TABLE OF CONTENTS
USAA Family of Funds 1
Message from the President 2
Investment Review 4
Message from the Managers 5
Shareholder Voting Results 8
Financial Information:
Statement of Assets and Liabilities 9
Portfolio of Investments in Securities 10
Notes to Portfolio of Investments in Securities 34
Statement of Operations 35
Statements of Changes in Net Assets 36
Notes to Financial Statements 37
IMPORTANT INFORMATION
Through our ongoing efforts to reduce expenses and respond to shareholder
requests, your annual and semiannual report mailings are "streamlined." One copy
of each report is sent to each address, rather than to every registered owner.
For many shareholders and their families, this eliminates duplicate copies,
saving paper and postage costs to the Fund.
If you are the primary shareholder on at least one account, prefer not to
participate in streamlining, and would like to continue receiving one report per
registered account owner, you may request this in writing to:
USAA Investment Management Company
Attn: Report Mail
9800 Fredericksburg Road
San Antonio, TX 78284-8916
or phone a Mutual Fund Representative at 1-800-531-8448 during business hours.
This report is for the information of the shareholders and others who have
received a copy of the currently effective prospectus of the USAA Aggressive
Growth Fund, managed by USAA Investment Management Company (IMCO). It may be
used as sales literature only when preceded or accompanied by a current
prospectus which gives further details about the Fund. USAA with the eagle is
registered in the U.S. Patent & Trademark Office. (Copyright) 1997, USAA.
All rights reserved.
<TABLE>
USAA Family of Funds Performance Summary
<CAPTION>
If you own only one or two USAA funds, you may not be aware of the performance
of our other funds. This summary is a snapshot of the performance of all 33
funds by investment objective as of December 31, 1996.
<S> <C> <C> <C> <C> <C>
Average Annual Total Return(%)*
Investment Inception Since
Objective Date 1 yr 5 yrs 10 yrs Inception
CAPITAL APPRECIATION
=========================================================================================================
Aggressive Growth 10/19/81 16.47 11.45 13.12 -
Emerging Markets (1) 11/7/94 16.59 - - 4.84
Gold (1) 8/15/84 0.00 6.57 .93 -
Growth 4/5/71 17.80 13.69 13.24 -
Growth & Income 6/1/93 23.04 - - 16.24
International (1) 7/11/88 19.15 13.09 - 10.60
S&P 500 Index (4) 5/1/96 - - - 16.83+
World Growth (1) 10/1/92 19.08 - - 13.66
ASSET ALLOCATION
============
Balanced Strategy 9/1/95 13.45 - - 12.49
Cornerstone Strategy (1) 8/15/84 17.87 12.69 10.70 -
Growth and Tax Strategy (2)** 1/11/89 11.12 9.64 - 9.97
Growth Strategy (1) 9/1/95 22.13 - - 21.47
Income Strategy 9/1/95 3.00 - - 9.72
INCOME TAXABLE
=========
GNMA 2/1/91 2.94 6.43 - 7.66
Income 3/4/74 1.33 7.33 9.25 -
Income Stock 5/4/87 18.70 12.76 - 12.78
Short-Term Bond 6/1/93 6.31 - - 5.60
INCOME-TAX EXEMPT
========
Long-Term (2)** 3/19/82 4.47 6.87 7.37 -
Intermediate-Term (2)** 3/19/82 4.49 6.89 7.09 -
Short-Term (2)** 3/19/82 4.44 4.94 5.45 -
California Bond (2)** 8/1/89 5.39 7.29 - 7.65
Florida Tax-Free Income (2)** 10/1/93 4.38 - - 3.69
New York Bond (2)** 10/15/90 3.73 6.61 - 8.35
Texas Tax-Free Income (2)** 8/1/94 5.25 - - 9.44
Virginia Bond (2)** 10/15/90 5.06 7.09 - 8.18
MONEY MARKET
========
Money Market (3) 2/2/81 5.24 4.37 5.84 -
Tax Exempt Money Market (2,3)** 2/6/84 3.34 3.04 4.21 -
Treasury Money Market Trust (3) 2/1/91 5.10 4.16 - 4.32
California Money Market (2,3)** 8/1/89 3.27 2.93 - 3.64
Florida Tax-Free Money Market (2,3)** 10/1/93 3.24 - - 3.01
New York Money Market (2,3)** 10/15/90 3.20 2.79 - 3.07
Texas Tax-Free Money Market (2,3)** 8/1/94 3.25 - - 3.32
Virginia Money Market (2,3)** 10/15/90 3.17 2.87 - 3.20
</TABLE>
Non-deposit investment products offered by USAA Investment Management Company
are not insured by the FDIC, are not deposits or other obligations of, or
guaranteed by, USAA Federal Savings Bank, and are subject to investment risks,
including possible loss of the principal amount invested.
For more complete information about the mutual funds managed and distributed by
USAA IMCO, including charges and expenses, please call 1-800-531-8181 for a
prospectus. Read it carefully before you invest.
(1) Foreign investing is subject to additional risks, which are discussed
in the funds' prospectuses.
(2) Some income may be subject to state or local taxes or the federal
alternative minimum tax.
(3) An investment in a money market fund is neither insured nor guaranteed by
the U.S. government and there is no assurance that any of the funds will be
able to maintain a stable net asset value of $1 per share.
(4) S&P 500 (Registered Trademark) is a trademark of The McGraw-Hill
Companies, Inc., and has been licensed for use. The product is not sponsored,
sold or promoted by Standard & Poor's, and Standard & Poor's makes no
representation regarding the advisability of investing in the product.
* Total return equals income yield plus share price change and assumes
reinvestment of all dividends and capital gain distributions. No adjustment
has been made for taxes payable by shareholders on their reinvested dividends
and capital gain distributions. The performance data quoted represent past
performance and are not an indication of future results. Investment return
and principal value of an investment will fluctuate, and an investor's
shares, when redeemed, may be worth more or less than their original cost.
** IRAs are not available for tax-exempt funds. The Growth and Tax Strategy Fund
is not available as an investment for your IRA because the majority of its
income is tax-exempt. California, Florida, New York, Texas, and Virginia
funds available to residents only.
+ Cumulative total return since inception, including account maintenance fee.
MESSAGE FROM THE PRESIDENT
I have been at USAA for 19 years. The first eight were one heck of a lot of
fun. I was a portfolio manager and I also got to do a lot of trading. Since 1986
I have been a manager of people, and sometime in the future I will write about
the relative degree of fun between those two pursuits. In my eight years as a
money manager I got to know how it feels when your fund isn't working, and I
also know how it feels to be on top of the world. By the same token, some
people wrote about me snidely and some others put nice pictures of me in
national magazines. This is all background for the following comments on
fund performance.
According to the Investment Company Institute there are now about 6,000 mutual
funds in the U.S. Why isn't there one; the one with the best performance? To
answer that question you ask questions. Best performance over one year? . . .
Three years? . . . Five years? Shouldn't we differentiate between growth funds
and money market funds?. . . Between taxable bonds and tax-exempt bonds? There
are obvious reasons to look beyond just one fund.
But then there are other questions. Was the best stock fund for the last 10
years also the best stock fund in 1996? I'd be surprised if it were. And here
is a great question. Do you know anyone who beat the best stock fund for
the past 10 years by moving money each year into the fund that would turn
into that year's best? I'd be more surprised if you did.
I think that most people choose a mutual fund company because of trust. At USAA
we give you a lot to foster that trust. The expenses of our funds are very low
compared to their competitors. We have never had any loads on our funds. The
array of features we offer, from guidance from our reps to TouchLine(Registered
Trademark) and computer access, is world class. And our funds have
established a proud tradition of performance. It is not possible to have the
top performing fund every year, but since 1986 we have been recognized 19
times by Lipper Analytical Services for having funds that were the best in
their category, both for one year and over longer periods. Four of these
were awarded in 1996. They went to the Cornerstone Strategy Fund, Tax
Exempt Short-Term Fund, and the Texas Tax-Free Income Fund.(1)
Performance, service, ease of doing business and trust. That's how I buy a
mutual fund.
Sincerely,
Michael J.C. Roth, CFA
PRESIDENT AND
VICE CHAIRMAN OF THE BOARD
[Photograph of Michael J.C. Roth, CFA, President and Vice Chairman of the
Board appears here]
For more complete information about the mutual funds managed and distributed by
USAA IMCO, including charges and expenses, please call for a prospectus. Read it
carefully before you invest.
Performance Achievement Certificates
(1) Fund rankings awarded by Lipper Analytical Services on cumulative total
returns:
USAA Texas Tax-Free Income Fund was ranked #1 out of 20 in the Texas Municipal
Debt Funds category for the 1-year period ended 12/31/96 in Lipper's Fixed
Income Fund Performance Analysis. Average annual total returns for the 1-year
period ended 12/31/96 and the 8/1/94 to 12/31/96 period were 5.25% and 9.44%
respectively.
