A Message from the President
Dear Shareholder
During the first quarter 1996, U.S. equity markets remained strong as the Dow
Jones Industrial Average gained 9.77% while the Standard & Poor's 500 Composite
Index increased 5.37%. International markets also did well through quarter-end,
with European markets posting impressive gains. Domestic bond prices retreated
during the first quarter amid fears of higher inflation and rising interest
rates. Most economists predict that inflation will remain under control which
should create a stable environment for both equity and fixed-income investments.
However, investors should be aware that neither stocks nor bonds will likely
repeat their double digit returns of 1995.
Asset growth continues to be impressive for both Princor and the entire mutual
fund industry. Total assets of Princor funds were $2.6 billion at the end of
March 1996. This represents a 37% increase in fund assets for the past year and
a 254% growth in assets over the past five years.
On February 29, we introduced a new income-oriented fund-Princor Limited Term
Bond Fund-to fill the investment niche between money market funds and longer
term bond funds. The Fund makes a good selection for investors seeking returns
greater than those of a money market fund, but who are less comfortable with the
increased market fluctuation associated with longer maturity bonds. If Princor
Limited Term Bond Fund sounds like it may have a place in your portfolio,
contact your registered representative for more information.
In other investment news, the management and directors of Princor Capital
Accumulation Fund have decided to modify the strategy for achieving the Fund's
investment objective. For several years, the investment advisor has followed a
strategy based on the use of common stocks with a variety of investment
characteristics. This strategy sought to realize the Fund's objective of
long-term capital appreciation and growth of investment income. Though the
strategy is being modified, the Fund objective remains unchanged. Going forward,
the investment advisor will follow a more focused strategy often described as
value investing. Value investing refers to the selection of stocks of companies
which have above-average dividend yields and below-average current prices as
measured by their price-to-earnings ratios. The primary concentration will be
companies with a medium to large market capitalization. The directors feel this
modified approach will help current and potential investors have a clearer
understanding of the investment focus of the Fund, while continuing the
favorable pattern of investment results achieved in recent years. Once
initiated, the strategy shift will be gradual and take a number of months to
complete.
By now, most of you have received your first consolidated Princor account
statement. In addition, many of you will now receive only one copy of our
semiannual report. Both of these enhancements are the result of our recent
conversion to a new shareholder recordkeeping system. This is just one more
example of our committment to providing the finest in mutual fund products and
services to you, our shareholder.
Sincerely,
STEPHAN L. JONES
Stephan L. Jones
President
<PAGE>
Princor Funds Performance
<TABLE>
<CAPTION>
Average Annual Total Returns
As of March 31, 1996
(the latest calendar quarter)
1 Year 5 Years 10 Yearsd
with without with without with without
sales sales sales sales sales sales
A Shares of: charge charge charge charge charge charge
<S> <C> <C> <C> <C> <C> <C>
Balanced 12.86% 18.42% 10.50% 11.57% 9.93%a 10.57%a
Blue Chip 20.91 26.87 10.61 11.68 10.86b 11.92b
Bond 6.94 12.21 8.44 9.49 9.05a 9.69a
Capital Accumulation 22.70 28.75 12.59 13.68 10.28 10.82
Emerging Growth 23.75 29.85 16.75 17.88 17.05a 17.74a
Government Securities Income 5.39 10.58 6.95 7.98 7.94 8.46
Growth 20.19 26.12 15.13 16.25 12.89 13.43
High Yield 6.98 12.26 10.54 11.61 7.45a 8.08a
Tax-Exempt Bond 3.48 8.58 6.66 7.69 7.03 7.55
Utilities 21.16 27.14 7.10c 8.68c - -
World 18.81 24.67 11.04 12.12 9.07 9.60
<CAPTION>
1 Year 5 Years d
with without with without
B Shares of: CDSC* CDSC* CDSC* CDSC*
<S> <C> <C> <C> <C>
Balanced 13.56% 17.56% 16.79% 19.69%
Blue Chip 21.98 25.98 25.71 28.55
Bond 7.59 11.59 10.17 13.13
Capital Accumulation 23.72 27.72 27.49 30.33
Emerging Growth 24.97 28.97 32.02 34.82
Government Securities Income 5.84 9.84 9.62 12.58
Growth 21.25 25.25 28.32 31.14
High Yield 7.22 11.22 9.49 12.46
Tax-Exempt Bond 3.72 7.72 11.23 14.18
Utilities 22.35 26.35 21.56 24.43
World 19.85 23.85 12.85 15.78
<FN>
* Contingent Deferred Sales Charge
a Partial period, from effective date 12/18/87
b Partial period, from effective date 3/1/91
c Partial period, from effective date 12/16/92
d Partial period, from effective date 12/9/94
</FN>
</TABLE>
Total return represents the overall performance of an investment for a specific
period of time, assuming the reinvestment of dividends and capital gains.
Average annual total returns for A shares are with and without maximum 4.75%
sales charge. Average annual total returns for B shares are with and without
maximum 4.0% contingent deferred sales charge.
Total returns reflect past performance. Past performance does not predict future
performance. The investment return and principal value of an investment will
fluctuate so that shares, when redeemed, may be worth more or less than their
original cost.
Contents
Page
Comments from the Funds'
Portfolio Managers.......................1
Princor Growth-Oriented Funds
and Your Financial Future................6
The Princor Growth-Oriented Funds
Financial Statements and Highlights
Statements of Assets and Liabilities.....8
Statements of Operations................10
Statements of Changes in Net Assets.....12
Notes to Financial Statements...........14
Schedules of Portfolio Investments
Balanced Fund..........................20
Blue Chip Fund.........................22
Capital Accumulation Fund..............23
Emerging Growth Fund...................25
Growth Fund, Inc.......................27
World Fund, Inc........................29
Financial Highlights....................34
The Princor Income-Oriented Funds
Financial Statements and Highlights
Statements of Assets and Liabilities....40
Statements of Operations................42
Statements of Changes in Net Assets.....44
Notes to Financial Statements...........46
Schedules of Portfolio Investments
Bond Fund..............................52
Government Securities Income Fund......54
High Yield Fund........................55
Limited Term Bond Fund.................56
Tax-Exempt Bond Fund...................57
Utilities Fund, Inc....................61
Financial Highlights....................62
The Princor Money Market Funds
Financial Statements and Highlights
Statements of Assets and Liabilities....68
Statements of Operations................69
Statements of Changes in Net Assets.....70
Notes to Financial Statements...........72
Schedules of Portfolio Investments
Cash Management Fund...................76
Tax-Exempt Cash Management
Fund.................................79
Financial Highlights....................82
The Princor Family of Mutual Funds........84
<PAGE>
MANAGER'S COMMENTS
Princor Management Corporation, the adviser to the Princor funds, is staffed
with investment professionals who manage each individual fund. Comments by these
individuals in the following paragraphs summarize in capsule form the general
strategy and recent results of each fund over the past six months. We believe
any Princor fund should, under normal circumstances, represent only a portion of
an investor's total investments. For most investors a portfolio should be
balanced among stocks, bonds, and cash reserves to fit their own needs and risk
tolerance. Those who maintain this balanced approach should be aware of the
short-term results, but focus on the long term. Past performance is no guarantee
of future results. Fund values will fluctuate so that the shares, upon
redemption, may be worth more or less than their original cost.
Growth-Oriented Funds
Princor Balanced Fund
Judi Vogel
The most significant event affecting balanced portfolios in this semiannual
period was the increase in interest rates caused by stronger than expected
economic growth in the second half of the period. Bond investors pushed rates
higher as signs of strength, particularly employment gains, which fueled
inflation concerns. Despite the market's worries, actual inflation remains well
under control, with no significant pressures in sight. The stockmarket continued
to make gains, boosted more by record cash flows into equity mutual funds than
by fundamentals. Increasing levels of market volatility resulted from investors'
uncertainty about the direction of the economy and the constantly changing
outlook for corporate earnings.
As a balanced fund, we participate in both the equity and fixed income markets
through a diversified blend of investments in common stocks, convertible bonds,
US Treasury securities, and cash. Stocks have been strong performers over the
last six months while bond returns have moderated. Looking ahead we are
positioning the account to be less sensitive to the economic cycle. After five
years of economic expansion, we expect growth to slow by 1997. Higher interest
rates will only accelerate this process. We are currently focusing on companies
that can provide earnings growth regardless of the state of the economy.
Princor Blue Chip Fund
Mark Williams
During the past six months, stronger than expected economic news and an
increasingly strong dollar adversely affected the Fund's relative returns. After
the strong employment reports of February and March, investors rotated out of
companies the Fund typically holds and into those companies that get greater
benefits from a strengthening economy, i.e., cyclicals. This is evident by the
strong performance of the Basic Material, Consumer Cyclical, and Industrial
sectors.
A strengthening dollar penalized earnings comparisons of multinationals due to
currency translations. Smaller companies have been the main beneficiaries as
investors rotated out of multinationals in an attempt to avoid the negative
currency implications.
It appears corporate profit growth has peaked for this cycle. If so, those
companies that can exhibit consistent earnings growth should benefit. The Fund's
holdings are well positioned for this event.
Princor Capital Accumulation Fund
David White
Our strategy is to hold common stocks that will produce better rates of return
if bought and held forever. Our analysis is very similar to the approach which
companies take when making acquisitions. Future cash flows are weighted against
today's price. This is our "bottom up" approach. Overlaying this approach is a
"top down" strategy. We look at the big picture: the economy, international
trade, secular industry trends, earnings and the stock market. Any macro
insights help select specific investments for the portfolio.
We are concerned about the ability of our economic system to continue generating
strong earnings gains. As a consequence, we favor companies that will continue
to grow earnings even if aggregate profits slow or decline. After substantially
trimming the account's cyclical exposure in 1995, more modest cuts occurred the
past six months. Today, the account is neutral with regard to cyclical stocks.
The Spring 1996 economic rebound will be short lived but give us a chance to
further reduce the account's exposure to cyclical companies.
Princor Emerging Growth Fund
Mike Hamilton
The portfolio has been structured to take advantage of our broad themes of
productivity enhancements, an aging population trend and lower interest rates.
The structure has resulted in investment concentration in technology,
financials, growth cyclicals and healthcare. We have chosen to underweight
utilities, energy and consumer areas. The Emerging Growth Fund trailed the S&P
500 for 1995 primarily because of the differences in sector weighting compared
to the market. The emphasis on cyclical growth and financial stocks hurt
performance against benchmarks. An economic slowdown seemed to be anticipated by
investors and they sold off economically sensitive stocks.
Going forward, the portfolio remains positioned to capture growth from an
elongated economic cycle. The current slowing in economic activity should set
the stage for further growth; therefore we continue to overweight growth
cyclicals. These companies are low-cost producers with niche markets whose
revenues should benefit from the trend toward more outsourcing.
Princor Growth Fund
Mike Hamilton
The equity markets had a banner year in 1995. With inflation seemingly under
control, interest rates eased supporting a robust stock market. In addition,
corporate profits had one of their better increases than had been seen in a long
time. The portfolio has been structured around a theme of productivity and
manufacturing efficiency. The companies that can enable the enhancement of both
labor and machines should be in a stronger position than their competition.
Another related theme has been the demographic growth of babyboomers and the
corresponding need for healthcare and financial services.
The healthcare sector has been one of the strongest in the portfolio in the past
year or so. The fund did trail the S&P 500 given the selloff in the Technology
sector in the fourth quarter. While no major change is planned currently in the
portfolio we continue to focus on those companies that are best positioned to
take market share from their competitors, develop new markets and products and
sell into a global marketplace. Also, we favor companies with proven management
that have the skills to operate profitably in this competitive environment.
Princor World Fund
Scott Opsal
The Princor World Fund significantly outperformed the EAFE Index and the average
international fund because of overweightings in cyclicals and health care, large
exposures in Europe, and an underweighting in Japan. After falling late in 1995,
cyclicals have rallied early in 1996 providing a significant return advantage to
the World Fund based on its overweighting in the sector. Mergers and
restructuring in the drug industry have also provided significant incremental
returns on the Fund's healthcare holdings. Currency has worked against US
investors recently as the US dollar strengthened vs. most currencies, however
the World Fund experienced less currency loss than average due to a favorable
country mix.
European economies continue to move ahead at a slow rate and we do not expect
European Gross Domestic Product to grow outside of a 1% to 2% range this year.
On a worldwide basis, the signals regarding economic growth in the major
economies are ambiguous. Because of this outlook, the Fund's current strategy is
to search for stable growth companies and significantly underpriced situations.
We also maintain our deeply discounted cyclical positions in case economies
strengthen.
Important Notes for Growth-Oriented Funds
Standard & Poor's 500 Stock Index: An unmanaged index of 500 widely held common
stocks representing industrial, financial, utility and transportation companies
listed on the New York Stock Exchange, American Stock Exchange and the
Over-the-Counter market.
Morgan Stanley EAFE (Europe, Australia and Far East) Index: This average
reflects an arithmetic, market value weighted average of performance of more
than 900 listed securities which are listed on the stock exchanges of the
following countries: Australia, Austria, Belgium, Denmark, Netherlands, New
Zealand, Norway, Singapore/Malaysia, Spain, Sweden, Switzerland, and the United
Kingdom.
Income-Oriented Funds
Princor Bond Fund
Don Brattebo
Bond markets have been very volatile this past 6 months and this is reflected in
the Fund's performance. To illustrate, the yield on the 10 year U.S. Treasury
Note was at the 6.00% level at the beginning of November and dropped to 5.57% by
the end of January. However, the last three months saw a complete reversal of
fixed income markets with bond values tumbling and the yield on that same 10
year Treasury Note jumping way up to 6.67%.
The major influence on the bond market continues to be the outlook for
inflation. Market analysts, strategists, economists and portfolio managers
continually scrutinize, upon its release, every bit of economic data trying to
find the "magic" formula that will divulge where inflation is truly headed.
Consequently, we can expect volatility to remain an element to be dealt with in
fixed income markets during coming months because currently there is a wide
variance of opinion on the subject.
The objective of the Bond Fund is to deliver an attractive total rate of return
to our shareholders over the long term. Therefore, we will continue to resist
the pressures to skip from one course to another based on emotional reactions.
Our philosophy is to find the better values on a day-to-day basis and combine it
with accurate credit underwriting, good call protection and broad
diversification. These are necessary ingredients for long term successful
performance.
Princor Government Securities Income Fund
Marty Schafer
The drop in interest rates, coupled with our controlled duration, led to our
strong results in 1995. After 1995's powerful bond market rally, interest rates
were poised for a rise in the first quarter of 1996. Since our duration is
somewhat longer than our competitors, when rates rise we will underperform in
comparison and when rates fall our performance is superior. We try to keep our
duration between five and six years. Duration measures the sensitivity of the
value of the mortgage-backed securities to changes in interest rates.
Our disciplined approach of running a portfolio priced at or below par once
again provided our shareholders with strong performance. We continue to believe
the value of discount mortgage securities should persist, as they are powered by
fundamental and technical forces. As always, our focus continues to be long
term, striking an appropriate relationship between current income and total
return.
Princor High Yield Fund
Ken Hovey
As with our fixed income investments, the last six months has been difficult for
high yield securities as interest rates have increased causing market values to
fall. The Treasury market increased in yield during the period on maturities
longer than one year. Increases varied but were generally up between 30 and 40
basis points. High yield securities have outperformed other bond investments as
its risk premium narrowed during the six month period. This narrowing helped
cushion the change in risk free Treasuries.
Our Fund has been performing about in line with the high yield market overall as
measured by the Lehman Brothers High Yield market weighted participations in all
sectors of high yield. Our Fund is composed of nearly equal amounts of BB and B
bonds. Those two sectors compose the vast majority of high yield. However, there
are riskier segments including CCC and lower rated bonds, deferred interest
bonds, equities of high yield companies, and distressed debt that we do not
purchase. Our lack of participation in those sectors, and underweighting of B
bonds as compared to many if not most other high yield funds has caused our
Fund's return for the six months to be lower than the Lipper High Yield average
yield. Risk premiums have narrowed proportionately more on higher risk assets
causing their returns to be higher over the six month period.
We continue to believe that our conservative strategy of investing in a blend of
B and BB bonds will provide the best risk adjusted returns over time.
Additionally, we believe that high yield belongs in most portfolios as an asset
type that is fixed income in nature, but has some equity characteristics which
allow it the potential to do well as compared to other fixed income instruments
and without the volatility of equities.
Princor Limited Term Bond Fund
Marty Schafer
The effective start date for this fund was February 29, 1996. Initial
investments consisted of 46% corporate bonds, 50% mortgage-backed securities and
4% commercial paper. High grade A or better corporate bond purchases were
laddered, with maturities ranging from 1998 to 2001. Mortgage-backed securities
have some prepayment risk, and a careful review was done to insure the
underlying loans backing these pools were located in economically weak regions
of the U.S. In economically weak regions, housing prices were depressed, which
prevents many homeowners from refinancing their existing mortgage. Given the
very high quality of the portfolio and its strategically stratified cash flow,
we believe this fund is well positioned as a low risk alternative for fixed
income investors.
Princor Tax-Exempt Bond Fund
Dan Garrett
The past six months have been a mix of falling interest rates in the last two
months of 1995 then a sharp rise through April 1996. There also has been
extraordinary focus on the federal budget and tax reform as election year
primaries generated discussion of potential policy agendas. While there has been
much speculation about tax reform, the general consensus is that there will be
little impact on municipal bonds.
We have continued to focus on the long term total return of the fund as our
primary goal. We have reduced the volatility of the Fund by buying shorter
maturities, while maintaining focus on the need for current income.
Princor Utilities Fund
Catherine Green
The Utilities sector proved to be an active place to be invested during the
latest six months. From October to January, the environment was positive for
these stocks and the outlook was positive. For the last three months of this
semiannual period, we found a much greater struggle in these companies. The
first and foremost reason for the movement was interest rates. Utility stock
prices tend to move in the opposite direction as the interest rates move. So,
when interest rates rise, utility stock prices tend to decline, and that is
indeed what happened in the second three months.
The second impact on this sector related to quality. We have been moving from
full regulation to a more competitive environment for electric utilities. As we
move closer to the day of competition, the market is looking closer for the
companies who will be the most successful. These are the companies that the
market was most positive on in the past six months. These also tend to be the
types of companies we seek as investments for the Fund. On the telephone side of
the utility sector, we have new legislation that was passed early in 1996. Its
implications on the earnings of these companies is yet unclear. However, the
volatility of these stocks has increased as the market continues to sort out
what it considers important factors in this new era.
Important Notes for Income-Oriented Funds
Lehman Brothers, High Yield Index: An unmanaged index of all publicly issued
fixed, dollar-denominated, SEC-registered corporate debt rated Ba1 or lower with
at least $100 million outstanding and one year or more to maturity.
Lipper High Current Yield Fund Average: This average consists of funds which aim
at high (relative) current yield from fixed income securities. No quality or
maturity restrictions. They tend to invest in lower grade debt issues. The
one-year average currently contains 130 funds.
Money Market Funds
Princor Cash Management Fund
Princor Tax-Exempt Cash Management Fund
Mike Johnson Steve Schneider
During the first half of the Princor fiscal year 1996, the Federal Reserve
stepped in twice and lowered the targeted Fed Funds rate a total of 50 basis
points to the 5.25% level where it currently remains. After the release of
stronger than anticipated first quarter Gross Domestic Product and employment
results, Chairman Greenspan indicated that the Fed will probably not take any
additional near-term rate action assuming the economy continues to grow without
any eminent danger of inflation heating up. The average maturity of our own
portfolio, as well as that of the industry, rose throughout much of the half as
investors were anticipating that rates would continue to move lower. Once hopes
of additional easing subsided, average maturities declined and have subsequently
leveled off. We continue to target and actively monitor the industry averages to
keep both yields and average maturities in line. Both portfolios continue to
invest from a list of approved issues of the highest credit quality actively
managed by our investment securities analytical staff. Through the first quarter
of 1996, assets for both the Princor taxable and tax-exempt portfolios, as well
as those industry-wide, continue to reach new record high levels.
<PAGE>
Princor Growth-Oriented Funds and Your Financial Future
Recently, the financial press has reported on the huge influx of money into
stock mutual funds. According to The Wall Street Journal, investors poured more
than $55 billion into equity mutual funds during the first quarter of 1996
alone. Experts cite many reasons for the inpouring of money into stock funds,
but typically investors choose growth-oriented funds for these three reasons:
- the need for growth of capital in pursuing their long-term financial goals
- the preference for a diversified, professionally managed portfolio
- the desire to hedge their assets against the effects of inflation
Whether you attain your long-term financial goals depends greatly on the
performance of your investments. Though past results cannot guarantee future
returns, historically common stocks have outperformed other investment classes.
From 1925 to 1995, common stocks, as measured by the Standard & Poor's 500
Composite Index, achieved much greater returns than Treasury bills and long-term
government bonds. Investors should remember that an investment in stocks carries
with it a greater risk of share price fluctuation and loss of principal.
After deciding to invest in equities, the next challenge is selecting the right
investment. For most individuals, finding the time and expertise necessary to
invest successfully in the stock market is difficult. This problem is easily
solved by using a family of high quality mutual funds, such as the Princor
family of mutual funds. By using mutual funds for funding your long-term
financial goals, you achieve two things. First, you gain a level of
diversification difficult to accomplish if buying stocks and bonds on your own.
Secondly, you receive the benefit of knowing that your money is managed by a
staff of highly qualified, professional money managers. The Princor family of
mutual funds offers a choice of seven different growth-oriented funds which
range from conservative to aggressive.
If you are still asking yourself if the potential for greater returns outweighs
the additional risks of investing in stock funds, ask this question: What is the
greatest risk faced by most investors? For many, the answer is that they may
outlive their income.
To help avoid outliving your income, your investments need to provide a return
higher than the rate of inflation. One time-proven method of beating inflation
is to invest in growth-oriented mutual funds. Besides providing the potential
for capital appreciation, stock funds can also provide an excellent source of
income when you are ready to start taking withdrawals. Surprised? Don't be. A
service provided to Princor shareholders who seek regular income is the periodic
withdrawal program. The periodic withdrawal program allows shareholders to
establish a plan whereby a check or wire transfer is issued automatically from
their account in a predetermined amount either monthly, quarterly, semiannually
or annually. Since certain considerations apply to periodic withdrawal plans,
please see the Princor fund prospectus for full details.
Below is an example of how a growth-oriented mutual fund can generate income and
still increase in value. Assume that on 4/1/76, $100,000 was invested in Princor
Capital Accumulation Fund-A. On 12/31/76, a 6% annual periodic withdrawal is
taken. On December 31 of each year thereafter, the periodic withdrawal amount is
indexed for inflation using an assumed rate of 3%. Over the next twenty years,
withdrawals totaling over $160,000 are distributed from the account.
Twenty-years later on 3/31/96, despite the withdrawals the value of the account
is $529,515.
By selecting Princor Capital Accumulation Fund-A, the investors achieved two
goals: 1) to receive regular income in the form of periodic withdrawals helping
them to maintain their lifestyle and 2) to continue the growth of their
investment in hopes of providing for their beneficiaries. Each of these goals
might not have been met if the investors had not kept a long-term perspective,
realized that the investment would fluctuate in value and redefined the term
risk to mean loss of purchasing power!
As you can see, Princor growth-oriented funds offer several compelling reasons
to invest! Their potential for capital appreciation and their ability to fight
off inflation are complemented by diversification and professional management!
Let Princor growth-oriented funds help you achieve your long-term investment
goals. Contact your registered representative for assistance in creating a
portfolio of Princor growth-oriented funds designed with your financial future
in mind.
================================================================================
YEAR END INVESTMENT AMOUNT WITHDRAWAL MARKET VALUE
- --------------------------------------------------------------------------------
12/76 100,000 6,000 99,990
- --------------------------------------------------------------------------------
12/77 0 6,180 92,597
- --------------------------------------------------------------------------------
12/78 0 6,365 89,785
- --------------------------------------------------------------------------------
12/79 0 6,556 96,133
- --------------------------------------------------------------------------------
12/80 0 6,753 112,930
- --------------------------------------------------------------------------------
12/81 0 6,956 113,795
- --------------------------------------------------------------------------------
12/82 0 7,164 128,332
- --------------------------------------------------------------------------------
12/83 0 7,379 168,432
- --------------------------------------------------------------------------------
12/84 0 7,601 169,305
- --------------------------------------------------------------------------------
12/85 0 7,829 222,772
- --------------------------------------------------------------------------------
12/86 0 8,063 246,090
- --------------------------------------------------------------------------------
12/87 0 8,305 252,293
- --------------------------------------------------------------------------------
12/88 0 8,555 278,379
- --------------------------------------------------------------------------------
12/89 0 8,811 310,696
- --------------------------------------------------------------------------------
12/90 0 9,076 268,293
- --------------------------------------------------------------------------------
12/91 0 9,348 357,797
- --------------------------------------------------------------------------------
12/92 0 9,628 380,561
- --------------------------------------------------------------------------------
12/93 0 9,917 399,261
- --------------------------------------------------------------------------------
12/94 0 10,215 389,677
- --------------------------------------------------------------------------------
12/95 0 10,521 503,325
- --------------------------------------------------------------------------------
03/96 0 0 529,515
================================================================================
For the period ending 3/31/96, the average annual total returns for Princor
Capital Accumulation Fund-A assuming a maximum sales charge of 4.75% are:
one-year 22.7%, five-years 12.6% and ten-years 10.3%. The investment results
shown here are historical and are not intended to indicate future performance of
any Princor fund. The illustration assumes investment in A shares, reflects
deduction of a 3.75% sales charge (not the maximum sales charge of 4.75%) and
assumes reinvestment of dividends and capital gains distributions. Totals do not
reflect taxes or inflation. Had dividends and capital gains not been reinvested,
results would be lower. Investment returns and principal values fluctuate so
that the shares, when redeemed, may be worth more or less than their original
cost.
<PAGE>
<TABLE>
<CAPTION>
April 30, 1996
STATEMENTS OF ASSETS AND LIABILITIES
(unaudited)
Princor Princor Princor Capital
Balanced Blue Chip Accumulation
GROWTH FUNDS Fund, Inc. Fund, Inc. Fund, Inc.
<S> <C> <C> <C>
Investment in Securities -- at cost.............................. $61,328,806 $30,496,684 $323,069,764
Assets
Investment in securities -- at value (Note 4).................... $67,662,275 $43,278,687 $396,135,080
Cash ............................................................ 4,955 3,617 5,412
Receivables:
Dividends and interest........................................ 357,134 42,117 308,467
Investment securities sold.................................... -- -- --
Capital Stock sold............................................ 52,195 225,732 127,306
Other assets..................................................... 5,756 1,787 36,429
Total Assets 68,082,315 43,551,940 396,612,694
Liabilities
Accrued expenses................................................. 76,770 37,869 265,745
Capital Stock reacquired......................................... 7,018 1,500 382,215
Total Liabilities 83,788 39,369 647,960
Net Assets Applicable to Outstanding Shares .................. $67,998,527 $43,512,571 $395,964,734
Net Assets Consist of:
Capital Stock.................................................... $ 49,134 $ 26,747 $ 155,592
Additional paid-in capital....................................... 58,266,499 30,683,381 292,921,261
Accumulated undistributed net investment income.................. 122,460 393 1,723,449
Accumulated undistributed net realized gain (loss) from:
Investment transactions ...................................... 3,226,965 20,047 28,099,116
Foreign currency transactions................................. -- -- --
Net unrealized appreciation of investments....................... 6,333,469 12,782,003 73,065,316
Net unrealized (depreciation) on translation of assets and
liabilities in foreign currencies............................. -- -- --
Total Net Assets $67,998,527 $43,512,571 $395,964,734
Capital Stock (par value: $.01 a share)
Shares authorized................................................ 100,000,000 100,000,000 100,000,000
Net Asset Value Per Share:
Class A: Net Assets.............................................. $63,974,471 $39,309,544 $390,448,631
Shares issued and outstanding........................... 4,621,714 2,415,513 15,341,527
Net asset value per share............................... $13.84 $16.27 $25.45
Maximum offering price per share(1) ................... $14.53 $17.08 $26.72
Class B: Net Assets ............................................. $4,023,049 $4,077,234 $5,515,085
Shares issued and outstanding........................... 291,636 251,484 217,625
Net asset value per share(2)............................ $13.79 $16.21 $25.34
Class R: Net Assets ............................................. $1,007 $125,793 $1,038
Shares issued and outstanding........................... 73 7,744 41
Net asset value per share............................... $13.79 $16.24 $25.32
<FN>
(1) Maximum offering price is equal to net asset value plus a front-end sales charge of 4.75% of the offering price.
(2) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
</FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
April 30, 1996
STATEMENTS OF ASSETS AND LIABILITIES
(unaudited)
Princor Princor Princor
Emerging Growth Growth World
GROWTH FUNDS Fund, Inc. Fund, Inc. Fund, Inc.
<S> <C> <C> <C>
Investment in Securities -- at cost.............................. $158,642,173 $157,117,454 $131,566,978
Assets
Investment in securities -- at value (Note 4).................... $212,134,906 $226,889,033 $160,880,981
Cash ............................................................ 8,931 11,372 89,105
Receivables:
Dividends and interest........................................ 133,297 201,201 516,443
Investment securities sold.................................... 108,000 -- --
Capital Stock sold............................................ 416,953 790,138 347,635
Other assets..................................................... 9,070 16,391 5,933
Total Assets 212,811,157 227,908,135 161,840,097
Liabilities
Accrued expenses................................................. 199,393 190,772 208,297
Capital Stock reacquired......................................... 96,821 65,655 33,176
Total Liabilities 296,214 256,427 241,473
Net Assets Applicable to Outstanding Shares .................. $212,514,943 $227,651,708 $161,598,624
Net Assets Consist of:
Capital Stock.................................................... $ 62,270 $ 57,880 $ 208,793
Additional paid-in capital....................................... 150,104,066 155,244,934 130,197,203
Accumulated undistributed net investment income.................. 151,564 579,260 62,452
Accumulated undistributed net realized gain (loss) from:
Investment transactions ...................................... 8,704,310 1,998,056 1,836,243
Foreign currency transactions................................. -- -- (13,316)
Net unrealized appreciation of investments....................... 53,492,733 69,771,578 29,314,003
Net unrealized (depreciation) on translation of assets and
liabilities in foreign currencies............................. -- -- (6,754)
Total Net Assets $212,514,943 $227,651,708 $161,598,624
Capital Stock (par value: $.01 a share)
Shares authorized................................................ 100,000,000 100,000,000 100,000,000
Net Asset Value Per Share:
Class A: Net Assets.............................................. $193,494,049 $210,717,591 $151,723,567
Shares issued and outstanding........................... 5,667,014 5,356,142 19,598,938
Net asset value per share............................... $34.14 $39.34 $7.74
Maximum offering price per share(1) ................... $35.84 $41.30 $8.13
Class B: Net Assets ............................................. $18,894,679 $16,933,020 $9,746,668
Shares issued and outstanding........................... 556,324 431,801 1,263,713
Net asset value per share(2)............................ $33.96 $39.21 $7.71
Class R: Net Assets ............................................. $126,215 $1,097 $128,389
Shares issued and outstanding........................... 3,705 28 16,619
Net asset value per share............................... $34.07 $39.18 $7.73
<FN>
(1) Maximum offering price is equal to net asset value plus a front-end sales charge of 4.75% of the offering price.
(2) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
</FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended April 30, 1996
STATEMENTS OF OPERATIONS
(unaudited)
Princor Princor Princor Capital
Balanced Blue Chip Accumulation
GROWTH FUNDS Fund, Inc. Fund, Inc. Fund, Inc.
Net Investment Income
Income:
<S> <C> <C> <C>
Dividends..................................................... $ 381,695 $ 458,238 $ 4,181,169
Less: Withholding tax on foreign dividends.................... -- -- --
Interest...................................................... 924,924 70,353 210,690
Total Income 1,306,619 528,591 4,391,859
Expenses:
Management and investment advisory fees (Note 3) ........... 188,766 97,581 798,712
Distribution and shareholder servicing fees--Class A (Note 3). 69,831 45,288 183,776
Distribution and shareholder servicing fees--Class B (Note 3). 10,670 12,476 16,884
Distribution and shareholder servicing fees--Class R (Note 3). 1 43 1
Transfer and administrative services (Note 3)................. 121,369 89,408 279,269
Registration fees--Class A.................................... 15,222 11,338 26,052
Registration fees--Class B.................................... 2,859 2,772 1,988
Registration fees--Class R.................................... 4 12 5
Custodian fees ............................................... 5,857 3,475 5,742
Auditing and legal fees ...................................... 3,970 3,630 5,407
Directors' fees .............................................. 4,003 4,002 4,086
Other ........................................................ 3,451 2,115 15,738
Total Expenses 426,003 272,140 1,337,660
Net Investment Income 880,616 256,451 3,054,199
Net Realized and Unrealized Gain (Loss) on Investments
and Foreign Currency
Net realized gain (loss) from:
Investment transactions....................................... 3,250,220 21,530 28,188,465
Foreign currency transactions................................. -- -- --
Net increase (decrease) in unrealized appreciation/
depreciation on:
Investments................................................... 367,657 4,010,923 20,667,909
Translation of assets and liabilities in foreign currencies... -- -- --
Net Realized and Unrealized Gain
on Investments and Foreign Currency 3,617,877 4,032,453 48,856,374
Net Increase in Net Assets
Resulting from Operations $4,498,493 $4,288,904 $51,910,573
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended April 30, 1996
STATEMENTS OF OPERATIONS
(unaudited)
Princor Princor Princor
Emerging Growth Growth World
GROWTH FUNDS Fund, Inc. Fund, Inc. Fund, Inc.
Net Investment Income
Income:
<S> <C> <C> <C>
Dividends..................................................... $ 830,197 $ 1,586,598 $ 1,827,475
Less: Withholding tax on foreign dividends.................... -- -- (222,930)
Interest...................................................... 767,817 523,669 190,309
Total Income 1,598,014 2,110,267 1,794,854
Expenses:
Management and investment advisory fees (Note 3) ........... 572,634 482,073 521,296
Distribution and shareholder servicing fees--Class A (Note 3). 195,049 187,262 136,242
Distribution and shareholder servicing fees--Class B (Note 3). 62,842 55,442 28,527
Distribution and shareholder servicing fees--Class R (Note 3). 43 1 44
Transfer and administrative services (Note 3)................. 388,022 357,481 286,134
Registration fees--Class A.................................... 28,440 23,031 24,155
Registration fees--Class B.................................... 4,047 4,051 2,610
Registration fees--Class R.................................... 6 4 7
Custodian fees ............................................... 4,345 4,192 95,708
Auditing and legal fees ...................................... 4,908 4,730 5,405
Directors' fees .............................................. 4,086 4,086 4,089
Other ........................................................ 5,589 6,530 6,733
Total Expenses 1,270,011 1,128,856 1,110,950
Net Investment Income 328,003 981,411 683,904
Net Realized and Unrealized Gain (Loss) on Investments
and Foreign Currency
Net realized gain (loss) from:
Investment transactions....................................... 8,712,327 2,002,401 1,756,718
Foreign currency transactions................................. -- -- (13,316)
Net increase (decrease) in unrealized appreciation/
depreciation on:
Investments................................................... 10,764,170 15,158,267 14,678,790
Translation of assets and liabilities in foreign currencies... -- -- (10,231)
Net Realized and Unrealized Gain
on Investments and Foreign Currency 19,476,497 17,160,668 16,411,961
Net Increase in Net Assets
Resulting from Operations $19,804,500 $18,142,079 $17,095,865
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended April 30, 1996
STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)
Princor Princor
Balanced Blue Chip
GROWTH FUNDS Fund, Inc. Fund, Inc.
