PRESIDENT'S MESSAGE
FUNDS' INVESTMENT HIGHLIGHTS
FUNDS' PORTFOLIOS
FINANCIAL INFORMATION
FINANCIAL STATEMENTS
FINANCIAL HIGHLIGHTS
NOTES TO FINANCIAL STATEMENTS
PRESIDENT'S MESSAGE
Notwithstanding recent market volatility, each of the funds in Composite
Group's equity sector produced satisfying results for the six months ended April
30, 1996.
Class A share total returns at net asset value (before the deduction of the
maximum sales charge but including reinvestment of dividends and capital gains)
were 9.30% from Bond & Stock Fund, 15.50% from Growth & Income Fund, and 14.48%
from Northwest Fund. For a more complete disclosure of performance including
returns to Class B shareholders and the effect of maximum sales charges to both
classes, please refer to the Investment Highlights section of this report.
During the past six months, there were several signs of impending
inflation. The reaction of the bond markets was predictably negative but
equities in general did not reflect the same inflationary concerns. Our analysis
suggests inflation will remain around 3% for the next year so we do not expect
it to present a problem near term. On the other hand, if conditions change,
we're confident the Federal Reserve won't hesitate to step in again and
stabilize the economy.
Portfolio management - never an easy task - will continue to be confronted
by challenges in the period ahead. Although we find some attractively priced
stocks, we believe that equity markets for the most part are priced at fairly
full valuation levels. The market is experiencing sector rotation at a somewhat
accelerated pace as evidenced by many financial, telephone, and technology
stocks moving in and out of favor. But we remain optimistic. The growth
potential of the economy coupled with ongoing significant cash flows into equity
mutual funds should provide favorable long-term market support for stocks.
[PHOTO - COMPOSITE GROUP EQUITY INVESTMENT TEAM (L to R): DAVID W. SIMPSON,
PHILIP M. FOREMAN, JEFFREY D. HUFFMAN]
In large measure, the performance of our funds will be determined by the
quality of management - the decisions to be made by the people responsible for
fund investments. Although each of our equity portfolio managers is responsible
for a specific fund, they work as a team. With fund investment objectives
uppermost in mind, they monitor economic and market conditions, immerse
themselves in relevant research, evaluate all portfolio holdings and, when
circumstances dictate, bring their recommendations for portfolio additions or
deletions to the group.
This is a process we have followed since the introduction of our first
mutual fund in 1939 - one of the first 50 in the nation. Experience has
demonstrated that forcing the shared scrutiny of a group of professionals on
securities selection generally enhances our potential for success. I'm proud of
the work of our people. Because of their efforts and those of our distributor,
assets under management in our three equity funds continue to grow and now total
nearly $600 million.
Thanks so much for your continued trust in Composite Funds.
WILLIAM G. PAPESH
PRESIDENT
<PAGE>
INVESTMENT HIGHLIGHTS
COMPOSITE BOND & STOCK FUND
THE PAST SIX MONTHS PRODUCED TWO milestones of particular interest to
investors. Although turbulent, the stock markets advanced to record highs and
bond yields retested the low levels of Autumn 1993. As shown in the chart,
Composite Bond & Stock Fund shareholders participated well in this environment.
The Fund's common stock holdings, which comprise half of the portfolio, are
companies we feel have strong financial characteristics and a favorable growth
outlook. We attempt to buy these stocks when they trade in the market at prices
which do not fully reflect their underlying value. We also hold a portion of the
Fund in convertible bonds and preferred stocks. These securities are typically
issued by smaller, faster growing companies that do not pay dividends on their
common stock. The convertible securities allow us to participate in the growth
of the company while earning a relatively high level of current income. Our bond
holdings are diversified among government bonds, corporates, and mortgage-backed
securities. We shift the allocation among these three sectors attempting to take
advantage of value disparities which arise from time to time.
The Fund's performance benefited during the period from investments in the
stocks of aerospace and defense companies. We have long considered these stocks
as representing good value - and during the period the value of our investment
in Loral Corporation was realized when it agreed to be acquired by Lockheed
Martin Corporation for a price nearly 40 percent higher than its recent trading
range. We also were pleased with the performance of Boeing Company stock which
reached a record high as investors began to see a turn in the commercial
aircraft business. In contrast, we have been disappointed generally with the
performance of our investments in natural gas companies which, despite record
demand and tight inventories, have failed to generate adequate returns to
shareholders.
Our fixed-income performance benefited from our sector allocation which
overweighed corporate bonds relative to treasury securities. The yield
differential between sectors was stable during the period enabling us to capture
the higher income generated by corporates without compromising principal. We
found the mortgage sector offering good value relative to treasuries and added
to our holdings. Our long-term outlook anticipates sluggish economic growth, low
demand for credit, and benign inflation which we expect to result in lower
interest rates. Thus, we have positioned the bond portfolio with an average
maturity that is longer than the Lehman Index.
While it is easy to be carried away in the excitement of record-breaking
new highs, we are also attuned to the risks attendant to investments in
financial assets. We attempt to mitigate the inherent risks by being well
diversified, emphasizing quality, and exercising discipline in valuing
individual securities. We believe these attributes will serve long-term
investors well under any market conditions.
FUND PERFORMANCE
PERIODS ENDED 4/30/96
- -------------------------------------------------------------------------------
SIX MONTHS
CLASS A CLASS B
SHARES SHARES
TOTAL RETURN --------- ---------
With sales charge 4.38% 4.94%
Without sales charge 9.30% 8.94%
PER SHARE
Dividends $0.269 $0.222
Capital gains $0.316 $0.316
NET ASSET VALUES
Beginning $13.48 $13.47
Ending $14.13 $14.12
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
WITH WITHOUT
CLASS A SALES SALES
SHARES CHARGE CHARGE
- ---------- -------- ---------
ONE YEAR 17.56% 23.10%
FIVE YEARS 10.65% 11.67%
TEN YEARS 9.53% 10.04%
CLASS B
SHARES
- ----------
ONE YEAR 18.16% 22.16%
LIFE OF CLASS 14.65% 15.47%
(since 3/30/94)
- --------------------------------------------------------------------------------
Reference to sales charges above based on the maximum 4.5% Initial sales charge
for class a shares or applicable class b shares contingent deferred sales
charges of 4% for one year and 2% since March 1994. Information presented
represents past performance which cannot predict future results. Investment
returns and principal values of fund shares will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
<PAGE>
COMPOSITE GROWTH & INCOME FUND
THE EQUITY MARKETS CONTINUED TO POST strong gains during the past six
months. As shown in the performance chart, Composite Growth & Income Fund
participated well in this market rally, which was fueled by Federal Reserve
discount rate cuts and by decent corporate earnings.
Through most of the period, defensive stocks (foods, drugs, finance, and
aerospace) were the best performing industries. In the past few months, however,
cyclical stocks have become the market leaders. In response, the Fund slowly
moved out of its defensive holdings throughout the period, into a more neutrally
weighted industry position between cyclical and defensive holdings.
The Fund had several holdings with particularly large gains during the
period, including Barra, Dole Foods, Nike, and First Security Corporation. The
Fund particularly benefited from the takeover of Loral Corporation by Lockheed
Martin. Lockheed took the opportunity to become the clear leader in defense
electronics. In contrast, the poor performers for the period were Burlington
Resources and Nalco Chemical. We are hopeful that the market will soon recognize
their underlying value and price these companies accordingly. As expected, most
of our holdings raised their dividends in excess of inflation in 1995.
Looking ahead, we expect the portfolio to be neutrally weighted across most
industries. The only notable overweighting is in the telephone equipment area,
where we believe capital spending will pick up now that the Telecom bill has
passed. We anticipate an environment in which economic growth picks up from its
low level early in the year. Cyclical stocks should be more attractive in this
environment.
As shareholders know, we are long-term investors. We avoid the risks
associated with trading stocks for a quick profit. Rather, we seek rewards from
the growth of the businesses in our portfolio. The Fund's investment strategy
will continue to focus on buying sound businesses when they represent good
value. Over the long term, we believe investors will be well served by our
philosophy of buying good businesses at attractive valuation levels. This
approach is at the heart of our investment philosophy-balancing risk and return
to achieve the Fund's primary objective of long-term capital growth.
FUND PERFORMANCE
PERIODS ENDED 4/30/96
- -------------------------------------------------------------------------------
SIX MONTHS
CLASS A CLASS B
SHARES SHARES
TOTAL RETURN --------- ---------
With sales charge 10.31% 11.09%
Without sales charge 15.50% 15.09%
PER SHARE
Dividends $0.122 $0.067
Capital gains $0.540 $0.540
NET ASSET VALUES
Beginning $14.65 $14.59
Ending $16.21 $16.14
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
WITH WITHOUT
CLASS A SALES SALES
SHARES CHARGE CHARGE
- ---------- -------- ---------
ONE YEAR 23.67% 29.50%
FIVE YEARS 12.65% 13.69%
TEN YEARS 10.94% 11.45%
CLASS B
SHARES
- ----------
ONE YEAR 24.46% 28.46%
LIFE OF CLASS 19.29% 20.08%
(since 3/30/94)
- --------------------------------------------------------------------------------
Reference to sales charges above based on the maximum 4.5% initial sales charge
for Class A shares or applicable Class B shares contingent deferred sales
charges of 4% for one year and 2% since March 1994. Information presented
represents past performance which cannot predict future results. Investment
returns and principal values of Fund shares will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
<PAGE>
INVESTMENT HIGHLIGHTS (CONTINUED)
COMPOSITE NORTHWEST FUND
IT HAS BEEN AN EVENTFUL SIX MONTHS FOR Composite Northwest Fund. On
December 15, 1995, shareholders approved a proposal to "de-couple" the Fund from
the Northwest 50(R) Index. Shortly thereafter a number of changes were made to
the portfolio. Twenty new companies were added, 12 positions were deleted, and
the weightings of a number of other positions were modified between December 15,
1995 and April 30, 1996. We do not anticipate adding or deleting as many stocks
during subsequent six-month periods.