USAA Tax Exempt Short-Term Fund was ranked #1 out of 5, #1 out of 7, and #4
out of 30 in the Short Municipal Debt Funds category for the 10-,5-, and
1-year periods ended 12/31/96 in Lipper's Fixed Income Fund Performance
Analysis. Average annual total returns for the 10-, 5-, and 1-year periods
ended 12/31/96 were 5.45%, 4.94%, and 4.44%, respectively.
USAA Cornerstone Strategy Fund was ranked #1 out of 5, #3 out of 13, and #5
out of 71 in the Global Flexible Portfolio Funds category for the 10-, 5-,
and 1-year periods ended 12/31/96 in Lipper's Equity Fund Performance Analysis.
Average annual total returns for the 10-, 5-, and 1-year periods ended 12/31/96
were 10.70%, 12.69%, and 17.87%, respectively.
The performance data quoted represent past performance and is no guarantee of
future results. The investment return and principal value of an investment
will fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
INVESTMENT REVIEW
AGGRESSIVE GROWTH FUND
OBJECTIVE: Appreciation of capital.
TYPES OF INVESTMENTS: Common stock of companies with prospects of rapidly
growing earnings.
7/31/96 1/31/97
Net Assets............................... $607.4 MILLION $752.3 MILLION
Net Asset Value Per Share................ $27.88 $31.04
Average Annual Total Returns as of 1/31/97
July 31, 1996 to January 31, 1997.............................. 13.49%+
1 Year......................................................... 22.31%
5 Years........................................................ 13.26%
10 Years....................................................... 12.16%
+ Total returns for periods of less than one year are not annualized.
This six-month return is cumulative.
[A graph is shown here which is a comparison of the change in value of a
$10,000 investment, for the period of 1/31/87 to 1/31/97, with dividends
and capital gains reinvested. The ending value of each item graphed is as
follows: The Russell 2000 Index - $29,472 and the USAA Aggressive Growth Fund -
$31,515.]
The graph illustrates the comparison of a $10,000 hypothetical investment in
the USAA Aggressive Growth Fund and the broad-based Russell 2000(Registered
Trademark) Index, a widely recognized small cap index. It is an unmanaged
index consisting of the 2,000 smallest companies within the Russell 3000
(Registered Trademark) Index.
Total return equals income yield plus share price change and assumes
reinvestment of all dividends and capital gain distributions. No
adjustment has been made for taxes payable by shareholders on their reinvested
income dividends and capital gain distributions. The performance data quoted
represent past performance and are not an indication of future results.
Investment return and principal value of an investment will fluctuate, and an
investor's shares, when redeemed, may be worth more or less than their original
cost.
MESSAGE FROM THE MANAGERS
[A photo of Eric M. Efron, CFA, Portfolio Manager and John K. Cabell, Jr., CFA,
Portfolio Manager appears here.]
Investment Philosophy
The USAA Aggressive Growth Fund, unequivocally and unapologetically, invests in
high risk, rapid growth situations.
The first, and most important, question we ask when reviewing our current
investments and evaluating potential new ones is whether the companies under
consideration have potential to rapidly become larger than they are today in
terms of both sales and earnings. This is in stark contrast to the basic
question that value investors ask - is it cheap?
We are willing to pay premium valuations, and assume high risk, for the
companies in which we invest. We do this because we feel that if and when these
companies realize their potential, these premiums will be repaid several times
over as a substantial build up in underlying values results from their rapid
earnings growth. The entry fees that we must pay to participate in these
situations almost always appear to be high at the time of initiation. When these
situations succeed, however, these entry fees can ultimately turn out to be real
bargains.
We believe that small to mid-sized companies provide the best opportunities for
rapid growth. They tend to be more flexible, nimble, and innovative than their
larger counterparts. This puts them in a superior position to adapt to, and take
advantage of, the massive changes that constantly sweep across our economy and
society. A number of larger companies, however, still remain able to cope
successfully with change. We invest in these companies on an opportunistic
basis.
Fund Performance
During the six months ended January 31, 1997, equity investors, for the most
part, remained in a conservative mode as they continued to show a strong
preference for stocks with larger market capitalizations, greater trading
liquidity, and more modest valuations. This is reflected in the market indices.
The S&P 500 Index, (1) a leading proxy for these larger stocks, provided a
total return of 24.13% versus 17.97% for the Russell 2000 (Registered
Trademark), a widely recognized unmanaged small cap index consisting of the
stocks of 2,000 small companies.
This proved to be a challenging environment for aggressive growth investors who
tend to favor smaller, more rapidly growing, pricier companies. Under these
less than optimal conditions, the USAA Aggressive Growth Fund, which invests
more intensively than most in this realm, generated a relatively muted return
of 13.49% during the six months ended January 31, 1997.
Outlook
High valuation, low liquidity stocks of rapidly growing, smaller companies
continue to underperform more liquid and more conservatively valued equities of
larger, more mature companies. We are not sure when the pendulum will swing back
in favor of the first group, but when it does, we will be well-positioned to
take advantage of the upswing.
In order to participate more fully in the current outperformance of larger
stocks, we have increased our exposure to these equities on a selective basis.
We emphasize that smaller growth equities will continue to constitute the bulk
of our investments. These moves should add further stability and balance to the
Fund over time.
(1) The S&P 500 Index is an unmanaged index representing the average
performance of a group of 500 widely held publicly traded stocks. It is not
possible to invest directly in the S&P 500 Index.
Top 10
Equity Holdings
(% of Net Assets)
HBO 1.5
St. John Knits 1.5
McAfee Associates 1.2
Amgen 1.0
Just For Feet 1.0
PeopleSoft 1.0
Tommy Hilfiger 1.0
Ascend
Communications .8
Papa John's
International .8
Clear Channel
Communications .7
Top 10 Industries
(% of Net Assets)
Healthcare Related 21.2
Computer Software & Service 11.6
Specialized Services 10.5
Telecommunications Related 8.6
Retail Related 6.9
Electronics Related 6.0
Oil Related 4.6
Textiles 3.4
Broadcasters 3.0
Finance - Consumer 2.3
See page 10 for a complete listing of the Portfolio of Investments in
Securities.
SHAREHOLDER VOTING RESULTS
On November 20, 1996, a special meeting of shareholders was held to vote on a
proposal to amend the Advisory Agreement between USAA Mutual Fund, Inc. and
USAA Investment Management Company to increase the management fee paid by the
Aggressive Growth Fund to .75% of its annual average net assets. All
shareholders of record on September 26, 1996 were entitled to vote. Sufficient
shareholder votes to approve the proposal were not received.
The results of the voting were as follows:
Number of
Shares Voting
For 9,546,988
Against 6,502,509
Abstain 616,106
<TABLE>
Aggressive Growth Fund
Statement of Assets and Liabilities
(In Thousands)
<CAPTION>
January 31, 1997
(Unaudited)
<S> <C>
Assets
Investments in securities, at market value (identified cost of $517,356) $ 753,753
Cash 385
Receivables:
Capital shares sold 1,138
Dividends 36
Securities sold 4,341
- ----------------------------------------------------------------------------------------------------------
Total assets 759,653
- ----------------------------------------------------------------------------------------------------------
Liabilities
Securities purchased 6,351
Capital shares redeemed 489
USAA Investment Management Company 242
USAA Transfer Agency Company 150
Accounts payable and accrued expenses 76
- ----------------------------------------------------------------------------------------------------------
Total liabilities 7,308
- ----------------------------------------------------------------------------------------------------------
Net assets applicable to capital shares outstanding $ 752,345
==========================================================================================================
Represented by:
Paid-in capital $ 514,637
Accumulated net investment loss (1,695)
Accumulated net realized gain on investments 3,006
Net unrealized appreciation of investments 236,397
- ----------------------------------------------------------------------------------------------------------
Net assets applicable to capital shares outstanding $ 752,345
==========================================================================================================
Capital shares outstanding 24,233
==========================================================================================================
Net asset value, redemption price, and offering price per share $ 31.04
==========================================================================================================
</TABLE>
See accompanying notes to financial statements.