Six Months Year Six Months Year
Ended Ended Ended Ended
April 30, October 31, April 30, October 31,
1996 1995 1996 1995
Operations
<S> <C> <C> <C> <C>
Net investment income............................................ $ 880,616 $ 1,764,386 $ 256,451 $ 561,604
Net realized gain from investment transactions................... 3,250,220 2,846,701 21,530 1,227,208
Net realized gain (loss) from foreign currency transactions...... -- -- -- --
Net increase (decrease) in unrealized appreciation/depreciation
on investments and translation of assets and liabilities in
foreign currencies............................................ 367,657 2,809,432 4,010,923 4,662,787
Net Increase in Net Assets
Resulting from Operations 4,498,493 7,420,519 4,288,904 6,451,599
Dividends and Distributions to Shareholders From net investment
income:
Class A....................................................... (1,074,500) (1,526,106) (343,679) (487,675)
Class B....................................................... (34,059) (10,560) (17,286) (6,240)
Class R....................................................... (7) -- (409) --
(1,108,566) (1,536,666) (361,374) (493,915)
From net realized gain on investments and foreign currency
transactions:
Class A....................................................... (2,798,187) (234,514) (811,020) --
Class B....................................................... (71,790) -- (46,234) --
(2,869,977) (234,514) (857,254) --
Total Distributions (3,978,543) (1,771,180) (1,218,628) (493,915)
Capital Share Transactions (Note 5)
Shares sold:
Class A....................................................... 6,416,903 7,935,949 7,421,225 6,239,894
Class B....................................................... 2,752,539 1,269,648 2,188,319 1,632,045
Class R....................................................... 1,000 -- 125,574 --
Shares issued in reinvestment of dividends and distributions:
Class A....................................................... 3,203,496 1,395,703 873,404 366,550
Class B....................................................... 105,640 10,489 63,357 6,184
Class R....................................................... 7 -- 409 --
Shares redeemed:
Class A....................................................... (3,269,607) (11,165,026) (7,078,129) (4,463,004)
Class B....................................................... (119,755) (73,722) (95,603) (41,750)
Net Increase (Decrease) in Net Assets from
Capital Share Transactions 9,090,223 (626,959) 3,498,556 3,739,919
Total Increase 9,610,173 5,022,380 6,568,832 9,697,603
Net Assets
Beginning of period.............................................. 58,388,354 53,365,974 36,943,739 27,246,136
End of period (including undistributed net investment
income as set forth below).................................... $67,998,527 $ 58,388,354 $43,512,571 $36,943,739
Undistributed Net Investment Income ............................ $ 122,460 $ 350,410 $ 393 $ 105,316
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended April 30, 1996
STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)
Princor Capital Princor
Accumulation Emerging Growth
GROWTH FUNDS Fund, Inc. Fund, Inc.
Six Months Year Six Months Year
Ended Ended Ended Ended
April 30, October 31, April 30, October 31,
1996 1995 1996 1995
Operations
<S> <C> <C> <C> <C>
Net investment income............................................ $ 3,054,199 $ 6,438,683 $ 328,003 $ 549,975
Net realized gain from investment transactions................... 28,188,465 21,096,912 8,712,327 3,897,774
Net realized gain (loss) from foreign currency transactions...... -- -- -- --
Net increase (decrease) in unrealized appreciation/depreciation
on investments and translation of assets and liabilities in
foreign currencies............................................ 20,667,909 24,916,772 10,764,170 25,019,957
Net Increase in Net Assets
Resulting from Operations 51,910,573 52,452,367 19,804,500 29,467,706
Dividends and Distributions to Shareholders From net investment
income:
Class A....................................................... (3,591,175) (5,617,183) (498,551) (236,412)
Class B....................................................... (18,627) (6,731) (2,733) (992)
Class R....................................................... -- -- -- --
(3,609,802) (5,623,914) (501,284) (237,404)
From net realized gain on investments and foreign currency
transactions
Class A....................................................... (20,944,281) (4,755,174) (3,664,535) (544,422)
Class B....................................................... (159,788) -- (234,697) --
(21,104,069) (4,755,174) (3,899,232) (544,422)
Total Distributions (24,713,871) (10,379,088) (4,400,516) (781,826)
Capital Share Transactions (Note 5)
Shares sold:
Class A....................................................... 18,385,022 28,287,310 37,523,242 46,003,051
Class B....................................................... 2,985,668 2,179,812 9,201,525 8,944,401
Class R....................................................... 1,000 -- 124,658 --
Shares issued in reinvestment of dividends and distributions:
Class A....................................................... 24,148,432 10,162,185 4,046,112 763,370
Class B....................................................... 178,371 6,731 233,241 992
Class R....................................................... -- -- -- --
Shares redeemed:
Class A....................................................... (18,655,382) (26,662,663) (12,954,444) (16,885,879)
Class B....................................................... (179,546) (107,211) (671,989) (867,829)
Net Increase (Decrease) in Net Assets from
Capital Share Transactions 26,863,565 13,866,164 37,502,345 37,958,106
Total Increase 54,060,267 55,939,443 52,906,329 66,643,986
Net Assets
Beginning of period.............................................. 341,904,467 285,965,024 159,608,614 92,964,628
End of period (including undistributed net investment
income as set forth below).................................... $395,964,734 $341,904,467 $212,514,943 $159,608,614
Undistributed Net Investment Income ............................ $ 1,723,449 $ 2,279,052 $ 151,564 $ 324,845
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended April 30, 1996
STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)
Princor Princor
Growth World
GROWTH FUNDS Fund, Inc. Fund, Inc.
Six Months Year Six Months Year
Ended Ended Ended Ended
April 30, October 31, April 30, October 31,
1996 1995 1996 1995
Operations
<S> <C> <C> <C> <C>
Net investment income............................................ $ 981,411 $ 1,593,835 $ 683,904 $ 1,294,944
Net realized gain from investment transactions................... 2,002,401 5,884,252 1,756,718 5,921,120
Net realized gain (loss) from foreign currency transactions...... -- -- (13,316) 97,847
Net increase (decrease) in unrealized appreciation/depreciation
on investments and translation of assets and liabilities in
foreign currencies............................................ 15,158,267 24,040,842 14,668,559 (5,208,159)
Net Increase in Net Assets
Resulting from Operations 18,142,079 31,518,929 17,095,865 2,105,752
Dividends and Distributions to Shareholders From net investment
income:
Class A....................................................... (954,776) (1,314,723) (1,382,731) (571,155)
Class B....................................................... (11,602) (7,563) (15,480) (1,106)
Class R....................................................... -- -- -- --
(966,378) (1,322,286) (1,398,211) (572,261)
From net realized gain on investments and foreign currency
transactions:
Class A....................................................... (5,595,867) (2,370,009) (5,735,449) (2,940,766)
Class B....................................................... (291,327) -- (196,110) --
(5,887,194) (2,370,009) (5,931,559) (2,940,766)
Total Distributions (6,853,572) (3,692,295) (7,329,770) (3,513,027)
Capital Share Transactions (Note 5)
Shares sold:
Class A....................................................... 29,920,266 42,675,725 18,861,612 28,751,013
Class B....................................................... 8,355,087 7,815,161 5,354,411 3,799,760
Class R....................................................... 1,000 -- 124,802 --
Shares issued in reinvestment of dividends and distributions:
Class A....................................................... 6,351,778 3,557,579 7,075,249 3,389,757
Class B....................................................... 301,495 7,560 209,953 1,106
Class R....................................................... -- -- -- --
Shares redeemed:
Class A....................................................... (10,520,332) (15,426,370) (10,011,784) (19,795,122)
Class B....................................................... (652,949) (212,100) (243,890) (88,847)
Net Increase (Decrease) in Net Assets from
Capital Share Transactions 33,756,345 38,417,555 21,370,353 16,057,667
Total Increase 45,044,852 66,244,189 31,436,448 14,650,392
Net Assets
Beginning of period.............................................. 182,606,856 116,362,667 130,462,176 115,811,784
End of period (including undistributed net investment
income as set forth below).................................... $227,651,708 $182,606,856 $161,598,624 $130,462,176
Undistributed Net Investment Income ............................ $ 579,259 $ 564,227 $ 62,452 $ 776,759
See accompanying notes.
</TABLE>
<PAGE>
April 30, 1996
NOTES TO FINANCIAL STATEMENTS
(unaudited)
Princor Balanced Fund, Inc.
Princor Blue Chip Fund, Inc.
Princor Capital Accumulation Fund, Inc.
Princor Emerging Growth Fund, Inc.
Princor Growth Fund, Inc.
Princor World Fund, Inc.
Note 1 -- Significant Accounting Policies
Princor Balanced Fund, Inc., Princor Blue Chip Fund, Inc., Princor Capital
Accumulation Fund, Inc., Princor Emerging Growth Fund, Inc., Princor Growth
Fund, Inc. and Princor World Fund, Inc. (the "Growth Funds") are registered
under the Investment Company Act of 1940, as amended, as open-end diversified
management investment companies and operate in the mutual fund industry.
On December 5, 1994, the name of Princor Managed Fund, Inc. was changed to
Princor Balanced Fund, Inc.
On December 5, 1994, the initial purchases of Class B shares of the Growth Funds
were made by Princor Management Corporation (See Note 3). All shares outstanding
prior to the initial Class B share purchases have been classified as Class A
shares. Effective December 9, 1994, the Growth Funds also began offering Class B
shares to the public. On February 27, 1996, the initial purchases of Class R
shares of the Growth Funds were made by Princor Management Corporation (See Note
3). Effective February 29, 1996, the Growth Funds began offering Class R shares
to eligible purchasers.
Class A shares generally are sold with an initial sales charge based on
declining rates and certain purchases may be subject to a contingent deferred
sales charge ("CDSC"). Class B shares are sold without an initial sales charge,
but are subject to a declining CDSC on certain redemptions redeemed within six
years of purchase. Class R shares are sold without an initial sales charge and
are not subject to a CDSC. Class B shares and Class R shares bear a higher
ongoing distribution fee than Class A shares. Class B shares automatically
convert into Class A shares, based on relative net asset value (without a sales
charge) after seven years. Class R shares automatically convert into Class A
shares, based on relative net asset value (without a sales charge) after four
years. All classes of shares for each fund represent interests in the same
portfolio of investments, and will vote together as a single class except where
otherwise required by law or as determined by the Fund's respective Board of
Directors. In addition, the Board of Directors of each fund declare separate
dividends on each class of shares.
The Growth Funds allocate daily all income, expenses (other than class-specific
expenses), and realized and unrealized gains or losses to each class of shares
based upon the relative proportion of the value of shares outstanding of each
class. Class-specific expenses, which include distribution and shareholder
servicing fees and any other items specifically attributable to a particular
class, are charged directly to such class.
The Growth Funds value securities for which market quotations are readily
available at market value, which is determined using the last reported sale
price or, if no sales are reported, as is regularly the case for some securities
traded over-the-counter, the last reported bid price. When reliable market
quotations are not considered to be readily available, which may be the case,
for example, with respect to certain debt securities, preferred stocks and
foreign securities, the investments are valued by using market quotations,
prices provided by market makers or estimates of market values obtained from
yield data and other factors relating to instruments or securities with similar
characteristics in accordance with procedures established in good faith by each
fund's Board of Directors. Securities with remaining maturities of 60 days or
less are valued at amortized cost, which approximates market.
With respect to Princor World Fund, Inc., the value of foreign securities in
foreign currency amounts is expressed in U.S. dollars at the closing daily rate
of exchange. The identified cost of the portfolio holdings is translated at
approximate rates prevailing when acquired. Income and expense amounts are
translated at approximate rates prevailing when received or paid, with daily
accruals of such amounts reported at approximate rates prevailing at the date of
valuation.
Since the carrying amount of the foreign securities of the fund is determined
based on the exchange rate and market values at the close of the period, it is
not practicable to isolate that portion of the results of operations arising as
a result of changes in the foreign exchange rates from the fluctuations arising
from changes in the market prices of securities during the period.
The Growth Funds record investment transactions generally one day after the
trade date, except for short-term investment transactions which are recorded
generally on the trade date. The identified cost basis has been used in
determining the net realized gain or loss from investment transactions and
unrealized appreciation or depreciation on investments. The Growth Funds record
dividend income on the ex-dividend date, except dividend income from foreign
securities whereby the ex-dividend date has passed; such dividends are recorded
as soon as the Growth Funds are informed of the ex-dividend date. Interest
income is recognized on an accrual basis.
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
Dividends and distributions to shareholders from net investment income and net
realized gain from investments and foreign currency transactions is determined
in accordance with federal income tax regulations, which may differ from
generally accepted accounting principles. To the extent these "book/tax"
differences are permanent in nature (i.e. that they result from other than
timing of recognition - "temporary"), such amounts are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary
differences do not require reclassification. Reclassifications made for the year
ended October 31, 1995 were not material.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Note 2 -- Federal Income Taxes
No provision for federal income taxes is considered necessary because each fund
is qualified as a "regulated investment company" under the Internal Revenue Code
and intends to distribute each year substantially all of its net investment
income and realized capital gains to shareholders. The cost of investments for
federal income tax reporting purposes is approximately the same as that for
financial reporting purposes.
Note 3 -- Management Agreement and Transactions With Affiliates
The Growth Funds have agreed to pay investment advisory and management fees to
Princor Management Corporation (wholly owned by Princor Financial Services
Corporation, a subsidiary of Principal Mutual Life Insurance Company) (the
"Manager") computed at an annual percentage rate of each fund's average daily
net assets. The annual rate used in this calculation for Princor Blue Chip Fund,
Inc., Princor Capital Accumulation Fund, Inc. and Princor Growth Fund, Inc. is
.50% of the first $100 million of each fund's average daily net assets, .45% of
the next $100 million of the fund's average daily net assets, .40% of the next
$100 million of the fund's average daily net assets and .35% of the next $100
million of the fund's average daily net assets. With respect to Princor Balanced
Fund, Inc. the annual rate is .60% of the first $100 million of the fund's
average daily net assets. With respect to Princor Emerging Growth Fund, Inc.,
the annual rate is .65% of the first $100 million of the fund's average daily
net assets, .60% of the next $100 million of the fund's average daily net assets
and .55% of the next $100 million of the fund's average daily net assets.With
respect to Princor World Fund, Inc., the annual rate is .75% of the first $100
million of the fund's average daily net assets and .70% of the next $100 million
of the fund's average daily net assets. The Growth Funds also reimburse the
Manager for transfer and administrative services, including the cost of
accounting, data processing, supplies and other services rendered.
The Manager has agreed to reimburse the Growth Funds annually for their total
expenses (excluding brokerage commissions, interest and taxes) in excess of
limits prescribed by any state in which the Growth Funds' shares are offered for
sale (currently 2 1/2% of the first $30 million of each fund's average annual
net assets, 2% of the next $70 million of such assets and 1 1/2% of such assets
in excess thereof).
Princor Financial Services Corporation, as principal underwriter, receives
proceeds of any CDSC on certain Class A and Class B share redemptions. The
charge is based on declining rates, which begin at .75% for Class A shares and
4.00% for Class B shares of the Growth Funds. Princor Financial Services
Corporation also retains sales charges on sales of Class A shares based on
declining rates which begin at 4.75% of the offering price. The aggregate amount
of these charges retained, by fund, for the period ended April 30, 1996 were as
follows:
Class A Class B
Princor Balanced Fund, Inc. $195,620 $ 3,699
Princor Blue Chip Fund, Inc. 197,748 2,451
Princor Capital Accumulation
Fund, Inc. 477,636 4,047
Princor Emerging Growth Fund, Inc. 943,377 14,685
Princor Growth Fund, Inc. 899,296 13,910
Princor World Fund, Inc. 416,582 7,059
No brokerage commissions were paid by the Growth Funds to Princor Financial
Services Corporation during the periods. Brokerage commissions were paid to
other affiliates by the following funds:
April 30, October 31,
1996 1995
Princor Balanced Fund, Inc. 555 1,162
Princor Capital Accumulation Fund, Inc. -- 17,491
Princor Emerging Growth Fund, Inc. 500 200
Princor Growth Fund, Inc. -- 5,894
Princor World Fund, Inc. -- 21,577
The Growth Funds bear distribution and shareholder servicing fees with respect
to Class A shares computed at an annual rate of up to 0.25% of the average daily
net assets attributable to Class A shares of each fund. Effective December 1994,
each of the Growth Funds adopted a distribution plan with respect to Class B
shares that provides for distribution and shareholder servicing fees computed at
an annual rate of up to 1.00% of the average daily net assets attributable to
Class B shares of each fund. Effective February 1996, each of the Growth Funds
adopted a distribution plan with respect to Class R shares that provides for
distribution and shareholder servicing fees computed at an annual rate of up to
.75% of the average daily net assets attributable to Class R shares of each
Fund. Distribution and shareholder servicing fees are paid to Princor Financial
Services Corporation; a portion of the fees are subsequently remitted to retail
dealers. Pursuant to the distribution agreements, fees unused by the principal
underwriter at the end of the fiscal year are returned to the Growth Funds.
At April 30, 1996, Principal Mutual Life Insurance Company, subsidiaries of
Principal Mutual Life Insurance Company and benefit plans sponsored on behalf of
Principal Mutual Life Insurance Company owned shares of the Growth Funds as
follows:
Class A Class B Class R
Princor Balanced Fund, Inc. 673,350 91 73
Princor Blue Chip Fund, Inc. 304,471 86 62
Princor Capital Accumulation
Fund, Inc. 6,803,478 55 40
Princor Emerging Growth
Fund, Inc. 46,739 43 30
Princor Growth Fund, Inc. 37,577 36 26
Princor World Fund, Inc. 4,104,541 156 134
Note 4 -- Investment Transactions
For the six months ended April 30, 1996, the cost of investment securities
purchased and proceeds from investment securities sold (not including short-term
investments and U.S. government securities) by the Growth Funds were as follows:
Purchases Sales
Princor Balanced Fund, Inc. $11,065,283 $ 7,919,536
Princor Blue Chip Fund, Inc. 3,217,711 1,045,501
Princor Capital Accumulation Fund, Inc. 93,810,024 91,636,865
Princor Emerging Growth Fund, Inc. 48,555,508 22,024,575
Princor Growth Fund, Inc. 20,676,785 2,648,670
Princor World Fund, Inc. 18,224,333 12,189,876
At April 30, 1996, net unrealized appreciation of investments by the Growth
Funds was composed of the following:
<TABLE>
<CAPTION>
Net Unrealized
Gross Unrealized Appreciation
Appreciation (Depreciation) of Investments
<S> <C> <C> <C>
Princor Balanced Fund, Inc. $ 7,332,562 $ (999,093) $ 6,333,469
Princor Blue Chip Fund, Inc. 12,958,338 (176,335) 12,782,003
Princor Capital Accumulation Fund, Inc. 77,971,011 (4,905,995) 73,065,016
Princor Emerging Growth Fund, Inc. 57,936,250 (4,443,517) 53,492,733
Princor Growth Fund, Inc. 73,827,450 (4,055,872) 69,771,578
Princor World Fund, Inc. 36,345,044 (7,031,041) 29,314,003
</TABLE>
At April 30, 1996, Princor Balanced Fund, Inc., Princor Emerging Growth Fund,
Inc., Princor Growth Fund, Inc. and Princor World Fund, Inc. held the following
securities which may require registration under the Securities Act of 1933, or
an exemption therefrom, in order to effect a sale in the ordinary course of
business.
<TABLE>
<CAPTION>
Value at Value as a
Date of April 30, Percentage of
Fund Security Description Acquisition Cost 1996 Net Assets
<S> <C> <C> <C> <C> <C>
Princor Balanced Federal-Mogul Corp.; Series D
Fund, Inc. Convertible Preferred Stock 10/15/92 $ 450,450 $ 464,100 .68%
Princor Emerging Ciba-Geigy Corp.; Exchangeable
Growth Fund, Inc. Subordinated Debentures 3/20/91 350,000 358,750 .17
Sierra On Line;
Convertible Subordinated Debentures 8/15/94 458,750 1,420,000 .67
8/17/94 447,125 1,391,260 .65
3,170,010 1.49
Princor Growth Ciba-Geigy Corp.; Exchangeable
Fund, Inc. Subordinated Debentures 3/20/91 500,000 512,500 .23
Princor World Alfa SA; Convertible
Fund, Inc. Subordinated Debentures 9/25/95 1,293,500 1,352,000 .84
Fokus Bank 10/9/95 557,692 645,361 .40
Royal Plastics Group 11/23/94 441,561 832,932 .52
Voest-Alpine Stahl 10/27/95 913,965 989,920 .61
1/11/96 414,525 428,965 .27
4,249,178 2.64
</TABLE>
The Growth Funds' investments are with various issuers in various industries.
The Schedules of Investments contained herein summarize concentrations of credit
risk by issuer and industry.
Note 5 -- Capital Share Transactions
Transactions in Capital Stock by fund were as follows:
<TABLE>
<CAPTION>
Princor Princor Blue Princor Capital
Balanced Fund, Inc. Chip Fund, Inc. Accumulation Fund, Inc.
<S> <C> <C> <C>
Six Months Ended April 30, 1996:
Shares sold:
Class A ......................................... 466,666 466,355 1,016,483
Class B ......................................... 200,484 137,864 122,198
Class R* ........................................ 72 7,719 41
Shares issued in reinvestment of dividends and
distributions:
Class A ........................................... 235,241 56,147 752,376
Class B ........................................... 7,775 4,089 7,539
Class R* ........................................ 1 25 --
Shares redeemed:
Class A ......................................... (237,130) (449,501) (764,392)
Class B ......................................... (8,722) (6,015) (7,366)
Net Increase 664,387 216,683 1,126,878
Year Ended October 31, 1995:
Shares sold:
Class A ......................................... 621,291 459,446 1,337,962
Class B** ....................................... 96,737 118,048 99,674
Shares issued in reinvestment of dividends and
distributions:
Class A ........................................... 109,764 27,369 504,425
Class B** ......................................... 785 428 303
Shares redeemed:
Class A ......................................... (868,199) (332,080) (1,230,978)
Class B** ....................................... (5,423) (2,930) (4,723)
Net Increase (Decrease) (45,045) 270,281 706,663
<FN>
* Period from February 27, 1996 (date operations commenced) through April 30,
1996.
** Period from December 5, 1994 (date operations commenced) through October
31, 1995.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Princor Emerging Princor Princor
Growth Fund, Inc. Growth Fund, Inc. World Fund, Inc.
<S> <C> <C> <C>
Six Months Ended April 30, 1996:
Shares sold:
Class A ......................................... 1,144,297 778,089 2,575,203
Class B ......................................... 282,052 217,465 726,162
Class R* ......................................... 3,705 28 16,619
Shares issued in reinvestment of dividends and
distributions:
Class A ........................................... 128,476 167,794 1,013,100
Class B ........................................... 7,449 8,094 30,387
Shares redeemed:
Class A ......................................... (394,636) (275,509) (1,368,408)
Class B ......................................... (20,515) (16,923) (32,963)
Net Increase 1,150,828 881,038 2,960,100
Year Ended October 31, 1995:
Shares sold:
Class A ......................................... 1,672,153 1,289,559 4,196,714
Class B** ........................................ 315,641 228,863 552,636
Shares issued in reinvestment of dividends and
distributions:
Class A ......................................... 30,633 118,018 500,571
Class B** ........................................ 35 220 166
Shares redeemed:
Class A ......................................... (620,722) (469,161) (2,887,555)
Class B** ........................................ (28,338) (5,918) (12,675)
Net Increase 1,369,402 1,170,581 2,349,857
<FN>
* Period from February 27, 1996 (date operations commenced) through April 30,
1996.
** Period from December 5, 1994 (date operations commenced) through October
31, 1995.
</FN>
</TABLE>
Effective December 5, 1994, the articles of incorporation of Princor World Fund,
Inc. were amended resulting in a decrease in the par value of its capital stock
from $.10 to $.01 per share.
Note 6 -- Line of Credit
The Growth Funds have an unsecured line of credit with a bank which allows each
fund to borrow up to $500,000. Borrowings are made solely to facilitate the
handling of unusual and/or unanticipated short-term cash requirements. Interest
is charged to each fund, based on its borrowings, at a rate equal to the bank's
Fed Funds Unsecured Rate plus 100 basis points. Additionally, a commitment fee
is charged at the annual rate of .25% on the unused portion of the line of
credit. At April 30, 1996, the Growth Funds had no outstanding borrowings under
the line of credit.
<PAGE>
SCHEDULES OF INVESTMENTS
PRINCOR BALANCED FUND, INC.
Shares
Held Value
Common Stocks (48.59%)
Advertising (0.60%)
Interpublic Group of Cos., Inc. 8,800 $ 411,400
Beverages (1.09%)
Pepsico, Inc. 9,500 603,250
Universal Foods Corp. 4,000 137,000
740,250
Combination Utility Services (0.41%)
Cinergy Corp. 9,500 275,500
Commercial Banks (3.94%)
Banc One Corp. 12,200 423,950
Bank of Boston Corp. 8,100 391,837
Chase Manhattan Corp. 3,848 265,031
Comerica, Inc. 8,600 374,100
First of America Bank Corp. 5,300 239,825
Firstar Corp. 5,400 251,100
KeyCorp. 10,400 401,700
Nationsbank Corp. 4,200 334,950
2,682,493
Communications Equipment (1.96%)
Allen Group, Inc. 3,000 74,250
DSC Communications Corp. 11,400(a) 359,100
General Instrument Corp. 20,300(a) 664,825
Northern Telecom Ltd. 4,600 236,900
1,335,075
Computer & Office Equipment (1.35%)
Hewlett-Packard Co. 3,600 381,150
International Business Machines Corp. 5,000 537,500
918,650
Construction & Related
Machinery (0.44%)
Caterpillar, Inc. 4,700 300,800
Consumer Products (0.52%)
Philip Morris Cos., Inc. 3,900 351,488
Crude Petroleum & Natural Gas (1.09%)
Texaco, Inc. 8,700 743,850
Dairy Products (0.28%)
Dean Foods Co. 8,000 187,000
Drugs (5.16%)
Abbott Labs 21,300 865,313
American Home Products Corp. 6,600 696,300
Bristol-Myers Squibb Co. 6,600 542,850
Lilly (Eli) & Co. 6,200 365,800
Merck & Co., Inc. 9,800 592,900
Warner-Lambert Co. 4,000 447,000
3,510,163
Electric Services (1.46%)
Dominion Resources, Inc. 10,200 392,700
FPL Group, Inc. 7,000 301,875
Potomac Electric Power Co. 12,000 298,500
993,075
Electrical Industrial
Apparatus (0.44%)
Emerson Electric Co. 3,600 301,050
Electronic Components &
Accessories (0.63%)
Duracell International, Inc. 9,500 429,875
Electronic Distribution
Equipment (1.31%)
General Electric Co. 11,500 891,250
Fats & Oils (0.96%)
Archer Daniels Midland Co. 34,500 651,187
Fire, Marine, & Casualty
Insurance (0.58%)
Allstate Corp. 10,165 395,164
General Industrial Machinery (0.41%)
BW/IP Holdings, Inc.;Class A 4,200 86,625
Pall Corp. 6,900 193,200
279,825
Grain Mill Products (0.66%)
Ralston-Ralston Purina Group 7,700 449,488
Grocery Stores (2.51%)
Albertson's, Inc. 13,000 500,500
American Stores Co. 18,600 620,775
Sysco Corp. 18,200 584,675
1,705,950
Household Furniture (0.73%)
Masco Corp. 18,100 493,225
Industrial Inorganic Chemicals (0.55%)
Dow Chemical Co. 4,200 373,275
Insurance Agents, Brokers &
Services (0.56%)
Equifax, Inc. 15,600 382,200
Jewelry, Silverware, &
Plated Ware (0.24%)
Jostens, Inc. 7,200 162,000
Management & Public Relations (0.86%)
Dun & Bradstreet Corp. 9,600 584,400
Meat Products (1.09%)
ConAgra, Inc. 7,334 283,276
Tyson Foods, Inc. 18,500 460,187
743,463
Medical Instruments & Supplies (0.70%)
St. Jude Medical, Inc. 8,950(a) 326,675
United States Surgical Corp. 4,000 148,000
474,675
Medical Service & Health Insurance (0.99%)
AON Corp. 6,800 364,650
Foundation Health Corp. 6,200(a) 242,575
Physicians Corp. of America 4,300(a) 64,231
671,456
Metal Forgings & Stampings (1.01%)
Newell Co. 24,000 684,000
Metalworking Machinery (0.14%)
Giddings & Lewis 5,100 94,669
Miscellaneous Business Services (0.22%)
Safety-Kleen Corp. 9,900 148,500
Miscellaneous Converted Paper
Products (1.25%)
Minnesota Mining & Mfg. Co. 12,900 848,175
Miscellaneous Electrical Equipment
& Supplies (1.16%)
Motorola, Inc. 12,900 790,125
Miscellaneous Fabricated Metal
Products (0.20%)
Keystone International, Inc. 6,300 137,813
Miscellaneous Shopping Goods
Stores (0.93%)
Toys 'R' Us, Inc. 22,700(a) 632,762
Motor Vehicles, Parts & Supplies (0.80%)
Grainger (W. W.), Inc. 7,900 545,100
Offices & Clinics of Medical Doctors (0.33%)
FHP International Corp. 7,500(a) 221,250
Petroleum Refining (1.45%)
Atlantic Richfield Co. 2,800 329,700
Exxon Corp. 7,700 654,500
984,200
Photographic Equipment
& Supplies (0.29%)
Eastman Chemical Co. 2,950 198,388
Plastic Materials & Synthetics (0.19%)
Wellman, Inc. 5,300 127,200
Sanitary Services (2.32%)
Browning-Ferris Industries, Inc. 19,100 615,975
WMX Technologies, Inc. 27,600 959,100
1,575,075
Security Brokers & Dealers (0.29%)
Edwards (A.G.), Inc. 8,475 199,162
Soap, Cleaners & Toilet Goods (1.70%)
Avon Products 7,600 675,450
Colgate-Palmolive Co. 6,300 482,738
1,158,188
Telephone Communication (2.31%)
AT&T Corp. 15,000 918,750
MCI Communications Corp. 22,200 653,512
1,572,262
Variety Stores (2.48%)
Dayton-Hudson Corp. 9,800 935,900
Wal-Mart Stores, Inc. 31,500 752,063
1,687,963
Total Common Stocks 33,043,059
Preferred Stocks (3.30%)
Commercial Banks (0.84%)
Boatmen's Bancshares, Inc. Convertible 16,800 571,200
Motor Vehicles & Equipment (2.39%)
Federal-Mogul Corp.
Series D Convertible 7,800(b) 464,100
Ford Motor Co.
Series A Convertible 10,000 1,160,000
1,624,100
Paper Mills (0.07%)
James River Corp. of Virginia
Series L Convertible
Exchangeable 1,000 47,625
Total Preferred Stocks 2,242,925
Bonds (3.78%)
Principal
Amount Value
Aircraft & Parts (0.33%)
Rohr Industries, Inc.
Convertible Subordinated
Debentures; 7.00%; 10/1/12 $ 260,000 $ 226,200
Blast Furnace & Basic
Steel Products (0.50%)
Quanex Corp. Convertible
Subordinated Debentures;
6.88%; 6/30/07 350,000 336,875
Electric Lighting & Wiring
Equipment (0.39%)
Cooper Industries, Inc. Convertible
Subordinated Debentures;
7.05%; 1/1/15 245,000 262,150
Electrical Industrial Apparatus (0.50%)
Liebert Co. Convertible
Subordinated Debentures;
8.00%; 11/15/10 110,000 341,687
Engines & Turbines (0.75%)
Outboard Marine Corp. Convertible
Subordinated Debentures;
7.00%; 7/1/02 500,000 507,500
Lumber & Other Building
Materials (0.38%)
Hechinger Co. Convertible
Subordinated Debentures;
5.50%; 4/1/12 600,000 258,750
Petroleum Refining (0.61%)
Pennzoil Co. Senior Exchangeable
Debentures; 6.50%; 1/15/03 300,000 414,000
Trucking & Courier Services,
Ex., Air (0.32%)
Builders Transport, Inc. Convertible
Subordinated Debentures;
6.50%; 5/1/11 306,000 219,555
Total Bonds 2,566,717
U.S. Government Treasury Notes & Bonds (35.95%)
Treasury Notes & Bonds (35.95%)
5.13%; 2/28/98 4,000,000 3,937,500
5.13%; 11/30/98 1,000,000 975,000
6.00%; 10/15/99 2,150,000 2,132,531
5.50%; 4/15/00 5,800,000 5,631,434
6.38%; 8/15/02 3,300,000 3,273,187
5.75%; 8/15/03 3,000,000 2,851,875
5.88%; 2/15/04 2,200,000 2,098,936
7.50%; 2/15/05 1,000,000 1,052,500
8.25%; 5/15/05 750,000 791,953
7.25%; 5/15/16 575,000 585,961
7.50%;11/15/16 575,000 600,875
7.25%; 8/15/22 500,000 510,000
24,441,752
Commercial Paper (7.89%)
Business Credit Institutions (3.06%)
General Electric Capital Corp.;
5.22%; 5/3/96 2,080,000 2,079,397
Crude Petroleum & Natural Gas (3.17%)
Chevron Oil Finance Corp.;
5.25%; 5/6/96 2,160,000 2,158,425
Personal Credit Institutions (1.66%)
Associates Corp. of North America;
5.35%; 5/1/96 1,130,000 1,130,000
Total Commercial Paper 5,367,822
Total Portfolio Investments (99.51%) 67,662,275
Cash, receivables and other assets,
net of liabilities (0.49%) 336,252
Total Net Assets (100.00%) $67,998,527
(a) Non-income producing security - No dividend paid during the period.
(b) Restricted security - See Note 4 to the financial statements.