As we have mentioned before, our change from a fund indexed to the
Northwest economy to a fully managed portfolio will inevitably lead to higher
turnover than in previous years. Accordingly, capital gain distributions are
also likely to be higher than in the past. Our intent is to structure a
portfolio which offers solid long-term growth opportunity. In the process,
however, we will be mindful of concerns regarding the tax consequences of
capital gain distributions.
As shown in the chart, the Fund produced positive results for the six-month
period ended April 30, 1996. The Fund's performance was led by Itron and
Advanced Technology Laboratories, which rose 103% and 81%, respectively. The
Fund continues to have significant exposure to the technology sector although
results were mixed. In addition to our two leaders, In Focus Systems (new to the
Fund) performed well and was up 54%. In contrast, Mentor Graphics, Tektronix and
Electro Scientific Industries declined 33%, 24% and 23%, respectively.
Because of earnings growth concerns, we moderately reduced exposure to the
retail industry and significantly reduced exposure to the utility industry. In
contrast, we added small positions in two real estate investment trusts
(Shurgard Storage Centers and Wellsford Residential Properties) which have
moderate growth prospects and respectable yields.
In December 1995, West One Bancorp merged with US Bancorp, reducing once
again the number of large financial institutions in the Northwest. New positions
were taken in InterWest Bancorp and First Savings Bank of Washington Bancorp,
two smaller community banks with interesting growth prospects.
Looking forward, we continue to believe that the Northwest is well
positioned for strong economic growth over the next few years. The commercial
aircraft cycle clearly is on an upswing which bodes well for Boeing as well as
its many suppliers. Technology companies, led by Microsoft and Intel, continue
to be a source of regional strength, while a variety of other industries such as
trade, agriculture, and tourism help keep the region's economy diversified.
While vulnerable to trade and natural resource disputes, we think the region has
better opportunities for growth than most other regions of the country. We hope
to participate in this growth by owning stocks of high-quality Northwest
companies.
FUND PERFORMANCE
PERIODS ENDED 4/30/96
- -------------------------------------------------------------------------------
SIX MONTHS
CLASS A CLASS B
SHARES SHARES
TOTAL RETURN --------- ---------
With sales charge 9.33% 10.01%
Without sales charge 14.48% 14.01%
PER SHARE
Dividends $0.031 -
Capital gains $0.183 $0.183
NET ASSET VALUES
Beginning $17.40 $17.31
Ending $19.68 $19.53
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
WITH WITHOUT
CLASS A SALES SALES
SHARES CHARGE CHARGE
- ---------- -------- ---------
ONE YEAR 23.31% 29.13%
FIVE YEARS 9.50% 10.50%
LIFE OF FUND 13.94% 14.50%
(since 11/24/86)
CLASS B
SHARES
- ----------
ONE YEAR 24.07% 28.07%
LIFE OF CLASS 15.42% 16.23%
(since 3/30/94)
- --------------------------------------------------------------------------------
Reference to sales charges above based on the maximum 4.5% initial sales charge
for Class A shares or applicable Class B shares contingent deferred sales
charges of 4% for one year and 2% since March 1994. Information presented
represents past performance which cannot predict future results. Investment
returns and principal values of Fund shares will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
<PAGE>
COMPOSITE
BOND &
STOCK
FUND, INC.
PORTFOLIO OF
INVESTMENTS
IN SECURITIES
APRIL 30,
1996
COMPOSITE BOND & STOCK FUND PORTFOLIO
(UNAUDITED)
PRINCIPAL MARKET
AMOUNT VALUE
- -------------- --------------
U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS-10.39%
$ 648,094 Government National Mortgage Association,
10.00%, due 08/15/2019........................ $ 711,892
6,972,035 Government National Mortgage Association,
6.50%, due 01/15/2024 to 04/15/2026........... 6,531,926
978,178 Government National Mortgage Association,
6.00%, due 01/15/2024, 01/15/2026............. 891,977
500,000 U.S. Treasury Bond, 8.375%, due 08/15/2008...... 547,812
1,000,000 U.S. Treasury Bond, 7.50%, due 11/15/2016....... 1,045,312
500,000 U.S. Treasury Bond, 7.25%, due 08/15/2022....... 510,156
500,000 U.S. Treasury Bond, 6.25%, due 08/15/2023....... 451,406
4,000,000 U.S. Treasury Bond, zero coupon, due 08/15/2012. 1,259,596
1,000,000 U.S. Treasury Note, 6.50%, due 05/15/2005....... 986,875
750,000 U.S. Treasury Note, 6.375%, due 08/15/2002...... 744,140
4,000,000 U.S. Treasury Note, 5.875%, due 11/15/2005...... 3,776,248
9,000,000 U.S. Treasury Note, 5.75%, due 08/15/2003....... 8,558,433
500,000 U.S. Treasury Bill, 7.50%, due 12/31/1996....... 506,563
--------------
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY
OBLIGATIONS (cost $27,295,141)................ 26,522,336
--------------
COLLATERALIZED MORTGAGE OBLIGATIONS-1.91%
1,250,000 DLJ Mortgage Acceptance Corp., 1993-M17, 7.35%,
due 12/18/2003 .............................. 1,206,114
1,000,000 Federal Home Loan Mortgage Corporation -
CMO PAC-1(11) 1311H, 7.50%, due 07/15/2020.... 1,007,570
2,000,000 Federal Home Loan Mortgage Corporation -
GNMA PAC-1(11) 2E, 6.85%, due 07/25/2018...... 1,965,060
332,989 MDC Mortgage Funding Corporation - PAC-P3,
8.20%, due 11/20/2017......................... 334,132
83,707 Merrill Lynch Mortgage Investors, Inc., 1988-H,
9.70%, due 06/15/2008 ........................ 85,534
166,942 Merrill Lynch Mortgage Investors, Inc., 1988-P,
10.05%, due 12/15/2008 ........................ 181,215
100,553 Shearson Lehman Series U, 8.75%,
due 08/27/2017................................ 101,049
--------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(cost $4,842,603) ........................... 4,880,674
--------------
CORPORATE BONDS-16.66%
NON-CONVERTIBLE CORPORATE BONDS-10.85%
AEROSPACE/DEFENSE - 0.90%
1,000,000 Boeing Company, 8.75%, due 08/15/2021............ 1,131,366
1,200,000 Loral Corporation, 7.625%, due 06/15/2025........ 1,168,834
--------------
2,300,200
--------------
BANK/FINANCE - 2.24%
$1,000,000 Bank of New York, 7.875%, due 11/15/2002......... $ 1,042,361
1,250,000 First Nationwide, 10.00%, due 10/01/2006......... 1,402,554
1,000,000 Franchise Finance Corp. of America, 7.00%,
due 11/30/2000................................ 974,489
1,000,000 Franchise Finance Corp. of America, 7.875%,
due 11/30/2005................................ 971,959
300,000 Kemper Corporation, 6.875%, due 09/15/2003....... 294,016
1,000,000 Mercantile Bank, 7.625%, due 10/15/2002.......... 1,022,727
--------------
5,708,106
--------------
BUILDING & FOREST PRODUCTS - 0.37%
1,000,000 Weyerhaeuser Company, 7.125%, due 07/15/2023..... 936,124
--------------
ELECTRICAL EQUIPMENT - 0.34%
1,000,000 Westinghouse Electric Corporation, 7.875%,
due 09/01/2023................................. 875,759
--------------
FOODS - 0.75%
750,000 Conagra, Inc., 9.75%, due 03/01/2021.............. 881,305
1,000,000 Dart & Kraft Finance, 7.75%, due 11/30/1998....... 1,026,748
--------------
1,908,053
--------------
HEALTH/MEDICAL - 0.56%
1,600,000 American Medical Association, zero coupon,
due 08/12/1997................................ 1,426,379
--------------
INSURANCE - 0.97%
1,000,000 Continental Corporation, 7.25%, due 03/01/2003.... 979,720
1,500,000 Integon Corporation, 8.00%, due 08/15/1999........ 1,506,158
--------------
2,485,878
--------------
MEDIA - 0.97%
800,000 Western Publishing, 7.65%, due 09/15/2002......... 656,000
250,000 Tele-Communications, Inc., 9.25%, due 01/15/2023.. 243,906
1,500,000 Time Warner, Inc., 9.15%, due 02/01/2023.......... 1,562,446
--------------
2,462,352
--------------
OILS - 0.45%
1,000,000 Coastal Corporation, 9.625%, due 05/15/2012....... 1,142,850
--------------
RETAIL - 0.38%
1,000,000 Price/Costco, Inc., 7.125%, due 06/15/2005........ 969,265
--------------
TRANSPORTATION - 0.51%
1,200,000 Burlington Northern, 8.75%, due 02/25/2022........ 1,309,391
--------------
UTILITIES-ELECTRIC - 1.39%
1,000,000 Commonwealth Edison 1st Mortgage, 9.375%,
due 02/15/2000................................ 1,072,272
1,000,000 Ohio Edison 1st Mortgage, 8.75%,
due 02/15/1998............. .................. 1,030,579
500,000 Public Service Company of New Hampshire, 9.17%,
due 05/15/1998 ............................... 519,255
350,000 Texas Utilities Electric Company, 9.70%,
due 03/01/2002................................ 391,815
500,000 Texas Utilities Electric Company, 9.50%,
due 08/01/1999................................ 536,846
--------------
3,550,767
--------------
UTILITIES-GAS & ELECTRIC - 1.02%
$1,100,000 Niagara Mohawk Power, 9.50%, due 06/01/2000....... $ 1,091,754
500,000 Niagara Mohawk Power, 8.77%, due 01/01/2018....... 428,345
1,000,000 System Energy Resources, 11.375%, due 09/01/2016.. 1,080,336
--------------
2,600,435
--------------
TOTAL NON-CONVERTIBLE CORPORATE BONDS
(cost $28,043,426).............................. 27,675,559
--------------
CONVERTIBLE CORPORATE BONDS-5.81%
BANK/FINANCE - 1.29%
1,300,000 Legg Mason, Inc., 5.25%, due 05/01/2003........... 1,478,750
1,715,000 Liberty Property Trust, 8.00%, due 07/01/2001..... 1,809,325
--------------
