<PAGE>
UNITED
FUNDS, INC.
United Bond Fund
United Income Fund
United Accumulative Fund
United Science and Technology Fund
SEMIANNUAL
REPORT
-------------------------------------------
For the six months ended June 30, 1996
<PAGE>
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>
PRESIDENT'S LETTER
JUNE 30, 1996
Dear Shareholder:
As President of your Fund, I would like to thank you for your continued
confidence in our products and services. Our goal to provide the best service
possible to our shareholders has not changed since we opened our doors nearly 60
years ago. Waddell & Reed's team of professionals, including the Corporation's
manager, our customer service representatives and your personal account
representative continue to strive to meet your financial needs.
Waddell & Reed plays a special role in the investment industry. We take
pride in being one of the few financial services firms committed to locally
based account representatives who provide the personal service you need. When
you're ready to evaluate your financial plan to keep up with life's changes, or
to find an answer to a financial question that you may have, your representative
is ready to assist you--when you need it. He or she is available to help you
plan for your retirement, fund a child's education or make plans for other long-
term financial goals.
All of us are committed to helping you meet the financial goals that are
important to you. This is accomplished by our offering investment products to
meet a variety of personal financial objectives, along with the personal service
to make the investment process more convenient and accessible.
We want to continue to meet your financial needs for many years to come.
Should you have any questions about your account or other financial issues that
are important to you, contact your personal account representative or your local
Waddell & Reed office. They're ready to help you make the most of your
financial future.
Respectfully,
Keith A. Tucker
President
<PAGE>
SHAREHOLDER SUMMARY
- ----------------------------------------------------------------------
UNITED BOND FUND
PORTFOLIO STRATEGY:
Corporate and government OBJECTIVE: Reasonable return with emphasis on
bonds the preservation of principal.
Maximum 10% Non-Debt
Securities STRATEGY: Invests in bonds issued by companies in
a variety of industries and in
government securities. (May purchase
securities subject to repurchase
agreements. May invest in certain
options and futures.)
FOUNDED: 1964
SCHEDULED DIVIDEND FREQUENCY: MONTHLY
PERFORMANCE SUMMARY -- Class A Shares
PER SHARE DATA
For the Six Months Ended June 30, 1996
- --------------------------------------
DIVIDENDS PAID $0.19
=====
NET ASSET VALUE ON
6/30/96 $6.02
12/31/95 6.34
-----
CHANGE PER SHARE $(0.32)
=====
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 6-30-96 -0.89% 5.16%
5-year period ended 6-30-96 7.82% 9.11%
10-year period ended 6-30-96 7.68% 8.32%
*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 June 30, 1996, United Bond Fund had net assets totaling $530,004,101 invested
in a diversified portfolio of:
95.24% Bonds
4.76% Cash and Cash Equivalents
As a shareholder of United Bond Fund, for every $100 you had invested on June
30, 1996, your Fund owned:
Bonds:
Corporate $63.20
U.S. Government 26.24
Other Government 5.80
Cash and Cash Equivalents 4.76
Not all holdings will be represented in the portfolio at all times.
<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
JUNE 30, 1996
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES
Chemicals and Allied Products - 3.42%
Dow Capital BV,
9.0%, 5-15-2010 ....................... $ 6,250 $ 7,005,687
Procter & Gamble Company (The),
8.0%, 9-1-2024 ........................ 10,000 11,127,800
Total ................................. 18,133,487
Communication - 5.82%
Bell Telephone Company of Pennsylvania (The),
8.35%, 12-15-2030 ..................... 5,000 5,702,100
BellSouth Telecommunications, Inc.,
5.85%, 11-15-2045 ..................... 3,000 2,918,550
Continental Cablevision, Inc.,
8.5%, 9-15-2001 ....................... 5,000 5,234,800
Infinity Broadcasting Corporation,
10.375%, 3-15-2002 .................... 1,750 1,863,750
Jones Intercable, Inc.,
9.625%, 3-15-2002 ..................... 2,500 2,512,500
Tele-Communications, Inc.,
6.58%, 2-15-2005 ...................... 5,000 4,921,650
Turner Broadcasting System, Inc.,
8.375%, 7-1-2013 ...................... 4,000 3,832,560
Viacom International Inc.:
9.125%, 8-15-99 ....................... 1,500 1,530,000
6.75%, 1-15-2003 ...................... 2,500 2,358,775
Total ................................. 30,874,685
Depository Institutions - 11.20%
AmSouth Bancorporation,
6.75%, 11-1-2025 ...................... 6,000 5,791,320
Banc One Credit Card Master Trust,
7.55%, 12-15-99 ....................... 5,000 5,087,500
First Union Corporation,
6.55%, 10-15-2035 ..................... 5,000 4,763,200
Kansallis-Osake-Pankki,
10.0%, 5-1-2002 ....................... 6,000 6,768,420
NBD Bank, National Association,
8.25%, 11-1-2024 ...................... 6,000 6,555,720
NationsBank Corporation,
8.57%, 11-15-2024 ..................... 5,000 5,602,000
Riggs National Corporation,
8.5%, 2-1-2006 ........................ 5,000 4,975,000
See Notes to Schedules of Investments on page 33
<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
JUNE 30, 1996
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES (CONTINUED)
Depository Institutions (Continued)
SouthTrust Bank of Alabama, N.A.:
5.58%, 2-6-2006 ....................... $ 4,500 $ 4,283,145
7.69%, 5-15-2025 ...................... 5,000 5,195,050
Wells Fargo & Company:
5.632%, 9-5-97 ........................ 5,000 4,999,650
8.75%, 5-1-2002 ....................... 5,000 5,347,000
Total ................................. 59,368,005
Eating and Drinking Places - 1.86%
Marriott International, Inc.:
6.75%, 12-15-2003 ..................... 5,000 4,770,050
7.875%, 4-15-2005 ..................... 5,000 5,089,900
Total ................................. 9,859,950
Electric, Gas and Sanitary Services - 4.05%
Arkla, Inc.,
10.0%, 11-15-2019 ..................... 8,000 8,751,520
Coastal Corporation (The),
10.375%, 10-1-2000 .................... 5,000 5,606,900
El Paso Electric Company,
7.25%, 2-1-99 ......................... 1,750 1,723,050
NorAm Energy Corp.,
7.5%, 8-1-2000 ........................ 2,000 2,026,960
Seagull Energy Corporation,
7.875%, 8-1-2003 ...................... 3,500 3,368,750
Total ................................. 21,477,180
Electronic and Other Electric Equipment - 1.09%
Motorola, Inc.,
8.4%, 8-15-2031 ....................... 5,000 5,756,150
Food and Kindred Products- 4.14%
Coca-Cola Enterprises Inc.:
8.0%, 1-4-2005 ....................... 5,000 5,328,050
0.0%, 6-20-2020 ....................... 60,000 10,590,600
Nabisco, Inc.,
6.8%, 9-1-2001 ........................ 6,000 6,044,400
Total ................................. 21,963,050
Forestry - 0.38%
Doman Industries Limited,
8.75%, 3-15-2004 ...................... 2,250 2,025,000
General Building Contractors - 0.78%
Del Webb Corporation,
10.875%, 3-31-2000 .................... 4,000 4,130,000
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
JUNE 30, 1996
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES (CONTINUED)
Health Services - 0.96%
Tenet Healthcare Corporation,
8.625%, 12-1-2003 ..................... $ 5,000 $ 5,068,750
Hotels and Other Lodging Places - 0.78%
RHG Finance Corporation,
8.875%, 10-1-2005 ..................... 4,000 4,135,640
Industrial Machinery and Equipment - 0.62%
Joy Technologies Inc.,
10.25%, 9-1-2003 ...................... 3,000 3,300,000
Instruments and Related Products - 0.57%
Mark IV Industries, Inc.,
8.75%, 4-1-2003 ....................... 3,000 3,000,000
Insurance Carriers - 1.38%
Penn Central Corporation (The),
10.625%, 4-15-2000 .................... 4,000 4,329,800
Reliance Group Holdings, Inc.,
9.0%, 11-15-2000 ...................... 3,000 2,970,000
Total ................................. 7,299,800
Metal Mining - 0.91%
Noranda Inc.,
7.0%, 7-15-2005 ....................... 5,000 4,806,900
Nondepository Institutions - 14.91%
Associates Corporation of North America,
7.95%, 2-15-2010 ...................... 7,250 7,673,472
Chevy Chase Savings Bank, F.S.B.,
9.25%, 12-1-2005 ...................... 1,500 1,440,000
Chrysler Financial Corporation,
12.75%, 11-1-99 ....................... 9,000 10,544,850
Countrywide Mortgage Backed Securities,
Inc.,
6.5%, 4-25-2024 ....................... 10,000 9,625,000
DLJ Mortgage Acceptance Corp.,
6.5%, 4-25-2024 ....................... 4,827 4,445,699
Equicon Loan Trust,
7.3%, 2-18-2013 ....................... 4,571 4,482,020
General Electric Capital Corporation,
8.3%, 9-20-2009 ....................... 9,750 10,635,300
General Motors Acceptance Corporation,
8.875%, 6-1-2010 ...................... 10,000 11,155,300
Residential Asset Securities Corporation,
Mortgage Pass-Through Certificates,
1995-KS3 Class D,
8.0%, 10-25-2024 ...................... 4,000 3,937,520