PRINCOR BLUE CHIP FUND, INC.
Shares
Held Value
Common Stocks (92.32%)
Beverages (5.16%)
Coca-Cola Co. 12,600 $1,026,900
Pepsico, Inc. 19,200 1,219,200
2,246,100
Commercial Banks (5.59%)
Banc One Corp. 16,745 581,889
KeyCorp 26,500 1,023,562
Torchmark Corp. 7,800 335,400
Wachovia Corp. 11,200 492,800
2,433,651
Commercial Printing (1.89%)
R. R. Donnelley & Sons Co. 22,900 824,400
Computer & Office Equipment (3.26%)
Hewlett-Packard Co. 13,400 1,418,725
Consumer Products (3.48%)
Philip Morris Cos., Inc. 16,800 1,514,100
Department Stores (3.34%)
May Department Stores 28,500 1,453,500
Drug Stores & Proprietary Stores (2.82%)
Walgreen Co. 38,300 1,225,600
Drugs (13.63%)
Baxter International, Inc. 27,200 1,203,600
Bristol-Myers Squibb Co. 14,500 1,192,625
Johnson & Johnson 14,200 1,313,500
Merck & Co., Inc. 20,100 1,216,050
Warner-Lambert Co. 9,000 1,005,750
5,931,525
Eating & Drinking Places (2.03%)
McDonald's Corp. 18,400 880,900
Electric Services (4.83%)
Dominion Resources, Inc. 27,500 1,058,750
KU Energy Corp. 37,000 1,040,625
2,099,375
Electrical Industrial Apparatus (2.84%)
Emerson Electric Co. 14,800 1,237,650
Electronic Distribution Equipment (3.49%)
General Electric Co. 19,600 1,519,000
General Industrial Machinery (1.93%)
Pall Corp. 30,000 840,000
Grain Mill Products (1.95%)
Ralston-Ralston Purina Group 14,500 846,438
Industrial Inorganic
Chemicals (2.29%)
Dow Chemical Co. 11,200 995,400
Insurance Agents, Brokers &
Services (2.86%)
Equifax, Inc. 50,800 1,244,600
Management & Public Relations (2.35%)
Dun & Bradstreet Corp. 16,800 1,022,700
Metal Cans & Shipping
Containers (3.08%)
Crown Cork & Seal Co., Inc. 28,400 1,338,350
Miscellaneous Converted Paper
Products (2.93%)
Minnesota Mining & Mfg. Co. 19,400 1,275,550
Miscellaneous Electrical Equipment &
Supplies (3.18%)
Motorola, Inc. 22,600 1,384,250
Petroleum Refining (5.49%)
Exxon Corp. 13,800 1,173,000
Royal Dutch Petroleum Co. ADR 8,500 1,217,625
2,390,625
Preserved Fruits & Vegetables (2.84%)
H. J. Heinz Co. 36,500 1,236,437
Sanitary Services (1.60%)
WMX Technologies, Inc. 20,000 695,000
Security Brokers & Dealers (1.28%)
American Express Co. 11,500 557,750
Soap, Cleaners & Toilet Goods (2.76%)
Procter & Gamble Co. 14,200 1,199,900
Telephone Communication (5.42%)
AT&T Corp. 18,900 1,157,625
Bellsouth Corp. 30,000 1,200,000
2,357,625
Total Common Stocks 40,169,151
Commercial Paper (7.15%)
Principal
Amount Value
Business Credit Institutions (3.68%)
General Electric Capital Corp.
5.22%; 5/3/96 $1,600,000 $ 1,599,536
Personal Credit Institutions (3.47%)
Associates Corp. of North America
5.35%; 5/1/96 1,510,000 1,510,000
Total Commercial Paper 3,109,536
Total Portfolio Investments (99.46%) 43,278,687
Cash, receivables and other assets,
net of liabilities (0.53%) 233,884
Total Net Assets (100.00%) $43,512,571
PRINCOR CAPITAL ACCUMULATION FUND, INC.
Shares
Held Value
Common Stocks (97.82%)
Advertising (1.22%)
Interpublic Group of Cos., Inc. 103,000 $ 4,815,250
Beverages (2.29%)
Pepsico, Inc. 116,900 7,423,150
Universal Foods Corp. 48,300 1,654,275
9,077,425
Combination Utility Services (0.88%)
Cinergy Corp. 120,300 3,488,700
Commercial Banks (9.22%)
Banc One Corp. 158,540 5,509,265
Bank of Boston Corp. 100,700 4,871,362
Boatmen's Bancshares, Inc. 87,000 3,371,250
Chase Manhattan Bank Corp. 58,136 4,004,117
Comerica, Inc. 95,400 4,149,900
First of America Bank Corp. 80,200 3,629,050
KeyCorp 159,500 6,160,688
Nationsbank Corp. 60,300 4,808,925
36,504,557
Communications Equipment (4.02%)
Allen Group, Inc. 44,700 1,106,325
DSC Communications Corp. 136,300(a) 4,293,450
General Instrument Corp. 232,400(a) 7,611,100
Northern Telecom Ltd. 56,500 2,909,750
15,920,625
Computer & Office Equipment (2.69%)
Hewlett-Packard Co. 41,000 4,340,875
International Business
Machines Corp. 58,700 6,310,250
10,651,125
Construction & Related
Machinery (0.94%)
Caterpillar, Inc. 58,000 3,712,000
Crude Petroleum & Natural Gas (2.06%)
Texaco, Inc. 95,300 8,148,150
Dairy Products (0.56%)
Dean Foods Co. 95,100 2,222,962
Drugs (9.97%)
Abbott Labs 242,700 9,859,688
American Home Products Corp. 75,300 7,944,150
Bristol-Myers Squibb Co. 74,800 6,152,300
Lilly (Eli) & Co. 59,800 3,528,200
Merck & Co., Inc. 112,600 6,812,300
Warner-Lambert Co. 46,400 5,185,200
39,481,838
Electric Services (2.90%)
Dominion Resources, Inc. 108,200 4,165,700
FPL Group, Inc. 85,100 3,669,938
Potomac Electric Power Co. 146,800 3,651,650
11,487,288
Electrical Industrial Apparatus (1.78%)
Emerson Electric Co. 84,397 7,057,699
Electronic Components & Accessories (1.28%)
Duracell International, Inc. 111,600 5,049,900
Electronic Distribution Equipment (2.51%)
General Electric Co. 128,300 9,943,250
Fats & Oils (2.19%)
Archer Daniels Midland Co. 460,000 8,682,500
Fire, Marine & Casualty Insurance (1.18%)
Allstate Corp. 120,051 4,666,983
General Industrial Machinery (0.93%)
BW/IP Holdings, Inc.; Class A 64,100 1,322,062
Pall Corp. 84,000 2,352,000
3,674,062
Grain Mill Products (1.31%)
Ralston-Ralston Purina Group 88,600 5,172,025
Grocery Stores (5.01%)
Albertson's, Inc. 155,300 5,979,050
American Stores Co. 212,300 7,085,513
Sysco Corp. 210,500 6,762,312
19,826,875
Household Furniture (1.34%)
Masco Corp. 194,700 5,305,575
Industrial Inorganic Chemicals (1.07%)
Dow Chemical Co. 47,700 4,239,337
Insurance Agents, Brokers
& Services (1.13%)
Equifax, Inc. 182,800 4,478,600
Jewelry, Silverware & Plated Ware (0.50%)
Jostens, Inc. 88,200 1,984,500
Management & Public Relations (1.70%)
Dun & Bradstreet Corp. 110,600 6,732,775
Meat Products (1.38%)
Tyson Foods, Inc. 219,700 5,465,038
Medical Instruments & Supplies (1.51%)
St. Jude Medical, Inc. 102,050(a) 3,724,825
United States Surgical Corp. 61,100 2,260,700
5,985,525
Medical Service & Health Insurance (2.17%)
AON Corp. 74,600 4,000,425
Foundation Health Corp. 93,200(a) 3,646,450
Physicians Corp. of America 64,300(a) 960,481
8,607,356
Metal Forgings & Stampings (2.04%)
Newell Co. 283,300 8,074,050
Metalworking Machinery (0.30%)
Giddings & Lewis 64,200 1,191,712
Miscellaneous Business Services (0.46%)
Safety-Kleen Corp. 121,200 1,818,000
Miscellaneous Converted Paper
Products (2.50%)
Minnesota Mining & Mfg. Co. 150,300 9,882,225
Miscellaneous Electrical Equipment
& Supplies (2.05%)
Motorola, Inc. 132,400 8,109,500
Miscellaneous Fabricated Metal
Products (0.42%)
Keystone International, Inc. 76,200 1,666,875
Miscellaneous Shopping Goods
Stores (1.90%)
Toys 'R' Us, Inc. 270,100(a) 7,529,037
Motor Vehicles, Parts & Supplies (1.57%)
Grainger (W. W.), Inc. 90,300 6,230,700
Offices & Clinics of Medical Doctors (0.85%)
FHP International Corp. 113,700(a) 3,354,150
Petroleum Refining (3.01%)
Atlantic Richfield Co. 35,900 4,227,225
Exxon Corp. 90,400 7,684,000
11,911,225
Photographic Equipment & Supplies (0.60%)
Eastman Chemical Co. 35,400 2,380,650
Plastic Materials & Synthetics (0.39%)
Wellman, Inc. 64,200 1,540,800
Sanitary Services (4.51%)
Browning-Ferris Industries, Inc. 218,100 7,033,725
WMX Technologies, Inc. 311,800 10,835,050
17,868,775
Security Brokers & Dealers (0.60%)
Edwards (A.G.), Inc. 100,322 2,357,567
Soap, Cleaners & Toilet Goods (3.48%)
Avon Products 93,000 8,265,375
Colgate-Palmolive Co. 71,900 5,509,338
13,774,713
Telephone Communication (4.52%)
AT&T Corp. 171,000 10,473,750
MCI Communications Corp. 252,800 7,441,800
17,915,550
Variety Stores (4.88%)
Dayton-Hudson Corp. 110,400 10,543,200
Wal-Mart Stores, Inc. 368,300 8,793,163
19,336,363
Total Common Stocks 387,323,812
Commercial Paper (2.22%)
Principal
Amount Value
Business Credit Institutions (0.70%)
General Electric Capital Corp.;
5.22%; 5/3/96 $2,785,000 $ 2,784,192
Crude Petroleum & Natural
Gas (1.01%)
Chevron Oil Finance Co.;
5.25%; 5/6/96 4,010,000 4,007,076
Personal Credit Institutions (0.51%)
Associates Corp. of North America;
5.35%; 5/1/96 2,020,000 2,020,000
Total Commercial Paper 8,811,268
Total Portfolio Investments (100.04%) 396,135,080
Liabilities, net of cash, receivables
and other assets (-0.04%) (170,346)
Total Net Assets (100.00%) $395,964,734
(a) Non-Income producing security - No dividend paid during the period.
PRINCOR EMERGING GROWTH FUND, INC.
Shares
Held Value
Common Stocks (82.80%)
Blast Furnace & Basic Steel Products (1.24%)
Lukens, Inc. 100,000 $ 2,637,500
Carpets & Rugs (1.02%)
Shaw Industries, Inc. 175,000 2,165,625
Chemicals & Allied Products (0.51%)
Sigma-Aldrich Corp. 20,000 1,080,000
Commercial Banks (7.06%)
Boatmen's Bancshares, Inc. 10,200 395,250
First Commerce Corp. 15,000 510,000
First Federal Capital Corp. 108,532 2,360,571
Independent Bank Corp. Michigan 36,750 1,056,562
Integra Financial Corp. 10,000 738,750
Mercantile Bancorp., Inc. 89,343 3,975,763
Merchants Bancorp., Inc. 57,500 1,681,875
North Fork Bancorp., Inc. 25,000 593,750
Peoples Heritage Financial Group, Inc. 58,900 1,229,537
Princeton National Bancorp., Inc. 100,000 1,900,000
Summit Bancorp. 15,840 562,320
15,004,380
Commercial Printing (0.41%)
Merrill Corp. 40,000 880,000
Computer & Data Processing
Services (6.95%)
American Management Systems, Inc. 165,000(a) 4,393,125
Cerner Corp. 227,100(a) 4,683,937
HBO & Co. 24,000 2,850,000
Microsoft Corp. 25,000(a) 2,834,375
14,761,437
Computer & Office Equipment (1.64%)
EMC Corp. 156,600(a) 3,210,300
Seagate Technology 4,705(a) 272,890
3,483,190
Construction & Related Machinery (1.41%)
Energy Ventures, Inc. 100,000(a) 3,000,000
Crude Petroleum & Natural Gas (0.75%)
Devon Energy Corp. 62,900 1,603,950
Dairy Products (0.49%)
Dreyer's Grand Ice Cream, Inc. 30,000 1,042,500
Drugs (2.72%)
Alliance Pharmaceutical Corp. 45,000(a) 815,625
Forest Laboratories, Inc. 31,200(a) 1,439,100
Genzyme Corp. - General Division 7,565(a) 425,531
Genzyme Corp. - Tissue Repair 1,021(a) 14,038
Merck & Co., Inc. 16,970 1,026,685
Pharmacia & Upjohn, Inc. 47,300 1,809,225
Seragen, Inc. 60,000(a) 247,500
5,777,705
Electronic Components &
Accessories (5.88%)
Intel Corp. 74,000 5,013,500
Linear Technology Corp. 88,000 3,025,000
Solectron Corp. 100,000(a) 4,450,000
12,488,500
Engineering & Architectural
Services (1.50%)
Paychex, Inc. 47,050 3,187,638
Finance Services (1.11%)
First Financial Corp. 100,000 2,350,000
Fire, Marine & Casualty Insurance (2.31%)
Avemco Corp. 100,000 1,550,000
Berkley W. R. Corp. 78,000 3,354,000
4,904,000
Footwear, Except Rubber (0.91%)
Nine West Group, Inc. 45,000(a) 1,929,375
General Industrial Machinery (6.01%)
Flow International Corp. 166,500(a) 1,644,187
Kaydon Corp. 80,000 3,180,000
Pentair, Inc. 121,100 3,299,975
Roper Industries, Inc. 100,000 4,650,000
12,774,162
Grocery Stores (0.77%)
Casey's General Stores, Inc. 75,700 1,632,281
Hardware Stores (0.93%)
Central Tractor Farm & Country, Inc. 151,400(a) 1,968,200
Holding Offices (1.28%)
ISB Financial Corp. 50,000 775,000
Today's Bancorp., Inc. 66,000 1,947,000
2,722,000
Hose, Belting, Gaskets & Packing (1.08%)
Mark IV Industries 110,360 2,289,975
Hospitals (2.58%)
Humana, Inc. 110,000(a) 2,708,750
Universal Health Services, Inc.;
Class B 50,000(a) 2,775,000
5,483,750
Insurance Agents, Brokers &
Services (1.61%)
Equifax, Inc. 140,000 3,430,000
Investment Offices (0.96%)
INVESCO PLC ADR 55,000 2,035,000
Iron & Steel Foundries (0.71%)
Atchison Casting Corp. 110,000(a) 1,512,500
Laundry, Cleaning & Garment
Services (0.93%)
G&K Services, Inc.; Class A 74,500 1,983,562
Life Insurance (0.85%)
First Colony Corp. 70,000 1,802,500
Measuring & Controlling Devices (2.02%)
ISCO, Inc. 30,934 301,611
Millipore Corp. 67,700 2,834,938
Photon Dynamics 115,000(a) 1,150,000
4,286,549
Meat Products (0.85%)
Michael Foods, Inc. 166,000 1,805,250
Medical Instruments & Supplies (4.66%)
Andros Analyzers, Inc. 10,000(a) 177,500
Boston Scientific Corp. 60,600(a) 2,613,375
MDT Corp. 40,700(a) 188,238
Nellcor Puritan Bennett 79,000(a) 3,871,000
Steris Corp. 94,000(a) 3,055,000
9,905,113
Medical Service & Health Insurance (5.02%)
Foundation Health Corp. 70,000(a) 2,738,750
Health System International, Inc. 90,800(a) 2,803,450
Orthofix International NV 156,200(a) 1,620,575
United Healthcare Corp. 60,000 3,510,000
10,672,775
Metal Services, NEC (1.76%)
BMC Industries, Inc. 140,000 3,745,000
Miscellaneous Chemical Products (2.95%)
Cytec Industries 23,000(a) 1,906,125
H. B. Fuller Co. 40,000 1,310,000
Loctite Corp. 60,600 3,060,300
6,276,425
Office Furniture (1.01%)
Chromcraft Revington, Inc. 50,000(a) 1,162,500
Kimball International, Inc.; Class B 33,600 974,400
2,136,900
Offices & Clinics of Medical
Doctors (0.05%)
FHP International Corp. 3,360(a) 99,120
Operative Builders (1.14%)
D. R. Horton, Inc. 175,000(a) 1,750,000
Pulte Corp. 25,000 662,500
2,412,500
Paints & Allied Products (1.02%)
RPM, Inc. 141,300 2,172,487
Plastic Materials & Synthetics (0.97%)
A. Schulman, Inc. 95,000 2,066,250
Plumbing, Heating &
Air-Conditioning (2.25%)
Apogee Enterprises, Inc. 151,400 3,974,250
Metalclad Corp. 228,400 813,675
4,787,925
Refrigeration & Service Machinery (0.66%)
Tecumseh Products Co.; Class A 25,000 1,412,500
Sanitary Services (0.86%)
Browning-Ferris Industries, Inc. 50,000 1,612,500
Sanifill, Inc. 5,204 225,723
1,838,223
Savings Institutions (0.63%)
North Side Savings Bank (NY) 16,275 557,419
Sterling Financial Corp. 57,233(a) 786,954
1,344,373
Screw Machine Product, Bolts, Etc. (1.11%)
Trimas Corp. 100,000 2,362,500
Security Brokers & Dealers (0.60%)
Jefferies Group, Inc. 40,000 1,285,000
Toys & Sporting Goods (0.84%)
Mattel, Inc. 68,750 1,787,500
Trucking & Courier Services,
Ex., Air (0.77%)
J. B. Hunt Transport Services, Inc. 80,500 1,640,188
Total Common Stocks 175,966,308
Preferred Stock (1.43%)
Offices & Clinics of Medical Doctors (1.43%)
FHP International Corp.
Series A Convertible 111,200 3,044,100
Bonds (2.24%)
Principal
Amount Value
Computer & Data Processing
Services (1.32%)
Sierra On Line Convertible
Subordinated Debentures;
6.50%; 4/1/01 $ 990,000(b) $2,811,600
Industrial Inorganic Chemicals (0.72%)
Ciba-Geigy Corp. Exchangeable
Subordinated Debentures;
6.25%; 3/15/16 350,000(b) 358,750
ICN Pharmaceuticals, Inc.
Convertible Subordinated
Debentures; 8.50%; 11/15/99 1,000,000 1,163,750
1,522,500
Nursing & Personal Care Facilities (0.10%)
Greenery Rehabilitation Group, Inc.
Convertible Senior Subordinated
Notes; 8.75%; 4/1/15 250,000 220,000
Sanitary Services (0.10%)
Enclean, Inc.Convertible
Subordinated Debentures;
7.50%; 8/1/01 200,000 202,724
Total Bonds 4,756,824
Commercial Paper (13.35%)
Business Credit Institutions (0.83%)
General Electric Capital Corp.;
5.22%; 5/3/96 1,760,000 1,759,490
Miscellaneous Electrical Equipment &
Supplies (2.90%)
General Electric Co.;
5.29%; 5/7/96 6,175,000 6,169,556
Personal Credit Institutions (6.09%)
American General Finance Corp.;
5.21%; 5/2/96 6,235,000 6,234,098
Ford Motor Credit Co.;
5.27%; 5/1/96 6,710,000 6,710,000
12,944,098
Security Brokers & Dealers (3.53%)
Smith Barney Inc.;
5.25%; 5/6/96 7,500,000 7,494,531
Total Commercial Paper 28,367,674
Total Portfolio Investments (99.82%) 212,134,906
Cash, receivables and other assets,
net of liabilities (0.18%) 380,037
Net Assets (100.00%) $212,514,943
(a) Non-income producing security - No dividend paid during the period.
(b) Restricted security - See Note 4 to the financial statements.
PRINCOR GROWTH FUND, INC.
Shares
Held Value
Common Stocks (85.71%)
Advertising (1.23%)
Interpublic Group of Cos., Inc. 60,000 $ 2,805,000
Beverages (2.47%)
Coca-Cola Co. 30,000 2,445,000
Pepsico, Inc. 50,000 3,175,000
5,620,000
Blast Furnace & Basic Steel
Products (1.16%)
Lukens, Inc. 80,000 2,110,000
Quanex Corp. 24,142 531,124
2,641,124
Carpets & Rugs (1.09%)
Shaw Industries, Inc. 200,000 2,475,000
Cash Grains (2.45%)
Pioneer Hi-Bred International 100,000 5,575,000
Commercial Banks (5.31%)
Banc One Corp. 55,000 1,911,250
Boatmen's Bancshares, Inc. 45,000 1,743,750
CoreStates Financial Corp. 12,250 477,750
First of America Bank Corp. 40,000 1,810,000
Firstar Corp. 75,000 3,487,500
FirstMerit Corp. 50,000 1,512,500
Princeton National Bancorp., Inc. 60,000 1,140,000
12,082,750
Communications Equipment (4.22%)
General Instrument Corp. 175,000(a) 5,731,250
Northern Telecom Ltd. 75,000 3,862,500
9,593,750
Computer & Data Processing
Services (2.09%)
Microsoft Corp. 42,000(a) 4,761,750
Computer & Office Equipment (3.65%)
Bay Networks 100,000(a) 3,150,000
Digital Equipment Corp. 25,000(a) 1,493,750
Hewlett-Packard Co. 30,000 3,176,250
Pitney Bowes, Inc. 10,000 487,500
8,307,500
Department Stores (1.46%)
May Department Stores 65,000 3,315,000
Drugs (8.25%)
Alliance Pharmaceutical Corp. 20,000(a) 362,500
Bristol-Myers Squibb Co. 25,000 2,056,250
Genzyme Corp. - General Division 4,728(a) 265,950
Genzyme Corp. - Tissue Repair 638(a) 8,773
Johnson & Johnson 40,000 3,700,000
Lilly (Eli) & Co. 50,000 2,950,000
Merck & Co., Inc. 50,000 3,025,000
Pharmacia & Upjohn, Inc. 75,000 2,868,750
Seragen, Inc. 70,500(a) 290,812
Smithkline Beecham PLC ADR. 60,000 3,240,000
18,768,035
Electric Light & Wiring
Equipment (0.28%)
Raychem Corp. 8,100 630,788
Electrical Goods (0.70%)
Avnet, Inc. 30,000 1,582,500
Electronic Components &
Accessories (3.23%)
Intel Corp. 63,000 4,268,250
Linear Technology Corp. 90,000 3,093,750
7,362,000
Electronic Distribution Equipment (0.68%)
General Electric Co. 20,000 1,550,000
Federal & Federally Sponsored
Credit (0.54%)
Federal National Mortgage
Association 40,000 1,225,000
Footwear, Except Rubber (0.51%)
Stride Rite Corp. 120,000 1,155,000
General Industrial Machinery (3.32%)
Flow International Corp. 100,000(a) 987,500
Ingersoll-Rand Co. 70,000 2,712,500
Tyco International Ltd. 100,000 3,862,500
7,562,500
Grain Mill Products (1.39%)
Ralcorp Holdings, Inc. 10,833(a) 238,326
Ralston-Ralston Purina Group 50,000 2,918,750
3,157,076
Grocery Stores (0.20%)
Casey's General Stores, Inc. 21,052 453,934
Holding Offices (0.39%)
Today's Bancorp., Inc. 30,000 885,000
Hose, Belting, Gaskets &
Packing (1.17%)
Mark IV Industries 128,157 2,659,251
Hospitals (2.35%)
Humana, Inc. 105,000(a) 2,585,625
Universal Health Services, Inc.
Class B 50,000(a) 2,775,000
5,360,625
Household Furniture (0.96%)
Masco Corp. 80,000 2,180,000
Investment Offices (0.81%)
INVESCO PLC ADR 50,000 1,850,000
Lumber & Other Building
Materials (2.08%)
Home Depot, Inc. 100,000 4,737,500
Management & Public Relations (0.27%)
Dun & Bradstreet Corp. 10,000 608,750
Medical Instruments &
Supplies (6.34%)
Andros Analyzers, Inc. 60,000(a) 1,065,000
Becton, Dickinson & Co. 35,000 2,821,875
Boston Scientific Corp. 150,000(a) 6,468,750
Nellcor Puritan Bennett 83,300(a) 4,081,700
14,437,325
Medical Service & Health
Insurance (5.41%)
AON Corp. 40,000 2,145,000
Foundation Health Corp. 75,000(a) 2,934,375
Health System International, Inc. 50,000(a) 1,543,750
United Healthcare Corp. 60,000 3,510,000
Value Health, Inc. 75,000(a) 2,184,375
12,317,500
Millwork, Plywood & Structural
Members (0.68%)
Georgia-Pacific Corp. 20,000 1,555,000
Miscellaneous Chemical Products (0.44%)
Loctite Corp. 20,000 1,010,000
Miscellaneous Converted Paper
Products (0.40%)
Minnesota Mining & Mfg. Co. 14,000 920,500
Miscellaneous Electrical Equipment
& Supplies (1.61%)
Motorola, Inc. 60,000 3,675,000
Miscellaneous Shopping Goods
Stores (0.43%)
Toys 'R' Us, Inc. 35,000(a) 975,625
Motor Vehicles & Equipment (2.81%)
Chrysler Corp. 50,000 3,137,500
Dana Corp. 98,000 3,258,500
6,396,000
Office Furniture (0.15%)
Chromcraft Revington, Inc. 15,000(a) 348,750
Offices & Clinics of Medical
Doctors (0.19%)
FHP International Corp. 15,000(a) 442,500
Operative Builders (0.49%)
Pulte Corp. 42,105 1,115,782
Petroleum Refining (2.34%)
Atlantic Richfield Co. 20,000 2,355,000
Exxon Corp. 35,000 2,975,000
5,330,000
Plastic Materials & Synthetics (0.76%)
A. Schulman, Inc. 80,000 1,740,000
Plumbing, Heating & Air-
Conditioning (0.41%)
Metalclad Corp. 264,500(a) 942,281
Preserved Fruits & Vegetables (0.76%)
CPC International, Inc. 25,000 1,728,125
Radio, Television & Computer
Stores (0.23%)
Tandy Corp. 10,000 518,750
Refrigeration & Service
Machinery (0.99%)
Tecumseh Products Co.; Class A 40,000 2,260,000
Rubber & Plastics Footwear (0.64%)
Reebok International Ltd. 50,000 1,450,000
Sanitary Services (2.02%)
Browning-Ferris Industries, Inc. 80,000 2,580,000
Sanifill, Inc. 10,409 451,490
WMX Technologies, Inc. 45,000 1,563,750
4,595,240
Security Brokers & Dealers (1.25%)
Salomon, Inc. 70,000 2,843,750
Soap, Cleaners & Toilet Goods (3.38%)
Colgate-Palmolive Co. 40,000 3,065,000
Ecolab, Inc. 120,000 3,900,000
Int'l. Flavors & Fragrances, Inc. 15,000 736,875
7,701,875
Toys & Sporting Goods (1.41%)
Mattel, Inc. 123,046 3,199,196
Trucking & Courier Services,
Ex., Air (0.31%)
Caliber System Inc. 15,000 601,875
Roadway Express 7,500 111,563
713,438
Total Common Stocks 195,121,470
Preferred Stocks (2.00%)
Motor Vehicles & Equipment (0.51%)
Ford Motor Co.
Series A Convertible 10,000 1,160,000
Offices & Clinics of Medical
Doctors (1.49%)
FHP International Corp.
Series A Convertible 124,000 3,394,500
Total Preferred Stocks 4,554,500
Bonds (1.43%)
Principal
Amount Value
Electrical Industrial Apparatus (0.68%)
Liebert Co. Convertible
Subordinated Debentures;
8.00%; 11/15/10 $ 500,000 $1,553,125
Industrial Inorganic Chemicals (0.23%)
Ciba-Geigy Corp. Exchangeable
Subordinated Debentures;
6.25%; 3/15/16 500,000(b) 512,500
Nursing & Personal Care Facilities (0.39%)
Greenery Rehabilitation Group, Inc.
Convertible Senior Subordinated
Notes; 8.75%; 4/1/15 1,000,000 880,000
Sanitary Services (0.13%)
Enclean, Inc. Convertible
Subordinated Debentures;
7.50%; 8/1/01 300,000 304,086
Total Bonds 3,249,711
Commercial Paper (10.52%)
Business Credit Institutions (2.55%)
General Electric Capital Corp.; 5,805,000 5,803,316
5.22%; 5/3/96
Miscellaneous Electrical Equipment &
Supplies (3.08%)
General Electric Co.;
5.29%; 5/7/96 7,020,000 7,013,811
Personal Credit Institutions (2.90%)
Ford Motor Credit Co.;
5.27%; 5/1/96 3,410,000 3,410,000
5.23%; 5/2/96 3,200,000 3,199,535
6,609,535
Security Brokers & Dealers (1.99%)
Smith Barney Inc.;
5.25%; 5/6/96 4,540,000 4,536,690
Total Commercial Paper 23,963,352
Total Portfolio Investments (99.66%) 226,889,033
Cash, receivables and other assets,
net of liabilities (0.34%) 762,675
Total Net Assets (100.00%) $227,651,708
(a) Non-income producing security - No dividend paid during the period.
(b) Restricted security - See Note 4 to the financial statements.
PRINCOR WORLD FUND, INC.
Shares
Held Value
Common Stocks (92.27%)
Aircraft & Parts (0.15%)
Cemex SA 62,560 $ 247,998
Beer, Wine & Distilled Beverages (0.50%)
Heineken Holdings 4,343 812,519
Beverages (1.70%)
Lion Nathan 1,102,000 2,747,273
Blast Furnace & Basic
Steel Products (0.88%)
Voest-Alpine Stahl 43,000(a)(b) 1,418,885
Cement, Hydraulic (0.30%)
Apasco SA 90,000 482,944
Central Reserve Depositories (1.08%)
Ergo Bank 17,000 854,524
Union Bank of Norway 36,700 892,080
1,746,604
Coal Mining Services (0.37%)
Morgan Hydrocarbons, Inc. 213,600(a) 596,186
Combination Utility Services (1.55%)
BBC AG (Brown Boveri) 1,230 1,478,409
Iberdrola 1 SA 105,000 1,026,375
2,504,784
Commercial Banks (10.69%)
ABN-AMRO Holdings NV 56,218 2,906,280
Banco Popular 12,230 2,024,157
Bangkok Bank 152,000 2,203,320
Bank of Ireland 325,741 2,341,386
Christiana Bank Ordinary Shares 361,000 784,262
Fokus Bank 120,000(a)(b) 645,361
Grupo Financiero Bancomer
Series B 1,030,000(a) 457,361
Series L 38,148(a) 13,306
National Australia Bank Ltd. 374,715 3,364,653
Svenska Handelsbanken AB Free 130,750 2,539,178
17,279,264
Communications Equipment (0.22%)
ABC Communications Holdings Ltd. 1,946,000 352,206
Communications Services, NEC (1.80%)
KPN Royal PTT Nederland 77,786 2,915,082
Computer & Office Equipment (0.43%)
Canon, Inc. 35,000 694,978
Concrete, Gypsum & Plaster
Products (0.21%)
Cementos De Mexico SA 80,000 339,134
Concrete Work (0.49%)
Hanil Cemet 13,500 797,971
Construction & Related
Machinery (1.71%)
Keumkang 10,000 744,002
Powerscreen International PLC 296,000 2,025,450
2,769,452
Crude Petroleum & Natural Gas (1.24%)
Hardy Oil & Gas 520,000 2,009,304
Department Stores (0.64%)
Vendex International 36,000 1,030,202
Drugs (5.23%)
Galencia Holdings AG 2,890 1,188,847
Hafslund Nycomed 35,198 981,233
Roussel-Uclaf 16,850 3,964,224
Sandoz AG 2,130 2,320,584
8,454,888
Electric Light & Wiring
Equipment (0.91%)
Clipsal Industries Holdings 149,000 368,030
Otra NV 44,300 1,097,314
1,465,344
Electric Services (3.51%)
CEP-A Consolidated Electric
Power-Asia 762,000 1,260,930
Korea Electric Power Corp. 39,500 1,669,892
Korea Mobil Telecommunications Corp. 290 280,228
Northern Ireland Electric 361,000 2,459,394
5,670,444
Electronic Components &
Accessories (1.30%)
Amtek Engineering 675,000 1,133,025
Murata Mfg. 9,000 348,826
Varitronix 340,000 624,156
2,106,007
Electronic Distribution
Equipment (1.33%)
Phillips Electronics 61,100 2,154,443
Engines & Turbines (0.15%)
Mabuchi Motor 4,000 245,915
Flat Glass (0.26%)
Weru AG 1,275 415,710
Foreign Banks, Branches &
Agencies (0.26%)
Shinhan Bank 19,292 426,384
Forest Products (0.42%)
Metsa-Serla 94,000 683,893
Functions Closely Related
to Banking (0.94%)
Liechtenstein Global 3,000 1,528,159
Gas Production & Distribution (1.92%)
Australia Gas & Light 313,058 1,304,592
OMV AG 18,200 1,805,028
3,109,620
Grocery Stores (1.42%)
Ahold NV New ADR 41,057 2,042,586
Koninklijke Ahold NV 4,989 245,702
2,288,288
Highway & Street Construction (0.47%)
Edrasis Psallidas 58,500 760,326
Holding Offices (1.05%)
First Pacific Co. Ltd. 1,272,302 1,694,158
Household Appliances (0.86%)
Fisher & Paykel 421,000 1,382,049
Household Audio & Video
Equipment (0.72%)
SKF 'B' Free 49,700 1,155,290
Industrial Inorganic Chemicals (1.80%)
Bayer AG 9,055 2,908,663
Investment Offices (0.52%)
Invesco PLC 222,000 839,496
Lumber & Other Building
Materials (0.91%)
Wickes PLC 754,000 1,470,888
Meat Products (3.80%)
Orkla B Ordinary Shares 70,400 3,208,572
Unilever NV 21,500 2,929,688
6,138,260
Metalworking Machinery (0.24%)
Danieli & Co.-DR 110,000 395,126
Miscellaneous Chemical Products (3.17%)
Ciba Geigy AG-REG 1,500 1,736,654
Hoechst AG 10,100 3,389,894
5,126,548
Miscellaneous Durable Goods (2.12%)
Hagemeyer NV 50,100 3,425,107
Miscellaneous Equipment Rental &
Leasing (0.57%)
Insituto Mobiliane Italian 117,000 927,288
Miscellaneous Fabricated Metal
Products (0.34%)
Bridon PLC 289,285 546,967
Miscellaneous Food &
Kindred Products (1.32%)
Burns, Philp & Co., Ltd. 989,938 2,031,520
Grupo Herdez SA 328,000(a) 102,084
2,133,604
Miscellaneous Furniture &
Fixtures (0.21%)
Pt Surya Toto 154,000 337,165
Miscellaneous Manufacturers (0.44%)
Carter Holt Harvey Ltd. 297,300 704,413
Miscellaneous Non-Durable
Goods (1.81%)
Grand Metropolitan PLC 445,000 2,918,142
Miscellaneous Plastics
Products, NEC (0.52%)
Royal Plastics Group 54,000(a)(b) 832,932
Miscellaneous Textile Goods (0.41%)
Espirit Asia 1,708,000 656,903
Miscellaneous Transportation
Equipment (0.49%)
Autoliv AB 14,500 789,309
Miscellaneous Transportation
Services (0.48%)
Koninklijke Pakhoed NV 31,255 781,475
Miscellaneous Wood Products (0.69%)
Enso-Gutzeit 142,000 1,120,916
Motor Vehicles & Equipment (1.23%)
Volvo AB 87,000 1,990,340
Non-Classifiable Establishments (0.68%)
Thailand International Fund 31 1,100,500
Office Furniture (0.48%)
Lamex Holdings 2,660,000 773,732
Oil & Gas Field Services (1.99%)
Repsol Petroleo, SA 87,800 3,215,832
Personal Credit Institutions (0.68%)
Manhattan Card Co. 1,861,000 1,106,701
Plastic Materials & Synthetics (1.28%)
Astra AB 47,050 2,073,166
Primary Nonferrous Metals (1.31%)
British Steel PLC 712,000 2,120,828
Pulp Mills (1.09%)
Babcock International Group 228,171 393,753
Kymmene 50,700 1,360,520
1,754,273
Railroad Equipment (0.54%)
Vae AG 9,350 873,577
Sand & Gravel (0.23%)
Bardon Group PLC 650,000 365,771
Security Brokers & Dealers (1.01%)
Peregrine Investment Holdings 1,058,000 1,634,481
Ship & Boat Building &
Repairing (0.70%)
Unitor Ships Service 67,500 1,138,268
Special Industry Machinery (2.58%)
Bobst SA 835 1,274,671
IHC Caland NV 43,300 1,698,405
Sulzer AG 1,800 1,156,966
4,130,042
Sugar & Confectionary Products (3.81%)
Huhtamake I Free 36,200 1,193,753
Nestle 2,604 2,889,300
Tate & Lyle 286,000 2,068,607
6,151,660
Telephone Communication (7.87%)
Cable & Wireless PLC 105,000 821,691
Compania DeTelecomunicaciones ADR 9,600 876,000
Nokia Corp. Class A ADR 57,000 2,073,375
Telecom Italia-DI 1,440,000 2,383,797
Telecom Italia Mobile 1,440,000 2,015,643
Telefonica De Espana, SA 109,400 1,945,507
Tele Danmark B 34,800 1,748,151
Telefonos De Mexico SA ADR 25,300 860,200
12,724,364
Water Supply (0.84%)
Wessex Water PLC 268,660 1,362,651
Water Transportation of
Freight, NEC (1.40%)
Argonaut AB 'B' Free 158,000(a) 244,075
ICB Shipping AB 'B' Free 213,733 2,012,469
2,256,544
Total Common Stocks 149,111,636
Preferred Stocks (0.47%)
Highway & Street Construction (0.47%)
BAU Holdings AG 16,200 761,293
Bonds (0.84%)
Principal
Amount Value
Fire, Marine & Casualty
Insurance (0.84%)
Alfa SA Convertible Subordinated
Debenture; 8.00%; 9/15/00 $1,300,000(b) $1,352,000
Commercial Paper (5.97%)
Business Credit Institutions (1.42%)
General Electric Capital Corp.;
5.22%; 5/3/96 2,300,000 2,299,333
Crude Petroleum & Natural Gas (2.78%)
Chevron Oil Finance Co.;
5.25%; 5/6/96 4,500,000 4,496,719
Personal Credit Institutions (1.77%)
Associates Corp. of North America;
5.35%; 5/1/96 2,860,000 2,860,000
Total Commercial Paper 9,656,052
Total Portfolio Investments (99.55%) 160,880,981
Cash, receivables and other assets
net of liabilities (0.45%) 717,643
Total Net Assets (100.00%) $161,598,624
(a) Non-Income producing security - No dividend paid during the period.