3,288,075
--------------
CONSUMER PRODUCTS - 0.27%
1,000,000 Bell Sports Corporation, 4.25%,
due 11/15/2000................................. 687,500
--------------
HEALTH & MEDICAL - 0.53%
1,250,000 Tenet Healthcare Corporation, 6.00%,
due 12/01/2005................................. 1,350,000
--------------
MEDIA - 0.45%
3,200,000 Time Warner, Inc., zero coupon, due 12/17/2012.... 1,144,000
--------------
RETAIL SALES - 0.48%
1,300,000 Proffitt's, Inc., 4.75%, due 11/01/2003........... 1,222,000
--------------
TECHNOLOGY/ELECTRONICS - 0.99%
2,200,000 EMC Corporation, 4.25%, due 01/01/2001............ 2,524,500
--------------
TEMPORARY SERVICES - 0.51%
1,000,000 Olsten Corporation, 4.875%, due 05/15/2003........ 1,322,500
--------------
TRANSPORTATION & EQUIPMENT - 1.29%
1,670,000 Airborne Freight Corporation, 6.75%,
due 08/15/2001................................ 1,667,912
1,500,000 Varlen Corporation, 6.50%,
due 06/01/2003................................ 1,623,750
--------------
3,291,662
--------------
TOTAL CONVERTIBLE CORPORATE BONDS
(cost $13,975,849)............................. 14,830,237
--------------
TOTAL CORPORATE BONDS (cost $42,019,275).......... 42,505,796
--------------
FOREIGN OBLIGATIONS-1.98%
500,000 Empressa La Moderna, 10.25%, due 11/12/1997....... 507,140
1,400,000 Fomento Economico Mexicano SA, 9.50%,
due 07/22/1997................................ 1,414,321
1,000,000 Province of Alberta, 9.20%, due 11/01/1997........ 1,046,050
1,000,000 Province of Manitoba, 9.00%, due 12/15/2000....... 1,091,670
1,500,000 United Mexican States, Series A, 6.25%,
due 12/31/2019................................ 999,375
--------------
TOTAL FOREIGN OBLIGATIONS (cost $4,667,829)....... 5,058,556
--------------
MARKET
SHARES COMMON STOCKS-53.16% VALUE
---------- AEROSPACE/DEFENSE - 3.39% --------------
30,000 Boeing Company.................................... $ 2,463,750
25,000 Lockheed Martin Corporation....................... 2,015,625
80,000 Loral Space & Communications...................... 1,150,000
60,000 Raytheon Company.................................. 3,037,500
--------------
8,666,875
--------------
BANK/FINANCE - 4.98%
125,000 Federal National Mortgage Association............. 3,828,125
60,000 Mellon Bank Corporation........................... 3,225,000
35,000 J. P. Morgan & Company, Inc. .................... 2,944,375
75,000 Norwest Corporation............................... 2,709,375
--------------
12,706,875
--------------
BEVERAGES - 0.86%
65,000 Seagram Company, Ltd. ............................ 2,201,875
--------------
BUILDING AND FOREST PRODUCTS - 1.96%
50,000 Rayonier, Inc. ................................... 1,793,750
65,000 Weyerhaeuser Company.............................. 3,217,500
--------------
5,011,250
--------------
CHEMICALS - 1.08%
90,000 Nalco Chemical Company............................ 2,745,000
--------------
CONSUMER NON-DURABLES/SERVICES - 3.06%
30,000 Nike, Inc......................................... 2,625,000
43,000 Proctor & Gamble Company.......................... 3,633,500
160,000 Stride Rite Corporation........................... 1,540,000
--------------
7,798,500
--------------
ELECTRONICS/GENERAL - 2.86%
30,000 General Electric Company.......................... 2,325,000
30,000 Hewlett-Packard Company........................... 3,176,250
45,500 Tektronix, Inc. .................................. 1,802,938
--------------
7,304,188
--------------
ELECTRONICS-SEMICONDUCTORS/COMPONENTS - 1.32%
55,000 Motorola, Inc. ................................... 3,368,750
--------------
FOODS - 2.11%
15,000 Campbell Soup Company............................. 937,500
45,000 Dole Food Company................................. 1,800,000
45,000 Sara Lee Corporation.............................. 1,395,000
39,500 Supervalu, Inc. .................................. 1,264,000
--------------
5,396,500
--------------
HEALTH AND MEDICAL - 6.46%
60,000 Abbott Laboratories.............................. 2,437,500
70,000 Bausch & Lomb, Inc. ............................. 2,791,250
70,000 Baxter International, Inc. ...................... 3,097,500
80,000 Caremark International, Inc.*.................... 2,210,000
30,000 Johnson & Johnson................................ 2,775,000
18,615 Manor Care, Inc.................................. 746,927
40,000 Merck & Company, Inc............................. 2,420,000
--------------
16,478,177
--------------
INDUSTRIAL PRODUCTS/SERVICES - 1.83%
80,000 Crane Company.................................... $ 3,320,000
29,900 GATX Corporation................................. 1,345,500
--------------
4,665,500
--------------
INSURANCE - 1.56%
20,000 American International Group, Inc. .............. 1,827,500
15,000 General Re Corporation........................... 2,143,125
--------------
3,970,625
--------------
MINING - 1.15%
40,000 Phelps Dodge Corporation......................... 2,940,000
--------------
NATURAL GAS & OILS - 4.72%
25,000 Atlantic Richfield Company....................... 2,943,750
40,000 Burlington Resources, Inc. ...................... 1,490,000
25,000 Mobil Corporation................................ 2,875,000
50,000 Occidental Petroleum Corporation................. 1,287,500
43,200 Shell Transport & Trading Company,
American Depository Receipt .................. 3,456,000
--------------
12,052,250
--------------
RAILROADS - 0.93%
35,000 Union Pacific Corporation........................ 2,384,375
--------------
REAL ESTATE INVESTMENT TRUSTS - 7.06%
50,000 BRE Properties, Inc. ............................ 1,768,750
50,000 Developers Diversified Realty Corporation........ 1,456,250
62,500 Duke Realty Investments, Inc. ................... 1,851,562
95,000 First Industrial Realty Trust.................... 2,268,125
50,000 Health Care Property Investors, Inc.............. 1,575,000
52,500 Hospitality Properties Trust..................... 1,338,750
100,000 Nationwide Health Properties, Inc. .............. 1,987,500
85,000 Shurgard Storage Centers, Inc. .................. 2,178,125
100,000 United Dominion Realty Trust..................... 1,425,000
100,000 Wellsford Residential Property Trust............. 2,175,000
-------------
18,024,062
-------------
TOBACCO - 1.67%
24,000 Phillip Morris Companies, Inc.................... 2,163,000
70,000 RJR Nabisco Holdings Corporation................. 2,091,250
-------------
4,254,250
-------------
UTILITIES-GAS & ELECTRIC - 0.85%
45,300 DPL, Inc........................................ 1,036,238
31,500 Nipsco Industries, Inc. ........................ 1,130,062
-------------
2,166,300
-------------
UTILITIES-TELECOMMUNICATIONS - 5.31%
55,000 AT&T Corporation................................ 3,368,750
30,000 Alltel Corporation.............................. 986,250
45,000 Ameritech Corporation........................... 2,626,875
30,000 Century Telephone Enterprise.................... 982,500
80,900 Frontier Corporation............................ 2,558,462
50,000 GTE Corporation................................. 2,168,750
50,000 Lincoln Telecommunications Company.............. 850,000
-------------
13,541,587
-------------
TOTAL COMMON STOCKS (cost $100,606,725)......... 135,676,939
--------------
CONVERTIBLE PREFERRED STOCKS-4.74%
CAPITAL GOODS - 0.64%
30,000 GATX Corporation, Series A...................... $ 1,635,000
---------------
HEALTH & MEDICAL - 0.70%
65,000 FHP International Corporation, Series A......... 1,779,375
---------------
INDUSTRIAL PRODUCTS/SERVICES - 0.54%
30,000 Southdown, Inc., Series D....................... 1,391,250
---------------
INSURANCE - 1.90%
39,200 Integon Corporation............................. 2,239,300
35,000 Penncorp Financial Group........................ 2,607,500
---------------
4,846,800
---------------
NATURAL GAS PIPELINES - 0.96%
30,000 Williams Companies.............................. 2,437,500
---------------
TOTAL CONVERTIBLE PREFERRED STOCK
(cost $10,428,266)............................ 12,089,925
---------------
REPURCHASE AGREEMENT-9.40%
PRINCIPAL
AMOUNT
- ------------
$23,993,000 Repurchase agreement with First Boston, collateralized by a
U.S. Treasury Note, in a joint trading account at 5.25% dated
04/30/1996, due 05/01/1996 with a maturity value of
$23,996,499 (cost $23,993,000).................. 23,993,000
---------------
TOTAL INVESTMENTS (cost $213,852,839)........... 250,727,226
Other assets ($5,346,276)
less liabilities ($850,067)................ 4,496,209
---------------
NET ASSETS...................................... $255,223,435
---------------
* Non-income producing security
FEDERAL INCOME TAX INFORMATION:
Net unrealized appreciation of investments at April 30, 1996, of $36,851,528,
based on aggregate cost of $213,875,698, was composed of gross appreciation of
$39,603,377 for investments having an excess of value over cost and gross
depreciation of $2,751,849 for investments having an excess of cost over value.
OTHER INFORMATION:
Purchases and sales (including maturities and principal repayments) of
investment securities, other than short-term investments, aggregated $65,663,972
and $65,046,858, respectively, for the six-month period ended April 30, 1996,
including purchases and sales of U.S. government securities of $20,519,193 and
$11,988,360, respectively.