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
JUNE 30, 1996
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES (CONTINUED)
Nondepository Institutions (Continued)
Residential Funding Mortgage
Securities I, Inc.,
8.0%, 8-25-2020 ....................... $10,000 $10,059,300
WFS Financial 1996-B Owner Trust, Class A-2,
6.2%, 5-20-99 ......................... 5,000 5,005,000
Total ................................. 79,003,461
Oil and Gas Extraction - 2.52%
Anadarko Petroleum Corporation,
7.25%, 3-15-2025 ...................... 5,000 5,114,450
Union Texas Petroleum Holdings, Inc.,
8.25%, 11-15-99 ....................... 5,000 5,126,500
YPF Sociedad Anoima,
8.0%, 2-15-2004 ....................... 3,500 3,101,875
Total ................................. 13,342,825
Paper and Allied Products - 1.30%
Boise Cascade Office Products Corporation,
9.875%, 2-15-2001 ..................... 2,500 2,658,450
Canadian Pacific Forest Products Ltd.,
9.25%, 6-15-2002 ...................... 4,000 4,237,800
Total ................................. 6,896,250
Printing and Publishing - 1.92%
News America Holdings Incorporated,
9.125%, 10-15-99 ...................... 5,000 5,321,550
Time Warner Incorporated,
7.75%, 6-15-2005 ...................... 5,000 4,881,100
Total ................................. 10,202,650
Stone, Clay and Glass Products - 1.53%
Owens-Corning Fiberglas Corporation,
8.875%, 6-1-2002 ...................... 5,000 5,344,650
USG Corporation:
9.25%, 9-15-2001 ...................... 2,000 2,050,000
8.5%, 8-1-2005 ........................ 750 725,625
Total ................................. 8,120,275
Transportation Equipment - 2.10%
General Motors Corporation,
8.8%, 3-1-2021 ........................ 5,000 5,603,450
McDonnell Douglas Corporation,
9.25%, 4-1-2002 ....................... 5,000 5,501,100
Total ................................. 11,104,550
Wholesale Trade -- Durable Goods- 0.96%
Lockheed Martin Corporation,
7.7%, 6-15-2008 ....................... 5,000 5,093,550
TOTAL CORPORATE DEBT SECURITIES - 63.20% $334,962,158
(Cost: $335,979,575)
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
JUNE 30, 1996
Principal
Amount in
Thousands Value
OTHER GOVERNMENT SECURITIES
Australia - 0.71%
New South Wales Treasury Corporation,
7.0%, 2-1-2000 (A) .................... $A5,000 $3,750,377
Canada - 4.04%
Hydro Quebec:
8.05%, 7-7-2024 ....................... $10,000 10,600,400
7.4%, 3-28-2025 ....................... 5,000 5,427,450
Province of Nova Scotia,
8.25%, 11-15-2019 ..................... 5,000 5,386,700
Total ................................. 21,414,550
Supranationals - 1.05%
Inter-American Development Bank,
8.4%, 9-1-2009 ........................ 5,000 5,594,800
TOTAL OTHER GOVERNMENT SECURITIES - 5.80% $30,759,727
(Cost: $29,633,817)
UNITED STATES GOVERNMENT SECURITIES
Federal Home Loan Mortgage Corporation:
6.83%, 7-3-2002 ....................... 4,500 4,430,385
7.5%, 11-15-2017 ...................... 8,000 8,077,440
7.5%, 4-15-2019 ....................... 12,273 11,747,894
7.95%, 12-15-2020 ..................... 9,000 9,185,580
Federal National Mortgage Association:
7.09%, 4-1-2004 ....................... 4,500 4,417,740
7.0%, 7-25-2006 ....................... 10,000 10,025,000
7.5%, 9-1-2009 ........................ 4,442 4,461,891
6.5%, 5-25-2018 ....................... 10,000 9,818,700
7.0%, 8-25-2021 ....................... 10,000 9,640,600
Government National Mortgage Association:
7.5%, 7-15-2023 ....................... 6,859 6,814,981
7.5%, 12-15-2023 ...................... 5,843 5,805,348
8.0%, 9-15-2025 ....................... 10,057 10,226,768
United States Treasury:
5.625%, 1-31-98 ....................... 20,000 19,878,200
5.5%, 2-28-99 ......................... 25,000 24,535,250
TOTAL UNITED STATES GOVERNMENT
SECURITIES - 26.24% $139,065,777
(Cost: $138,950,588)
TOTAL SHORT-TERM SECURITIES - 2.87% $15,196,687
(Cost: $15,196,687)
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
JUNE 30, 1996
Value
TOTAL INVESTMENT SECURITIES - 98.11% $519,984,349
(Cost: $519,760,667)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 1.89% 10,019,752
NET ASSETS - 100.00% $530,004,101
See Notes to Schedules of Investments on page 33.
<PAGE>
SHAREHOLDER SUMMARY
- -----------------------------------------------------------------
UNITED INCOME FUND
PORTFOLIO STRATEGY:
Investment quality OBJECTIVE: Maintenance of current income,
dividend-paying subject to changing market
common stocks conditions.
Cash Reserves STRATEGY: Invests principally in common stocks of
companies which have the potential for
capital growth or which may be expected
to resist market decline. (May purchase
securities subject to repurchase
agreements. May invest in certain
options and futures.)
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
SCHEDULED DIVIDEND FREQUENCY: QUARTERLY
(MARCH, JUNE, SEPTEMBER, DECEMBER)
PERFORMANCE SUMMARY -- Class A Shares
PER SHARE DATA
For the Six Months Ended June 30, 1996
- --------------------------------------
DIVIDENDS PAID $ 0.16
=====
NET ASSET VALUE ON
6/30/96 $31.39
12/31/95 28.96
------
CHANGE PER SHARE $ 2.43
======
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 6-30-96 10.36% 17.09%
5-year period ended 6-30-96 13.43% 14.78%
10-year period ended 6-30-96 12.83% 13.50%
*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 June 30, 1996, United Income Fund had net assets totaling $4,509,339,376
invested in a diversified portfolio of:
92.55% Common Stocks
4.31% Cash and Cash Equivalents
2.67% U.S. Government Securities
0.47% Corporate Debt Securities
As a shareholder of United Income Fund, for every $100 you had invested on June
30, 1996, your Fund owned:
$58.14 Manufacturing Stocks
10.37 Services Stocks
8.72 Transportation, Communication, Electric, Gas
and Sanitary Services Stocks
7.83 Wholesale and Retail Trade Stocks
5.06 Finance, Insurance and Real Estate Stocks
4.31 Cash and Cash Equivalents
2.67 United States Government Securities
2.90 Other
Not all holdings will be represented in the portfolio at all times.
<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
JUNE 30, 1996
Shares Value
COMMON STOCKS
Amusement and Recreation Services - 0.98%
Walt Disney Company (The) .............. 700,000 $44,012,500
Apparel and Accessory Stores - 1.37%
Gap, Inc. (The) ........................ 1,400,000 44,975,000
Nordstrom, Inc. ........................ 375,000 16,640,625
Total ................................. 61,615,625
Apparel and Other Textile Products - 0.66%
Tommy Hilfiger Corporation* ............ 560,000 30,030,000
Building Materials and Garden Supplies - 0.92%
Home Depot, Inc. (The) ................. 765,000 41,310,000
Business Services - 7.37%
Broderbund Software, Inc.* ............. 450,000 14,568,750
cisco Systems, Inc.* ................... 1,730,000 98,068,510
Computer Associates International, Inc. 375,000 26,718,750
Electronic Data Systems Corporation .... 1,081,000 58,103,750
Informix Corporation* .................. 1,500,000 33,655,500
Microsoft Corporation* ................. 300,000 36,018,600
Oracle Systems Corporation* ............ 1,650,000 65,071,050
Total ................................. 332,204,910
Chemicals and Allied Products - 14.70%
ABB Asea Brown Boveri Ltd (B) .......... 25,000 30,962,477
Abbott Laboratories .................... 1,100,000 47,850,000
Air Products & Chemicals, Inc. ......... 1,150,000 66,412,500
Astra AB, Class A (B) .................. 600,000 26,554,287
Colgate-Palmolive Company .............. 600,000 50,850,000
Dow Chemical Company (The) ............. 575,000 43,700,000
du Pont (E.I.) de Nemours and Company .. 1,000,000 79,125,000
Eastman Chemical Company ............... 175,000 10,653,125
IMC Global, Inc. ....................... 600,000 22,575,000
Merck & Co., Inc. ...................... 700,000 45,237,500
PPG Industries, Inc. ................... 1,250,000 60,937,500
Pfizer Inc. ............................ 650,000 46,393,750
Praxair, Inc. .......................... 1,000,000 42,250,000
Procter & Gamble Company (The) ......... 600,000 54,375,000
Union Carbide Corporation .............. 875,000 34,781,250
Total ................................. 662,657,389
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
JUNE 30, 1996
Shares Value
COMMON STOCKS (Continued)
Communication - 1.75%
AT&T Corporation ....................... 500,000 $ 31,000,000
MCI Communications Corporation ......... 1,875,000 47,928,750
Total ................................. 78,928,750
Depository Institutions - 2.51%
Citicorp ............................... 750,000 61,968,750
First Bank Systems, Inc. ............... 500,000 29,000,000
Norwest Corporation .................... 635,000 22,145,625
Total ................................. 113,114,375
Eating and Drinking Places - 0.96%
McDonald's Corporation ................. 930,000 43,477,500
Electric, Gas and Sanitary Services - 0.44%
WMX Technologies, Inc. ................. 600,000 19,650,000
Electronic and Other Electric Equipment - 11.89%
AMP Incorporated ....................... 1,100,000 44,137,500
