<PAGE>
UNITED
FUNDS, INC.
United Bond Fund
United Income Fund
United Accumulative Fund
United Science and Technology Fund
ANNUAL
REPORT
-------------------------------------------
For the fiscal year ended December 31, 1993
<PAGE>
UNITED BOND FUND
MANAGER'S LETTER
DECEMBER 31, 1993
- ---------------------------------------------------------------------------
Dear Shareholder:
This report relates to the operation of the United Bond Fund for the fiscal
year ended December 31, 1993. The following discussion, graphs and tables
provide you with information regarding the Fund's performance during that
period.
During the past fiscal year the global economy was weak. In the United
States the overall economy gradually improved, inflation remained low, and long-
term interest rates declined. In addition, American industries continued to
improve efficiencies and productivity, which led to increased market confidence
in the debt-repaying ability of these issuers. The current administration's
steady monetary policy and the gradual improvement in the overall economy
produced a relatively high rate of return for the investment grade bonds.
The Fund was positioned well during the past fiscal year. The Fund
benefited from both declining interest rates and improving corporate credits by
maintaining a bond portfolio with a maturity that was longer than the market
average. During the year, the Fund increased its concentration in corporate
bonds that we felt would benefit from cyclical changes in the economy.
The strategies and techniques we applied resulted in the direction of the
Fund's performance remaining fairly consistent with that of the indexes charted
on the following page. Those indexes reflect the performance of securities that
generally represent the bond market (the Lehman Brothers Government/Corporate
Bond Index) and the universe of funds with similar investment objectives (the
Lipper Corporate Debt Funds A-Rated Universe Average). The Fund's performance
was impacted positively during the past fiscal year by the Fund's increased
investments in lower-rated, investment grade securities and longer-maturity
issues.
In 1994 we anticipate another year of relatively low inflation, moderate
economic growth, and continuing increases in productivity. We also anticipate
that corporations will continue to refinance their debt at lower interest rates
and issue more equity securities. Therefore, we intend to pursue the same
strategies we have recently employed as we seek to achieve superior performance.
We appreciate your continued confidence.
Respectfully,
James C. Cusser
Manager, United Bond Fund
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
UNITED BOND FUND,
The line graph which appears here in the paper version was filed on Form SE on
February 25, 1994.
<PAGE>
SHAREHOLDER SUMMARY
- ----------------------------------------------------------------------
UNITED BOND FUND
PORTFOLIO STRATEGY:
High quality bonds OBJECTIVE: Reasonable return with emphasis on the
preservation of principal.
Maximum 10% Non-Debt
Securities STRATEGY: Invests in high quality bonds issued by
companies in a variety of industries and
in government securities.
FOUNDED: 1964
DIVIDENDS: PAID MONTHLY
<PAGE>
PER SHARE DATA
For the Fiscal Year Ended December 31, 1993
- -------------------------------------------
DIVIDENDS PAID $0.41
=====
CAPITAL GAINS DISTRIBUTION $0.33
=====
NET ASSET VALUE ON
12/31/93 $6.39 adjusted to: $6.72(A)
12/31/92 6.31
-----
CHANGE PER SHARE $0.41
=====
(A) This number includes the capital gains distribution of $0.33 paid in
December 1993 added to the actual net asset value on December 31, 1993.
Past performance is not necessarily an indication of future results.
TOTAL RETURN HISTORY
Average Annual Total Return
---------------------------
With Without
Period Sales Load* Sales Load**
- ------ ----------- ------------
1-year period ended 12-31-93 6.68% 13.19%
5-year period ended 12-31-93 9.45% 10.75%
10-year period ended 12-31-93 11.26% 11.92%
*Performance data quoted represents past performance and is based on deduction
of 5.75% sales load on the initial purchase in each of the three periods.
**Performance data quoted in this column represents past performance without
taking into account the sales load deducted on an initial purchase.
Investment return and principal value will fluctuate and an investor's shares,
when redeemed, may be worth more or less than their original cost.
<PAGE>
PORTFOLIO HIGHLIGHTS
On December 31, 1993, United Bond Fund had net assets totaling $641,668,131
invested in a diversified portfolio of:
94.25% Bonds
5.75% Cash and Cash Equivalents
As a shareholder of United Bond Fund, for every $100 you had invested on
December 31, 1993, your Fund owned:
Bonds:
Corporate $67.22
U.S. Government 20.81
Other Government 4.07
Municipal Bonds 2.15
Cash and Cash Equivalents 5.75
Not all holdings will be represented in the portfolio at all times.
<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
DECEMBER 31, 1993
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES
Aerospace - 1.59%
McDonnell Douglas Corporation,
9.25%, 4-1-2002 ....................... $ 9,000 $ 10,192,590
Airlines - 1.54%
Federal Express Corporation,
7.15%, 9-28-2012 ...................... 10,000 9,900,000
Automotive - 1.27%
Toyota Motor Credit Corp.,
4.15%, 8-5-96 ......................... 8,000 8,160,000
Banks and Savings and Loans - 13.80%
Banc One Corporation,
6.0%, 9-15-2005 ....................... 10,000 9,573,300
Banco Nacional de Comercio Exterior,
S.N.C.,
7.5%, 7-1-2000 ........................ 5,000 5,100,000
Central Fidelity Bank,
8.15%, 11-15-2002 ..................... 10,000 11,063,700
Chemical Banking Corporation:
7.625%, 1-15-2003 ..................... 5,000 5,345,500
7.125%, 3-1-2005 ...................... 5,000 5,183,400
Citicorp,
6.75%, 8-15-2005 ...................... 10,000 9,978,300
National Westminster Bancorp Inc.,
9.375%, 11-15-2003 .................... 5,000 6,047,200
Norwest Corporation,
6.65%, 10-15-2023 ..................... 10,000 9,272,600
RBSG Capital Corp.,
10.125%, 3-1-2004 ..................... 5,000 6,277,000
Republic New York Corporation,
5.875%, 10-15-2008 .................... 5,000 4,684,850
Shawmut National Corporation,
7.2%, 4-15-2003 ....................... 10,000 10,342,400
Wells Fargo & Company,
8.75%, 5-1-2002 ....................... 5,000 5,698,000
Total ................................. 88,566,250
Building - 2.64%
Centex Corporation,
8.75%, 3-1-2007 ....................... 5,000 5,539,900
Georgia-Pacific Corporation,
9.875%, 11-1-2021 ..................... 5,000 5,850,100
Owens-Corning Fiberglas Corporation,
8.875%, 6-1-2002 ...................... 5,000 5,555,050
Total ................................. 16,945,050
See Notes to Schedules of Investments on page 39.
<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
DECEMBER 31, 1993
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES (Continued)
Canadian Oil - 1.74%
NOVA Corporation of Alberta,
8.5%, 12-15-2012 ...................... $10,000 $ 11,145,400
Chemicals Major - 2.59%
Dow Capital Corporation,
9.0%, 5-15-2010 ....................... 9,550 11,393,628
Grace (W.R.) & Co.,
7.4%, 2-1-2000 ........................ 5,000 5,238,750
Total ................................. 16,632,378
Chemicals Specialty and Miscellaneous
Technology - 1.87%
Eastman Kodak Company,
9.2%, 6-1-2021 ........................ 10,000 11,975,000
Domestic Oil - 2.21%
Occidental Petroleum Corporation,
10.125%, 9-15-2009 .................... 5,000 6,307,750
Seagull Energy Corporation,
7.875%, 8-1-2003 ...................... 2,500 2,506,250
Union Texas Petroleum Holdings, Inc.,
8.25%, 11-15-99 ....................... 5,000 5,361,750
Total ................................. 14,175,750
Electrical Equipment - 3.06%
Black & Decker Corporation (The),
6.625%, 11-15-2000 .................... 10,000 9,896,400
General Electric Capital Corporation,
8.5%, 7-24-2008 ....................... 8,250 9,747,210
Total ................................. 19,643,610
Financial - 6.52%
Chrysler Financial Corporation,
9.5%, 12-15-99 ........................ 10,000 11,545,400
Equicon Loan Trust,
7.30%, 2-18-2013 ...................... 4,571 4,655,592
General Motors Acceptance Corporation,
8.875%, 6-1-2010 ...................... 10,000 11,600,000
Greyhound Financial Corporation,
8.79%, 11-15-2001 ..................... 3,000 3,466,200
Residential Funding Mortgage
Securities I, Inc.,
8.0%, 8-25-2020 ....................... 10,000 10,565,600
Total ................................. 41,832,792
See Notes to Schedules of Investments on page 39.
<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
DECEMBER 31, 1993
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES (Continued)
Food and Related - 2.69%
Archer Daniels-Midland Company,
8.875%, 4-15-2011 ..................... $10,000 $ 12,021,600
ConAgra, Inc.,
7.375%, 2-1-2005 ...................... 5,000 5,202,500
Total ................................. 17,224,100
Insurance - 0.47%
Reliance Group Holdings, Inc.,
9.0%, 11-15-2000 ...................... 3,000 3,018,750
International Oil - 0.79%
LASMO (USA) INC.,
7.125%, 6-1-2003 ...................... 5,000 5,077,750
Leisure Time - 4.44%
Marriott International, Inc.,
6.75%, 12-15-2003 ..................... 3,000 2,979,180
Tele-Communications, Inc.,
7.875%, 8-1-2013 ...................... 10,000 10,424,900
Time Warner Incorporated:
8.875%, 10-1-2012 ..................... 5,000 5,577,750
9.15%, 2-1-2023 ....................... 5,000 5,482,250
Turner Broadcasting,
8.375%, 7-1-2013 ...................... 4,000 4,048,760
Total ................................. 28,512,840
Machinery - 0.95%
Caterpillar, Inc.,
9.375%, 8-15-2011 ..................... 5,000 6,087,550
Metals and Mining - 1.18%
Noranda Inc.,
8.625%, 7-15-2002 ..................... 7,000 7,582,470
Multi-Industry - 0.81%
Mark IV Industries, Inc.,
8.75%, 4-1-2003 ....................... 5,000 5,200,000
Public Utilities - Electric - 6.37%
Beaver Valley Public Service II Funding
Corporation,
8.68%, 6-1-2017 ....................... 4,000 3,972,120
Korea Electric Power Corporation,
6.375%, 12-1-2003 ..................... 5,000 4,856,650
PVNGS Funding Corp., Inc.,
8.0%, 12-30-2015 ...................... 7,000 7,139,860
See Notes to Schedules of Investments on page 39.
<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
DECEMBER 31, 1993
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES (Continued)
Public Utilities - Electric (Continued)
Pacific Gas and Electric Company,
5.875%, 10-1-2005 ..................... $10,000 $ 9,550,400
Texas Utilities Company,
7.875%, 3-1-2023 ...................... 10,000 10,379,300
Union Electric Company,
7.15%, 8-1-2023 ....................... 5,000 4,940,300
Total ................................. 40,838,630
Public Utilities - Pipelines - 2.68%
Arkla, Inc.,
8.875%, 7-15-99 ....................... 10,000 10,691,600
Williams Companies, Inc. (The),
10.25%, 7-15-2020 ..................... 5,000 6,468,550
Total ................................. 17,160,150
Publishing and Advertising - 1.58%
News America Holdings Incorporated,
8.25%, 8-10-2018 ...................... 10,000 10,159,900
Railroads - 0.78%
Kansas City Southern Railway (The),
6.625%, 3-1-2005 ...................... 5,000 4,991,200
Retailing - 1.40%
Best Buy Co., Inc.,
8.625%, 10-1-2000 ..................... 2,500 2,500,000
Eagle Food Centers, Inc.,
8.625%, 4-15-2000 ..................... 2,500 2,487,500
Penn Traffic Company,
8.625%, 12-15-2003 .................... 4,000 4,020,000
Total ................................. 9,007,500
Telecommunications - 2.71%
Bell Telephone Company of Pennsylvania,
8.35%, 12-15-2030 ..................... 5,000 5,981,550
GTE Corporation,
7.83%, 5-1-2023 ....................... 10,000 10,329,400
Sprint Corporation,
8.125%, 7-15-2002 ..................... 1,000 1,078,180
Total ................................. 17,389,130
See Notes to Schedules of Investments on page 39.