(b) Restricted security - See Notes 4 to the financial statements.
Princor World Fund, Inc. Investments by Country
Total Market Percentage of Total
Country Value Market Value
Australia $ 6,700,764 4.17%
Austria 4,858,783 3.02
Canada 1,429,118 0.89
Chile 876,000 0.54
Denmark 1,748,152 1.09
Finland 6,432,456 4.00
France 3,964,224 2.46
Germany 6,714,267 4.17
Greece 1,614,850 1.00
Hong Kong 8,103,269 5.04
Indonesia 337,165 0.21
Italy 5,721,853 3.56
Japan 1,289,719 0.80
Korea 3,918,476 2.44
Mexico 3,855,026 2.40
Netherlands 22,038,803 13.70
New Zealand 4,833,736 3.00
Norway 7,649,776 4.75
Singapore 1,501,055 0.93
Spain 8,211,871 5.10
Sweden 10,803,827 6.72
Switzerland 13,573,589 8.44
Thailand 3,303,820 2.05
United Kingdom 21,744,330 13.52
United States 9,656,052 6.00
Total Market Value $160,880,981 100.00%
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Selected data for a share of Capital Stock outstanding throughout each period:
Income from Investment Operations Less Distributions
------------------------------------- ------------------------------------------
Net Realized
and
Net Asset Net Unrealized Total Dividends
Value at Invest- Gain from from Net Distributions
Beginning ment (Loss) on Investment Investment from Total
of Period Income Investments Operations Income Capital Gains Distributions
PRINCOR BALANCED FUND, INC.(b)
Class A:
<S> <C> <C> <C> <C> <C> <C> <C>
Six Months Ended April 30, 1996 $13.74 $.19 $ .82 $1.01 $(.24) $ (.67) $ (.91)
Year Ended October 31,
1995 12.43 .41 1.31 1.72 (.36) (.05) (.41)
1994 13.26 .32 (.20) .12 (.40) (.55) (.95)
1993 12.78 .35 1.14 1.49 (.37) (.64) (1.01)
1992 11.81 .41 .98 1.39 (.42) -- (.42)
1991 9.24 .46 2.61 3.07 (.50) -- (.50)
Class B:
Six Months Ended April 30, 1996 13.71 .15 .80 .95 (.20) (.67) (.87)
Period Ended October 31, 1995(c) 11.80 .31 1.90 2.21 (.30) -- (.30)
Class R:
Period Ended April 30, 1996(f) 13.81 .01 .06 .07 (.09) -- (.09)
PRINCOR BLUE CHIP FUND, INC.
Class A:
Six Months Ended April 30, 1996 15.03 .11 1.63 1.74 (.15) (.35) (.50)
Year Ended October 31,
1995 12.45 .24 2.55 2.79 (.21) -- (.21)
1994 11.94 .20 .57 .77 (.26) -- (.26)
1993 11.51 .21 .43 .64 (.18) (.03) (.21)
1992 10.61 .17 .88 1.05 (.15) -- (.15)
Period Ended October 31, 1991(g) 10.02 .10 .57 .67 (.08) -- (.08)
Class B:
Six Months Ended April 30, 1996 14.99 .06 1.61 1.67 (.10) (.35) (.45)
Period Ended October 31, 1995(c) 11.89 .15 3.10 3.25 (.15) -- (.15)
Class R:
Period Ended April 30, 1996(f) 16.21 -- .08 .08 (.05) -- (.05)
PRINCOR CAPITAL ACCUMULATION FUND, INC.
Class A:
Six Months Ended April 30, 1996 23.69 .19 3.27 3.46 (.24) (1.46) (1.70)
Year Ended October 31,
1995 20.83 .45 3.15 3.60 (.39) (.35) (.74)
1994 21.41 .39 .93 1.32 (.41) (1.49) (1.90)
1993 21.34 .43 1.67 2.10 (.43) (1.60) (2.03)
1992 19.53 .45 1.82 2.27 (.46) -- (.46)
1991 14.31 .49 5.24 5.73 (.51) -- (.51)
Class B:
Six Months Ended April 30, 1996 23.61 .09 3.24 3.33 (.14) (1.46) (6.60)
Period Ended October 31, 1995(c) 19.12 .33 4.46 4.79 (.30) -- (.30)
Class R:
Period Ended April 30, 1996(f) 24.73 (.09) .68 .59 -- -- --
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Ratios/Supplemental Data
------------------------------------------------------------------
Ratio of Net
Net Asset Ratio of Investment
Value at Net Assets at Expenses to Income to Portfolio Average
End Total End of Period Average Average Turnover Commission
of Period Return(a) (in thousands) Net Assets Net Assets Rate Rate Paid
PRINCOR BALANCED FUND, INC.(b)
Class A:
<S> <C> <C> <C> <C> <C> <C> <C>
Six Months Ended April 30, 1996 $13.84 7.59%(d) $ 63,974 1.32%(e) 2.83%(e) 30.9%(e) $.0441
Year Ended October 31,
1995 13.74 14.18% 57,125 1.37% 3.21% 35.8% N/A
1994 12.43 0.94% 53,366 1.51% 2.70% 14.4% N/A
1993 13.26 12.24% 39,952 1.35% 2.78% 27.5% N/A
1992 12.78 11.86% 31,339 1.29% 3.39% 30.6% N/A
1991 11.81 34.09% 23,372 1.30% 4.25% 23.6% N/A
Class B:
Six Months Ended April 30, 1996 13.79 7.10%(d) 4,023 2.19%(e) 1.88%(e) 30.9%(e) .0441
Period Ended October 31, 1995(c) 13.71 18.72%(d) 1,263 1.91%(e) 2.53%(e) 35.8%(e) N/A
Class R:
Period Ended April 30, 1996(f) 13.79 0.89%(d) 1 3.55%(e) .20%(e) 30.9%(e) .0441
PRINCOR BLUE CHIP FUND, INC.
Class A:
Six Months Ended April 30, 1996 16.27 11.77%(d) 39,310 1.34%(e) 1.38%(e) 5.7%(e) .0396
Year Ended October 31,
1995 15.03 22.65% 35,212 1.38% 1.83% 26.1% N/A
1994 12.45 6.58% 27,246 1.46% 1.72% 5.5% N/A
1993 11.94 5.65% 23,759 1.25% 1.87% 11.2% N/A
1992 11.51 9.92% 19,926 1.56% 1.49% 13.5% N/A
Period Ended October 31, 1991(g) 10.61 6.37%(d) 12,670 1.71%(e) 1.67%(e) .4%(e) N/A
Class B:
Six Months Ended April 30, 1996 16.21 11.30%(d) 4,077 2.14%(e) .48%(e) 5.7%(e) .0396
Period Ended October 31, 1995(c) 14.99 26.20%(d) 1,732 1.90%(e) .97%(e) 26.1%(e) N/A
Class R:
Period Ended April 30, 1996(f) 16.24 1.20%(d) 126 1.25%(e) .30%(e) 5.7%(e) .0396
PRINCOR CAPITAL ACCUMULATION FUND, INC
Class A:
Six Months Ended April 30, 1996 25.45 15.20%(d) 390,449 .71%(e) 1.66%(e) 12.6%(e) .0427
Year Ended October 31,
1995 23.69 17.94% 339,656 .75% 2.08% 46.0% N/A
1994 20.83 6.67% 285,965 .83% 2.02% 31.7% N/A
1993 21.41 10.42% 240,016 .82% 2.16% 24.8% N/A
1992 21.34 11.67% 190,301 .93% 2.17% 38.3% N/A
1991 19.53 40.63% 152,814 .99% 2.72% 19.7% N/A
Class B:
Six Months Ended April 30, 1996 25.34 14.66%(d) 5,515 1.61%(e) .64%(e) 12.6%(e) .0427
Period Ended October 31, 1995(c) 23.61 25.06%(d) 2,248 1.50%(e) 1.07%(e) 46.0%(e) N/A
Class R:
Period Ended April 30, 1996(f) 25.32 2.93%(d) 1 3.60%(e) (2.06)%(e) 12.6%(e) .0427
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Selected data for a share of Capital Stock outstanding throughout each period:
Income from Investment Operations Less Distributions
------------------------------------- ------------------------------------------
Net Realized
and
Net Asset Net Unrealized Total Dividends
Value at Invest- Gain from from Net Distributions
Beginning ment (Loss) on Investment Investment from Total
of Period Income Investments Operations Income Capital Gains Distributions
PRINCOR EMERGING GROWTH FUND, INC.
Class A:
<S> <C> <C> <C> <C> <C> <C> <C>
Six Months Ended April 30, 1996 $31.45 $.06 $ 3.48 $3.54 $(.10) $ (.75) $ (.85)
Year Ended October 31,
1995 25.08 .12 6.45 6.57 (.06) (.14) (.20)
1994 23.56 -- 1.61 1.61 -- (.09) (.09)
1993 19.79 .06 3.82 3.88 (.11) -- (.11)
1992 18.33 .14 1.92 2.06 (.15) (.45) (.60)
1991 11.35 .17 7.06 7.23 (.21) (.04) (.25)
Class B:
Six Months Ended April 30, 1996 31.31 (.03) 3.44 3.41 (.01) (.75) (.76)
Period Ended October 31, 1995(c) 23.15 -- 8.18 8.18 (.02) -- (.02)
Class R:
Period Ended April 30, 1996(f) 33.77 .01 .29 .30 -- -- --
PRINCOR GROWTH FUND, INC.
Class A:
Six Months Ended April 30, 1996 37.22 .18 3.31 3.49 (.19) (1.18) (1.37)
Year Ended October 31,
1995 31.14 .35 6.67 7.02 (.31) (.63) (.94)
1994 30.41 .26 2.56 2.82 (.28) (1.81) (2.09)
1993 28.63 .40 2.36 2.76 (.42) (.56) (.98)
1992 25.92 .39 3.32 3.71 (.40) (.60) (1.00)
1991 16.57 .41 9.32 9.73 (.38) -- (.38)
Class B:
Six Months Ended April 30, 1996 37.10 .04 3.29 3.33 (.04) (1.18) (1.22)
Period Ended October 31, 1995(c) 28.33 .21 8.76 8.97 (.20) -- (.20)
Class R:
Period Ended April 30, 1996(f) 39.27 (.09) -- (.09) -- -- --
PRINCOR WORLD FUND, INC.
Class A:
Six Months Ended April 30, 1996 7.28 .03 .83 .86 (.07) (.33) (.40)
Year Ended October 31,
1995 7.44 .08 (.02) .06 (.03) (.19) (.22)
1994 6.85 .01 .64 .65 (.02) (.04) (.06)
1993 5.02 .03 1.98 2.01 (.05) (.13) (.18)
1992 5.24 .06 (.14) (.08) (.06) (.08) (.14)
1991 4.64 .05 .58 .63 (.03) -- (.03)
Class B:
Six Months Ended April 30, 1996 7.24 .01 .81 .82 (.02) (.33) (.35)
Period Ended October 31, 1995(c) 6.71 .05 .51 .56 (.03) -- (.03)
Class R:
Period Ended April 30, 1996(f) 7.48 .03 .22 .25 -- -- --
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Ratios/Supplemental Data
------------------------------------------------------------------
Ratio of Net
Net Asset Ratio of Investment
Value at Net Assets at Expenses to Income to Portfolio Average
End Total End of Period Average Average Turnover Commission
of Period Return(a) (in thousands) Net Assets Net Assets Rate Rate Paid
PRINCOR EMERGING GROWTH FUND, INC.
Class A:
<S> <C> <C> <C> <C> <C> <C> <C>
Six Months Ended April 30, 1996 $34.14 11.48%(d) $ 193,494 1.33%(e) .42%(e) 27.4%(e) $.0403
Year Ended October 31,
1995 31.45 26.89% 150,611 1.47% .47% 13.5% N/A
1994 25.08 6.86% 92,965 1.74% .02% 8.1% N/A
1993 23.56 19.66% 48,668 1.66% .26% 7.0% N/A
1992 19.79 11.63% 29,055 1.74% .80% 5.8% N/A
1991 18.33 64.56% 17,174 1.78% 1.14% 8.4% N/A
Class B:
Six Months Ended April 30, 1996 33.96 11.09%(d) 18,895 2.09%(e) (.36)%(e) 27.4%(e) .0403
Period Ended October 31, 1995(c) 31.31 35.65%(d) 8,997 2.04%(e) (.17)%(e) 13.5%(e) N/A
Class R:
Period Ended April 30, 1996(f) 34.07 1.37%(d) 126 1.34%(e) .09%(e) 27.4%(e) .0403
PRINCOR GROWTH FUND, INC.
Class A:
Six Months Ended April 30, 1996 39.34 9.58%(d) 210,718 1.06%(e) 1.01%(e) 2.8%(e) .0408
Year Ended October 31,
1995 37.22 23.29% 174,328 1.16% 1.12% 12.2% N/A
1994 31.14 9.82% 116,363 1.30% .95% 13.6% N/A
1993 30.41 9.83% 80,051 1.26% 1.40% 16.4% N/A
1992 28.63 14.76% 63,405 1.19% 1.46% 15.6% N/A
1991 25.92 59.30% 45,892 1.13% 1.85% 10.6% N/A
Class B:
Six Months Ended April 30, 1996 39.21 9.15%(d) 16,933 1.87%(e) .23%(e) 2.8%(e) .0408
Period Ended October 31, 1995(c) 37.10 31.48%(d) 8,279 1.80%(e) .31%(e) 12.2%(e) N/A
Class R:
Period Ended April 30, 1996(f) 39.18 0.31%(d) 1 3.29%(e) (1.41)%(e) 2.8%(e) .0408
PRINCOR WORLD FUND, INC.
Class A:
Six Months Ended April 30, 1996 7.74 12.55%(d) 151,724 1.53%(e) .99%(e) 17.7%(e) .0233
Year Ended October 31,
1995 7.28 1.03% 126,554 1.63% 1.10% 35.4% N/A
1994 7.44 9.60% 115,812 1.74% .10% 13.2% N/A
1993 6.85 41.39% 63,718 1.61% .59% 19.5% N/A
1992 5.02 (1.57)% 35,048 1.69% 1.23% 19.9% N/A
1991 5.24 13.82% 26,478 1.72% 1.36% 27.6% N/A
Class B:
Six Months Ended April 30, 1996 7.71 11.94%(d) 9,747 2.33%(e) .47%(e) 17.7%(e) .0233
Period Ended October 31, 1995(c) 7.24 9.77%(d) 3,908 2.19%(e) .58%(e) 35.4%(e) N/A
Class R:
Period Ended April 30, 1996(f) 7.73 4.04%(d) 128 1.62%(e) 3.08%(e) 17.7%(e) .0233
See accompanying notes.
</TABLE>
<PAGE>
Notes to Financial Highlights
(a) Total return is calculated without the front-end sales charge or contingent
deferred sales charge.
(b) Effective December 5, 1994, the name of Princor Managed Fund, Inc. was
changed to Princor Balanced Fund, Inc.
(c) Period from December 9, 1994, date Class B shares first offered to the
public, through October 31, 1995. The Growth Funds Class B shares
recognized no net investment income for the period from the initial
purchase by Princor Management Corporation of Class B shares on December 5,
1994 through December 8, 1994. The Growth Funds Class B shares incurred
unrealized losses on investments during the initial interim period as
follows. This represents Class B share activities of each fund prior to the
initial public offering of Class B shares:
Per Share
Fund Unrealized (Loss)
Princor Balanced Fund, Inc. $(.19)
Princor Blue Chip Fund, Inc. (.15)
Princor Capital Accumulation Fund, Inc. (.46)
Princor Emerging Growth Fund, Inc. (.77)
Princor Growth Fund, Inc. (.86)
Princor World Fund, Inc. (.07)
(d) Total return amounts have not been annualized.
(e) Computed on an annualized basis.
(f) Period from February 29, 1996, date Class R shares first offered to
eligible purchasers, through April 30, 1996. Certain of the Growth Funds
Class R shares recognized net investment income for the period from the
initial purchase of Class R shares on February 27, 1996 through February
28, 1996 as follows, none of which was distributed to the sole shareholder,
Princor Management Corporation. Additionally, the Growth Funds incurred
unrealized gains (losses) on investments during the intial interim period
as follows. This represents Class R share activities of each fund prior to
the initial public offering of Class R shares:
Per Share Per Share
Net Investment Unrealized
Fund Income Gain (Loss)
Princor Balanced Fund, Inc. -- $(.03)
Princor Blue Chip Fund, Inc. $.01 (.02)
Princor Capital Accumulation Fund, Inc. .01 (.11)
Princor Emerging Growth Fund, Inc. -- .19
Princor Growth Fund, Inc. .01 .10
Princor World Fund, Inc. -- .02
(g) Period from March 1,1991, date shares first offered to public, through
October 31, 1991. Net investment income, aggregating $.01 per share for the
period from the initial purchase of shares on February 11, 1991 through
February 28, 1991, was recognized, none of which was distributed to its
sole stockholder, Principal Mutual Life Insurance Company, during the
period. Additionally, the fund incurred unrealized gains on investments of
$.01 per share during this initial interim period. This represented
activities of the fund prior to the initial public offering of fund shares.
<PAGE>
<TABLE>
<CAPTION>
April 30, 1996
STATEMENTS OF ASSETS AND LIABILITIES
(unaudited)
Princor Princor Government
Bond Securities Income
INCOME FUNDS Fund, Inc. Fund, Inc.
<S> <C> <C>
Investment in Securities -- at cost.............................. $108,853,093 $276,319,654
Assets
Investment in securities -- at value (Note 4).................... $110,607,569 $269,210,166
Cash ............................................................ 1,804 500
Receivables:
Dividends and interest........................................ 2,385,731 1,595,740
Investment securities sold.................................... - -
Capital Stock sold............................................ 38,087 55,700
Other assets..................................................... 6,921 24,316
Total Assets 113,040,112 270,886,422
Liabilities
Accrued expenses................................................. 84,618 226,606
Payables:
Investment securities purchased............................... - 2,738,125
Capital Stock reacquired...................................... 30,390 202,410
Total Liabilities 115,008 3,167,141
Net Assets Applicable to Outstanding Shares .................. $112,925,104 $267,719,281
Net Assets Consist of:
Capital Stock.................................................... $ 103,503 $ 243,100
Additional paid-in capital....................................... 111,460,157 274,182,747
Accumulated undistributed net investment income.................. 683,989 1,606,240
Accumulated undistributed net realized (loss) on
investment transactions ...................................... (1,077,021) (1,203,318)
Net unrealized appreciation (depreciation) of investments........ 1,754,476 (7,109,488)
Total Net Assets $112,925,104 $267,719,281
Capital Stock (par value: $.01 a share)
Shares authorized................................................ 100,000,000 100,000,000
Net Asset Value Per Share:
Class A: Net Assets.............................................. $106,883,845 $258,647,845
Shares issued and outstanding........................... 9,795,585 23,484,397
Net asset value per share............................... $10.91 $11.01
Maximum offering price per share(1)..................... $11.45 $11.56
Class B: Net Assets ............................................. $6,040,278 $9,070,460
Shares issued and outstanding........................... 554,627 825,485
Net asset value per share(2)............................ $10.89 $10.99
Class R: Net Assets.............................................. $981 $976
Shares issued and outstanding........................... 90 89
Net asset value per share............................... $10.90 $10.97
<FN>
(1) Maximum offering price is equal to net asset value plus a front-end sales charge of 4.75% (1.50% with respect to
Princor Limited Term Bond Fund, Inc.) of the offering price.
(2) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
</FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
(unaudited)
Princor Princor
High Yield Limited Term Bond
INCOME FUNDS Fund, Inc. Fund, Inc.
<S> <C> <C>
Investment in Securities -- at cost.............................. $25,560,229 $10,993,467
Assets
Investment in securities -- at value (Note 4).................... $25,462,963 $10,721,894
Cash ............................................................ 1,964 1,484
Receivables:
Dividends and interest........................................ 697,694 136,482
Investment securities sold.................................... - 60,684
Capital Stock sold............................................ 4,071 17,173
Other assets..................................................... 2,661 -
Total Assets 26,169,353 10,937,717
Liabilities
Accrued expenses................................................. 22,481 6,848
Payables:
Investment securities purchased............................... - -
Capital Stock reacquired...................................... 33,106 50,000
Total Liabilities 55,587 56,848
Net Assets Applicable to Outstanding Shares .................. $26,113,766 $10,880,869
Net Assets Consist of:
Capital Stock.................................................... $ 32,426 11,123
Additional paid-in capital....................................... 28,838,894 11,089,162
Accumulated undistributed net investment income.................. 221,562 52,157
Accumulated undistributed net realized (loss) on
investment transactions ...................................... (2,881,850) -
Net unrealized appreciation (depreciation) of investments........ (97,266) (271,573
Total Net Assets $26,113,766 $10,880,869
Capital Stock (par value: $.01 a share)
Shares authorized................................................ 100,000,000 100,000,000
Net Asset Value Per Share:
Class A: Net Assets.............................................. $24,831,911 $10,848,715
Shares issued and outstanding........................... 3,082,837 1,109,060
Net asset value per share............................... $8.05 $9.78
Maximum offering price per share(1)..................... $8.45 $9.93
Class B: Net Assets ............................................. $1,280,861 $31,157
Shares issued and outstanding........................... 159,648 3,185
Net asset value per share(2)............................ $8.02 $9.78
Class R: Net Assets.............................................. $994 $997
Shares issued and outstanding........................... 124 102
Net asset value per share............................... $8.02 $9.77
<FN>
(1) Maximum offering price is equal to net asset value plus a front-end sales charge of 4.75% (1.50% with respect to
Princor Limited Term Bond Fund, Inc.) of the offering price.
(2) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
</FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
(unaudited)
Princor Princor
Tax-Exempt Bond Utilities
INCOME FUNDS Fund, Inc. Fund, Inc.
<S> <C> <C>
Investment in Securities -- at cost.............................. $178,715,883 $66,991,808
Assets
Investment in securities -- at value (Note 4).................... $181,209,180 $72,107,547
Cash ............................................................ 85,747 4,475
Receivables:
Dividends and interest........................................ 3,798,759 285,207
Investment securities sold.................................... - -
Capital Stock sold............................................ 94,814 19,533
Other assets..................................................... 12,469 2,632
Total Assets 185,200,969 72,419,394
Liabilities
Accrued expenses................................................. 125,099 78,914
Payables:
Investment securities purchased............................... - -
Capital Stock reacquired...................................... 146,633 72,437
Total Liabilities 271,732 151,351
Net Assets Applicable to Outstanding Shares .................. $184,929,237 $72,268,043
Net Assets Consist of:
Capital Stock.................................................... $ 157,042 $ 63,762
Additional paid-in capital....................................... 183,213,184 68,857,924
Accumulated undistributed net investment income.................. 1,027,351 48,236
Accumulated undistributed net realized (loss) on
investment transactions ...................................... (1,961,637) (1,817,618)
Net unrealized appreciation (depreciation) of investments........ 2,493,297 5,115,739
Total Net Assets $184,929,237 $72,268,043
Capital Stock (par value: $.01 a share)
Shares authorized................................................ 100,000,000 100,000,000
Net Asset Value Per Share:
Class A: Net Assets.............................................. $180,143,558 $66,920,530
Shares issued and outstanding........................... 15,296,932 5,903,685
Net asset value per share............................... $11.78 $11.34
Maximum offering price per share(1)..................... $12.37 $11.91
Class B: Net Assets ............................................. $4,785,679 $5,346,544
Shares issued and outstanding........................... 407,279 472,451
Net asset value per share(2)............................ $11.75 $11.32
Class R: Net Assets.............................................. N/A $969
Shares issued and outstanding........................... N/A 86
Net asset value per share............................... N/A $11.27
<FN>
(1) Maximum offering price is equal to net asset value plus a front-end sales charge of 4.75% (1.50% with respect to
Princor Limited Term Bond Fund, Inc.) of the offering price.
(2) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
</FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended April 30, 1996, Except as Noted
STATEMENTS OF OPERATIONS
(unaudited)
Princor Princor Government
Bond Securities Income
INCOME FUNDS Fund, Inc. Fund, Inc.
Net Investment Income
Income:
<S> <C> <C>
Dividends....................................................... $ - $ -
Interest........................................................ 4,318,541 9,616,081
Total Income 4,318,541 9,616,081
Expenses:
Management and investment advisory fees (Note 3) ............. 277,458 614,432
Distribution and shareholder servicing fees--Class A (Note 3)... 113,471 210,547
Distribution and shareholder servicing fees--Class B (Note 3)... 19,170 32,440
Distribution and shareholder servicing fees--Class R (Note 3)... 1 1
Transfer and administrative services (Note 3)................... 114,309 214,761
Registration fees--Class A...................................... 18,594 26,102
Registration fees--Class B...................................... 2,314 2,325
Registration fees--Class R...................................... 4 4
Custodian fees ................................................. 4,136 17,967
Auditing and legal fees ........................................ 4,247 4,249
Directors' fees ................................................ 3,996 4,014
Other .......................................................... 5,424 14,475
Total Gross Expenses 563,124 1,141,317
Less: Management and investment
advisory fees waived......................................... (14,108) -
Total Net Expenses 549,016 1,141,317
Net Investment Income 3,769,525 8,474,764
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) from investment transactions.............. (691,766) 705,659
Net increase (decrease) in unrealized appreciation/depreciation
on investments ................................................ (4,558,082) (8,038,163)
Net Realized and Unrealized
Gain (Loss) on Investments (5,249,848) (7,332,504)
Net Increase (Decrease) in Net Assets
Resulting from Operations $(1,480,323) $1,142,260
<FN>
(1) Period from February 13, 1996 (date operations commenced) through April 30, 1996.
</FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended April 30, 1996, Except as Noted
STATEMENTS OF OPERATIONS
(unaudited)
INCOME FUNDS Princor Princor
High Yield Limited Term Bond
Fund, Inc. Fund, Inc.(1)
Net Investment Income
Income:
<S> <C> <C>
Dividends....................................................... $ - $ -
Interest........................................................ 1,244,936 146,833
Total Income 1,244,936 146,833
Expenses:
Management and investment advisory fees (Note 3) ............. 75,616 10,689
Distribution and shareholder servicing fees--Class A (Note 3)... 30,298 1,068
Distribution and shareholder servicing fees--Class B (Note 3)... 4,832 6
Distribution and shareholder servicing fees--Class R (Note 3)... 1 1
Transfer and administrative services (Note 3)................... 38,875 13,513
Registration fees--Class A...................................... 10,826 921
Registration fees--Class B...................................... 2,365 7
Registration fees--Class R...................................... 4 4
Custodian fees ................................................. 2,592 1,626
Auditing and legal fees ........................................ 3,431 1,689
Directors' fees ................................................ 4,003 1,592
Other .......................................................... 1,935 827
Total Gross Expenses 174,778 31,943
Less: Management and investment
advisory fees waived......................................... - (13,989)
Total Net Expenses 174,778 17,954
Net Investment Income 1,070,158 128,879
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) from investment transactions.............. 121,151 -
Net increase (decrease) in unrealized appreciation/depreciation
on investments ................................................ (100,727) (271,573)
Net Realized and Unrealized
Gain (Loss) on Investments 20,424 (271,573)
Net Increase (Decrease) in Net Assets
Resulting from Operations $1,090,582 $(142,694)
<FN>
(1) Period from February 13, 1996 (date operations commenced) through April 30, 1996.
</FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended April 30, 1996, Except as Noted
STATEMENTS OF OPERATIONS
(unaudited)
Princor Princor
Tax-Exempt Bond Utilities
INCOME FUNDS Fund, Inc. Fund, Inc.
Net Investment Income
Income:
<S> <C> <C>
Dividends....................................................... $ - $1,633,172
Interest........................................................ 5,660,493 46,897
Total Income 5,660,493 1,680,069
Expenses:
Management and investment advisory fees (Note 3) ............. 440,121 219,478
Distribution and shareholder servicing fees--Class A (Note 3)... 153,767 83,633
Distribution and shareholder servicing fees--Class B (Note 3)... 19,435 24,483
Distribution and shareholder servicing fees--Class R (Note 3)... - 1
Transfer and administrative services (Note 3)................... 89,172 114,620
Registration fees--Class A...................................... 16,325 16,375
Registration fees--Class B...................................... 2,950 2,920
Registration fees--Class R...................................... - 5
Custodian fees ................................................. 3,275 3,724
Auditing and legal fees ........................................ 4,609 3,869
Directors' fees ................................................ 4,004 4,003
Other .......................................................... 9,974 3,851
Total Gross Expenses 743,632 476,962
Less: Management and investment
advisory fees waived......................................... - (35,874)
Total Net Expenses 743,632 441,088
Net Investment Income 4,916,861 1,238,981
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) from investment transactions.............. 366,019 1,424,235
Net increase (decrease) in unrealized appreciation/depreciation
on investments ................................................ (3,510,348) 1,275,530
Net Realized and Unrealized
Gain (Loss) on Investments (3,144,329) 2,699,765
Net Increase (Decrease) in Net Assets
Resulting from Operations $1,772,532 $3,938,746
<FN>
(1) Period from February 13, 1996 (date operations commenced) through April 30, 1996.
</FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended April 30, 1996, Except as Noted
STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)
Princor Princor Government
Bond Securities Income
INCOME FUNDS Fund, Inc. Fund, Inc.
