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ENDOWMENTS, INC.(SM) AND BOND PORTFOLIO FOR ENDOWMENTS, INC. (SM)
ENDOWMENTS, INC. SEEKS TO PROVIDE LONG-TERM GROWTH OF PRINCIPAL WITH INCOME AS
A SECONDARY OBJECTIVE, PRIMARILY THROUGH INVESTMENTS IN STOCKS.
BOND PORTFOLIO FOR ENDOWMENTS, INC. SEEKS TO PROVIDE AS HIGH A LEVEL OF CURRENT
INCOME AS IS CONSISTENT WITH THE PRESERVATION OF CAPITAL THROUGH INVESTMENTS IN
FIXED-INCOME SECURITIES.
SEMI-ANNUAL REPORT
For the Six Months Ended January 31, 1996
<PAGE>
DEAR SHAREHOLDER:
The first half of fiscal 1996 saw continued gains in the stock and bond
markets. In this environment, both Endowments, Inc. and Bond Portfolio for
Endowments, Inc. recorded strong results.
ENDOWMENTS, INC. ("ENDI"):
The value of an investment in ENDI, with all distributions reinvested,
increased 10.8% for the six months ended January 31.
Of the 50 securities held in the fund's portfolio throughout the period, 38
posted increases. The ten stocks showing the largest gains rose between 24% and
40%, while the ten weakest had declines ranging from 1% to 23%.
ENDI's rather substantial investments in the pharmaceutical industry did
especially well. Merck and Johnson & Johnson went up in price 36.1% and 33.8%,
respectively, while American Home Products, our largest single holding, rose
29.1%. The fund's positions in these stocks were built up a couple of years ago
when they were out of favor and attractively priced. Since then, they have
benefited from the growing belief that Congress is unlikely to enact health
care legislation that would curtail the industry's profitability.
During the six months, the stock market continued to soar. Standard & Poor's
500 Composite Index, an unmanaged measure of the market heavily weighted with
the stocks of large companies, rose 14.5% for this period on a total return
basis.
By most historical standards, the bull market is in a very mature phase. It has
been 64 months since prices have experienced a decline of at least 10%. The
longest interval between such corrections in the past was 45 months, and the
average is 21 months. The upward movement of prices has depressed the dividend
yield on the S&P 500 to around 2%, an all-time low.
In these circumstances, we have maintained a conservative investment posture,
holding a little over 20% of net assets in cash and equivalents. These holdings
currently are producing a return of just over 5%.
This cautious approach is characteristic of ENDI at times when the market seems
fully valued. The fund is managed in a manner that places considerable emphasis
on the preservation of capital. Typically, it has lagged the S&P 500 during
strong bull markets and held up better than the index in down markets. The S&P
index, it should be remembered, is a hypothetical investment; unlike all mutual
funds, it has no expenses and holds no assets in cash.
BOND PORTFOLIO FOR ENDOWMENTS, INC. ("BENDI"):
BENDI also had a fine six months, recording a total return of 7.3%. This
matches the return for the unmanaged Lehman Brothers Aggregate Bond Index and
compares with an average return of 7.4% for 117 corporate A-rated bond funds
tracked by Lipper Analytical Services.
The period from August through December was marked by low inflation and rising
corporate profits, and by some evidence of a slowing economy. As 1996 started,
intermediate- and long-term yields began rising despite reductions in
short-term rates.
BENDI entered the first half of the fiscal year with a portfolio whose average
maturity was about 7 1/2 years. As the period progressed, we lengthened
maturities further to capitalize on the strength displayed by the fixed-income
market. On January 31, the average effective maturity of the bonds in the
portfolio was about nine years.
Lately, there has been some evidence of a pickup in economic activity. However,
for the next several months we look for relatively modest growth and continued
low inflation. That, of course, would bode well for the bond market.
The rally in bond prices that continued in 1995 was preceded by a sharp
downswing in the bond market in 1994. That downswing, as you may recall,
followed a strong upturn in 1993. Taken together, these three calendar years,
1993-95, are a reminder that the environment in which BENDI invests has become
a fast-changing one. The quiet, uncomplicated market of years past no longer
exists. In managing BENDI, we recognize that this presents us with new and
difficult challenges as we pursue a conservative approach to meeting the fund's
objective: high current income consistent with preservation of capital.
A REVIEW OF THE PAST 20+ YEARS
In our annual report six months ago, as ENDI and BENDI were completing 20 years
under the stewardship of Capital Research and Management Company, we reviewed
the purpose of the funds and the results achieved thus far. Here is a summary
of that review together with an update on the lifetime results for both funds.
ENDI and BENDI were formed to help trustees, directors and advisers of
501(c)(3) tax-exempt organizations fulfill their fiduciary responsibilities.
The funds place experienced professional investment management within the reach
of small as well as large nonprofit institutions. From the outset, expenses
have been kept low and the funds' activities have been overseen by a Board of
Directors made up primarily of designated representatives of shareholders.
ENDI and BENDI have pursued a value-oriented, research-driven approach. Both
funds have built solid records while fluctuating less than the comparable
indexes and outdistancing inflation by a comfortable margin. Over the 20
1/2-year period, ENDI has matched the return generated by the S&P 500 with less
volatility than the index has shown. (The average compound growth rate for both
the fund and the index -- 14.5% a year including reinvestment -- is higher than
the 10.5% average annual return for the index over the past 70 years.) BENDI's
average compound return for the period is 10.1% a year. During this time, the
average return for 15 corporate A-rated bond funds in existence throughout the
period was 9.8%, according to Lipper. Over this span, which dates back to July
1975, the Consumer Price Index increased at an average annual rate of 5.2%.
The experience of these past 20+ years confirms our belief that ENDI and BENDI
provide a valuable service within the framework of a prudent investment
strategy that limits the risks our investors have to take. We believe this
strategy should continue to serve the funds and their shareholders well in the
future.