<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
DECEMBER 31, 1993
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES (Continued)
Textiles and Apparel - 0.78%
Fruit of the Loom, Inc.,
6.5%, 11-15-2003 ...................... $ 5,000 $ 4,976,100
Tobacco - 0.76%
RJR Nabisco, Inc.,
8.75%, 4-15-2004 ...................... 5,000 4,901,100
TOTAL CORPORATE DEBT SECURITIES - 67.22% $431,295,990
(Cost: $426,661,637)
MUNICIPAL BONDS
Alabama - 0.45%
The Special Care Facilities Financing
Authority of the City of Birmingham-
Baptist Medical Centers, Taxable
Revenue Bonds (The Baptist Medical
Centers), Series 1993-B,
7.1%, 8-15-2005 ....................... 2,800 2,866,500
California - 0.15%
Department of Water and Power of the City
of Los Angeles, Electric Plant Revenue Bonds,
Second Issue of 1993,
5.125%, 10-15-2014 .................... 1,000 975,000
Florida - 0.62%
State of Florida, Full Faith and Credit
State Board of Education, Public
Education Capital Outlay Refunding
Bonds, 1993 Series A,
5.1%, 6-1-2009 ........................ 3,000 3,022,500
City of Vero Beach, Florida, Taxable
Electric Refunding Revenue Bonds,
Series 1993B,
6.8%, 12-1-2013 ....................... 1,000 938,750
Total ................................. 3,961,250
New York - 0.15%
County of Nassau, New York, General
Obligation Bonds (Federally Taxable),
5.75%, 10-15-2005 ..................... 1,000 943,750
South Carolina - 0.32%
Oconee County, South Carolina, Pollution
Control Facilities Revenue Refunding
Bonds, Series 1993 (Duke Power Company
Project),
5.8%, 4-1-2014 ........................ 2,000 2,062,500
See Notes to Schedules of Investments on page 39.
<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
DECEMBER 31, 1993
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
Washington - 0.46%
Seattle, Washington, Municipal Light
and Power Refunding Revenue Bonds,
5.375%, 11-1-2018 ..................... 1,000 995,000
Washington Public Power Supply System,
Nuclear Project No. 1 Refunding
Revenue Bonds, Series 1993C,
5.375%, 7-1-2015 ...................... $ 2,000 $ 1,967,500
Total.................................. 2,962,500
TOTAL MUNICIPAL BONDS - 2.15% $13,771,500
(Cost: $13,613,673)
OTHER GOVERNMENT SECURITIES
Argentina - 0.78%
Republic of Argentina,
8.375%, 12-20-2003 .................... 5,000 5,037,500
Italy - 1.52%
Republic of Italy,
6.0%, 9-27-2003 ....................... 10,000 9,750,600
Mexico - 0.83%
United Mexican States,
8.50%, 9-15-2002 ...................... 5,000 5,356,250
New Zealand - 0.94%
New Zealand,
8.75%, 12-15-2006 ..................... 5,000 6,000,300
TOTAL OTHER GOVERNMENT SECURITIES - 4.07% $ 26,144,650
(Cost: $25,818,994)
UNITED STATES GOVERNMENT SECURITIES
Federal Home Loan Mortgage Corporation,
0.0%, 3-23-94 ......................... 2,000 2,200,000
Federal National Mortgage Association:
7.0%, 7-25-2006 ....................... 10,000 10,346,800
7.5%, 12-25-2006 ...................... 5,000 5,192,150
6.5%, 5-25-2018 ....................... 10,000 10,068,700
8.0%, 5-25-2019 ....................... 9,000 9,177,120
7.0%, 8-25-2021 ....................... 10,000 10,093,700
Government National Mortgage Association,
10.5%, 3-15-2029 ...................... 1,426 1,584,893
See Notes to Schedules of Investments on page 39.
<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
DECEMBER 31, 1993
Principal
Amount in
Thousands Value
UNITED STATES GOVERNMENT SECURITIES (Continued)
United States Treasury:
0.0%, 2-15-95 ......................... 25,000 $ 23,978,500
6.375%, 1-15-2000...................... 5,000 5,251,550
15.75%, 11-15-2001 .................... 5,000 8,192,950
6.25%, 2-15-2003 ...................... 10,000 10,334,400
11.625%, 11-15-2004 ................... 5,000 7,258,600
0.0%, 8-15-2010 ....................... 20,000 6,583,600
0.0%, 11-15-2014 ...................... 20,000 4,779,000
Miscellaneous United States Government
Backed Securities:
Agency for International Development
for the State of Israel:
6.125%, 3-15-2003 ................... 10,000 10,089,000
0.0%, 3-15-2014 ..................... 10,000 2,409,000
Postal Square Limited Partnership,
8.95%, 6-15-2022 .................... 4,945 6,015,515
TOTAL UNITED STATES GOVERNMENT
SECURITIES - 20.81% $133,555,478
(Cost: $129,459,065)
TOTAL SHORT-TERM SECURITIES - 4.94% $ 31,716,465
(Cost: $31,716,465)
TOTAL INVESTMENT SECURITIES - 99.19% $636,484,083
(Cost: $627,269,834)
CASH AND OTHER ASSETS, NET
OF LIABILITIES - 0.81% 5,184,048
NET ASSETS - 100.00% $641,668,131
<PAGE>
UNITED INCOME FUND
MANAGER'S LETTER
- ---------------------------------------------------------------------------
DECEMBER 31, 1993
Dear Shareholder:
This report relates to the operation of the United Income Fund for the
fiscal year ended December 31, 1993. The following discussion, graphs and
tables provide you with information regarding the Fund's performance during that
period.
During the first three quarters of the past fiscal year, the United States'
economy experienced slow growth, low inflation and declines in interest rates.
The fourth quarter saw a slight rise in interest rates and an acceleration in
the economy. Of particular note, the securities of companies in cyclical
industries generally experienced substantial increases in value during the year.
The Fund held a significant quantity of cyclical stocks throughout the
year, with emphasis on companies perceived as having the most potential for
positive change. Automobiles companies were a prime example of this. The Fund
also emphasized investments in companies with strong, efficient worldwide
distribution systems, such as Gillette, Procter & Gamble and Colgate. Companies
with overseas distribution capabilities have grown faster, in many cases, than
domestic companies that do not have international outlets for their goods and
services.
The strategies and techniques we applied resulted in the direction of the
Fund's performance remaining fairly consistent with that of the indexes charted
on the following page. Those indexes reflect the performance of securities that
generally represent the stock market (the S&P 500 Index) and the universe of
funds with similar investment objectives (the Lipper Equity Income Fund Universe
Average). The Fund's performance was impacted positively during the past fiscal
year by strong results from several of its cyclical stocks, and companies with
strong foreign distribution. Consequently, the Fund's overall performance again
bettered that of the indexes depicted.
In 1994 we anticipate continuation of generally slow growth in the U. S.
economy, with perhaps some improvements in areas like the retail sector. We
expect to continue to pursue the same strategies we have recently employed. The
search for companies that have excellent prospects for superior earnings and
revenue growth will continue to be our mission.
We appreciate your continued confidence.
Respectfully,
Russell E. Thompson
Manager, United Income Fund
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
UNITED INCOME FUND,
The line graph which appears here in the paper version was filed on Form SE on
February 25, 1994.
<PAGE>
SHAREHOLDER SUMMARY
- -----------------------------------------------------------------
UNITED INCOME FUND
PORTFOLIO STRATEGY:
Investment quality OBJECTIVE: Current income relative
dividend-paying to changing market
common stocks conditions.
Cash Reserves STRATEGY: Invest principally in common stocks of
large, well-known companies.
The use of cash reserves (often invested
in money market securities) for
defensive purposes is a strategy that
may be utilized by the Income Fund from
time to time.
Moving into cash reserve positions at
times thought to be near a major stock
market peak allows the Fund the
opportunity to capture profits and
attempts to cushion the impact of market
declines. The added flexibility
provided by our CASH RESERVES STRATEGY
has from time to time been an important
element in our past success and, when
deemed appropriate, may be used in the
management of the portfolio in the
future.
FOUNDED: 1940
DIVIDENDS: PAID QUARTERLY (March, June, September,
December)
<PAGE>
PERFORMANCE SUMMARY
PER SHARE DATA
For the Fiscal Year Ended December 31, 1993
- -------------------------------------------
DIVIDENDS PAID $0.40
======
CAPITAL GAINS DISTRIBUTION $0.39
======
NET ASSET VALUE ON
12/31/93 $24.77 adjusted to: $25.16(A)
12/31/92 22.05
------
CHANGE PER SHARE $ 3.11
======
(A) This number includes the capital gains distribution of $0.39 paid in
December 1993 added to the actual net asset value on December 31, 1993.
Past performance is not necessarily an indication of future results.
TOTAL RETURN HISTORY
Average Annual Total Return
---------------------------
With Without
Period Sales Load* Sales Load**
- ------ ----------- ------------
1-year period ended 12-31-93 9.37% 16.05%
5-year period ended 12-31-93 13.86% 15.21%
10-year period ended 12-31-93 15.64% 16.33%
*Performance data quoted represents past performance and is based on deduction
of 5.75% sales load on the initial purchase in each of the three periods.
**Performance data quoted in this column represents past performance without
taking into account the sales load deducted on an initial purchase.
Investment return and principal value will fluctuate and an investor's shares,
when redeemed, may be worth more or less than their original cost.
<PAGE>
PORTFOLIO HIGHLIGHTS
On December 31, 1993, United Income Fund had net assets totaling $3,060,073,276
invested in a diversified portfolio of:
94.10% Common Stocks
2.60% Cash and Cash Equivalents
2.55% U.S. Government Securities
0.75% Corporate Debt Securities
As a shareholder of United Income Fund, for every $100 you had invested on
December 31, 1993, your Fund owned:
Basic Industries Stocks $43.63
Consumer Stocks 22.32
Technological Stocks 16.39
Financial Stocks 11.76
Cash and Cash Equivalents 2.60
U.S. Government Securities 2.55
Corporate Debt Securities 0.75
Not all holdings will be represented in the portfolio at all times.
<PAGE>
- ---------------------------------------------------------------------------
These STOCK CATEGORIES are provided as a reference only. Not all categories or
subcategories will be represented in a portfolio at all times. Refer to the
following pages for a more detailed portfolio listing.
BASIC INDUSTRIES
Airlines
Automotive
Building
Chemicals Major
Electrical Equipment
Engineering and Construction
Machinery
Manufacturers
Metals and Mining
Multi-Industry
Paper
Precious Metals
Railroad Equipment
Railroads
Shipping
Steel
Tire and Rubber
Trucking
CONSUMER
Beverages
Consumer Electronics and Appliances
Food and Related
Hospital Management
Household Products
Leisure Time
Packaging and Containers
Publishing and Advertising
Retailing
Services, Consumer and Business
Textiles and Apparel
Tobacco
ENERGY AND ENERGY-RELATED
Canadian Oil
Coal
Domestic Oil
International Oil
Oil Services
Propane
FINANCIAL
Banks and Savings and Loans
Financial
Insurance
PUBLIC UTILITIES
Electric
Gas
Pipelines
TECHNOLOGICAL
Aerospace
Biotechnology and Medical Services
Business Machines and Office Equipment
Chemicals Specialty and Miscellaneous Technology
Drugs and Hospital Supply
Electronics
Telecommunications
<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
DECEMBER 31, 1993
Shares Value
COMMON STOCKS
Aerospace - 0.13%
Aviall Inc.* ........................... 250,000 $ 3,812,500
Airlines - 3.25%
AMR Corporation* ....................... 400,000 26,800,000
Delta Air Lines, Incorporated .......... 200,000 10,925,000
Southwest Airlines Co. ................. 1,650,000 61,875,000
Total ................................. 99,600,000
Automotive - 7.64%
Chrysler Corporation ................... 1,280,000 68,160,000
Dana Corporation ....................... 380,000 22,752,500
Eaton Corporation ...................... 500,000 25,250,000
Ford Motor Company ..................... 950,000 61,275,000
General Motors Corporation ............. 710,000 38,961,250
Magna Group, Inc., Class A ............. 350,000 17,412,500
Total ................................. 233,811,250
Banks and Savings and Loans - 8.18%
Banc One Corporation ................... 350,000 13,693,750
BankAmerica Corporation ................ 502,500 23,303,438
Barclays Bank PLC (A) .................. 500,000 4,697,500
Chase Manhattan Corporation ............ 850,000 28,793,750
Chemical Banking Corporation ........... 625,000 25,078,125
Citicorp* .............................. 1,000,000 36,750,000
Deutsche Bank Aktiengesellschaft (A) ... 44,000 22,433,972
First Bank Systems, Inc. ............... 610,500 18,772,875
First Interstate Bancorporation ........ 300,000 19,237,500
Midlantic Corporation* ................. 600,000 15,337,200
NationsBank Corporation ................ 389,000 19,061,000
PNC Bank Corp. ......................... 500,000 14,500,000
Skandinaviska Enskilda Banken (A)* ..... 1,300,000 8,799,700
Total ................................. 250,458,810
Beverages - 2.14%
PepsiCo, Inc. .......................... 1,300,000 53,137,500
Whitman Corporation .................... 765,000 12,431,250
Total ................................. 65,568,750
Building - 3.27%
Armstrong World Industries, Inc. ....... 696,100 37,067,325
Georgia-Pacific Corporation ............ 200,000 13,750,000
Louisiana-Pacific Corporation .......... 200,000 8,250,000
Stanley Works (The) .................... 150,000 6,675,000
Temple-Inland Inc. ..................... 350,000 17,631,250
Weyerhaeuser Company ................... 375,000 16,734,375
Total ................................. 100,107,950
See Notes to Schedules of Investments on page 39.