Six Months Year Six Months Year
Ended Ended Ended Ended
April 30, October 31, April 30, October 31,
1996 1995 1996 1995
Operations
<S> <C> <C> <C> <C>
Net investment income............................................ $ 3,769,525 $ 7,110,733 $ 8,474,764 $ 16,661,711
Net realized gain (loss) from investment transactions............ (691,766) (385,488) 705,659 (1,074,727)
Net increase (decrease) in unrealized appreciation/depreciation
on investments................................................ (4,558,082) 10,947,591 (8,038,163) 25,002,420
Net Increase (Decrease) in Net Assets
Resulting from Operations (1,480,323) 17,672,836 1,142,260 40,589,404
Dividends and Distributions to Shareholders
From net investment income:
Class A....................................................... (3,668,195) (6,978,094) (8,234,338) (16,398,545)
Class B....................................................... (122,677) (57,053) (182,492) (94,011)
Class R....................................................... (11) - (10) -
(3,790,883) (7,035,147) (8,416,840) (16,492,556)
From net realized gain on investments:
Class A....................................................... - (104,351) - -
Total Distributions (3,790,883) (7,139,498) (8,416,840) (16,492,556)
Capital Share Transactions (Note 5)
Shares sold:
Class A....................................................... 12,048,761 18,360,174 22,513,108 29,006,758
Class B....................................................... 3,751,413 2,713,516 5,219,270 4,730,337
Class R....................................................... 1,000 - 1,000 -
Shares issued in reinvestment of dividends and distributions:
Class A....................................................... 2,445,175 4,697,390 6,463,283 12,817,448
Class B....................................................... 98,739 46,382 144,068 78,109
Class R....................................................... 11 - 10 -
Shares redeemed:
Class A....................................................... (9,554,103) (15,323,500) (24,436,430) (54,093,676)
Class B....................................................... (264,190) (159,124) (737,955) (246,114)
Net Increase (Decrease) in Net Assets from
Capital Share Transactions 8,526,806 10,334,838 9,166,354 (7,707,138)
Total Increase 3,255,600 20,868,176 1,891,774 16,389,710
Net Assets
Beginning of period.............................................. 109,669,504 88,801,328 265,827,507 249,437,797
End of period (including undistributed net investment
income as set forth below).................................... $112,925,104 $109,669,504 $267,719,281 $265,827,507
Undistributed Net Investment Income ............................ $ 683,989 $ 705,347 $ 1,606,240 $1,548,316
<FN>
(1) Period from February 13, 1996 (date operations commenced) through April 30, 1996.
</FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended April 30, 1996, Except as Noted
STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)
Princor Princor
High Yield Limited Term Bond
INCOME FUNDS Fund, Inc. Fund, Inc.
Six Months Year Period
Ended Ended Ended
April 30, October 31, April 30,
1996 1995 1996 (1)
Operations
<S> <C> <C> <C>
Net investment income............................................ $ 1,070,158 $ 1,881,438 $ 128,879
Net realized gain (loss) from investment transactions............ 121,151 (105,759) -
Net increase (decrease) in unrealized appreciation/depreciation
on investments................................................ (100,727) 581,993 (271,573)
Net Increase (Decrease) in Net Assets
Resulting from Operations 1,090,582 2,357,672 (142,694)
Dividends and Distributions to Shareholders
From net investment income:
Class A....................................................... (1,076,982) (1,737,075) (76,708)
Class B....................................................... (37,995) (15,260) (7)
Class R....................................................... (14) - (7)
(1,114,991) (1,752,335) (76,722)
From net realized gain on investments:
Class A....................................................... - - -
Total Distributions (1,114,991) (1,752,335) (76,722)
Capital Share Transactions (Note 5)
Shares sold:
Class A....................................................... 2,094,558 3,890,858 11,041,603
Class B....................................................... 742,019 625,699 30,998
Class R....................................................... 1,000 - 1,000
Shares issued in reinvestment of dividends and distributions:
Class A....................................................... 583,485 1,277,540 76,670
Class B....................................................... 19,227 6,460 7
Class R....................................................... 14 - 7
Shares redeemed:
Class A....................................................... (1,225,578) (2,175,333) (50,000)
Class B....................................................... (105,363) (4,140) -
Net Increase (Decrease) in Net Assets from
Capital Share Transactions 2,109,362 3,621,084 11,100,285
Total Increase 2,084,953 4,226,421 10,880,869
Net Assets
Beginning of period.............................................. 24,028,813 19,802,392 -
End of period (including undistributed net investment
income as set forth below).................................... $26,113,766 $24,028,813 $10,880,869
Undistributed Net Investment Income ............................ $ 221,562 $ 266,395 $ 52,157
<FN>
(1) Period from February 13, 1996 (date operations commenced) through April 30, 1996.
</FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended April 30, 1996, Except as Noted
STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)
Princor Princor
Tax-Exempt Bond Utilities
INCOME FUNDS Fund, Inc. Fund, Inc.
Six Months Year Six Months Year
Ended Ended Ended Ended
April 30, October 31, April 30, October 31,
1996 1995 1996 1995
Operations
<S> <C> <C> <C> <C>
Net investment income............................................ $ 4,916,861 $ 9,855,608 $ 1,238,981 $ 3,019,757
Net realized gain (loss) from investment transactions............ 366,019 (1,677,841) 1,424,235 (393,414)
Net increase (decrease) in unrealized appreciation/depreciation
on investments................................................ (3,510,348) 17,420,735 1,275,530 11,053,532
Net Increase (Decrease) in Net Assets
Resulting from Operations 1,772,532 25,598,502 3,938,746 13,679,875
Dividends and Distributions to Shareholders
From net investment income:
Class A....................................................... (4,846,334) (9,781,885) (1,353,839) (3,003,083)
Class B....................................................... (91,467) (67,120) (83,606) (66,295)
Class R....................................................... - - (9) -
(4,937,801) (9,849,005) (1,437,454) (3,069,378)
From net realized gain on investments:
Class A....................................................... - - - -
Total Distributions (4,937,801) (9,849,005) - (3,069,378)
Capital Share Transactions (Note 5)
Shares sold:
Class A....................................................... 13,010,985 18,520,960 6,230,814 9,551,504
Class B....................................................... 1,488,264 3,375,082 2,360,306 3,732,230
Class R....................................................... - - 1,000 -
Shares issued in reinvestment of dividends and distributions:
Class A....................................................... 3,316,839 6,671,473 1,170,978 2,502,797
Class B....................................................... 68,729 49,501 78,385 61,981
Class R....................................................... - - 9 -
Shares redeemed:
Class A....................................................... (12,820,985) (32,510,884) (8,750,509) (13,188,883)
Class B....................................................... (170,749) (78,915) (1,149,602) (191,972)
Net Increase (Decrease) in Net Assets from
Capital Share Transactions 4,893,083 (3,972,783) (58,619) 2,467,657
Total Increase 1,727,814 11,776,714 2,442,673 13,078,154
Net Assets
Beginning of period.............................................. 183,201,423 171,424,709 69,825,370 56,747,216
End of period (including undistributed net investment
income as set forth below).................................... $184,929,237 $183,201,423 $72,268,043 $69,825,370
Undistributed Net Investment Income ............................ $ 1,027,350 $ 1,048,291 $ 48,236 $ 246,709
<FN>
(1) Period from February 13, 1996 (date operations commenced) through April 30, 1996.
</FN>
See accompanying notes.
</TABLE>
<PAGE>
April 30, 1996
NOTES TO FINANCIAL STATEMENTS
(unaudited)
Princor Bond Fund, Inc.
Princor Government Securities Income Fund, Inc.
Princor High Yield Fund, Inc.
Princor Limited Term Bond Fund, Inc.
Princor Tax-Exempt Bond Fund, Inc.
Princor Utilities Fund, Inc.
Note 1 -- Significant Accounting Policies
Princor Bond Fund, Inc., Princor Government Securities Income Fund, Inc.,
Princor High Yield Fund, Inc., Princor Limited Term Bond Fund, Inc., Princor
Tax-Exempt Bond Fund, Inc. and Princor Utilities Fund, Inc. (the "Income Funds")
are registered under the Investment Company Act of 1940, as amended, as open-end
diversified management investment companies and operate in the mutual fund
industry.
On February 13, 1996, the initial purchase of 1,000,000 shares of Class A
Capital Stock of Princor Limited Term Bond Fund, Inc. was made by Principal
Mutual Life Insurance Company (see Note 3).
On February 27, 1996, the initial purchase of Class B shares of Princor Limited
Term Bond Fund, Inc. was made by Princor Management Corporation; the initial
purchases of Class B shares of the other funds were made on December 5, 1994
(see Note 3). All shares outstanding prior to the initial Class B share
purchases have been classified as Class A shares. Effective February 29, 1996,
Princor Limited Term Bond Fund, Inc. began offering Class B shares to the
public; the effective date of the other funds was December 9, 1994. On February
27, 1996, the initial purchases of Class R shares of the Income Funds (except
for Princor Tax-Exempt Bond Fund, Inc.) were made by Princor Management
Corporation (see Note 3). Effective February 29, 1996, the funds began offering
Class R shares to eligible purchasers.
Class A shares generally are sold with an initial sales charge based on
declining rates and certain purchases may be subject to a contingent deferred
sales charge ("CDSC"). Class B shares are sold without an initial sales charge,
but are subject to a declining CDSC on certain redemptions redeemed within six
years of purchase. Class R shares are sold without an initial sales charge and
are not subject to a CDSC. Class B shares and Class R shares bear a higher
ongoing distribution fee than Class A shares. Class B shares automatically
convert into Class A shares, based on relative net asset value (without a sales
charge) after seven years. Class R shares automatically convert into Class A
shares, based on relative net asset value (without a sales charge) after four
years. All classes of shares for each fund represent interests in the same
portfolio of investments, and will vote together as a single class except where
otherwise required by law or as determined by the Fund's respective Board of
Directors. In addition, the Board of Directors of each fund declare separate
dividends on each class of shares.
The Income Funds allocate daily all income, expenses (other than class-specific
expenses), and realized and unrealized gains or losses to each class of shares
based upon the relative proportion of the value of shares outstanding of each
class. Class-specific expenses, which include distribution and shareholder
servicing fees and any other items specifically attributable to a particular
class, are charged directly to such class.
The Income Funds value securities for which market quotations are readily
available at market value, which is determined using the last reported sale
price or, if no sales are reported, as is regularly the case for some securities
traded over-the-counter, the last reported bid price. When reliable market
quotations are not considered to be readily available, which may be the case,
for example, with respect to certain debt securities and preferred stocks, the
investments are valued by using market quotations, prices provided by market
makers or estimates of market values obtained from yield data and other factors
relating to instruments or securities with similar characteristics in accordance
with procedures established in good faith by each fund's Board of Directors.
Securities with remaining maturities of 60 days or less are valued at amortized
cost, which approximates market.
The Income Funds record investment transactions generally one day after the
trade date, except for short-term investment transactions which are recorded
generally on the trade date. The identified cost basis has been used in
determining the net realized gain or loss from investment transactions and
unrealized appreciation or depreciation on investments. Dividends are taken into
income on an accrual basis as of the ex-dividend date and interest income is
recognized on an accrual basis.
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
Dividends and distributions to shareholders from net investment income and net
realized gain from investments is determined in accordance with federal income
tax regulations, which may differ from generally accepted accounting principles.
To the extent these "book/tax" differences are permanent in nature (i.e. that
they result from other than timing of recognition - "temporary"), such amounts
are reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassification.
Reclassifications made for the year ended October 31, 1995 were not material.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Note 2 -- Federal Income Taxes
No provision for federal income taxes is considered necessary because each fund
is qualified as a "regulated investment company" under the Internal Revenue Code
and intends to distribute each year substantially all of its net investment
income and realized capital gains to shareholders. The cost of investments for
federal income tax reporting purposes is approximately the same as that for
financial reporting purposes.
Note 3 -- Management Agreement and Transactions With Affiliates
The Income Funds have agreed to pay investment advisory and management fees to
Princor Management Corporation (wholly owned by Princor Financial Services
Corporation, a subsidiary of Principal Mutual Life Insurance Company) (the
"Manager") computed at an annual percentage rate of each fund's average daily
net assets. With the exception of Princor High Yield Fund, Inc. and Princor
Utilities Fund, Inc., the annual rate used in this calculation is .50% of the
first $100 million of each fund's average daily net assets, .45% of the next
$100 million of each fund's average daily net assets and .40% of the next $100
million of each fund's average daily net assets. With respect to Princor High
Yield Fund, Inc. and Princor Utilities Fund, Inc., the annual rate is .60% of
the first $100 million of the fund's average daily net assets. The Income Funds
also reimburse the Manager for transfer and administrative services, including
the cost of accounting, data processing, supplies and other services rendered.
The Manager has agreed to reimburse the Income Funds annually for their total
expenses (excluding brokerage commissions, interest and taxes) in excess of
limits prescribed by any state in which the Income Funds' shares are offered for
sale (currently 2 1/2% of the first $30 million of each fund's average annual
net assets, 2% of the next $70 million of such assets and 1 1/2% of such assets
in excess thereof).
The Manager voluntarily waives a portion of its fee for some of the Income
Funds. The waivers are in amounts that maintain total operating expenses for
each fund within certain limits. The limits are expressed as a percentage of
average net assets attributable to each class on an annualized basis during the
reporting period. The amounts waived and the operating expense limits are as
follows:
Amount
Waived
---------------------------------------
Six Months
Ended Year Ended Expense
April 30, 1996 October 31, 1995 Limit
-------------- ---------------- -------
Princor Bond
Fund, Inc.
Class A $12,331 $ 86,018 0.95%
Class B 1,774 300 1.70
Class R 3 - 1.45
Princor Limited
Term Bond
Fund, Inc.
Class A 13,964(a) - 0.90
Class B 21(a) - 1.15
Class R 4(a) - 1.40
Princor Utilities
Fund, Inc.
Class A(b) 33,264 151,147 1.10
Class B(b) 2,610 1,336 1.85
(a)For period ended April 30, 1996.
(b)The expense limit for the period November 1, 1994 through February 28, 1995
was 1.00% and 1.75% for Class A and Class B shares, respectively. The Manager
discontinued the expense waiver effective February 29, 1996.
Princor Financial Services Corporation, as principal underwriter, receives
proceeds of any CDSC on certain Class A and Class B share redemptions. The
charge is based on declining rates, which begin at .75% for Class A shares and
4.00% for Class B shares (.25% and 1.25% for Princor Limited Term Bond Fund,
respectively) of the Income Funds. Princor Financial Services Corporation also
retains sales charges on sales of Class A shares based on declining rates which
begin at 4.75% of the offering price (1.50% for Princor Limited Term Bond Fund,
Inc.). The aggregate amount of these charges retained, by fund, for the period
ended April 30, 1996 were as follows:
Class A Class B
-------- --------
Princor Bond Fund, Inc. $368,083 $ 2,980
Princor Government Securities
Income Fund, Inc. 650,260 12,818
Princor High Yield Fund, Inc. 51,990 3,533
Princor Limited Term
Bond Fund, Inc. 1,624 -
Princor Tax-Exempt Bond Fund, Inc. 298,240 3,912
Princor Utilities Fund, Inc. 165,561 15,789
No brokerage commissions were paid by the Income Funds to Princor Financial
Services Corporation during the periods. Brokerage commissions were paid to
another affiliate by Princor Utilities Fund, Inc. in the amount of $2,217 and
$3,446 for the six months ended April 30, 1996 and year ended October 31, 1995,
respectively.
The Income Funds bear distribution and shareholder servicing fees with respect
to Class A shares computed at an annual rate of up to .25% (.15% for the Princor
Limited Term Bond Fund, Inc.) of the average daily net assets attributable to
Class A shares of each fund. Each of the Income Funds adopted a distribution
plan with respect to Class B shares that provides for distribution and
shareholder servicing fees computed at an annual rate of up to 1.00% of the
average daily net assets attributable to Class B shares of each fund (.50% for
the Princor Limited Term Bond Fund, Inc.). Effective February 1996, each of the
Income Funds, with the exception of Princor Tax-Exempt Bond Fund, Inc., adopted
a distribution plan with respect to Class R shares that provides for
distribution and shareholder servicing fees computed at an annual rate of up to
.75% of the average daily net assets attributable to Class R shares of each
fund. Distribution and shareholder servicing fees are paid to Princor Financial
Services Corporation; a portion of the fees are subsequently remitted to retail
dealers. Pursuant to the distribution agreements, fees unused by the principal
underwriter at the end of the fiscal year are returned to the Income Funds.
At April 30, 1996 Principal Mutual Life Insurance Company, subsidiaries of
Principal Mutual Life Insurance Company, benefit plans sponsored on behalf of
Principal Mutual Life Insurance Company and several joint ventures (in each of
which a subsidiary of Principal Mutual Life Insurance Company is a participant)
owned shares of the Income Funds as follows:
Class A Class B Class R
--------- ------- -------
Princor Bond Fund, Inc. 178,251 107 90
Princor Government Securities
Income Fund, Inc. 94,034 106 89
Princor High Yield Fund, Inc. 1,116,208 145 124
Princor Limited Term Bond
Fund, Inc. 1,007,638 102 102
Princor Tax-Exempt Bond
Fund, Inc. 92,516 101 N/A
Princor Utilities Fund, Inc. 85,553 27,490 86
Note 4 -- Investment Transactions
For the period ended April 30, 1996, the cost of investment securities purchased
and proceeds from investment securities sold (not including short-term
investments and U.S. government securities) by the Income Funds were as follows:
Purchases Sales
----------- ------------
Princor Bond Fund, Inc. $10,186,530 $ 1,285,000
Princor High Yield Fund, Inc. 6,539,843 3,811,188
Princor Limited Term Bond Fund, Inc. 9,626,778 143,708
Princor Tax-Exempt Bond Fund, Inc. 18,802,060 13,140,501
Princor Utilities Fund, Inc. 20,239,399 19,199,889
At April 30, 1996, net unrealized appreciation (depreciation) of investments by
the Income Funds was composed of the following:
<TABLE>
<CAPTION>
Net Unrealized
Gross Unrealized Appreciation (Depreciation)
----------------------------------
Appreciation (Depreciation) of Investments
------------ ------------ --------------------------
<S> <C> <C> <C>
Princor Bond Fund, Inc. $3,681,944 $(1,927,468) $ 1,754,476
Princor Government Securities Income Fund, Inc. 1,422,893 (8,532,381) (7,109,488)
Princor High Yield Fund, Inc. 554,873 (652,139) (97,266)
Princor Limited Term Bond Fund, Inc. - (271,573) (271,573)
Princor Tax-Exempt Bond Fund, Inc. 5,193,358 (2,700,061) 2,493,297
Princor Utilities Fund, Inc. 7,212,588 (2,096,849) 5,115,739
</TABLE>
Princor Government Securities Income Fund, Inc. may trade portfolio securities
on a "to-be-announced" (TBA) basis. In a TBA transaction, the fund commits to
purchase or sell securities for which all specific information is not known at
the time of the trade. Securities purchased on a TBA basis are not settled until
they are delivered to the fund, normally 15 to 30 days later. These transactions
are subject to market fluctuations and their current value is determined in the
same manner as for other portfolio securities. As of April 30, 1996, TBA
purchase commitments involved securities with a face amount of $3,000,000, cost
of $2,738,125 and market value of $2,736,040. Princor Government Securities
Income Fund, Inc. has set aside investment securities and other assets in excess
of the commitments to serve as collateral.
At April 30, 1996, Princor High Yield Fund, Inc. and Princor Tax-Exempt Bond
Fund, Inc. held the following securities which may require registration under
the Securities Act of 1933, or an exemption therefrom, in order to effect a sale
in the ordinary course of business.
<TABLE>
<CAPTION>
Value at Value as a
Date of April 30, Percentage of
Fund Security Description Acquisition Cost 1996 Net Assets
---- -------------------- ----------- ---- -------- -------------
Princor High Yield Fund, Inc. California Energy Casecnan
Water & Energy Co., Inc.;
<S> <C> <C> <C> <C>
Senior Secured Series B 11/21/95 $700,000 $ 707,000 2.71%
Howmet Corp.; Senior
Subordinated Notes 11/22/95 350,000 367,500 1.41
Mariner Health Corp.; Senior
Subordinated Notes 4/1/96 696,878 689,500 2.64
1,764,000 6.76
Princor Tax-Exempt Bond Fund, Inc. Eddyville, Iowa, IDR Ref. Bonds;
Cargill Inc. Project 1/11/95 859,910 960,000 .52
</TABLE>
The Income Funds' investments are with various issuers in various industries.
The Schedules of Investments contained herein summarize concentration of credit
risk by issuer and industry.
Note 5 -- Capital Share Transactions
Transactions in Capital Stock by fund were as follows:
<TABLE>
<CAPTION>
Princor Princor Princor
Bond Government Securities High Yield
Fund, Inc. Income Fund, Inc. Fund, Inc.
Six Months Ended April 30, 1996:
Shares sold:
<S> <C> <C> <C>
Class A ......................................... 1,059,839 1,990,589 258,370
Class B ......................................... 332,296 462,357 91,737
Class R*........................................... 89 88 122
Shares issued in reinvestment of dividends and
distributions:
Class A ........................................... 214,790 571,122 72,233
Class B ........................................... 8,711 12,763 2,378
Class R*........................................... 1 1 2
Shares redeemed:
Class A ......................................... (841,168) (2,166,611) (151,066)
Class B ......................................... (23,751) (65,849) (13,137)
Net Increase (Decrease) 750,807 (804,460) 260,639
Year Ended October 31, 1995:
Shares sold:
Class A ......................................... 1,706,844 2,679,878 489,469
Class B**.......................................... 247,333 431,102 78,379
Shares issued in reinvestment of dividends and
distributions:
Class A ......................................... 439,527 1,196,621 162,114
Class B**.......................................... 4,196 7,084 812
Shares redeemed:
Class A ......................................... (1,429,838) (5,051,162) (275,812)
Class B**.......................................... (14,158) (21,972) (521)
Net Increase (Decrease) 953,904 (758,449) 454,441
<FN>
* Period from February 27, 1996, (date operations commenced) through April 30, 1996.
**Period from December 5, 1994, (date operations commenced) through October 31, 1995.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Princor Princor Princor
Limited Term Bond Tax-Exempt Bond Utilities
Fund, Inc.(1) Fund, Inc. Fund, Inc.
Six Months Ended April 30, 1996, Except as Noted:
Shares sold:
<S> <C> <C> <C>
Class A ......................................... 1,106,367 1,082,781 540,792
Class B ......................................... 3,184 124,371 205,194
Class R*........................................... 101 - 85
Shares issued in reinvestment of dividends and
distributions:
Class A ......................................... 7,795 275,220 100,601
Class B ......................................... 1 5,711 6,738
Class R*........................................... 1 - 1
Shares redeemed:
Class A ......................................... (5,102) (1,066,660) (758,450)
Class B ......................................... - (14,247) (101,185)
Net Increase (Decrease) 1,112,347 407,176 (6,224)
Year Ended October 31, 1995:
Shares sold:
Class A ......................................... N/A 1,625,100 985,916
Class B**.......................................... N/A 293,841 374,706
Shares issued in reinvestment of dividends and
distributions:
Class A ......................................... N/A 590,347 257,037
Class B**.......................................... N/A 4,276 6,082
Shares redeemed:
Class A ......................................... N/A (2,897,205) (1,355,492)
Class B**.......................................... N/A (6,673) (19,084)
Net Increase (Decrease) N/A (390,314) 249,165
<FN>
(1) Period from February 13, 1996 (February 27, 1996 -- Princor Limited Term Bond Fund, Inc. Class B & Class R) date operations
commenced through April 30, 1996.
* Period from February 27, 1996 (date operations commenced) through April 30, 1996.
** Period from December 5, 1994, (date operations commenced) through October 31, 1995.
</FN>
</TABLE>
Note 6 -- Line of Credit
The Income Funds have an unsecured line of credit with a bank which allows each
fund to borrow up to $500,000. Borrowings are made solely to facilitate the
handling of unusual and/or unanticipated short-term cash requirements. Interest
is charged to each fund, based on its borrowings, at a rate equal to the bank's
Fed Funds Unsecured Rate plus 100 basis points. Additionally, a commitment fee
is charged at the annual rate of .25% on the unused portion of the line of
credit. At April 30, 1996, the Income Funds had no outstanding borrowings under
the line of credit.
<PAGE>
SCHEDULES OF INVESTMENTS
INCOME FUNDS
PRINCOR BOND FUND, INC.
Principal
Amount Value
Bonds (97.27%)
Air Transportation, Scheduled (2.25%)
Federal Express Corp. Pass
Through Cert.;
7.58%; 7/2/19 $1,000,000 $ 952,820
Federal Express Corp. 1994 Pass
Through Cert., Series A310-A3;
8.40%; 3/23/10 1,500,000 1,595,016
2,547,836
Aircraft & Parts (0.97%)
Textron, Inc. Medium-Term
Notes, Series C;
9.80%; 1/10/00 500,000 547,505
9.55%; 3/19/01 500,000 553,120
1,100,625
Auto & Home Supply Stores (1.28%)
Pep Boys-Manny, Moe & Jack Notes;
7.00%; 6/1/05 1,500,000 1,440,504
Beverages (0.95%)
Joseph E. Seagram & Sons
Guaranteed Debentures;
8.38%; 2/15/07 1,000,000 1,073,390
Cable & Other Pay TV Services (2.03%)
Tele-Communications, Inc. Notes;
7.25%; 8/1/05 2,000,000 1,834,326
Tele-Communications, Inc. Senior
Debentures; 7.88%; 8/1/13 500,000 456,585
2,290,911
Cash Grains (2.50%)
Aktiebolaget SKF Senior Notes;
7.63%; 7/15/03 2,500,000 2,525,007
Dekalb Corp. Notes;
10.00%; 4/15/98 300,000 300,000
2,825,007
Combination Utility Services (1.62%)
Pennsylvania Gas & Water Co.
First Mortgage Bonds;
8.38%; 12/1/02 500,000 517,894
Public Service Electric & Gas
Medium-Term Notes;
8.16%; 5/26/09 1,250,000 1,308,262
1,826,156
Construction & Related
Machinery (1.04%)
Caterpillar, Inc. Global Debentures;
9.38%; 8/15/11 1,000,000 1,173,180
Consumer Products (0.88%)
RJR Nabisco Capital Corp. Senior
Notes; 8.75%; 4/15/04 1,000,000 998,750
Copper Ores (2.33%)
Asarco, Inc. Debentures;
7.88%; 4/15/13 1,500,000 1,444,806
Asarco, Inc. Notes; 7.38%; 2/1/03 1,200,000 1,187,460
2,632,266
Crude Petroleum & Natural Gas (0.49%)
Occidental Petroleum Corp.
Medium-Term Notes;
9.73%; 6/15/01 500,000 556,140
Department Stores (2.96%)
Dillard Investment Co. Notes;
9.25%; 5/1/97 200,000 206,040
Harcourt General, Inc. Subordinated
Notes; 9.50%; 3/15/00 400,000 431,514
Sears Roebuck Co.
Medium-Term Notes;
9.05%; 2/6/12 500,000 562,965
9.12%; 2/13/12 1,000,000 1,131,370
Sears Roebuck Co. Notes;
8.55%; 8/1/96 1,000,000 1,006,541
3,338,430
Drug Stores & Proprietary Stores (1.58%)
Rite Aid Corp. Senior Debentures;
6.88%; 8/15/13 2,000,000 1,789,384
Eating & Drinking Places (2.01%)
Marriott International, Inc. Notes;
6.75%; 12/15/03 1,300,000 1,249,682
Marriott International, Inc. Senior
Notes; 7.88%; 4/15/05 1,000,000 1,017,072
2,266,754
Electric Services (4.71%)
Cleveland Electric Illuminating Co.
First Mortgage Medium-Term
Notes; 7.85%; 7/30/02 1,500,000 1,386,465
Ohio Edison Co. First Mortgage
Bonds; 8.25%; 4/1/02 2,000,000 2,063,150
Southern California Edison Co.
Notes; 6.38%; 1/15/06 1,000,000 925,000
Toledo Edison Co. Debentures;
8.70%; 9/1/02 1,000,000 944,317
5,318,932
Fabricated Rubber Products,
NEC (1.48%)
M. A. Hanna Co. Senior Notes;
9.38%; 9/15/03 1,500,000 1,665,682
Farm & Garden Machinery (1.40%)
Tenneco, Inc. Notes;
9.88%; 2/1/01 500,000 556,705
7.88%; 10/1/02 1,000,000 1,029,765
1,586,470
Gas Production & Distribution (1.42%)
Tennessee Gas Pipeline Co. Notes;
9.25%; 5/15/96 400,000 400,428
Transco Energy Co. Notes;
9.38%; 8/15/01 1,100,000 1,201,785
1,602,213
General Government, NEC (3.63%)
Ontario Hydro Debentures;
7.45%; 3/31/13 2,000,000 2,001,620
Province of Saskatchewan, Canada
Global Notes; 8.00%; 2/1/13 2,000,000 2,092,060
4,093,680
Gold & Silver Ores (1.06%)
Placer Dome, Inc. Notes;
7.13%; 6/15/07 1,250,000 1,194,881
Grain Mill Products (0.87%)
Ralston Purina Co. Debentures;
7.75%; 10/1/15 1,000,000 980,156
Grocery Stores (0.96%)
Food Lion, Inc.
Medium-Term Notes;
8.67%; 8/28/06 1,000,000 1,086,800
Household Furniture (1.66%)
Masco Corp. Debentures;
7.13%; 8/15/13 2,000,000 1,873,800
Industrial Inorganic Chemicals (2.91%)
FMC Corp. Senior Notes;
6.38%; 9/1/03 750,000 701,570
Grace, (W.R.) & Co. Guaranteed
Notes; 8.00%; 8/15/04 2,500,000 2,583,462
3,285,032
Machinery, Equipment,
& Supplies (0.21%)
AAR Corp. Notes; 7.25%; 10/15/03 250,000 238,270
Metalworking Machinery (1.11%)
Black & Decker Corp. Notes;
7.00%; 2/1/06 1,300,000 1,254,932
Millwork, Plywood & Structural
Members (1.45%)
Georgia-Pacific Corp. Debentures;
9.50%; 12/1/11 600,000 682,643
Georgia-Pacific Corp. Senior
Debentures; 7.70%; 6/15/15 1,000,000 954,944
1,637,587
Miscellaneous Chemical
Products (1.32%)
Cabot Corp. Notes;
10.25%; 12/15/97 400,000 422,867
Ferro Corp. Senior Debentures;
7.63%; 5/1/13 1,100,000 1,069,862
1,492,729
Miscellaneous Equipment Rental
& Leasing (0.95%)
McDonnell Douglas Finance Corp.
Medium-Term Notes, Series 9;
9.94%; 6/11/98 1,000,000 1,067,160
Miscellaneous Investing (1.09%)
Weingarten Realty Investors
Medium-Term Notes;
7.29%; 5/23/05 1,250,000 1,232,100
Miscellaneous Metal Ores (1.61%)
Cyprus Amax Minerals Notes;
7.38%; 5/15/07 1,100,000 1,081,143
Cyprus Minerals Co. Notes;
10.13%; 4/1/02 650,000 738,054
1,819,197
Motion Picture Production
& Services (0.37%)
Columbia Pictures Entertainment, Inc.
Senior Subordinated Notes;
9.88%; 2/1/98 400,000 422,394
Motor Vehicles & Equipment (1.95%)
Ford Motor Co. Debentures;
8.88%; 1/15/22 1,000,000 1,110,513
General Motors Corp. Global
Medium-Term Notes;
8.88%; 5/15/03 1,000,000 1,090,060
2,200,573
Newspapers (2.10%)
News America Holdings, Inc.
Guaranteed Senior Notes;
8.50%; 2/15/05 2,250,000 2,368,681
Operative Builders (1.30%)
Pulte Corp Senior Notes;
8.38%; 8/15/04 500,000 511,960
7.30%; 10/24/05 1,000,000 950,482
1,462,442
Paper Mills (7.98%)
Boise Cascade Corp. Notes;
9.90%; 3/15/00 500,000 546,081
9.85%; 6/15/02 1,000,000 1,120,663
Bowater, Inc. Debentures;
9.50%; 10/15/12 1,000,000 1,148,897
9.38%; 12/15/21 1,500,000 1,734,282
Champion International Corp. Notes;
9.88%; 6/1/00 750,000 826,015
Chesapeake Corp. Notes;
9.88%; 5/1/03 1,000,000 1,131,387
7.20%; 3/15/05 600,000 584,250
James River Corp. Notes;
6.70%; 11/15/03 2,000,000 1,922,920
9,014,495
Paperboard Mills (1.41%)
Federal Paper Board Co., Inc.
Debentures; 8.88%; 7/1/12 1,500,000 1,592,686
Personal Credit Institutions (3.88%)
Coastal Corp. Senior Notes;
9.75%; 8/1/03 1,500,000 1,694,421
General Motors Acceptance Corp.
Global Notes; 8.50%; 1/1/03 2,000,000 2,139,822
Household Finance Corp. Senior
Subordinated Notes;
9.63%; 7/15/00 500,000 546,909
4,381,152
Petroleum Refining (7.80%)
Ashland Oil, Inc.
Medium-Term Notes;
7.71%; 5/11/07 500,000 507,745
7.72%; 7/15/13 1,000,000 985,880
7.73%; 7/15/13 750,000 740,107
Mapco, Inc. Medium-Term Notes;
8.48%; 8/5/13 1,000,000 1,019,050
Pennzoil Co. Debentures;
10.13%; 11/15/09 1,675,000 1,965,165
Sun Co., Inc. Debentures;
9.00%; 11/1/24 2,000,000 2,236,452
Sun Co., Inc. Notes; 7.13%; 3/15/04 300,000 293,490
Ultramar Credit Corp. Guaranteed
Notes; 8.63%; 7/1/02 1,000,000 1,065,483
8,813,372
Photographic Equipment
& Supplies (0.92%)
Xerox Corp. Notes; 9.63%; 9/1/97 1,000,000 1,043,548
Primary Nonferrous Metals (3.52%)
Amax, Inc. Notes; 9.88%; 6/13/01 900,000 977,515
Reynolds Metals Co.
Medium-Term Notes;
8.22%; 5/30/07 2,000,000 2,114,760
7.65%; 2/4/08 875,000 887,197
3,979,472
Pulp Mills (2.44%)
ITT Rayonier, Inc. Notes;
7.50%; 10/15/02 1,875,000 1,877,207
International Paper Co.
Medium-Term Notes;
9.70%; 8/15/00 800,000 879,352
2,756,559
Refrigeration & Service
Machinery (2.21%)
Westinghouse Electric Corp.
Debentures; 8.63%; 8/1/12 1,000,000 954,500
Westinghouse Electric Corp.
Global Notes; 8.88%; 6/1/01 1,500,000 1,540,125
2,494,625
Rental of Railroad Cars (2.70%)
Gatx Capital Corp. Medium-Term
Notes,
Series B; 9.50%; 1/10/02 1,500,000 1,660,965
Series C; 6.86%; 10/13/05 1,000,000 959,190
General American Transportation
Corp. Medium-Term Notes;
10.65%; 11/14/97 400,000 424,520
3,044,675
Sanitary Services (1.58%)
Laidlaw, Inc. Notes;
7.70%; 8/15/02 1,000,000 1,021,270
Laidlaw, Inc. Senior Notes;
7.88%; 4/15/05 750,000 766,703
1,787,973
Telephone Communication (2.24%)
Sprint Corp. Notes; 8.13%; 7/15/02 1,500,000 1,579,797
U.S. West Capital Funding, Inc.