Cordially,
Robert B. Egelston
Chairman of the Board
Thomas E. Terry
President
March 8, 1996
Here are the total returns and average annual compound returns with all
distributions reinvested for periods ended December 31, 1995 (the most recent
calendar quarter) -- For ENDI: 10 years: +230.81%, or +12.71% a year; 5 years:
+91.68%, or +13.90% a year; 12 months: +28.31%; and for BENDI: 10 years:
+148.58%, or +9.53% a year; 5 years: +63.96%, or +10.39% a year; 12 months:
+15.99%. BENDI's 30-day yield as of February 29, 1996, calculated in accordance
with the Securities and Exchange Commission formula, was 5.83%.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS. SHARE PRICE AND RETURN WILL
VARY, SO YOU MAY LOSE MONEY BY INVESTING IN THE FUNDS. THE SHORTER THE TIME
PERIOD OF YOUR INVESTMENT, THE GREATER THE POSSIBILITY OF LOSS. FUND SHARES ARE
NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED OR GUARANTEED BY, THE U.S.
GOVERNMENT, ANY FINANCIAL INSTITUTION, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, OR ANY OTHER AGENCY, ENTITY OR PERSON.
<PAGE>
ENDOWMENTS, INC.
INVESTMENT PORTFOLIO, JANUARY 31, 1996
<TABLE>
<CAPTION>
Percent
of Net
INDUSTRY DIVERSIFICATION Assets
- -------------------------------------- ----------
<S> <C> <C> <C>
Common Stocks
Banking 10.37%
Insurance 10.26
Health & Personal Care 9.12
Energy Sources 6.47
Forest Products & Paper 5.21
Utilities: Electric & Gas 5.05
Real Estate 4.42
Transportation: Rail & Road 3.80
Multi-Industry 3.42
Business & Public Services 3.01
Merchandising 2.03
Beverages & Tobacco 2.01
Chemicals 1.95
Food & Household Products 1.91
Data Processing & Reproduction 1.89
Telecommunications 1.11
Machinery & Engineering 1.07
Broadcasting & Publishing 1.05
Aerospace & Military Technology 1.03
Electrical & Electronics 1.02
Automobiles .98
Financial Services .97
Metals: Nonferrous .92
----------
79.07
Short-Term Securities 20.73
Excess of cash and receivables over payables .20
----------
Net Assets 100.00%
==========
Percent
of Net
TEN LARGEST HOLDINGS Assets
- -------------------------------------- ----------
American Home Products 4.23%
Minnesota Mining and Manufacturing 3.42
Phillips Petroleum 3.20
Ohio Casualty 2.70
Dun & Bradstreet 2.26
Weingarten Realty Investors 2.04
Wal-Mart Stores 2.03
Philip Morris 2.01
General Mills 1.91
International Business Machines 1.89
----------
25.69%
==========
Percent
Number Market Of Net
COMMON STOCKS of shares Value Assets
- --------------------------------------------------- --------- ------- ----------
ENERGY
Energy Sources-6.47%
Amoco Corp. 8,600 $605,225 1.00%
Atlantic Richfield Co. 5,000 568,125 .94
Exxon Corp. 10,000 802,500 1.33
Phillips Petroleum Co. 59,000 1,924,875 3.20
Utilities: Electric & Gas-5.05%
Consolidated Edison Co. of New York, Inc. 17,000 573,750 .95
Duke Power Co. 15,000 746,250 1.24
Entergy Corp. 25,000 740,625 1.23
Pacific Gas and Electric Co. 20,000 555,000 .92
Union Electric Co. 10,000 426,250 .71
--------- ----------
6,942,600 11.52
--------- ----------
MATERIALS
Chemicals-1.95%
Armor All Products Corp. 28,000 427,000 .71
Dow Chemical Co. 10,000 745,000 1.24
Forest Products & Paper-5.21%
Georgia-Pacific Corp. 10,000 733,750 1.22
International Paper Co. 15,000 613,125 1.02
Louisiana-Pacific Corp. 30,000 765,000 1.27
Union Camp Corp. 20,000 1,030,000 1.70
Metals: Nonferrous-0.92%
Aluminum Co. of America 10,000 555,000 .92
--------- ----------
4,868,875 8.08
--------- ----------
CAPITAL EQUIPMENT
Aerospace & Military Technology-1.03%
Boeing Co. 8,000 621,000 1.03
Data Processing & Reproduction-1.89%
International Business Machines Corp. 10,500 1,141,875 1.89
Electrical & Electronics-1.02%
General Electric Co. 8,000 614,000 1.02
Machinery & Engineering-1.07%
Caterpillar Inc. 10,000 643,750 1.07
--------- ----------
3,020,625 5.01
--------- ----------
CONSUMER GOODS
Automobiles-0.98%
Ford Motor Co., Class A 20,000 592,500 .98
Beverages & Tobacco-2.01%
Philip Morris Companies Inc. 13,000 1,209,000 2.01
Food & Household Products-1.91%
General Mills, Inc. 20,000 1,150,000 1.91
Health & Personal Care-9.12%
American Home Products Corp. 25,000 2,550,000 4.23
Johnson & Johnson 8,000 768,000 1.27
Merck & Co., Inc. 10,000 702,500 1.17
Schering-Plough Corp. 10,000 541,250 .90
Warner-Lambert Co. 10,000 937,500 1.55
--------- ----------
8,450,750 14.02
--------- ----------
SERVICES
Broadcasting & Publishing-1.05%
Gannett Co., Inc. 10,000 635,000 1.05
Business & Public Services-3.01%
Dun & Bradstreet Corp. 21,000 1,365,000 2.26
WMX Technologies, Inc. 15,000 448,125 .75
Merchandising-2.03%
Wal-Mart Stores, Inc. 60,000 1,222,500 2.03
Telecommunications-1.11%
AT&T Corp. 10,000 668,750 1.11
Transportation: Rail & Road-3.80%
CSX Corp. 20,000 927,500 1.54
TNT Freightways Corp. 45,000 832,500 1.38
Union Pacific Corp. 8,000 533,000 .88
--------- ----------
6,632,375 11.00
--------- ----------
FINANCE
Banking-10.37%
Boatmen's Bancshares, Inc. 15,000 643,125 1.07
Central Fidelity Banks, Inc. 15,000 474,375 .79
Comerica Inc. 15,000 594,375 .99
First Hawaiian, Inc. 20,000 567,500 .94
Huntington Bancshares Inc. 25,000 596,875 .99
Integra Financial Corp. 10,000 643,750 1.07
J.P. Morgan & Co. Inc. 14,000 1,137,500 1.89
U.S. Bancorp 18,000 591,750 .98
Washington Mutual Savings Bank 33,150 1,002,270 1.65
Financial Services-0.97%
Beneficial Corp. 12,000 586,500 .97
Insurance-10.26%
Allstate Corp. 15,000 654,375 1.09
AMBAC Inc. 20,000 957,500 1.59
American General Corp. 27,000 1,019,250 1.69
Liberty Corp. 20,000 697,500 1.16
Ohio Casualty Corp. 44,000 1,628,000 2.70