<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
DECEMBER 31, 1993
Shares Value
COMMON STOCKS (Continued)
Business Machines and Office Equipment - 1.65%
Apple Computer, Inc. ................... 725,000 $ 21,296,875
General Motors Corporation, Class E .... 1,000,000 29,250,000
Total ................................. 50,546,875
Chemicals Major - 4.84%
Air Products & Chemicals, Inc. ......... 800,000 35,400,000
du Pont (E.I.) de Nemours and Company .. 600,000 28,950,000
PPG Industries, Inc. ................... 625,000 47,578,125
Praxair, Inc. .......................... 1,000,000 16,625,000
Union Carbide Corporation .............. 875,000 19,578,125
Total ................................. 148,131,250
Chemicals Specialty and Miscellaneous Technology - 2.83%
Betz Laboratories, Inc. ................ 280,000 12,285,000
Minnesota Mining and Manufacturing
Company ............................... 250,000 27,187,500
Polaroid Corporation ................... 1,400,000 47,250,000
Total ................................. 86,722,500
Consumer Electronics and Appliances - 1.85%
Maytag Corporation ..................... 1,200,000 21,600,000
Rival Company (The) .................... 221,200 4,465,364
Whirlpool Corporation .................. 460,300 30,609,950
Total ................................. 56,675,314
Drugs and Hospital Supply - 2.72%
American Cyanamid Company .............. 250,000 12,562,500
Sandoz Ltd. (A) ........................ 15,567 43,259,090
Schering-Plough Corporation ............ 400,000 27,400,000
Total ................................. 83,221,590
Electrical Equipment - 2.84%
Emerson Electric Co. ................... 400,000 24,100,000
General Electric Company ............... 600,000 62,925,000
Total ................................. 87,025,000
Electronics - 5.28%
AMP Incorporated ....................... 550,000 34,718,750
Applied Materials, Inc.* ............... 400,000 15,600,000
Intel Corporation ...................... 525,000 32,615,625
Motorola, Inc. ......................... 850,000 78,518,750
Total ................................. 161,453,125
See Notes to Schedules of Investments on page 39.
<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
DECEMBER 31, 1993
Shares Value
COMMON STOCKS (Continued)
Engineering and Construction - 1.56%
BBC Brown Boveri Baen, Series A (A)* ... 25,000 $ 18,245,950
Fluor Corporation ...................... 400,000 16,200,000
Foster Wheeler Corporation ............. 400,000 13,400,000
Total ................................. 47,845,950
Financial - 3.58%
Federal Home Loan Mortgage Corporation . 500,000 25,000,000
Federal National Mortgage Association .. 295,200 23,173,200
Grupo Financiero Banamex Accival,
S.A. de C.V. B (A) .................... 1,000,000 7,083,000
Grupo Financiero Banamex Accival,
S.A. de C.V. C (A) .................... 1,000,000 8,692,000
Grupo Financiero Banamex Accival,
S.A. de C.V. L (A) .................... 50,000 384,700
Household International, Inc. .......... 600,000 19,575,000
Xerox Corporation ...................... 280,000 25,025,000
Total ................................. 108,932,900
Food and Related - 1.44%
CPC International Inc. ................. 500,000 23,812,500
Nestle S.A. (A) ........................ 8,000 6,897,848
Pet Incorporated ....................... 765,000 13,387,500
Total ................................. 44,097,848
Household Products - 3.76%
Avon Products, Inc. .................... 280,000 13,615,000
Colgate-Palmolive Company .............. 600,000 37,425,000
Gillette Company (The) ................. 500,000 29,812,500
Procter & Gamble Company (The) ......... 600,000 34,200,000
Total.................................. 115,052,500
Leisure Time - 2.28%
Walt Disney Company (The) .............. 700,000 29,837,500
McDonald's Corporation ................. 700,000 39,900,000
Total ................................. 69,737,500
Machinery - 6.65%
Caterpillar Inc. ....................... 800,000 71,200,000
Clark Equipment Company* ............... 500,000 26,187,500
Deere & Company ........................ 685,000 50,690,000
Ingersoll-Rand Company ................. 400,000 15,300,000
Mannesmann AG (A) ...................... 25,000 6,074,925
Parker Hannifin Corporation ............ 400,000 15,100,000
Trinova Corporation .................... 600,000 18,825,000
Total ................................. 203,377,425
See Notes to Schedules of Investments on page 39.
<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
DECEMBER 31, 1993
Shares Value
COMMON STOCKS (Continued)
Multi-Industry - 1.94%
ITT Corporation ........................ 650,204 $ 59,331,115
Packaging and Containers - 0.70%
Pilkington PLC (A) ..................... 8,164,516 21,464,513
Paper - 3.04%
Champion International Corporation ..... 800,000 26,700,000
International Paper Company ............ 400,000 27,100,000
James River Corporation of Virginia .... 800,000 15,400,000
Union Camp Corporation ................. 500,000 23,812,500
Total ................................. 93,012,500
Railroads - 3.95%
CSX Corporation ........................ 350,000 28,350,000
Conrail, Inc. .......................... 600,000 40,125,000
Norfolk Southern Corporation ........... 300,000 21,150,000
Union Pacific Corporation .............. 500,000 31,312,500
Total ................................. 120,937,500
Retailing - 9.35%
Cifra, S.A. de C.V. C (A) .............. 7,000,000 21,000,000
Circuit City Stores, Inc. .............. 1,500,000 32,625,000
Dayton Hudson Corporation .............. 300,000 20,025,000
Dillard Department Stores, Inc.,
Class A ............................... 710,000 26,980,000
Gap, Inc. (The) ........................ 400,000 15,750,000
Home Depot, Inc. (The) ................. 725,000 28,637,500
K Mart Corporation ..................... 750,000 15,937,500
Limited Inc. ........................... 760,000 13,015,000
May Department Stores Company (The) .... 1,000,000 39,375,000
Penney (J.C.) Company, Inc. ............ 676,000 35,405,500
Toys "R" Us Inc.* ...................... 300,000 12,262,500
Wal-Mart Stores, Inc. .................. 1,000,000 25,000,000
Total ................................. 286,013,000
Services, Consumer and Business - 0.80%
Block (H&R), Inc. ...................... 600,000 24,450,000
See Notes to Schedules of Investments on page 39.
<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
DECEMBER 31, 1993
Shares Value
COMMON STOCKS (Continued)
Steel - 2.55%
Avesta Sheffield AB (A)* ............... 3,831,000 $ 19,737,312
Bethlehem Steel Corporation* ........... 400,000 8,150,000
British Steel PLC (A) .................. 8,250,000 15,353,250
Inland Steel Industries, Inc.* ......... 400,000 13,250,000
USX Corporation - U.S. Steel Group ..... 500,000 21,687,500
Total ................................. 78,178,062
Telecommunications - 3.78%
American Telephone and Telegraph
Company ............................... 500,000 26,250,000
General Instrument Corporation* ........ 250,000 14,031,250
MCI Communications Corporation ......... 1,000,000 28,187,000
Telefonaktiebolaget LM Ericsson,
Class B, ADR........................... 500,000 20,125,000
Telefonos de Mexico S.A. de C.V., ADR .. 400,000 27,000,000
Total ................................. 115,593,250
Tire and Rubber - 1.23%
Goodyear Tire & Rubber Company (The) ... 825,000 37,743,750
Trucking - 0.87%
Ryder System, Inc. ..................... 1,000,000 26,500,000
TOTAL COMMON STOCKS - 94.10% $2,879,402,727
(Cost: $1,861,674,843)
Principal
Amount in
Thousands
CORPORATE DEBT SECURITIES
Banks and Savings and Loans - 0.36%
Morgan Guaranty Trust Company of New York,
7.375%, 2-1-2002 ...................... $10,250 11,079,123
Electrical Equipment - 0.39%
General Electric Capital Corporation,
8.3%, 9-20-2009 ....................... 10,000 11,703,200
TOTAL CORPORATE DEBT SECURITIES - 0.75% $ 22,782,323
(Cost: $19,806,227)
See Notes to Schedules of Investments on page 39.
<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
DECEMBER 31, 1993
Principal
Amount in
Thousands Value
UNITED STATES GOVERNMENT SECURITIES
United States Treasury:
8.5%, 5-15-97 ......................... $16,000 $ 17,849,920
8.75%, 10-15-97 ....................... 20,000 22,615,600
10.375%, 11-15-2012 ................... 8,500 11,736,630
9.0%, 11-15-2018 ...................... 20,000 25,928,200
TOTAL UNITED STATES GOVERNMENT
SECURITIES - 2.55% $ 78,130,350
(Cost: $68,530,401)
TOTAL SHORT-TERM SECURITIES - 2.48% $ 75,960,254
(Cost: $75,960,254)
TOTAL INVESTMENT SECURITIES - 99.88% $3,056,275,654
(Cost: $2,025,971,725)
CASH AND OTHER ASSETS,
NET OF LIABILITIES - 0.12% 3,797,622
NET ASSETS - 100.00% $3,060,073,276
See Notes to Schedules of Investments on page 39.
<PAGE>
UNITED ACCUMULATIVE FUND
MANAGER'S LETTER
DECEMBER 31, 1993
- ---------------------------------------------------------------------------
Dear Shareholder:
This report relates to the operation of the United Accumulative Fund for
the fiscal year ended December 31, 1993. The following discussion, graphs and
tables provide you with information regarding the Fund's performance during that
period.
During the first three quarters of the past fiscal year, the United States'
economy experienced slow growth, low inflation and declines in interest rates.
The fourth quarter saw a slight rise in interest rates and an acceleration in
the economy. The overall effect of these trends produced a substantial increase
in the value of stocks of companies in cyclical industries and a decrease in the
value of stocks that are particularly sensitive to rising interest rates. The
Clinton administration's national health care initiative adversely affected the
securities of companies in the health care industry. Transportation-related
securities rose in value significantly during the year in anticipation of a
better economy improving their prospects.
For the first three quarters of the year, the Fund held a large quantity of
securities sensitive to interest rate changes, with emphasis on common stocks of
financial institutions. The increase in interest rates during the fourth
quarter led us to reduce this exposure. During the year, the Fund sold many of
its holdings in pharmaceutical companies in view of the effects of the health-
care reform proposals. Conversely, the Fund increased its emphasis on
investments in cyclical industries, particularly companies in the transportation
sector, in anticipation of a stronger economy.
The strategies and techniques we applied resulted in the direction of the
Fund's performance remaining fairly consistent with that of the indexes charted
on the following page. Those indexes reflect the performance of securities that
generally represent the stock market (the S&P 500 Index) and the universe of
mutual fund portfolios with similar investment objectives (the Lipper Growth
Fund Universe Average). The Fund's performance was impacted positively by the
increase in value of cyclical stocks and the Fund's large position in securities
in the financial sectors.
We expect the economy to grow moderately in 1994, and we anticipate that
inflation and interest rates will remain low, although they may rise somewhat
from 1993 levels. We intend to continue to pursue the strategies employed
during the fourth quarter of 1993 by gradually reducing the Fund's exposure in
financial securities and increasing investments in cyclicals, possibly some in
foreign countries.
We appreciate your continued confidence.
Respectfully,
Antonio Intagliata
Manager, United Accumulative Fund
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
UNITED ACCUMULATIVE FUND,
The line graph which appears here in the paper version was filed on Form SE on
February 25, 1994.
<PAGE>
SHAREHOLDER SUMMARY
- -----------------------------------------------------------------
UNITED ACCUMULATIVE FUND
PORTFOLIO STRATEGY:
Appreciation-oriented OBJECTIVE: Long-term appreciation
common stock of capital with a secondary
objective of current income.
Cash Reserves
STRATEGY: The portfolio consists mainly of common
stock in large, well-known companies
representing the major sectors of our
economy.
The use of cash reserves (often invested
in money market securities) for
defensive purposes is a strategy that
may be utilized by the Accumulative Fund
from time to time.
Moving into cash reserve positions at
times thought to be near a major stock
market peak allows the Fund the
opportunity to capture profits and
attempts to cushion the impact of market
declines. The added flexibility
provided by our CASH RESERVES STRATEGY
has from time to time been an important
element in our past success and, when
deemed appropriate, may be used in the
management of the portfolio in the
future.
FOUNDED: 1940
DIVIDENDS: PAID SEMIANNUALLY (June and December)
<PAGE>
PERFORMANCE SUMMARY
PER SHARE DATA
For the Fiscal Year Ended December 31, 1993
- -------------------------------------------
DIVIDENDS PAID $0.11
=====
CAPITAL GAINS DISTRIBUTION $0.86
=====
NET ASSET VALUE ON
12/31/93 $7.19 adjusted to: $8.05(A)
12/31/92 7.50
-----
CHANGE PER SHARE $0.55
=====
(A) This number includes the capital gains distribution of $0.86 paid in
December 1993 added to the actual net asset value on December 31, 1993.