Notes; 6.80%; 11/23/07 1,000,000 953,140
2,532,937
Variety Stores (4.12%)
Dayton-Hudson Corp. Debentures;
9.25%; 8/15/11 1,000,000 1,120,064
Dayton-Hudson Corp.
Sinking Fund Debentures;
9.50%; 10/15/16 900,000 944,515
Shopko Stores, Inc.
Senior Notes;
9.00%; 11/15/04 2,500,000 2,588,452
4,653,031
Total Bonds 109,837,569
Commercial Paper (0.68%)
Personal Credit Institutions (0.68%)
Associates Corp. of North America;
5.35%; 5/1/96 770,000 770,000
Total Portfolio Investments (97.95%) 110,607,569
Cash, receivables and other assets, net of
liabilities (2.05%) 2,317,535
Total Net Assets (100.00%) $112,925,104
PRINCOR GOVERNMENT SECURITIES INCOME
FUND, INC.
Description of Issue Principal
Type Rate Maturity Amount Value
Government National Mortgage Association (GNMA)
Certificates (100.16%)
GNMA I 6.00% 10/15/23-4/15/26 $31,948,298 $ 29,143,880
GNMA I 6.50 9/15/23-10/15/25 45,021,268 42,166,920
GNMA I 7.00 10/15/22-10/15/23 64,362,556 62,282,804
GNMA I 7.25 9/15/25-10/15/25 5,870,046 5,729,986
GNMA I 7.50 4/15/17-8/15/24 58,661,139 58,334,687
GNMA I 8.00 8/15/16-5/15/25 33,557,372 34,250,116
GNMA II 6.00 1/20/24-4/20/26 26,819,878 24,230,955
GNMA II 6.50 3/20/24-3/20/26 12,927,368 12,010,818
Total GNMA Certificates 268,150,166
Principal
Amount Value
Federal Agency Short-Term Obligations (0.40%)
Federal Home Loan Mortgage Corporation;
5.30%; 5/1/96 $1,060,000 $ 1,060,000
Total Portfolio Investments (100.56%) 269,210,166
Liabilities, net of cash, receivables and
other assets (-0.56%) (1,490,885)
Total Net Assets (100.00%) $267,719,281
PRINCOR HIGH YIELD FUND, INC.
Bonds (95.98%)
Principal
Amount Value
Agricultural Chemicals (2.72%)
IMC Fertilizer Group, Inc. Senior
Debentures; 9.45%; 12/15/11 $700,000 $ 710,500
Aircraft & Parts (2.45%)
Rohr Industries, Inc. Subordinated
Debentures; 9.25%; 3/1/17 700,000 638,750
Automotive Rentals, No Drivers (1.34%)
Alamo Rent-A-Car, Inc. Senior Notes;
11.75%; 1/31/06 350,000 350,875
Blast Furnace & Basic Steel
Products (2.76%)
Ivaco Senior Notes;
11.50%; 9/15/05 350,000 346,500
Weirton Steel Corp. Senior Notes;
10.75%; 6/1/05 400,000 374,000
720,500
Broadwoven Fabric Mills, Cotton (2.55%)
J.P. Stevens & Co., Inc. Sinking
Fund Debentures; 9.00%; 3/1/17 700,000 666,750
Cable & Other Pay TV Services (2.73%)
Jones Intercable, Inc. Senior Notes;
9.63%; 3/15/02 700,000 714,000
Cogeneration - Small Power
Producer (1.37%)
California Energy Co., Inc. Limited
Resource Senior Secured Notes;
9.88%; 6/30/03 350,000(a) 357,000
Computer & Data Processing
Services (2.87%)
Tenet Heathcare Corp. Senior
Subordinated Notes;
10.13%; 3/1/05 700,000 749,000
Consumer Products (2.27%)
RJR Nabisco, Inc. Senior Notes;
8.75%; 8/15/05 600,000 594,000
Crude Petroleum & Natural Gas (3.62%)
Chesapeake Energy Corp. Senior Notes;
9.13%; 4/15/06 350,000 346,500
Nuevo Energy Co. Senior Subordinated
Notes; 9.50%; 4/15/06 600,000 600,000
946,500
Electric Services (1.34%)
El Paso Electric Co. First Mortgage
Bonds, Series D;
8.90%; 2/1/06 350,000 349,125
Engines & Turbines (2.57%)
Outboard Marine Debentures;
9.13%; 4/15/17 700,000 672,000
Ferroalloy Ores, Except
Vanadium (1.05%)
Geneva Steel Co. Senior Notes;
9.50%; 1/15/04 350,000 273,000
Forest Products (2.41%)
Doman Industries Ltd.
Senior Notes; 8.75%; 3/15/04 700,000 628,649
Fuel Dealers (2.69%)
Petroleum Heat & Power Co., Inc.
Subordinated Notes;
10.13%; 4/1/03 700,000 701,750
General Government, NEC (1.18%)
Republic of Argentina
Global Bonds; 8.38%; 12/20/03 350,000 308,000
Groceries & Related Products (4.87%)
Fleming Cos., Inc. Senior Notes;
10.63%; 12/15/01 700,000 598,500
Rykoff-Sexton, Inc. Senior
Subordinated Notes;
8.88%; 11/1/03 700,000 672,000
1,270,500
Grocery Stores (3.90%)
Dominick's Finer Foods, Inc.
Senior Subordinated Notes;
10.88%; 5/1/05 350,000 365,750
Ralph's Grocery Co. Senior
Subordinated Notes;
11.00%; 6/15/05 700,000 653,625
1,019,375
Hotels & Motels (5.34%)
Bally's Grand, Inc. First Mortgage
Notes; 10.38%; 12/15/03 700,000 723,625
John Q. Hammons Hotels, L.P. &
Finance Corp. First Mortgage
Notes; 8.88%; 2/15/04 700,000 670,250
1,393,875
Knitting Mills (2.75%)
Tultex Corp. Senior Notes;
10.63%; 3/15/05 700,000 717,500
Miscellaneous Amusement, Recreation
Service (1.43%)
Rio Hotel & Casino, Inc. Senior
Subordinated Notes;
10.63%; 7/15/05 350,000 374,500
Miscellaneous Converted Paper
Products (2.16%)
Drypers Corp. Senior Notes;
12.50%; 11/1/02 700,000 563,500
Miscellaneous Plastics Products,
NEC (3.76%)
Congoleum Corp. Senior Notes;
9.00%; 2/1/01 700,000 677,250
Plastic Containers, Inc.
Senior Secured Notes;
10.75%; 4/1/01 300,000 303,750
981,000
Motor Vehicles & Equipment (2.53%)
Lear Seating Corp. Subordinated
Notes; 8.25%; 2/1/02 700,000 659,750
Nonferrous Foundries (Casting) (1.41%)
Howmet Corp. Senior Subordinated
Notes; 10.00%; 12/1/03 350,000(a) 367,500
Nursing & Personal Care Facilities (2.64%)
Mariner Health Group, Inc. Senior
Subordinated Notes;
9.50%; 4/1/06 700,000(a) 689,500
Petroleum Refining (2.72%)
Crown Central Petroleum Corp.
Senior Notes; 10.88%; 2/1/05 700,000 710,500
Pulp Mills (2.40%)
Magnetek, Inc. Senior Subordinated
Debentures; 10.75%; 11/15/98 650,000 627,250
Radio, Television, & Computer
Stores (2.71%)
CompUSA, Inc. Senior Subordinated
Notes; 9.50%; 6/15/00 700,000 708,750
Radio & Television Boardcasting (3.74%)
American Radio Systems Senior
Subordinated Notes;
9.00%; 2/1/06 350,000 339,500
EZ Communications, Inc. Senior
Subordinated Notes;
9.75%; 12/1/05 300,000 291,000
Sullivan Broadcasting, Inc. Senior
Subordinated Notes;
10.25%; 12/15/05 350,000 345,625
976,125
Soap, Cleaners, & Toilet Goods (2.81%)
Coty, Inc. Senior Subordinated
Notes; 10.25%; 5/1/05 700,000 735,000
Telephone Communication (9.52%)
Paging Network, Inc. Senior
Debentures; 8.88%; 2/1/06 700,000 672,875
Rogers Cablesystems Ltd. Senior
Secured Second Priority Notes;
9.63%; 8/1/02 750,000 755,625
Telecom Argentina STET-France
Telecom SA Senior Notes;
12.00%; 11/15/02 350,000 375,375
Vanguard Cellular Systems, Inc.
Senior Debentures;
9.38%; 4/15/06 350,000 348,250
360 Communications Company
Senior Notes; 7.50%; 3/1/06 350,000 334,939
2,487,064
Textile Finishing, Except Wool (2.66%)
Dominion Textile (USA), Inc.
Guaranteed Senior Notes;
9.25%; 4/1/06 700,000 693,875
Water Supply (2.71%)
Cal. Energy Casecnan Water & Energy
Co., Inc. Senior Secured Bonds,
Series B; 11.95%; 11/15/10 700,000 707,000
Total Bonds 25,062,963
Commercial Paper (1.53%)
Personal Credit Institutions (1.53%)
Associates Corp. of North America;
5.35%; 5/1/96 400,000 400,000
Total Portfolio Investments (97.51%) 25,462,963
Cash, receivables and other assets, net of
liabilities (2.49%) 650,803
Total Net Assets (100.00%) $26,113,766
(a) Restricted security - See Note 4 to the financial statements.
PRINCOR LIMITED TERM BOND FUND, INC.
Principal
Amount Value
Bonds (46.86%)
Combination Utility Services (6.10%)
Consolidated Edison Co. Debentures;
6.50%; 9/1/99 $100,000 $ 99,275
6.50%; 2/1/01 300,000 294,583
PacifiCorp. First Mortgage
Medium-Term Notes;
9.50%; 5/20/99 250,000 269,965
663,823
Consumer Products (3.70%)
Philip Morris Cos. Notes;
7.13%; 12/1/99 400,000 402,948
Department Stores (7.02%)
J. C. Penney Co., Inc. Notes;
9.05%; 3/1/01 375,000 406,359
Sears Roebuck Co. Medium-Term
Notes; 6.46%; 5/12/00 100,000 98,714
Sears Roebuck Co. Notes;
8.20%; 4/15/99 250,000 258,818
763,891
Electric Services (3.20%)
Southern California Edison Co. First
Mortgage Refunding Bonds;
6.75%; 1/15/00 350,000 348,525
Miscellaneous Food & Kindred
Products (1.95%)
General Mills, Inc. Medium-Term
Notes; 9.00%; 11/30/98 200,000 211,816
Motor Vehicles & Equipment (4.02%)
General Motors Corp. Medium-Term
Notes; 9.20%; 7/2/01 400,000 437,844
Paperboard Mills (3.99%)
Temple-Inland, Inc. Notes;
9.00%; 5/1/01 400,000 434,189
Personal Credit Institutions (12.88%)
Amercian General Finance Corp.
Notes; 7.25%; 4/15/00 500,000 506,416
Chrysler Financial Corp.
Medium-Term Notes;
8.45%; 1/28/00 400,000 421,084
Ford Motor Credit Co. Notes;
6.85%; 8/15/00 475,000 473,846
1,401,346
Telephone Communication (4.00%)
NYNEX Capital Funding Medium-Term
Notes, Series A; 9.40%; 6/1/00 400,000 434,936
Total Bonds 5,099,318
Federal Home Loan Mortgage Corporation (FHLMC) Certificates (35.96%)
Description of Issue Principal
Type Rate Maturity Amount Value
FHLMC 7.25% 12/1/07 $ 933,080 $ 940,899
FHLMC 8.00 12/1/11 470,631 483,907
FHLMC 8.25 1/1/12 164,695 169,345
FHLMC Gold 8.50 1/1/00-4/1/00 1,405,387 1,449,742
FHLMC Gold 9.00 9/1/09 827,646 868,822
Total FHLMC Certificates 3,912,715
Federal National Mortgage Association (FNMA)
Certificates (1.90%)
FNMA 8.00% 10/1/06 199,736 206,257
Government National Mortgage Association (GNMA)
Certificates (5.96%)
GNMA I 9.00 7/15/17 155,412 165,497
GNMA II 8.00 1/20/16 473,924 482,639
Total GNMA Certificates 648,136
U.S. Government Treasury Note (4.46%)
Principal
Amount Value
U.S. Government Treasury Note;
4.75%; 8/31/98 $500,000 $ 485,468
Commercial Paper (3.40%)
Personal Credit Institutions (3.40%)
Associates Corp. of North America;
5.35%; 5/1/96 370,000 370,000
Total Portfolio Investments (98.54%) 10,721,894
Cash and receivables, net of liabilities (1.46%) 158,975
Total Net Assets (100.00%) $10,880,869
PRINCOR TAX-EXEMPT BOND FUND, INC.
Principal
Amount Value
Long-Term Tax-Exempt Bonds (97.39%)
Alabama (2.22%)
Courtland, Alabama IDB IDR Series A
Bonds for Champion International;
7.20%; 12/1/13 $3,815,000 $ 4,101,125
Arizona (2.58%)
Navajo County Arizona Pollution Control
Corp. Rev. Ref. Bonds, Arizona Public
Service Co., Series 1993A;
5.88%; 8/15/28 4,100,000 3,813,000
Pinal County Arizona Industrial Dev.
Authority Browning-Ferris Industries,
Inc. Proj., Series 1996;
5.00%; 2/1/06 1,000,000 957,500
4,770,500
Arkansas (2.61%)
City of Blytheville, Arkansas Solid Waste
Recycling & Sewer Treatment Rev.
Bonds, Series 1992, Nucor Corp.
Project; 6.90%; 12/1/21 4,610,000 4,817,450
California (2.93%)
ABAG Finance Authority for Nonprofit
Corp., Cert.of Participation,
Stanford University Hospital;
5.00%; 11/1/04 750,000 723,750
5.50%; 11/1/13 1,250,000 1,162,500
5.25%; 11/1/20 1,750,000 1,513,750
City of Upland, California, San Antonio
Comm. Hospital Cert. of Partticipation;
5.25%; 1/1/04 2,080,000 2,012,400
5,412,400
Colorado (2.74%)
City & County of Denver, Colorado,
Airport System Rev. Bonds,
Series 1991D; 7.75%; 11/15/13 3,185,000 3,686,637
Colorado Health Fac. Authority Rev.
Bonds for Sisters of Charity
Healthcare Systems, Series 1994;
5.25%; 5/15/14 1,500,000 1,380,000
5,066,637
Florida (0.73%)
Nassau County, Florida Pollution
Control Rev. Ref. ITT Rayonier
Project; 7.65%; 6/1/06 1,265,000 1,350,387
Georgia (3.21%)
Coweta County, Georgia Dev. Authority
Pollution Control Rev. Bonds,
Georgia Power Co., Yates Project;
6.00%; 3/1/18 2,500,000 2,487,500
Fulco, Georgia, Hospital Authority Rev.
Anticipation Cert. for St. Joseph's
Hospital of Atlanta, Inc.;
5.50%; 10/1/14 2,000,000 1,837,500
Municipal Electric Authority of Georgia
Power Rev. Bonds, Series R;
7.30%; 1/1/09 1,505,000 1,608,469
5,933,469
Illinois (15.69%)
Chicago, Illinois O'Hare International
Airport Special Fac. Rev. Bonds for
American Airlines, Inc. Project-A;
7.88%; 11/1/25 6,010,000 6,423,188
City of Chicago, Illinois Adj. Rate Gas
Supply Rev. Bonds, Series 1985A,
Peoples Gas Light & Coke Project;
6.88%; 3/1/15 3,800,000 4,089,750
Illinois Dev. Financial Authority Pollution
Control Rev. Bonds for Illinois
Power Co.; 7.63%; 12/1/16 2,050,000 2,152,623
Illinois Health Fac. Authority for Sarah Bush
Lincoln Health Center Area E-7 Hospital
Association Bonds, Series 1987;
7.20%; 4/1/01 150,000 155,406
7.38%; 4/1/17 850,000 874,726
Illinois Health Fac. Authority Ref. Rev.
Bonds for OSF Healthcare System;
6.00%; 11/15/10 500,000 484,375
6.00%; 11/15/13 500,000 483,125
Illinois Health Fac. Authority Ref. Rev.
Bonds for OSF Healthcare System,
Series 1993; 5.75%; 11/15/07 1,000,000 972,500
Illinois Health Fac. Authority Rev. Bonds
for Sarah Bush Lincoln Health
Center, Series 1992;
7.25%; 5/15/12 2,950,000 3,020,063
7.25%; 5/15/22 1,515,000 1,539,619
Illinois Health Fac. Authority Rev. Bonds
for South Suburban Hospital,
Series 1992;
7.00%; 2/15/09 500,000 514,375
7.00%; 2/15/18 1,250,000 1,285,937
Illinois Health Fac. Authority Rev. Bonds,
Northwestern Memorial Hospital,
Series 1994A;
5.60%; 8/15/06 500,000 499,375
5.75%; 8/15/08 615,000 611,925
5.80%; 8/15/09 840,000 828,450
6.10%; 8/15/14 1,000,000 992,500
Illinois Health Fac. Authority Rev. Ref.
Bonds for Advocate Healthcare,
Series A; 6.75%; 4/15/12 2,000,000 2,037,500
Regional Transportation Authority,
Illinois General Obligation Bonds,
Series 1994A; 6.25%; 6/1/15 2,000,000 2,052,500
29,017,937
Indiana (6.30%)
City of Mount Vernon, Indiana, Pollution
Control Rev. Bonds, for Southern
Indiana Gas & Electric Co. Project,;
7.25%; 3/1/14 700,000 760,375
City of Petersburg, Indiana, Pollution
Control Rev. Bonds, for Indianapolis
Power & Light Co. Project,
Series 1993A; 6.10%; 1/1/16 4,000,000 4,025,000
Indiana Health Fac. Financing Authority
Hospital Rev. Ref. Bonds, Welborn
Memorial Baptist Hospital, Series 1993;
5.63%; 7/1/23 1,860,000 1,646,100
Lawrenceburg, Indiana Pollution Control
Rev. Ref. Bonds, Indiana Michigan
Power Co. Project,
Series D; 7.00%; 4/1/15 1,000,000 1,045,000
Series E; 5.90%; 11/1/19 3,220,000 2,994,600
Warrick County, Indiana Environmental
Improvement Rev. Bonds, Southern
Indiana Gas & Electric, Series 1993B;
6.00%; 5/1/23 1,190,000 1,184,050
11,655,125
Iowa (4.50%)
City of Muscatine, Iowa, Electric Rev.
Ref. Bonds, Series 1986;
6.00%; 1/1/06 160,000 160,056
5.00%; 1/1/07 1,665,000 1,550,531
Eddyville, Iowa, IDR Ref. Bonds,
Cargill, Inc. Project;
5.63%; 12/1/13 1,000,000(a) 960,000
Iowa Finance Authority Hospital Fac.
Ref. Rev. Bonds for Jennie
Edmundson Memorial Hospital;
7.40%; 11/1/06 550,000 579,563
7.65%; 11/1/16 4,900,000 5,071,500
8,321,650
Kentucky (0.99%)
City of Ashland, Kentucky Sewage and
Solid Waste Rev. Bonds for Ashland,
Inc. Project, Series 1995;
7.13%; 2/1/22 750,000 782,812
City of Ashland, Kentucky, Solid Waste
Rev. Bonds for Ashland Oil, Inc.
Project, Series 1991; 7.20%; 10/1/20 1,000,000 1,040,000
1,822,812
Louisiana (1.11%)
St. Charles Parish, Louisiana Pollution
Control Rev. Bonds for Louisiana
Power & Light Co. Project;
7.50%; 6/1/21 1,950,000 2,047,500
Maine (1.05%)
Skowhegan, Maine, Pollution Control
Rev. Ref. Bonds for Scott Paper
Co. Project, Series 1993;
5.90%; 11/1/13 2,000,000 1,945,000
Michigan (2.31%)
Michigan State Hospital Financing
Authority Hospital Rev. Bond for
Detroit Medical Center, Series 1993B;
5.75%; 8/15/13 600,000 570,000
5.50%; 8/15/23 2,000,000 1,787,500
Michigan State Hospital Financing
Authority Rev. Ref. Bonds, Daughters
of Charity Natl. Health System;
5.50%; 11/1/05 1,000,000 1,003,750
Michigan State Hospital Financing
Authority Rev. Ref. Bonds,
Daughters of Charity Hospital;
5.25%; 11/1/15 1,000,000 908,750
4,270,000
Minnesota (1.58%)
City of Bass Brook, Minnesota, Pollution
Control Rev. Ref. Bonds for Minnesota
Power & Light Project; 6.00%; 7/1/22 3,000,000 2,917,500
Missouri (1.18%)
Missouri State Health & Educational
Fac. Authority Health Fac. Rev. Bonds,
BJC Health System, Series 1994A;
6.75%; 5/15/12 2,000,000 2,180,000
Montana (1.04%)
Forsyth, Montana Pollution Control Rev.
Ref. Bonds, Montana Power Co.,
Colstrip Project, Series 1993A;
6.13%; 5/1/23 2,000,000 1,927,500
Nebraska (1.94%)
Nebraska Public Power Dist. Power
Supply System Rev. Bonds;
5.30%; 1/1/02 1,000,000 1,021,250
5.40%; 1/1/03 1,500,000 1,535,625
5.50%; 1/1/04 1,000,000 1,027,500
3,584,375
Nevada (2.03%)
Clark County, Nevada, IDR Ref. Bonds,
Nevada Power Co. Project,
Series 1992C; 7.20%; 10/1/22 3,600,000 3,748,500
New Mexico (1.11%)
City of Lordsburg, New Mexico,
Pollution Control Rev. Bonds
for Phelps Dodge Corp. Project;
6.50%; 4/1/13 2,000,000 2,060,000
North Carolina (2.77%)
Martin County, North Carolina Industrial
Fac. & Pollution Control Finance
Authority Solid Waste Rev. Bonds,
Weyerhaeuser; 6.80%; 5/1/24 2,000,000 2,082,500
North Carolina Medical Care Hospital
Rev. Bonds for Rex Hospital Project;
6.13%; 6/1/10 1,700,000 1,693,625
North Carolina Municipal Power Agency,
Catawba Electric Rev. Bonds;
6.00%; 1/1/15 1,400,000 1,342,250
5,118,375
North Dakota (1.12%)
Mercer County, North Dakota Pollution
Control Rev. Bonds, Ottertail Power
Co. Project, Series 1991;
6.90%; 2/1/19 1,950,000 2,071,875
Ohio (5.30%)
Cuyahoga County, Ohio, Hospital Rev.
Bonds for Meridia Health Systems,
Series 1991;
7.25%; 8/15/19 1,445,000 1,524,475
7.00%; 8/15/23 250,000 260,312
Lorain County, Ohio Hospital Ref. Bonds,
Humility Mary Health Care, Series A;
5.90%; 12/15/08 3,270,000 3,306,788
Ohio Air Quality Dev. Rev. Bonds,
Columbus Southern Power Co. Project,
Series 1985B; 6.25%; 12/1/20 4,900,000 4,722,375
9,813,950
Oklahoma (1.24%)
Tulsa Industrial Authority Rev. Bonds,
St. John Medical Center Project,
Series 1994;
6.25%; 2/15/14 1,280,000 1,292,800
6.25%; 2/15/17 1,000,000 1,006,250
2,299,050
Rhode Island (1.57%)
Rhode Island State Industrial Facilities
Corp. Marine, Term Revenue
Bonds, Mobil Oil Refining;
6.00%; 11/1/14 2,900,000 2,896,375
South Carolina (2.56%)
Oconee County, South Carolina Pollution
Control Rev. Ref. Bonds, Duke Power
Co. Project, Series 1993;
5.80%; 4/1/14 1,000,000 988,750
York County, South Carolina Exempt Fac.
Industrial Rev. Bonds for Hoechst
Celanese Project, Series 1994;
5.70%; 1/1/24 2,000,000 1,865,000
York County, South Carolina Pollution
Control Rev. Bonds, Bowater, Inc.
Project; 7.63%; 3/1/06 1,700,000 1,887,000
4,740,750
South Dakota (0.57%)
Pennington County, South Dakota
Pollution Control Rev. Ref. Bonds
for Black Hills Power & Light Co.
Project; 6.70%; 6/1/10 1,000,000 1,056,250
Texas (5.27%)
Brazos River Authority, Texas, Pollution
Control Rev. Bonds for Houston
Lighting & Power;
8.25%; 5/1/15 820,000 882,525
7.75%; 10/1/15 855,000 920,194
8.25%; 5/1/19 500,000 538,125
Guadalupe-Blanco River Authority,
Texas Industrial Dev. Corp.
Pollution Control Rev. E I Du Pont
1982 Series A; 6.35%; 7/1/22 2,500,000 2,575,000
Matagorda County, Texas, Navigational
District No. 1 Pollution Control Rev.
Bonds for Central Power & Light Co.;
7.50%; 12/15/14 2,585,000 2,840,269
6.00%; 7/1/28 1,000,000 977,500
Tarrant County, Texas, Health Fac. Dev.
Corp., Harris Methodist Health System
Rev. Bonds; 5.90%; 9/1/06 1,000,000 1,020,000
9,753,613
Utah (0.75%)
Intermountain Power Agency, Utah
Power Supply Rev. Ref. Bonds,
Series 1993A; 5.50%; 7/1/20 1,500,000 1,383,750
Virginia (4.66%)
Albemarle County, Virginia IDA Hospital
Rev. Ref. Bonds, Martha Jefferson
Hospital; 5.50%; 10/1/15 1,900,000 1,771,750
Arlington County, Virginia, IDA Hospital
Fac. Rev. Ref. Bonds, Arlington Hospital,
Series 1993; 5.00%; 9/1/21 2,715,000 2,304,356
Chesapeake, Virginia IDA Rev. Ref.
Bond for Cargill, Inc.Project;
5.88%; 3/1/13 1,410,000 1,385,325
Penninsula Ports Authority of Virgina,
Dominion Terminal Associates
Project - The Pittson Co.;
7.38%; 6/1/20 3,000,000 3,165,000
8,626,431
Washington (4.38%)
City of Seattle, Washington Municipal
Light and Power Rev. Bonds;
1993; 5.10%; 11/1/05 1,950,000 1,942,688
1994; 6.63%; 7/1/16 1,000,000 1,053,750
Pilchuck Dev. Public Corp., State of
Washington, Special Fac. Airport
Rev. Bonds, Series 1993, Tramco, Inc.
Project for BF Goodrich;
6.00%; 8/1/23 3,155,000 2,961,756
Washington Health Care Fac. Authority
Rev. Bonds, Series 1989, Sisters of
Providence; 7.88%; 10/1/10 2,000,000 2,150,000
8,108,194
West Virginia (6.35%)
Marshall County, West Virginia,
Pollution Control Rev. Bonds
for Ohio Power Co. Project,
Series C; 6.85%; 6/1/22 1,200,000 1,258,500
Series D; 5.90%; 4/1/22 4,500,000 4,483,125
Pleasants County, West Virgina
Pollution Control Rev. Bonds
for Potomac Edison Co.;
6.15%; 5/1/15 2,000,000 1,997,500
Putnam County, West Virginia,
Pollution Control Rev. Bonds for
Appalachian Power Co. Project,
Series C; 6.60%; 7/1/19 3,875,000 4,000,938
11,740,063
Wisconsin (3.00%)
Kaukauna, Wisconsin Pollution Control
Rev. Ref. Bonds Intl. Paper Co. Project,
Series A; 5.40%; 5/1/04 3,610,000 3,569,387
Wisconsin Health & Educational Fac.
Authority Rev. Bonds, Series 1995,
Franciscan Skemp Medical Center, Inc.;
5.88%; 11/15/10 1,000,000 988,750
6.13%; 11/15/15 1,000,000 992,500
5,550,637
Total Long-Term Tax-Exempt Bonds 180,109,180
Short-Term Tax-Exempt Bonds (0.60%)
Massachusetts (0.11%)
Commonwealth of Massachusetts,
Dedicated Income Tax Bonds,
Series B, LOC National
Westminster; 3.90%; 5/1/95*; 12/1/97 200,000 200,000
Michigan (0.11%)
Township of Cornell, Michigan, The
Economic Dev. Corp., Environmental
Improvement Rev. Ref. Bonds,
Series 1986, Mead Escanaba Paper
Co. Project, LOC Suisse Bank;
3.95%; 5/1/96*; 11/1/16 200,000 200,000
Pennsylvania (0.38%)
Delaware County, Pennsylvania Fac. Rev.
Tax and Rev. Anticipation Notes,
Series 1985, Guaranteed by United
Parcel Service; 3.95%; 5/1/96*; 12/1/15 700,000 700,000
Total Short-Term Tax-Exempt Bonds 1,100,000
Total Portfolio Investments (97.99%) 181,209,180
Cash, receivables and other assets, net of
liabilities (2.01%) 3,720,057
Total Net Assets (100.00%) $184,929,237
* Demand Date
(a) Restricted security - See Note 4 to the financial statements.
PRINCOR UTILITIES FUND, INC.
Shares
Held Value
Common Stocks (97.94%)
Combination Utility Services (29.50%)
Baltimore Gas & Electric Co. 79,300 $2,091,537
Cilcorp., Inc. 52,000 2,242,500
Cinergy Corp. 73,799 2,140,171
L G & E Energy Corp. 100,000 2,112,500
Pacificorp 105,300 2,106,000
Public Service Co. of Colorado 63,900 2,116,688
Utilicorp United, Inc. 79,000 2,221,875
Washington Water Power Co. 117,700 2,133,313
Western Resources, Inc. 71,200 2,118,200
Wisconsin Energy Corp. 76,600 2,039,475
21,322,259
Electric Services (34.33%)
Central & Southwest 81,500 2,220,875
Duke Power Co. 44,600 2,096,200
FPL Group, Inc. 50,000 2,156,250
Houston Industries, Inc. 100,900 2,156,738
Idaho Power Co. 71,400 2,070,600
Mid American Energy Co. 120,200 2,058,425
New England Electric System 44,000 1,551,000
Portland General Corp. 71,100 2,088,562
Puget Sound Power & Light Co. 91,500 2,173,125
Southern Co. 93,300 2,052,600
Teco Energy, Inc. 87,000 2,022,750
Texas Utilities Co. 53,800 2,165,450
24,812,575
Gas Production & Distribution (6.21%)
AGL RES, Inc. 54,400 1,026,800
British Gas PLC 26,600 940,975
New Jersey Resources Corp. 38,700 1,098,113
Peoples Energy Corp. 23,300 733,950
Washington Energy Co. 35,500 687,812
4,487,650
Telephone Communication (27.90%)
Ameritech Corp. 39,000 2,276,625
AT&T Corp. 43,600 2,670,500
Bell Atlantic Corp. 36,000 2,340,000
Bellsouth Corp. 55,000 2,200,000
GTE Corp. 51,000 2,212,125
MCI Communications Corp. 89,800 2,643,487
Sprint Corp. 64,000 2,696,000
US West Communications Group 80,000 2,620,000
360 Communications Co. 21,333(a) 501,326
20,160,063
Total Common Stocks 70,782,547
Commercial Paper (1.84%)
Principal
Amount Value
Personal Credit Institutions (1.84%)
Associates Corp. of North America;
5.35%; 5/1/96 $1,325,000 $1,325,000
Total Portfolio Investments (99.78%) 72,107,547
Cash, receivables and other assets, net of
liabilities (0.22%) 160,496
Total Net Assets (100.00%) $72,268,043
(a) Non-income producing security - No dividend paid during the period.
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Selected data for a share of Capital Stock outstanding throughout each period:
Income from Investment Operations Less Distributions
--------------------------------- -----------------------------------------
Net Realized
and
Net Asset Net Unrealized Total Dividends
Value at Invest- Gain from from Net Distributions
Beginning ment (Loss) on Investment Investment from Total
of Period Income Investments Operations Income Capital Gains Distributions
--------- ------- ------------ ---------- ---------- ------------- -------------
PRINCOR BOND FUND, INC.
Class A:
<S> <C> <C> <C> <C> <C> <C> <C>
Six Months Ended April 30, 1996 $11.42 $.38(b) $(.50) $(.12) $(.39) $ - $(.39)
Year Ended October 31,
1995 10.27 .78(b) 1.16 1.94 (.78) (.01) (.79)
1994 11.75 .78(b) (1.47) (.69) (.78) (.01) (.79)
1993 10.97 .81(b) .79 1.60 (.81) (.01) (.82)
1992 10.65 .85(b) .32 1.17 (.85) - (.85)
1991 9.99 .88(b) .65 1.53 (.87) - (.87)
Class B:
Six Months Ended April 30, 1996 11.41 .34(b) (.51) (.17) (.35) - (.35)
Period Ended October 31, 1995(c) 10.19 .63(b) 1.19 1.82 (.60) - (.60)
Class R:
Period Ended April 30, 1996(f) 11.27 .12(b) (.36) (.24) (.13) - (.13)
PRINCOR GOVERNMENT
SECURITIES INCOME FUND, INC.
Class A:
Six Months Ended April 30, 1996 11.31 .35 (.30) .05 (.35) - (.35)
Year Ended October 31,
1995 10.28 .71 1.02 1.73 (.70) - (.70)
1994 11.79 .69 (1.40) (.71) (.68) (.12) (.80)
1993 11.44 .74 .55 1.29 (.74) (.20) (.94)
1992 11.36 .81 .12 .93 (.81) (.04) (.85)
1991 10.54 .85 .84 1.69 (.87) - (.87)
Class B:
Six Months Ended April 30, 1996 11.29 .31 (.30) .01 (.31) - (.31)
Period Ended October 31, 1995(c) 10.20 .56 1.07 1.63 (.54) - (.54)
Class R:
Period Ended April 30, 1996(f) 11.27 .08 (.26) (.18) (.12) - (.12)
PRINCOR HIGH YIELD FUND, INC.
Class A:
Six Months Ended April 30, 1996 8.06 .40 .01 .41 (.42) - (.42)
Year Ended October 31,
1995 7.83 .68 .20 .88 (.65) - (.65)
1994 8.36 .63 (.51) .12 (.65) - (.65)
1993 8.15 .71 .21 .92 (.71) - (.71)
1992 7.86 .79 .29 1.08 (.79) - (.79)
1991 7.12 .88 .80 1.68 (.94) - (.94)
Class B:
Six Months Ended April 30, 1996 8.05 .35 - .35 (.38) - (.38)
Period Ended October 31, 1995(c) 7.64 .53 .38 .91 (.50) - (.50)
Class R:
Period Ended April 30, 1996(f) 8.21 .16 (.18) (.02) (.17) - (.17)
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Ratios/Supplemental Data
------------------------------------------------------
Ratio of Net
Net Asset Ratio of Investment
Value at Net Assets at Expenses to Income to Portfolio
End Total End of Period Average Average Turnover
of Period Return(a) (in thousands) Net Assets Net Assets Rate
--------- --------- -------------- ----------- ------------- ----------
PRINCOR BOND FUND, INC.
