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, 1997
<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, 1997
Dear Shareholder:
As Waddell & Reed celebrates its 60th anniversary in the financial
services industry, I would like to thank you for your continued confidence
in our products and services. Since we opened our doors in 1937, our goal
has been and continues to be to provide the best service possible to our
shareholders. This commitment is reflected in every area of our
organization: starting with your financial advisor and continuing with our
investment management and customer service people of our affiliated
companies.
Your confidence in the success of the products and services offered by
Waddell & Reed and its affiliates is reflected in the growth the Funds have
experienced over our 60 years. Total mutual fund assets under management
reached the $1 billion mark in 1961, and over the $5 billion mark in 1985.
As of June 30, 1997, mutual fund assets under management totaled more than
$19.3 billion.
We look forward to helping you meet the financial goals that are
important to you, now and for many years to come. Should you have any
questions about your account or other financial issues that are important
to you, contact your financial advisor 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
<PAGE>
PERFORMANCE SUMMARY -- Class A Shares
PER SHARE DATA
For the Six Months Ended June 30, 1997
--------------------------------------
DIVIDENDS PAID $0.19
=====
NET ASSET VALUE ON
6/30/97 $6.13
12/31/96 6.14
-----
CHANGE PER SHARE $(0.01)
=====
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 6-30-97 2.27% 8.51%
5-year period ended 6-30-97 6.35% 7.62%
10-year period ended 6-30-97 7.95% 8.59%
*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, 1997, United Bond Fund had net assets totaling $511,711,471
invested in a diversified portfolio of:
95.69% Bonds
4.31% Cash and Cash Equivalents
As a shareholder of United Bond Fund, for every $100 you had invested on
June 30, 1997, your Fund owned:
Bonds:
Corporate $65.11
U.S. Government 23.56
Other Government 7.02
Cash and Cash Equivalents 4.31
Not all holdings will be represented in the portfolio at all times.
<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
JUNE 30, 1997
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES
Chemicals and Allied Products - 4.41%
Dow Capital BV,
9.0%, 5-15-2010 ....................... $ 5,000 $ 5,716,550
Dow Chemical Company (The),
8.55%, 10-15-2009 ..................... 5,000 5,536,850
Procter & Gamble Company (The),
8.0%, 9-1-2024 ........................ 10,000 11,296,200
Total ................................. 22,549,600
Communication - 7.45%
Bell Telephone Company of Pennsylvania (The),
8.35%, 12-15-2030 ..................... 5,000 5,713,450
BellSouth Telecommunications, Inc.,
5.85%, 11-15-2045 ..................... 3,000 2,951,010
Cablevision Industries Corporation,
9.25%, 4-1-2008 ....................... 5,000 5,315,800
Centel Capital Corporation,
9.0%, 10-15-2019 ...................... 5,585 6,441,404
Continental Cablevision, Inc.,
8.5%, 9-15-2001 ....................... 3,000 3,168,660
Jones Intercable, Inc.,
9.625%, 3-15-2002 ..................... 2,500 2,618,750
Tele-Communications, Inc.,
6.58%, 2-15-2005 ...................... 7,500 7,750,650
Turner Broadcasting System, Inc.,
8.375%, 7-1-2013 ...................... 4,000 4,148,600
Total ................................. 38,108,324
Depository Institutions - 9.48%
AmSouth Bancorporation,
6.75%, 11-1-2025 ...................... 6,000 5,866,500
Chevy Chase Savings Bank, F.S.B.,
9.25%, 12-1-2005 ...................... 1,500 1,503,750
J.P. Morgan & Co. Incorporated,
7.54%, 1-15-2027 ...................... 4,250 4,066,272
Kansallis-Osake-Pankki,
10.0%, 5-1-2002 ....................... 6,000 6,728,700
NBD Bank, National Association,
8.25%, 11-1-2024 ...................... 6,000 6,667,680
NationsBank Corporation,
8.57%, 11-15-2024 ..................... 5,000 5,695,250
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
JUNE 30, 1997
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES (CONTINUED)
Depository Institutions (Continued)
Riggs National Corporation,
8.5%, 2-1-2006 ........................ $ 6,000 $ 6,240,000
SouthTrust Bank of Alabama, N.A.:
5.58%, 2-6-2006 ....................... 4,500 4,346,775
7.69%, 5-15-2025 ...................... 5,000 5,398,550
Sovereign Bancorp, Inc.,
8.0%, 3-15-2003 ....................... 2,000 2,015,000
Total ................................. 48,528,477
Electric, Gas and Sanitary Services - 6.71%
Arkla, Inc.,
10.0%, 11-15-2019 ..................... 8,000 8,803,920