Past performance is not necessarily an indication of future results.
TOTAL RETURN HISTORY
Average Annual Total Return
---------------------------
With Without
Period Sales Load* Sales Load**
- ------ ----------- ------------
1-year period ended 12-31-93 2.79% 9.06%
5-year period ended 12-31-93 10.72% 12.03%
10-year period ended 12-31-93 12.42% 13.09%
*Performance data quoted represents past performance and is based on deduction
of 5.75% sales load on the initial purchase in each of the three periods.
**Performance data quoted in this column represents past performance without
taking into account the sales load deducted on an initial purchase.
Investment return and principal value will fluctuate and an investor's shares,
when redeemed, may be worth more or less than their original cost.
<PAGE>
PORTFOLIO HIGHLIGHTS
On December 31, 1993, United Accumulative Fund had net assets totaling
$1,033,774,298 invested in a diversified portfolio of:
87.30% Common Stocks
10.63% Cash and Cash Equivalents
2.07% Preferred Stock
As a shareholder of United Accumulative Fund, for every $100 you had invested on
December 31, 1993, your Fund owned:
Basic Industries Stocks $30.68
Technological Stocks 19.15
Financial Stocks 18.66
Consumer Stocks 17.59
Cash and Cash Equivalents 10.63
Preferred Stock 2.07
Energy and Energy-Related Stocks 1.22
Not all holdings will be represented in the portfolio at all times.
<PAGE>
- ---------------------------------------------------------------------------
These STOCK CATEGORIES are provided as a reference only. Not all categories or
subcategories will be represented in a portfolio at all times. Refer to the
following pages for a more detailed portfolio listing.
BASIC INDUSTRIES
Airlines
Automotive
Building
Chemicals Major
Electrical Equipment
Engineering and Construction
Machinery
Manufacturers
Metals and Mining
Multi-Industry
Paper
Precious Metals
Railroad Equipment
Railroads
Shipping
Steel
Tire and Rubber
Trucking
CONSUMER
Beverages
Consumer Electronics and Appliances
Food and Related
Hospital Management
Household Products
Leisure Time
Packaging and Containers
Publishing and Advertising
Retailing
Services, Consumer and Business
Textiles and Apparel
Tobacco
ENERGY AND ENERGY-RELATED
Canadian Oil
Coal
Domestic Oil
International Oil
Oil Services
Propane
FINANCIAL
Banks and Savings and Loans
Financial
Insurance
PUBLIC UTILITIES
Electric
Gas
Pipelines
TECHNOLOGICAL
Aerospace
Biotechnology and Medical Services
Business Machines and Office Equipment
Chemicals Specialty and Miscellaneous Technology
Drugs and Hospital Supply
Electronics
Telecommunications
<PAGE>
THE INVESTMENTS OF UNITED ACCUMULATIVE FUND
DECEMBER 31, 1993
Shares Value
COMMON STOCKS
Airlines - 2.12%
Mesa Airlines, Inc.* ................... 500,000 $ 8,750,000
Southwest Airlines Co. ................. 350,000 13,125,000
Total ................................. 21,875,000
Automotive - 10.58%
Chrysler Corporation ................... 300,000 15,975,000
Dana Corporation ....................... 100,000 5,987,500
Federal-Mogul Corp. .................... 400,000 11,600,000
Ford Motor Company ..................... 700,000 45,150,000
MascoTech, Inc. ........................ 250,000 6,968,750
Superior Industries International,
Inc. .................................. 135,000 5,805,000
Varity Corporation* .................... 400,000 17,900,000
Total ................................. 109,386,250
Banks and Savings and Loans - 7.33%
BankAmerica Corporation ................ 400,000 18,550,000
Banque National de Paris (A) ........... 240,000 11,657,280
Continental Bank Corporation ........... 300,000 7,912,500
Grupo Financiero Bancomer, S.A. de
C.V. C (A) ............................ 2,950,000 6,209,750
Midlantic Corporation* ................. 500,000 12,781,000
UJB Financial Corp. .................... 400,000 9,500,000
Washington Federal Savings and Loan
Association ........................... 350,000 9,100,000
Total ................................. 75,710,530
Building - 1.63%
Temple-Inland Inc. ..................... 250,000 12,593,750
United Dominion Realty Trust, Inc. ..... 300,000 4,275,000
Total ................................. 16,868,750
Business Machines and Office Equipment - 5.31%
BMC Software* .......................... 53,300 2,545,075
First Data Corporation ................. 300,000 12,225,000
General Motors Corporation, Class E .... 500,000 14,625,000
Informix Corporation* .................. 500,000 10,500,000
Microsoft Corporation* ................. 150,000 12,093,750
Pyramid Technology Corporation* ........ 200,000 2,925,000
Total ................................. 54,913,825
See Notes to Schedules of Investments on page 39.
<PAGE>
THE INVESTMENTS OF UNITED ACCUMULATIVE FUND
DECEMBER 31, 1993
Shares Value
COMMON STOCKS (Continued)
Chemicals Major - 2.34%
du Pont (E.I.) de Nemours and Company .. 500,000 $ 24,125,000
Chemicals Specialty and Miscellaneous
Technology - 0.50%
Browning-Ferris Industries, Inc. ....... 200,000 5,150,000
Drugs and Hospital Supply - 2.36%
Biocraft Laboratories Inc. ............. 150,000 3,206,250
Mylan Laboratories Inc. ................ 150,000 3,806,250
Perrigo Company* ....................... 400,000 13,650,000
Watson Pharmaceuticals Inc.* ........... 150,000 3,768,750
Total ................................. 24,431,250
Electronics - 4.55%
Atmel Corporation* ..................... 200,000 6,900,000
cisco Systems, Inc.* ................... 250,000 16,156,250
Intel Corporation ...................... 200,000 12,425,000
Motorola, Inc. ......................... 125,000 11,546,875
Total ................................. 47,028,125
Engineering and Construction - 1.17%
Grupo Tribasa, S.A. de C.V., ADS* ...... 350,000 12,118,750
Financial - 1.56%
Grupo Financiero Banamex Accival,
S.A. de C.V., B (A) ................... 300,000 2,124,900
Grupo Financiero Banamex Accival,
S.A. de C.V., C (A) ................... 525,000 4,563,300
Grupo Financiero Banamex Accival,
S.A. de C.V., L (A) ................... 41,250 317,378
Household International, Inc. .......... 280,000 9,135,000
Total ................................. 16,140,578
Hospital Management - 1.10%
Hillhaven Corporation (The)* ........... 600,000 11,325,000
Insurance - 9.77%
American International Group, Inc. ..... 100,000 8,775,000
American Re Corporation* ............... 350,000 9,931,250
Equitable of Iowa Companies ............ 250,000 8,468,750
First Colony Corporation ............... 500,000 12,687,500
General Re Corporation ................. 150,000 16,050,000
Kemper Corporation ..................... 173,900 6,303,875
NWNL Companies, Inc. (The) ............. 100,000 3,200,000
National Re Corporation ................ 209,600 6,497,600
SAFECO Corporation ..................... 150,000 8,240,550
Sphere Drake Holdings Ltd. ............. 300,000 5,025,000
TIG Holdings, Inc. ..................... 700,000 15,837,500
Total ................................. 101,017,025
See Notes to Schedules of Investments on page 39.
<PAGE>
THE INVESTMENTS OF UNITED ACCUMULATIVE FUND
DECEMBER 31, 1993
Shares Value
COMMON STOCKS (Continued)
International Oil - 1.22%
Exxon Corporation ...................... 200,000 $ 12,600,000
Leisure Time - 3.77%
Bell Sports Corp.* ..................... 144,000 4,500,000
Cheesecake Factory Incorporated (The)* . 104,500 3,553,000
Comcast Corporation, Class A ........... 250,000 8,984,250
Disney (Walt) Company (The) ............ 400,000 17,050,000
GTECH Holdings Corporation* ............ 150,000 4,912,500
Total ................................. 38,999,750
Machinery - 2.06%
Cooper Industries, Inc. ................ 200,000 9,850,000
Ingersoll-Rand Company ................. 300,000 11,475,000
Total ................................. 21,325,000
Multi-Industry - 3.95%
Allied-Signal Inc. ..................... 150,000 11,850,000
Grupo Carso, S.A. de C.V.,
Class 1 (A)* .......................... 1,400,000 15,279,600
ITT Corporation ........................ 150,000 13,687,500
Total ................................. 40,817,100
Paper - 1.98%
Champion International Corporation ..... 400,000 13,350,000
Union Camp Corporation ................. 150,000 7,143,750
Total ................................. 20,493,750
Publishing and Advertising - 3.15%
Gannett Co., Inc. ...................... 150,000 8,587,500
Knight-Ridder Newspapers, Inc. ......... 200,000 11,950,000
Tribune Company ........................ 200,000 12,025,000
Total ................................. 32,562,500
Railroads - 4.07%
Burlington Northern Inc. ............... 240,000 13,890,000
Norfolk Southern Corporation ........... 400,000 28,200,000
Total ................................. 42,090,000
Retailing - 9.57%
Bed, Bath & Beyond, Inc.* .............. 200,000 6,875,000
Books-A-Million, Inc.* ................. 250,000 5,531,250
Circuit City Stores, Inc. .............. 500,000 10,875,000
Dillard Department Stores, Inc.,
Class A ............................... 300,000 11,400,000
Family Dollar Stores, Inc. ............. 500,000 8,500,000
May Department Stores Company (The) .... 250,000 9,843,750
Penney (J.C.) Company, Inc. ............ 200,000 10,475,000
Sears, Roebuck and Co. ................. 200,000 10,550,000
Spiegel, Inc., Class A ................. 300,000 6,750,000
See Notes to Schedules of Investments on page 39.
<PAGE>
THE INVESTMENTS OF UNITED ACCUMULATIVE FUND
DECEMBER 31, 1993
Shares Value
COMMON STOCKS (Continued)
Retailing - (Continued)
Tommy Hilfiger Corporation* ............ 252,000 $ 7,875,000
Toys "R" Us, Inc.* ..................... 250,000 10,218,750
Total ................................. 98,893,750
Steel - 0.78%
LTV Corporation (The)* ................. 500,000 8,062,500
Telecommunications - 6.43%
General Instrument Corporation* ........ 100,000 5,612,500
Glenayre Technologies, Inc. ............ 165,900 7,154,438
MCI Communications Corporation ......... 500,000 14,093,500
Sprint Corporation ..................... 200,000 6,950,000
Telefonaktiebolaget LM Ericsson,
Class B, ADR .......................... 500,000 20,125,000
Telefonos de Mexico S.A. de C.V., ADR .. 100,000 6,750,000
Vanguard Cellular Systems, Inc.* ....... 200,000 5,800,000
Total ................................. 66,485,438
TOTAL COMMON STOCKS - 87.30% $ 902,419,871
(Cost: $865,033,304)
PREFERRED STOCK - 2.07%
Airlines
Delta Air Lines, Inc. .................. 400,000 $ 21,400,000
(Cost: $21,044,625)
Principal
Amount in
Thousands
SHORT-TERM SECURITIES
Banks and Savings and Loans - 1.24%
Credit Lyonnais N.A. Inc.,
3.27%, 2-1-94 ......................... $11,550 11,517,477
U.S. Bancorp,
Master Note ........................... 1,346 1,346,000
Total ................................. 12,863,477
Beverages - 0.22%
PepsiCo, Inc.:
3.3%, 1-6-94 .......................... 1,130 1,129,482
3.29%, 1-21-94 ........................ 1,150 1,147,898
Total ................................. 2,277,380
See Notes to Schedules of Investments on page 39.
<PAGE>
THE INVESTMENTS OF UNITED ACCUMULATIVE FUND
DECEMBER 31, 1993
Principal
Amount in
Thousands Value
SHORT-TERM SECURITIES (Continued)
Financial - 3.45%
Associates Corporation of North America,
Master Note ........................... $ 2,615 $ 2,615,000
BHP Finance (U.S.A.) Inc.,
3.22%, 2-7-94 ......................... 9,300 9,269,222
Block Financial Corp.,
3.28%, 1-27-94 ........................ 1,595 1,591,222
Grand Metropolitan Investment Corp.,
3.35%, 1-6-94 ......................... 3,600 3,598,325
John Deere Capital Corp.,
3.35%, 1-7-94 ......................... 4,500 4,497,487
Kerr-McGee Credit Corp.,
3.45%, 1-14-94 ........................ 6,000 5,992,525
Merrill Lynch & Co. Inc.,
3.27%, 1-31-94 ........................ 7,100 7,080,653
USAA Capital Corp.,
3.27%, 1-12-94 ........................ 1,000 999,001
Total ................................. 35,643,435
Food and Related - 1.18%
ConAgra, Inc.,
3.5%, 1-31-94 ......................... 3,500 3,489,792
Golden Peanut Co.,
3.25%, 2-11-94 ........................ 5,000 4,981,493
Sara Lee Corporation,
Master Note ........................... 3,770 3,770,000
Total ................................. 12,241,285
Metals and Mining - 1.01%
Aluminum Company of America,
3.25%, 2-11-94 ........................ 10,500 10,461,135
Multi-Industry - 1.03%
Baxter International Inc.,
3.53%, 1-7-94 ......................... 650 649,618
Olin Corp.,
3.4%, 1-12-94 ......................... 10,000 9,989,611
Total ................................. 10,639,229
Public Utilities - Electric - 0.14%
Houston Industries Inc.,
3.45%, 1-14-94 ........................ 1,450 1,448,194
See Notes to Schedules of Investments on page 39.