<TABLE>
Aggressive Growth Fund
Portfolio of Investments in Securities
<CAPTION>
January 31, 1997
(Unaudited)
<C> <S> <C>
Market
Number Value
of Shares Security (000)
Common Stocks (96.7%)
Aerospace/Defense (0.1%)
35,000 Triumph Group, Inc.* $ 1,046
- -----------------------------------------------------------------------------------------------------------
Air Freight (0.6%)
42,500 AirNet Systems, Inc.* 595
23,500 Atlas Air, Inc.* 899
100,000 Eagle USA Airfreight, Inc.* 2,637
30,000 Kitty Hawk, Inc.* 360
- -----------------------------------------------------------------------------------------------------------
4,491
- -----------------------------------------------------------------------------------------------------------
Airlines (0.6%)
33,300 Aviation Sales Co.* 783
30,000 Greenwich Air Services, Inc. "A" 743
80,000 Greenwich Air Services, Inc. "B" 1,950
36,000 Midwest Express Holdings, Inc.* 1,372
- -----------------------------------------------------------------------------------------------------------
4,848
- -----------------------------------------------------------------------------------------------------------
Auto Parts (0.3%)
21,900 Aftermarket Technology Corp.* 378
14,400 Dura Automotive Systems, Inc. 378
27,000 Tower Automotive, Inc.* 1,208
- -----------------------------------------------------------------------------------------------------------
1,964
- -----------------------------------------------------------------------------------------------------------
Bank Holding Companies - Major Regional (0.2%)
49,500 Columbia Banking Systems, Inc. 848
20,000 First Security Corp. 685
- -----------------------------------------------------------------------------------------------------------
1,533
- -----------------------------------------------------------------------------------------------------------
Beverages - Alcoholic (0.3%)
50,000 Robert Mondavi Corp.* 1,938
- -----------------------------------------------------------------------------------------------------------
Beverages - Soft Drinks (0.2%)
40,000 Starbucks Corp.* 1,370
- -----------------------------------------------------------------------------------------------------------
Biotechnology (4.1%)
20,200 Affymetrix, Inc.* 591
25,000 Agouron Pharmaceuticals, Inc.* 2,144
130,000 Amgen, Inc.* 7,329
22,500 Aronex Pharmaceuticals, Inc.* 183
25,000 Arqule, Inc.* 556
45,000 Biochem Pharmaceuticals Inc.* 2,526
20,000 Chiron Corp.* 372
37,100 CN Biosciences, Inc.* 621
30,000 DepoTech Corp.* 540
22,500 Digene Corp.* 293
24,000 Ergo Science Corp.* 342
24,700 Genset, S.A. ADR* 349
120,000 Genzyme Corp.* 3,360
40,000 Gilead Sciences, Inc.* 1,305
35,000 Integra LifeSciences Corp.* 179
6,000 Intercardia, Inc.* 99
15,000 Matrix Pharmaceutical, Inc.* 98
35,000 Med Immune, Inc.* 556
9,900 Millennium Pharmaceuticals, Inc.* 192
25,000 Myriad Genetics, Inc.* 962
18,000 Neose Technologies, Inc.* 324
18,000 Neurocrine Biosciences, Inc.* 167
40,000 Neurogen Corp.* 790
18,000 Onyx Pharmaceuticals, Inc.* 187
10,000 PDT, Inc.* 311
30,000 Pharmacopeia, Inc.* 592
51,000 QLT PhotoTherapeutics, Inc.* 1,202
15,000 Regeneron Pharmaceuticals, Inc.* 146
25,000 SangStat Medical Corp.* 762
30,000 Synaptic Pharmaceutical Corp.* 384
127,500 Techne Corp.* 3,347
- -----------------------------------------------------------------------------------------------------------
30,809
- -----------------------------------------------------------------------------------------------------------
Broadcasters (3.0%)
30,000 Allin Communications Corp.* 638
60,000 Argyle Television, Inc.* 1,560
135,000 CanWest Global Communications Corp.* 1,789
50,000 CellularVision USA, Inc.* 450
45,000 Central European Media Enterprises Ltd. "A"* 1,586
120,000 Clear Channel Communications, Inc.* 5,115
46,800 Cox Radio, Inc.* 860
25,000 Digital Generation Systems, Inc.* 172
30,000 Emmis Broadcasting Corp.* 1,087
55,400 Gray Communications Systems, Inc.* 1,032
20,000 Heftel Broadcasting Corp.* 805
45,000 Lodgenet Entertainment Corp.* 709
48,000 Medialink Worldwide, Inc.* 486
143,775 Outdoor Systems, Inc.* 4,331
36,000 Pegasus Communications Corp.* 441
45,000 Source Media, Inc.* 326
42,900 Univision Communications, Inc.* 1,544
- -----------------------------------------------------------------------------------------------------------
22,931
- -----------------------------------------------------------------------------------------------------------
Brokerage Firms (0.5%)
70,000 Charles Schwab Corp. 2,616
32,300 E-Trade Group, Inc.* 569
28,100 Hambrecht & Quist Group* 661
- -----------------------------------------------------------------------------------------------------------
3,846
- -----------------------------------------------------------------------------------------------------------
Building Materials (0.6%)
61,500 Barnett, Inc.* 1,522
50,000 Diamond Home Services, Inc.* 1,287
40,200 Service Experts, Inc.* 1,106
35,000 Wilmar Industries, Inc.* 748
- -----------------------------------------------------------------------------------------------------------
4,663
- -----------------------------------------------------------------------------------------------------------
Chemicals (0.1%)
48,200 NuCo2, Inc.* 747
- -----------------------------------------------------------------------------------------------------------
Chemicals - Specialty (0.2%)
40,000 Airgas, Inc.* 790
23,100 Zoltek Companies, Inc.* 872
- -----------------------------------------------------------------------------------------------------------
1,662
- -----------------------------------------------------------------------------------------------------------
Communication - Equipment Manufacturers (5.4%)
50,400 ACC Corp.* 1,613
25,000 Act Networks, Inc.* 769
9,800 Advanced Fibre Communications, Inc.* 468
33,750 AML Communications, Inc.* 375
90,000 Ascend Communications, Inc.* 6,266
45,000 Aware, Inc.* 495
50,000 BroadBand Technologies, Inc.* 700
95,000 Cascade Communications Corp.* 3,776
48,000 Cellular Technical Services, Inc.* 660
40,000 DSC Communications Corp.* 900
100,000 FORE Systems, Inc.* 2,912
41,700 Larscom, Inc. "A"* 500
50,000 Optical Data Systems, Inc.* 819
31,700 Orckit Communications Ltd.* 464
110,000 P-Com, Inc.* 4,276
30,000 Pairgain Technologies, Inc.* 1,228
27,000 Peerless Systems Corp.* 540
45,000 Powerwave Technologies, Inc.* 1,024
20,000 Premisys Communications, Inc.* 535
50,000 QualComm, Inc.* 2,800
67,500 REMEC, Inc.* 1,755
18,000 Sawtek, Inc.* 671
60,000 Spectrian Corp.* 728
43,000 Superconductor Technologies* 177
35,000 Sync Research, Inc.* 486
80,000 Tellabs, Inc.* 3,295
22,800 Tollgrade Communications, Inc.* 661
18,200 Verilink Corp.* 460
45,000 ViaSat, Inc.* 450
24,000 Xylan Corp.* 636
- -----------------------------------------------------------------------------------------------------------
40,439
- -----------------------------------------------------------------------------------------------------------
Computer Software & Service (11.6%)
95,900 4Front Software International, Inc.* 384
80,000 Affiliated Computer Services, Inc.* 2,100
60,000 Analogy, Inc.* 315
30,200 Applied Microsystems Corp.* 438
40,000 Arbor Software Corp.* 1,190
12,600 Aspect Development, Inc.* 372
30,000 Aurum Softwave Incorporated 720
74,439 Avant! Corp.* 2,396
45,000 Award Software International, Inc.* 652
14,700 AXENT Technologies, Inc.* 206
40,500 BA Merchant Services, Inc.* 653
45,000 BroadVision, Inc.* 394
35,000 Business Objects S.A. ADS* 503
20,000 CBT Group ADS* 1,275
20,200 CCC Information Services Group, Inc.* 374
50,000 Checkfree Corp.* 712
25,000 Citrix Systems, Inc.* 1,156
45,500 Claremont Technology Group, Inc.* 1,160
20,000 Computer Associates International, Inc. 907
45,000 Connect, Inc.* 309
43,500 Credit Management Solutions, Inc.* 859
75,000 Crystal Systems Solutions Ltd.* 563
14,400 CyberCash, Inc.* 234
7,100 CyberMedia, Inc.* 135
25,000 Cylink Corp.* 331
25,000 DataWorks Corp.* 544
9,600 Documentum, Inc.* 314
37,300 Dr. Solomon's Group plc ADR* 886
14,600 Edify Corp.* 190
60,000 Elcom International, Inc.* 473
35,000 ENVOY Corp.* 1,190
22,500 Excite, Inc.* 411
60,000 First Virtual Holdings, Inc.* 540
