<PAGE> PAGE 1
000 B000000 12/31/97
000 C000000 0001040674
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0.a
000 J000000 A
001 A000000 THE WORLD FUNDS, INC
001 B000000 811-8255
001 C000000 8042858211
002 A000000 1500 FOREST AVE, SUITE 223
002 B000000 RICHMOND
002 C000000 VA
002 D010000 23229
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 Y
007 B000000 1
007 C010100 1
007 C020100 SAND HILL PORTFOLIO MANAGER FUND
007 C030100 N
007 C010200 2
007 C010300 3
007 C010400 4
007 C010500 5
007 C010600 6
007 C010700 7
007 C010800 8
007 C010900 9
007 C011000 10
020 A000001 BROADCORT
020 C000001 6
020 A000002 MERRILL LYNCH
020 C000002 1
020 C000003 0
020 C000004 0
020 C000005 0
020 C000006 0
020 C000007 0
020 C000008 0
020 C000009 0
020 C000010 0
021 000000 7
022 A000001 BROADCORT
022 C000001 1965
022 D000001 1132
022 A000002 MERRILL LYNCH
<PAGE> PAGE 2
022 C000002 1407
022 D000002 233
022 A000003 MORGAN STANLEY
022 C000003 112
022 D000003 0
022 C000004 0
022 D000004 0
022 C000005 0
022 D000005 0
022 C000006 0
022 D000006 0
022 C000007 0
022 D000007 0
022 C000008 0
022 D000008 0
022 C000009 0
022 D000009 0
022 C000010 0
022 D000010 0
023 C000000 3484
023 D000000 1365
026 A000000 N
026 B000000 Y
026 C000000 Y
026 D000000 Y
026 E000000 N
026 F000000 N
026 G010000 N
026 G020000 N
026 H000000 N
027 000000 Y
077 A000000 Y
077 B000000 Y
077 C000000 Y
077 Q010000 Y
086 A010000 0
086 A020000 0
086 B010000 0
086 B020000 0
086 C010000 0
086 C020000 0
086 D010000 0
086 D020000 0
086 E010000 0
086 E020000 0
086 F010000 0
086 F020000 0
008 A000101 SAND HILL ADVISERS
008 B000101 A
008 C000101 801-17601
008 D010101 MENLO PARK
<PAGE> PAGE 3
008 D020101 CA
008 D030101 94025
008 D040101 7111
010 A000101 COMMONWEALTH SHAREHOLDER SERVICES, INC
010 C010101 RICHMOND
010 C020101 VA
010 C030101 23229
011 A000101 FIRST DOMINION CAPITAL CORP
011 B000101 8-33719
011 C010101 RICHMOND
011 C020101 VA
011 C030101 23226
012 A000101 FUND SERVICES, INC
012 B000101 84-1553
012 C010101 RICHMOND
012 C020101 VA
012 C030101 23226
013 A000101 TAIT, WELLER AND BAKER
013 B010101 PHILADELPHIA
013 B020101 PA
013 B030101 19102
013 B040101 1707
014 A000101 FIRST DOMINION CAPITAL CORP.
014 B000101 8-33719
015 A000101 STAR BANK
015 B000101 C
015 C010101 CINCINNATI
015 C020101 OH
015 C030101 45201
015 E010101 X
018 000100 Y
019 A000100 N
019 B000100 0
024 000100 N
025 D000101 0
025 D000102 0
025 D000103 0
025 D000104 0
025 D000105 0
025 D000106 0
025 D000107 0
025 D000108 0
028 A010100 156
028 A020100 0
028 A030100 0
028 A040100 108
028 B010100 218
028 B020100 0
028 B030100 0
028 B040100 41
028 C010100 351
<PAGE> PAGE 4
028 C020100 0
028 C030100 0
028 C040100 2
028 D010100 321
028 D020100 0
028 D030100 0
028 D040100 2
028 E010100 243
028 E020100 0
028 E030100 0
028 E040100 17
028 F010100 778
028 F020100 319
028 F030100 0
028 F040100 52
028 G010100 2067
028 G020100 319
028 G030100 0
028 G040100 222
028 H000100 0
029 000100 N
030 A000100 0
030 B000100 0.00
030 C000100 0.00
031 A000100 0
031 B000100 0
032 000100 0
033 000100 0
034 000100 N
035 000100 0
036 B000100 0
037 000100 N
038 000100 0
039 000100 N
040 000100 N
041 000100 N
042 A000100 0
042 B000100 0
042 C000100 0
042 D000100 0
042 E000100 0
042 F000100 0
042 G000100 0
042 H000100 0
043 000100 0
044 000100 0
045 000100 Y
046 000100 N
047 000100 Y
048 000100 0.000
048 A010100 100000
<PAGE> PAGE 5
048 A020100 1.000
048 B010100 0
048 B020100 0.000
048 C010100 0
048 C020100 0.000
048 D010100 0
048 D020100 0.000
048 E010100 0
048 E020100 0.000
048 F010100 0
048 F020100 0.000
048 G010100 0
048 G020100 0.000
048 H010100 0
048 H020100 0.000
048 I010100 0
048 I020100 0.000
048 J010100 0
048 J020100 0.000
048 K010100 100000
048 K020100 0.750
049 000100 N
050 000100 N
051 000100 N
052 000100 N
053 A000100 Y
053 B000100 Y
054 A000100 Y
054 B000100 N
054 C000100 N
054 D000100 N
054 E000100 N
054 F000100 N
054 G000100 N
054 H000100 Y
054 I000100 N
054 J000100 N
054 K000100 N
054 L000100 N
054 M000100 N
054 N000100 N
054 O000100 Y
055 A000100 N
055 B000100 N
056 000100 N
057 000100 N
058 A000100 N
058 B000100 N
058 C000100 N
058 D000100 N