Analog Devices, Inc.* .................. 1,230,000 31,365,000
Duracell International Inc. ............ 1,000,000 43,125,000
Emerson Electric Co. ................... 400,000 36,150,000
General Electric Company ............... 1,200,000 103,800,000
Intel Corporation ...................... 1,530,000 112,358,610
Motorola, Inc. ......................... 1,300,000 81,737,500
Nokia Corporation, Series A (B) ........ 760,000 28,084,886
Texas Instruments Incorporated ......... 350,000 17,456,250
Whirlpool Corporation .................. 765,000 37,963,125
Total ................................. 536,177,871
Fabricated Metal Products - 2.39%
Gillette Company (The) ................. 1,000,000 62,375,000
Parker Hannifin Corporation ............ 600,000 25,425,000
TRINOVA Corporation .................... 600,000 20,025,000
Total ................................. 107,825,000
Food and Kindred Products - 2.37%
CPC International Inc. ................. 500,000 36,000,000
PepsiCo, Inc. .......................... 2,000,000 70,750,000
Total ................................. 106,750,000
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
JUNE 30, 1996
Shares Value
COMMON STOCKS (Continued)
Furniture and Home Furnishings Stores - 1.28%
Circuit City Stores, Inc. .............. 1,600,000 $ 57,800,000
General Merchandise Stores - 3.30%
Cifra, S.A. de C.V., Series C (B)* ..... 8,000,000 11,440,656
Dayton-Hudson Corporation .............. 316,600 32,649,375
May Department Stores Company (The) .... 1,000,000 43,750,000
Penney (J.C.) Company, Inc. ............ 676,000 35,490,000
Wal-Mart Stores, Inc. .................. 1,000,000 25,375,000
Total ................................. 148,705,031
Health Services - 0.92%
Columbia/HCA Healthcare Corporation .... 375,000 20,015,625
Tenet Healthcare Corporation* .......... 1,000,000 21,375,000
Total ................................. 41,390,625
Heavy Construction, Excluding Building - 0.98%
Fluor Corporation ...................... 400,000 26,150,000
Foster Wheeler Corporation ............. 400,000 17,950,000
Total ................................. 44,100,000
Holding and Other Investment Offices - 0.50%
Grupo Financiero Banamex Accival,
S.A. de C.V., Class B, CPO Shares (B)* 9,800,000 20,413,428
Grupo Financiero Banamex Accival,
S.A. de C.V., Class L (B)* ............ 749,775 1,427,010
Grupo Financiero Bancomer, S.A. de C.V.,
Series B, CPO Shares (B)* ............. 2,000,000 872,324
Total ................................. 22,712,762
Hotels and Other Lodging Places - 1.10%
ITT Corporation* ....................... 750,204 49,701,015
Industrial Machinery and Equipment - 8.63%
Applied Materials, Inc.* ............... 1,730,000 52,656,010
Case Corporation ....................... 1,214,600 58,300,800
Caterpillar Inc. ....................... 1,400,000 94,850,000
Ceridian Corporation* .................. 425,000 21,462,500
Deere & Company ........................ 2,055,000 82,200,000
Harnischfeger Industries, Inc. ......... 600,000 19,950,000
Hewlett-Packard Company ................ 425,000 42,340,625
Ingersoll-Rand Company ................. 400,000 17,500,000
Total ................................. 389,259,935
Instruments and Related Products - 3.15%
Baxter International Inc. .............. 880,000 41,580,000
General Motors Corporation, Class H .... 176,100 10,588,012
Medtronic, Inc. ........................ 800,000 44,800,000
Xerox Corporation ...................... 840,000 44,940,000
Total ................................. 141,908,012
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
JUNE 30, 1996
Shares Value
COMMON STOCKS (Continued)
Insurance Carriers - 0.73%
United HealthCare Corporation .......... 650,000 $ 32,825,000
Lumber and Wood Products - 0.67%
Georgia-Pacific Corporation ............ 425,000 30,175,000
Miscellaneous Manufacturing Industries - 0.16%
Valmet Corporation, ADS* ............... 225,000 7,425,000
Nondepository Institutions - 1.82%
Federal Home Loan Mortgage Corporation . 500,000 42,750,000
Federal National Mortgage Association .. 1,180,800 39,556,800
Total ................................. 82,306,800
Paper and Allied Products - 2.69%
Champion International Corporation ..... 500,000 20,875,000
International Paper Company ............ 1,200,000 44,250,000
Union Camp Corporation ................. 500,000 24,375,000
Weyerhaeuser Company ................... 750,000 31,875,000
Total ................................. 121,375,000
Petroleum and Coal Products - 0.51%
Royal Dutch Petroleum Company .......... 150,000 23,062,500
Primary Metal Industries - 1.66%
Aluminum Company of America ............ 650,000 37,293,750
Mannesmann AG (B) ...................... 65,000 22,486,024
Nucor Corporation ...................... 300,000 15,187,500
Total ................................. 74,967,274
Railroad Transportation - 2.97%
CSX Corporation ........................ 700,000 33,775,000
Conrail Inc. ........................... 600,000 39,825,000
Norfolk Southern Corporation ........... 300,000 25,425,000
Union Pacific Corporation .............. 500,000 34,937,500
Total ................................. 133,962,500
Rubber and Miscellaneous Plastics Products - 2.22%
Armstrong World Industries, Inc. ....... 900,000 51,862,500
Goodyear Tire & Rubber Company (The) ... 1,000,000 48,250,000
Total ................................. 100,112,500
Special Trade Contractors - 0.95%
Telefonaktiebolaget LM Ericsson,
Class B, ADR ......................... 2,000,000 42,874,000
Transportation By Air - 3.56%
AMR Corporation* ....................... 400,000 36,400,000
Southwest Airlines Co. ................. 2,475,000 72,084,375
USAir Group, Inc.* ..................... 2,900,000 52,200,000
Total ................................. 160,684,375
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
JUNE 30, 1996
Shares Value
COMMON STOCKS (Continued)
Transportation Equipment - 6.44%
Boeing Company (The) ................... 635,000 $ 55,324,375
Chrysler Corporation ................... 1,100,000 68,200,000
Dana Corporation ....................... 760,000 23,560,000
Eaton Corporation ...................... 500,000 29,312,500
Ford Motor Company ..................... 1,900,000 61,512,500
General Motors Corporation ............. 1,000,000 52,375,000
Total ................................. 290,284,375
TOTAL COMMON STOCKS - 92.55% $4,173,385,624
(Cost: $2,352,629,859)
Principal
Amount in
Thousands
CORPORATE DEBT SECURITIES
Depository Institutions - 0.23%
Morgan Guaranty Trust Company of New York,
7.375%, 2-1-2002 ...................... $10,250 10,428,248
Nondepository Institutions - 0.24%
General Electric Capital Corporation,
8.3%, 9-20-2009 ....................... 10,000 10,908,000
TOTAL CORPORATE DEBT SECURITIES - 0.47% $21,336,248
(Cost: $19,931,983)
UNITED STATES GOVERNMENT SECURITIES
United States Treasury:
6.75%, 4-30-2000 ...................... 37,000 37,387,390
5.75%, 8-15-2003 ...................... 50,000 47,617,000
10.375%, 11-15-2012 ................... 8,500 10,791,005
9.0%, 11-15-2018 ...................... 20,000 24,375,000
TOTAL UNITED STATES GOVERNMENT
SECURITIES - 2.67% $120,170,395
(Cost: $114,763,544)
TOTAL SHORT-TERM SECURITIES - 4.28% $193,218,042
(Cost: $193,218,042)
TOTAL INVESTMENT SECURITIES - 99.97% $4,508,110,309
(Cost: $2,680,543,428)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.03% 1,229,067
NET ASSETS - 100.00% $4,509,339,376
See Notes to Schedules of Investments on page 33.
<PAGE>
SHAREHOLDER SUMMARY
- -----------------------------------------------------------------
UNITED ACCUMULATIVE FUND
PORTFOLIO STRATEGY:
Appreciation-oriented OBJECTIVE: Capital growth, with a secondary
common stocks objective of current income.
Cash Reserves
STRATEGY: Invests mainly in common stocks or
securities convertible into common
stocks. (May purchase securities
subject to repurchase agreements. May
invest in certain options and futures.)
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
SCHEDULED DIVIDEND FREQUENCY: SEMIANNUALLY
(JUNE AND DECEMBER)
PERFORMANCE SUMMARY -- Class A Shares
PER SHARE DATA
For the Six Months Ended June 30, 1996
- -------------------------------------------
DIVIDEND PAID $0.04
=====
NET ASSET VALUE ON
6/30/96 $8.01
12/31/95 7.78
-----
CHANGE PER SHARE $0.23
=====
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 6-30-96 12.11% 18.95%
5-year period ended 6-30-96 12.21% 13.54%
10-year period ended 6-30-96 10.32% 10.98%
*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 June 30, 1996, United Accumulative Fund had net assets totaling
$1,223,826,702 invested in a diversified portfolio of:
89.56% Common Stocks
10.44% Cash and Cash Equivalents
As a shareholder of United Accumulative Fund, for every $100 you had invested on
June 30, 1996, your Fund owned:
$40.95 Manufacturing Stocks
18.03 Services Stocks
16.74 Finance, Insurance and Real Estate Stocks
10.44 Cash and Cash Equivalents
6.42 Wholesale and Retail Trade Stocks
5.77 Transportation, Communication, Electric, Gas
and Sanitary Services Stocks
1.65 Mining Stocks
Not all holdings will be represented in the portfolio at all times.