20,200 Forte Software, Inc.* 740
85,000 Gemstar International Group Ltd.* 1,530
16,400 Geotel Communications Corp.* 283
30,000 Geoworks* 750
30,000 Harbinger Corp.* 1,207
31,400 HNC Software, Inc.* 946
11,600 I2 Technologies, Inc.* 421
31,600 Indus Group, Inc.* 774
100,000 Industri-Matematik International Corp.* 925
27,500 Infinity Financial Technology, Inc.* 564
36,000 Infoseek Corp.* 356
24,500 Ingram Micro, Inc.* 508
45,000 Integrated Systems, Inc.* 1,260
48,800 Intelligroup, Inc.* 573
90,000 Interlink Computer Sciences, Inc.* 1,350
50,000 Level 8 Systems, Inc.* 781
13,200 Lycos, Inc.* 223
150,000 McAfee Associates, Inc.* 8,737
50,000 MDSI Mobile Data Solutions, Inc.* 956
30,700 Mechanical Dynamics, Inc.* 276
30,000 Memco Software Ltd.* 578
50,000 Mercury Interactive Corp.* 625
19,000 Midway Games, Inc.* 375
40,000 Objective Systems Integrators, Inc.* 515
9,200 Open Market, Inc.* 146
54,000 Optika Imaging Systems, Inc.* 365
22,500 OrCad, Inc.* 166
45,000 Peerless Group, Inc.* 298
36,000 Pegasystems, Inc.* 1,359
140,000 PeopleSoft, Inc.* 7,630
36,000 Phoenix International Ltd., Inc.* 648
39,400 Planning Sciences International plc ADR* 704
50,000 PLATINUM Technology, Inc.* 837
16,500 Puma Technology, Inc.* 252
10,000 Pure Atria Corp.* 235
160,000 Rational Software Corp.* 4,060
7,000 Red Brick Systems, Inc.* 165
8,600 Rogue Wave Software, Inc.* 176
40,000 Safeguard Scientifics, Inc.* 1,180
52,000 Sanchez Computer Associates, Inc.* 449
4,400 Sapient Corp.* 206
20,000 Security Dynamics Technologies, Inc.* 695
66,000 Seec, Inc.* 693
54,950 Segue Software, Inc.* 756
16,800 Select Software Tools plc ADR* 267
30,000 Siebel Systems, Inc.* 525
45,000 Simulation Sciences, Inc.* 686
50,000 Smallworld plc ADR* 856
63,000 SRS Labs, Inc. 630
32,500 Sterling Commerce, Inc.* 1,101
45,000 Summit Design, Inc.* 495
11,800 Systemsoft Corp.* 162
36,000 TALX Corp.* 315
28,200 Technology Modeling Associates, Inc.* 423
45,000 Tecnomatix Technologies Ltd.* 1,147
33,800 Template Software, Inc.* 490
120,000 Transaction Network Services, Inc.* 1,365
80,000 Transaction Systems Architects, Inc.* 2,130
63,000 TriTeal Corp.* 1,165
13,800 Trusted Information Systems, Inc.* 210
50,000 TTI Team Telecom International Ltd.* 363
22,500 USCS International, Inc.* 447
45,000 V-One Corp.* 338
27,000 Verity, Inc.* 381
40,000 Versatility, Inc.* 530
31,500 Visigenic Software, Inc.* 473
21,200 Visio Corp.* 1,089
41,900 Voice Control Systems, Inc.* 304
45,000 Voxware, Inc.* 163
45,000 White Pine Software, Inc.* 276
20,000 Wind River Systems, Inc.* 1,017
27,000 Worldtalk Communications Corp.* 257
29,600 Xionics Document Technologies, Inc.* 577
- -----------------------------------------------------------------------------------------------------------
87,341
- -----------------------------------------------------------------------------------------------------------
Computer Systems (1.4%)
43,700 Aavid Thermal Technologies, Inc.* 568
61,300 Accent Color Sciences, Inc.* 628
40,500 CHS Electronics, Inc.* 757
20,000 Dell Computer Corp.* 1,322
33,300 Firearms Training Systems, Inc.* 500
30,000 IMNET Systems, Inc.* 889
30,000 Integrated Process Equipment Corp.* 802
45,000 Manchester Equipment, Inc.* 315
50,000 Micron Electronics, Inc.* 1,069
6,000 Raptor Systems, Inc.* 121
36,000 Raster Graphics, Inc.* 378
30,000 Read-Rite Corp.* 990
50,000 Sandisk Corp.* 600
45,000 SBS Technologies, Inc.* 1,372
23,900 Viisage Technology, Inc.* 278
20,000 Vivid Technologies, Inc.* 375
- -----------------------------------------------------------------------------------------------------------
10,964
- -----------------------------------------------------------------------------------------------------------
Cosmetics (0.8%)
44,600 Carson, Inc.* 602
47,500 ESC Medical Systems Ltd.* 1,544
25,000 Estee Lauder Companies, Inc.* 1,197
45,000 French Fragrances, Inc.* 354
50,000 Revlon, Inc. "A"* 1,600
25,000 ThermoLase Corp.* 347
- -----------------------------------------------------------------------------------------------------------
5,644
- -----------------------------------------------------------------------------------------------------------
Drugs (0.5%)
70,000 Elan Corp. plc ADR* 2,695
25,000 Teva Pharmaceutical Industries Ltd. ADR 1,369
- -----------------------------------------------------------------------------------------------------------
4,064
- -----------------------------------------------------------------------------------------------------------
Electric Power (0.1%)
16,800 Calpine Corp.* 370
- -----------------------------------------------------------------------------------------------------------
Electrical Equipment (0.3%)
30,000 Ault, Inc.* 270
50,000 Charter Power Systems, Inc. 1,725
- -----------------------------------------------------------------------------------------------------------
1,995
- -----------------------------------------------------------------------------------------------------------
Electronics - Instrumentation (2.8%)
31,700 Ase Test Ltd.* 773
50,000 Brooks Automation, Inc.* 869
27,000 Checkpoint Systems, Inc.* 564
10,200 Cymer, Inc.* 525
21,000 DuPont Photomasks, Inc.* 1,145
40,000 Electroglas, Inc.* 785
100,000 Etec Systems, Inc.* 4,450
45,000 Gasonics International Corp.* 804
50,000 HMT Technology Corp.* 1,081
45,000 IKOS Systems, Inc.* 1,080
20,000 Integrated Measurement Systems, Inc.* 420
45,000 Mattson Technology, Inc.* 484
26,000 National Instruments Corp.* 907
30,800 OnTrak Systems, Inc.* 681
22,500 Photon Dynamics, Inc.* 188
50,000 Photronics, Inc.* 1,900
40,000 Plasma & Materials Technologies, Inc.* 540
95,000 Speedfam International, Inc.* 3,313
39,000 Thermo Optek Corp.* 463
- -----------------------------------------------------------------------------------------------------------
20,972
- -----------------------------------------------------------------------------------------------------------
Electronics - Semiconductors (3.2%)
30,000 Advanced Micro Devices, Inc.* 1,050
45,000 Alliance Semiconductor Corp.* 340
20,000 Atmel Corp.* 927
40,000 Benchmarq Microelectronics, Inc.* 660
50,000 Celeritek, Inc.* 738
45,000 ESS Technology, Inc.* 1,457
97,300 Integrated Packaging Assembly Corp.* 730
45,000 Integrated Silicon Solution, Inc.* 442
30,000 Lattice Semiconductors Corp.* 1,556
40,000 LSI Logic Corp.* 1,390
50,000 MEMC Electronic Materials, Inc.* 1,381
60,000 Microchip Technology, Inc.* 2,287
55,000 Oak Technology, Inc.* 742
23,000 S3, Inc.* 385
31,050 SDL, Inc.* 706
45,000 Sheldahl, Inc.* 1,097
50,000 Sierra Semiconductor Corp.* 769
45,000 SIPEX Corp.* 1,384
45,000 SMART Modular Technologies, Inc.* 1,395
115,000 TranSwitch Corp.* 762
30,000 Trident Microsystems, Inc.* 623
40,000 Triquint Semiconductor, Inc.* 1,450
20,000 Vitesse Semiconductor Corp.* 1,097
30,000 VLSI Technology, Inc.* 495
30,000 Zoran Corp.* 668
- -----------------------------------------------------------------------------------------------------------
24,531
- -----------------------------------------------------------------------------------------------------------
Entertainment (0.1%)
135,000 Video Update, Inc.* 574
- -----------------------------------------------------------------------------------------------------------
Finance - Business/Commercial (0.8%)
60,000 Amerin Corp.* 1,290
10,000 Granite Financial, Inc.* 122
54,000 Leasing Solutions, Inc.* 1,485
41,000 Medallion Financial Corp. 682
31,700 Profit Recovery Group International, Inc.* 491
50,000 Sirrom Capital Corp. 1,950
- -----------------------------------------------------------------------------------------------------------
6,020
- -----------------------------------------------------------------------------------------------------------
Finance - Consumer (2.3%)
87,500 Aames Financial Corp. 3,763
34,200 ACC Consumer Finance Corp.* 372
29,500 Associates First Capital Corp. 1,435
47,500 Central Financial Acceptance Corp.* 908
80,000 Cityscape Financial Corp.* 2,380
21,700 Conti Financial Corp.* 854
32,000 Delta Financial Corp.* 640
25,000 First Enterprise Financial Group, Inc.* 350
30,000 Money Store, Inc. 765
30,000 National Auto Finance, Inc.* 289
46,000 NCO Group, Inc.* 1,282