Cajun Electric Power Cooperative, Inc.,
8.92%, 3-15-2019 ...................... 5,000 5,417,350
Cleveland Electric Illuminating Co. (The),
9.5%, 5-15-2005 ....................... 4,000 4,302,600
Consolidated Edison Company
of New York, Inc.,
8.05%, 12-15-2027 ..................... 4,500 4,471,470
El Paso Electric Company,
7.25%, 2-1-99 ......................... 2,250 2,254,117
Pacific Gas & Electric Co.,
6.875%, 12-1-99........................ 4,750 4,751,615
Pennsylvania Power & Light Co.,
9.25%, 10-1-2019 ...................... 4,000 4,322,680
Total ............................... 34,323,752
Fabricated Metal Products - 0.60%
Mark IV Industries, Inc.,
8.75%, 4-1-2003 ....................... 3,000 3,097,500
Food and Kindred Products - 3.51%
Coca-Cola Enterprises Inc.,
0.0%, 6-20-2020 ....................... 60,000 11,928,000
Nabisco, Inc.,
6.8%, 9-1-2001 ........................ 6,000 6,009,780
Total ................................. 17,937,780
Food Stores - 0.40%
Kroger Co. (The),
7.65% 4-15-2007 ....................... 2,000 2,047,100
Health Services - 1.70%
Tenet Healthcare Corporation:
7.875%, 1-15-2003 ..................... 3,500 3,508,750
8.625%, 12-1-2003 ..................... 5,000 5,175,000
Total ................................. 8,683,750
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
JUNE 30, 1997
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES (CONTINUED)
Hotels and Other Lodging Places - 1.86%
Marriott International, Inc.,
7.875%, 4-15-2005 ..................... $ 5,000 $ 5,186,000
RHG Finance Corporation,
8.875%, 10-1-2005 ..................... 4,000 4,356,880
Total ................................. 9,542,880
Industrial Machinery and Equipment - 0.64%
Joy Technologies Inc.,
10.25%, 9-1-2003 ...................... 3,000 3,256,770
Insurance Carriers - 0.61%
Reliance Group Holdings, Inc.,
9.0%, 11-15-2000 ...................... 3,000 3,120,000
Lumber and Wood Products - 0.42%
Doman Industries Limited,
8.75%, 3-15-2004 ...................... 2,250 2,171,250
Nondepository Institutions - 14.32%
Associates Corporation of North America,
7.95%, 2-15-2010 ...................... 7,250 7,751,773
Banc One Credit Card Master Trust,
Series 1994-B, Class A,
7.55%, 12-15-99 ....................... 5,000 5,031,250
Chrysler Financial Corporation,
12.75%, 11-1-99 ....................... 9,000 10,200,330
Countrywide Mortgage Backed Securities,
Inc.,
6.5%, 4-25-2024 ....................... 10,000 9,978,900
DLJ Mortgage Acceptance Corp.,
6.5%, 4-25-2024 ....................... 4,776 4,572,849
Equicon Loan Trust,
7.3%, 2-18-2013 ....................... 4,571 4,560,829
General Electric Capital Corporation,
8.3%, 9-20-2009 ....................... 5,000 5,486,800
General Motors Acceptance Corporation,
8.875%, 6-1-2010 ...................... 10,000 11,398,300
Residential Asset Securities Corporation,
Mortgage Pass-Through Certificates,
1995-KS3 Class D,
8.0%, 10-25-2024 ...................... 4,000 4,102,080
Residential Funding Mortgage
Securities, Inc.,
8.0%, 8-25-2020 ....................... 5,314 5,316,965
Westinghouse Electric Corporation,
8.875%, 6-14-2014 ..................... 4,500 4,877,910
Total ................................. 73,277,986
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
JUNE 30, 1997
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES (CONTINUED)
Oil and Gas Extraction - 4.13%
Anadarko Petroleum Corporation,
7.25%, 3-15-2025 ...................... $ 5,000 $ 5,090,150
Mitchell Energy & Development Corp.,
9.25%, 1-15-2002 ...................... 3,000 3,232,290
Oryx Energy Company:
10.0%, 4-1-2001 ....................... 3,500 3,817,660
8.375%, 7-15-2004 ..................... 3,500 3,647,315
Seagull Energy Corporation,
7.875%, 8-1-2003 ...................... 1,250 1,281,250
YPF Sociedad Anoima,
8.0%, 2-15-2004 ....................... 4,000 4,074,800
Total ................................. 21,143,465
Paper and Allied Products - 1.32%
Boise Cascade Office Products Corporation,
9.875%, 2-15-2001 ..................... 2,500 2,622,100
Canadian Pacific Forest Products Ltd.,
9.25%, 6-15-2002 ...................... 4,000 4,138,040
Total ................................. 6,760,140
Printing and Publishing - 1.25%
News America Holdings Incorporated,
9.125%, 10-15-99 ...................... 2,000 2,108,480
Viacom International Inc.:
9.125%, 8-15-99 ....................... 1,500 1,537,500
10.25%, 9-15-2001 ..................... 2,500 2,733,750
Total ................................. 6,379,730
Security and Commodity Brokers - 0.96%
Salomon Inc.,
3.65%, 2-14-2002 ...................... 5,000 4,910,000