Paul Revere Corp. 30,000 682,500 1.13
Trenwick Group Inc. 10,000 542,500 .90
Real Estate-4.42%
Security Capital Pacific Trust 30,000 588,750 .98
Weingarten Realty Investors 32,000 1,232,000 2.04
Western Investment Real Estate Trust 75,000 843,750 1.40
--------- ----------
15,684,145 26.02
--------- ----------
MULTI-INDUSTRY
Multi-Industry-3.42%
Minnesota Mining and Manufacturing Co. 32,000 2,064,000 3.42
--------- ----------
TOTAL COMMON STOCKS (cost: $35,902,083) 47,663,370 79.07
--------- ----------
Principal
Amount
SHORT-TERM SECURITIES (000)
Corporate Short-Term Notes-17.25%
Associates Corp. of North America 5.80% due 2/1/96 $1,100 1,099,823 1.82
Bell Atlantic Financial Services, Inc. 5.43% 550 549,419 .91
due 2/7/96
Bell Atlantic Network Funding Corp. 5.50% due 2/22/96 965 961,757 1.60
Coca-Cola Co. 5.35%-5.41% due 2/23-3/7/96 /1/ 1,600 1,593,334 2.64
H.J. Heinz Co. 5.46% due 2/16/96 1,100 1,097,331 1.82
IBM Credit Corp. 5.37% due 3/13/96 870 864,549 1.43
J.C. Penney Funding Corp. 5.35% due 3/11/96 1,500 1,491,083 2.47
Vermont American Corp. 5.45% due 2/13/96 /1/ 1,750 1,746,556 2.90
Xerox Corp. 5.39% due 3/6/96 1,000 994,759 1.66
--------- ----------
10,398,611 17.25
--------- ----------
FEDERAL AGENCY DISCOUNT NOTES-3.48%
Federal Home Loan Mortgage Corp. 5.42% due 2/13/96 1,000 998,043 1.66
Federal National Mortgage Assn. 5.44% due 2/9/96 1,100 1,098,504 1.82
--------- ------------
2,096,547 3.48
---------
TOTAL SHORT-TERM SECURITIES (cost: $12,495,158) 12,495,158 20.73
--------- ----------
TOTAL INVESTMENT SECURITIES (cost: $48,397,241) 60,158,528 99.80
Excess of cash and receivables over payables 119,129 .20
--------- ----------
NET ASSETS $60,277,657 100.00%
========= ==========
</TABLE>
/1/ Purchased in a private placement transaction; resale to the public may
require registration or may extend only to qualified institutional buyers.
See Notes to Financial Statements
Common stocks added to the portfolio
since July 31, 1995
- --------------------------------------
Boatmen's Bancshares
Caterpillar
Duke Power
Georgia-Pacific
Integra Financial
International Paper
Union Electric
Common stocks eliminated from the portfolio
since July 31, 1995
- --------------------------------------
American Brands
Ameritech
Bankers Trust New York
Carolina Power & Light
Houston Industries
Melville
Monsanto
Sprint
Student Loan Marketing
Super Food Services
Texas Utilities
<PAGE>
Endowments, Inc.
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
at January 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C>
Assets:
Investment securities at market
(cost: $48,397,241) $60,158,528
Cash 83,592
Receivables for dividends 73,488
------------
60,315,608
Liabilities:
Payables for-
Management services $26,078
Accrued expenses 11,873 37,951
------------ ------------
Net Assets at January 31, 1996-
Equivalent to $18.50 per share on
3,258,721 shares of $1 par value
capital stock outstanding (authorized
capital stock--6,000,000 shares) $60,277,657
=============
Statement of Operations
for the six months ended January 31, 1996
Investment Income:
Income:
Dividends $ 819,472
Interest 364,347 $1,183,819
------------
Expenses:
Management services fee 148,202
Custodian fee 1,478
Registration statement and prospectus 10,499
Auditing fees 17,000
Legal fees 6,681
Taxes other than federal income tax 31,398
Other expenses 9,421
------------
Total expenses before fee waiver 224,679
Fee waiver 4,058 220,621
----------- -----------
Net investment income 963,198
------------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 2,755,846
Net increase in unrealized
appreciation on investments:
Beginning of period 9,360,047
End of period 11,761,287
------------
Net unrealized appreciation on investments 2,401,240
------------
Net realized gain and unrealized
appreciation on investments 5,157,086
------------
Net Increase in Net Assets Resulting
from Operations $6,120,284
============
See Notes to Financial Statements
Statement of Changes in Net Assets
Six
months ended Year ended
1/31/96 7/31/95
Operations:
Net investment income $ 963,198 $ 2,026,933
Net realized gain on investments 2,755,846 2,706,488
Net unrealized appreciation on investments 2,401,240 4,723,583
------------ ------------
Net increase in net assets resulting
from operations 6,120,284 9,457,004
------------- -------------
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income (1,034,241) (1,942,631)
Distributions from net realized
gain on investments (3,710,692) (4,141,493)
------------- -------------
Total dividends and distributions (4,744,933) (6,084,124)
------------- -------------
Capital Share Transactions:
Proceeds from shares sold:
160,023 and 317,243
shares, respectively 2,953,733 5,302,616
Proceeds from shares issued in
reinvestment of net investment income
dividends and distributions of net
realized gain on investments:
244,192 and 362,222 shares,
respectively 4,417,183 5,645,016
Cost of shares repurchased:
287,551 and 618,230
shares, respectively (5,203,755) (10,507,091)
------------- -------------
Net increase in net assets resulting
from capital share transactions 2,167,161 440,541
------------- -------------
Total Increase in Net Assets 3,542,512 3,813,421
Net Assets:
Beginning of period 56,735,145 52,921,724
------------- -------------
End of period (including undistributed
net investment income: $190,351 and
$261,394, respectively) $60,277,657 $ 56,735,145
============= =============
</TABLE>
See Notes to Financial Statements
<PAGE>
ENDOWMENTS, INC.