<PAGE>
THE INVESTMENTS OF UNITED ACCUMULATIVE FUND
JUNE 30, 1996
Shares Value
COMMON STOCKS
Apparel and Accessory Stores - 1.05%
Gap, Inc. (The) ........................ 400,000 $ 12,850,000
Business Services - 14.07%
America Online, Inc.*. ................. 375,000 16,359,375
Broderbund Software, Inc.* ............. 400,000 12,950,000
CUC International Inc.* ................ 300,000 10,650,000
Cerner Corporation* .................... 900,000 19,350,000
cisco Systems, Inc.* ................... 500,000 28,343,500
DST Systems, Inc.* ..................... 350,000 11,200,000
Electronic Data Systems Corporation .... 700,000 37,625,000
Informix Corporation* .................. 900,000 20,193,300
Netscape Communications Corporation* ... 100,000 6,237,500
Physician Computer Network* ............ 300,000 3,487,500
Summit Medical Systems, Inc.* .......... 300,000 5,775,000
Total ................................. 172,171,175
Chemicals and Allied Products - 17.87%
BioChem Pharma Inc.* ................... 350,000 13,102,950
du Pont (E.I.) de Nemours and Company .. 200,000 15,825,000
Geon Company (The) ..................... 500,000 11,250,000
Georgia Gulf Corporation ............... 300,000 8,775,000
IMC Global, Inc. ....................... 275,000 10,346,875
Lilly (Eli) and Company ................ 700,000 45,500,000
Merck & Co., Inc. ...................... 500,000 32,312,500
Neurex Corporation* .................... 356,200 7,813,959
Pfizer Inc. ............................ 500,000 35,687,500
SmithKline Beecham plc, ADR ............ 700,000 38,062,500
Total ................................. 218,676,284
Communication - 0.74%
Tele-Communications, Inc., Class A* .... 500,000 9,031,000
Depository Institutions - 8.83%
Boatmen's Bancshares, Inc. ............. 300,000 12,000,000
Chase Manhattan Corporation (The) ...... 500,000 35,312,500
Dime Bancorp, Inc.* .................... 250,000 3,250,000
Great Western Financial Corporation .... 700,000 16,712,500
Long Island Bancorp, Inc. .............. 375,000 11,460,750
Northern Trust Corporation ............. 225,000 13,021,875
Roosevelt Financial Group, Inc. ........ 845,600 16,330,227
Total ................................. 108,087,852
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED ACCUMULATIVE FUND
JUNE 30, 1996
Shares Value
COMMON STOCKS (Continued)
Electric, Gas and Sanitary Services - 1.43%
Coastal Corporation (The) .............. 231,200 $ 9,652,600
Sonat Inc. ............................. 174,100 7,834,500
Total ................................. 17,487,100
Electronic and Other Electric Equipment - 0.56%
Xilinx, Inc.* .......................... 215,000 6,812,705
Engineering and Management Services - 0.23%
Owen Healthcare, Inc.* ................. 200,000 2,775,000
Fabricated Metal Products - 1.95%
Parker Hannifin Corporation ............ 350,000 14,831,250
TRINOVA Corporation .................... 270,100 9,014,588
Total ................................. 23,845,838
Food and Kindred Products - 2.88%
CPC International Inc. ................. 100,000 7,200,000
ConAgra, Inc. .......................... 189,400 8,594,025
Heinz (H. J.) Company .................. 300,000 9,112,500
Ralcorp Holdings* ...................... 500,000 10,312,500
Total ................................. 35,219,025
General Merchandise Stores - 4.60%
Dillard Department Stores, Inc., Class A 400,000 14,600,000
Dollar General Corporation ............. 350,000 10,237,500
Kohl's Corporation* .................... 500,000 18,312,500
May Department Stores Company (The) .... 300,000 13,125,000
Total ................................. 56,275,000
Health Services - 3.10%
Beverly Enterprises, Inc.* ............. 1,750,000 21,000,000
Manor Care, Inc. ....................... 350,000 13,781,250
MedPartners/Mullikin, Inc.* ............ 150,000 3,131,250
Total ................................. 37,912,500
Industrial Machinery and Equipment - 2.46%
Baker Hughes Incorporated .............. 300,000 9,862,500
Cooper Cameron Corporation* ............ 25,700 1,124,375
Seagate Technology, Inc.* .............. 300,000 13,500,000
Silicon Valley Group, Inc.* ............ 300,000 5,643,600
Total ................................. 30,130,475
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED ACCUMULATIVE FUND
JUNE 30, 1996
Shares Value
COMMON STOCKS (Continued)
Instruments and Related Products - 3.77%
Boston Scientific Corporation* ......... 175,000 $ 7,875,000
Honeywell Inc. ......................... 300,000 16,350,000
Raytheon Company ....................... 325,000 16,778,125
Teradyne, Inc.* ........................ 300,000 5,175,000
Total ................................. 46,178,125
Insurance Carriers - 7.91%
American International Group, Inc. ..... 300,000 29,587,500
Berkley (W. R.) Corporation ............ 325,000 13,690,625
Chubb Corporation (The) ................ 350,000 17,456,250
Humana Inc.* ........................... 500,000 8,937,500
ReliaStar Financial Corp. .............. 100,000 4,312,500
Travelers Group, Inc. .................. 500,000 22,812,500
Total ................................. 96,796,875
Miscellaneous Retail - 0.11%
Alberto-Culver Company, Class A ........ 34,600 1,384,000
Oil and Gas Extraction - 1.65%
Noble Drilling Corporation* ............ 500,000 6,937,500
Phillips Petroleum Company ............. 175,000 7,328,125
Santa Fe Energy Resources, Inc.* ....... 500,000 5,937,500
Total ................................. 20,203,125
Petroleum and Coal Products - 5.69%
Chevron Corporation .................... 150,000 8,850,000
Exxon Corporation ...................... 300,000 26,062,500
Lyondell Petrochemical Company ......... 500,000 12,062,500
Texaco Inc. ............................ 200,000 16,775,000
Unocal Corporation .................... 175,000 5,906,250
Total ................................. 69,656,250
Printing and Publishing - 1.00%
Berkshire Hathaway Inc.* ............... 400 12,280,000
Railroad Transportation - 1.93%
Conrail Inc., Class A .................. 100,000 6,637,500
Illinois Central Corporation ........... 600,000 17,025,000
Total ................................. 23,662,500
Transportation By Air - 1.66%
Southwest Airlines Co. ................. 700,000 20,387,500
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED ACCUMULATIVE FUND
JUNE 30, 1996
Shares Value
COMMON STOCKS (Continued)
Transportation Equipment - 5.41%
Federal-Mogul Corporation .............. 300,000 $ 5,512,500
Ford Motor Company ..................... 700,000 22,662,500
General Motors Corporation ............. 300,000 15,712,500
Lockheed Martin Corporation ............ 200,000 16,800,000
Sundstrand Corporation ................. 150,000 5,493,750
Total ................................. 66,181,250
Wholesale Trade -- Nondurable Goods - 0.66%
Sara Lee Corporation ................... 250,000 8,093,750
TOTAL COMMON STOCKS - 89.56% $1,096,097,329
(Cost: $1,079,033,205)
Principal
Amount In
Thousands
SHORT-TERM SECURITIES
Commercial Paper
Chemicals and Allied Products - 1.64%
Air Products & Chemicals Inc.,
5.39%, 8-12-96 ........................ $ 7,010 6,965,919
du Pont (E.I.) De Nemours and Company,
5.31%, 7-22-96 ........................ 13,185 13,144,159
Total ................................. 20,110,078
Communication - 0.28%
GTE Corporation,
5.4%, 7-19-96 ......................... 3,390 3,380,847
Depository Institutions - 0.08%
U.S. Bancorp,
Master Note ........................... 1,031 1,031,000
Electric, Gas and Sanitary Services - 0.87%
Commonwealth Edison Co.:
5.53%, 7-9-96 ......................... 300 299,631
5.56%, 7-26-96 ........................ 5,200 5,179,922
Public Service Co. of Colorado,
5.55%, 7-11-96 ........................ 4,070 4,063,725
Public Service Electric & Gas Co.,
5.5%, 7-11-96 ......................... 1,125 1,123,281
Total ................................. 10,666,559
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED ACCUMULATIVE FUND
JUNE 30, 1996
Principal
Amount In
Thousands Value
SHORT-TERM SECURITIES (Continued)
Commercial Paper (Continued)
Food and Kindred Products - 1.78%
ConAgra, Inc.,
5.55%, 8-9-96 ......................... $ 7,520 $ 7,474,786
General Mills, Inc.,
Master Note ........................... 1,988 1,988,000
Quaker Oats Co.,
5.54%, 7-9-96 ......................... 7,460 7,450,816
Seagram (Joseph E.) & Sons Inc.,
5.39%, 7-30-96 ........................ 4,895 4,873,746
Total ................................. 21,787,348
Nondepository Institutions - 2.59%
AT&T Capital Corp.,
5.3%, 7-2-96 .......................... 8,410 8,408,762
Island Finance Puerto Rico Inc.,
5.37%, 7-12-96 ........................ 2,920 2,915,209
Textron Financial Corp.,
5.47%, 7-26-96 ........................ 8,680 8,647,028
USL Capital Corporation:
5.31%, 7-19-96 ........................ 10,000 9,973,450
5.36%, 7-22-96 ........................ 1,790 1,784,403
Total ................................. 31,728,852
Printing and Publishing - 1.11%
American Greetings Corp.:
5.34%, 7-9-96 ......................... 4,765 4,759,346
5.35%, 7-10-96 ........................ 8,800 8,788,230
Total ................................. 13,547,576
Transportation Equipment - 1.31%
Dana Credit Corp.:
5.5%, 7-12-96 ......................... 4,780 4,771,967
5.55%, 7-15-96 ........................ 7,380 7,364,072
Echlin Inc.,
5.37%, 7-11-96 ........................ 3,900 3,894,183
Total ................................. 16,030,222
Wholesale Trade -- Nondurable Goods - 0.15%
Sara Lee Corporation,
Master Note ........................... 1,830 1,830,000
Total Commercial Paper - 9.81% 120,112,482
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED ACCUMULATIVE FUND
JUNE 30, 1996
Principal
Amount In
Thousands Value
SHORT-TERM SECURITIES (Continued)
Municipal Obligation - 0.82%
California
Oakland-Alameda County Coliseum Lease
Revenue Bonds (Oakland Coliseum Project),
1995 Series B-1 (Canadian Imperial Bank
of Commerce),
5.43%, 7-17-96 ........................ $10,000$ 10,000,000
TOTAL SHORT-TERM SECURITIES - 10.63% $ 130,112,482
(Cost: $130,112,482)
TOTAL INVESTMENT SECURITIES - 100.19% $1,226,209,811
(Cost: $1,209,145,687)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.19%) (2,383,109)
NET ASSETS - 100.00% $1,223,826,702
See Notes to Schedules of Investments on page 33.
<PAGE>
SHAREHOLDER SUMMARY
- ------------------------------------------------------------------------
UNITED SCIENCE AND TECHNOLOGY FUND
PORTFOLIO STRATEGY:
Technology-related OBJECTIVE: Long-term capital growth.
stocks
Generally at least 80% STRATEGY: Invests in common
in science or technology stocks of companies whose
securities; may have more products, processes or services
than 20% in debt securities. are expected to benefit from scientific
or technological discoveries or
developments. (May purchase
securities subject to repurchase
agreements. May invest in certain
options and futures.)