120,000 RAC Financial Group, Inc.* 3,960
44,000 WFS Financial, Inc.* 649
- -----------------------------------------------------------------------------------------------------------
17,647
- -----------------------------------------------------------------------------------------------------------
Finance - Real Estate (0.7%)
36,000 IMC Mortgage Co.* 1,800
50,000 PMI Group, Inc. 2,612
48,000 Southern Pacific Funding Corp.* 1,038
- -----------------------------------------------------------------------------------------------------------
5,450
- -----------------------------------------------------------------------------------------------------------
Finance - Receivables (0.1%)
22,500 Healthcare Financial Partners, Inc.* 352
- -----------------------------------------------------------------------------------------------------------
Foods (0.4%)
75,000 Odwalla, Inc.* 937
50,000 Suiza Foods Corp.* 1,275
59,000 UniMark Group, Inc.* 546
- -----------------------------------------------------------------------------------------------------------
2,758
- -----------------------------------------------------------------------------------------------------------
Gaming Companies (0.5%)
50,000 Anchor Gaming* 1,850
30,000 MGM Grand, Inc.* 1,181
30,000 Silicon Gaming, Inc.* 608
- -----------------------------------------------------------------------------------------------------------
3,639
- -----------------------------------------------------------------------------------------------------------
Healthcare - Diversified (1.0%)
10,000 Occusystems, Inc.* 231
112,500 PhyCor, Inc.* 3,952
52,000 PhyMatrix Corp.* 825
50,000 Physician Sales & Service, Inc.* 950
70,000 Physician Support Systems, Inc.* 1,225
27,000 UroCor, Inc.* 284
- -----------------------------------------------------------------------------------------------------------
7,467
- -----------------------------------------------------------------------------------------------------------
Healthcare - HMOs (0.5%)
45,000 CompDent Corp.* 1,373
14,300 First Commonwealth, Inc.* 250
30,000 Raytel Medical Corp.* 323
30,000 RTW, Inc.* 375
55,000 United Dental Care, Inc.* 1,512
- -----------------------------------------------------------------------------------------------------------
3,833
- -----------------------------------------------------------------------------------------------------------
Healthcare - Miscellaneous (7.6%)
45,000 Advance Paradigm, Inc.* 855
22,500 Advanced Health Corp.* 270
45,200 AMISYS Managed Care Systems, Inc.* 689
63,000 APACHE Medical Systems, Inc.* 354
15,500 Applied Analytical Industries, Inc.* 401
30,000 COHR, Inc.* 840
27,000 Collaborative Clincal Research, Inc.* 284
65,000 CRA Managed Care, Inc.* 3,169
22,500 Diagnostic Health Services, Inc.* 219
21,700 EndoVascular Technologies, Inc.* 252
10,400 Enterprise Systems, Inc.* 218
112,500 Express Scripts, Inc. "A"* 3,825
180,000 HBO & Co. 11,272
60,000 HCIA, Inc.* 2,317
60,000 Health Systems Design Corp.* 533
25,700 IDX Systems Corp.* 829
22,500 Impath, Inc.* 394
65,000 LanVision Systems, Inc.* 463
42,500 Medical Alliance, Inc.* 611
54,500 Medquist, Inc.* 1,349
36,000 Nu Skin Asia Pacific, Inc.* 918
15,000 Oacis Healthcare Holdings Corp.* 105
251,600 Orthodontic Centers of America, Inc.* 3,931
65,600 PAREXEL International Corp.* 3,854
68,000 Pediatrix Medical Group, Inc.* 2,677
50,000 Phamis, Inc.* 863
27,000 Pharmaceutical Product Development, Inc.* 783
70,000 Physician Computer Network, Inc.* 586
164,000 Physician Reliance Network, Inc.* 1,333
67,800 Physicians Resource Group, Inc.* 1,161
22,500 Quadramed Corp.* 267
35,000 Renal Care Group, Inc.* 1,278
150,000 Renal Treatment Centers, Inc.* 4,219
60,000 Rural/Metro Corp.* 2,100
51,000 Sunquest Information Systems, Inc.* 842
55,000 Total Renal Care Holdings, Inc.* 2,014
43,300 Transition Systems, Inc.* 639
29,000 Twinlab Corp.* 417
20,000 Ultrafem, Inc.* 345
- -----------------------------------------------------------------------------------------------------------
57,476
- -----------------------------------------------------------------------------------------------------------
Home Furnishings & Appliances (0.1%)
25,000 Industrie Natuzzi SPA ADR 575
- -----------------------------------------------------------------------------------------------------------
Homebuilding (0.3%)
30,000 American Homestar Corp.* 608
50,000 Palm Harbor Homes, Inc.* 1,287
- -----------------------------------------------------------------------------------------------------------
1,895
- -----------------------------------------------------------------------------------------------------------
Hospitals (1.0%)
100,000 HEALTHSOUTH Rehabilitation Corp.* 4,363
90,000 National Surgery Centers, Inc.* 3,071
- -----------------------------------------------------------------------------------------------------------
7,434
- -----------------------------------------------------------------------------------------------------------
Hotel/Motel (1.2%)
52,500 Doubletree Corp.* 2,166
50,000 Extended Stay America, Inc.* 906
30,000 Felcor Suite Hotels, Inc. 1,065
30,000 Prime Hospitality Corp.* 514
75,000 Studio Plus Hotels, Inc.* 1,594
30,000 Suburban Lodges of America, Inc.* 544
50,000 Sun International Hotels Ltd.* 1,781
30,300 Wyndham Hotel Corp.* 757
- -----------------------------------------------------------------------------------------------------------
9,327
- -----------------------------------------------------------------------------------------------------------
Household Products (0.4%)
85,000 USA Detergents, Inc.* 3,102
- -----------------------------------------------------------------------------------------------------------
Housing - Manufactured (0.1%)
70,200 Belmont Homes, Inc.* 658
- -----------------------------------------------------------------------------------------------------------
Insurance - Property/Casualty (0.4%)
100,000 HCC Insurance Holdings, Inc.* 2,787
- -----------------------------------------------------------------------------------------------------------
Leisure Time (0.6%)
31,500 Family Golf Centers, Inc.* 847
49,500 RockShox, Inc.* 742
100,000 West Marine, Inc.* 3,225
- -----------------------------------------------------------------------------------------------------------
4,814
- -----------------------------------------------------------------------------------------------------------
Machinery - Diversified (0.2%)
25,000 DT Industries, Inc.* 934
6,000 RDO Equipment Co.* 106
20,000 Thai Engine Manufacturing Co. Ltd. 149
- -----------------------------------------------------------------------------------------------------------
1,189
- -----------------------------------------------------------------------------------------------------------
Manufacturing - Diversified Industries (0.9%)
50,000 Culligan Water Technologies, Inc.* 1,663
126,500 United States Filter Corp.* 4,854
- -----------------------------------------------------------------------------------------------------------
6,517
- -----------------------------------------------------------------------------------------------------------
Medical Products & Supplies (5.9%)
27,000 American Medserve Corp.* 395
55,000 AmeriSource Health Corp.* 2,695
80,000 Apria Healthcare Group, Inc.* 1,540
24,500 Arrow International, Inc. 784
50,000 ArthroCare Corp.* 325
35,000 Atrix Laboratories, Inc.* 437
40,000 Biopsys Medical, Inc.* 1,070
76,500 Capstone Pharmacy Services, Inc.* 885
14,500 Cardiogenesis Corp.* 212
53,700 CardioThoracic Systems, Inc.* 1,363
60,000 CardioVascular Dynamics, Inc.* 615
15,000 CONMED Corp.* 291
50,000 CryoLife, Inc.* 519
20,300 CYTYC Corp.* 511
60,000 Eclipse Surgical Technologies, Inc.* 532
30,000 Endosonics Corp.* 386
98,000 Gulf South Medical Supply* 2,683
27,000 Heartport, Inc.* 854
65,000 Henry Schein, Inc.* 2,194
25,000 IDEXX Laboratories, Inc.* 812
11,900 Imagyn Medical, Inc.* 110
13,500 Intelligent Medical Imaging, Inc.* 86
50,000 IRIDEX Corp.* 388
60,000 Lumisys, Inc.* 585
50,000 NCS HealthCare, Inc.* 1,694
20,000 Neurex Corp.* 278
32,000 Nitinol Medical Technologies, Inc.* 356
120,000 Omnicare, Inc. 3,315
50,000 Perclose, Inc.* 1,131