See accompanying notes to financial statements.
<PAGE>
COMPOSITE
GROWTH &
INCOME
FUND
PORTFOLIO OF
INVESTMENTS
IN SECURITIES
APRIL 30,
1996
COMPOSITE GROWTH & INCOME FUND
PORTFOLIO (UNAUDITED)
PRINCIPAL MARKET
AMOUNT VALUE
- -------------- ------------
U.S.TREASURY BOND - 0.93%
$1,800,000 6.25%, due 08/15/2023 (cost $1,640,456) ........... $ 1,625,062
------------
CONVERTIBLE CORPORATE BONDS-1.21%
COMMUNICATIONS - 0.09%
125,000 LDDS Communications, Inc. 5.00%, due 08/15/2003 ... 158,438
------------
RETAIL - 0.62%
1,245,000 Michael Stores, 4.75%, due 01/15/2003.............. 1,083,150
------------
TRANSPORTATION & EQUIPMENT - 0.50%
870,000 Airborne Freight Corporation, 6.75%,
due 08/15/2001................................. 868,912
------------
TOTAL CONVERTIBLE CORPORATE BONDS (cost $2,080,425) 2,110,500
------------
COMMON STOCKS-95.45%
AEROSPACE/DEFENSE - 6.46%
SHARES
--------
37,000 Boeing Company**................................... 3,038,625
51,100 Lockheed Martin Corporation........................ 4,119,938
137,950 Loral Space & Communications....................... 1,983,031
41,940 Raytheon Company................................... 2,123,213
------------
11,264,807
------------
BANK/FINANCE - 10.49%
2,500 California Bancshares, Inc......................... 74,375
42,100 Federal Home Loan Mortgage Corporation............. 3,510,088
33,500 First Security Corporation......................... 845,875
21,600 Franklin Resources, Inc............................ 1,236,600
41,100 J P Morgan and Company, Inc........................ 3,457,538
56,352 Legg Mason, Inc.................................... 1,620,120
45,007 Mellon Bank Corporation............................ 2,419,126
80,362 Norwest Corporation................................ 2,903,077
62,169 U.S. Bancorp Oregon................................ 2,012,721
10,000 Washington Federal, Inc............................ 210,000
-------------
18,289,520
-------------
BEVERAGES - 2.36%
32,800 PepsiCo, Inc....................................... 2,082,800
60,000 Seagram Company, Ltd. ............................. 2,032,500
-------------
4,115,300
-------------
BUILDING AND FOREST PRODUCTS - 2.48%
57,200 Rayonier, Inc...................................... 2,052,050
46,000 Weyerhaeuser Company............................... 2,277,000
-------------
4,329,050
-------------
COMPUTER SYSTEMS & SOFTWARE - 5.85%
104,050 Barra, Inc.*....................................... $ 3,459,662
35,222 General Motors Class E............................. 1,985,640
31,000 Microsoft Corporation*............................. 3,514,625
84,650 Sequent Computer Systems, Inc.*.................... 1,238,006
-------------
10,197,933
-------------
CONSUMER DURABLES - 2.16%
138,083 Castle & Cooke, Inc.*.............................. 2,243,849
58,000 Fleetwood Enterprises.............................. 1,522,500
-------------
3,766,349
-------------
CONSUMER NON-DURABLES/SERVICES - 5.72%
60,500 Alberto Culver Company, Class A.................... 2,041,875
29,000 Colgate Palmolive Company.......................... 2,222,125
68,000 Kimberly Clark Mexican, American Depository Receipt 2,490,500
15,000 Nike, Inc., Class B................................ 1,312,500
22,500 Proctor and Gamble Company......................... 1,901,250
-------------
9,968,250
-------------
ELECTRONICS/GENERAL - 6.34%
33,700 Arrow Electronics, Inc.* .......................... 1,689,212
54,400 DSC Communications Corporation*.................... 1,713,600
42,775 Emerson Electric Company........................... 3,577,059
28,000 General Electric Company........................... 2,170,000
18,000 Hewlett-Packard Company............................ 1,905,750
-------------
11,055,621
-------------
ELECTRONICS - SEMICONDUCTORS/COMPONENTS - 3.72%
23,400 Intel Corporation.................................. 1,585,350
30,000 Lattice Semiconductor Corporation*................. 982,500
64,000 Motorola, Inc...................................... 3,920,000
-------------
6,487,850
-------------
FOODS - 2.53%
29,500 Campbell Soup Company.............................. 1,843,750
64,050 Dole Food Company.................................. 2,562,000
-------------
4,405,750
-------------
HEALTH AND MEDICAL - 10.58%
68,500 Abbott Laboratories................................ 2,782,812
42,250 Bausch & Lomb, Inc................................. 1,684,719
91,668 Caremark International, Inc........................ 2,532,328
74,600 FHP International Corporation*..................... 2,200,700
21,000 Forest Laboratories*............................... 968,625
24,500 Johnson and Johnson................................ 2,266,250
94,015 Manor Care, Inc.................................... 3,772,352
36,925 Merck and Company, Inc............................. 2,233,963
-------------
18,441,749
-------------
INDUSTRIAL PRODUCTS/SERVICES - 4.00%
64,300 Crane Company...................................... 2,668,450
92,924 Donaldson Company, Inc............................. 2,439,255
121,900 Hanson Trust Ads, American Depository Receipt...... 1,843,738
-------------
6,981,443
-------------
INSURANCE - 3.06%
24,532 American International Group, Inc.................. $ 2,241,611
72,900 Integon Corporation................................ 1,403,325
55,000 Penncorp Financial Group, Inc...................... 1,684,375
-------------
5,329,311
-------------
MACHINERY - DIVERSIFIED - 1.37%
14,100 Applied Materials, Inc.*........................... 564,000
47,000 Deere & Company.................................... 1,827,125
-------------
2,391,125
-------------
MEDIA - 2.69%
45,750 Dun & Bradstreet Corporation....................... 2,785,031
47,700 Viacom Inc., Class A*.............................. 1,908,000
-------------
4,693,031
-------------
NATURAL GAS/OILS - 7.89%
70,635 Burlington Resources, Inc.......................... 2,631,154
20,930 Exxon Corporation.................................. 1,779,050
18,100 Mobil Corporation.................................. 2,081,500
87,000 Occidental Petroleum Corporation................... 2,240,250
45,000 Phillips Petroleum Company......................... 1,867,500
10,100 Royal Dutch Petroleum Company...................... 1,446,825
21,450 Shell Transport & Trading Company,
American Depository Receipt .................... 1,716,000
-------------
13,762,279
-------------
RAILROADS - 2.18%
55,900 Union Pacific Corporation.......................... 3,808,188
-------------
REAL ESTATE INVESTMENT TRUSTS - 3.85%
42,913 Bank of America Realty............................. 1,518,047
41,400 Health Care Property Investors, Inc................ 1,304,100
40,500 Nationwide Health Properties, Inc.................. 804,938
120,300 Shurgard Storage Centers, Inc...................... 3,082,688
-------------
6,709,773
-------------
RETAIL SALES - 2.00%
54,500 Lowe's Companies................................... 1,764,437
59,800 Fred Meyer, Inc., Class A*......................... 1,719,250
-------------
3,483,687
-------------
STEEL & IRON - 0.94%
80,600 Worthington Industries............................. 1,642,225
-------------
TOBACCO - 2.00%
19,000 Phillip Morris Companies, Inc...................... 1,712,375
59,400 RJR Nabisco Holdings Corporation*.................. 1,774,575
-------------
3,486,950
-------------
TRANSPORTATION & EQUIPMENT - 1.60%
94,050 Expeditors International of Washington, Inc. ..... $ 2,797,987
-------------
UTILITIES-GAS AND ELECTRIC - 0.56%
39,520 MCN Corporation.................................... 973,180
-------------
UTILITIES-TELECOMMUNICATIONS - 4.64%
57,000 AT&T Corporation................................... 3,491,250
38,000 GTE Corporation.................................... 1,648,250
97,000 Lincoln Telecommunications Company................. 1,649,000
25,900 SBC Communications, Inc............................ 1,295,000
-------------
8,083,500
-------------
TOTAL COMMON STOCKS (cost $123,016,288)............ 166,434,858
-------------
CONVERTIBLE PREFERRED STOCKS-1.49%
CAPITAL GOODS - 0.11%
3,500 GATX Corporation, Series A......................... 190,750
-------------
INSURANCE - 1.38%
31,600 Integon Corporation................................ 1,805,150
8,000 Penncorp Financial Group........................... 596,000
-------------
2,401,150
-------------
TOTAL CONVERTIBLE PREFERRED STOCK (cost $2,417,083) 2,591,900
-------------
REPURCHASE AGREEMENT-1.76%
Principal
Amount
- --------------
$3,066,000 Repurchase agreement with First Boston, collateralized by a U.S.
Treasury Note, in a joint trading account at 5.25%,
dated 04/30/1996, due 05/01/1996 with a maturity value of
$3,066,447 (cost $3,066,000) ..................... 3,066,000
TOTAL INVESTMENTS (cost $132,220,252)............. 175,828,320
Other assets ($942,499)
less liabilities ($2,405,798).................. (1,463,299)
-------------
NET ASSETS........................................ $174,365,021
=============
*Non-income producing security
** The portfolio position subject to and the description and value of written
covered call options outstanding at April 30, 1996 were as follows:
- --------------------------------------------------------------------------------
OPTION EXPIRATION EXERCISE VALUE OF
CONTRACTS SECURITY MONTH/YEAR PRICE CALL OPTIONS
- --------------------------------------------------------------------------------
90 Boeing Company AUG/96 $90 $18,000
FEDERAL INCOME TAX INFORMATION:
Net unrealized appreciation of investments at April 30, 1996, of $43,579,029,
based on aggregate cost, including premiums received on covered call options, of
$132,231,291, was composed of gross appreciation of $44,056,101 for investments
having an excess of value over cost and gross depreciation of $477,072 for
investments having an excess of cost over value.