058 E000100 N
<PAGE> PAGE 6
059 000100 Y
060 A000100 Y
060 B000100 Y
061 000100 25
062 A000100 N
062 B000100 0.0
062 C000100 0.0
062 D000100 0.0
062 E000100 0.0
062 F000100 0.0
062 G000100 0.0
062 H000100 0.0
062 I000100 0.0
062 J000100 0.0
062 K000100 0.0
062 L000100 0.0
062 M000100 0.0
062 N000100 0.0
062 O000100 0.0
062 P000100 0.0
062 Q000100 0.0
062 R000100 0.0
063 A000100 0
063 B000100 0.0
066 A000100 Y
066 B000100 N
066 C000100 N
066 D000100 N
066 E000100 N
066 F000100 N
066 G000100 Y
067 000100 N
068 A000100 N
068 B000100 N
069 000100 N
070 A010100 Y
070 A020100 N
070 B010100 Y
070 B020100 N
070 C010100 Y
070 C020100 N
070 D010100 Y
070 D020100 N
070 E010100 N
070 E020100 N
070 F010100 Y
070 F020100 N
070 G010100 Y
070 G020100 N
070 H010100 Y
070 H020100 N
<PAGE> PAGE 7
070 I010100 N
070 I020100 N
070 J010100 Y
070 J020100 N
070 K010100 Y
070 K020100 N
070 L010100 Y
070 L020100 N
070 M010100 Y
070 M020100 N
070 N010100 Y
070 N020100 N
070 O010100 Y
070 O020100 N
070 P010100 N
070 P020100 N
070 Q010100 N
070 Q020100 N
070 R010100 N
070 R020100 N
071 A000100 2734
071 B000100 1181
071 C000100 7381
071 D000100 16
072 A000100 12
072 B000100 113
072 C000100 98
072 D000100 0
072 E000100 0
072 F000100 81
072 G000100 0
072 H000100 0
072 I000100 19
072 J000100 17
072 K000100 0
072 L000100 0
072 M000100 0
072 N000100 4
072 O000100 0
072 P000100 0
072 Q000100 22
072 R000100 6
072 S000100 6
072 T000100 0
072 U000100 7
072 V000100 0
072 W000100 5
072 X000100 167
072 Y000100 13
072 Z000100 57
072AA000100 266
<PAGE> PAGE 8
072BB000100 0
072CC010100 985
072CC020100 0
072DD010100 52
072DD020100 0
072EE000100 281
073 A010100 0.0800
073 A020100 0.0000
073 B000100 0.4300
073 C000100 0.0000
074 A000100 432
074 B000100 0
074 C000100 588
074 D000100 1951
074 E000100 0
074 F000100 6896
074 G000100 0
074 H000100 0
074 I000100 0
074 J000100 0
074 K000100 0
074 L000100 686
074 M000100 16
074 N000100 10569
074 O000100 0
074 P000100 0
074 Q000100 0
074 R010100 0
074 R020100 0
074 R030100 0
074 R040100 3
074 S000100 0
074 T000100 10566
074 U010100 725
074 U020100 0
074 V010100 14.57
074 V020100 0.00
074 W000100 0.0000
074 X000100 153
074 Y000100 0
075 A000100 0
075 B000100 8137
076 000100 0.00
080 A000100 ICI MUTUAL
080 C000100 1000
081 A000100 Y
081 B000100 2
082 A000100 Y
082 B000100 10
083 A000100 N
083 B000100 0
<PAGE> PAGE 9
084 A000100 N
084 B000100 0
085 A000100 Y
085 B000100 N
SIGNATURE JOHN PASCO, III
TITLE CHAIRMAN
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> SAND HILL PORTFOLIO MANAGER FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 7,417,893
<INVESTMENTS-AT-VALUE> 9,434,676
<RECEIVABLES> 686,139
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 448,244
<TOTAL-ASSETS> 10,569,059
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,942
<TOTAL-LIABILITIES> 2,942
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 8,486,136
<SHARES-COMMON-STOCK> 725,028
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 4,913
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 58,285
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,016,783
<NET-ASSETS> 10,566,117
<DIVIDEND-INCOME> 98,335
<INTEREST-INCOME> 113,189
<OTHER-INCOME> 0
<EXPENSES-NET> 154,400
<NET-INVESTMENT-INCOME> 57,124
<REALIZED-GAINS-CURRENT> 265,654
<APPREC-INCREASE-CURRENT> 984,658
<NET-CHANGE-FROM-OPS> 1,307,436
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (52,211)
<DISTRIBUTIONS-OF-GAINS> (280,635)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 240,636
<NUMBER-OF-SHARES-REDEEMED> (42,017)
<SHARES-REINVESTED> 21,704
<NET-CHANGE-IN-ASSETS> 4,106,692
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 80,675
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 167,845
<AVERAGE-NET-ASSETS> 8,137,412
<PER-SHARE-NAV-BEGIN> 12.79
<PER-SHARE-NII> .09
<PER-SHARE-GAIN-APPREC> 2.20
<PER-SHARE-DIVIDEND> (.08)
<PER-SHARE-DISTRIBUTIONS> (.43)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.57
<EXPENSE-RATIO> 2.08
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON INTERNAL CONTROL
STRUCTURE
Board of Directors
The World Funds, Inc.
