung Electronics 3/27/95
Co., Ltd., GDR to
4/26/95 190,600 $8,804,450 $11,436,000
========== ===========
The total market value of restricted securities represents approximately
1.63% of the total net assets in the International Growth Fund at December
31, 1995.
(C) Principal amounts are denominated in the indicated foreign currency where
applicable (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
DECEMBER 31, 1995
Assets
Investment securities -- at value (Notes 1 and 3) . $697,391,337
Cash ............................................ 12,762
Receivables:
Investment securities sold ...................... 3,786,976
Dividends and interest .......................... 2,020,528
Fund shares sold ................................ 1,138,360
Prepaid insurance premium ......................... 19,016
------------
Total assets .................................. 704,368,979
------------
Liabilities
Payable for Fund shares redeemed ............ ..... 1,925,996
Accrued service fee .............................. 266,822
Accrued transfer agency and dividend disbursing .. 158,675
Accrued accounting services fee ................... 5,833
Other ............................................ 295,224
------------
Total liabilities ............................. 2,652,550
------------
Total net assets ............................. $701,716,429
============
Net Assets
$1.00 par value capital stock, authorized --
400,000,000; shares outstanding -- 85,311,477
Capital stock (Note 5)........................... $ 85,311,477
Additional paid-in capital ...................... 540,910,511
Accumulated undistributed income (loss):
Accumulated undistributed net investment income . 411,640
Accumulated net realized loss on
investment transactions ....................... (5,287,431)
Net unrealized appreciation in value
of investments at end of period ............... 79,093,073
Net unrealized appreciation in value of foreign
currency exchange at end of period ............ 1,277,159
------------
Net assets applicable to outstanding
units of capital ............................. $701,716,429
============
Net asset value per share (net assets divided by
shares outstanding) .............................. $8.23
=====
See notes to financial statements.
<PAGE>
UNITED INTERNATIONAL GROWTH FUND, INC.
STATEMENT OF OPERATIONS
For the Six Months Ended DECEMBER 31, 1995
Investment Income
Income:
Dividends (net of foreign withholding
taxes of $419,492) ............................ $ 4,354,214
Interest ........................................ 494,066
-----------
Total income .................................. 4,848,280
-----------
Expenses (Note 2):
Investment management fee ....................... 2,542,896
Transfer agency and dividend disbursing ......... 709,174
Service fee ..................................... 554,343
Custodian fees .................................. 432,487
Accounting services fee ......................... 35,000
Audit fees ...................................... 21,309
Legal fees ...................................... 5,737
Other ........................................... 143,883
-----------
Total expenses ................................ 4,444,829
-----------
Net investment income ....................... 403,451
-----------
Realized and Unrealized Gain (Loss) on Investments
Realized net gain on securities .................. 22,811,300
Realized net gain on forward currency contracts .. 2,433,010
Realized net loss on foreign currency
transactions .................................... (344,954)
-----------
Realized net gain on investments ................ 24,899,356
-----------
Unrealized depreciation in value of securities
during the period................................ (10,799,676)
Unrealized appreciation on open forward
currency contracts during the period ............ 1,126,594
Unrealized depreciation in value of foreign
currency exchange at end of period .............. (22,934)
-----------
Unrealized depreciation on investments .......... (9,696,016)
-----------
Net gain on investments ....................... 15,203,340
-----------
Net increase in net assets resulting from
operations ................................. $15,606,791
===========
See notes to financial statements.
<PAGE>
UNITED INTERNATIONAL GROWTH FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the For the
six months fiscal year
ended ended
December 31, June 30,
1995 1995
------------ -----------
Increase in Net Assets
Operations:
Net investment income ...............$ 403,451 $ 5,413,297
Realized net gain on investments .... 24,899,356 24,452,115
Unrealized appreciation
(depreciation) .................... (9,696,016) 16,770,945
------------ ------------
Net increase in net assets
resulting from operations ........ 15,606,791 46,636,357
------------ ------------
Dividends to shareholders from:*
Net investment income................ (3,143,559) (3,007,607)
Realized gains on securities
transactions ....................... (46,761,009) (64,022,607)
------------ ------------
(49,904,568) (67,030,214)
------------ ------------
Capital share transactions (Note 5):
Proceeds from sale of shares
(21,539,909 and 17,238,289
shares, respectively) ............. 192,148,805 152,187,285
Proceeds from reinvestment
of dividends and/or capital
gains distribution (6,163,506 and
7,967,530 shares, respectively) .... 49,123,121 66,005,451
Payments for shares redeemed
(20,633,471 and 10,746,945
shares, respectively) .............(184,607,031) (90,905,631)
------------ ------------
Net increase in net assets
resulting from capital share
transactions...................... 56,664,895 127,287,105
------------ ------------
Total increase ................... 22,367,118 106,893,248
Net Assets
Beginning of period .................. 679,349,311 572,456,063
------------ ------------
End of period, including
undistributed net investment
income of $411,640 and
$3,496,702, respectively.............$701,716,429 $679,349,311
============ ============
*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
six
months For the fiscal year ended June 30,
ended ----------------------------------