OTHER INFORMATION:
Purchases and sales of investment securities, other than short-term investments,
aggregated $53,285,975 and $39,730,069, respectively, during the six months
ended April 30, 1996, including purchases and sales of U.S. government
securities of $1,733,234 and $90,875.
See accompanying notes to financial statements.
<PAGE>
COMPOSITE
NORTHWEST
FUND, INC.
PORTFOLIO OF
INVESTMENTS
IN SECURITIES
APRIL 30,
1996
COMPOSITE NORTHWEST FUND PORTFOLIO
(UNAUDITED)
MARKET
SHARES VALUE
- -------------- -------------
COMMON STOCKS-97.08%
AEROSPACE/DEFENSE - 7.61%
131,138 Boeing Company................................. $ 10,769,667
83,750 Precision Castparts Corporation................ 3,632,656
--------------
14,402,323
--------------
BANK/FINANCE - 11.59%
147,400 First Savings Bank of Washington Bancorp, Inc. 2,229,425
24,302 Horizon Financial Corporation................. 303,775
85,300 Interwest Bancorp, Inc........................ 2,036,537
135,700 Safeco Corporation............................ 4,478,100
330,210 US Bancorp.................................... 10,690,549
103,927 Washington Federal, Inc. ..................... 2,182,467
--------------
21,920,853
--------------
BEVERAGES - 0.73%
59,700 Redhook Ale Brewery*.......................... 1,388,025
--------------
BUILDING AND FOREST PRODUCTS - 7.17%
21,933 Boise Cascade Corporation..................... 1,019,884
15,100 Georgia-Pacific Corporation................... 1,174,025
58,550 Longview Fibre Company........................ 1,031,944
101,288 Louisiana Pacific Corporation................. 2,544,861
89,800 Weyerhaeuser Company.......................... 4,445,100
54,500 Willamette Industries, Inc.................... 3,351,750
--------------
13,567,564
--------------
COMPUTER SYSTEMS & SOFTWARE - 13.14%
82,400 In Focus Systems*............................. 4,161,200
125,825 Microsoft Corporation*........................ 14,265,409
4,800 Radisys Corporation*.......................... 124,800
316,000 Sequent Computer Systems, Inc.*............... 4,621,500
42,900 Sierra On-Line Inc.*.......................... 1,683,825
--------------
24,856,734
--------------
CONSUMER NON-DURABLES/SERVICES - 4.94%
106,800 Nike, Inc., Class B .......................... 9,345,000
--------------
ELECTRONICS/GENERAL - 13.50%
257,000 Adaptive Solutions Inc.*...................... 1,124,375
104,000 Electro Scientific Industries*................ 2,496,000
124,100 Flir Systems Inc.*............................ 1,582,275
53,372 Fluke Corporation ............................ 2,061,494
62,800 Itron, Inc.*.................................. 3,689,500
302,900 Mentor Graphics Corporation*.................. 4,846,400
59,600 Merix Corporation*............................ 2,249,900
195,400 Planar Systems, Inc.*......................... 2,833,300
117,300 Tektronix, Inc. .............................. 4,648,013
--------------
25,531,257
--------------
ELECTRONICS - SEMICONDUCTORS/COMPONENTS - 6.67%
42,400 Intel Corporation............................. $ 2,872,600
140,000 Lattice Semiconductor Corporation............. 4,585,000
52,600 Micron Technology, Inc. ...................... 1,913,325
156,300 Triquint Semiconductor, Inc.*................. 3,243,225
--------------
12,614,150
--------------
HEALTH AND MEDICAL - 5.21%
87,900 Advanced Technology Laboratories, Inc.*....... 2,856,750
235,850 ICOS Corporation*............................. 2,078,428
144,300 Immunex Corporation*.......................... 2,254,688
121,400 Ostex International, Inc.*.................... 1,972,750
10,500 Pathogenesis Corporation*..................... 189,000
22,200 Space Labs Medical, Inc.*..................... 493,950
--------------
9,845,566
--------------
HOTELS/MOTELS - 1.11%
95,500 Red Lion Hotels, Inc.*........................ 2,101,000
--------------
INDUSTRIAL PRODUCTS/SERVICES - 0.72%
138,550 Flow International Corporation*............... 1,368,181
--------------
MINING - 1.06%
63,350 Coeur d'Alene Mines Corporation............... 1,259,081
96,350 Hecla Mining Company*......................... 746,713
--------------
2,005,794
--------------
REAL ESTATE INVESTMENT TRUST - 1.93%
70,700 Shurgard Storage Centers, Inc. ............... 1,811,688
84,300 Wellsford Residential Property Trust.......... 1,833,525
--------------
3,645,213
--------------
RETAIL SALES - 12.59%
224,200 Albertson's, Inc............................... 8,631,700
180,800 Fred Meyer, Inc.*.............................. 5,198,000
334,425 Price/Costco Inc.*............................. 6,354,075
21,241 Quality Food Centers, Inc.*.................... 552,266
113,700 Starbucks Corporation*......................... 3,084,113
--------------
23,820,154
--------------
STEEL & IRON - 1.47%
104,600 Schnitzer Steel Industries, Inc.,Class A....... 2,771,900
--------------
TRANSPORTATION AND EQUIPMENT - 7.07%
144,500 Airborne Freight Corporation................... 3,811,187
142,500 Alaska Air Group, Inc.*........................ 3,615,937
187,300 Expeditor's International of Washington, Inc. . 5,572,175
7,410 Paccar, Inc.................................... 366,795
--------------
13,366,094
--------------
UTILITIES-TELECOMMUNICATIONS - 0.57%
138,000 General Communication, Inc.*................... $ 1,069,500
--------------
TOTAL COMMON STOCKS (cost $113,413,612)........ 183,619,308
--------------
REPURCHASE AGREEMENT-3.03%
Principal
Amount
- -------------
$5,729,000 Repurchase agreement with First Boston, collateralized
by a U.S. Treasury Note, in a joint trading account at
5.25%, dated 04/30/1996, due 05/01/1996 with a
maturity value of $5,729,835 (cost $5,729,000).. 5,729,000
--------------
TOTAL INVESTMENTS (cost $119,142,612).......... 189,348,308
Other assets ($1,769,762)
less liabilities ($1,972,944)............. (203,182)
--------------
NET ASSETS..................................... $189,145,126
==============
*Non-income producing security
FEDERAL INCOME TAX INFORMATION:
Net unrealized appreciation of investments at April 30, 1996, of $70,122,896,
based on aggregate cost of $119,225,412, was composed of gross appreciation of
$72,749,314 for investments having an excess of value over cost and gross
depreciation of $2,626,418 for investments having an excess of cost over value.
OTHER INFORMATION:
Purchases and sales of investment securities, other than short-term investments,
aggregated $41,384,093 and $44,230,548, respectively, during the six months
ended April 30, 1996.
See accompanying notes to financial statements.
<PAGE>
FINANCIAL
INFORMATION
APRIL 30,
1996
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
COMPOSITE COMPOSITE COMPOSITE
BOND & STOCK GROWTH & INCOME NORTHWEST
FUND, INC. FUND FUND, INC.
-------------- --------------- ------------
<S> <C> <C> <C>
ASSETS
Investments at market (identified cost $213,852,839,
$132,220,252 and $119,142,612, respectively) $250,727,226 $175,828,320 $189,348,308
Cash.......................................... 3,331 7,870 11,842
Prepaid expense............................... 24,906 14,913 17,360
Receivable for:
Investment securities sold.................. 3,302,975 432,237 1,395,571
Interest.................................... 1,418,748 62,205 3,510
Dividends................................... 357,522 169,689 11,646
Sale of Fund's shares....................... 238,794 255,585 218,582
Expense reimbursement....................... - - 111,251
------------- --------------- --------------
Total assets.................................. 256,073,502 176,770,819 191,118,070
------------- --------------- --------------
LIABILITIES
Payable for:
Covered call options written at market
(premiums received -
$22,185).................................. - 18,000 -
Investment securities purchased............. 155,975 2,022,822 1,570,663
Repurchase of Fund's shares................. 545,930 261,272 339,193
Accrued expenses and other payables......... 148,162 103,704 63,088
------------- -------------- -------------
Total liabilities............................. 850,067 2,405,798 1,972,944
------------- -------------- -------------
NET ASSETS.................................... $255,223,435 $174,365,021 $189,145,126
============= ============== =============
COMPOSITION OF NET ASSETS
Capital stock, at par......................... $ 9,031 $ 1,076 $ 96
Additional paid-in capital.................... 204,353,717 122,735,519 109,252,412
Undistributed (overdistributed) net investment
income ..................................... 612,843 (60,906) (59,488)
Accumulated net realized gain................. 13,373,457 8,077,079 9,746,410
Net unrealized appreciation of investments.... 36,874,387 43,612,253 70,205,696
------------- -------------- -------------
$255,223,435 $174,365,021 $189,145,126
============= ============== =============
SHARES OUTSTANDING............................ 18,061,863 10,763,393 9,616,152
============= ============== =============
CLASS A SHARES:
Net asset value and redemption price per share
(net assets of $239,047,350, $158,738,808, and
$178,067,433, respectively, for 16,916,073,
9,794,996, and 9,048,822, shares outstanding,
respectively) ............................. $14.13 $16.21 $19.68
============= ============== =============
Offering price per share
(100/95.5 of net asset value per share) ... $14.80 $16.97 $20.61
============= ============== =============
CLASS B SHARES:
Net asset value, offering price and redemption
price per share (net assets of $16,176,085,
$15,626,213, and $11,077,693, respectively, for
1,145,790, 968,397, and 567,330 shares
outstanding, respectively) ................ $14.12 $16.14 $19.53
============= ============== ==============
On sales of $25,000 or more, the offering price of Class A is reduced.