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
SCHEDULED DIVIDEND FREQUENCY: SEMIANNUALLY
(JUNE AND DECEMBER)
PERFORMANCE SUMMARY -- Class A Shares
PER SHARE DATA
For the Six Months Ended June 30, 1996
- --------------------------------------
NET ASSET VALUE ON
6/30/96 $25.91
12/31/95 $22.89
------
CHANGE PER SHARE $ 3.02
======
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 6-30-96 29.55% 37.46%
5-year period ended 6-30-96 21.10% 22.55%
10-year period ended 6-30-96 16.20% 16.89%
*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 June 30, 1996, United Science and Technology Fund had net assets totaling
$992,079,034 invested in a diversified portfolio of:
91.34% Common Stocks
8.66% Cash and Cash Equivalents
As a shareholder of United Science and Technology Fund, for every $100 you had
invested on June 30, 1996, your Fund owned:
$53.66 Services Stocks
30.89 Manufacturing Stocks
8.66 Cash and Cash Equivalents
3.84 Transportation, Communication, Electric, Gas
and Sanitary Services Stocks
2.95 Other
Not all holdings will be represented in the portfolio at all times.
<PAGE>
THE INVESTMENTS OF UNITED SCIENCE AND TECHNOLOGY FUND
JUNE 30, 1996
Shares Value
COMMON STOCKS
Business Services - 52.16%
Alternative Resources Corporation* ..... 350,000 $ 12,731,250
America Online, Inc.* .................. 540,000 23,557,500
Avant! Corporation* .................... 132,300 3,059,437
Broderbund Software, Inc.* ............. 260,000 8,417,500
CKS Group, Inc.* ....................... 394,000 12,681,678
CUC International Inc.* ................ 600,000 21,300,000
Cerner Corporation* .................... 453,500 9,750,250
cisco Systems, Inc.* ................... 751,200 42,583,274
Computer Associates International,
Inc. .................................. 225,000 16,031,250
CyberCash, Inc.* ....................... 100,000 5,468,700
DST Systems, Inc.* ..................... 200,000 6,400,000
Electronic Data Systems Corporation .... 325,000 17,468,750
First Data Corporation ................. 150,000 11,943,750
HBO & Company .......................... 802,000 54,235,250
HCIA Inc.* ............................. 300,000 18,975,000
HPR Inc.* .............................. 309,000 6,450,375
IMNET Systems, Inc.* ................... 200,000 6,075,000
Inference Corporation, Class A* ........ 210,000 4,987,500
Informix Corporation* .................. 1,000,000 22,437,000
Intuit Inc.* ........................... 280,000 13,160,000
i2 Technologies, Inc.* ................. 100,000 4,312,500
Learmonth & Burchett Management
Systems Plc, ADS* ..................... 500,000 2,218,500
Lycos, Inc.* ........................... 28,500 317,063
Macromedia, Inc.* ...................... 470,000 10,340,000
Microsoft Corporation* ................. 123,000 14,767,626
Netscape Communications Corporation* ... 100,000 6,237,500
Objective Systems Integrators, Inc.* .... 114,800 4,190,200
Oracle Systems Corporation* ............ 450,000 17,746,650
Parametric Technology Corporation* ..... 800,000 34,649,600
Platinum Software Corporation* ......... 207 1,488
Premisys Communications, Inc.* ......... 250,000 15,265,500
Pure Software Inc.* .................... 236,700 7,959,037
Shiva Corporation* ..................... 442,200 35,376,000
Summit Medical Systems, Inc.* .......... 200,000 3,850,000
Sync Research, Inc.* ................... 309,000 4,326,000
Synopsys, Inc.* ........................ 350,000 13,956,250
3Com Corporation* ...................... 290,000 13,249,230
USCS International, Inc.* .............. 124,000 2,402,500
Xylan Corporation* ..................... 185,100 8,630,288
Total ................................. 517,509,396
Chemicals and Allied Products - 5.54%
ALZA Corporation* ...................... 300,000 8,212,500
Abbott Laboratories .................... 200,000 8,700,000
Idexx Laboratories, Inc.* .............. 300,000 11,737,500
Lilly (Eli) and Company ................ 100,000 6,500,000
Neurex Corporation* .................... 160,000 3,509,920
Pfizer Inc. ............................ 100,000 7,137,500
Roche Holdings AG (B) .................. 1,200 9,159,133
Total ................................. 54,956,553
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED SCIENCE AND TECHNOLOGY FUND
JUNE 30, 1996
Shares Value
COMMON STOCKS (Continued)
Communication - 3.84%
Brooks Fiber Properties, Inc.* ......... 82,500 $ 2,712,187
Intermedia Communications of Florida,
Inc.* ................................. 100,000 3,225,000
MFS Communications Company, Inc.* ...... 560,000 21,034,720
Nokia Corporation, Series A, ADS ....... 300,000 11,100,000
Total ................................. 38,071,907
Electronic and Other Electric Equipment - 19.20%
Ascend Communications, Inc.* ........... 1,300,000 73,043,100
Atmel Corporation* ..................... 260,000 7,848,620
Cascade Communications Corp.* .......... 930,600 63,338,497
General Electric Company ............... 120,000 10,380,000
Tellabs* ............................... 300,000 20,062,500
Xilinx, Inc.* .......................... 500,000 15,843,500
Total ................................. 190,516,217
Fabricated Metal Products - 0.74%
Parker Hannifin Corporation ............ 172,050 7,290,619
Health Services - 1.15%
PhyCor, Inc.* .......................... 300,000 11,362,500
Industrial Machinery and Equipment - 2.66%
Applied Materials, Inc.* ............... 320,000 9,739,840
Deere & Company ....................... 290,000 11,600,000
Digital Link Corporation* .............. 300,000 5,062,500
Total ................................. 26,402,340
Instruments and Related Products - 2.64%
Boston Scientific Corporation* ......... 200,000 9,000,000
Cognex Corporation* .................... 320,000 5,219,840
Medtronic, Inc. ........................ 100,000 5,600,000
STERIS Corporation* .................... 200,000 6,387,400
Total ................................. 26,207,240
Insurance Carriers - 0.76%
United HealthCare Corporation .......... 150,000 7,575,000
Miscellaneous Retail - 1.60%
OmniCare, Inc. ......................... 600,000 15,900,000
Stone, Clay and Glass Products - 0.46%
Department 56, Inc.* ................... 200,000 4,525,000
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED SCIENCE AND TECHNOLOGY FUND
JUNE 30, 1996
Shares Value
COMMON STOCKS (Continued)
Wholesale Trade -- Nondurable Goods - 0.59%
Cardinal Health, Inc.* ................. 81,311 $ 5,864,556
TOTAL COMMON STOCKS - 91.34% $906,181,328
(Cost: $376,753,671)
TOTAL SHORT-TERM SECURITIES - 8.54% $ 84,727,470
(Cost: $84,727,470)
TOTAL INVESTMENT SECURITIES - 99.88% $990,908,798
(Cost: $461,481,141)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.12% 1,170,236
NET ASSETS - 100.00% $992,079,034
See Notes to Schedules of Investments on page 33.
<PAGE>
UNITED FUNDS, INC.
JUNE 30, 1996
Notes to Schedules of Investments
*No income dividends were paid during the preceding 12 months.
(A) Principal amounts are denominated in the indicated foreign currency where
applicable ($A - Australian Dollar).
(B) Listed on an exchange outside the United States.
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>
<TABLE>
UNITED FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1996
United
United United United Science and
Bond Income Accumulative Technology
Fund Fund Fund Fund
------------ -------------- -------------- ------------
<S> <C> <C> <C> <C>
Assets
Investment securities --
at value (Notes 1 and 3) $519,984,349 $4,508,110,309 $1,226,209,811 $990,908,798
Cash ...................... 12,480 --- 10,526 10,097
Receivables:
Investment securities
sold .................. 5,042,188 --- 14,985,900 663,753
Dividends and interest .. 7,944,629 7,256,179 1,120,550 142,657
Fund shares sold ........ 334,439 6,330,042 505,371 2,071,845
Prepaid insurance
premium ................. 13,368 39,792 29,324 8,457
------------ -------------- -------------- ------------
Total assets .......... 533,331,453 4,521,736,322 1,242,861,482 993,805,607
------------ -------------- -------------- ------------
Liabilities
Payable for investment
securities purchased 995,000 --- 15,784,966 ---
Payable for Fund
shares redeemed ......... 2,092,153 10,076,046 2,644,477 1,186,627
Due to custodian .......... --- 36,260 --- ---
Accrued service fee ....... 152,513 1,295,485 346,419 287,877
Accrued transfer agency
and dividend disbursing . 66,824 569,535 135,010 141,375
Accrued accounting
services fee ............ 5,000 8,333 8,333 7,083
Other ..................... 15,862 411,287 115,575 103,611
------------ -------------- -------------- ------------
Total liabilities ....... 3,327,352 12,396,946 19,034,780 1,726,573
------------ -------------- -------------- ------------
Total net assets ...... $530,004,101 $4,509,339,376 $1,223,826,702 $992,079,034
============ ============== ============== ============
Net Assets
$1.00 par value capital stock
Capital stock ........... $ 87,974,696 $ 143,643,812 $ 152,752,631 $ 38,290,565
Additional paid-in
capital ............... 467,729,961 2,415,468,049 907,307,828 416,863,435
Accumulated undistributed
income (loss):
Accumulated undistributed
net investment
income (loss) ......... 553,557 3,561,031 3,184,309 (1,595,728)
Accumulated undistributed net
realized gain (loss) on
investment
transactions .......... (26,478,547) 119,100,237 143,517,788 9,092,941
Net unrealized appreciation
of investments
at end of period ...... 224,434 1,827,566,247 17,064,146 529,427,821
------------ -------------- -------------- ------------
Net assets applicable to
outstanding units
of capital .......... $530,004,101 $4,509,339,376 $1,223,826,702 $992,079,034
============ ============== ============== ============
Net asset value per share
(net assets divided by
shares outstanding)
Class A ................... $6.02 $31.39 $8.01 $25.91
Class Y ................... $6.03 $31.39 $8.01 $25.92
Capital shares
outstanding
Class A ................... 87,233,407 139,392,369 152,357,964 38,188,200
Class Y ................... 741,289 4,251,443 394,667 102,365
Capital shares authorized ... 400,000,000 600,000,000 600,000,000 200,000,000
See notes to financial statements.