Stone, Clay and Glass Products - 2.11%
Owens-Corning Fiberglas Corporation,
8.875%, 6-1-2002 ...................... 5,000 5,378,250
Owens-Illinois, Inc.,
7.85%, 5-15-2004 ...................... 2,500 2,538,975
USG Corporation:
9.25%, 9-15-2001 ...................... 2,000 2,115,000
8.5%, 8-1-2005 ........................ 750 780,000
Total ................................. 10,812,225
Transportation Equipment - 0.64%
McDonnell Douglas Corporation,
9.25%, 4-1-2002 ....................... 3,000 3,298,620
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
JUNE 30, 1997
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES (CONTINUED)
Wholesale Trade -- Durable Goods- 2.59%
Fisher Scientific International Inc.,
7.125%, 12-15-2005 .................... $ 3,500 $ 3,428,040
Motorola, Inc.,
8.4%, 8-15-2031 ....................... 8,500 9,809,680
Total ................................. 13,237,720
TOTAL CORPORATE DEBT SECURITIES - 65.11% $333,187,069
(Cost: $337,283,884)
OTHER GOVERNMENT SECURITIES
Canada - 5.91%
Hydro Quebec:
8.05%, 7-7-2024 ....................... 10,000 10,839,800
7.4%, 3-28-2025 ....................... 5,000 5,419,250
Province de Quebec:
5.67%, 2-27-2026 ...................... 3,500 3,483,865
6.29%, 3-6-2026 ....................... 5,000 4,948,950
Province of Nova Scotia,
8.25%, 11-15-2019 ..................... 5,000 5,559,750
Total ............................... 30,251,615
Supranational - 1.11%
Inter-American Development Bank,
8.4%, 9-1-2009 ........................ 5,000 5,652,700
TOTAL OTHER GOVERNMENT SECURITIES - 7.02% $ 35,904,315
(Cost: $29,174,666)
UNITED STATES GOVERNMENT SECURITIES
Fannie Mae:
7.09%, 4-1-2004 ....................... 4,500 4,450,770
7.0%, 7-25-2006 ....................... 10,000 10,056,200
7.0%, 8-25-2021 ....................... 10,000 9,962,500
Federal Home Loan Mortgage Corporation:
7.5%, 2-15-2007 ....................... 10,000 10,203,100
7.5%, 11-15-2017 ...................... 10,000 10,140,600
7.5%, 4-15-2019 ....................... 13,226 13,089,768
7.95%, 12-15-2020 ..................... 9,000 9,205,290
Government National Mortgage Association:
7.5%, 7-15-2023 ....................... 6,155 6,214,232
7.5%, 12-15-2023 ...................... 5,291 5,341,056
8.0%, 9-15-2025 ....................... 9,316 9,658,882
7.75%, 10-15-2031 ..................... 1,993 2,023,371
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED BOND FUND
JUNE 30, 1997
Principal
Amount in
Thousands Value
UNITED STATES GOVERNMENT SECURITIES (Continued)
Tennessee Valley Authority,
5.98%, 4-1-2036 ....................... $ 5,000 $ 5,040,400
United States Department of Veterans Affairs,
Guaranteed Remic Pass-Through Certificates,
Vendee Mortgage Trust, 1997-2 Class C,
7.5%, 8-15-2017 ....................... 4,000 4,045,000
United States Treasury:
5.5%, 2-28-99 ......................... 8,000 7,933,760
6.75%, 5-31-99 ........................ 7,500 7,586,700
0.0%, 2-15-2019 ....................... 25,000 5,611,250
TOTAL UNITED STATES GOVERNMENT
SECURITIES - 23.56% $120,562,879
(Cost: $115,371,448)
TOTAL SHORT-TERM SECURITIES - 3.30% $ 16,907,020
(Cost: $16,907,020)
TOTAL INVESTMENT SECURITIES - 98.99% $506,561,283
(Cost: $498,737,018)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 1.01% 5,150,188
NET ASSETS - 100.00% $511,711,471
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)
<PAGE>
PERFORMANCE SUMMARY -- Class A Shares
PER SHARE DATA
For the Six Months Ended June 30, 1997
--------------------------------------
DIVIDENDS PAID $0.14
=====
NET ASSET VALUE ON
6/30/97 $39.38
12/31/96 32.91
------
CHANGE PER SHARE $ 6.47
======
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 6-30-97 25.07% 32.70%
5-year period ended 6-30-97 16.80% 18.19%
10-year period ended 6-30-97 14.31% 14.99%
*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, 1997, United Income Fund had net assets totaling $6,115,089,953
invested in a diversified portfolio of:
95.28% Common Stocks
2.39% Cash and Cash Equivalents
1.98% U.S. Government Securities
0.35% Corporate Debt Securities
As a shareholder of United Income Fund, for every $100 you had invested on
June 30, 1997, your Fund owned:
$59.25 Manufacturing Stocks
12.37 Wholesale and Retail Trade Stocks
10.09 Finance, Insurance and Real Estate Stocks
6.37 Services Stocks
4.42 Transportation, Communication, Electric, Gas
and Sanitary Services Stocks
2.39 Cash and Cash Equivalents
1.98 United States Government Securities
1.55 Contract Construction Stocks
1.23 Agriculture, Forestry and Fisheries Stocks
0.35 Corporate Debt Securities
Not all holdings will be represented in the portfolio at all times.