A contingent deferred sales charge may be imposed on redemptions of Class B shares.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
COMPOSITE COMPOSITE COMPOSITE
BOND & STOCK GROWTH & INCOME NORTHWEST
FUND, INC. FUND FUND, INC.
------------- --------------- -------------
<S> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividends..................................................... $ 2,318,265 $ 1,568,107 $ 991,178
Interest...................................................... 3,131,388 174,872 102,005
------------- --------------- -------------
Total income.................................................... 5,449,653 1,742,979 1,093,183
------------- --------------- -------------
Expenses:
Management fees............................................... 738,017 488,507 531,643
Distribution expenses - Class A............................... 281,895 180,956 202,165
Distribution expenses - Class B............................... 53,785 57,781 41,967
Shareholder servicing......................................... 107,296 90,540 157,438
Postage, printing and office expense.......................... 72,821 63,558 95,807
Registration and filing fees.................................. 29,029 25,043 18,182
Custodial fees................................................ 16,511 15,096 12,544
Auditing and legal fees....................................... 5,251 5,066 4,319
Directors' fees............................................... 4,049 4,049 4,049
Insurance..................................................... 2,035 1,200 1,624
Expense reimbursement......................................... - - (111,260)
------------- --------------- -------------
Total expenses.................................................. 1,310,689 931,796 958,478
Fees paid indirectly............................................ (2,392) (2,246) (1,785)
------------- --------------- -------------
Net expenses.................................................... 1,308,297 929,550 956,693
------------- --------------- -------------
Net investment income........................................... 4,141,356 813,429 136,490
------------- --------------- -------------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Realized gain from investment transactions...................... 13,396,351 8,110,304 9,866,297
Unrealized appreciation of
investments during the period................................. 2,827,161 13,281,576 13,838,121
------------- --------------- --------------
Net realized and unrealized gain on investments................. 16,223,512 21,391,880 23,704,418
------------- --------------- --------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....................................... $20,364,060 $22,205,309 $23,840,908
============= =============== ==============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
COMPOSITE BOND & STOCK COMPOSITE GROWTH & COMPOSITE NORTHWEST
FUND, INC. INCOME FUND FUND, INC.
------------------------- ------------------------ ---------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR
APRIL 30, ENDED APRIL 30, ENDED APRIL 30, ENDED
1996 OCTOBER 31, 1996 OCTOBER 31, 1996 OCTOBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995 (UNAUDITED) 1995
------------- ------------ ----------- ----------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment income............. $4,141,356 $7,801,438 $ 813,429 $ 1,869,353 $ 136,490 $ 647,511
Realized gain from
investment transactions......... 13,396,351 5,091,453 8,110,304 5,167,763 9,866,297 3,535,477
Unrealized appreciation of
investments during the period... 2,827,161 27,020,438 13,281,576 15,766,081 13,838,121 26,914,344
----------- ------------ ----------- ------------ ----------- --------------
Net increase in net assets
resulting from operations....... 20,364,868 39,913,329 22,205,309 22,803,197 23,840,908 31,097,332
DIVIDENDS TO SHAREHOLDERS
From net investment income:
Class A....................... (4,290,530) (7,611,297) (1,121,678) (1,620,482) (276,035) (691,134)
Class B....................... (171,725) (142,065) (46,654) (37,057) - (1,003)
From net capital gains from
investment transactions:
Class A....................... (4,933,214) (1,345,096) (4,850,668) (3,249,511) (1,664,401) -
Class B....................... (193,701) (24,534) (350,320) (82,370) (80,343) -
NET CAPITAL SHARE
TRANSACTIONS
Class A....................... 20,068,916 (13,056,430) 13,438,433 10,857,705 (537,442) (24,088,466)
Class B....................... 8,414,889 3,253,167 5,589,662 5,910,393 2,826,153 2,995,582
------------- ------------ ------------- ------------ ------------ -------------
Total increase in net assets...... 39,259,503 20,987,074 34,864,084 34,581,875 24,108,840 9,312,311
NET ASSETS
Beginning of the period........... 215,963,932 194,976,858 139,500,937 104,919,062 165,036,286 155,723,975
------------- ------------ ------------- ------------ ------------ -------------
End of the period................. $255,223,435 $215,963,932 $174,365,021 $139,500,937 $189,145,126 $165,036,286
============= ============ ============= ============ ============ =============
UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT
INCOME AT END OF PERIOD .......... $ 612,843 $ 933,742 $ (60,906) $ 293,997 $ (59,488) $ 80,057
============ ============ ============ ============ ============ =============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
COMPOSITE BOND &
STOCK FUND, INC.
CLASS A CLASS B
------------------------------------------------------------------------ --------------------------------------
SIX MONTHS ELEVEN MONTHS YEAR SIX MONTHS YEAR MARCH 30,
ENDED ENDED ENDED ENDED ENDED 1994 TO
APRIL 30, 1996 YEARS ENDED OCTOBER 31, OCTOBER 31, NOVEMBER 30, APRIL 30, 1996 OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1995 1994 1993 1992(5) 1991 (UNAUDITED) 1995 1994(6)
--------------- ------- ------- -------- ------------ ------------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD ............. $13.48 $11.53 $12.23 $11.27 $11.01 $ 9.90 $13.47 $11.51 $11.49
--------------- -------- ------- -------- ------------ ------------- -------------- ----------- -----------
INCOME FROM
INVESTMENT
OPERATIONS
Net Investment
Income............. 0.25 0.50 0.46 0.48 0.44 0.55 0.21 0.39 0.18
Net Gains or Losses
on Securities
(both realized and
unrealized)....... 0.99 2.02 (0.57) 1.06 0.80 1.10 0.98 2.03 0.04
--------------- -------- -------- -------- ------------ ------------- -------------- ------------ ----------
Total From
Investment
Operations....... 1.24 2.52 (0.11) 1.54 1.24 1.65 1.19 2.42 0.22
--------------- -------- -------- -------- ------------ ------------- -------------- ------------ ----------
LESS DISTRIBUTIONS
Dividends
(from net investment
income).......... (0.27) (0.49) (0.44) (0.46) (0.53) (0.54) (0.22) (0.38) (0.20)
Distributions
(from capital
gains)........... (0.32) (0.08) (0.15) (0.12) (0.45) 0.00 (0.32) (0.08) 0.00
--------------- -------- -------- -------- ------------ ------------- -------------- ------------ ----------
Total
Distributions.... (0.59) (0.57) (0.59) (0.58) (0.98) (0.54) (0.54) (0.46) (0.20)
--------------- -------- -------- -------- ------------ ------------- -------------- ------------ ----------
NET ASSET VALUE,
END OF PERIOD ...... $14.13 $13.48 $11.53 $12.23 $11.27 $11.01 $14.12 $13.47 $11.51
=============== ======== ======== ======== ============ ============= ============== ============ ==========
TOTAL RETURN (1) ... 9.30% 22.55% -0.90% 13.99% 11.92% 16.96% 8.94% 21.60% 1.94%
RATIOS/SUPPLEMENTAL
DATA
Net Assets, End of Period
($1,000's)........ $239,047 $208,592 $191,615 $180,281 $102,523 $66,090 $16,176 $7,372 $3,362
Ratio of Expenses
to Average Net
Assets(2) ........ 1.08%(7) 1.02% 1.06% 1.13% 1.13%(7) 1.14% 1.84%(7) 1.84% 1.77%(7)
Ratio of Net Income
to Average Net
Assets............ 3.54%(7) 3.98% 3.97% 4.01% 4.30%(7) 4.90% 2.77%(7) 3.10% 3.22%(7)
Portfolio Turnover
Rate(3)........... 58%(7) 32% 25% 19% 15%(7) 35% 58%(7) 32% 25%
Average Commission
Paid(4)........... $0.0685 - - - - - $0.0685 - -
(1) Total return does not reflect sales charge and is not annualized.
(2) The ratio of expenses to average net assets includes expenses paid indirectly beginning in fiscal year 1995.
(3) A portfolio turnover rate is the percentage computed by taking the lesser of purchases or sales of portfolio securities
(excluding securities with a maturity date of one year or less at the time of acquisition) for a period and dividing it by the
monthly average of the market value of such securities during the period.
(4) Average commission paid beginning in fiscal year 1996.
(5) Change in Fund's fiscal year-end. See note 1.
(6) From the commencement of offering Class B shares.
(7) Annualized.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COMPOSITE GROWTH FINANCIAL HIGHLIGHTS (CONTINUED)
& INCOME
FUND
CLASS A CLASS B
---------------------------------------------------------------- ---------------------------------------
SIX MONTHS SIX MONTHS YEAR MARCH 30,
ENDED ENDED ENDED 1994 TO
APRIL 30, 1996 YEARS ENDED OCTOBER 31, APRIL 30, 1996 OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1995 1994 1993 1992 1991 (UNAUDITED) 1995 1994(5)
--------------- -------- -------- ------- ------- -------- -------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ..... $14.65 $12.71 $12.81 $12.02 $11.86 $ 9.18 $14.59 $12.68 $12.00
--------------- -------- -------- ------- ------- -------- ---------- ----------- ------------
INCOME FROM
INVESTMENT OPERATIONS
Net Investment Income... 0.09 0.22 0.18 0.21 0.29 0.29 0.04 0.11 0.05
Net Gains on
Securities (both realized
and unrealized)........ 2.13 2.31 0.85 1.10 0.80 2.69 2.12 2.31 0.69
--------------- -------- -------- -------- ------- -------- ---------- ----------- ------------
Total From Investment
Operations............ 2.22 2.53 1.03 1.31 1.09 2.98 2.16 2.42 0.74
--------------- -------- -------- -------- ------- -------- ---------- ----------- ------------
LESS DISTRIBUTIONS
Dividends
(from net investment
income)............... (0.12) (0.19) (0.18) (0.21) (0.34) (0.30) (0.07) (0.11) (0.06)
Distributions
(from capital gains)... (0.54) (0.40) (0.95) (0.31) (0.59) 0.00 (0.54) (0.40) 0.00
--------------- -------- -------- -------- ------- -------- ---------- ----------- ------------
Total Distributions... (0.66) (0.59) (1.13) (0.52) (0.93) (0.30) (0.61) (0.51) (0.06)
--------------- -------- -------- -------- ------- -------- ---------- ----------- ------------
NET ASSET VALUE,
END OF PERIOD ........... $16.21 $14.65 $12.71 $12.81 $12.02 $11.86 $16.14 $14.59 $12.68
=============== ======== ======== ======== ======= ======== ========== =========== ============
TOTAL RETURN (1) ........ 15.50% 20.87% 8.55% 11.06% 9.94% 32.69% 15.09% 19.95% 6.14%
RATIOS/SUPPLEMENTAL
DATA
Net Assets, End of Period
($1,000's)............. $158,739 $130,630 $102,837 $95,229 $81,102 $69,365 $15,626 $8,871 $2,082
Ratio of Expenses to
Average Net Assets(2) . 1.14%(6) 1.07% 1.10% 1.17% 1.10% 1.12% 1.90%(6) 1.91% 1.85%(6)
Ratio of Net Income to
Average Net Assets..... 1.10%(6) 1.62% 1.45% 1.67% 2.37% 2.73% 0.29%(6) 0.69% 0.65%(6)
Portfolio Turnover Rate(3) 51%(6) 39% 34% 54% 18% 26% 51%(6) 39% 34%
Average Commission Paid(4) $0.0686 - - - - - $0.0686 - -
(1) Total return does not reflect sales charge and is not annualized.