</TABLE>
<PAGE>
UNITED FUNDS, INC.
STATEMENT OF OPERATIONS
For the Six Months Ended JUNE 30, 1996
<TABLE>
United
United United United Science and
Bond Income Accumulative Technology
Fund Fund Fund Fund
------------ -------------- -------------- ------------
<S> <C> <C> <C> <C>
Investment Income (Loss)
Income:
Dividends ............... $ --- $ 32,487,681 $ 8,973,085 $ 870,606
Interest ................ 19,018,937 10,451,907 3,958,232 1,778,677
------------ ------------ ----------- ------------
Total income .......... 19,018,937 42,939,588 12,931,317 2,649,283
------------ ------------ ----------- ------------
Expenses (Note 2):
Investment
management fee ........ 1,180,803 12,142,857 3,411,804 2,703,314
Transfer agency and
dividend disbursing
-- Class A ............ 391,730 2,709,253 611,063 698,232
Service fee -- Class A .. 344,527 2,901,203 732,697 624,418
Custodian fees .......... 7,174 169,033 18,255 17,238
Accounting services fee . 31,667 50,000 50,000 42,500
Audit fees .............. 31,179 7,253 43,262 13,243
Shareholder servicing
fee -- Class Y ........ 2,790 84,201 1,821 1,098
Legal fees .............. 2,893 23,398 6,619 4,694
Other ................... 50,864 363,152 101,172 135,896
------------ ------------ ----------- ------------
Total expenses ........ 2,043,627 18,450,350 4,976,693 4,240,633
------------ ------------ ----------- ------------
Net investment
income (loss) ..... 16,975,310 24,489,238 7,954,624 (1,591,350)
------------ ------------ ----------- ------------
Realized and Unrealized
Gain (Loss) on
Investments
Realized net gain
on securities ........... 967,209 92,833,234 118,209,367 2,551,613
Realized net loss on foreign
currency transactions ... (1,183) (227,761) --- (4,378)
------------ ------------ ----------- ------------
Realized net gain
on investments ......... 966,026 92,605,473 118,209,367 2,547,235
Unrealized appreciation
(depreciation) in value
of investments during
the period ............... (29,187,582) 249,626,967 (83,811,370) 111,268,268
------------ ------------ ----------- ------------
Net gain (loss) on
investments ............ (28,221,556) 342,232,440 34,397,997 113,815,503
------------ ------------ ----------- ------------
Net increase (decrease)
in net assets
resulting from
operations ........... $(11,246,246) $366,721,678 $42,352,621 $112,224,153
============ ============ =========== ============
See notes to financial statements.
</TABLE>
<PAGE>
UNITED FUNDS, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended JUNE 30, 1996
<TABLE>
United
United United United Science and
Bond Income Accumulative Technology
Fund Fund Fund Fund
------------ -------------- -------------- ------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net investment
income (loss) ......... $ 16,975,310 $ 24,489,238 $ 7,954,624 $ (1,591,350)
Realized net gain
on investments ........ 966,026 92,605,473 118,209,367 2,547,235
Unrealized
appreciation
(depreciation) ........ (29,187,582) 249,626,967 (83,811,370) 111,268,268
------------ -------------- -------------- ------------
Net increase (decrease)
in net assets resulting
from operations ..... (11,246,246) 366,721,678 42,352,621 112,224,153
------------ -------------- -------------- ------------
Dividends to shareholders
from net investment
income:*
Class A ............... (16,866,736) (22,138,807) (6,076,174) ---
Class Y ............... (129,796) (746,123) (16,814) ---
------------ -------------- -------------- ------------
(16,996,532) (22,884,930) (6,092,988) ---
------------ -------------- -------------- ------------
Capital share
transactions (Note 5) (8,230,166) 82,082,161 (19,215,695) 59,072,298
------------ -------------- -------------- ------------
Total increase (decrease) (36,472,944) 425,918,909 17,043,938 171,296,451
Net Assets
Beginning of period ....... 566,477,045 4,083,420,467 1,206,782,764 820,782,583
------------ -------------- -------------- ------------
End of period ............. $530,004,101 $4,509,339,376 $1,223,826,702 $992,079,034
============ ============== ============== ============
Undistributed
net investment
income (loss) ........... $553,557 $3,561,031 $3,184,309 $(1,595,728)
======== ========== ========== ===========
*See "Financial Highlights" on pages 38-45.
See notes to financial statements.
</TABLE>
<PAGE>
UNITED FUNDS, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the Fiscal Year Ended December 31, 1995
<TABLE>
United
United United United Science and
Bond Income Accumulative Technology
Fund Fund Fund Fund
------------ -------------- -------------- ------------
<S> <C> <C> <C> <C>
Increase in Net Assets
Operations:
Net investment
income ................ $ 35,631,421 $ 48,335,097 $ 15,451,348 $ (430,999)
Realized net gain
on investments ........ 4,111,327 137,562,148 161,864,113 26,780,950
Unrealized
appreciation .......... 61,755,254 742,707,419 140,365,483 255,993,038
------------ -------------- -------------- ------------
Net increase
in net assets resulting
from operations ..... 101,498,002 928,604,664 317,680,944 282,342,989
------------ -------------- -------------- ------------
Dividends to shareholders
from:*
Net investment income
Class A ............... (35,740,983) (46,382,026) (14,998,659) ---
Class Y ............... ((90,066) (676,269) (4,366) ---
Realized net gain on
investment transactions
Class A ............... --- (121,451,126) (127,689,006) (24,276,021)
Class Y ............... --- (3,204,607) (68,073) ---
------------ -------------- -------------- ------------
(35,831,049) (171,718,028) (142,760,104) (24,276,021)
------------ -------------- -------------- ------------
Capital share
transactions (Note 5) ... (17,026,228) 181,629,624 64,841,625 66,213,033
------------ -------------- -------------- ------------
Total increase .......... 48,640,725 938,516,260 239,762,465 324,280,001
Net Assets
Beginning of period ....... 517,836,320 3,144,904,207 967,020,299 496,502,582
------------ -------------- -------------- ------------
End of period ............. $566,477,045 $4,083,420,467 $1,206,782,764 $820,782,583
============ ============== ============== ============
Undistributed net
investment income ....... $575,962 $2,184,484 $1,322,673 $---
======== ========== ========== ====
*See "Financial Highlights" on pages 38-45.
See notes to financial statements.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS OF
UNITED BOND FUND
Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:
For the
six months For the fiscal year ended December 31,
ended --------------------------------------
6/30/96 1995 1994 1993 1992 1991
---------- ----- ----- ----- ----- -----
Net asset value,
beginning of period $6.34 $5.62 $6.39 $6.31 $6.32 5.80
---- ---- ---- ---- ---- ----
Income from investment
operations:
Net investment income 0.19 0.40 0.39 0.41 0.45 0.47
Net realized and
unrealized gain
(loss) on
investments ..... (0.32) 0.72 (0.75) 0.41 0.00 0.56
---- ---- ---- ---- ---- ----
Total from investment
operations ....... (0.13) 1.12 (0.36) 0.82 0.45 1.03
---- ---- ---- ---- ---- ----
Less distributions:
Dividends from net
investment income (0.19) (0.40) (0.39) (0.41) (0.46) (0.47)
Distribution from
capital gains ... (0.00) (0.00) (0.02) (0.33) (0.00) (0.04)
---- ---- ---- ---- ---- ----
Total distributions (0.19) (0.40) (0.41) (0.74) (0.46) (0.51)
---- ---- ---- ---- ---- ----
Net asset value,
end of period .... $6.02 $6.34 $5.62 $6.39 $6.31 $6.32
===== ===== ===== ===== ===== =====
Total return* ...... -2.02% 20.50% -5.76% 13.19% 7.50% 18.78%
Net assets, end of
period (000
omitted) .........$525,537$563,445$517,836$641,668$589,946$524,404
Ratio of expenses to
average net assets 0.75%** 0.74% 0.72% 0.65% 0.64% 0.65%
Ratio of net investment
income to average
net assets ....... 6.24%** 6.54% 6.60% 6.14% 7.29% 7.96%
Portfolio turnover
rate ............. 34.43% 66.38%127.11% 175.39%115.17% 318.76%
*Total return calculated without taking into account the sales load deducted
on an initial purchase.
**Annualized.
See notes to financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS OF
UNITED BOND FUND
Class Y Shares
For a Share of Capital Stock Outstanding Throughout Each Period:
For the For the
six months period from
ended 6/19/95 to
6/30/96 12/31/95*
---------- -----------
Net asset value,
beginning of period $6.34 $6.11
---- ----
Income from investment
operations:
Net investment income 0.19 0.21
Net realized and
unrealized gain (loss)
on investments .. (0.31) 0.22
---- ----
Total from investment
operations ....... (0.12) 0.43
---- ----
Less distributions:
Dividends from net
investment income (0.19) (0.20)
Distribution from
capital gains ... (0.00) (0.00)
---- ----
Total distributions (0.19) (0.20)
---- ----
Net asset value,
end of period .... $6.03 $6.34
==== ====
Total return ....... -1.97% 7.20%
Net assets, end of
period (000
omitted) ......... $4,467 $3,032
Ratio of expenses to
average net assets 0.61%** 0.63%**
Ratio of net investment
income to average
net assets ....... 6.43%** 6.41%**
Portfolio turnover
rate ............. 34.43% 66.38%
*On June 17, 1995, the Fund began offering Class Y shares to the public.
Fund shares outstanding prior to that date were designated Class A
shares.