<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
JUNE 30, 1997
Shares Value
COMMON STOCKS
Apparel and Accessory Stores - 1.27%
Gap, Inc. (The) ........................ 2,000,000 $ 77,750,000
Apparel and Other Textile Products - 0.36%
Tommy Hilfiger Corporation* ............ 554,800 22,295,748
Building Materials and Garden Supplies - 0.86%
Home Depot, Inc. (The) ................. 765,000 52,736,805
Business Services - 4.20%
Computer Associates International, Inc. 562,500 31,323,937
Manpower Inc. .......................... 925,000 41,162,500
Microsoft Corporation* ................. 800,000 101,174,400
Oracle Systems Corporation* ............ 1,650,000 83,065,950
Total ................................. 256,726,787
Chemicals and Allied Products - 18.64%
Abbott Laboratories .................... 1,100,000 73,425,000
Air Products and Chemicals, Inc. ....... 1,150,000 93,437,500
Amgen Inc. ............................. 490,000 28,465,570
Astra AB, Class A (A) .................. 1,600,000 29,841,467
Avon Products, Inc. .................... 450,000 31,752,900
BetzDearborn Inc. ...................... 850,000 56,100,000
Colgate-Palmolive Company .............. 1,200,000 78,300,000
Dow Chemical Company (The) ............. 575,000 50,096,875
du Pont (E.I.) de Nemours and Company .. 2,000,000 123,874,000
IMC Global, Inc. ....................... 600,000 21,000,000
Lilly (Eli) and Company ................ 625,000 68,320,000
Merck & Co., Inc. ...................... 700,000 72,450,000
PPG Industries, Inc. ................... 1,250,000 72,656,250
Pfizer Inc. ............................ 650,000 77,675,000
Praxair, Inc. .......................... 1,000,000 56,000,000
Procter & Gamble Company (The) ......... 600,000 84,750,000
Union Carbide Corporation .............. 875,000 41,179,250
Warner-Lambert Company ................. 650,000 80,762,500
Total ................................. 1,140,086,312
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
JUNE 30, 1997
Shares Value
COMMON STOCKS (Continued)
Communication - 2.05%
MCI Communications Corporation ......... 1,050,000 $ 40,195,050
Nokia Corporation, Series A (A) ........ 760,000 56,852,702
SBC Communications Inc. ................ 460,000 28,462,500
Total ................................. 125,510,252
Depository Institutions - 4.97%
BankAmerica Corporation ................ 950,000 61,333,900
Chase Manhattan Corporation (The) ...... 525,000 50,957,550
Citicorp ............................... 500,000 60,281,000
First Bank System, Inc. ................ 500,000 42,687,500
Norwest Corporation .................... 1,100,000 61,875,000
Wells Fargo & Company ................... 100,000 26,950,000
Total ................................. 304,084,950
Electric, Gas and Sanitary Services - 1.19%
Duke Energy Corp. ...................... 575,000 27,563,775
Southern Company (The) ................. 1,175,000 25,703,125
Waste Management Inc. .................. 600,000 19,275,000
Total ................................. 72,541,900
Electronic and Other Electric Equipment - 7.92%
AMP Incorporated ....................... 1,100,000 45,925,000
Aeroquip-Vickers Inc. .................. 600,000 28,350,000
Analog Devices, Inc.* .................. 1,740,000 46,217,880
Emerson Electric Co. ................... 800,000 44,049,600
General Electric Company ............... 2,400,000 156,900,000
Intel Corporation ...................... 1,150,000 162,831,950
Total ................................. 484,274,430
Engineering and Management Services - 0.52%
Fluor Corporation ...................... 575,000 31,732,525
Food and Kindred Products - 2.29%
CPC International Inc. ................. 700,000 64,618,400
PepsiCo, Inc. .......................... 2,000,000 75,124,000
Total ................................. 139,742,400
Food Stores - 0.50%
Kroger Co. (The)* ...................... 1,050,000 30,450,000
Forestry - 1.23%
Georgia-Pacific Corporation ............ 425,000 36,284,375
Weyerhaeuser Company ................... 750,000 39,000,000
Total ................................. 75,284,375
Furniture and Fixtures - 0.11%
Lear Corporation* ...................... 146,200 6,487,625
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
JUNE 30, 1997
Shares Value
COMMON STOCKS (Continued)
Furniture and Home Furnishings Stores - 0.94%
Circuit City Stores, Inc. .............. 1,600,000 $ 57,200,000
General Merchandise Stores - 4.82%
Cifra, S.A. de C.V., Series A, CPO (A) . 978,460 1,808,359
Cifra, S.A. de C.V., Series C (A) ...... 8,000,000 12,791,137
Dayton Hudson Corporation .............. 949,800 50,517,013
Federated Department Stores, Inc.* ...... 760,000 26,410,000
Kmart Corporation* ..................... 5,000,000 61,250,000
May Department Stores Company (The) .... 1,000,000 47,250,000
Sears, Roebuck and Co. ................. 565,000 30,368,750
Wal-Mart Stores, Inc. .................. 1,900,000 64,242,800
Total ................................. 294,638,059
Health Services - 0.73%
Tenet Healthcare Corporation* .......... 1,500,000 44,343,000
Heavy Construction, Excluding Building - 0.26%
Foster Wheeler Corporation ............. 400,000 16,200,000
Industrial Machinery and Equipment - 15.72%
AGCO Corporation ....................... 535,000 19,226,295
Applied Materials, Inc.* ............... 1,730,000 122,451,130
Case Corporation ....................... 1,214,600 83,655,575
Caterpillar Inc. ....................... 1,400,000 150,325,000
cisco Systems, Inc.* ................... 1,500,000 100,734,000
Compaq Computer Corporation* ........... 650,000 64,512,500
Deere & Company ........................ 2,055,000 112,638,660
Eaton Corporation ...................... 500,000 43,656,000