(2) The ratio of expenses to average net assets includes expenses paid indirectly beginning in fiscal year 1995.
(3) A portfolio turnover rate is the percentage computed by taking the lesser of purchases or sales of portfolio securities
(excluding securities with a maturity date of one year or less at the time of acquisition) for a period and dividing it by the
monthly average of the market value of such securities during the period.
(4) Average commission paid beginning in fiscal year 1996.
(5)From the commencement of offering Class B shares.
(6)Annualized.
</TABLE>
<PAGE>
COMPOSITE
NORTHWEST
FUND, INC. FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
CLASS A CLASS B
------------------------------------------------------------ -------------------------------------------
SIX MONTHS SIX MONTHS YEAR MARCH 30,
ENDED ENDED ENDED 1994 TO
APRIL 30, 1996 YEARS ENDED OCTOBER 31, APRIL 30, 1996 OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1995 1994 1993 1992 1991 (UNAUDITED) 1995 1994(5)
-------------- ------- ------ ------- -------- -------- --------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ..... $17.40 $14.30 $14.50 $14.04 $13.45 $ 8.43 $17.31 $14.28 $14.42
-------------- ------- ------ ------- -------- -------- --------------- ----------- -----------
INCOME FROM
INVESTMENT OPERATIONS
Net Investment Income... 0.02 0.07 0.08 0.07 0.08 0.07 (0.03) (0.05) (0.02)
Net Gains or Losses on
Securities (both
realized and
unrealized)............ 2.47 3.10 0.35 0.46 0.69 5.03 2.43 3.08 (0.12)
-------------- ------- ------- ------- --------- -------- --------------- ----------- -----------
Total From Investment
Operations............ 2.49 3.17 0.43 0.53 0.77 5.10 2.40 3.03 (0.14)
-------------- ------- ------- ------- --------- -------- --------------- ----------- -----------
LESS DISTRIBUTIONS
Dividends
(from net investment
income)............... (0.03) (0.07) (0.08) (0.07) (0.07) (0.08) 0.00 0.00 0.00
Distributions
(from capital gains)... (0.18) 0.00 (0.55) 0.00 (0.11) 0.00 (0.18) 0.00 0.00
-------------- ------- ------- ------- --------- -------- --------------- ----------- -----------
Total Distributions... (0.21) (0.07) (0.63) (0.07) (0.18) (0.08) (0.18) 0.00 0.00
-------------- ------- ------- ------- --------- -------- --------------- ----------- -----------
NET ASSET VALUE,
END OF PERIOD ........... $19.68 $17.40 $14.30 $14.50 $14.04 $13.45 $19.53 $17.31 $14.28
============== ======= ======= ======= ========= ======== =============== =========== ===========
TOTAL RETURN (1) ........ 14.48% 22.24% 2.97% 3.82% 5.77% 60.49% 14.01% 21.25% -0.97%
RATIOS/SUPPLEMENTAL
DATA
Net Assets, End of Period
($1,000's)............. $178,067 $157,953 $152,622 $168,840 $167,115 $98,754 $11,078 $7,083 $3,102
Ratio of Expenses to
Average Net Assets(2) . 1.09%(6) 1.10% 1.09% 1.09% 1.11% 1.21% 1.86%(6) 1.95% 1.96%(6)
Ratio of Net Income to
Average Net Assets..... 0.20%(6) 0.44% 0.51% 0.48% 0.53% 0.63% -0.60%(6) -0.45% -0.39%(6)
Portfolio Turnover Rate(3) 49%(6) 11% 11% 8% 4% 8% 49%(6) 11% 0.11%
Average Commission Paid (4) $0.0698 - - - - - $0.0698 - -
NOTE: Figures representing per-share amounts have been adjusted to retroactively reflect a 2-for-1 stock split effective
December 29, 1992.
(1) Total return does not reflect sales charge and is not annualized.
(2) Fund expenses that exceeded 1.50% of average daily net assets up to $30,000,000, and 1% of such assets over $30,000,000 were
reimbursed by the investment adviser, Composite Research & Management Co. The ratio of expenses to average net assets includes
expenses paid indirectly beginning in fiscal year 1995.
(3) A portfolio turnover rate is the percentage computed by taking the lesser of purchases or sales of portfolio securities
(excluding securities with a maturity date of one year or less at the time of acquisition) for a period and dividing it by the
monthly average of the market value of such securities during the period.
(4) Average commission paid beginning in fiscal year 1996.
(5) From the commencement of offering Class B shares.
(6) Annualized.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - ACCOUNTING POLICIES
Composite Bond & Stock Fund, Inc., Composite Equity Series, Inc. (Composite
Growth Fund, Inc. prior to February 28, 1995), and Composite Northwest Fund,
Inc. are registered under the Investment Company Act of 1940, as amended, as
open-end diversified management investment companies. Composite Growth & Income
Fund is a portfolio of Composite Equity Series, Inc.
On December 15, 1995, a special meeting of Composite Northwest Fund
shareholders approved a proposal to "decouple" the Fund from the Northwest 50
(R) Index. 4,505,086, 479,501, and 148,473 shares were used for, against, and
abstained, respectively.
The Funds offer both Class A and Class B shares. Class B shares were first
offered on March 30, 1994. The two classes of shares differ in their respective
sales charges, shareholder servicing fees, and distribution and service fees.
All shareholders bear the common expenses of the Fund pro rata, based on value
of shares outstanding, without distinction between share class. Dividends are
declared separately for each class. Neither class has preferential dividend
rights; differences in per share dividend rates are generally due to differences
in separate class expenses, including distribution and service fees.
Following is a summary of significant accounting policies, in conformity
with generally accepted accounting principles, which are consistently followed
by each Fund in the preparation of its financial statements.
a. Investment securities are stated on the basis of valuations provided by
independent pricing services, approved by the Boards of Directors, which
uses information with respect to last reported sales price for securities
traded on a national securities exchange (or reported on the National
Association of Securities Dealers Automated Quotation [NASDAQ] National
Market System) or securities traded over-the-counter, in determining value.
Investment securities with less than 60 days to maturity when purchased are
valued at amortized cost which approximates market value. Investment
securities not currently quoted as described above will be priced at fair
market value as determined in good faith in a manner prescribed by the
Boards of Directors.
b. Interest income is earned from the settlement date on securities purchased
and is recorded on the accrual basis. Dividend income is recorded on the
ex-dividend date.
c. Each Fund records dividends to shareholders on the ex-dividend date.
d. Security transactions are accounted for on the trade date (execution date
of the order to buy or sell). Realized gain or loss from security
transactions and the change in unrealized appreciation or depreciation are
determined on the basis of identified cost.
e. Each Fund complies with requirements of the Internal Revenue Code
applicable to regulated investment companies and distributes taxable income
so that no provision for federal income or excise tax is required. Income
dividends and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatment for
deferral of wash sales.
f. Custodial fees have been increased by $2,392, $2,246, and $1,785, for
Composite Bond & Stock Fund, Inc., Composite Growth & Income Fund, and
Composite Northwest Fund, Inc., respectively. Such amounts relate to
"expense offset arrangements." The Funds could have otherwise employed the
assets to produce income if they had not entered into such arrangements. In
accordance with the regulations, such amounts are added to the net
custodial fees and then reflected as a deduction, "fees paid indirectly" to
derive net expenses. There were no "expense offset arrangements" other than
custodial fees.
NOTE 2 - COVERED CALL OPTIONS WRITTEN
Each Fund may write listed covered call options in which premiums received
are recorded as a liability which is marked to market to reflect the current
value of options written. A covered call option gives the holder the right to
buy the underlying security which each Fund owns at any time during the option
period at a predetermined exercise price. When a fund writes a covered call
option, it gains income from the premium received.. The risk in writing a
covered call option is that each Fund gives up the opportunity to participate in
any increase in the price of the underlying security beyond the exercise price.
Proceeds from the call options exercised are increased by the amount of premium
received. If an option expires or is canceled in a closing transaction, each
Fund will realize a gain or loss depending on whether the cost of the closing
transaction, if any, is less than or greater than the premium originally
received. As of April 30, 1996, portfolio securities valued at $739,125 were
held in a segregated account by the custodian in connection with covered call
options written by the Composite Growth & Income Fund.