NOTES TO FINANCIAL STATEMENTS
1. Endowments, Inc. (the "fund") is registered under the Investment Company Act
of 1940 as an open-end, diversified management investment company. The fund
seeks to provide long-term growth of principal with income as a secondary
objective, primarily through investments in stocks. The following paragraphs
summarize the significant accounting policies consistently followed by the fund
in the preparation of its financial statements:
Common stocks traded on a national securities exchange (or reported on the
NASDAQ national market) and securities traded in the over-the-counter market
are stated at the last reported sales price on the day of valuation; other
securities, and securities for which no sale was reported on that date, are
stated at the last quoted bid price. Short-term securities with original or
remaining maturities in excess of 60 days are valued at the mean of their
quoted bid and asked prices. Short-term securities with 60 days or less to
maturity are valued at amortized cost, which approximates market value.
Securities for which market quotations are not readily available are valued at
fair value as determined in good faith by the Valuation Committee of the Board
of Directors.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. Realized gains
and losses from securities transactions are reported on an identified cost
basis. Dividend and interest income is reported on the accrual basis. Discounts
on securities purchased are amortized over the life of the respective
securities. The fund does not amortize premiums on securities purchased.
Dividends and distributions paid to shareholders are recorded on the
ex-dividend date.
Shares of the fund may be owned only by organizations exempt from federal
income taxation under Section 501(c)(3) of the Internal Revenue Code. The fund
itself is exempt from federal taxation under Section 501(c)(2) of the Internal
Revenue Code.
Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
The custodian fee of $1,478 includes $1,445 that was paid by these credits
rather than in cash.
2. It is the fund's policy to continue to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its net investment income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision is
required.
As of January 31, 1996, net unrealized appreciation on investments for book
and federal income tax purposes aggregated $11,761,287, of which $12,328,447
related to appreciated securities and $567,160 related to depreciated
securities. There was no difference between book and tax realized gains on
securities transactions for the six months ended January 31, 1996. The cost of
portfolio securities for book and federal income tax purposes was $48,397,241
at January 31, 1996.
3. The fee of $148,202 for management services was paid pursuant to an
agreement with Capital Research and Management Company (CRMC), with which
certain officers and Directors of the fund are affiliated. The Investment
Advisory and Service Agreement provides for monthly fees, accrued daily, based
on an annual rate of 0.50% of the first $150 million of average net assets and
0.40% of such assets in excess of $150 million. The Investment Advisory and
Service Agreement provides for a fee reduction to the extent the fund's annual
ordinary operating expenses exceed 1.50% of the first $30 million of the
average net assets of the fund and 1.00% of the average net assets in excess
thereof. Expenses which are not subject to this limitation are interest,
taxes, and extraordinary expenses. During the six months ended January 31,
1996, no such fee reduction was required.
Effective December 1, 1995, CRMC has voluntarily agreed to waive its
management services fees to the extent necessary to ensure that the fund's
annual expenses do not exceed 0.75% of average net assets. Fee reductions were
$4,058 for the six months ended January 31, 1996.
No fees were paid by the fund to its officers and Directors.
4. As of January 31, 1996, accumulated undistributed net realized gain on
investments was $1,178,922 and additional paid-in capital was $43,888,376.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $7,823,500 and $10,326,318, respectively, during the
six months ended January 31, 1996.
<PAGE>
ENDOWMENTS, INC.
PER-SHARE DATA AND RATIOS
<TABLE>
<CAPTION>
Six Year ended July 31
months
ended ------ ------ ------ ------ ------
01/31/96 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of $18.06 $17.18 $18.43 $18.26 $17.89 $16.91
Period
-------- ------ ------ ------ ------ ------
Income from Investment Operations:
Net investment income .30 .63 .65 .66 .78 .78
Net realized and unrealized
gain (loss) on investments 1.62 2.21 (.16) 1.05 1.74 1.60
-------- ------ ------ ------ ------ ------
Total income from investment 1.92 2.84 .49 1.71 2.52 2.38
operations
-------- ------ ------ ------ ------ ------
Less Distributions:
Dividends from net investment (.33) (.61) (.66) (.69) (.73) (.87)
income
Distributions from net realized (1.15) (1.35) (1.08) (.85) (1.42) (.53)
gains
-------- ------ ------ ------ ------ ------
Total distributions (1.48) (1.96) (1.74) (1.54) (2.15) (1.40)
-------- ------ ------ ------ ------ ------
Net Asset Value, End of Period $18.50 $18.06 $17.18 $18.43 $18.26 $17.89
======== ====== ====== ====== ====== ======
Total Return 10.85%/1/ 18.57% 2.77% 10.05% 15.74% 15.03%
Ratios/Supplemental Data:
Net assets, end of period (in ) $60 $57 $53 $72 $58 $46
millions
Ratio of expenses to average .37%/1/ /2/ .73% .73% .64% .70% .69%
net assets
Ratio of net income to average 1.64%/1/ 3.70% 3.78% 3.72% 4.37% 4.63%
net assets
Portfolio turnover rate 16.94%/1/ 24.04% 25.58% 29.70% 20.35% 34.43%
</TABLE>
/1/ Based on operations for the period shown and, accordingly, not
representative of a full year's operations.
/2/ Had CRMC not waived management services fees, the fund's expense ratio
would have been .38%.
<PAGE>
ENDOWMENTS, INC.