Harnischfeger Industries, Inc. ......... 1,200,000 49,800,000
Ingersoll-Rand Company ................. 400,000 24,700,000
International Business Machines
Corporation ........................... 600,000 54,112,200
New Holland NV ......................... 1,200,000 32,850,000
Parker Hannifin Corporation ............ 600,000 36,412,200
United Technologies Corporation ........ 800,000 66,400,000
Total ................................. 961,473,560
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
JUNE 30, 1997
Shares Value
COMMON STOCKS (Continued)
Instruments and Related Products - 3.64%
General Motors Corporation, Class H .... 176,100 $ 10,169,775
Guidant Corporation .................... 900,000 76,500,000
Medtronic, Inc. ........................ 800,000 64,800,000
Xerox Corporation ...................... 900,000 70,987,500
Total ................................. 222,457,275
Insurance Carriers - 2.26%
Aetna Life & Casualty Company .......... 650,000 66,543,750
Oxford Health Plans Inc.* .............. 1,000,000 71,781,000
Total ................................. 138,324,750
Miscellaneous Manufacturing Industries - 1.08%
Armstrong World Industries, Inc. ....... 900,000 66,037,500
Motion Pictures - 0.92%
Walt Disney Company (The) .............. 700,000 56,175,000
Nondepository Institutions - 2.86%
Fannie Mae ............................. 1,805,800 78,778,025
Federal Home Loan Mortgage Corporation . 2,800,000 96,250,000
Total ................................. 175,028,025
Paper and Allied Products - 0.48%
International Paper Company ............ 600,000 29,137,200
Petroleum and Coal Products - 2.87%
Mobil Corporation ...................... 800,000 55,900,000
Royal Dutch Petroleum Company .......... 1,200,000 65,250,000
Tosco Corporation ...................... 1,825,000 54,635,025
Total ................................. 175,785,025
Primary Metal Industries - 0.80%
Aluminum Company of America ............ 650,000 48,993,750
Railroad Transportation - 0.58%
Union Pacific Corporation .............. 500,000 35,250,000
Rubber and Miscellaneous Plastics Products - 1.04%
Goodyear Tire & Rubber Company (The) ... 1,000,000 63,312,000
Special Trade Contractors - 1.29%
Telefonaktiebolaget LM Ericsson, ADR,
Class B ............................... 2,000,000 78,812,000
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
JUNE 30, 1997
Shares Value
COMMON STOCKS (Continued)
Transportation By Air - 0.60%
AMR Corporation* ....................... 400,000 $ 37,000,000
Transportation Equipment - 4.30%
AlliedSignal Inc. ...................... 700,000 58,800,000
Boeing Company (The) ................... 1,270,000 67,388,740
Chrysler Corporation ................... 2,200,000 72,186,400
Dana Corporation ....................... 760,000 28,880,000
Ford Motor Company ..................... 200,000 7,550,000
General Motors Corporation ............. 500,000 27,875,000
Total ................................. 262,680,140
Wholesale Trade -- Durable Goods - 0.62%
Motorola, Inc. ......................... 500,000 38,000,000
Wholesale Trade -- Nondurable Goods - 3.36%
Gillette Company (The) ................. 1,904,000 180,404,000
Safeway Inc.* .......................... 550,000 25,368,750
Total ................................. 205,772,750
TOTAL COMMON STOCKS - 95.28% $5,826,324,143
(Cost: $2,989,854,600)
Principal
Amount in
Thousands
CORPORATE DEBT SECURITIES
Depository Institutions - 0.17%
Morgan Guaranty Trust Company of New York,
7.375%, 2-1-2002 ...................... $10,250 10,506,762
Nondepository Institutions - 0.18%
General Electric Capital Corporation,
8.3%, 9-20-2009 ....................... 10,000 10,973,600
TOTAL CORPORATE DEBT SECURITIES - 0.35% $ 21,480,362
(Cost: $19,983,484)
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED INCOME FUND
JUNE 30, 1997
Principal
Amount in
Thousands Value
UNITED STATES GOVERNMENT SECURITIES
United States Treasury:
6.75%, 4-30-2000 ...................... $37,000 $ 37,485,440
5.75%, 8-15-2003 ...................... 50,000 48,281,000
10.375%, 11-15-2012 ................... 8,500 10,789,645
9.0%, 11-15-2018 ...................... 20,000 24,740,600
TOTAL UNITED STATES GOVERNMENT
SECURITIES - 1.98% $ 121,296,685
(Cost: $114,844,091)
TOTAL SHORT-TERM SECURITIES - 2.44% $ 149,054,590
(Cost: $149,054,590)
TOTAL INVESTMENT SECURITIES - 100.05% $6,118,155,780
(Cost: $3,273,736,765)
LIABILITIES, NET OF CASH AND OTHER ASSETS _ (0.05%) (3,065,827)
NET ASSETS - 100.00% $6,115,089,953
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)
<PAGE>
PERFORMANCE SUMMARY -- Class A Shares
PER SHARE DATA
For the Six Months Ended June 30, 1997
-------------------------------------------
DIVIDEND PAID $0.04
=====
NET ASSET VALUE ON
6/30/97 $9.16
12/31/96 7.75
-----
CHANGE PER SHARE $1.41
=====
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 6-30-97 21.30% 28.70%
5-year period ended 6-30-97 15.34% 16.72%
10-year period ended 6-30-97 11.69% 12.35%
*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, 1997, United Accumulative Fund had net assets totaling
$1,499,740,816 invested in a diversified portfolio of:
95.69% Common Stocks
4.31% Cash and Cash Equivalents
As a shareholder of United Accumulative Fund, for every $100 you had
invested on June 30, 1997, your Fund owned:
$36.70 Manufacturing Stocks
25.31 Finance, Insurance and Real Estate Stocks
16.01 Transportation, Communication, Electric, Gas
and Sanitary Services Stocks
8.77 Services Stocks
4.31 Cash and Cash Equivalents
3.67 Wholesale and Retail Trade Stocks
2.58 Mining Stocks
2.28 Agriculture, Forestry and Fisheries Stocks
0.37 Miscellaneous Investing Institutions Stocks
Not all holdings will be represented in the portfolio at all times.