50,000 Possis Medical, Inc.* 944
50,000 Rochester Medical Corp.* 875
26,100 Seamed Corp.* 431
105,800 Serologicals Corp.* 3,227
30,000 SONUS Pharmaceuticals, Inc.* 840
50,000 Spine-Tech, Inc.* 1,087
120,000 St. Jude Medical, Inc.* 4,545
47,700 Suburban Ostomy Supply, Inc.* 632
25,000 Sybron Corp.* 772
18,000 Trex Medical Corp.* 272
10,000 United States Surgical Corp. 401
45,500 Urologix, Inc.* 796
15,000 Vertex Pharmaceuticals, Inc.* 735
30,000 VidaMed, Inc.* 371
50,000 Vitalink Pharmacy Services, Inc.* 1,212
33,500 Xomed Surgical Products, Inc.* 507
- -----------------------------------------------------------------------------------------------------------
44,693
- -----------------------------------------------------------------------------------------------------------
Nursing Care (0.6%)
61,950 American Homepatient, Inc.* 1,479
50,000 Home Health Corp. of America, Inc.* 619
25,000 Multicare Companies, Inc. 450
62,000 Pediatric Services of America, Inc.* 1,147
30,000 Sunrise Assisted Living, Inc.* 776
- -----------------------------------------------------------------------------------------------------------
4,471
- -----------------------------------------------------------------------------------------------------------
Office Equipment & Supplies (0.7%)
78,800 American Pad & Paper Co.* 1,881
90,000 Corporate Express, Inc.* 3,038
- -----------------------------------------------------------------------------------------------------------
4,919
- -----------------------------------------------------------------------------------------------------------
Oil - Exploration & Production (1.3%)
45,000 3-D Geophysical, Inc.* 456
36,300 Belco Oil & Gas Corp.* 966
105,000 Chesapeake Energy Corp.* 2,507
20,800 Clayton Williams Energy, Inc.* 353
27,100 Nuevo Energy Co.* 1,396
31,500 Petroleum Securities Australia Ltd. ADR* 827
42,900 Rutherford-Moran Oil Corp.* 912
45,000 Stone Energy Corp.* 1,282
30,000 Swift Energy Co.* 1,095
- -----------------------------------------------------------------------------------------------------------
9,794
- -----------------------------------------------------------------------------------------------------------
Oil & Gas Drilling (1.4%)
8,000 Atwood Oceanics, Inc.* 539
10,000 Cliffs Drilling Co.* 682
35,100 Diamond Offshore Drilling, Inc.* 2,321
80,000 Falcon Drilling Co., Inc.* 3,010
33,300 Patterson Energy, Inc.* 1,066
29,600 The Houston Exploration Co.* 518
40,000 Transocean Offshore, Inc. 2,620
- -----------------------------------------------------------------------------------------------------------
10,756
- -----------------------------------------------------------------------------------------------------------
Oil Well Equipment & Service (1.9%)
50,000 Carbo Ceramics, Inc.* 1,063
11,500 Core Laboratories N.V.* 239
40,500 Dawson Production Services, Inc.* 587
26,000 Energy Ventures, Inc.* 1,560
50,000 Global Industries, Ltd.* 1,050
28,800 Halter Marine Group, Inc.* 468
29,600 Hvide Marine, Inc. "A"* 736
120,000 Input/Output, Inc.* 2,850
24,100 National-Oilwell, Inc.* 771
35,000 Oceaneering International, Inc.* 599
25,000 Petroleum Geo-Services ADR* 1,075
20,900 Trico Marine Services, Inc.* 977
50,000 Tuboscope Vetco International Corp.* 734
34,700 Varco International, Inc.* 924
30,000 Veritas DGC, Inc.* 578
- -----------------------------------------------------------------------------------------------------------
14,211
- -----------------------------------------------------------------------------------------------------------
Paper & Forest Products (0.1%)
21,900 Amscam Holdings, Inc.* 267
- -----------------------------------------------------------------------------------------------------------
Photography - Imaging (0.3%)
37,500 Seattle Filmworks, Inc.* 666
67,500 Ultrak, Inc.* 1,940
- -----------------------------------------------------------------------------------------------------------
2,606
- -----------------------------------------------------------------------------------------------------------
Pollution Control (0.1%)
29,300 Superior Services, Inc.* 557
- -----------------------------------------------------------------------------------------------------------
Publishing (0.2%)
27,000 C/NET, Inc.* 783
55,600 World Color Press, Inc.* 1,098
- -----------------------------------------------------------------------------------------------------------
1,881
- -----------------------------------------------------------------------------------------------------------
Real Estate (0.2%)
33,000 Signature Resorts, Inc.* 1,209
- -----------------------------------------------------------------------------------------------------------
Restaurants (1.7%)
25,700 Cooker Restaurant Corp. 299
50,000 Einstein/Noah Bagel Corp.* 1,513
20,300 Landry's Seafood Restaurants, Inc.* 414
105,750 Logan's Roadhouse, Inc.* 2,802
25,000 Lone Star Steakhouse & Saloon, Inc.* 659
25,200 New York Bagel Enterprises, Inc.* 170
211,950 Papa John's International, Inc.* 6,120
50,700 PJ America, Inc.* 862
5,300 Planet Hollywood International, Inc. "A"* 93
- -----------------------------------------------------------------------------------------------------------
12,932
- -----------------------------------------------------------------------------------------------------------
Retail - Department Stores (0.3%)
73,200 Saks Holdings, Inc.* 2,086
- -----------------------------------------------------------------------------------------------------------
Retail - Food Chains (0.2%)
17,400 Disco S.A. ADS* 470
30,000 Dominick's Supermarkets, Inc.* 600
10,000 Wild Oats Markets, Inc.* 160
- -----------------------------------------------------------------------------------------------------------
1,230
- -----------------------------------------------------------------------------------------------------------
Retail - General Merchandising (0.3%)
55,000 Dollar Tree Stores, Inc.* 2,324
- -----------------------------------------------------------------------------------------------------------
Retail - Specialty (6.1%)
37,700 99 Cents Only Stores* 650
53,700 Abercrombie & Fitch Co.* 738
50,700 Alrenco, Inc.* 577
25,000 Barnes & Noble, Inc.* 778
40,300 Borders Group, Inc.* 1,798
20,000 Coldwater Creek, Inc.* 363
25,000 CompUSA, Inc. 513
46,400 Cost Plus World Market* 800
31,700 Cross Continent Auto Retailers, Inc.* 693
21,000 Daisytek International Corp.* 798
18,000 Delia's, Inc.* 333
45,000 Eagle Hardware and Garden, Inc.* 861
100,000 Fastenal Co. 3,775
90,000 Finish Line, Inc. "A"* 1,980
76,200 Gadzooks, Inc.* 2,143
190,000 Garden Ridge Corp.* 1,639
60,500 Global DirectMail Corp.* 2,095
26,300 Hibbett Sporting Goods, Inc.* 427
266,250 Just For Feet, Inc.* 7,854
71,400 K&G Men's Center, Inc.* 1,999
20,500 Loehmann's Holdings, Inc.* 313
40,000 Marks Bros. Jewelers, Inc.* 430
65,000 MSC Industrial Direct Co., Inc.* 2,519
70,000 Nine West Group, Inc.* 3,614
45,000 OfficeMax, Inc.* 540
49,000 Party City Corp.* 759
41,500 Petco Animal Supplies, Inc.* 1,012
140,000 PETSMART, Inc.* 3,185
50,000 Renters Choice, Inc.* 822
53,500 U.S. Office Products Co.* 1,772
- -----------------------------------------------------------------------------------------------------------
45,780
- -----------------------------------------------------------------------------------------------------------
Shoes (0.3%)
70,000 Kenneth Cole Productions, Inc.* 1,356
48,800 Vans, Inc.* 677
- -----------------------------------------------------------------------------------------------------------
2,033
- -----------------------------------------------------------------------------------------------------------
Specialized Services (10.5%)
120,000 AccuStaff, Inc.* 2,595
100,000 ACT Manufacturing, Inc.* 2,837
50,000 Acxiom Corp.* 881
8,400 Administaff, Inc.* 183
40,000 Altron, Inc.* 790
18,000 American Residential Services, Inc.* 423
40,000 APAC TeleServices, Inc.* 1,570
81,000 Apollo Group, Inc.* 2,693
18,000 Benchmark Electronics, Inc.* 562
16,700 BTG, Inc* 347
21,300 Caribiner International, Inc.* 988
10,000 Children's Comprehensive Services, Inc.* 130
19,400 CKS Group, Inc.* 601
35,000 Computer Learning Centers, Inc.* 1,015