Transactions of covered call options written by Composite Growth & Income
Fund during the six-month period ended April 30, 1996 were as follows:
AMOUNT OF NUMBER OF
PREMIUMS SHARES OPTIONED
----------- ----------------
Options outstanding at October 31, 1995.......... $ - -
Options written.................................. 22,185 9,000
----------- ----------------
Options outstanding at April 30, 1996............ $22,185 9,000
=========== ================
NOTE 3 - TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
The amounts of fees and expenses described below are shown on each Fund's
statement of operations.
Management fees were paid by each Fund to Composite Research & Management
Co., the investment manager. Management fees for the Bond & Stock Fund and the
Growth & Income Fund are equal to an annual rate of .625% of each Fund's average
daily net assets. Fees are reduced to .50% on average daily net assets in excess
of $250 million. The management fee for the Northwest Fund is equal to an annual
rate of .625% of the Fund's average net assets. Should these assets of the Fund
grow to greater than $500 million, the fee would be decreased. Also, under terms
of the Northwest's management agreement, the Manager will reimburse the Fund
should Fund expenses (excluding taxes, interest, and portfolio brokerage but
including the management fee) exceed in any fiscal year 1.50% of the average
daily net assets up to $30 million, and 1% of such net assets over $30 million.
For the six-month period ended April 30, 1996, the Fund accrued $111,260 under
this agreement.
Directors' fees and expenses were paid directly by each Fund to directors
having no affiliation with the Funds other than in their capacity as directors.
Other officers and directors received no compensation from the Funds.
Shareholder servicing fees were paid to Murphey Favre Securities Services,
Inc. (MFSSI), the transfer and shareholder servicing agent, for services
incidental to issuance and transfer of shares, maintaining shareholder lists,
and issuing and mailing distributions and reports.
Distribution expenses were paid to Murphey Favre, Inc. (MFI), the principal
underwriter and distributor, in accordance with separate Distribution Plans for
Class A and Class B. The Fund's Board of Directors adopted the Plans pursuant to
Rule 12b-1 of the Investment Company Act of 1940. The Class A Distribution Plan
provides that a Fund will reimburse MFI up to 0.25% of the average daily net
assets attributable to Class A shares annually for a portion of its expenses
incurred in distributing each Fund's Class A shares, including payment to
brokers. The Class B Distribution Plan provides that the Funds will pay MFI a
distribution fee, equal to 0.75% annually, and a service fee of 0.25%, of that
Fund's average daily net assets attributable to Class B shares.
For the six month period ended April 30, 1996, commissions (sales charges
paid by investors) on the purchases of Class A shares totaled $640,300,
$323,255, and $276,020, of which $639,258, $321,957, and $257,709 was retained
by MFI, in the Bond & Stock Fund, the Growth & Income Fund, and the Northwest
Fund, respectively. For the six-month period ended April 30, 1996, MFI received
contingent deferred sales charges of $12,040, $8,264, and $4,867 for the Bond &
Stock Fund, the Growth & Income Fund, and the Northwest Fund, respectively, upon
redemption of Class B shares as reimbursement for sales commissions advanced by
MFI at the time of such sales. Also, under terms of the distribution contracts,
MFI will reimburse the fund if the fund its expenses exceed the most stringent
applicable state blue sky limitation. No such reimbursement was required during
the six-month period ended April 30, 1996.
<PAGE>
NOTE 4 - CAPITAL STOCK
COMPOSITE BOND & STOCK FUND, INC.
Capital stock authorized.............. 300,000,000
Designated as:
Class A............................. 200,000,000
Class B............................. 100,000,000
Par value per share................... $0.0005
<TABLE>
<CAPTION>
CLASS A CLASS B
-------------------------- ----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30, 1996 OCTOBER 31, APRIL 30, 1996 OCTOBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995
------------- ------------ ---------------- -----------
<S> <C> <C> <C> <C>
SHARES
Sold................................................... 2,149,087 1,549,537 645,403 277,347
Issued for reinvestment of dividends and capital gains. 289,951 701,393 12,123 12,463
------------- ------------ ---------------- -----------
2,439,038 2,250,930 657,526 289,810
Reacquired............................................. (1,000,756) (3,397,944) (59,006) (34,621)
------------- ------------ ---------------- -----------
Net increase (decrease)................................ 1,438,282 (1,147,014) 598,520 255,189
============= ============ ================ ===========
AMOUNT
Sold................................................... $ 25,284,193 $ 19,292,373 $8,883,140 $3,517,987
Issued for reinvestment of dividends and capital gains. 8,818,353 8,425,803 362,186 164,801
------------- ------------- ---------------- -----------
34,102,546 27,718,176 9,245,326 3,682,788
Reacquired............................................. (14,033,630) (40,774,606) (830,437) (429,621)
------------- ------------- ---------------- -----------
Net increase (decrease)................................ $ 20,068,916 $(13,056,430) $8,414,889 $3,253,167
============= ============= ================ ===========
</TABLE>
COMPOSITE GROWTH & INCOME FUND
Capital stock authorized.............. 40,000,000
Designated as:
Class A............................. 25,000,000
Class B............................. 15,000,000
Par value per share................... $0.0001
<TABLE>
CLASS A CLASS B
--------------------------- -----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30, 1996 OCTOBER 31, APRIL 30, 1996 OCTOBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995
------------- ------------- --------------- ------------
<S> <C> <C> <C> <C>
SHARES
Sold................................................... 1,048,063 1,994,187 366,324 477,156
Issued for reinvestment of dividends and capital gains. 376,894 78,845 26,491 2,070
------------- ------------- --------------- ------------
1,424,957 2,073,032 392,815 479,226
Reacquired............................................. (549,264) (1,247,093) (32,507) (35,353)
------------- ------------- --------------- ------------
Net increase........................................... 875,693 825,939 360,308 443,873
============= ============= =============== ============
AMOUNT
Sold................................................... $16,325,792 $22,670,694 $5,698,862 $6,269,139
Issued for reinvestment of dividends and capital gains. 5,665,907 4,557,325 396,094 118,471
------------- ------------- --------------- ------------
21,991,699 27,228,019 6,094,956 6,387,610
Reacquired............................................. (8,553,266) (16,370,314) (505,294) (477,217)
------------- ------------- --------------- ------------
Net increase........................................... $13,438,433 $10,857,705 $5,589,662 $5,910,393
============= ============= =============== ============
</TABLE>
<PAGE>
NOTE 4 - CAPITAL STOCK (CONTINUED)
COMPOSITE NORTHWEST FUND, INC.
Capital stock authorized............. 10,000,000,000
Designated as:
Class A............................ 6,000,000,000
Class B............................ 4,000,000,000
Par value per share.................. $0.00001
<TABLE>
<CAPTION>
CLASS A CLASS B
--------------------------- -----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30, 1996 OCTOBER 31, APRIL 30, 1996 OCTOBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995
--------------- ------------ ---------------- -------------
<S> <C> <C> <C> <C>
SHARES
Sold.................................................. 1,028,512 2,053,954 168,781 233,910
Issued for reinvestment of dividends and capital gains 107,929 43,814 4,603 0
--------------- ------------- --------------- -------------
1,136,441 2,097,768 173,384 233,910
Reacquired............................................ (1,162,838) (3,693,516) (15,329) (41,868)
--------------- ------------- --------------- -------------
Net increase (decrease)............................... (26,397) (1,595,748) 158,055 192,042
=============== ============= =============== =============
AMOUNT
Sold.................................................. $ 18,373,599 $ 31,637,029 $3,019,263 $3,650,064
Issued for reinvestment of dividends and capital gains 1,894,196 658,565 80,228 1,003
--------------- ------------- --------------- -------------
20,267,795 32,295,594 3,099,491 3,651,067
Reacquired............................................ (20,805,237) (56,384,060) (273,338) (655,485)
--------------- ------------- --------------- -------------
Net increase (decrease)............................... $ (537,442) $(24,088,466) $2,826,153 $2,995,582
=============== ============= =============== =============
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
For further information, please contact:
FUND OFFICES
Composite Group of Funds
601 W. Main Avenue, Suite 801
Spokane, WA 99201-0613
Phone: (509) 353-3550
- --------------------------------------------------------------------------------
ADVISER
Composite Research & Management Co.
1201 Third Avenue, Suite 1220 Seattle, WA 98101-3015
DISTRIBUTOR
Murphey Favre, Inc.
1201 Third Avenue, Suite 780 Seattle, WA 98101-3015
CUSTODIAN
Investors Fiduciary Trust Company
127 W. 10th Street Kansas City, MO 64105-1716
INDEPENDENT PUBLIC ACCOUNTANTS
LeMaster & Daniels
601 W. Riverside Avenue, Suite 800 Spokane, WA 99201-0614
COUNSEL
Paine, Hamblen, Coffin, Brooke & Miller
717 W. Sprague Avenue, Suite 1200 Spokane, WA 99204-0464
OFFICERS
PRESIDENT
William G. Papesh
EXECUTIVE VICE PRESIDENT
Kerry K. Killinger
VICE PRESIDENTS
Gene G. Branson
Douglas D. Springer
VICE PRESIDENT & TREASURER
Monte D. Calvin
SECRETARY
John T. West
BOARD OF DIRECTORS
CHAIRMAN
Leland J. Sahlin
MEMBERS
Wayne L. Attwood, M.D.
Kristianne Blake
Anne V. Farrell
Edwin J. McWilliams
Michael K. Murphy
William G. Papesh
Jay Rockey
Richard C. Yancey
This report is submitted for the general information of
shareholders of the Funds. For more detailed information
about the Funds, their officers and directors, fees, expenses
and other pertinent information, please see the prospectus
of the Funds. This report is not authorized for distribution
to prospective investors in the Funds unless preceded or
accompanied by an effective prospectus.
(6/96)
COMPOSITE GROUP
EQUITY
FUNDS
SEMIANNUAL
REPORT
APRIL 30,
1996
COMPOSITE BOND &
STOCK FUND, INC.
COMPOSITE GROWTH
& INCOME FUND
COMPOSITE
NORTHWEST
FUND, INC.