<PAGE>
THE INVESTMENTS OF UNITED ACCUMULATIVE FUND
DECEMBER 31, 1993
Principal
Amount in
Thousands Value
SHORT-TERM SECURITIES (Continued)
Public Utilities - Gas - 1.09%
Michigan Consolidated Gas Co.,
3.23%, 1-24-94 ........................ $ 9,300 $ 9,280,808
Questar Corp.,
3.22%, 2-4-94 ......................... 1,950 1,944,070
Total ................................. 11,224,878
Telecommunications - 1.95%
American Telephone and Telegraph Company,
3.3%, 1-28-94 ......................... 6,800 6,783,170
Siemens Corp.,
3.3%, 1-21-94 ......................... 5,000 4,990,833
Southwestern Bell Capital Corp.,
3.25%, 1-24-94 ........................ 8,400 8,382,558
Total ................................. 20,156,561
TOTAL SHORT-TERM SECURITIES - 11.31% $ 116,955,574
(Cost: $116,955,574)
TOTAL INVESTMENT SECURITIES - 100.68% $1,040,775,445
(Cost: $1,003,033,503)
LIABILITIES, NET OF CASH AND
OTHER ASSETS - (0.68%) (7,001,147)
NET ASSETS - 100.00% $1,033,774,298
See Notes to Schedules of Investments on page 39.
<PAGE>
UNITED SCIENCE AND TECHNOLOGY FUND
MANAGER'S LETTER
DECEMBER 31, 1993
- ---------------------------------------------------------------------------
Dear Shareholder:
This report relates to the operation of the United Science and Technology
Fund for the fiscal year ended December 31, 1993. The following discussion,
graphs and tables provide you with information regarding the Fund's performance
during that period.
During the past fiscal year, the equity markets experienced record issuance
of initial public offerings, generally lower interest rates, with fluctuations,
and price volatility in industries and companies that are traditionally
relatively stable. Concerns about health-care reform had a negative impact on
medical-related equity securities, and Federal tax policy contributed in a
number of cases to smaller increases in corporate profits than initially
anticipated.
Because of concerns about declines in the value of medical-related equity
securities, the Fund reduced its health-care investments. In view of smaller
than expected increases in corporate profits, the Fund invested in corporations
that could either raise prices effectively or lower costs significantly to
increase profits. Finally, the Fund made a general move to more economically
sensitive securities and away from stocks of companies producing nondurable
consumer goods.
The strategies and techniques we applied resulted in the direction of the
Fund's performance remaining fairly consistent with that of the indexes charted
on the following page. Those indexes reflect the performance of securities that
generally represent the non-financial institution portion of the stock market
(the S&P 400 Index) and the universe of mutual fund portfolios with similar
investment objectives (the Lipper Science & Technology Fund Universe Average).
The Fund's performance was impacted positively during the past fiscal year by
the Fund's large technology exposure, which is highly sensitive to the economy.
We anticipate that the level of interest rates and inflation will remain
low in 1994. Therefore, we expect to continue to pursue the same strategies we
have recently employed, as always attempting to shift the Fund's assets to
higher growth markets and companies.
We appreciate your continued confidence.
Respectfully,
Abel Garcia
Manager, United Science and Technology Fund
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
UNITED SCIENCE AND TECHNOLOGY FUND
The line graph which appears here in the paper version was filed on Form SE on
February 25, 1994.
<PAGE>
SHAREHOLDER SUMMARY
- ------------------------------------------------------------------------
UNITED SCIENCE AND TECHNOLOGY FUND
PORTFOLIO STRATEGY:
Technology-related OBJECTIVE: Long-term appreciation
stocks of capital.
Generally at least 80% STRATEGY: Invests in common
in science or technology stocks of companies that
securities; may have more are expected to benefit
than 20% in debt securities. from scientific or technological
discoveries or developments.
Cash Reserves The use of cash reserves (often invested
in money market securities) for
defensive purposes is a strategy that
may be utilized by the Science and
Technology Fund from time to time.
Moving into cash reserve positions at
times thought to be near a major stock
market peak allows the Fund the
opportunity to capture profits and
attempts to cushion the impact of market
declines. The added flexibility
provided by our CASH RESERVES STRATEGY
has from time to time been an important
element in our past success and, when
deemed appropriate, may be used in the
management of the portfolio in the
future.
FOUNDED: 1950
DIVIDENDS: PAID SEMIANNUALLY (June and December)
<PAGE>
PERFORMANCE SUMMARY
PER SHARE DATA
For the Fiscal Year Ended December 31, 1993
- -------------------------------------------
DIVIDENDS PAID $0.01
======
CAPITAL GAINS DISTRIBUTION $1.02
======
NET ASSET VALUE ON
12/31/93 $14.83 adjusted to: $15.85(A)
12/31/92 14.64
------
CHANGE PER SHARE $ 1.21
======
(A) This number includes the capital gains distribution of $1.02 paid in
December 1993 added to the actual net asset value on December 31, 1993.
Past performance is not necessarily an indication of future results.
TOTAL RETURN HISTORY
Average Annual Total Return
---------------------------
With Without
Period Sales Load* Sales Load**
- ------ ----------- ------------
1-year period ended 12-31-93 2.27% 8.51%
5-year period ended 12-31-93 13.95% 15.31%
10-year period ended 12-31-93 12.94% 13.61%
*Performance data quoted represents past performance and is based on deduction
of 5.75% sales load on the initial purchase in each of the three periods.
**Performance data quoted in this column represents past performance without
taking into account the sales load deducted on an initial purchase.
Investment return and principal value will fluctuate and an investor's shares,
when redeemed, may be worth more or less than their original cost.
<PAGE>
PORTFOLIO HIGHLIGHTS
On December 31, 1993, United Science and Technology Fund had net assets totaling
$446,610,640 invested in a diversified portfolio of:
92.31% Common Stocks
6.93% Cash and Cash Equivalents
0.76% Corporate Debt Securities
As a shareholder of United Science and Technology Fund, for every $100 you had
invested on December 31, 1993, your Fund owned:
Technological Stocks $57.43
Basic Industries Stocks 15.39
Consumer Stocks 14.10
Cash and Cash Equivalents 6.93
Public Utilities Stocks 3.70
Financial Stocks 1.69
Corporate Debt Securities 0.76
Not all holdings will be represented in the portfolio at all times.
<PAGE>
- ---------------------------------------------------------------------------
These STOCK CATEGORIES are provided as a reference only. Not all categories or
subcategories will be represented in a portfolio at all times. Refer to the
following pages for a more detailed portfolio listing.
BASIC INDUSTRIES
Airlines
Automotive
Building
Chemicals Major
Electrical Equipment
Engineering and Construction
Machinery
Manufacturers
Metals and Mining
Multi-Industry
Paper
Precious Metals
Railroad Equipment
Railroads
Shipping
Steel
Tire and Rubber
Trucking
CONSUMER
Beverages
Consumer Electronics and Appliances
Food and Related
Hospital Management
Household Products
Leisure Time
Packaging and Containers
Publishing and Advertising
Retailing
Services, Consumer and Business
Textiles and Apparel
Tobacco
ENERGY AND ENERGY-RELATED
Canadian Oil
Coal
Domestic Oil
International Oil
Oil Services
Propane
FINANCIAL
Banks and Savings and Loans
Financial
Insurance
PUBLIC UTILITIES
Electric
Gas
Pipelines
TECHNOLOGICAL
Aerospace
Biotechnology and Medical Services
Business Machines and Office Equipment
Chemicals Specialty and Miscellaneous Technology
Drugs and Hospital Supply
Electronics
Telecommunications
<PAGE>
THE INVESTMENTS OF UNITED SCIENCE AND TECHNOLOGY FUND
DECEMBER 31, 1993
Shares Value
COMMON STOCKS
Automotive - 6.79%
Chrysler Corporation ................... 60,000 $ 3,195,000
General Motors Corporation ............. 135,000 7,408,125
Hayes Wheels International, Inc. ....... 150,000 4,593,750
Standard Products Company (The) ........ 137,500 4,812,500
Superior Industries International, Inc. 240,000 10,320,000
Total ................................. 30,329,375
Biotechnology and Medical Services - 2.83%
Kendall International, Inc.* ........... 85,000 3,899,375
Osteotech, Inc.* ....................... 106,500 545,813
Ventritex, Inc.* ....................... 210,000 8,216,250
Total ................................. 12,661,438
Business Machines and Office Equipment - 24.04%
BMC Software, Inc.* .................... 155,000 7,401,250
Broderbund Software, Inc.* ............. 164,000 5,699,000
Cerner Corporation* .................... 246,000 10,578,000
Computer Associates International,
Inc. .................................. 100,000 4,000,000
Creative Technology Ltd.* .............. 50,000 1,575,000
First Data Corporation ................. 200,000 8,150,000
General Motors Corporation, Class E .... 330,000 9,652,500
Informix Corporation* .................. 700,000 14,700,000
Intuit* ................................ 100,000 4,275,000
Micro Focus Group Plc (A)* .............. 150,000 2,215,950
Micro Focus Group Plc, ADR* ............ 75,000 1,115,625
Microchip Technology Incorporated* ..... 30,000 1,166,250
Microsoft Corporation* ................. 95,000 7,659,375
Oracle Systems Corporation* ............ 280,000 8,067,360
Parametric Technology Corporation* ..... 350,000 13,475,000
Pinnacle Micro, Inc.* .................. 150,000 2,718,750
Santa Cruz Operation, Inc.* ............ 60,000 408,720
Synopsys, Inc.* ........................ 100,000 4,500,000
Total ................................. 107,357,780
Chemicals Major - 1.08%
Georgia Gulf Corporation* .............. 215,000 4,810,625
Chemicals Specialty and Miscellaneous Technology - 1.28%
Crompton & Knowles Corporation ......... 260,000 5,720,000
Consumer Electronics and Appliances - 0.45%
Rival Company (The) .................... 100,000 2,018,700
See Notes to Schedules of Investments on page 39.
<PAGE>
THE INVESTMENTS OF UNITED SCIENCE AND TECHNOLOGY FUND
DECEMBER 31, 1993
Shares Value
COMMON STOCKS (Continued)
Drugs and Hospital Supply - 4.36%
Perrigo Company* ....................... 200,000 $ 6,825,000
Roche Holdings AG (A) .................. 3,000 12,661,290
Total ................................. 19,486,290
Electrical Equipment - 1.41%
General Electric Company ............... 60,000 6,292,500
Electronics - 17.00%
Advanced Technology Materials Inc.* .... 127,500 772,905
Applied Materials, Inc.* ............... 380,000 14,820,000
Atmel Corporation* ..................... 115,000 3,967,500
cisco Systems, Inc.* ................... 360,000 23,265,000
IDB Communications Group, Inc.* ........ 110,000 6,022,500
Intel Corporation ...................... 100,000 6,212,500
Lam Research* .......................... 125,000 4,046,875
Motorola, Inc. ......................... 40,000 3,695,000
Quickturn System Inc.* ................. 77,500 959,063
Standard Microsystems Corporation* ..... 25,000 537,500
Summa Four, Inc.* ...................... 72,200 2,833,850
Wellfleet Communications, Inc.* ........ 40,000 2,575,000
Xilinx, Inc.* .......................... 131,000 6,222,500
Total ................................. 75,930,193
Hospital Management - 5.25%
TakeCare, Inc.* ........................ 145,000 8,283,125
United HealthCare Corporation .......... 200,000 15,175,000
Total ................................. 23,458,125
Household Products - 0.58%
ADESA Corporation ...................... 140,000 2,572,500
Insurance - 1.69%
Insurance Auto Auctions, Inc.* ......... 165,000 6,043,125
Valence Technology Inc.* ............... 100,000 1,500,000
Total ................................. 7,543,125
Leisure Time - 3.18%
ANTEC Corporation* ..................... 100,000 2,450,000
Comcast Corporation, Class A ........... 100,000 3,625,000
Grupo Televisa S.A. de C.V. (A) ........ 120,000 4,180,200
Iwerks Entertainment, Inc.* ............ 30,000 791,250
SPI Holdings Inc., Class B* ............ 350,000 3,150,000
Total ................................. 14,196,450
See Notes to Schedules of Investments on page 39.