20,000 Concord EFS, Inc.* 400
38,250 COREStaff, Inc.* 880
27,000 Cornell Corrections, Inc.* 290
68,000 Corrections Corp. of America* 2,125
51,200 Cotelligent Group, Inc.* 1,002
20,200 CSG Systems International, Inc.* 379
50,000 Danka Business Systems plc ADR 2,225
34,500 Data Processing Resources Corp.* 755
45,000 Donnelley Enterprise Solutions, Inc.* 1,069
67,500 Eagle River Interactive, Inc.* 532
30,000 Ecsoft Group plc ADR* 330
45,000 Education Management Corp.* 911
45,000 Educational Medical, Inc.* 534
59,500 Electronic Fab Technology Corp.* 327
85,800 F.Y.I., Inc.* 1,941
37,000 Fine Host Corp.* 906
34,500 First USA Paymentech, Inc.* 1,151
6,100 Forrester Research, Inc.* 160
100,000 Getty Communications plc ADR* 1,675
19,400 Information Management Resources, Inc.* 473
13,500 Integrated Systems Consulting Group, Inc.* 187
65,300 IntelliQuest Information Group, Inc.* 1,388
9,500 International Network Services* 302
27,000 International Telecommunication Data Systems, Inc.* 587
102,200 Labor Ready, Inc.* 1,329
32,000 Lamar Advertising Co. "A"* 784
23,400 Lason, Inc.* 474
25,000 Lazare Kaplan International, Inc.* 444
46,300 LCC International, Inc. "A"* 810
56,700 Leap Group, Inc.* 397
67,500 Learning Tree International, Inc.* 2,632
35,300 Lightbridge, Inc.* 362
40,600 Mastech Corp.* 741
50,000 Merix Corp.* 944
22,500 META Group, Inc.* 557
90,000 Metromail Corp.* 1,856
30,000 National Media Corp.* 229
35,000 NHP, Inc.* 560
20,000 Nobel Education Dynamics, Inc.* 235
33,500 Nova Corp.* 703
27,300 Obie Media Corp.* 212
18,000 Ontrack Data International, Inc.* 257
100,000 Personnel Group of America, Inc.* 2,525
135,000 PMT Services, Inc.* 2,160
20,700 Praegitzer Industries, Inc.* 254
47,300 Precision Response Corp.* 1,655
27,000 Prime Service, Inc.* 668
50,000 Professional Staff plc ADR* 450
54,000 RemedyTemp, Inc. "A"* 992
45,000 Rental Service Corp.* 1,125
80,000 Romac International, Inc.* 2,055
32,100 SABRE Group Holdings, Inc.* 863
58,500 SCB Computer Technology, Inc.* 1,053
30,000 Select Appointments Holdings plc ADR* 337
150,000 SITEL Corp.* 3,075
35,400 Snyder Communications, Inc.* 1,066
12,500 SOS Staffing Services, Inc.* 134
25,500 Source Services Corp.* 507
29,100 Staffmark, Inc.* 378
36,000 Strategic Distribution, Inc.* 176
45,400 Superior Consultant, Inc.* 1,112
6,450 Sykes Enterprises, Inc.* 255
100,000 Telescan, Inc.* 475
46,800 TeleSpectrum Worldwide, Inc.* 766
39,500 Teletech Holdings, Inc.* 1,126
26,100 Think New Ideas, Inc.* 121
29,600 Ticketmaster Group, Inc.* 418
45,000 TMP Worldwide, Inc.* 591
58,100 Universal Outdoor Holdings, Inc.* 1,627
37,400 Vanstar Corp.* 552
32,400 Wackenhut Corp. "B" 486
20,000 Wackenhut Corrections Corp.* 395
45,500 Warrantech Corp.* 449
15,000 West TeleServices Corp.* 345
27,000 Whittman-Hart, Inc.* 547
60,000 Youth Services International, Inc.* 1,050
- -----------------------------------------------------------------------------------------------------------
79,458
- -----------------------------------------------------------------------------------------------------------
Telecommunications (1.4%)
38,800 Brooks Fiber Properties, Inc.* 994
27,900 IDT Corp.* 237
41,500 Intermedia Communications of Florida, Inc.* 986
63,600 IXC Communications, Inc.* 2,131
50,000 Orion Network Systems, Inc.* 731
45,500 Pacific Gateway Exchange, Inc.* 1,354
63,000 SmartTalk TeleServices, Inc.* 1,110
45,000 Tel-Save Holdings, Inc.* 1,150
45,000 Telco Communications Group, Inc.* 742
34,300 Teleport Communications Group, Inc.* 1,068
45,000 Viatel, Inc.* 338
- -----------------------------------------------------------------------------------------------------------
10,841
- -----------------------------------------------------------------------------------------------------------
Telephones (1.8%)
20,000 360 Communications Co.* 395
28,800 Advanced Radio Telecom Corp.* 310
45,400 Aerial Communications, Inc.* 309
50,800 American Communications Services, Inc.* 559
40,000 Arch Communications Group, Inc.* 330
105,000 Brightpoint, Inc.* 2,979
71,000 CellNet Data Systems, Inc.* 941
27,600 Clearnet Communications, Inc. "A"* 352
45,000 DIGEX, Inc.* 540
54,000 FaxSav, Inc.* 391
60,000 InterCel, Inc.* 795
13,500 McLeod, Inc.* 311
58,500 Metro One Telecommunications, Inc.* 526
38,200 Omnipoint Corp.* 855
10,500 Open Joint Stock, Co. Vimpel-Communications ADR* 385
46,200 PageMart Wireless, Inc.* 318
30,000 Paging Network, Inc.* 437
100,000 PhoneTel Technologies, Inc.* 362
39,300 Premiere Technologies, Inc.* 1,012
54,000 Primus Telecommunications Group, Inc.* 661
32,700 Rural Celluar Corp.* 319
10,000 T-Netix, Inc.* 101
45,000 Western Wireless Corp. "A"* 675
- -----------------------------------------------------------------------------------------------------------
13,863
- -----------------------------------------------------------------------------------------------------------
Textiles (3.4%)
70,000 Cutter & Buck, Inc.* 980
55,000 Gucci Group N.V.* 3,836
30,000 Mossimo, Inc.* 289
50,000 Nautica Enterprises, Inc.* 1,175
50,000 North Face, Inc.* 987
240,000 St. John Knits, Inc. 10,920
140,000 Tommy Hilfiger Corp.* 7,175
- -----------------------------------------------------------------------------------------------------------
25,362
- -----------------------------------------------------------------------------------------------------------
Tobacco (0.1%)
27,000 Consolidated Cigar Holdings, Inc.* 655
- -----------------------------------------------------------------------------------------------------------
Transportation - Miscellaneous (0.5%)
65,200 Coach USA, Inc.* 1,907
40,000 Fritz Companies, Inc.* 520
50,000 Hub Group, Inc. "A"* 1,350
- -----------------------------------------------------------------------------------------------------------
3,777
- -----------------------------------------------------------------------------------------------------------
Truckers (0.2%)
30,000 Amerco* 1,110
25,000 Heartland Express, Inc.* 623
- -----------------------------------------------------------------------------------------------------------
1,733
- -----------------------------------------------------------------------------------------------------------
Miscellaneous (1.1%)
23,000 Bacou USA, Inc.* 351
32,500 Carriage Services, Inc.* 772
85,150 Equity Corp. International* 1,682
60,000 Oakley, Inc.* 600
135,000 Stewart Enterprises, Inc. 4,775
15,400 Tag Heuer International S.A. ADR* 212
- -----------------------------------------------------------------------------------------------------------
8,392
- -----------------------------------------------------------------------------------------------------------
Total common stocks (cost: $491,115) 727,512
- -----------------------------------------------------------------------------------------------------------
Short-Term (3.5%)
Commercial Paper
$ 10,058 Ford Motor Credit Co. 5.35% 2/03/97 $ 10,055
16,193 Heller Financial, Inc. 5.42 2/04/97 16,186
- -----------------------------------------------------------------------------------------------------------
Total short-term (cost: $26,241) 26,241
- -----------------------------------------------------------------------------------------------------------
Total investments (cost: $517,356) $ 753,753
===========================================================================================================
</TABLE>
- -----------------------------------
*Non-income producing.
Aggressive Growth Fund
Notes to Portfolio of Investments in Securities
January 31, 1997
(Unaudited)
General Notes
Market values of securities are determined by procedures and practices discussed
in note 1 to the financial statements.
The cost of securities for federal income tax purposes is approximately the same
as that reported in the financial statements.
The percentages shown represent the percentage of the investments to net assets.
Investments in foreign securities were 6.2% of net assets at January 31, 1997.
ADS/ADR -- American Depositary Shares/Receipts are foreign shares held by a U.S.
bank which issues a receipt evidencing ownership. Dividends are paid in U.S.
dollars.
See accompanying notes to financial statements.