**Annualized.
See notes to financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS OF
UNITED INCOME FUND
Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:
For the
six months For the fiscal year ended December 31,
ended --------------------------------------
6/30/96 1995 1994 1993 1992 1991
---------- ----- ----- ----- ----- -----
Net asset value,
beginning of period $28.96 $23.34 $24.77 $22.05 $20.44 $16.46
---- ---- ---- ---- ---- ----
Income from investment
operations:
Net investment income 0.17 0.36 0.36 0.40 0.46 0.51
Net realized and
unrealized gain
(loss) on
investments ..... 2.42 6.53 (0.80) 3.11 1.96 4.29
---- ---- ---- ---- ---- ----
Total from investment
operations ....... 2.59 6.89 (0.44) 3.51 2.42 4.80
---- ---- ---- ---- ---- ----
Less distributions:
Dividends from net
investment income (0.16) (0.35) (0.36) (0.40) (0.46) (0.53)
Distribution from
capital gains ... (0.00) (0.92) (0.63) (0.39) (0.35) (0.29)
---- ---- ---- ---- ---- ----
Total distributions (0.16) (1.27) (0.99) (0.79) (0.81) (0.82)
---- ---- ---- ---- ---- ----
Net asset value,
end of period .... $31.39 $28.96 $23.34 $24.77 $22.05 $20.44
====== ====== ====== ====== ====== ======
Total return* ...... 8.94% 29.60% -1.82% 16.05% 11.96% 29.64%
Net assets, end of
period (000
omitted) .........$4,375,868$3,975,717$3,144,904$3,060,073$2,537,161
$2,150,986
Ratio of expenses to
average net assets 0.85%** 0.83% 0.74% 0.66% 0.65% 0.66%
Ratio of net investment
income to average
net assets ....... 1.12%** 1.31% 1.45% 1.70% 2.19% 2.71%
Portfolio turnover
rate ............. 10.02% 17.59% 18.54% 21.70% 19.25% 24.68%
Average commission
rate paid ........ $0.0422
*Total return calculated without taking into account the sales load deducted
on an initial purchase.
**Annualized.
See notes to financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS OF
UNITED INCOME FUND
Class Y Shares
For a Share of Capital Stock Outstanding Throughout Each Period:
For the For the
six months period from
ended 6/19/95 to
6/30/96 12/31/95*
---------- -----------
Net asset value,
beginning of period $28.96 $27.73
---- ----
Income from investment
operations:
Net investment income 0.19 0.21
Net realized and
unrealized gain
on investments .. 2.42 2.14
---- ----
Total from investment
operations ....... 2.61 2.35
---- ----
Less distributions:
Dividends from net
investment income (0.18) (0.20)
Distribution from
capital gains ... (0.00) (0.92)
---- ----
Total distributions (0.18) (1.12)
---- ----
Net asset value,
end of period .... $31.39 $28.96
==== ====
Total return ....... 9.01% 8.45%
Net assets, end of
period (000
omitted) ......... $133,471 $107,703
Ratio of expenses to
average net assets 0.72%** 0.74%**
Ratio of net investment
income to average
net assets ....... 1.25%** 1.36%**
Portfolio turnover
rate ............. 10.02% 17.59%
Average commission
rate paid ........ $0.0422
*On June 17, 1995, the Fund began offering Class Y shares to the public.
Fund shares outstanding prior to that date were designated Class A
shares.
**Annualized.
See notes to financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS OF
UNITED ACCUMULATIVE FUND
Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:
For the
six months For the fiscal year ended December 31,
ended --------------------------------------
6/30/96 1995 1994 1993 1992 1991
---------- ----- ----- ----- ----- -----
Net asset value,
beginning of period $7.78 $6.58 $7.19 $7.50 $7.15 $6.03
---- ---- ---- ---- ---- ----
Income from investment
operations:
Net investment
income........... 0.05 0.11 0.13 0.11 0.16 0.19
Net realized and
unrealized gain
(loss) on
investments ..... 0.22 2.12 (0.13) 0.55 0.85 1.22
---- ---- ---- ---- ---- ----
Total from investment
operations ....... 0.27 2.23 0.00 0.66 1.01 1.41
---- ---- ---- ---- ---- ----
Less distributions:
Dividends from net
investment income (0.04) (0.11) (0.13) (0.11) (0.16) (0.20)
Distribution from
capital gains ... (0.00) (0.92) (0.48) (0.84) (0.50) (0.09)
Distribution in
excess of capital
gains............ (0.00) (0.00) (0.00) (0.02) (0.00) (0.00)
---- ---- ---- ---- ---- ----
Total distributions (0.04) (1.03) (0.61) (0.97) (0.66) (0.29)
---- ---- ---- ---- ---- ----
Net asset value,
end of period .... $8.01 $7.78 $6.58 $7.19 $7.50 $7.15
==== ==== ==== ==== ==== ====
Total return* ...... 3.47% 34.21% 0.04% 9.06% 14.20% 23.68%
Net assets, end of
period (000
omitted) .........$1,220,665$1,206,128$967,020$1,033,774$992,924 $904,635
Ratio of expenses to
average net assets 0.81%** 0.80% 0.71% 0.65% 0.62% 0.63%
Ratio of net investment
income to average
net assets ....... 1.30%** 1.42% 1.76% 1.34% 2.13% 2.79%
Portfolio turnover
rate ............. 115.32% 229.03%205.40% 230.29%194.41% 241.11%
Average commission
rate paid ........ $0.0561
*Total return calculated without taking into account the sales load deducted
on an initial purchase.
**Annualized.
See notes to financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS OF
UNITED ACCUMULATIVE FUND
Class Y Shares
For a Share of Capital Stock Outstanding Throughout Each Period:
For the For the
six months period from
ended 7/11/95 to
6/30/96 12/31/95*
---------- -----------
Net asset value,
beginning of period $7.78 $7.84
---- ----
Income from investment
operations:
Net investment income 0.05 0.05
Net realized and
unrealized gain
on investments .. 0.22 0.87
---- ----
Total from investment
operations ....... 0.27 0.92
---- ----
Less distributions:
Dividends from net
investment income (0.04) (0.06)
Distribution from
capital gains ... (0.00) (0.92)
---- ----
Total distributions (0.04) (0.98)
---- ----
Net asset value,
end of period .... $8.01 $7.78
==== ====
Total return ....... 3.50% 11.92%
Net assets, end of
period (000
omitted) ......... $3,162 $655
Ratio of expenses to
average net assets 0.74%** 0.76%**
Ratio of net investment
income to average
net assets ....... 1.38%** 1.24%**
Portfolio turnover
rate ............. 115.32% 229.03%
Average commission
rate paid ........ $0.0561
*On June 17, 1995, the Fund began offering Class Y shares to the public.
Fund shares outstanding prior to that date were designated Class A
shares.
**Annualized.
See notes to financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS OF
UNITED SCIENCE AND TECHNOLOGY FUND
Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:
For the
six months For the fiscal year ended December 31,
ended --------------------------------------
6/30/96 1995 1994 1993 1992 1991
---------- ----- ----- ----- ----- -----
Net asset value,
beginning of period $22.89 $15.21 $14.83 $14.64 $15.42 $10.27
------ ------ ------ ------ ------ ------
Income from investment
operations:
Net investment
income (loss) ... (0.04) (0.01) 0.00 0.01 0.03 0.10
Net realized and
unrealized gain
(loss) on
investments ..... 3.06 8.40 1.40 1.21 (0.66) 5.90
------ ------ ------ ------ ------ ------
Total from investment
operations ....... 3.02 8.39 1.40 1.22 (0.63) 6.00
------ ------ ------ ------ ------ ------
Less distributions:
Dividends from net
investment income (0.00) (0.00) (0.00) (0.01) (0.03) (0.10)
Distribution from
capital gains ... (0.00) (0.71) (1.02) (0.95) (0.12) (0.75)
Distribution in
excess of capital
gains ........... (0.00) (0.00) (0.00) (0.07) (0.00) (0.00)
------ ------ ------ ------ ------ ------
Total distributions (0.00) (0.71) (1.02) (1.03) (0.15) (0.85)
------ ------ ------ ------ ------ ------
Net asset value,
end of period .... $25.91 $22.89 $15.21 $14.83 $14.64 $15.42
====== ====== ====== ====== ====== ======
Total return* ...... 13.19% 55.37% 9.78% 8.51% -4.03% 59.25%
Net assets, end of
period (000
omitted) .........$989,426$820,783$496,503$446,611$428,806$405,380
Ratio of expenses to
average net assets 0.95%** 0.93% 0.96% 0.91% 0.87% 0.85%
Ratio of net investment
income to average
net assets ....... -0.36%**-0.07% 0.00% 0.06% 0.24% 0.75%
Portfolio turnover
rate ............. 13.42% 32.89% 64.39% 68.38% 45.79% 59.24%
Average commission
rate paid ........ $0.0513
*Total return calculated without taking into account the sales load deducted
on an initial purchase.
**Annualized.
See notes to financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS OF
UNITED SCIENCE AND TECHNOLOGY FUND
Class Y Shares
For a Share of Capital Stock Outstanding Throughout The Period:
For the
period from
2/27/96 to
6/30/96*
----------
Net asset value,
beginning of period $24.05
----
Income from investment
operations:
Net investment loss (0.01)
Net realized and
unrealized gain
on investments .. 1.88
----
Total from investment
operations ....... 1.87
----
Less distributions:
Dividends from net
investment income (0.00)
Distribution from
capital gains ... (0.00)
----
Total distributions (0.00)
----
Net asset value,
end of period .... $25.92
====
Total return ....... 7.78%
Net assets, end of
period (000
omitted) ......... $2,653
Ratio of expenses to
average net assets 0.80%**
Ratio of net investment
income to average
net assets ....... -0.16%**
Portfolio turnover
rate ............. 13.42%***
Average commission
rate paid ........ $0.0513***
*On June 17, 1995, the Fund began offering Class Y shares to the public.
Fund shares outstanding prior to that date were designated Class A
shares.
**Annualized.
***For the six months ended June 30, 1996.
See notes to financial statements.
<PAGE>
UNITED FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
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 series of capital shares; each series 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 pricing service or 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 System) 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 except that certain dividends from foreign securities are
recorded as soon as the Corporation is informed of the ex-dividend date.
Interest income is recorded on the accrual basis. See Note 3 -- Investment
Securities Transactions.