RESULTS OF ANNUAL MEETING OF SHAREHOLDERS HELD NOVEMBER 16, 1995
<TABLE>
<CAPTION>
<S> <C>
Shares Outstanding on September 27, 1995 (record date) 3,166,384
Shares Voting on November 16, 1995 2,792,970 (88.2%)
</TABLE>
ELECTION OF DIRECTORS:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Percent of Percent of
Votes Shares Votes Shares
Director For Voting For Withheld Withheld
Robert B. Egelston 2,792,970 100% 0 0%
Frank L. Ellsworth 2,792,970 100 0 0
Steven D. Lavine 2,792,970 100 0 0
Patricia A. McBride 2,792,970 100 0 0
John R. Metcalf 2,792,970 100 0 0
Charles R. Redmond 2,792,970 100 0 0
Thomas E. Terry 2,792,970 100 0 0
Robert C. Ziebarth 2,792,970 100 0 0
</TABLE>
REDUCTION OF AUTHORIZED CAPITAL STOCK:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Percent of Percent of Percent of
Votes Shares Votes Shares Shares
For Voting For Against Voting Against Abstentions Abstaining
Reduction of the authorized
shares to 6,000,000
shares 2,720,093 97.4% 0 0% 72,877 2.6%
</TABLE>
RATIFICATION OF AUDITORS:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Percent of Percent of Percent of
Votes Shares Votes Shares Shares
For Voting For Against Voting Against Abstentions Abstaining
Deloitte & Touche LLP 2,735,143 97.9% 0 0% 57,827 2.1%
</TABLE>
<PAGE>
ENDOWMENTS, INC.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of
Endowments, Inc.:
We have audited the accompanying statement of assets and liabilities of
Endowments, Inc. (the "fund"), including the schedule of portfolio investments,
as of January 31, 1996, and the related statement of operations for the six
months then ended, the statement of changes in net assets for the six months
then ended and for the year ended July 31, 1995, and the per-share data and
ratios for the six months ended January 31, 1996 and for each of the five years
in the period ended July 31, 1995. These financial statements and the per-share
data and ratios are the responsibility of the fund's management. Our
responsibility is to express an opinion on these financial statements and the
per-share data and ratios based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the per-share
data and ratios are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of securities owned
at January 31, 1996 by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the per-share data and ratios
referred to above present fairly, in all material respects, the financial
position of Endowments, Inc. at January 31, 1996, the results of its operations
for the six months then ended, the changes in its net assets for the six months
then ended and for the year ended July 31, 1995, and the per-share data and
ratios for the six months ended January 31, 1996 and for each of the five years
ended July 31, 1995, in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Los Angeles, California
February 21, 1996
<PAGE>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
INVESTMENT PORTFOLIO, JANUARY 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Principal Percent
Amount Market of Net
BONDS & NOTES (000) Value Assets
Industrials - 18.68%
Dayton Hudson Corp. 10.00% due 6/1/10 $825 $1,023,000 2.39%
General Motors Corp. 8.80% due 3/1/21 2,000 2,443,780 5.70
Hanson America, Inc. 2.39% convertible
debentures due 3/1/01/1/ 1,000 840,000 1.96
Inco Ltd. 9.60% due 6/15/22 700 803,208 1.87
Pohang Iron & Steel Co., Ltd. 7.375% due 5/15/05 1,000 1,060,760 2.47
TCI Communications, Inc. 8.75% due 8/1/15 500 553,320 1.29
U S WEST, Inc. 0% convertible
debentures due 6/25/11 2,000 712,500 1.66
USX Corp. 9.125% due 1/15/13 500 575,945 1.34
---------- -------
8,012,513 18.68
---------- -------
Electric & Telephone Utilities - 5.27%
Big Rivers Electric Corp. 10.70% due 9/15/17 2,000 2,258,560 5.27
---------- -------
Gas Utilities - 1.17%
Columbia Gas System Inc., 7.42% due 11/28/15 500 501,605 1.17
---------- -------
Transportation /2/ - 8.66%
American Airlines, Inc., 1991-A, 9.71% due 1/2/07 896 1,039,718 2.42
Continental Airlines, Inc., 1996-A, 6.94% due 4/15/15/1/ 500 500,625 1.17
Delta Air Lines, Inc., 1993-A2, 10.50% due 4/30/16 500 615,045 1.43
Federal Express Corp. 7.53% due 9/23/06 472 499,341 1.17
Jet Equipment Trust, Series 1995-B, Class A, 7.63%
due 2/15/15 /1/ 500 534,400 1.25
Jet Equipment Trust, Series 1995-B, Class B, 7.83%
due 2/15/15 /1/ 500 524,630 1.22
---------- -------
3,713,759 8.66
---------- -------
Financial - 10.98%
American Re Corp. 10.875% due 9/15/04 1,500 1,674,540 3.90
Equitable Life Assurance Society of the United States
7.70% due 12/1/15/1/ 1,000 1,035,000 2.41
General Electric Capital Corp. 8.875% due 5/15/09 1,000 1,235,000 2.88
Irvine Co. 7.46% due 1/9/06/1/ /3/ /4/ 500 504,375 1.18
Maybank-New York due 7.125% 9/15/05 250 263,378 0.61
---------- -------
4,712,293 10.98
---------- -------
Collateralized Mortgage/Asset-Backed
Obligations /2/ - 3.85%
CSFB Finance Co. Ltd. 7.00% due 11/15/05 /1/ 500 496,650 1.16
Merrill Lynch Mortgage Investors, Inc., 1995-A,
7.522% due 6/15/21 /5/ 491 508,816 1.18
Prudential Home Mortgage Securities Co., Inc.,
Series 1992-2033, Class A-12, 7.50% due 11/25/22 500 500,625 1.17
SKW II Real Estate L.P. 6.45% due 4/15/02 /1/ 145 145,262 0.34
---------- -------
1,651,353 3.85
---------- -------
Floating Rate Eurodollar Notes (Undated) /5/ - 5.54%
Bank of Nova Scotia 6.00% 1,000 782,800 1.83
Canadian Imperial Bank of Commerce 6.125% 1,000 785,000 1.83
Midland Bank 5.813% 1,000 808,000 1.88
---------- -------
2,375,800 5.54
---------- -------
Governments (excluding U.S. Government) &
Governmental Authorities - 5.91%
Ontario (Province of) 17.00% due 11/5/11 1,100 1,261,491 2.94