Class A:
<S> <C> <C> <C> <C> <C> <C>
Six Months Ended April 30, 1996 $10.91 (1.19)%(d) $106,884 .95%(b)(e) 6.75%(e) 2.4%(e)
Year Ended October 31,
1995 11.42 19.73% 106,962 .94%(b) 7.26% 5.1%
1994 10.27 (6.01)% 88,801 .95%(b) 7.27% 8.9%
1993 11.75 15.22% 85,015 .92%(b) 7.19% 9.3%
1992 10.97 11.45% 62,534 .88%(b) 7.95% 8.4%
1991 10.65 16.04% 37,825 .80%(b) 8.66% 0.9%
Class B:
Six Months Ended April 30, 1996 10.89 (1.43)%(d) 6,040 1.67%(b)(e) 6.06%(e) 2.4%(e)
Period Ended October 31, 1995(c) 11.41 17.98%(d) 2,708 1.59%(b)(e) 6.30%(e) 5.1%(e)
Class R:
Period Ended April 30, 1996(f) 10.90 (2.01)%(d) 1 1.44%(b)(e) 6.37%(e) 2.4%(e)
PRINCOR GOVERNMENT
SECURITIES INCOME FUND, INC.
Class A:
Six Months Ended April 30, 1996 11.01 .42%(d) 258,648 .82%(e) 6.29%(e) 26.3%(e)
Year Ended October 31,
1995 11.31 17.46% 261,128 .87% 6.57% 10.1%
1994 10.28 (6.26)% 249,438 .95% 6.35% 24.8%
1993 11.79 11.80% 236,718 .93% 6.38% 52.6%
1992 11.44 8.49% 161,565 .95% 7.04% 54.3%
1991 11.36 16.78% 94,613 .98% 7.80% 14.9%
Class B:
Six Months Ended April 30, 1996 10.99 1.85%(d) 9,070 1.65%(e) 5.49%(e) 26.3%(e)
Period Ended October 31, 1995(c) 11.29 16.07%(d) 4,699 1.53%(e) 5.68%(e) 10.1%(e)
Class R:
Period Ended April 30, 1996(f) 10.97 (1.56)%(d) 1 3.08%(e) 4.30%(e) 26.3%(e)
PRINCOR HIGH YIELD FUND, INC.
Class A:
Six Months Ended April 30, 1996 8.05 4.42%(d) 24,832 1.34%(e) 8.53%(e) 31.9%(e)
Year Ended October 31,
1995 8.06 11.73% 23,396 1.45% 8.71% 40.3%
1994 7.83 1.45% 19,802 1.46% 7.82% 27.2%
1993 8.36 11.66% 19,154 1.35% 8.57% 23.4%
1992 8.15 14.35% 16,359 1.41% 9.69% 28.2%
1991 7.86 25.63% 13,195 1.50% 12.06% 14.2%
Class B:
Six Months Ended April 30, 1996 8.02 3.80%(d) 1,281 2.49%(e) 7.56%(e) 31.9%(e)
Period Ended October 31, 1995(c) 8.05 12.20%(d) 633 2.10%(e) 7.78%(e) 40.3%(e)
Class R:
Period Ended April 30, 1996(f) 8.02 (.83)%(d) 1 3.63%(e) 8.10%(e) 31.9%(e)
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Selected data for a share of Capital Stock outstanding throughout each period:
Income from Investment Operations Less Distributions
---------------------------------- ------------------------------------------
Net Realized
and
Net Asset Net Unrealized Total Dividends
Value at Invest- Gain from from Net Distributions
Beginning ment (Loss) on Investment Investment from Total
of Period Income Investments Operations Income Capital Gains Distributions
--------- ------- ------------- ---------- ---------- -------------- -------------
PRINCOR LIMITED TERM
BOND FUND, INC.
Class A:
<S> <C> <C> <C> <C> <C> <C> <C>
Period Ended April 30, 1996(g) $ 9.90 $.10(b) $(.14) $ (.04) $(.08) $ - $(.08)
Class B:
Period Ended April 30, 1996(g) 9.90 .10(b) (.15) (.05) (.07) - (.07)
Class R:
Period Ended April 30, 1996(f) 9.90 .09(b) (.15) (.06) (.07) - (.07)
PRINCOR TAX-EXEMPT BOND
FUND, INC.
Class A:
Six Months Ended April 30, 1996 11.98 .32 (.20) .12 (.32) - (.32)
Year Ended October 31,
1995 10.93 .65 1.05 1.70 (.65) - (.65)
1994 12.62 .64 (1.54) (.90) (.63) (.16) (.79)
1993 11.62 .66 1.11 1.77 (.66) (.11) (.77)
1992 11.47 .68 .19 .87 (.69) (.03) (.72)
1991 10.82 .69 .68 1.37 (.70) (.02) (.72)
Class B:
Six Months Ended April 30, 1996 11.96 .26 (.19) .07 (.28) - (.28)
Period Ended October 31, 1995(c) 10.56 .50 1.38 1.88 (.48) - (.48)
PRINCOR UTILITIES FUND, INC.
Class A:
Six Months Ended April 30, 1996 10.94 .20(b) .43 .63 (.23) - (.23)
Year Ended October 31,
1995 9.25 .48(b) 1.70 2.18 (.49) - (.49)
1994 11.45 .46(b) (2.19) (1.73) (.45) (.02) (.47)
Period Ended October 31, 1993(h) 10.18 .35(b) 1.27 1.62 (.35) - (.35)
Class B:
Six Months Ended April 30, 1996 10.93 .15(b) .42 .57 (.18) - (.18)
Period Ended October 31, 1995(c) 9.20 .40(b) 1.77 2.17 (.44) - (.44)
Class R:
Period Ended April 30, 1996 11.75 (.02) (.35) (.37) (.11) - (.11)
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Ratios/Supplemental Data
-----------------------------------------------------
Ratio of Net
Net Asset Ratio of Investment
Value at Net Assets at Expenses to Income to Portfolio Average
End Total End of Period Average Average Turnover Commission
of Period Return(a) (in thousands) Net Assets Net Assets Rate Rate Paid
--------- --------- -------------- ----------- ------------ --------- -----------
PRINCOR LIMITED TERM
BOND FUND, INC.
Class A:
<S> <C> <C> <C> <C> <C> <C> <C>
Period Ended April 30, 1996(g) $ 9.78 (.36)%(d) $ 10,849 .85%(b)(e) 6.11%(e) 10.1%(e) N/A
Class B:
Period Ended April 30, 1996(g) 9.78 (.40)%(d) 31 .83%(b)(e) 5.48%(e) 10.1%(e) N/A
Class R:
Period Ended April 30, 1996(f) 9.77 (.48)%(d) 1 1.40%(b)(e) 5.51%(e) 10.1%(e) N/A
PRINCOR TAX-EXEMPT BOND
FUND, INC.
Class A:
Six Months Ended April 30, 1996 11.78 .99%(d) 180,144 .79%(e) 5.34%(e) 14.6%(e) N/A
Year Ended October 31,
1995 11.98 16.03% 179,715 .83% 5.67% 17.6% N/A
1994 10.93 (7.41)% 171,425 .91% 5.49% 20.6% N/A
1993 12.62 15.70% 177,480 .89% 5.45% 20.3% N/A
1992 11.62 7.76% 106,661 .99% 5.96% 22.9% N/A
1991 11.47 13.09% 62,755 1.01% 6.24% 13.1% N/A
Class B:
Six Months Ended April 30, 1996 11.75 1.41%(d) 4,786 1.71%(e) 4.43%(e) 14.6%(e) N/A
Period Ended October 31, 1995(c) 11.96 17.97%(d) 3,486 1.51%(e) 4.78%(e) 17.6%(e) N/A
PRINCOR UTILITIES FUND, INC.
Class A:
Six Months Ended April 30, 1996 11.34 5.71%(d) 66,921 1.15%(b)(e) 3.45%(e) 13.4%(e) .0433
Year Ended October 31,
1995 10.94 24.36% 65,873 1.04%(b) 4.95% 13.0% -
1994 9.25 (15.20)% 56,747 1.00%(b) 4.89% 13.8%
Period Ended October 31, 1993(h) 11.45 15.92%(d) 50,372 1.00%(b)(e) 4.48%(e) 4.3%(e) -
Class B:
Six Months Ended April 30, 1996 11.32 5.23%(d) 5,347 1.95%(b)(e) 2.59%(e) 13.4%(e) .0433
Period Ended October 31, 1995(c) 10.93 24.18%(d) 3,952 1.72%(b)(e) 3.84%(e) 13.0%(e) -
Class R:
Period Ended April 30, 1996 11.27 (2.40)%(d) 1 4.48%(b)(e) (.74)%(e) 13.4%(e) .0433
See accompanying notes.
</TABLE>
<PAGE>
Notes to Financial Highlights
(a) Total return is calculated without the front-end sales charge or contingent
deferred sales charge.
(b) Without the Manager's voluntary waiver of a portion of certain of its
expenses (see Note 3 to the financial statements) for the periods indicated, the
following funds would have had per share net investment income and the ratios of
expenses to average net assets as shown:
<TABLE>
<CAPTION>
Year, Per Share Ratio of Expenses
Except Net Investment to Average Net Amount
Fund as Noted Income Assets Waived
---- -------- -------------- ----------------- ------
Princor Bond Fund, Inc.
<S> <C> <C> <C> <C>
Class A 1996* $.38 .97%(e) $ 12,332
1995 .77 1.02% 86,018
1994 .77 1.09% 120,999
1993 .79 1.07% 111,162
1992 .82 1.11% 110,868
1991 .84 1.15% 100,396
Class B 1996* .33 1.75%(e) 1,774
1995(c) .62 1.62%(e) 300
Class R 1996(f) .09 3.25%(e) 3
Princor Limited Term
Bond Fund, Inc.
Class A 1996(g) .09 1.49%(e) 11,029
Class B 1996(g) .09 2.05%(e) 21
Class R 1996(f) .05 3.99%(e) 4
Princor Utilities Fund, Inc.(i)
Class A 1996* .19 1.25%(e) 33,264
1995 .46 1.30% 151,145
1994 .41 1.50% 284,836
1993(h) .32 1.54%(e) 139,439
Class B 1996* .15 2.05%(e) 2,609
1995(c) .40 1.81%(e) 1,338
<FN>
*Period from October 31, 1995 through April 30, 1996.
</FN>
</TABLE>
(c)Period from December 9, 1994, date Class B shares first offered to the
public, through October 31, 1995. Certain of the Income Funds Class B shares
recognized net investment income as follows, for the period from the initial
purchase of Class B shares on December 5, 1994 through December 8, 1994, none
of which was distributed to the sole shareholder, Princor Management
Corporation. Additionally, the Income Funds Class B shares incurred
unrealized losses on investments during the initial interim period as
follows. This represents Class B share activities of each fund prior to the
initial public offering of Class B shares:
Per Share Per Share
Net Investment Unrealized
Fund Income (Loss)
---- -------------- ----------
Princor Bond Fund, Inc. $.01 $ -
Princor Government Securities
Income Fund, Inc. .01 (.02)
Princor High Yield Fund, Inc. .01 (.03)
Princor Tax-Exempt Bond Fund, Inc. - (.05)
Princor Utilities Fund, Inc. .01 (.01)
(d) Total return amounts have not been annualized.
(e) Computed on an annualized basis.
(f)Period from February 29, 1996, date Class R shares first offered to eligible
purchasers, through April 30, 1996. The Income Funds Class R shares
recognized no net investment income for the period from the initial purchase
by Princor Management Corporation of Class R shares on February 27, 1996
through February 28, 1996. Certain of the Income Funds Class R shares
incurred unrealized losses on investments during the initial interim period
as follows. This represents Class R share activities of each fund prior to
the initial public offering of Class R shares:
Per Share
Fund Unrealized (Loss)
---- -----------------
Princor Bond Fund, Inc. $(.03)
Princor Government Securities
Income Fund, Inc. (.03)
Princor Limited Term Bond Fund, Inc. (.02)
(g)Period from February 29, 1996, date shares first offered to the public,
through April 30, 1996. With respect to Class A shares, net investment
income, aggregating $.02 per share for the period from the initial purchase
of shares on February 13, 1996 through February 28, 1996, was recognized,
none of which was distributed to its sole stockholder, Principal Mutual Life
Insurance Company during the period. Additionally, Class A shares incurred
unrealized losses on investments of $.12 per share during the initial interim
period. With respect to Class B shares, no net investment income was
recognized for the period from initial purchase of shares on February 27,
1996 through February 28, 1996. Additionally, Class B shares incurred
unrealized losses on investments of $.02 per share during the initial interim
period. This represents Class A share and Class B share activities of the
fund prior to the initial public offering of both classes of shares.
(h)Period from December 16, 1992, date shares first offered to public, through
October 31, 1993. Net investment income, aggregating $.05 per share for the
period from the initial purchase of shares on November 16, 1992 through
December 15, 1992, was recognized, none of which was distributed to its sole
stockholder, Principal Mutual Life Insurance Company, during the period.
Additionally, the fund incurred unrealized gains on investments of $.13 per
share during the initial interim period. This represents activities of the
fund prior to the initial public offering of fund shares.
(i)Princor Utilities Fund, Inc. discontinued expense waiver on February 29,
1996.
<PAGE>
April 30, 1996
STATEMENTS OF ASSETS AND LIABILITIES
(unaudited)
Princor Cash
Management Cash Management
MONEY MARKET FUNDS Fund, Inc.
Assets
Investment in securities -- at value
(approximates cost) (Note 1)........... $716,554,948
Cash..................................... 52,082
Receivables:
Dividends and interest ................ 694,270
Capital Stock sold..................... 3,589,314
Other assets.............................. 45,884
Total Assets 720,936,498
Liabilities
Accrued expenses.......................... 463,154
Capital Stock reacquired.................. 38,614
Total Liabilities 501,768
Net Assets Applicable to
Outstanding Shares ..................... $720,434,730
Net Assets Consist of:
Capital Stock............................. $ 7,204,347
Additional paid-in capital................ 713,230,383
Total Net Assets $720,434,730
Capital Stock (par value: $.01 a share)
Shares authorized......................... 2,000,000,000
Net Asset Value Per Share:
Class A: Net Assets....................... $720,248,682
Shares issued and outstanding.... 720,248,682
Net asset value per share........ $1.000
Class B: Net Assets....................... $160,852
Shares issued and outstanding.... 160,852
Net asset value per share(1)..... $1.000
Class R: Net Assets....................... $25,196
Shares issued and outstanding.... 25,196
Net asset value per share........ $1.000
<PAGE>
April 30, 1996
STATEMENTS OF ASSETS AND LIABILITIES
(unaudited)
Princor Tax-Exempt
Cash Management
Fund, Inc
Assets
Investment in securities -- at value
(approximates cost) (Note 1)........... $106,875,148
Cash...................................... 93,966
Receivables:
Dividends and interest ................ 894,746
Capital Stock sold..................... 70,842
Other assets.............................. 6,412
Total Assets 107,941,114
Liabilities
Accrued expenses.......................... 52,726
Capital Stock reacquired.................. 5,537
Total Liabilities 58,263
Net Assets Applicable to
Outstanding Shares ..................... $107,882,851
Net Assets Consist of:
Capital Stock............................. $ 1,078,828
Additional paid-in capital................ 106,804,023
Total Net Assets $107,882,851
Capital Stock (par value: $.01 a share)
Shares authorized......................... 1,000,000,000
Net Asset Value Per Share:
Class A: Net Assets....................... $107,856,061
Shares issued and outstanding.... 107,856,061
Net asset value per share........ $1.000
Class B: Net Assets....................... $26,790
Shares issued and outstanding.... 26,790
Net asset value per share(1)..... $1.000
Class R: Net Assets....................... N/A
Shares issued and outstanding.... N/A
Net asset value per share........ N/A
(1) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
See accompanying notes.
<PAGE>
Six Months Ended April 30, 1996
STATEMENT OF OPERATIONS
(unaudited)
Princor Cash
Management
MONEY MARKET FUNDS Fund, Inc.
Net Investment Income
Interest Income......................... $18,926,787
Expenses:
Management and investment
advisory fees (Note 3)............ 1,259,288
Distribution and shareholder
servicing fees--Class B (Note 3).. 702
Distribution and shareholder
servicing fees--Class R (Note 3).. 13
Transfer and administrative
services (Note 3)................. 876,715
Registration fees--Class A........... 178,373
Registration fees--Class B........... 1,879
Registration fees--Class R .......... 2
Custodian fees....................... 12,612
Auditing and legal fees.............. 4,759
Directors' fees...................... 4,003
Other................................ 19,336
Total Gross Expenses 2,357,682
Less: Management and investment
advisory fees waived.............. (8,477)
Total Net Expenses 2,349,205
Net Investment Income $16,577,582
<PAGE>
Six Months Ended April 30, 1996
STATEMENTS OF OPERATIONS
(unaudited)
Princor Tax-Exempt
Cash Management
Fund, Inc.
Net Investment Income
Interest Income......................... $2,034,753
Expenses:
Management and investment
advisory fees (Note 3)............ 276,788
Distribution and shareholder
servicing fees--Class B (Note 3).. 106
Distribution and shareholder
servicing fees--Class R (Note 3).. -
Transfer and administrative
services (Note 3)................. 110,644
Registration fees--Class A........... 41,299
Registration fees--Class B........... 1,842
Registration fees--Class R .......... -
Custodian fees....................... 5,526
Auditing and legal fees.............. 4,297
Directors' fees...................... 4,003
Other................................ 5,294
Total Gross Expenses 449,799
Less: Management and investment
advisory fees waived.............. (43,734)
Total Net Expenses 406,065
Net Investment Income $1,628,688
See accompanying notes.
<PAGE>
Six Months Ended April 30, 1996
STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)
Princor Cash
Management
MONEY MARKET FUNDS Fund, Inc.
Six Months Year
Ended Ended
April 30, October 31,
1996 1995
Operations
Net investment income .................. $ 16,577,582 $ 26,040,525
Dividends to Shareholders from net
investment income:
Class A.............................. (16,573,554) (26,038,303)
Class B.............................. (3,832) (2,222)
Class R..................... (196) -
Total Dividends (16,577,582) (26,040,525)
Capital Share Transactions (Note 4)
Shares sold:
Class A.............................. 1,595,571,630 2,636,234,604
Class B.............................. 95,774 281,031
Class R.............................. 25,000 -
Shares issued in reinvestment of
dividends:
Class A.............................. 16,446,374 25,316,128
Class B.............................. 3,726 2,222
Class R.............................. 196 -
Shares redeemed:
Class A.............................. (1,515,633,600) (2,370,032,403)
Class B.............................. (146,385) (75,516)
Net Increase in Net Assets from
Capital Share Transactions 96,362,715 291,726,066
Total Increase 96,362,715 291,726,066
Net Assets
Beginning of period..................... 624,072,015 332,345,949
End of period .......................... $720,434,730 $624,072,015
<PAGE>
Six Months Ended April 30, 1996
STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)
Princor Tax-Exempt
Cash Management
Fund, Inc.
Six Months Year
Ended Ended
April 30, October 31,
1996 1995
Operations
Net investment income .................. $ 1,628,688 $ 3,074,990
Dividends to Shareholders from net
investment income:
Class A.............................. (1,628,385) (3,074,485)
Class B.............................. (303) (505)
Class R.............................. - -
Total Dividends (1,628,688) (3,074,990)
Capital Share Transactions (Note 4)
Shares sold:
Class A.............................. 223,619,048 391,567,743
Class B.............................. 41,568 26,000
Class R.............................. - -
Shares issued in reinvestment of
dividends:
Class A.............................. 1,603,327 2,992,959
Class B.............................. 285 505
Class R.............................. - -
Shares redeemed:
Class A.............................. (217,253,493) (374,409,156)
Class B.............................. (41,568) -
Net Increase in Net Assets from
Capital Share Transactions 7,969,167 20,178,051
Total Increase 7,969,167 20,178,051
Net Assets
Beginning of period..................... 99,913,684 79,735,633
End of period .......................... $107,882,851 $99,913,684
See accompanying notes.
<PAGE>
April 30, 1996
NOTES TO FINANCIAL STATEMENTS
(unaudited)
Princor Cash Management Fund, Inc.
Princor Tax-Exempt Cash Management Fund, Inc.
Note 1 -- Significant Accounting Policies
Princor Cash Management Fund, Inc. and Princor Tax-Exempt Cash Management Fund,
Inc. (the "Money Market Funds") are registered under the Investment Company Act
of 1940, as amended, as open-end diversified management investment companies and
operate in the mutual fund industry.
On December 8, 1994, the initial purchases of Class B shares of the Money Market
Funds were made by Princor Management Corporation (see Note 3). All shares
outstanding prior to the initial Class B share purchases have been classified as
Class A shares. Effective December 9, 1994, the Money Market Funds also began
offering Class B shares to the public. Class B shares are sold without an
initial sales charge, but bear a higher ongoing distribution fee and are subject
to a declining contingent deferred sales charge ("CDSC") of up to 4.00% on
certain redemptions redeemed within six years of purchase. Class B shares
automatically convert into Class A shares, based on relative net asset value
(without a sales charge) after seven years.
On February 27, 1996, the initial purchase of Class R shares of Princor Cash
Management Fund, Inc. was made by Princor Management Corporation (see Note 3).
Effective February 29, 1996, Princor Cash Management Fund, Inc. began offering
Class R shares to eligible purchasers. Class R shares are sold without an
initial sales charge or a CDSC. Class R shares bear a higher ongoing
distribution fee than Class A shares. Class R shares automatically convert to
Class A shares, based on relative net asset value (without a sales charge) after
four years.
All classes of shares for each fund represent interests in the same portfolio of
investments, and will vote together as a single class except where otherwise
required by law or as determined by the Fund's respective Boards of Directors.
In addition, the Board of Directors of each fund declare separate dividends on
each class of shares.
The Money Market Funds allocate all income, expenses (other than class-specific
expenses), and realized gains or losses daily to each class of shares based upon
the relative proportion of the number of traded shares outstanding of each
class. Class-specific expenses, which include distribution and shareholder
servicing fees and any other items specifically attributable to a particular
class, are charged directly to such class.
The Money Market Funds value their securities at amortized cost, which
approximates market. Under the amortized cost method, a security is valued by
applying a constant yield to maturity of the difference between the principal
amount due at maturity and the cost of the security to the fund.
The Money Market Funds record investment transactions generally on the trade
date. The identified cost basis has been used in determining the net realized
gain or loss from investment transactions. Dividends are taken into income on an
accrual basis as of the ex-dividend date and interest income is recognized on an
accrual basis.
The Money Market Funds declare all net investment income and any realized gains
and losses from investment transactions as dividends daily to shareholders of
record as of that day.
Dividends and distributions to shareholders from net investment income and net
realized gain from investments is determined in accordance with federal income
tax regulations, which may differ from generally accepted accounting principles.
To the extent these "book/tax" differences are permanent in nature (i.e. that
they result from other than timing of recognition - "temporary"), such amounts
are reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassification. There were no
reclassifications made for the year ended October 31, 1995.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
The Money Market Fund's investments are with various issuers in various
industries. The Schedules of Investments contained herein summarize
concentration of credit risk by issuer and industry.
Note 2 -- Federal Income Taxes
No provision for federal income taxes is considered necessary because each fund
is qualified as a "regulated investment company" under the Internal Revenue Code
and intends to distribute each year substantially all of its net investment
income and realized capital gains to shareholders. The cost of investments for
federal income tax reporting purposes is approximately the same as that for
financial reporting purposes.
Note 3 -- Management Agreement and Transactions With Affiliates
The Money Market Funds have agreed to pay investment advisory and management
fees to Princor Management Corporation (wholly owned by Princor Financial
Services Corporation, a subsidiary of Principal Mutual Life Insurance Company)
(the "Manager") computed at an annual percentage rate of each fund's average
daily net assets. The annual rate used in this calculation is .50% of the first
$100 million of each fund's average daily net assets, .45% of the next $100
million of each fund's average daily net assets, .40% of the next $100 million
of each fund's average daily net assets, .35% of the next $100 million of each
fund's average daily net assets and .30% of each fund's average daily net assets
over $400 million. The Money Market Funds also reimburse the Manager for
transfer and administrative services, including the cost of accounting, data
processing, supplies and other services rendered.
The Manager has agreed to reimburse the Money Market Funds annually for their
total expenses (excluding brokerage commissions, interest and taxes) in excess
of limits prescribed by any state in which the Money Market Funds' shares are
offered for sale (currently 2 1/2% of the first $30 million of each fund's
average annual net assets, 2% of the next $70 million of such assets and 1 1/2%
of such assets in excess thereof).
The Manager voluntarily waives a portion of its fee for the Princor Cash
Management Fund, Inc. and Princor Tax-Exempt Cash Management Fund, Inc. The
waivers are in amounts that maintain total operating expenses for each fund
within certain limits. The limits are expressed as a percentage of average net
assets attributable to each class on an annualized basis during the reporting
period. The amounts waived and the operating expense limits are as follows:
Amount
Waived
---------------------------------
Six Months
Ended Year Ended Expense
April 30, 1996 October 31, 1995 Limit
Princor Cash
Management
Fund, Inc.
Class A(a) $ 6,702 $296,255 0.75%
Class B(a) 1,775 104 1.75
Class R - - 1.50
Princor Tax-Exempt
Cash Management
Fund, Inc.
Class A(a) 41,893 138,574 0.75
Class B(a) 1,841 99 1.75
(a) For the period November 1, 1994 through February 28, 1995, the expense
limits were .70% and 1.70% for Class A and Class B shares, respectively.
Princor Financial Services Corporation, as principal underwriter, receives
proceeds of any CDSC on certain Class A and Class B share redemptions. The
charge is based on declining rates, which begin at .75% for Class A shares and
4.00% for Class B shares of the Funds.
No brokerage commissions were paid by the Money Market Funds to affiliated
broker dealers during the period.
Effective December 1994, each of the Money Market Funds adopted a distribution
plan with respect to Class B shares that provides for distribution and
shareholder servicing fees computed at an annual rate of up to 1.00% of the
average daily net assets attributable to Class B shares of each fund. Effective
February 1996, Princor Cash Management Fund, Inc., adopted a distribution plan
with respect to Class R shares that provides for distribution and shareholder
servicing fees computed at an annual rate of up to .75% of the average daily net
assets attributable to Class R shares of the fund. Distribution and shareholder
servicing fees are paid to Princor Financial Services Corporation; a portion of
the fees are subsequently remitted to retail dealers. Pursuant to the
distribution agreements, fees unused by the principal underwriter at the end of
the fiscal year are returned to the Money Market Funds. There are no
distribution or shareholder servicing fees with respect to Class A shares.
At April 30, 1996, Principal Mutual Life Insurance Company, subsidiaries of
Principal Mutual Life Insurance Company, benefit plans sponsored on behalf of
Principal Mutual Life Insurance Company and several joint ventures (in each of
which a subsidiary of Principal Mutual Life Insurance Company is a participant)
owned shares of the Money Market Funds as follows:
Class A Class B Class R
Princor Cash Management
Fund, Inc. 10,773,592 27,490 25,167
Princor Tax-Exempt Cash
Management Fund, Inc. 1,000,054 26,775 N/A
Note 4 -- Capital Share Transactions
Transactions in Capital Stock by fund were as follows:
Princor Cash
Management Fund, Inc.
Six Months Ended April 30, 1996:
Shares sold:
Class A ......................................... 1,595,571,630
Class B ........................................ 95,774
Class R* ......................................... 25,000
Shares issued in reinvestment of dividends:
Class A ........................................... 16,446,374
Class B ........................................... 3,726
Class R* ........................................ 196
Shares redeemed:
Class A ......................................... (1,515,633,600)
Class B ......................................... (146,385)
Net Increase 96,362,715
Year Ended October 31, 1995:
Shares sold:
Class A ......................................... 2,636,234,604
Class B** ....................................... 281,031
Shares issued in reinvestment of dividends:
Class A ........................................... 25,316,128
Class B** ......................................... 2,222
Shares redeemed:
Class A ......................................... (2,370,032,403)
Class B** ....................................... (75,516)
Net Increase 291,726,066
Princor Tax-Exempt
Cash Management
Fund, Inc.
Six Months Ended April 30, 1996:
Shares sold:
Class A ......................................... 223,619,048
Class B ........................................ 41,568
Class R* ......................................... -
Shares issued in reinvestment of dividends:
Class A ........................................... 1,603,327
Class B ........................................... 285
Class R* ........................................ -
Shares redeemed:
Class A ......................................... (217,253,493)
Class B ......................................... ( 41,568)
Net Increase 7,969,167
Year Ended October 31, 1995:
Shares sold:
Class A ......................................... 391,567,743
Class B** ....................................... 26,000
Shares issued in reinvestment of dividends:
Class A ........................................... 2,992,959
Class B** ......................................... 505
Shares redeemed:
Class A ......................................... (374,409,156)
Class B** ....................................... -
Net Increase 20,178,051
* Period from February 27, 1996 (date operations commenced) through April 30,
1996.
** Period from December 8, 1994 (date operations commenced) through October
31, 1995.
Note 5 -- Line of Credit
The Money Market Funds have an unsecured line of credit with a bank which allows
each fund to borrow up to $500,000. Borrowings are made solely to facilitate the
handling of unusual and/or unanticipated short-term cash requirements. Interest
is charged to each fund, based on its borrowings, at a rate equal to the bank's
Fed Funds Unsecured Rate plus 100 basis points. Additionally, a commitment fee
is charged at the annual rate of .25% on the unused portion of the line of
credit. At April 30, 1996, the Money Market Funds had no outstanding borrowings
under the line of credit.
<PAGE>
SCHEDULES OF INVESTMENTS
PRINCOR CASH MANAGEMENT FUND, INC.
Principal
Amount Value
Commercial Paper (94.60%)
Advertising (0.27%)
Omnicom Finance, Inc.;
LOC Swiss Bank Corp.;
5.35%; 5/6/96 $11,950,000 $ 1,948,551
Asset Backed Securities (1.24%)
Corporate Asset Funding Co., Inc.;
5.42%; 5/20/96 3,000,000 2,991,418
5.30%; 6/3/96 6,000,000 5,970,850
8,962,268
Business Credit Institutions (11.91%)
American Express Credit Corp.;
5.52%; 5/3/96 3,900,000 3,898,804
5.58%; 5/28/96 1,725,000 1,717,781
4.98%; 6/18/96 1,500,000 1,490,040
5.30%; 7/12/96 5,000,000 4,947,000
5.29%; 7/15/96 3,400,000 3,362,529
4.90%; 8/2/96 4,600,000 4,541,772
5.00%; 8/27/96 3,100,000 3,049,194
5.03%; 8/29/96 3,400,000 3,342,993
CIT Group Holdings, Inc.;
5.04%; 5/13/96 3,000,000 2,994,960
5.33%; 5/23/96 5,000,000 4,983,714
5.28%; 7/26/96 3,500,000 3,455,853
General Electric Capital Corp.;
4.97%; 6/18/96 5,000,000 4,966,867
5.24%; 6/24/96 4,500,000 4,464,630
5.31% 6/26/96 1,500,000 1,487,610
5.23%; 6/28/96 3,400,000 3,371,351
5.20%; 7/8/96 3,000,000 2,970,533
4.82%; 8/8/96 3,000,000 2,960,235
4.94%; 8/16/96 5,500,000 5,419,245
4.95%; 8/30/96 4,000,000 3,933,450
International Lease Finance Corp.;
5.29%; 6/18/96 3,000,000 2,978,840
John Deere Capital Corp.;
5.27%; 5/15/96 3,000,000 2,993,852
5.08%; 5/16/96 4,500,000 4,490,475
5.08%; 5/23/96 4,000,000 3,987,582
5.13%; 5/28/96 4,000,000 3,984,610
85,793,920
Combination Utility Services (0.78%)
South Carolina Fuel Co.;
5.30%; 5/30/96 5,650,000 5,625,878
Computer & Office
Equipment (1.80%)
Xerox Corp.
5.05%; 5/9/96 5,000,000 4,994,389
5.05%; 5/10/96 3,500,000 3,495,581
Xerox Credit Corp.;
5.10%; 5/6/96 4,500,000 4,496,813
12,986,782
Consumer Products (0.20%)
Philip Morris Cos. Inc.;
5.32%; 5/21/96 1,413,000 1,408,824
Department Stores (4.70%)
Sears Roebuck Acceptance Corp.;
5.08%; 5/1/96 4,000,000 4,000,000
5.07%; 5/22/96 3,700,000 3,689,057
5.28%; 6/7/96 3,500,000 3,481,007
5.30%; 6/11/96 4,500,000 4,472,838
5.05%; 6/12/96 1,550,000 1,540,868
5.00%; 6/21/96 5,000,000 4,964,583
5.35%; 6/25/96 1,100,000 1,091,009
5.24%; 7/09/96 4,750,000 4,702,294
5.28%; 7/10/96 5,000,000 4,948,667
5.25%; 12/17/96 1,000,000 966,458
33,856,781
Drugs (.54%)
Warner-Lambert Co.;
4.76%; 11/12/96 4,000,000 3,896,867
Electric Services (8.94%)
AES Shady Point, Inc.
LOC Bank of Tokyo Ltd.;
5.41%; 5/14/96 7,900,000 7,884,567
5.40%; 5/16/96 1,000,000 997,750
5.42%; 5/21/96 6,400,000 6,380,729
5.45%; 5/21/96 6,000,000 5,981,833
AES Shady Point, Inc.
LOC Bank of Tokyo-
Mitsubishi, LTD.;
5.37%; 5/29/96 2,500,000 2,489,558
5.37%; 5/31/96 5,000,000 4,977,625
Centerior Fuel Corp.