<PAGE>
THE INVESTMENTS OF UNITED SCIENCE AND TECHNOLOGY FUND
DECEMBER 31, 1993
Shares Value
COMMON STOCKS (Continued)
Machinery - 5.04%
Cognex Corporation* .................... 260,000 $ 3,737,500
Deere & Company ........................ 85,000 6,290,000
Illinois Tool Works Inc. ............... 100,000 3,900,000
Parker Hannifin Corporation ............ 90,000 3,397,500
Trinova Corporation .................... 165,000 5,176,875
Total ................................. 22,501,875
Paper - 1.07%
Union Camp Corporation ................. 100,000 4,762,500
Public Utilities - Electric - 3.70%
Detroit Edison Company ................. 200,000 6,000,000
L G & E Energy Corp. ................... 100,000 4,050,000
Northern States Power Company .......... 150,000 6,468,750
Total ................................. 16,518,750
Publishing and Advertising - 1.03%
Centros Commerciales Pryca, S.A. (A) ... 150,000 1,980,300
Pilkington PLC (A) ..................... 1,000,000 2,629,000
Total ................................. 4,609,300
Retailing - 1.01%
Wal-Mart Stores, Inc. .................. 180,000 4,500,000
Services, Consumer and Business - 2.60%
CUC International Inc.* ................ 322,500 11,610,000
Telecommunications - 7.92%
DSC Communications Corporation* ........ 50,000 3,071,850
General Instrument Corporation* ........ 65,000 3,648,125
Glenayre Technologies, Inc. ............ 160,000 6,900,000
MCI Communications Corporation ......... 170,000 4,791,790
MFS Communications Company, Inc.* ...... 130,000 4,241,250
Rogers Cantel Mobile Communications
Inc.* ................................. 200,000 5,387,400
Telefonaktiebolaget LM Ericsson,
Class B, ADR .......................... 110,000 4,427,500
Vanguard Cellular Systems, Inc.* ....... 100,000 2,900,000
Total ................................. 35,367,915
TOTAL COMMON STOCKS - 92.31% $412,247,441
(Cost: $257,113,541)
See Notes to Schedules of Investments on page 39.
<PAGE>
THE INVESTMENTS OF UNITED SCIENCE AND TECHNOLOGY FUND
DECEMBER 31, 1993
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES
Electronics - 0.10%
IDB Communications Group, Inc.,
5.0%, 8-15-2003 ....................... $ 375 $ 435,000
Financial - 0.44%
American Express Company,
6.25%, 10-15-96 ....................... 1,838 1,987,495
Hospital Management - 0.22%
Vencor, Incorporated,
6.0%, 10-1-2002 ....................... 1,000 992,500
TOTAL CORPORATE DEBT SECURITIES - 0.76% $ 3,414,995
(Cost: $3,212,500)
SHORT-TERM SECURITIES
Banks and Savings and Loans - 0.96%
Credit Lyonnais N.A. Inc.,
3.34%, 1-4-94 ......................... 3,600 3,598,998
U.S. Bancorp,
Master Note ........................... 700 700,000
Total ................................. 4,298,998
Beverages - 0.40%
PepsiCo, Inc.,
3.29%, 1-21-94 ........................ 1,800 1,796,710
Financial - 3.03%
Associates Corporation of North America,
Master Note ........................... 6,460 6,460,000
Merrill Lynch & Co., Inc.,
3.32%, 1-13-94 ........................ 100 99,889
Textron Financial Corp.,
3.57%, 1-19-94 ........................ 1,000 998,215
Transamerica Finance Corp.,
3.35%, 1-28-94 ........................ 6,000 5,984,925
Total ................................. 13,543,029
Food and Related - 1.60%
Heinz (H.J.) Company,
3.29%, 1-24-94 ........................ 6,800 6,785,707
Sara Lee Corporation,
Master Note ........................... 340 340,000
Total ................................. 7,125,707
Public Utilities - Electric - 0.50%
Houston Industries Inc.,
3.45%, 1-14-94 ........................ 2,250 2,247,197
See Notes to Schedules of Investments on page 39.
<PAGE>
THE INVESTMENTS OF UNITED SCIENCE AND TECHNOLOGY FUND
DECEMBER 31, 1993
Principal
Amount in
Thousands Value
SHORT-TERM SECURITIES (Continued)
Public Utilities - Gas - 0.34%
Northern Illinois Gas Co.,
3.18%, 1-7-94 ......................... $ 1,500 $ 1,499,205
Retailing - 0.50%
K Mart Corporation,
3.3%, 1-24-94 ......................... 2,250 2,245,256
TOTAL SHORT-TERM SECURITIES - 7.33% $ 32,756,102
(Cost: $32,756,102)
TOTAL INVESTMENT SECURITIES - 100.40% $448,418,538
(Cost: $293,082,143)
LIABILITIES, NET OF CASH
AND OTHER ASSETS - (0.40%) (1,807,898)
NET ASSETS - 100.00% $446,610,640
See Notes to Schedules of Investments on page .
<PAGE>
Notes to Schedules of Investments
(A) Listed on an exchange outside the United States.
*No income dividends were paid during the preceding 12 months.
See Note 1 to financial statements for security valuation and other significant
accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and
depreciation of investments owned for Federal income tax purposes.
<PAGE>
UNITED FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES United
DECEMBER 31, 1993 United United United Science and
Bond Income Accumulative Technology
Fund Fund Fund Fund
Assets -------------------------- ------------ ------------
Investment securities --
at value
(Notes 1 and 3) $636,484,083$3,056,275,654$1,040,775,445$448,418,538
Cash .............. 21,560 72,071 14,500 46,598
Receivables:
Dividends and interest 9,332,893 5,906,855 872,470
469,358
Fund shares sold .. 1,158,824 4,054,389 571,185 517,031
Investment securities
sold ............ --- 3,473,959 --- ---
Prepaid insurance
premium ........... 20,913 67,422 41,444 13,797
----------------------------------------------------
Total assets .... 647,018,273 3,069,850,350 1,042,275,044 449,465,322
Liabilities ----------------------------------------------------
Payable for Fund
shares redeemed ... 5,115,255 8,646,931 8,132,549 1,954,047
Accrued service fee . 117,930 539,819 172,654 78,610
Payable for investment
securities purchased --- --- ---
677,500
Accrued transfer agency
and dividend disbursing 64,036 330,904 100,500 77,611
Accrued accounting
services fee....... 5,833 8,333 8,333 5,000
Other .............. 47,088 251,087 86,710 61,914
----------------------------------------------------
Total liabilities 5,350,142 9,777,074 8,500,746 2,854,682
----------------------------------------------------
Total net assets $641,668,131$3,060,073,276$1,033,774,298$446,610,640
Net Assets ====================================================
$1.00 par value capital stock
Capital stock ..... $100,455,536$ 123,543,428$ 143,744,364$ 30,113,520
Additional paid-in
capital .......... 529,868,917 1,898,743,048 854,945,922 263,080,692
Accumulated undistributed
income(loss):
Accumulated undistributed
net investment income 310,713 720,855 454,363 103,749
Accumulated undistributed net
realized gain (loss) on
investment transactions1,818,716 6,762,016 (3,112,293) (2,023,716)
Net unrealized appreciation
of investments at
end of period .... 9,214,249 1,030,303,929 37,741,942 155,336,395
----------------------------------------------------
Net assets applicable to
outstanding units
of capital ..... $641,668,131$3,060,073,276$1,033,774,298$446,610,640
====================================================
Net asset value per share (net
assets divided by shares
outstanding) ....... $6.39 $24.77 $7.19 $14.83
Sales load (offering price
X 5.75%) ............ .39 1.51 .44 .90
----- ------ ----- ------
Offering price per share (net asset
value divided by 94.25%) $6.78 $26.28 $7.63 $15.73
===== ====== ===== ======
Capital shares
outstanding ........ 100,455,536 123,543,428 143,744,364 30,113,520
Capital shares
authorized 260,000,000 300,000,000 340,000,000 100,000,000
On sales of $100,000 or more the sales load is reduced as set forth in the
Prospectus.
See notes to financial statements.
<PAGE>
UNITED FUNDS, INC.
STATEMENT OF OPERATIONS
For the Fiscal Year Ended DECEMBER 31, 1993
United
United United United Science and
Bond Income Accumulative Technology
Fund Fund Fund Fund
-------------------------- ------------------------
Investment Income
Income:
Dividends ......... $ --- $ 51,680,226 $13,332,161 $ 2,050,080
Interest .......... 42,809,303 14,164,531 6,876,726 2,004,864
----------- ------------ ----------- -----------
Total income .... 42,809,303 65,844,757 20,208,887 4,054,944
----------- ------------ ----------- -----------
Expenses (Note 2):
Investment
management fee ... 2,833,151 13,089,827 4,776,064 2,598,347
Transfer agency and
dividend disbursing 844,833 3,736,787 1,092,567
849,529
Service fee ....... 141,574 666,545 211,828 101,879
Custodian fees .... 50,794 336,818 166,981 56,911
Accounting services fee 70,000 100,000 98,750 60,000
Audit fees ........ 24,849 71,837 33,450 19,498
Legal fees ........ 13,027 44,505 27,866 8,170
Other ............. 127,909 500,322 169,904 114,908
----------- ------------ ----------- -----------
Total expenses .. 4,106,137 18,546,641 6,577,410 3,809,242
----------- ------------ ----------- -----------
Net investment
income ....... 38,703,166 47,298,116 13,631,477 245,702
----------- ------------ ----------- -----------
Realized and Unrealized
Gain (Loss) on
Investments
Realized net gain
on investments .... 42,273,683 72,262,232 99,077,252 19,831,519
Unrealized appreciation
(depreciation) in
value of investments
during the period.. (4,437,167) 297,996,504 (24,457,177) 14,872,734
----------- ------------ ----------- -----------
Net gain on
investments ..... 37,836,516 370,258,736 74,620,075 34,704,253
----------- ------------ ----------- -----------
Net increase in
net assets
resulting
from operations. $76,539,682 $417,556,852 $88,251,552 $34,949,955
=========== ============ =========== ===========
See notes to financial statements.
UNITED FUNDS, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the Fiscal Year Ended DECEMBER 31, 1993 United
United United United Science and
Bond Income Accumulative Technology
Fund Fund Fund Fund
----------------------------------------------------
Increase in Net Assets
Operations:
Net investment income $ 38,703,166$ 47,298,116$ 13,631,477
$ 245,702
Realized net gain
on investments .. 42,273,683 72,262,232 99,077,252 19,831,519
Unrealized appreciation
(depreciation) .. (4,437,167) 297,996,504 (24,457,177) 14,872,734
----------------------------------------------------
Net increase in net
assets resulting
from operations. 76,539,682 417,556,852 88,251,552 34,949,955
----------------------------------------------------
Dividends to shareholders:*
From net investment
income .......... (38,417,817) (47,391,411) (14,057,190) (289,842)
From realized net gain
on investment
transactions ..... (31,560,821) (47,069,010) (107,396,676)(26,791,116)
In excess of realized net
gain from investment
transactions ..... --- --- (3,112,293) (2,023,716)
----------------------------------------------------
.............. (69,978,638) (94,460,421) (124,566,159)(29,104,674)
----------------------------------------------------
Capital share
transactions**..... 45,161,486 199,815,817 77,165,152 11,958,973
----------------------------------------------------
Total increase .... 51,722,530 522,912,248 40,850,545 17,804,254
Net Assets
Beginning of period 589,945,601 2,537,161,028 992,923,753 428,806,386
----------------------------------------------------
End of period ...... $641,668,131$3,060,073,276$1,033,774,298$446,610,640
====================================================
Undistributed net
investment income $310,713 $720,855 $454,363 $103,749
======== ======== ======== ========
*See "Financial Highlights" on pages 44-47.
**Shares issued from sale
of shares ......... 10,823,257 15,138,889 8,005,063 2,391,048
Shares issued from
reinvestment of dividends
dividends and/or
distributions ..... 9,135,589 3,568,938 16,395,920 1,897,450
Shares redeemed (13,016,181) (10,230,919) (13,035,089) (3,465,411)
----------- ----------- ----------- ----------
Increase in
outstanding capital
shares ............ 6,942,665 8,476,908 11,365,894 823,087
=========== =========== =========== ==========
Value issued from sale
of shares.......... $72,085,126 $354,349,326 $ 61,908,432 $34,447,164
Value issued from
reinvestment of dividends
dividends and/or
distributions ..... 59,457,945 85,633,675 116,166,594 27,467,139
Value redeemed ..... (86,381,585) (240,167,184) (100,909,874)(49,955,330)
----------- ------------ ------------ -----------
Increase in outstanding
capital ........... $45,161,486 $199,815,817 $ 77,165,152 $11,958,973
=========== ============ ============ ===========
See notes to financial statements.