<PAGE>
THE INVESTMENTS OF UNITED ACCUMULATIVE FUND
JUNE 30, 1997
Shares Value
COMMON STOCKS
Agricultural Production -- Crops - 1.07%
Pioneer Hi-Bred International, Inc. .... 200,000 $ 16,000,000
Business Services - 3.90%
Cerner Corporation* .................... 735,000 15,435,000
Intuit Inc.* ........................... 300,000 6,871,800
Manpower Inc. .......................... 450,000 20,025,000
Shared Medical Systems Corporation ..... 300,000 16,162,500
Total ................................. 58,494,300
Chemicals and Allied Products - 19.97%
American Home Products Corporation ..... 500,000 38,250,000
BetzDearborn Inc. ...................... 250,000 16,500,000
Colgate-Palmolive Company .............. 200,000 13,050,000
Estee Lauder Companies, Class A ........ 250,000 12,562,500
Lilly (Eli) and Company ................ 500,000 54,656,000
Novartis AG ............................ 500,000 40,109,000
Pfizer Inc. ............................ 200,000 23,900,000
Praxair, Inc. .......................... 500,000 28,000,000
Schering-Plough Corporation ............ 500,000 23,937,500
Sigma Aldrich Corporation .............. 500,000 17,500,000
Warner-Lambert Company ................. 250,000 31,062,500
Total ................................. 299,527,500
Communication - 7.69%
AirTouch Communications* ............... 500,000 13,687,500
BellSouth Corporation .................. 500,000 23,187,500
Clear Channel Communications, Inc.* .... 100,000 6,150,000
Comcast Corporation, Special Class A ... 300,000 6,402,900
Evergreen Media Corporation, Class A* .. 150,000 6,684,300
Intermedia Communications Inc.* ....... 300,000 9,675,000
Iridium World Communications Ltd.* ..... 153,000 2,773,125
Jacor Communications, Inc.* ............ 150,000 5,751,450
SBC Communications Inc. ................ 250,000 15,468,750
Southern New England Telecommunications
Corporation ........................... 350,000 13,606,250
360. Communications Company* ........... 700,000 11,987,500
Total ................................. 115,374,275
Depository Institutions - 8.16%
BankPlus, fsb* ......................... 500,000 5,406,000
Barnett Banks, Inc. .................... 300,000 15,750,000
Coast Savings Financial, Inc.* ......... 150,000 6,815,550
Comerica Incorporated .................. 250,000 17,000,000
Crestar Financial Corporation .......... 400,000 15,550,000
First Commerce Corporation ............. 300,000 13,181,100
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED ACCUMULATIVE FUND
JUNE 30, 1997
Shares Value
COMMON STOCKS (Continued)
Depository Institutions (Continued)
Glendale Federal Bank, Federal
Savings Bank* ......................... 250,000 $ 6,531,250
Mellon Bank Corporation ................ 300,000 13,537,500
Northern Trust Corporation ............. 300,000 14,521,800
Washington Federal Inc. ................ 550,000 14,110,800
Total ................................. 122,404,000
Electric, Gas and Sanitary Services - 5.28%
American Water Works Company, Inc. ..... 300,000 6,412,500
Columbia Gas System, Inc. (The) ........ 300,000 19,575,000
Sonat Inc. ............................. 325,000 16,656,250
United Waste Systems, Inc.* ............ 75,000 3,070,275
Waste Management Inc. .................. 500,000 16,062,500
Wisconsin Energy Corporation ........... 700,000 17,412,500
Total ................................. 79,189,025
Electronic and Other Electric Equipment - 1.31%
Ascend Communications, Inc.* ........... 150,000 5,892,150
Emerson Electric Co. ................... 250,000 13,765,500
Total ................................. 19,657,650
Engineering and Management Services - 0.05%
Neurex Corporation* .................... 55,000 770,000
Food and Kindred Products - 2.08%
CPC International Inc. ................. 50,000 4,615,600
Ralston-Ralston Purina Group ........... 200,000 16,437,400
Wrigley (W.M.) Jr. Company ............. 150,000 10,050,000
Total ................................. 31,103,000
Food Stores - 1.87%
American Stores Company ................ 300,000 14,850,000
Kroger Co. (The)* ...................... 454,100 13,168,900
Total ................................. 28,018,900
Forestry - 1.21%
Weyerhaeuser Company ................... 350,000 18,200,000
General Merchandise Stores - 0.37%
Equitable of Iowa Companies ............ 100,000 5,600,000
Health Services - 2.72%
Tenet Healthcare Corporation* .......... 700,000 20,693,400
Total Renal Care Holdings, Inc.* ....... 500,000 20,093,500
Total ................................. 40,786,900
Holding and Other Investment Offices - 0.37%
Conseco, Inc. .......................... 150,000 5,550,000
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED ACCUMULATIVE FUND
JUNE 30, 1997
Shares Value
COMMON STOCKS (Continued)
Industrial Machinery and Equipment - 3.19%
Digital Equipment Corporation* ......... 200,000 $ 7,087,400
International Business Machines