Quebec (Province of) 13.25% due 9/15/14 1,000 1,275,850 2.97
---------- -------
2,537,341 5.91
---------- -------
Federal Agency Obligations - Mortgage
Pass-Throughs /2/ - 12.28%
Federal Home Loan Mortgage Corp. 8.75% due 7/1/08 153 161,107 0.38
Federal Home Loan Mortgage Corp. 12.50% due 12/1/12 70 81,328 0.19
Federal Home Loan Mortgage Corp. 9.00% due 3/1/20 176 187,523 0.44
Federal National Mortgage Assn. 9.00% due 11/1/20 322 343,043 0.80
Government National Mortgage Assn. 8.50% due 12/15/08 457 486,011 1.13
Government National Mortgage Assn. 7.50% due 1/15/24 653 672,085 1.57
Government National Mortgage Assn. 5.50% due 2/20/24 932 949,984 2.21
Government National Mortgage Assn. 6.00% due 6/20/24 959 977,278 2.28
Government National Mortgage Assn. 8.50% due 11/15/24 467 489,528 1.14
Government National Mortgage Assn. 8.50% due 4/15/25 878 920,171 2.14
---------- -------
5,268,058 12.28
---------- -------
U.S. Treaury Obligations - 20.84%
8.00% due 1/15/97 500 513,749 1.20
8.125% due 2/15/98 1,000 1,060,470 2.47
9.25% due 8/15/98 750 824,528 1.92
11.625% due 11/15/04 500 706,560 1.65
10.375% due 11/15/12 2,300 3,175,426 7.40
8.875% due 8/15/17 2,000 2,660,620 6.20
---------- -------
8,941,353 20.84
---------- -------
TOTAL BONDS & NOTES (cost: $38,804,453) 39,972,635 93.18
---------- -------
SHORT-TERM SECURITIES
Corporate Short-Term Notes - 4.66%
Associates Corp. of North America 5.80% due 2/1/96 1,000 999,839 2.33
Motorola, Inc. 5.42% due 2/22/96 1,000 996,688 2.33
---------- -------
TOTAL SHORT-TERM SECURITIES (cost: $1,996,527) 1,996,527 4.66
---------- -------
TOTAL INVESTMENT SECURITIES (cost: $40,800,980) 41,969,162 97.84
Excess of cash and receivables over payables 927,754 2.16
---------- -------
NET ASSETS $42,896,916 100.00%
========== =======
</TABLE>
/1/ Purchased in a private placement transaction; resale to the public may
require registration or may extend only to qualified institutional buyers.
/2/ Pass-through securities backed by a pool of mortgages or other loans on
which principal
payments are periodically made. Due to the possibility of early principal
payments, the effective maturity of these securities is shorter than the stated
maturity.
/3/ Represents a when-issued security.
/4/ Valued under procedures established by the Board of Directors.
/5/ Coupon rates may change periodically.
See Notes to Financial Statements
<PAGE>
Bond Portfolio for Endowments, Inc.
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
at January 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C>
Assets:
Investment securities at market
(cost: $40,800,980) $41,969,162
Cash 600,708
Receivables for-
Sales of investments $ 626
Accrued interest 852,721 853,347
---------------- -------------
43,423,217
Liabilities:
Payables for-
Purchases of investments 500,000
Management services 15,182
Accrued expenses 11,119 526,301
---------------- -------------
Net Assets at January 31, 1996-
Equivalent to $17.40 per share on
2,464,854 shares of $1 par value
capital stock outstanding (authorized
capital stock - 5,000,000 shares) $42,896,916
=============
Statement of Operations
for the six months ended January 31, 1996
Investment Income:
Interest income $ 1,733,616
Expenses:
Management services fee $110,931
Custodian fee 1,450
Registration statement and prospectus 10,704
Auditing fees 17,000
Legal fees 6,014
Taxes other than federal income tax 30,691
Other expenses 9,408
----------------
Total expenses before fee waiver 186,198
Fee waiver 21,113 165,085
---------------- -------------
Net investment income 1,568,531
-------------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 158,776
Net change in unrealized appreciation
(depreciation) on investments:
Beginning of period (205,230)
End of period 1,168,182
----------------
Net unrealized appreciation on
investments 1,373,412
-------------
Net realized gain and unrealized
appreciation on investments 1,532,188
-------------
Net Increase in Net Assets Resulting
from Operations $3,100,719
=============
Statement of Changes in Net Assets
Six
months ended Year ended
1/31/96 7/31/95
Operations:
Net investment income $ 1,568,531 $ 3,372,869
Net realized gain (loss) on investments 158,776 (339,552)
Net unrealized appreciation on investments 1,373,412 381,338
---------------- -------------
Net increase in net assets resulting
from operations 3,100,719 3,414,655
---------------- -------------
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income (1,603,016) (3,338,883)
Distributions from net realized
gain on investments - (191,002)
---------------- -------------
Total dividends and distributions (1,603,016) (3,529,885)
---------------- -------------
Capital Share Transactions:
Proceeds from shares sold:
68,818 and 214,880
shares, respectively 1,174,967 3,539,415
Proceeds from shares issued in
reinvestment of net investment income
dividends and distributions of net
realized gain on investments:
51,484 and 130,272 shares,
respectively 872,422 2,134,210
Cost of shares repurchased:
262,198 and 484,790
shares, respectively (4,482,279) (8,030,465)
---------------- -------------
Net decrease in net assets resulting
from capital share transactions (2,434,890) (2,356,840)
---------------- -------------
Total Decrease in Net Assets (937,187) (2,472,070)
Net Assets:
Beginning of period 43,834,103 46,306,173
---------------- -------------
End of period (including undistributed
net investment income: $275,351 and
$309,836, respectively) $42,896,916 $43,834,103
================ =============
</TABLE>
See Notes to Financial Statements
<PAGE>
Bond Portfolio for Endowments, Inc.