Richmond, Virginia
In planning and performing our audit of the financial statements of Sand Hill
Portfolio Manager fund, (the "Fund"), a series of shares of The World Funds,
Inc., for the year ended December 31, 1997, we considered its internal control
structure, including procedures for safeguarding securities, in order to
determine our auditing procedures for the purpose of expressing our opinion
on the financial statements and to comply with the requirements of Form N-SAR,
not to provide assurance on the internal control structure.
The management of the Fund is responsible for establishing and maintaining an
internal control structure. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and re-
lated costs of internal control structure policies and procedures. Two of the
objectives of an internal control structure are to provide management with
reasonable, but not absolute, assurance that assets are safeguarded against
loss from unauthorized use or disposition, and that transactions are executed
in accordance with management's authorization and recorded properly to permit
preparation of financial statements in conformity with generally accepted
accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any eval-
uation of the structure to future periods is subject to the risk that it may
become inadequate because of changes in conditions or that the effectiveness
of the design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily dis-
close all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design
or operation of the specific internal control structure elements does not
reduce to a relatively low level the risk that errors or irregularities in
amounts that would be materila in relation to the financial statements being
audited may occur and not be detected within a timely period by employees in
the normal course of performing their assigned functions. However, we noted
no matters involving the internal control structure, including procedures for
safeguarding securities, that we consider to be material weaknesses, as de-
fined above, as of December 31, 1997.
This report is intended soley for the information and use of management and
the Securities and Exchange Commission, and should not be used for any other
purpose.
TAIT, WELLER AND BAKER
Philadelphia, Pennsylvania
January 23, 1998
VONTOBEL FUNDS, INC.
1500 Forest Avenue, Suite 223
Richmond, Virginia 23229
SAND HILL PORTFOLIO MANAGER FUND
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
to be held on
July 11, 1997
Notice to Shareholders:
A special meeting of shareholders (the "Meeting") of Sand Hill Portfolio
Manager Fund (the "Fund") of Vontobel Funds, Inc. (the "Company") will be held
at 10:00 a.m. local time, on July 11, 1997, at the office of the Company at
1500 Forest Avenue, Richmond, Virginia, for the following purposes:
1. To approve or disapprove an Agreement and Plan of Reorganization (the
"Plan) pursuant to which the Fund will transfer all of its assets to a newly-
created series (the "New Fund") of The World Funds, Inc. (the "World Funds"),
in exchange for shares of common stock of the New Fund, as set forth in the
accompanying Proxy Statement, including authorization for the directors of the
Company to vote shares of the New Fund acquired in the reorganization as pro-
vided in the Plan.
2. To transact such other business as may properly come before the Meeting.
Shareholders of record at the close of business on May 30, 1997 are entitled
to vote at the Meeting or any adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
John Pasco, III
Chairman
June 17, 1997
Richmond, Virginia
IMPORTANT
Whether or not you plan to attend the meeting, please mark your voting
insructions on the enclosed proxy and promptly date, sign and return it in the
enclosed envelope. No postage is required if mailed in the United States. We
ask your cooperation in helping the Fund by mailing your proxy promptly.
INDEX OF EXHIBITS
Exhibit A: Financial Data Schedule
Exhibit B: Report of Independent Certified Public Accountants on Internal
Control Structure
Exhibit C: Proxy summary page