<PAGE>
UNITED FUNDS, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the Fiscal Year Ended DECEMBER 31, 1992 United
United United United Science and
Bond Income Accumulative Technology
Fund Fund Fund Fund
-------------------------- ------------------------
Increase in Net Assets
Operations:
Net investment
income .......... $ 40,237,323$ 50,479,790 $ 19,762,339$ 933,927
Realized net gain
on investments .. 21,422,845 20,047,357 52,249,568 7,054,052
Unrealized
appreciation
(depreciation) .. (20,856,292) 196,241,900 53,132,957(22,885,513)
-------------------------- ------------------------
Net increase (decrease)
in net assets
resulting from
operations...... 40,803,876 266,769,047 125,144,864(14,897,534)
-------------------------- ------------------------
Dividends to
shareholders from:*
Net investment income (40,699,367) (50,369,748)(19,168,674)
(947,911)
Realized net gain
on investment
transactions .... --- (39,110,054) (61,762,288) (3,540,877)
-------------------------- ------------------------
.............. (40,699,367) (89,479,802) (80,930,962) (4,488,788)
-------------------------- ------------------------
Capital share
transactions** .... 65,437,125 208,885,817 44,074,916 42,813,031
-------------------------- ------------------------
Total increase .... 65,541,634 386,175,062 88,288,818 23,426,709
Net Assets
Beginning of period 524,403,967 2,150,985,966 904,634,935 405,379,677
-------------------------- ------------------------
End of period ...... $589,945,601$2,537,161,028 $992,923,753$428,806,386
========================== ========================
Undistributed net investment
income .......... $25,364 $814,150 $880,076 $147,889
======= ======== ======== ========
*See "Financial Highlights" on pages 44-47.
**Shares issued from sale
of shares........... 17,482,760 15,872,640 6,974,607 5,038,057
Shares issued from
reinvestment of dividends
and/or capital gains
distributions ..... 5,232,824 3,706,114 10,083,013 292,379
Shares redeemed .... (12,206,683) (9,762,859) (11,199,087) (2,326,876)
------------
Increase in
outstanding
capital shares .... 10,508,901 9,815,895 5,858,533 3,003,560
========== ========= ========== =========
Value issued from sale
of shares.......... $108,793,491 $334,825,656 $51,857,594 $70,977,017
Value issued from
reinvestment of dividends
and/or capital gains
distributions ..... 32,474,091 79,889,015 75,225,480 4,176,680
Value redeemed ..... (75,830,457) (205,828,854) (83,008,158)(32,340,666)
------------ ------------ ----------- -----------
Increase in outstanding
capital ........... $ 65,437,125 $208,885,817 $44,074,916 $42,813,031
============ ============ =========== ===========
See notes to financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS OF
UNITED BOND FUND
For a Share of Capital Stock Outstanding Throughout Each Period:
For the fiscal year ended December 31,
--------------------------------------
1993 1992 1991 1990 1989
----- ----- ----- ----- -----
Net asset value,
beginning of period $6.31 $6.32 $5.80 $6.07 $6.03
----- ----- ----- ----- -----
Income from investment
operations:
Net investment income .41 .45 .47 .50 .55
Net realized and
unrealized gain
(loss) on
investments ..... .41 .00 .56 (0.26) .07
----- ----- ----- ----- -----
Total from investment
operations ....... .82 .45 1.03 .24 .62
----- ----- ----- ----- -----
Less distributions:
Dividends from net
investment income (0.41) (0.46) (0.47) (0.50) (0.56)
Distribution from
capital gains ... (0.33) (0.00) (0.04) (0.01) (0.02)
----- ----- ----- ----- -----
Total distributions (0.74) (0.46) (0.51) (0.51) (0.58)
----- ----- ----- ----- -----
Net asset value,
end of period .... $6.39 $6.31 $6.32 $5.80 $6.07
===== ===== ===== ===== =====
Total return* ...... 13.19% 7.50% 18.78% 4.24% 10.61%
Net assets, end of
period (000
omitted) ......... $641,668$589,946$524,404$439,487$403,010
Ratio of expenses to
average net assets 0.65% 0.64% 0.65% 0.67% 0.64%
Ratio of net investment
income to average
net assets ....... 6.14% 7.29% 7.96% 8.54% 8.97%
Portfolio turnover
rate ............. 175.39% 115.17% 318.76%294.66% 353.57%
*Total return calculated without taking into account the sales load deducted
on an initial purchase.
See notes to financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS OF
UNITED INCOME FUND
For a Share of Capital Stock Outstanding Throughout Each Period:
For the fiscal year ended December 31,
-------------------------------------
1993 1992 1991 1990 1989
----- ----- ----- ----- -----
Net asset value,
beginning of period $22.05 $20.44 $16.46 $18.69 $16.76
------ ------ ------ ------ ------
Income from investment
operations:
Net investment income .40 .46 .51 .61 .65
Net realized and
unrealized gain
(loss) on
investments ..... 3.11 1.96 4.29 (1.61) 3.89
------ ------ ------ ------ ------
Total from investment
operations ....... 3.51 2.42 4.80 (1.00) 4.54
------ ------ ------ ------ ------
Less distributions:
Dividends from net
investment income (0.40) (0.46) (0.53) (0.63) (0.65)
Distribution from
capital gains ... (0.39) (0.35) (0.29) (0.60) (1.96)
------ ------ ------ ------ ------
Total distributions (0.79) (0.81) (0.82) (1.23) (2.61)
------ ------ ------ ------ ------
Net asset value,
end of period .... $24.77 $22.05 $20.44 $16.46 $18.69
====== ====== ====== ====== ======
Total return* ...... 16.05% 11.96% 29.64% -5.45% 27.49%
Net assets, end of
period (000
omitted) ......... $3,060,073$2,537,161$2,150,986$1,578,543 $1,550,387
Ratio of expenses to
average net assets 0.66% 0.65% 0.66% 0.68% 0.64%
Ratio of net investment
income to average
net assets ....... 1.70% 2.19% 2.71% 3.44% 3.41%
Portfolio turnover
rate ............. 21.70% 19.25% 24.68% 30.94% 60.77%
*Total return calculated without taking into account the sales load deducted
on an initial purchase.
See notes to financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS OF
UNITED ACCUMULATIVE FUND
For a Share of Capital Stock Outstanding Throughout Each Period:
For the fiscal year ended December 31,
--------------------------------------
1993 1992 1991 1990 1989
----- ----- ----- ----- -----
Net asset value,
beginning of period $7.50 $7.15 $6.03 $7.12 $6.43
----- ----- ----- ----- -----
Income from investment
operations:
Net investment income .11 .16 .19 .28 .31
Net realized and
unrealized gain
(loss) on
investments ..... .55 .85 1.22 (0.99) 1.43
----- ----- ----- ----- -----
Total from investment
operations ....... .66 1.01 1.41 (0.71) 1.74
----- ----- ----- ----- -----
Less distributions:
Dividends from net
investment income (0.11) (0.16) (0.20) (0.29) (0.29)
Distribution from
capital gains ... (0.84) (0.50) (0.09) (0.09) (0.76)
Distribution in
excess of capital gains (0.02) (0.00) (0.00) (0.00) (0.00)
----- ----- ----- ----- -----
Total distributions (0.97) (0.66) (0.29) (0.38) (1.05)
----- ----- ----- ----- -----
Net asset value,
end of period .... $7.19 $7.50 $7.15 $6.03 $7.12
===== ===== ===== ===== =====
Total return* ...... 9.06% 14.20% 23.68%-10.17% 27.56%
Net assets, end of
period (000
omitted) ......... $1,033,774$992,924$904,635$767,218$877,109
Ratio of expenses to
average net assets 0.65% 0.62% 0.63% 0.64% 0.60%
Ratio of net investment
income to average
net assets ....... 1.34% 2.13% 2.79% 4.12% 4.19%
Portfolio turnover
rate ............. 230.29%194.41% 241.11%288.64% 338.24%
*Total return calculated without taking into account the sales load deducted
on an initial purchase.
See notes to financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS OF
UNITED SCIENCE AND TECHNOLOGY FUND
For a Share of Capital Stock Outstanding Throughout Each Period:
For the fiscal year ended December 31,
--------------------------------------
1993 1992 1991 1990 1989
----- ----- ----- ----- -----
Net asset value,
beginning of period $14.64 $15.42 $10.27 $11.72 $ 9.91
------ ------ ------ ------ ------
Income from investment
operations:
Net investment income .01 .03 .10 .24 .20
Net realized and
unrealized gain
(loss) on
investments ..... 1.21 (0.66) 5.90 (0.65) 2.50
------ ------ ------ ------ ------
Total from investment
operations ....... 1.22 (0.63) 6.00 (0.41) 2.70
------ ------ ------ ------ ------
Less distributions:
Dividends from net
investment income (0.01) (0.03) (0.10) (0.25) (0.19)
Distribution from
capital gains ... (0.95) (0.12) (0.75) (0.79) (0.70)
Distribution in
excess of capital gains (0.07) (0.00) (0.00) (0.00) (0.00)
------ ------ ------ ------ ------
Total distributions (1.03) (0.15) (0.85) (1.04) (0.89)
------ ------ ------ ------ ------
Net asset value,
end of period .... $14.83 $14.64 $15.42 $10.27 $11.72
====== ====== ====== ====== ======
Total return* ...... 8.51% -4.03% 59.25% -3.51% 27.40%
Net assets, end of
period (000
omitted) ......... $446,611$428,806$405,380$239,077$247,584
Ratio of expenses to
average net assets 0.91% 0.87% 0.85% 0.90% 0.84%
Ratio of net investment
income to average
net assets ....... 0.06% 0.24% 0.75% 2.06% 1.73%
Portfolio turnover
rate ............. 68.38% 45.79% 59.24% 63.86% 83.19%
*Total return calculated without taking into account the sales load deducted
on an initial purchase.
See notes to financial statements.
<PAGE>
UNITED FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993
NOTE 1 -- Significant Accounting Policies
United Funds, Inc. (the "Corporation") is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company.
The Corporation issues four classes of capital shares; each class represents
ownership of a separate mutual fund. The assets belonging to each Fund are held
separately by the Custodian. The capital shares of each Fund represent a pro
rata beneficial interest in the principal, net income and realized and
unrealized capital gains or losses of its respective investments and other
assets. The following is a summary of significant accounting policies
consistently followed by the Corporation in the preparation of its financial
statements. The policies are in conformity with generally accepted accounting
principles.
A. Security valuation -- Each stock and convertible bond is valued at the
latest sale price thereof on the last business day of the fiscal period as
reported by the principal securities exchange on which the issue is traded
or, if no sale is reported for a stock, the average of the latest bid and
asked prices. Bonds, other than convertible bonds, are valued using a
pricing system provided by a major dealer in bonds. Convertible bonds are
valued using this pricing system only on days when there is no sale
reported. Stocks which are traded over-the-counter are priced using NASDAQ
(National Association of Securities Dealers Automated Quotations) which
provides information on bid and asked or closing prices quoted by major
dealers in such stocks. Securities for which quotations are not readily
available are valued as determined in good faith in accordance with
procedures established by and under the general supervision of the
Corporation's Board of Directors. Short-term debt securities are valued at
amortized cost, which approximates market.
B. Security transactions and related investment income -- Security
transactions are accounted for on the trade date (date the order to buy or
sell is executed). Securities gains and losses are calculated on the
identified cost basis. Original issue discount (as defined in the Internal
Revenue Code), premiums on the purchase of bonds and post-1984 market
discount are amortized for both financial and tax reporting purposes over
the remaining lives of the bonds. Dividend income is recorded on the ex-
dividend date. Interest income is recorded on the accrual basis. See Note
3 -- Investment Securities Transactions.
C. Federal income taxes -- It is the Corporation's policy to distribute all of
its taxable income and capital gains to its shareholders and otherwise
qualify as a regulated investment company under the Internal Revenue Code.
In addition, the Corporation intends to pay distributions as required to
avoid imposition of excise tax. Accordingly, provision has not been made
for Federal income taxes. See Note 4 -- Federal Income Tax Matters.
D. Dividends and distributions -- Dividends and distributions to shareholders
are recorded by each Fund on the record date. During the twelve months
ended December 31, 1993, the Fund adopted Statement of Position 93-2
Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies.
Accordingly, permanent book and tax basis differences relating to future
shareholder distributions have been reclassified to additional paid-in
capital. As of January 1, 1993, the cumulative effect of such differences
was reclassified from accumulated undistributed net realized gain on
investment transactions to additional paid-in capital as follows:
United Bond Fund $(28,709,089)
United Income Fund 5,236,411
United Accumulative Fund (1,305,150)
United Science and Technology Fund 977,095
Additionally, certain distributions have been reclassified in the Statement
of Changes in Net Assets to better disclose the differences between
financial statement amounts and distributions determined in accordance with
income tax regulations. Net investment income, net realized gains and net
assets were not affected by this change.