Notes to Financial Statements
1. Bond Portfolio for Endowments, Inc. (the "fund") is registered under the
Investment Company Act of 1940 as an open-end, diversified management
investment company. The fund seeks to provide as high a level of current income
as is consistent with the preservation of capital through investments in
fixed-income securities. The following paragraphs summarize the significant
accounting policies consistently followed by the fund in the preparation of its
financial statements:
Bonds and notes are valued at prices obtained from a bond-pricing service
provided by a major dealer in bonds, when such prices are available; however,
in circumstances where the investment adviser deems it appropriate to do so,
such securities will be valued at the mean of their representative quoted bid
and asked prices or, if such prices are not available, at prices for securities
of comparable maturity, quality, and type. Short-term securities with original
or remaining maturities in excess of 60 days are valued at the mean of their
quoted bid and asked prices. Short-term securities with 60 days or less to
maturity are valued at amortized cost, which approximates market value.
Securities for which market quotations are not readily available are valued at
fair value as determined in good faith by the Valuation Committee of the Board
of Directors.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. Realized gains
and losses from securities transactions are reported on an identified cost
basis. Interest income is reported on the accrual basis. Discounts on
securities purchased are amortized over the life of the respective securities.
The fund does not amortize premiums on securities purchased. Dividends and
distributions paid to shareholders are recorded on the ex-dividend date.
Shares of the fund may be owned only by organizations exempt from federal
income taxation under Section 501(c)(3) of the Internal Revenue Code. The fund
itself is exempt from federal taxation under Section 501(c)(2) of the Internal
Revenue Code.
Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
The custodian fee of $1,450 was paid by these credits rather than in cash.
2. It is the fund's policy to continue to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its net investment income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision is
required.
As of January 31, 1996, net unrealized appreciation on investments for book
and federal income tax purposes aggregated $1,168,182, of which $1,347,363
related to appreciated securities and $179,181 related to depreciated
securities. There was no difference between book and tax realized gains on
securities transactions for the six months ended January 31, 1996. At the
beginning of the fiscal year the fund had available capital loss carryforwards
totaling $449,705. During the six months ended January 31, 1996, the fund
utilized $158,776 of such losses to offset, for tax purposes, capital gains
realized. The fund has available at January 31, 1996 a net capital loss
carryforward totaling $290,929, which may be used to offset capital gains
realized during subsequent years through July 31, 2003. It is the intention of
the fund not to make distributions from capital gains until the capital loss
carryforward is utilized. The cost of portfolio securities for book and federal
income tax purposes was $40,800,980 at January 31, 1996.
3. The fee of $110,931 for management services was paid pursuant to an
agreement with Capital Research and Management Company (CRMC), with which
certain officers and Directors of the fund are affiliated. The Investment
Advisory and Service Agreement provides for monthly fees, accrued daily, based
on an annual rate of 0.50% of the first $150 million of average net assets and
0.40% of such assets in excess of $150 million. The Investment Advisory and
Service Agreement provides for a fee reduction to the extent the fund's annual
ordinary operating expenses exceed 1.50% of the first $30 million of the
average net assets of the fund and 1.00% of the average net assets in excess
thereof. Expenses which are not subject to this limitation are interest,
taxes, and extraordinary expenses. During the six months ended January 31,
1996, no such fee reduction was required.
Effective December 1, 1995, CRMC has voluntarily agreed to waive its
management services fees to the extent necessary to ensure that the fund's
annual expenses do not exceed 0.75% of average net assets. Fee reductions were
$21,113 for the six months ended January 31, 1996.
No fees were paid by the fund to its officers and Directors.
4. As of January 31, 1996, accumulated net realized loss on investments was
$290,929 and additional paid-in capital was $39,279,458.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $10,102,982 and $13,395,308, respectively, during the
six months ended January 31, 1996.
<PAGE>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
PER-SHARE DATA AND RATIOS
<TABLE>
<CAPTION>
Year
Six ended
months July 31
ended ------ ------ ------ ------ ------
1/31/96 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $16.82 $16.86 $19.66 $19.44 $17.76 $17.50
------ ------ ------ ------ ------ ------
Income from Investment Operations
Net investment income .61 1.26 1.32 1.49 1.47 1.49
Net realized and unrealized
gain (loss) on investments .59 .01 (1.51) .64 1.70 .28
------ ------ ------ ------ ------ ------
Total income from investment 1.20 1.27 (.19) 2.13 3.17 1.77
operations
------ ------ ------ ------ ------ ------
Less Distributions:
Dividends from net investment income (.62) (1.24) (1.35) (1.48) (1.49) (1.51)
Distributions from net realized - (.07) (1.26) (.43) - -
gains
------ ------ ------ ------ ------ ------
Total distributions (.62) (1.31) (2.61) (1.91) (1.49) (1.51)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period $17.40 $16.82 $16.86 $19.66 $19.44 $17.76
====== ====== ====== ====== ====== ======
Total Return 7.27%/1/ 7.97% (1.44)% 11.74% 18.69% 10.78%
Ratios/Supplemental Data:
Net assets, end of period (in $43 $44 $46 $67 $65 $46
millions)
Ratio of expenses to average net .37%/1/ /2/ .76% .77% .65% .68% .68%
assets
Ratio of net income to average net 3.56%/1/ 7.52% 6.99% 7.69% 8.04% 8.76%
assets
Portfolio turnover rate 24.59%/1/ 69.22% 82.12% 35.97% 63.30% 54.86%
</TABLE>
/1/ Based on operations for the period shown and, accordingly, not
representative of a full year's operations.
/2/ Had CRMC not waived management services fees, the fund's expense ratio
would have been .42%.