C. Foreign currency translations -- All assets and liabilities denominated in
foreign currencies are translated into U.S. dollars daily. Purchases and
sales of investment securities and accruals of income and expenses are
translated at the rate of exchange prevailing on the date of the
transaction. For assets and liabilities other than investments in
securities, net realized and unrealized gains and losses from foreign
currency translations arise from changes in currency exchange rates. The
Corporation combines fluctuations from currency exchange rates and
fluctuations in market value when computing net realized and unrealized
gain or loss from investments.
D. 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.
E. Dividends and distributions -- Dividends and distributions to
shareholders are recorded by each Fund on the record date. Net investment
income distributions and capital gains distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales and post-October
losses, foreign currency transactions, net operating losses and expiring
capital loss carryforwards.
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
NOTE 2 -- Investment Management And Payments To Affiliated Persons
The Corporation 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, .15% 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 $14.3 billion of
combined net assets at June 30, 1996) 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 Corporation 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
For Class A shares, the Corporation also pays WARSCO a per account charge
for transfer agency and dividend disbursement services of $1.3125 for each
shareholder account which was in existence at any time during the prior month
($1.0208 per account prior to April 1, 1996), plus $0.30 for each account on
which a dividend or distribution of cash or shares had a record date in that
month. With respect to Class Y shares, the Corporation pays WARSCO a monthly
fee at an annual rate of .15% of the average daily net assets of the class for
the preceding 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 for Class A shares (which are not an
expense of the Corporation) of $13,901,301, out of which W&R paid sales
commissions of $7,895,250 and all expenses in connection with the sale of the
Corporation's shares, except for registration fees and related expenses.
Under a Service Plan for Class A shares adopted by the Corporation pursuant
to Rule 12b-1 under the Investment Company Act of 1940, the Corporation may pay
monthly a fee to W&R in an amount not to exceed .25% of the Corporation's Class
A average annual net assets. The fee is to be paid to reimburse W&R for amounts
it expends in connection with the provision of personal services to Fund
shareholders and/or maintenance of shareholder accounts.
The Corporation paid Directors' fees of $132,999.
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 June 30, 1996 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 $ 90,619,819 $452,135,792$1,263,128,838$140,001,599
Purchases of U.S. Government
securities 88,442,011 --- --- ---
Purchases of short-term
securities 148,068,0461,245,401,8431,083,942,820 473,190,899
Proceeds from maturities
and sales of investment
securities, excluding
short-term and U.S.
Government securities 102,285,181 417,662,9801,355,853,776 112,489,078
Proceeds from maturities and
sales of U.S. Government
securities 97,396,848 --- --- ---
Proceeds from maturities and sales
of short-term securities 140,613,6831,202,954,9451,021,030,891 453,635,047
For Federal income tax purposes, cost of investments owned at June 30, 1996
and the related appreciation (depreciation) were as follows:
Aggregate
Cost AppreciationDepreciation Appreciation
-------------- --------------------------------------
United Bond Fund $ 519,760,667$ 6,807,834$ 6,584,152 $ 223,682
United Income Fund 2,680,543,4281,865,803,462 38,236,581 1,827,566,881
United Accumulative
Fund 1,209,145,687 66,493,962 49,429,838 17,064,124
United Science and
Technology Fund 461,564,607 548,617,708 19,273,517 529,344,191
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 Science and Technology
Fund and United Accumulative Fund realized capital gain net income of
$137,622,658, $23,260,417 and $152,961,921, respectively, during the year ended
December 31, 1995, a portion of which was paid to shareholders during the period
ended December 31, 1995. Remaining capital gain net income will be distributed
to each Fund's shareholders. For Federal income tax purposes, United Bond Fund
realized capital losses of $80,903 during the year ended December 31, 1995.
This amount is available to offset future realized capital gain net income
through December 31, 2003. Remaining prior year capital loss carryforwards of
United Bond Fund aggregated $27,347,477, which are available to offset future
capital gain net income through December 31, 2002.
NOTE 5 -- Commencement of Multiclass Operations
On June 17, 1995, each Fund within the Corporation was authorized to offer
investors a choice of two classes of shares, Class A and Class Y, each of which
has equal rights as to assets and voting privileges with respect to each Fund.
Class Y shares are not subject to a sales charge on purchases; they are not
subject to a Rule 12b-1 Service Plan and have a separate transfer agency and
dividend disbursement services fee structure. A comprehensive discussion of the
terms under which shares of either class are offered is contained in the
prospectus and the Statement of Additional Information for the Corporation.
United Income Fund and United Bond Fund commenced multiclass operations on June
19, 1995 and United Accumulative Fund commenced multiclass operations on July
11, 1995. United Science and Technology Fund commenced multiclass operations on
February 27, 1996.
Income, non-class specific expenses and realized and unrealized gains and
losses are allocated daily to each class of shares based on the value of
relative net assets as of the beginning of each day adjusted for the prior day's
capital share activity.
Transactions in capital stock for the six months ended June 30, 1996 are
summarized below.
United
United United United Science and
Bond Income Accumulative Technology
Fund Fund Fund Fund
----------- ------------ ------------------------
Shares issued from sale
of shares:
Class A ............ 3,317,761 8,011,503 5,624,938 9,288,903
Class Y ............ 316,678 830,320 330,364 107,310
Shares issued from
reinvestment of
dividends:
Class A ............ 2,319,732 648,569 695,787 ---
Class Y ............ 21,370 23,808 2,081 ---
Shares redeemed:
Class A ............ (7,240,253) (6,537,612) (9,037,339) (6,962,059)
Class Y ............ (74,732) (321,499) (21,936) (4,945)
--------- --------- --------- ---------
Increase (decrease) in
outstanding capital
shares:
Class A ............ (1,602,760) 2,122,460 (2,716,614) 2,326,844
Class Y ............ 263,316 532,629 310,509 102,365
--------- --------- ---------- ---------
Total for Fund .... (1,339,444) 2,655,089 (2,406,105) 2,429,209
========= ========= ========== =========
Value issued from sale
of shares:
Class A ............ $20,317,652 $246,480,526 $44,944,769$225,862,613
Class Y ............ 1,963,595 25,643,653 2,667,268 2,647,102
Value issued from
reinvestment of
dividends:
Class A ............ 14,137,959 20,317,812 5,621,937 ---
Class Y ............ 129,796 746,123 16,815 ---
Value redeemed:
Class A ............ (44,321,892) (201,215,554) (72,288,348)(169,318,067)
Class Y ............ (457,276) (9,890,399) (178,136) (119,350)
----------- ----------- ----------- -----------
Increase (decrease) in
outstanding capital:
Class A ............ (9,866,281) 65,582,784 (21,721,642) 56,544,546
Class Y ............ 1,636,115 16,499,377 2,505,947 2,527,752
----------- ----------- ----------- -----------
Total for Fund .. $(8,230,166) $ 82,082,161 $(19,215,695)$ 59,072,298
=========== =========== =========== ===========
Transactions in capital stock for the fiscal year ended December 31, 1995
are summarized below.
United
United United United Science and
Bond Income Accumulative Technology
Fund Fund Fund Fund
----------- ------------ ------------------------
Shares issued from sale
of shares:
Class A ............ 7,903,177 13,156,068 3,690,645 15,272,219
Class Y ............ 494,273 3,737,901 76,842 ---
Shares issued from
reinvestment of
dividends and/or capital
gains distribution:
Class A ............ 4,996,291 5,453,592 17,417,933 1,060,921
Class Y ............ 14,634 133,843 9,457 ---
Shares redeemed:
Class A ............ (16,233,171) (16,103,667) (12,973,028)(13,108,833)
Class Y ............ (30,934) (152,930) (2,141) ---
----------- ----------- ---------- ----------
Increase (decrease) in
outstanding capital
shares:
Class A ............ (3,333,703) 2,505,993 8,135,550 3,224,307
Class Y ............ 477,973 3,718,814 84,158 ---
----------- ----------- ---------- ----------
Total for Fund .... (2,855,730) 6,224,807 8,219,708 3,224,307
========= ========== ========= =========
Value issued from sale
of shares:
Class A ............ $47,524,601 $358,973,863 $28,187,349$315,997,134
Class Y ............ 3,026,041 104,695,114 600,969 ---
Value issued from
reinvestment of
dividends and/or capital
gains distribution:
Class A ............ 29,904,406 155,645,364 133,229,799 23,096,462
Class Y ............ 90,066 3,880,877 72,439 ---
Value redeemed:
Class A ............ (97,382,064) (437,078,074) (97,231,889)(272,880,563)
Class Y ............ (189,278) (4,487,520) (17,042) ---
----------- ------------ ----------- -----------
Increase (decrease) in
outstanding capital:
Class A ............ $(19,953,057) $ 77,541,153 $64,185,259 $66,213,033
Class Y ............ 2,926,829 104,088,471 656,366 ---
----------- ----------- ---------- ----------
Total for fund .. $(17,026,228) $181,629,624 $64,841,625 $66,213,033
=========== ============ =========== ===========
<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
comprising United Funds, Inc. (hereafter referred to as the "Corporation") at
June 30, 1996, the results of its operations for the six months 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 June
30, 1996 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 LLP
Kansas City, Missouri
August 5, 1996
<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.
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
Linda Graves, Topeka, Kansas
John F. Hayes, Hutchinson, Kansas
Glendon E. Johnson, Miami, Florida
William T. Morgan, Coronado, California
Doyle Patterson, Kansas City, Missouri
Eleanor B. Schwartz, Kansas City, Missouri
Keith A. Tucker, Overland Park, Kansas
Frederick Vogel III, Milwaukee, Wisconsin
Paul S. Wise, Carefree, Arizona
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
Sharon K. Pappas, Vice President and Secretary
Carl E. Sturgeon, Vice President
Russell E. Thompson, Vice President
<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 Municipal High Income Fund, Inc.
United High Income Fund, Inc.
United High Income Fund II, Inc.
United Continental Income Fund, Inc.
United Retirement Shares, Inc.
United Asset Strategy Fund, Inc.
United Income Fund
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.
- ------------------------------------
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
Our INTERNET address is:
http://www.waddell.com
NUR1000SA(6-96)
printed on recycled paper