Aggressive Growth Fund
Statement of Operations
(In Thousands)
Six-month period ended January 31, 1997
(Unaudited)
Net investment loss:
Income:
Dividends $ 187
Interest 694
- --------------------------------------------------------------------------
Total income 881
- --------------------------------------------------------------------------
Expenses:
Management fees 1,390
Transfer agent's fees 837
Custodian's fees 113
Postage 72
Shareholder reporting fees 37
Directors' fees 2
Registration fees 101
Audit fees 14
Legal fees 4
Other 1
- ---------------------------------------------------------------------------
Total expenses 2,571
- ---------------------------------------------------------------------------
Net investment loss (1,690)
- ---------------------------------------------------------------------------
Net realized and unrealized gain on investments:
Net realized gain 3,034
Change in net unrealized appreciation/depreciation 82,086
- ---------------------------------------------------------------------------
Net realized and unrealized gain 85,120
- ----------------------------------------------------------------------------
Increase in net assets resulting from operations $ 83,430
=============================================================================
See accompanying notes to financial statements.
<TABLE>
Aggressive Growth Fund
Statements of Changes in Net Assets
(In Thousands)
<CAPTION>
Six-month period ended January 31, 1997
and Year ended July 31, 1996
(Unaudited)
<S> <C> <C>
1/31/97 7/31/96
From operations:
Net investment loss $ (1,690) $ (2,073)
Net realized gain on investments 3,034 27,284
Change in net unrealized appreciation/depreciation of
investments 82,086 45,276
------------- -------------
Increase in net assets resulting from operations 83,430 70,487
------------- -------------
Distributions to shareholders from:
Net realized gains (12,865) (25,025)
------------- -------------
From capital share transactions:
Proceeds from shares sold 161,841 335,121
Shares issued for dividends reinvested 11,556 23,005
Cost of shares redeemed (99,054) (159,541)
------------ ------------
Increase in net assets from capital share transactions 74,343 198,585
------------ ------------
Net increase in net assets 144,908 244,047
Net assets:
Beginning of period 607,437 363,390
------------ ------------
End of period $ 752,345 $ 607,437
============ ============
Undistributed net investment loss included in net assets:
Beginning of period $ (5) $ (5)
============= =============
End of period $ (1,695) $ (5)
============= =============
Change in shares outstanding:
Shares sold 5,338 11,908
Shares issued for dividends reinvested 392 901
Shares redeemed (3,281) (5,865)
------------- -------------
Increase in shares outstanding 2,449 6,944
============= =============
Authorized shares of $.01 par value 50,000 50,000
============= =============
</TABLE>
See accompanying notes to financial statements.
Aggressive Growth Fund
Notes to Financial Statements
January 31, 1997
(Unaudited)
(1) Summary of Significant Accounting Policies
USAA MUTUAL FUND, INC. (the Company), registered under the Investment Company
Act of 1940, as amended, is a diversified, open-end management investment
company incorporated under the laws of Maryland consisting of eight separate
funds. The information presented in this semiannual report pertains only
to the Aggressive Growth Fund (the Fund). The Fund's investment objective is
appreciation of capital.
A. Security valuation -- The value of each security is determined (as of the
close of trading on the New York Stock Exchange on each business day the
Exchange is open) as set forth below:
1. Portfolio securities, except as otherwise noted, traded primarily on a
domestic securities exchange are valued at the last sales price on that
exchange. Portfolio securities traded primarily on a foreign securities exchange
are generally valued at the closing values of such securities on the exchange
where primarily traded. If no sale is reported, the latest bid price is
generally used depending upon local custom or regulation.
2. Over-the-counter securities are priced at the last sales price or, if not
available, at the average of the bid and asked prices.
3. Securities purchased with maturities of 60 days or less are stated at
amortized cost which approximates market value.
4. Securities which cannot be valued by the methods set forth above, and all
other assets, are valued in good faith at fair value, using methods determined
by the Manager under the general supervision of the Board of Directors.
B. Federal taxes -- The Fund's policy is to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its income to its shareholders. Therefore, no
federal income or excise tax provision is required.
C. Investments in securities -- As is common in the industry, security
transactions are accounted for on the date the securities are purchased or sold
(trade date). Gain or loss from sales of investment securities is computed on
the identified cost basis. Dividend income is recorded on the ex-dividend
date. If the ex-dividend date has passed, certain dividends from foreign
securities are recorded upon notification. Interest income is recorded on the
accrual basis. Discounts and premiums on short-term securities are amortized
over the life of the respective securities.
D. Use of estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that may affect the reported amounts in the financial
statements.
(2) Lines of Credit
The Fund participates with other USAA funds in two joint short-term revolving
loan agreements totaling $850 million through January 13, 1998, one with USAA
Capital Corporation (CAPCO), an affiliate of the Manager ($750 million
uncommitted), and one with an unaffiliated bank ($100 million committed). The
purpose of the agreements is to meet temporary or emergency cash needs,
including redemption requests that might otherwise require the untimely
disposition of securities. Subject to availability under these agreements, the
Fund may borrow up to a maximum of 25% of its total assets, of which only 5% may
be borrowed from CAPCO, at the lending institution's borrowing rate plus a
markup. The Fund had no borrowings under either of these agreements during the
six-month period ended January 31, 1997.
(3) Distributions
Distributions of net investment income and realized gains from security
transactions not offset by capital losses are made in the succeeding fiscal year
or as otherwise required to avoid the payment of taxes.
(4) Investment Transactions
Purchases and sales of securities, excluding short-term securities, for the
six-month period ended January 31, 1997 were $192,525,123 and $140,352,181,
respectively.
Gross unrealized appreciation and depreciation of investments as of January 31,
1997 was $263,949,602 and $27,552,881, respectively.
(5) Transactions with Manager
A. Management fees -- The investment policies of the Fund and management of the
Fund's portfolio are carried out by USAA Investment Management Company (the
Manager). The Fund's management fees are computed as a percentage of its annual
average net assets, which on an annual basis is equal to .50% of the first
$200,000,000, .40% of that portion over $200,000,000 but not over $300,000,000,
and .33% of the portion over $300,000,000.
B. Transfer agent's fees -- USAA Transfer Agency Company, d/b/a USAA Shareholder
Account Services, an affiliate of the Manager, provides transfer agent services
to the Fund based on an annual charge per shareholder account plus out-of-pocket
expenses.
C. Underwriting services -- The Manager provides exclusive underwriting and
distribution of the Fund's shares on a continuing best efforts basis. The
Manager receives no commissions or fees for this service.
D. Brokerage services -- USAA Brokerage Services, a discount brokerage service
of the Manager, may execute portfolio transactions for the Fund. The
amount of brokerage commissions paid to USAA Brokerage Services during the
six-month period ended January 31, 1997 was $2,000.
(6) Transactions with Affiliates
USAA Investment Management Company is indirectly wholly owned by United Services
Automobile Association (the Association), a large, diversified financial
services institution. At January 31, 1997, the Association and its affiliates
owned 2,118,736 shares (8.7%) of the Fund.
Certain directors and officers of the Fund are also directors, officers, and/or
employees of the Manager. None of the affiliated directors or Fund officers
received any compensation from the Fund.
<TABLE>
<CAPTION>
(7) Financial Highlights
Per share operating performance for a share outstanding throughout each period
is as follows:
Six-Month Ten-Month
Period Ended Period Ended Year Ended
January 31, Year Ended July 31, July 31, September 30,
1997 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
Net asset value at
beginning of period $ 27.88 $ 24.49 $ 17.74 $ 20.40 $ 18.85 $ 20.60
Net investment
income (loss) (.07)(a) (.12)(a) (.05)(a) (.02)(a) .02 (.01)(a)
Net realized and
unrealized gain (loss) 3.80 5.12 8.35 (1.37) 3.67 (1.73)
Distributions from net
investment income - - - (.02) - (.01)
Distributions of realized
capital gains (.57) (1.61) (1.55) (1.25) (2.14) -
------------ ------------ ------------ ------------ -------------- ------------
Net asset value at
end of period $ 31.04 $ 27.88 $ 24.49 $ 17.74 $ 20.40 $ 18.85
============ ============= =========== =========== ============== ==============
Total return (%) * 13.49 21.16 49.98 (7.31) 21.32 (8.45)
Net assets at end
of period (000) $ 752,345 $ 607,437 $ 363,390 $ 248,953 $ 277,198 $ 234,967
Ratio of expenses to
average net assets (%) .72(b) .74 .86 .83(b) .86 .82
Ratio of net investment
income (loss) to
average net assets (%) (.47)(b) (.42) (.28) (.10)(b) .10 (.05)
Portfolio turnover (%) 20.54 43.75 138.32 98.99 113.01 74.08
Average commission
rate paid per share+ $ .051 $ .049
</TABLE>
(a) Calculated using weighted average shares.
(b) Annualized. The ratio is not necessarily indicative of 12 months of
operations.
* Assumes reinvestment of all dividend income and capital gain distributions
during the period.
+ Calculated by aggregating all commissions paid on the purchase and sale of
securities and dividing by the actual number of shares purchased or sold for
which commissions were charged.