<PAGE>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
RESULTS OF ANNUAL MEETING OF SHAREHOLDERS HELD NOVEMBER 16, 1995
<TABLE>
<CAPTION>
<S> <C>
Shares Outstanding on September 27, 1995 (record date) 2,649,293
Shares Voting on November 16, 1995 2,052,721 (77.5%)
</TABLE>
ELECTION OF DIRECTORS:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Percent of Percent of
Votes Shares Votes Shares
Director For Voting For Withheld Withheld
Robert B. Egelston 2,052,721 100% 0 0%
Frank L. Ellsworth 2,052,721 100 0 0
Steven D. Lavine 2,052,721 100 0 0
Patricia A. McBride 2,052,721 100 0 0
John R. Metcalf 2,052,721 100 0 0
Charles R. Redmond 2,052,721 100 0 0
Thomas E. Terry 2,052,721 100 0 0
Robert C. Ziebarth 2,052,721 100 0 0
</TABLE>
REDUCTION OF AUTHORIZED CAPITAL STOCK:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Percent of Percent of Percent of
Votes Shares Votes Shares Shares
For Voting For Against Voting Against Abstentions Abstaining
Reduction of the authorized
shares to 5,000,000 shares 1,926,765 93.9% 0 0% 125,956 6.1%
</TABLE>
RATIFICATION OF AUDITORS:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Percent of Percent of Percent of
Votes Shares Votes Shares Shares
For Voting For Against Voting Against Abstentions Abstaining
Deloitte & Touche LLP 1,953,161 95.1% 0 0% 99,560 4.9%
</TABLE>
<PAGE>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of
Bond Portfolio for Endowments, Inc.:
We have audited the accompanying statement of assets and liabilities of Bond
Portfolio for Endowments, Inc. (the "fund"), including the schedule of
portfolio investments, as of January 31, 1996, and the related statement of
operations for the six months then ended, the statement of changes in net
assets for the six months then ended and for the year ended July 31, 1995, and
the per-share data and ratios for the six months ended January 31, 1996 and for
each of the five years in the period ended July 31, 1995. These financial
statements and the per-share data and ratios are the responsibility of the
fund's management. Our responsibility is to express an opinion on these
financial statements and the per-share data and ratios based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the per-share
data and ratios are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of securities owned
at January 31, 1996 by correspondence with the custodian and brokers; where
replies were not recieved from brokers, we performed other procedures. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and the per-share data and ratios
referred to above present fairly, in all material respects, the financial
position of Bond Portfolio for Endowments, Inc. at January 31, 1996, the
results of its operations for the six months then ended, the changes in its net
assets for the six months then ended and for the year ended July 31, 1995, and
the per-share data and ratios for the six months ended January 31, 1996 and for
each of the five years ended July 31, 1995, in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
Los Angeles, California
February 21, 1996
<PAGE>
ENDOWMENTS, INC.
BOND PORTFOLIO FOR ENDOWMENTS, INC.
BOARD OF DIRECTORS
ROBERT B. EGELSTON, Los Angeles, California
Chairman of the Board and Chief Executive Officer of the funds
Former Chairman of the Board,
The Capital Group Companies, Inc.
FRANK L. ELLSWORTH, Ph.D., Los Angeles, California
President, Independent Colleges of Southern California
STEVEN D. LAVINE, Ph.D., Los Angeles, California
President, California Institute of the Arts
PATRICIA A. McBRIDE, Dallas, Texas
Chief Financial Officer, Kevin L. McBride, D.D.S., Inc.
JOHN R. METCALF, San Francisco, California
Private investor; former Vice President,
Alexander & Alexander, Inc.
CHARLES R. REDMOND, Los Angeles, California
Chairman, Pfaffinger Foundation;
former President and Chief Executive Officer,
Times Mirror Foundation;
former Executive Vice President and Member of the
Management Committee, The Times Mirror Company
THOMAS E. TERRY, Los Angeles, California
President of the funds
Consultant; former Vice President and Secretary,
Capital Research and Management Company
ROBERT C. ZIEBARTH, Dover, Massachusetts
Management Consultant, Ziebarth Company
OTHER OFFICERS
ABNER D. GOLDSTINE, Los Angeles, California
Senior Vice President of the funds
Senior Vice President and Director,
Capital Research and Management Company
GEORGE A. MILLER, San Francisco, California
Senior Vice President of the funds
Senior Vice President and Director,
Capital Research and Management Company
ROBERT G. O'DONNELL, San Francisco, California
Senior Vice President of the funds
Senior Vice President and Director,
Capital Research and Management Company
STEVEN N. KEARSLEY, Brea, California
Vice President and Treasurer of the funds
Vice President and Treasurer,
Capital Research and Management Company
LISA G. HATHAWAY, Los Angeles, California
Assistant Vice President of the funds
Assistant Vice President -- Fund Business Management Group,
Capital Research and Management Company
LOUISE M. PESCETTA, San Francisco, California
Assistant Vice President and Assistant Secretary of the funds
Assistant Vice President -- Fund Business Management Group,
Capital Research and Management Company
PATRICK F. QUAN, San Francisco, California
Secretary of the funds
Vice President -- Fund Business Management Group,
Capital Research and Management Company
MARY C. HALL, Brea, California
Assistant Treasurer of the funds
Senior Vice President -- Fund Business Management Group,
Capital Research and Management Company
ROBERT P. SIMMER, Norfolk, Virginia
Assistant Treasurer of the funds
Vice President -- Fund Business Management Group,
Capital Research and Management Company
OFFICE OF THE FUNDS
Four Embarcadero Center, Suite 1800
P.O. Box 7650
San Francisco, California 94120-7650
INVESTMENT ADVISER
Capital Research and Management Company
333 South Hope Street
Los Angeles, California 90071-1443
TRANSFER AGENT FOR SHAREHOLDER ACCOUNTS
American Funds Service Company
Four Embarcadero Center, Suite 1800
P.O. Box 7650
San Francisco, California 94120-7650
135 South State College Boulevard
Brea, California 92621-5804
CUSTODIAN OF ASSETS
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081-0001
COUNSEL
Morrison & Foerster LLP
345 California Street
San Francisco, California 94104-2675
INDEPENDENT AUDITORS
Deloitte & Touche LLP
1000 Wilshire Boulevard
Los Angeles, California 90017-2472
This report is for the information of shareholders of Endowments, Inc. and Bond
Portfolio for Endowments, Inc., but it may also be used as sales literature
when preceded or accompanied by the current prospectus, which gives details
about charges, expenses, investment objectives and operating policies of the
funds.
Printed in USA DT/WS/2916
(C)1996 Endowments, Inc.
(C)1996 Bond Portfolio for Endowments, Inc.
Lit. No. Endi-Bendi-013-0396 (NLS)
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