LOC Barclays Bank PLC;
5.33%; 5/15/96 2,200,000 2,195,440
CommEd Fuel Co., Inc.;
LOC Canadian Imperial
Bank of Commerce;
5.30%; 7/12/96 1,300,000 1,286,220
CommEd Fuel Co., Inc. ;
LOC Credit Suisse;
5.40%; 5/7/96 2,000,000 1,998,200
5.31%; 5/31/96 2,500,000 2,488,937
5.31%; 5/31/96 2,000,000 1,991,150
FPL Fuels, Inc.;
LOC Barclays Bank PLC;
5.33%; 5/8/96 3,000,000 2,996,894
Southern California Edison Co.;
5.35%; 7/12/96 5,500,000 5,441,150
Transmission Agency-Northern
California; LOC Industrial;
Bank of Japan Ltd.;
5.65%; 5/1/96 6,000,000 6,000,000
5.65%; 5/1/96 1,334,000 1,334,000
5.40%; 6/6/96 10,000,000 9,946,000
64,390,053
Electronic Components &
Accessories (0.21%)
SCI Systems, Inc.;
LOC ABN-AMRO Bank NV;
5.33%; 5/7/96 1,500,000 1,498,667
Federal & Federally Sponsored
Credit (1.48%)
FNMA Commercial Paper;
5.58%; 8/9/96 4,000,000 3,938,000
U.S. Government Treasury Bills;
5.35%; 8/22/96 2,000,000 1,966,414
5.09%; 3/6/97 5,000,000 4,781,554
10,685,968
Finance Services (3.65%)
ABN-AMRO North America
Finance, Inc.;
4.91%; 8/23/96 5,000,000 4,922,259
4.97%; 8/26/96 3,500,000 3,443,466
Mitsubishi International Corp.;
5.24%; 5/28/96 1,500,000 1,494,105
5.14%; 5/30/96 2,000,000 1,991,719
5.29%; 6/14/96 5,000,000 4,967,672
5.23%; 6/28/96 4,300,000 4,263,768
4.98%; 7/9/96 4,000,000 3,961,820
5.13%; 7/19/96 1,300,000 1,285,365
26,330,174
Gas Production & Distribution (0.55%)
Southwest Gas Corp.;
LOC Union Bank of Switzerland;
5.28%; 7/8/96 4,000,000 3,960,107
Investment Offices (2.00%)
Morgan Stanley Group Inc.;
5.30%; 5/17/96 5,000,000 4,988,222
5.30%; 5/21/96 2,500,000 2,492,639
5.29%; 7/26/96 3,000,000 2,962,088
5.27%; 7/30/96 4,000,000 3,947,300
14,390,249
Life Insurance (4.15%)
American General Capital Services, Inc.;
5.07%; 5/20/96 5,000,000 4,986,621
5.19%; 5/24/96 4,000,000 3,986,736
5.00%; 6/4/96 5,000,000 4,976,389
American General Corp.;
5.29%; 5/6/96 2,500,000 2,498,163
5.28%; 5/14/96 5,000,000 4,990,467
Prudential Funding Corp.;
5.20%; 6/14/96 4,000,000 3,974,578
5.20%; 6/17/96 4,500,000 4,469,450
29,882,404
Miscellaneous Food & Kindred
Products (2.32%)
Cargill Financial Services Corp.;
5.03%; 7/26/96 4,000,000 3,951,936
4.86%; 8/6/96 5,000,000 4,934,525
4.75%; 10/29/96 5,000,000 4,880,590
4.75%; 10/29/96 3,000,000 2,928,354
16,695,405
Miscellaneous Investing (1.62%)
Delaware Funding Corp.;
5.30%; 5/31/96 5,000,000 4,977,917
5.30%; 6/3/96 2,225,000 2,214,190
MLTC Funding, Inc.; LOC
Union Bank of Switzerland;
5.33%; 5/9/96 4,500,000 4,494,670
11,686,777
Mortgage Bankers & Brokers (0.69%)
Countrywide Home Loan, Inc.;
5.34%; 6/5/96 5,000,000 4,974,042
Nonresidential Building Construction (1.25%)
Kaempfer Capital Corp.;
LOC Barclays Bank PLC;
5.07%; 5/2/96 5,000,000 4,999,296
5.08%; 5/3/96 4,000,000 3,998,871
8,998,167
Personal Credit Institutions (19.87%)
American General Finance Corp.;
5.26%; 5/16/96 3,500,000 3,492,329
Associates Corp. of
North America;
5.35%; 5/1/96 2,175,000 2,175,000
5.10%; 5/3/96 4,000,000 3,998,867
5.05%; 5/10/96 3,075,000 3,071,118
5.13%; 5/29/96 4,300,000 4,282,843
5.28%; 6/20/96 5,000,000 4,963,333
5.29%; 6/24/96 3,000,000 2,976,195
5.08%; 7/1/96 4,000,000 3,965,569
Avco Financial Services, Inc.;
5.04%; 5/13/96 4,000,000 3,993,280
5.10%; 5/15/96 4,000,000 3,992,067
5.05%; 5/17/96 5,000,000 4,988,778
Beneficial Corp.;
5.31%; 5/13/96 4,500,000 4,492,035
5.23%; 6/7/96 3,000,000 2,983,874
5.27%; 6/13/96 5,500,000 5,465,379
5.00%; 7/2/96 5,000,000 4,956,944
Comoloco, Inc.;
5.30%; 8/1/96 4,500,000 4,439,050
Ford Motor Credit Co.;
5.05%; 5/10/96 4,000,000 3,994,950
5.05%; 5/14/96 2,000,000 1,996,353
5.05%; 5/15/96 2,100,000 2,095,876
5.33%; 5/22/96 5,000,000 4,984,454
5.31%; 5/30/96 4,600,000 4,580,323
5.25%; 6/14/96 1,825,000 1,813,290
5.25%; 6/27/96 2,000,000 1,983,375
5.28%; 7/26/96 1,500,000 1,481,080
General Motors Acceptance Corp.;
5.01%; 6/6/96 4,500,000 4,477,455
5.04%; 6/7/96 2,650,000 2,636,273
5.04%; 6/10/96 5,000,000 4,972,000
5.05%; 6/11/96 2,000,000 1,988,497
5.00%; 10/10/96 1,400,000 1,368,500
5.30%; 12/10/96 1,300,000 1,257,320
5.35%; 12/20/96 2,000,000 1,930,747
5.37%; 12/27/96 5,500,000 5,303,100
5.35%; 1/14/97 3,300,000 3,173,473
5.35%; 1/17/97 2,150,000 2,066,607
5.35%; 1/17/97 1,900,000 1,826,304
Household Finance Corp.;
5.10%; 6/3/96 4,600,000 4,578,495
5.10%; 6/4/96 4,425,000 4,403,686
5.26%; 6/19/96 1,975,000 1,960,860
Norwest Financial, Inc.;
5.04%; 5/15/96 2,000,000 1,996,080
5.05%; 5/17/96 4,000,000 3,991,022
5.07%; 5/23/96 2,850,000 2,841,170
5.10%; 5/24/96 1,650,000 1,644,624
5.13%; 5/29/96 3,575,000 3,560,736
143,143,311
Pipelines, Except Natural Gas (.69%)
Cortez Capital Corp.;
5.33%; 5/8/96 5,000,000 4,994,818
Real Estate Operators & Lessors (9.90%)
Maguire/Thomas Partners
Westlake/Southlake Partnership;
LOC Sumitomo Bank Ltd.;
5.42%; 7/11/96 7,400,000 7,320,898
5.50%; 7/11/96 4,725,000 4,673,747
5.42%; 7/15/96 8,000,000 7,909,667
5.40%; 7/22/96 5,500,000 5,432,350
5.37%; 7/23/96 1,000,000 987,619
5.38%; 7/23/96 7,000,000 6,913,253
5.38%; 7/25/96 1,000,000 987,309
5.40%; 8/15/96 1,500,000 1,476,150
Towson Town Center, Inc.
LOC Bank of Tokyo-Mitsubishi Ltd.;
5.40%; 6/17/96 7,000,000 6,950,650
5.38%; 6/18/96 4,000,000 3,971,307
Towson Town Center, Inc.
LOC Mitsubishi Bank Ltd.;
5.50%; 5/7/96 3,500,000 3,496,792
5.50%; 5/8/96 4,556,000 4,551,128
5.50%; 5/8/96 2,000,000 1,997,861
5.50%; 5/9/96 3,600,000 3,595,600
5.50%; 5/16/96 3,600,000 3,591,750
5.50%; 5/20/96 4,850,000 4,835,921
5.45%; 6/20/96 2,625,000 2,605,130
71,297,132
Security Brokers & Dealers (9.47%)
Bear Stearns Cos., Inc.;
5.03%; 5/31/96 4,000,000 3,983,233
5.08%; 6/7/96 2,500,000 2,486,947
5.05%; 6/25/96 5,200,000 5,159,880
5.12%; 6/27/96 3,350,000 3,322,843
5.29%; 6/27/96 7,000,000 6,941,369
5.30%; 7/23/96 5,000,000 4,938,903
5.29%; 7/29/96 5,000,000 4,934,610
Merrill Lynch & Co, Inc.;
5.33%; 5/2/96 2,200,000 2,199,674
5.30%; 5/14/96 3,400,000 3,393,493
5.32%; 5/16/96 6,500,000 6,485,592
5.32%; 5/17/96 4,000,000 3,990,542
5.18%; 5/24/96 3,000,000 2,990,072
5.03%; 5/31/96 2,000,000 1,991,617
5.20%; 6/21/96 2,100,000 2,084,530
5.05%; 6/26/96 3,500,000 3,472,505
5.28%; 6/28/96 3,500,000 3,470,227
5.06%; 7/31/96 4,000,000 3,948,838
5.00%; 9/3/96 2,500,000 2,456,597
68,251,472
Subdividers & Developers (1.06%)
Hartz 667 Commercial Paper Corp.;
LOC Bank of Tokyo-Mitsubishi, Ltd.;
5.40%; 5/17/96 7,650,000 7,631,640
Telephone Communication (0.41%)
Ameritech Corp.;
5.23%; 7/30/96 3,000,000 2,960,775
Tires & Inner Tubes (4.90%)
Bridgestone/Firestone, Inc.
LOC DAI-ICHI Kangyo Bank Ltd.;
5.43%; 5/6/96 3,000,000 2,997,737
5.43%; 5/15/96 1,000,000 997,888
5.40%; 5/24/96 3,000,000 2,989,650
5.35%; 6/5/96 2,800,000 2,785,436
5.48%; 6/19/96 5,000,000 4,962,706
Bridgestone/Firestone, Inc.;
LOC Sumitomo Bank Ltd.;
5.50%; 5/8/96 2,000,000 1,997,861
5.43%; 5/10/96 4,330,000 4,324,122
5.50%; 5/10/96 1,750,000 1,747,594
5.50%; 5/22/96 3,560,000 3,548,578
5.38%; 5/30/96 1,500,000 1,493,505
5.37%; 6/3/96 1,000,000 995,078
5.35%; 6/5/96 2,500,000 2,486,997
5.35%; 6/5/96 2,000,000 1,989,597
5.50%; 6/12/96 2,000,000 1,987,167
35,303,916
Total Commercial Paper 681,554,948
Bank Notes (4.86%)
Commercial Banks (4.86%)
Lasalle National Bank;
5.81%; 6/25/96 3,000,000 3,000,000
5.35%; 7/2/96 4,000,000 4,000,000
5.75%; 7/8/96 3,000,000 3,000,000
5.32%; 7/10/96 5,000,000 5,000,000
5.77%; 7/25/96 3,000,000 3,000,000
5.05%; 8/20/96 4,500,000 4,500,000
5.75%; 8/26/96 1,500,000 1,500,000
5.72%; 8/30/96 2,000,000 2,000,000
5.56%; 3/6/97 3,000,000 3,000,000
5.47%; 3/15/97 2,500,000 2,500,000
5.60%; 4/3/97 3,500,000 3,500,000
Total Bank Notes 35,000,000
Total Portfolio Investments (99.46%) 716,554,948
Cash, receivables and other assets, net of
liabilities (.54%) 3,879,782
Total Net Assets (100.00%) $720,434,730
PRINCOR TAX-EXEMPT CASH MANAGEMENT
FUND, INC.
Principal
Amount Value
Short-Term Tax-Exempt Bonds (99.07%)
Alabama (0.65%)
City of Stevenson, Alabama, IDB,
Improvement Rev. Bonds, The Mead
Corp., Series 1986; LOC Credit Suisse;
4.05%; 5/1/96*; 11/1/16 $ 700,000 $ 700,000
Alaska (4.83%)
Alaska Industrial Dev. & Export Authority,
IDB Current Ref. Bonds, Series
1988A; LOC Security Pacific
Bank Washington;
Lot #2; 4.20%; 5/7/96*; 7/1/97 80,000 80,000
Lot #3; 4.20%; 5/7/96*; 7/1/97 505,000 505,000
Lot #5; 4.20%; 5/7/96*; 7/1/98 1,495,000 1,495,000
Lot #6; 4.20%; 5/7/96*; 7/1/01 1,485,000 1,485,000
Lot #7; 4.20%; 5/7/96*; 7/1/01 170,000 170,000
Lot #8; 4.20%; 5/7/96*; 7/1/05 185,000 185,000
Lot #9; 4.20%; 5/7/96*; 7/1/05 250,000 250,000
Lot #12; 4.20%; 5/7/96*; 7/1/12 1,040,000 1,040,000
5,210,000
Arizona (1.21%)
Chandler County, Arizona, IDA, F/R
Monthly IDR, Parsons Municipal
Services, Series 1983; LOC
National Westminster;
3.60%; 5/15/96*; 12/15/09 1,300,000 1,300,000
California (2.78%)
County of Los Angeles, California,
1995-96 Tax & Rev. Anticipation
Notes; 4.50%; 7/1/96 3,000,000 3,003,528
Colorado (2.32%)
Adams County, Colorado, IDR Bonds,
City View Park Project, Series
1985; LOC Barclays Bank;
4.15%; 5/7/96*; 12/1/15 300,000 300,000
Arapahoe County, Colorado, F/R
Monthly IDR, Beckett
Aviation, Inc., Series 1983;
LOC Barclays Bank;
3.59%; 5/15/96*; 5/15/13 600,000 600,000
City of Thornton, Colorado, F/R
Monthly IDR, Service Merchandise
Co., Inc., Series 1984; LOC
Industrial Bank of Japan;
3.50%; 5/15/96*; 12/15/99 100,000 100,000
Denver Metropolis District City &
County of Denver Colorado General
Obligation Bonds, Series 1985;
LOC Barclays Bank;
3.70%; 5/31/96**; 12/1/05 1,500,000 1,500,000
2,500,000
Florida (3.99%)
Florida Housing Finance Agency,
F/R Monthly MF Rev's., Water
Apt. Project, Series 1984A;
LOC Wells Fargo;
3.60%; 5/1/96*; 4/1/07 1,700,000 1,700,000
Florida Housing Finance Agency,
F/R Monthly MF Rev's., Webb
Road 1 Apt. Project, Series 1984;
LOC Wells Fargo;
3.60%; 5/1/96*; 4/1/07 1,000,000 1,000,000
Florida Housing Finance Agency,
F/R Monthly MF Rev's., Webb
Road 2 Apt. Project, Series
1984C; LOC Wells Fargo;
3.60%; 5/1/96*; 4/1/07 1,600,000 1,600,000
4,300,000
Georgia (5.05%)
Burke County, Georgia, Dev. Authority, Adj.
Tender Pollution Control Rev. Bonds,
Ogelthorpe Power Corp., Vogtle Project,
Series 1992A; LOC Credit Suisse;
3.15%; 5/3/96**; 1/1/25 600,000 600,000
3.10%; 5/8/96**; 1/1/25 500,000 500,000
3.20%; 5/9/96**; 1/1/25 350,000 350,000
3.25%; 5/9/96**; 1/1/25 350,000 350,000
3.10%; 5/14/96**; 1/1/25 500,000 500,000
3.30%; 5/14/96**; 1/1/25 500,000 500,000
3.10%; 5/20/96**; 1/1/25 500,000 500,000
3.15%; 5/22/96**; 1/1/25 600,000 600,000
3.15%; 6/4/96**; 1/1/25 650,000 650,000
3.35%; 7/10/96**; 1/1/25 500,000 500,000
3.45%; 7/11/96**; 1/1/25 400,000 400,000
5,450,000
Illinois (7.60%)
Chicago, Illinois, Cook County CSX Beckett
Aviation, Inc., F/R Monthly Airport
Rev. Bonds; LOC Barclays Bank;
3.59%; 5/15/96*; 12/15/14 1,000,000 1,000,000
City of Burbank, Illinois, F/R Monthly IDR,
Service Merchandise Co., Inc., Series
1984; LOC Pittsburgh National Bank;
3.50%; 5/15/96*; 9/15/24 2,100,000 2,100,000
City of Chicago General Obligation
Tender Notes, Series 1995A; LOC
Morgan Guaranty;
3.75%; 5/1/96**; 10/31/96 1,000,000 1,000,000
City of Galesburg, Illinois, Knox College
Project, Series 1996; LOC LaSalle
National Bank;
4.00%; 5/7/96*; 3/1/31 2,700,000 2,700,000
City of Naperville, Illinois, Economic Dev.
Rev. Bonds, Service Merchandise Co.,
Inc.; LOC Pittsburgh National Bank;
3.50%; 5/15/96*; 11/30/24 1,400,000 1,400,000
8,200,000
Indiana (2.04%)
Carmel Clay Schools
Tax Anticipation Warrants of 1996;
3.75%; 12/31/96 2,200,000 2,202,836
Iowa (4.27%)
City of Storm Lake, Iowa; Private College
Rev. Bonds, Buena Vista College,
Series 1993; LOC Norwest Bank
Minnesota, N. A.;
4.15%; 5/1/96*; 12/1/03 400,000 400,000
Iowa Higher Education Loan Authority Fac.;
Rev. Bonds; Series 1995;
LOC Norwest Bank Minnesota, N.A.;
4.10%; 5/1/96*; 2/1/05 2,200,000 2,200,000
Iowa School Corp. Warrant Cert. 1995-96
Series A; Guaranteed By Capital
Guaranty; 4.75%; 6/28/96 2,000,000 2,002,745
4,602,745
Louisiana (13.03%)
Jefferson Parish, Louisiana, Hospital Rev.
Bonds, Jefferson Parish Hospital
Service, District #2, Customized
Purchase Program, Series 1985;
LOC Mitsubishi Bank;
4.10%; 5/1/96*; 12/1/15 3,300,000 3,300,000
Jefferson Parish, Louisiana, IDB Rev.
Ref. Bonds, George J. Achel, Sr.
Project, Series 1986; LOC Barclays
Bank; 4.15%; 5/1/96*; 12/1/04 1,600,000 1,600,000
Louisiana Public Fac. Authority, CP
Program Hospital Equip. Rev.
Bonds, Series 1985A, Pooled Project;
LOC Sumitomo Bank;
4.60%; 5/7/96*; 12/1/15 5,365,000 5,365,000
Parish of DeSoto, Louisiana; Adj. Tender
Pollution Control Rev. Ref. Bonds,
LOC Swiss Bank Corp.;
Series 1991A; 4.00%; 5/1/96*; 7/1/182,200,000 2,200,000
Series 1991B; 4.00%; 5/1/96*; 7/1/181,600,000 1,600,000
14,065,000
Maine (1.86%)
State of Maine General Obligation Tax
Anticipation Notes;
4.50%; 6/28/96 2,000,000 2,002,293
Maryland (0.83%)
Montgomery County, Maryland, F/R
Monthly IDA, Information Systems &
Networks; LOC Pittsburgh National
Bank; 3.55%; 5/7/96*; 4/1/14 900,000 900,000
Massachusetts (0.37%)
Commonwealth of Massachusetts,
Dedicated Income Tax Bonds, Series E;
LOC ABN-AMRO Bank;
3.90%; 5/1/96*; 12/1/97 400,000 400,000
Michigan (0.14%)
Township of Cornell, Michigan, The
Economic Dev. Corp.,
Environmental Improvement Rev.
Ref. Bonds, Series 1986, Mead
Escanaba Paper Co. Project; LOC Suisse
Bank; 3.95%; 5/1/96*; 11/1/16 150,000 150,000
Minnesota (11.08%)
City of Coon Rapids, Minnesota
Rev. Bonds for Health Central
System, Series 1985; LOC Norwest
Bank Minnesota, N.A.;
3.75%; 5/7/96*; 8/1/15 1,800,000 1,800,000
City of Rochester, Minnesota, Health Care
Fac. Rev. Bonds, Mayo Foundation/
Mayo Medical Center, Adj. Tender;
Series 1992C;
3.15%; 5/2/96**; 11/15/21 500,000 500,000
3.15%; 5/13/96**; 11/15/21 600,000 600,000
3.05%; 5/21/96**; 11/15/21 500,000 500,000
3.15%; 6/3/96**; 11/15/21 500,000 500,000
3.20%; 6/5/95**; 11/15/21 500,000 500,000
3.20%; 6/6/96**; 11/15/21 500,000 500,000
3.20%; 6/12/96**; 11/15/21 400,000 400,000
3.20%; 7/8/96**; 11/15/21 400,000 400,000
3.20%; 7/12/96**; 11/15/21 400,000 400,000
3.25%; 7/15/96**; 11/15/21 500,000 500,000
3.50%; 8/5/96**; 11/15/21 350,000 350,000
University of Minnesota Regents Variable
Rate Demand Bonds;
Series 1985F; 3.25%; 8/1/96**;
10/1/012, 500,000 2,500,000
Series 1985G; 3.25%; 8/1/96**;
10/1/072, 500,000 2,500,000
11,950,000
Montana (4.54%)
City of Forsyth, Montana, Portland General
Electric Co.; LOC Swiss Bank Corp.;
Series B; 4.05%; 5/7/96*; 6/1/13 2,400,000 2,400,000
Series D; 4.15%; 5/7/96*; 6/1/13 1,500,000 1,500,000
Series 1984; 4.15%; 5/7/96*;
8/1/14 1,000,000 1,000,000
4,900,000
Nebraska (0.93%)
Lincoln Electric System
Commercial Paper Notes;
3.20%; 5/7/96 500,000 500,000
3.25%; 7/9/96 500,000 500,000
1,000,000
New Hampshire (1.67%)
New Hampshire IDA, F/R Monthly 1983
Hudson, Oerlikon-Buhrle USA/Balzers;
LOC Union Bank of Switzerland;
3.50%; 7/1/13 1,800,000 1,800,000
New York (4.63%)
New York State Energy Research & Dev.
Authority Pollution Control Rev. Bonds,
Long Island Lighting Co.; Series 1985B;
LOC Deutsche Bank;
3.25%; 3/1/97**; 3/1/16 4,000,000 4,000,000
New York State Energy Resource &
Dev. Authority, Series 1985 D;
For New York State Electric & Gas Corp.;
LOC Union Bank of Switzerland;
3.65%; 12/2/96**; 12/1/15 1,000,000 1,000,000
5,000,000
North Carolina (5.19%)
North Carolina Eastern Municipal Power
Agency, Series 1988B; LOC Morgan
Guaranty Trust Co.; LOC Union
Bank of Switzerland;
3.15%; 5/6/96**; 1/1/26 500,000 500,000
3.15%; 5/10/96**; 1/1/26 500,000 500,000
3.45%; 5/13/96**; 1/1/26 500,000 500,000
3.10%; 5/14/96**; 1/1/10 300,000 300,000
3.15%; 5/15/96**; 1/1/10 300,000 300,000
3.30%; 5/15/96**; 1/1/10 500,000 500,000
3.00%; 5/17/96**; 1/1/26 500,000 500,000
University of North Carolina
Foundation, Inc., Series 1989;
LOC Credit Suisse;
4.05%; 5/7/96*; 10/1/09 2,500,000 2,500,000
5,600,000
Ohio (0.93%)
Village of Evendale, Ohio, SHV Real Estate
Income Project; LOC Citibank;
3.75%; 5/7/96*; 9/1/15 1,000,000 1,000,000
Pennsylvania (3.34%)
Bucks County, Pennsylvania, IDA SHV
Real Estate, Inc. Project, Series 1985;
LOC ABN-AMRO Bank;
3.75%; 5/7/96*; 7/1/15 2,300,000 2,300,000
Chester, Pennsylvania, IDA, F/R Monthly
IDR, Keystone Foods Corp.;
LOC Barclays Bank;
3.50%; 5/15/96*; 10/15/99 800,000 800,000
Delaware County, Pennsylvania, Tax & Rev.
Anticipation Notes, Fac. Rev.,
Series 1985; Guaranteed by
United Parcel Service;
3.95%; 5/1/96*; 12/1/15 500,000 500,000
3,600,000
Tennessee (0.46%)
Knox, Tennessee, IDB F/R Monthly IDR
1983, Service Merchandise Co., Inc.;
LOC Barclays Bank;
3.50%; 5/15/96*; 12/15/08 500,000 500,000
Texas (10.05%)
Cedar Hill, Texas, Industrial Dev. Corp.
F/R Monthly IDR 1985, Minyard
Properties Project; LOC Citibank;
3.75%; 5/1/96*; 5/1/02 400,000 400,000
City of Houston Tax & Rev. Anticipation
Notes Series 1995;
4.50%: 6/27/96 1,000,000 1,001,309
Coppell, Texas, Industrial Dev.
Corp., IDA 1984, Minyard
Properties Project; LOC Citibank;
3.75%; 5/1/96*; 12/1/01 1,170,000 1,170,000
Montgomery County, Texas, Industrial
Dev. Corp. Ref. Bonds,
Series 1986A; Dal-Tile Corp.
Project; LOC Credit Suisse;
4.15%; 5/7/96*; 12/1/03 150,000 150,000
Port Arthur Navigation Dist. Industrial
Dev. Corp. Adj. Tender Pollution
Control Rev. Bonds, American
Petrofina Co. of Texas Project, Series
1985; LOC Sumitomo Bank;
4.20%; 5/1/96*; 5/1/03 2,100,000 2,100,000
Port Dev. Corp., Adj. Tender Marine
Terminal Rev. Ref. Bonds, Mitsui &
Co. (USA), Inc. Project, Series 1985A;
LOC Industrial Bank of Japan;
3.25%; 5/16/96**; 12/1/05 500,000 500,000
3.15%; 6/5/96**; 12/1/05 500,000 500,000
State of Texas Tax & Rev.
Anticipation Notes, Series 1995A;
4.75%; 8/30/96 2,000,000 2,009,629
Texas Association of School Boards Tax
Anticipation Notes, Series 1995;
4.75%; 8/30/96 3,000,000 3,006,692
10,837,630
Washington (2.22%)
Port of Kalama, Washington, Public Corp.,
Port Fac. Rev. Bonds, Conagra, Inc.
Project; LOC Morgan Guaranty;
4.00%; 5/1/96*; 1/1/04 2,400,000 2,400,000
West Virginia (1.67%)
Putnam County, West Virginia, F/R
Monthly IDR 1981, FMC Corp.
Project; LOC Bankers Trust;
3.50%; 5/1/96*; 10/1/11 1,800,000 1,800,000
Wisconsin (0.93%)
State of Wisconsin 1995 Operating
Notes; 4.50%; 6/17/96 1,000,000 1,001,116
Wyoming (0.46%)
Lincoln County, Wyoming, Pollution
Control Ref. Bonds, Pacificorp
Project, Series 1991; LOC
Union Bank of Switzerland;
3.15%; 5/23/96**; 1/1/16 500,000 500,000
Total Portfolio Investments (99.07%) 106,875,148
Cash, receivables and other assets
net of liabilities (0.93%) 1,007,703
Total Net Assets (100.00%) $107,882,851
* Demand Date
** Put Date
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Selected data for a share of Capital Stock outstanding throughout each period:
Income from Investment Operations Less Distributions
Net Realized
and
Net Asset Net Unrealized Total Dividends Net Asset
Value at Invest- Gain from from Net Distributions Value at
Beginning ment (Loss) on Investment Investment from Total End
of Period Income(a) Investments Operations Income Capital Gains Distributions of Period
PRINCOR CASH MANAGEMENT FUND, INC.
Class A:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Six Months Ended April 30, 1996 $1.000 $ .025 $ - $.025 $(.025) $ - $(.025) $1.000
Year Ended October 31,
1995 1.000 .052 - .052 (.052) - (.052) 1.000
1994 1.000 .033 - .033 (.033) - (.033) 1.000
1993 1.000 .026 - .026 (.026) - (.026) 1.000
1992 1.000 .036 - .036 (.036) - (.036) 1.000
1991 1.000 .061 - .061 (.061) - (.061) 1.000
Class B:
Six Months Ended April 30, 1996 1.000 .021 - .021 (.021) - (.021) 1.000
Period Ended October 31, 1995(c) 1.000 .041 - .041 (.041) - (.041) 1.000
Class R:
Period Ended April 30, 1996(f) 1.000 .008 - .008 (.008) - (.008) 1.000
PRINCOR TAX-EXEMPT CASH MANAGEMENT FUND, INC.
Class A:
Six Months Ended April 30, 1996 1.000 .014 - .014 (.014) - (.014) 1.000
Year Ended October 31,
1995 1.000 .032 - .032 (.032) - (.032) 1.000
1994 1.000 .021 - .021 (.021) (.021) 1.000
1993 1.000 .020 - .020 (.020) - (.020) 1.000
1992 1.000 .028 - .028 (.028) - (.028) 1.000
1991 1.000 .043 - .043 (.043) - (.043) 1.000
Class B:
Six Months Ended April 30, 1996 1.000 .011 - .011 (.011) - (.011) 1.000
Period Ended October 31, 1995(c) 1.000 .021 - .021 (.021) - (.021) 1.000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Ratios/Supplemental Data
Ratio of Net
Ratio of Investment
Net Assets at Expenses to Income to Portfolio
Total End of Period Average Average Turnover
Return(b) (in thousands) Net Assets(a) Net Assets Rate
PRINCOR CASH MANAGEMENT FUND, INC.
Class A:
<S> <C> <C> <C> <C> <C>
Six Months Ended April 30, 1996 2.48%(d) $720,249 .70%(e) 4.92%(e) N/A
Year Ended October 31,
1995 5.36% 623,864 .72%(e) 5.24% N/A
1994 3.40% 332,346 .70% 3.27% N/A
1993 2.67% 284,739 .67% 2.63% N/A
1992 3.71% 247,189 .65% 3.66% N/A
1991 6.29% 262,543 .61% 5.95% N/A
Class B:
Six Months Ended April 30, 1996 2.08%(d) 161 1.50%(e) 4.10%(e) N/A
Period Ended October 31, 1995(c) 4.19%(d) 208 1.42%(e) 4.50%(e) N/A
Class R:
Period Ended April 30, 1996(f) .76%(d) 25 .94%(e) 4.47%(e) N/A
PRINCOR TAX-EXEMPT CASH MANAGEMENT FUND, INC.
Class A:
Six Months Ended April 30, 1996 1.45%(d) 107,856 .72%(e) 2.89%(e) N/A
Year Ended October 31,
1995 3.24% 99,887 .69% 3.19% N/A
1994 2.11% 79,736 .67% 2.08% N/A
1993 1.99% 79,223 .66% 1.96% N/A
1992 2.86% 69,224 .65% 2.84% N/A
1991 4.36% 71,469 .61% 4.27% N/A
Class B:
Six Months Ended April 30, 1996 1.08%(d) 27 1.47%(e) 2.15%(e) N/A
Period Ended October 31, 1995(c) 2.19%(d) 27 1.42%(e) 2.40%(e) N/A
See accompanying notes.
<PAGE>
<FN>
Notes to Financial Highlights
(a) Without the Manager's voluntary waiver of a portion of certain of its
expenses (see Note 3 to the financial statements) for the periods
indicated, the Money Market Funds would have had per share net investment
income (loss) and the ratios of expenses to average net assets as shown:
Per Share Ratio of
Year, Net Expenses
Except Investment to Average Amount
Fund as Noted Income (Loss) Net Assets Waived
Princor Cash Management
Fund, Inc.
Class A 1996* $ .025 .70%(e) $ 6,702
1995 .052 .78% 296,255
1994 .031 .90% 595,343
1993 .025 .84% 468,387
1992 .035 .80% 385,328
1991 .059 .79% 433,196
Class B 1996* .010 3.40%(e) 1,775
1995(c) .041 1.63%(e) 104
Princor Tax-Exempt Cash
Management Fund, Inc.
Class A 1996* .014 .80%(e) 41,893
1995 .031 .84% 138,574
1994 .019 .85% 150,515
1993 .018 .83% 131,442
1992 .026 .82% 134,497
1991 .040 .83% 147,279
Class B 1996* (.058) 14.58%(e) 1,841
1995(c) .018 1.89%(e) 99
*Period from 10/31/95 through 4/30/96.
(b) Total return is calculated without the front-end sales charge or contingent
deferred sales charge.
(c) Period from December 9, 1994, date Class B shares first offered to eligible
purchasers, through October 31, 1995.
(d) Total return amounts have not been annualized.
(e) Computed on an annualized basis.
(f) Period from February 29, 1996, date Class R shares first offered through
April 30, 1996.
</FN>
</TABLE>
<PAGE>
THE PRINCOR FAMILY OF MUTUAL FUNDS
Principal Mutual Life Insurance Company has sponsored the development of a
number of mutual funds. The funds which make up the Princor family of mutual
funds and a brief description of their respective investment objectives are
provided below. For more complete information about any of the funds, including
charges and expenses, obtain a prospectus from Princor Financial Services
Corporation, The Principal Financial Group, Des Moines, Iowa 50392-0200
(telephone 1-800-247-4123). Please read it carefully before you invest or send
money.
<TABLE>
<CAPTION>
GROWTH FUNDS INVESTMENT OBJECTIVE
<S> <C>
Princor Balanced Fund To seek the generation of a total return consisting of current income and capital
appreciation while assuming reasonable risks in furtherance of this objective.
Princor Blue Chip Fund To seek growth of capital and growth of income by investing primarily in common stocks of
well capitalized, established companies.
Princor Capital To seek long-term capital appreciation and a secondary objective of growth of investment
Accumulation Fund income.
Princor Emerging To seek capital appreciation by investing primarily in securities of emerging and other
Growth Fund growth-oriented companies.
Princor Growth Fund To seek growth of capital with realization of current income incidental to the objective of
growth of capital.
Princor World Fund To seek long-term growth of capital by investing in a portfolio of equity securities of
companies domiciled in any of the nations of the world.
INCOME FUNDS
Princor Bond Fund To seek as high a level of income as is consistent with preservation of capital and prudent
investment risk.
Princor Government Securities To seek a high level of current income, liquidity and safety of principal.
Income Fund
Princor High Yield Fund To seek high current income. Capital growth is a secondary objective when consistent with
seeking high current income.
Princor Limited Term Bond Fund To seek a high level of current income consistent with a relatively high level of principal
stability by investing in a portfolio of securities with a dollar weighted average maturity of
five years or less.
Princor Tax-Exempt Bond Fund To seek as high a level of current income exempt from federal taxation as is consistent with
preservation of capital.
Princor Utilities Fund To seek current income and long-term growth of income and capital by investing primarily in
equity and fixed income securities of companies in the public utilities industry.
MONEY MARKET FUNDS
Princor Cash Management Fund To seek as high a level of current income available from short-term securities as is
considered consistent with preservation of principal and maintenance of
liquidity by investing in a portfolio of money market instruments.
Princor Tax-Exempt Cash To seek, through investment in a professionally-managed portfolio of high quality short-term
Management Fund Municipal Obligations, as high a level of current interest income exempt from federal income
tax as is consistent with stability of principal and maintenance of liquidity.
</TABLE>