Corporation ........................... 250,000 22,546,750
Parker Hannifin Corporation ............ 300,000 18,206,100
Total ................................. 47,840,250
Instruments and Related Products - 3.52%
Baxter International Inc. .............. 500,000 26,125,000
General Motors Corporation, Class H .... 124,000 7,161,000
St. Jude Medical, Inc.* ................ 500,000 19,500,000
Total ................................. 52,786,000
Insurance Carriers - 13.44%
Chartwell Re Corporation ............... 500,000 15,000,000
Chubb Corporation (The) ................ 500,000 33,437,500
Equitable Companies Inc. (The) ......... 500,000 16,625,000
Humana, Inc.* .......................... 350,000 8,093,750
Liberty Corporation (The) .............. 300,000 12,225,000
NAC Re Corporation ..................... 350,000 16,931,250
Nationwide Financial Services, Inc. .... 400,000 10,624,800
Ohio Casualty Corporation .............. 132,500 5,846,562
ReliaStar Financial Corp. .............. 100,000 7,312,500
Travelers Group, Inc. .................. 500,000 31,531,000
Trenwick Group Inc. .................... 450,000 17,043,750
Western National Corporation .......... 1,000,000 26,812,000
Total ................................. 201,483,112
Metal Mining - 0.50%
Inco, Limited ......................... 250,000 7,515,500
Motion Pictures - 0.94%
Walt Disney Company (The) .............. 175,000 14,043,750
Nondepository Institutions - 1.46%
Fannie Mae ............................. 500,000 21,812,500
Oil and Gas Extraction _ 2.08%
ENI S.p.A. ............................. 325,000 18,463,900
Enron Oil & Gas Company ................. 700,000 12,687,500
Total.................................. 31,151,400
Paper and Allied Products - 1.38%
Champion International Corporation ..... 150,000 8,287,500
Kimberly-Clark Corporation ............. 250,000 12,437,500
Total ................................. 20,725,000
Personal Services - 1.16%
Loewen Group Inc. (The) ................ 500,000 17,437,500
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED ACCUMULATIVE FUND
JUNE 30, 1997
Shares Value
COMMON STOCKS (Continued)
Petroleum and Coal Products - 1.24%
Coastal Corporation (The) .............. 350,000 $ 18,615,450
Primary Metal Industries - 1.85%
Alumax, Inc.* .......................... 200,000 7,587,400
Aluminum Company of America ............ 150,000 11,306,250
British Steel plc, ADR ................. 350,000 8,837,500
Total ................................. 27,731,150
Printing and Publishing - 0.48%
Time Warner, Inc. ...................... 150,000 7,237,500
Railroad Transportation - 2.18%
Illinois Central Corporation, Class A .. 510,000 17,817,870
Wisconsin Central Transportation Corp.* 400,000 14,887,200
Total ................................. 32,705,070
Security and Commodity Brokers - 2.25%
American Express Company ............... 300,000 22,350,000
Paine Webber Group Inc. ................ 325,000 11,375,000
Total ................................. 33,725,000
Transportation By Air - 0.86%
Southwest Airlines Co. ................. 500,000 12,937,500
Transportation Equipment - 1.68%
AlliedSignal Inc. ...................... 300,000 25,200,000
Wholesale Trade _ Durable Goods - 0.51%
Motorola, Inc. ......................... 100,000 7,600,000
Wholesale Trade -- Nondurable Goods - 0.92%
Safeway Inc.* .......................... 300,000 13,837,500
TOTAL COMMON STOCKS - 95.69% $1,435,059,732
(Cost: $1,315,853,964)
TOTAL SHORT-TERM SECURITIES - 6.02% $ 90,325,910
(Cost: $90,325,910)
TOTAL INVESTMENT SECURITIES - 101.71% $1,525,385,642
(Cost: $1,406,179,874)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (1.71%) (25,644,826)
NET ASSETS - 100.00% $1,499,740,816
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)
<PAGE>
PERFORMANCE SUMMARY -- Class A Shares
PER SHARE DATA
For the Six Months Ended June 30, 1997
--------------------------------------
NET ASSET VALUE ON
6/30/97 $23.48
12/31/96 23.35
------
CHANGE PER SHARE $ 0.13
======
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 6-30-97 -9.28% -3.75%
5-year period ended 6-30-97 16.84% 18.23%
10-year period ended 6-30-97 12.95% 13.62%
*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, 1997, United Science and Technology Fund had net assets
totaling $1,000,303,429 invested in a diversified portfolio of:
88.45% Common Stocks
11.55% Cash and Cash Equivalents
As a shareholder of United Science and Technology Fund, for every $100 you
had invested on June 30, 1997, your Fund owned:
$35.87 Services Stocks
34.75 Manufacturing Stocks
11.55 Cash and Cash Equivalents
7.57 Transportation, Communication, Electric, Gas
and Sanitary Services Stocks
6.08 Wholesale and Retail Trade Stocks
2.16 Finance, Insurance and Real Estate Stocks
1.20 Agriculture, Forestry and Fisheries Stocks
0.82 Mining Stocks
Not all holdings will be represented in the portfolio at all times.