12/31/95 1995 1994 1993 1992 1991
-------- ------ ------ ------ ------ ------
Net asset value,
beginning of
period ........... $8.68 $8.98 $7.16 $7.10 $5.94 $6.77
----- ----- ----- ----- ----- -----
Income from investment
operations:
Net investment
income .......... .00 0.07 .04 .07 .08 .12
Net realized and
unrealized gain
(loss) on
investments ..... 0.18 0.60 2.32 .11 1.20 (0.83)
----- ----- ----- ----- ----- -----
Total from investment
operations ...... 0.18 0.67 2.36 .18 1.28 (0.71)
----- ----- ----- ----- ----- -----
Less distributions:
Dividends from net
investment
income .......... (0.04) (0.04) (0.04) (0.07) (0.09) (0.12)
Distribution from
capital gains ... (0.59) (0.93) (0.50) (0.05) (0.03) (0.00)
----- ----- ----- ----- ----- -----
Total distributions (0.63) (0.97) (0.54) (0.12) (0.12) (0.12)
----- ----- ----- ----- ----- -----
Net asset value,
end of period .... $8.23 $8.68 $8.98 $7.16 $7.10 $5.94
===== ===== ===== ===== ===== =====
Total return* ...... 2.37% 7.98% 33.31% 2.62% 21.59% -10.50%
Net assets, end of
period (000
omitted) .........$701,716$679,349$572,456$336,382$322,534$259,322
Ratio of expenses
to average net
assets ........... 1.24%** 1.25% 1.20% 1.18% 1.18% 1.20%
Ratio of net
investment income
to average net
assets ........... 0.11%** 0.86% 0.57% 1.07% 1.17% 1.89%
Portfolio turnover
rate ............. 27.90% 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.
**Annualized.
See notes to financial statements.
<PAGE>
UNITED INTERNATIONAL GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 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. Its investment objective is the long-term appreciation of your
investment. Realization of income is a secondary goal. 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 denominated in
foreign currencies are translated into U.S. dollars daily. Purchases and
sales of investment securities and accruals of income and expenses are
translated at the rate of exchange prevailing on the date of the
transaction. For assets and liabilities other than investments in
securities, net realized and unrealized gains and losses from foreign
currency translations arise from changes in currency exchange rates. The
Fund combines fluctuations from currency exchange rates and fluctuations in
market value when computing net realized and unrealized gain or loss from
investments.
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. The Fund uses forward
contracts to attempt to reduce the overall risk of its investments.
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.
G. The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.
NOTE 2 -- Investment Management and Payments to Affiliated Persons
The 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 $13.6 billion of
combined net assets at December 31, 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 December 31, 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
$1,769,964, out of which W&R paid sales commissions of $982,858 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 $14,523.
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 $191,079,687 while proceeds from maturities and
sales aggregated $209,404,498. Purchases of short-term securities aggregated
$260,735,627 while proceeds from maturities and sales aggregated $234,348,467.
No U.S. Government securities were bought or sold during the period.
For Federal income tax purposes, cost of investments owned at December 31,
1995 was $617,542,051, resulting in net unrealized appreciation of $78,646,757,
of which $126,963,196 related to appreciated securities and $48,316,439 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 has been 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.
NOTE 5 -- Commencement of Multiclass Operations
On July 4, 1995, the Fund was authorized to offer investors a choice of two
classes of shares, Class A and Class Y. A comprehensive discussion of the terms
under which shares of either class are offered is contained in the prospectus
and the Statement of Additional Information for the Fund.
The Fund commenced multiclass operations on September 28, 1995. The
following class specific information is presented in footnote format in lieu of
presentation in the principal financial statements due to the small amount of
Class Y share transactions during the reporting period:
Class A Class Y Total
------------ ---------- ------------
Shares issued from sales
of shares.......... 21,532,207 7,702 21,539,909
Shares issued from
reinvestment of
dividends and/or
capital gains
distribution ...... 6,162,924 582 6,163,506
Shares redeemed .... (20,633,471) --- (20,633,471)
----------- ---------- -----------
Increase in
outstanding shares. 7,061,660 8,284 7,069,944
============= ============ =============
Value issued from sale
of shares.......... $192,081,193 $67,612 $192,148,805
Value issued from
reinvestment of
dividends and/or
capital gains
distribution ...... 49,118,482 4,639 49,123,121
Value redeemed ..... (184,607,031) --- (184,607,031)
----------- ---------- -----------
Increase in
outstanding capital $ 56,592,644 $72,251 $ 56,664,895
============= ============ =============
Shares outstanding . 85,303,193 8,284 85,311,477
Net asset value per share $8.23 $8.23
Income, non-class specific expenses and realized and unrealized gains and
losses are allocated daily to each class of shares based on the value of
relative net assets as of the beginning of each day adjusted for the prior day's
capital share activity.
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 December 31, 1995, the results of its operations for the
six months then ended and the changes in its net assets and the financial
highlights for each of 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 December 31, 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
February 8, 1996
<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
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
Our INTERNET address is:
http://www.waddell.com
NUR1002SA(12-95)
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