NOTE 2 -- Investment Management And Payments To Affiliated Persons
The Fund pays a fee for investment management services. The fee is
computed daily based on the net asset value at the close of business. The fee
consists of two elements: (i) a "Specific" fee computed on net asset value as of
the close of business each day at the annual rate of .03% of net assets for
United Bond Fund, .05% of net assets for United Income Fund and United
Accumulative Fund, and .20% for United Science and Technology Fund; and (ii) a
"Group" fee computed each day on the combined net asset values of all of the
funds in the United Group of mutual funds (approximately $11.1 billion of
combined net assets at December 31, 1993) at annual rates of .51% of the first
$750 million of combined net assets, .49% on that amount between $750 million
and $1.5 billion, .47% between $1.5 billion and $2.25 billion, .45% between
$2.25 billion and $3 billion, .43% between $3 billion and $3.75 billion, .40%
between $3.75 billion and $7.5 billion, .38% between $7.5 billion and $12
billion, and .36% of that amount over $12 billion. The Fund accrues and pays
this fee daily.
Pursuant to assignment of the Investment Management Agreement between the
Corporation and Waddell & Reed, Inc. ("W&R"), Waddell & Reed Investment
Management Company ("WRIMCO"), a wholly-owned subsidiary of W&R, serves as the
Corporation's investment manager.
The Corporation has an Accounting Services Agreement with Waddell & Reed
Services Company ("WARSCO"), a wholly-owned subsidiary of W&R. Under the
agreement, WARSCO acts as the agent in providing accounting services and
assistance to the Corporation and pricing daily the value of shares of the
Corporation. For these services, each of the four Funds pays WARSCO a monthly
fee of one-twelfth of the annual fee shown in the following table.
Accounting Services Fee
Average
Net Asset Level Annual Fee
(all dollars in millions) Rate for Each Fund
------------------------- ------------------
From $ 0 to $ 10 $ 0
From $ 10 to $ 25 $ 10,000
From $ 25 to $ 50 $ 20,000
From $ 50 to $ 100 $ 30,000
From $ 100 to $ 200 $ 40,000
From $ 200 to $ 350 $ 50,000
From $ 350 to $ 550 $ 60,000
From $ 550 to $ 750 $ 70,000
From $ 750 to $1,000 $ 85,000
$1,000 and Over $100,000
The Corporation also pays WARSCO a per account charge for transfer agency
and dividend disbursement services of $1.0208 for each shareholder account which
was in existence at any time during the prior month, plus $0.30 for each account
on which a dividend or distribution of cash or shares had a record date in that
month. The Corporation also reimburses W&R and WARSCO for certain out-of-pocket
costs.
As principal underwriter for the Corporation's shares, W&R received direct
and indirect gross sales commissions (which are not an expense of the
Corporation) of $23,716,003, out of which W&R paid sales commissions of
$13,156,376 and all expenses in connection with the sale of the Corporation's
shares, except for registration fees and related expenses.
On September 28, 1993, shareholders of the Fund approved the adoption of a
12b-1 Service Plan with a maximum fee of .25%. The Plan went into effect
October 1, 1993.
The Corporation paid Directors' fees of $184,976.
W&R is an indirect subsidiary of Torchmark Corporation, a holding company,
and United Investors Management Company, a holding company, and a direct
subsidiary of Waddell & Reed Financial Services, Inc., a holding company.
NOTE 3 -- Investment Securities Transactions
Investment securities transactions for the period ended December 31, 1993
are summarized as follows:
United
United United United Science and
Bond IncomeAccumulative Technology
Fund Fund Fund Fund
----------- ------------------------ ------------
Purchases of investment
securities, excluding
short-term and U.S.
Government securities $772,224,082$ 842,027,861$1,919,573,087$261,362,421
Purchases of U.S. Government
securities 275,773,051 11,461,719 --- ---
Purchases of short-term
securities 631,608,3241,430,815,2572,070,112,359 512,029,023
Proceeds from maturities
and sales of investment
securities, excluding
short-term and U.S.
Government securities 634,959,873 515,220,1141,857,983,221 247,801,169
Proceeds from maturities and
sales of U.S. Government
securities 400,818,383 59,670,000 --- ---
Proceeds from maturities and sales
of short-term securities 625,556,0631,553,332,7782,176,307,288 542,103,588
Realized gain on U.S.
Government securities 11,897,226 8,133,087 --- ---
For Federal income tax purposes, cost of investments owned at December 31,
1993 and the related appreciation (depreciation) were as follows:
Aggregate
Cost AppreciationDepreciation Appreciation
-------------- --------------------------------------
United Bond Fund $627,269,834 $14,505,379 $(5,291,130) $9,214,249
United Income Fund 2,025,971,725 1,060,313,925 (30,009,996)1,030,303,929
United Accumulative
Fund 1,003,884,052 72,749,735 (35,858,342) 36,891,393
United Science and
Technology Fund 293,500,010 161,864,485 (6,945,957) 154,918,528
NOTE 4 -- Federal Income Tax Matters
The Corporation's income and expenses attributed to each Fund and the gains
and losses on security transactions of each Fund have been attributed to that
Fund for Federal income tax purposes as well as for accounting purposes. For
Federal income tax purposes, United Income Fund, United Accumulative Fund and
United Science and Technology Fund realized capital gain net income of
$53,914,906, $102,177,031 and $21,770,561, respectively, during the year ended
December 31, 1993. A portion of the capital gain net income was paid to
shareholders during the year ended December 31, 1993. For Federal income tax
purposes, United Bond Fund realized capital gain net income in the amount of
$41,552,432 during the year ended December 31, 1993. This capital gain net
income was partially offset by utilization of all available capital loss
carryovers resulting in distributable capital gains of $33,322,306. A portion
of the capital gain net income was paid to shareholders during the year ended
December 31, 1993. Remaining capital gain net income will be distributed to
each Fund's shareholders.
Internal Revenue Code regulations permit each Fund to defer into its next
fiscal year net capital losses incurred between each November 1 and the end of
its fiscal year ("post-October losses"). From November 1, 1993 through December
31, 1993, United Accumulative Fund and United Science and Technology Fund
incurred net capital losses of $2,287,546 and $1,521,176, respectively, which
have been deferred to the fiscal year ending December 31, 1994.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
United Funds, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of each of the four mutual funds
(United Bond Fund, United Income Fund, United Accumulative Fund and United
Science and Technology Fund) comprising United Funds, Inc. (hereafter referred
to as the "Corporation") at December 31, 1993, the results of its operations for
the year then ended and the changes in its net assets and the financial
highlights for the periods indicated, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Corporation's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1993 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
PRICE WATERHOUSE
Kansas City, Missouri
January 31, 1994
<PAGE>
INCOME TAX INFORMATION
The amounts of the dividends and long-term capital gains below, multiplied by
the number of shares owned by you on the record dates, will give you the total
amounts to be reported in your 1993 Federal income tax return.
PER-SHARE AMOUNTS REPORTABLE AS:
----------------------------------------------------
For Individuals For Corporations
------------------- ----------------------------------
Record Ordinary Long-Term Non- Long-Term
Date Total IncomeCapital GainQualifyingQualifyingCapital Gain
- ----------- ----- ---------------------------------------------------
United Bond Fund
01-15-93 $0.0340 $0.0340 $0.0000 $0.0000 $0.0340 $0.0000
02-12-93 0.0340 .0340 .0000 .0000 .0340 .0000
03-12-93 0.0340 .0340 .0000 .0000 .0340 .0000
04-16-93 0.0340 .0340 .0000 .0000 .0340 .0000
05-14-93 0.0340 .0340 .0000 .0000 .0340 .0000
06-11-93 0.0340 .0340 .0000 .0000 .0340 .0000
07-16-93 0.0340 .0340 .0000 .0000 .0340 .0000
08-13-93 0.0340 .0340 .0000 .0000 .0340 .0000
09-17-93 0.0340 .0340 .0000 .0000 .0340 .0000
10-15-93 0.0340 .0340 .0000 .0000 .0340 .0000
11-12-93 0.0340 .0340 .0000 .0000 .0340 .0000
12-17-93 0.3620 .1820 .1800 .0000 .1820 .1800
------- ------- ------- ------- ------- -------
$0.7360 $0.5560 $0.1800 $0.0000 $0.5560 $0.1800
======= ======= ======= ======= ======= =======
United Income Fund
03-12-93 $0.1000 $0.1000 $0.0000 $0.0998 $0.0002 $0.0000
06-11-93 0.1000 .1000 .0000 .1000 .0000 .0000
09-17-93 0.1000 .1000 .0000 .1000 .0000 .0000
12-17-93 0.4860 .0976 .3884 .0976 .0000 .3884
------- ------- ------- ------- ------- -------
$0.7860 $0.3976 $0.3884 $0.3974 $0.0002 $0.3884
======= ======= ======= ======= ======= =======
United Accumulative Fund
06-11-93 $0.0600 $0.0600 $0.0000 $0.0546 $0.0054 $0.0000
12-17-93 0.9080 .8145 .0935 .0440 .7705 .0935
------- ------- ------- ------- ------- -------
$0.9680 $0.8745 $0.0935 $0.0986 $0.7759 $0.0935
======= ======= ======= ======= ======= =======
United Science and Technology Fund
06-11-93 $0.0100 $0.0100 $0.0000 $0.0100 $0.0000 $0.0000
12-17-93 1.0200 .0000 1.0200 .0000 .0000 1.0200
------- ------- ------- ------- ------- -------
$1.0300 $0.0100 $1.0200 $0.0100 $0.0000 $1.0200
======= ======= ======= ======= ======= =======
CORPORATION DEDUCTIONS -- Under Federal tax law, the amounts reportable as
Qualifying Dividends are eligible for the dividends received deduction in the
year received as provided by Section 243 of the Internal Revenue Code.
Shareholders are advised to consult with their tax advisor concerning the tax
treatment of dividends and distributions from the Fund.
<PAGE>
To all IRA Planholders:
As required by law, income tax will automatically be withheld from any
distribution or withdrawal from an IRA unless you make a written election not to
have taxes withheld. The election may be made by submitting forms provided by
Waddell & Reed, Inc. which can be obtained from your Waddell & Reed
representative or by submitting Internal Revenue Service form W-4P. Once made,
an election can be revoked by providing written notice to Waddell & Reed, Inc.
If you elect not to have tax withheld you may be required to make payments of
estimated tax. Penalties may be imposed by the IRS if withholding and estimated
tax payments are not adequate.
<PAGE>
DIRECTORS
Ronald K. Richey, Birmingham, Alabama, Chairman of the Board
Henry L. Bellmon, Red Rock, Oklahoma
Dodds I. Buchanan, Boulder, Colorado
Jay B. Dillingham, Kansas City, Missouri
John F. Hayes, Hutchinson, Kansas
Glendon E. Johnson, Miami, Florida
William T. Morgan, Los Angeles, California
Doyle Patterson, Kansas City, Missouri
Keith A. Tucker, Overland Park, Kansas
Frederick Vogel, III, Milwaukee, Wisconsin
Paul S. Wise, Carefree, Arizona
Leslie S. Wright, Birmingham, Alabama
OFFICERS
Keith A. Tucker, President
James C. Cusser, Vice President
Abel Garcia, Vice President
Robert L. Hechler, Vice President
Henry J. Herrmann, Vice President
John M. Holliday, Vice President
Theodore W. Howard, Vice President and Treasurer
Antonio Intagliata, Vice President
Rodney O. McWhinney, Vice President
Sharon K. Pappas, Vice President and Secretary
Carl E. Sturgeon, Vice President
Russell E. Thompson, Vice President
This report is submitted for the general information of the shareholders of
United Funds, Inc. It is not authorized for distribution to prospective
investors unless accompanied with or preceded by the United Funds, Inc. current
prospectus.
<PAGE>
THE UNITED GROUP OF MUTUAL FUNDS
- -------------------------------------------------------------------
United Cash Management, Inc.
United Government Securities Fund, Inc.
United Bond Fund
United Municipal Bond Fund, Inc.
United Continental Income Fund, Inc.
United Income Fund
United Municipal High Income Fund, Inc.
United High Income Fund, Inc.
United High Income Fund II, Inc.
United Accumulative Fund
United Vanguard Fund, Inc.
United New Concepts Fund, Inc.
United Science and Technology Fund
United International Growth Fund, Inc.
United Gold & Government Fund, Inc.
United Retirement Shares, Inc.
- ------------------------------------
FOR MORE INFORMATION:
Contact your representative, or your
local office as listed on your
Account Statement, or contact:
WADDELL & REED
CUSTOMER SERVICE
6300 Lamar Avenue
P.O. Box 29217
Shawnee Mission, KS 66201-9217
(913) 236-1303
NUR1000A(12-93)
printed on recycled paper