<PAGE>
THE INVESTMENTS OF UNITED SCIENCE AND TECHNOLOGY FUND
JUNE 30, 1997
Shares Value
COMMON STOCKS
Agricultural Production _- Crops - 1.20%
Pioneer Hi-Bred International, Inc. .... 150,000 $ 12,000,000
Auto Repair, Services and Parking - 0.43%
Hertz Corp (The), Class A* ............. 120,600 4,341,600
Building Materials and Garden Supplies - 0.56%
Fastenal Company ....................... 114,600 5,601,075
Business Services - 31.08%
America Online, Inc.* .................. 540,000 30,037,500
Autodesk, Inc. ......................... 200,000 7,668,600
BMC Software, Inc.* .................... 300,000 16,631,100
Broderbund Software, Inc.* ............. 286,600 7,093,350
CKS Group, Inc.* ....................... 394,000 13,346,750
CUC International Inc.* ................ 1,000,000 25,812,000
First Data Corporation ................. 350,000 15,377,950
HBO & Company .......................... 300,000 20,662,500
HCIA Inc.* ............................. 385,000 12,897,500
HPR Inc.* .............................. 509,000 9,320,808
i2 Technologies, Inc.* ................. 187,500 5,777,250
International Network Services* ........ 310,000 8,050,080
Intuit Inc.* ........................... 388,100 8,889,819
Macromedia, Inc.* ...................... 137,000 1,185,872
McAfee Associates, Inc.* ............... 300,000 18,918,600
Microsoft Corporation* ................. 120,000 15,176,160
Oracle Systems Corporation* ............ 400,000 20,137,200
Parametric Technology Corporation* ..... 400,000 17,012,400
Security Dynamics Technologies, Inc.* .. 200,000 7,362,400
Shared Medical Systems Corporation ..... 250,000 13,468,750
Summit Medical Systems, Inc.* .......... 200,000 568,600
Synopsys, Inc.* ........................ 380,000 14,024,280
TMP Worldwide Inc.* .................... 250,000 6,046,750
Wind River Systems, Inc.* .............. 400,000 15,374,800
Total ................................. 310,841,019
Chemicals and Allied Products - 12.59%
Abbott Laboratories .................... 300,000 20,025,000
Amgen Inc. ............................. 250,000 14,523,250
Lilly (Eli) and Company ................ 170,000 18,583,040
Pfizer Inc. ............................ 200,000 23,900,000
Roche Holdings AG (A) .................. 1,200 10,848,966
Schering-Plough Corporation ............ 300,000 14,362,500
Sigma Aldrich Corporation .............. 321,000 11,235,000
Warner-Lambert Company ................. 100,000 12,425,000
Total ................................. 125,902,756
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED SCIENCE AND TECHNOLOGY FUND
JUNE 30, 1997
Shares Value
COMMON STOCKS (Continued)
Communication - 5.51%
Comcast Corporation, Special Class A ... 100,000 $ 2,134,300
Intermedia Communications Inc.* ........ 500,000 16,125,000
Iridium World Communications Ltd.* ..... 162,000 2,936,250
Nokia Corporation, Series A, ADR ....... 200,000 14,750,000
WorldCom Inc.* ......................... 600,000 19,180,800
Total ................................. 55,126,350
Depository Institutions - 1.12%
Credit Suisse Group,
Registered Shares (A) ................. 87,000 11,168,355
Electric, Gas and Sanitary Services - 1.54%
Compagnie Generale des Eaux (A) ......... 60,000 7,687,988
USA Waste Services, Inc.* .............. 200,000 7,725,000
Total.................................. 15,412,988
Electronic and Other Electric Equipment - 12.80%
ADC Telecommunications* ................ 150,000 5,015,550
Advanced Fibre Communications, Inc.* ... 200,000 12,093,600
Altera Corp.* .......................... 300,000 15,187,500
Ascend Communications, Inc.* ........... 600,000 23,568,600
Ciena Corp.* ........................... 11,500 541,570
Emerson Electric Co. ................... 150,000 8,259,300
General Electric Company ............... 360,000 23,535,000
Molex Inc. ............................. 156,000 5,698,836
PairGain Technologies, Inc.* ........... 400,000 6,212,400
Tellabs* ............................... 500,000 27,906,000
Total ................................. 128,018,356
Engineering and Management Services - 0.47%
Neurex Corporation* .................... 334,300 4,680,200
Furniture and Fixtures - 0.44%
Lear Corporation* ...................... 100,000 4,437,500
Health Services - 3.89%
PhyCor, Inc.* .......................... 400,000 13,762,400
Renal Treatment Centers, Inc.* ......... 270,000 7,256,250
Tenet Healthcare Corporation* .......... 400,000 11,824,800
Vencor, Incorporated* .................. 143,900 6,079,775
Total ................................. 38,923,225
Industrial Machinery and Equipment - 3.47%
cisco Systems, Inc.* ................... 251,200 16,869,587
Culligan Water Technologies, Inc.* ..... 100,000 4,475,000
Digital Equipment Corporation* ......... 200,000 7,087,400
Digital Link Corporation* .............. 300,000 6,281,100
Total ................................. 34,713,087
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED SCIENCE AND TECHNOLOGY FUND
JUNE 30, 1997
Shares Value
COMMON STOCKS (Continued)
Instruments and Related Products - 3.11%
Medtronic, Inc. ........................ 200,000 $ 16,200,000
STERIS Corporation* .................... 400,000 14,900,000
Total ................................. 31,100,000
Insurance Agents, Brokers and Service - 1.04%
CRA Managed Care, Inc.* ................ 200,000 10,443,600
Oil and Gas Extraction - 0.82%
Enron Corporation ...................... 200,000 $8,162,400
Petroleum and Coal Products - 1.62%
Tosco Corporation ...................... 300,000 8,981,100
Valero Energy Corporation .............. 200,000 7,250,000
Total ................................. 16,231,100
Printing and Publishing - 0.72%
Time Warner, Inc. ...................... 150,000 7,237,500
Water Transportation - 0.52%
Royal Caribbean Cruises Ltd. ........... 150,000 5,240,550
Wholesale Trade -- Durable Goods - 3.79%
Johnson & Johnson ...................... 150,000 9,656,250
OmniCare, Inc. ......................... 900,000 28,237,500
Total ................................. 37,893,750
Wholesale Trade -- Nondurable Goods - 1.73%
Cardinal Health, Inc. .................. 301,966 17,287,554
TOTAL COMMON STOCKS - 88.45% $ 884,762,965
(Cost: $573,127,714)
Principal
Amount in
Thousands
SHORT-TERM SECURITIES
Commercial Paper
Auto Repair, Services and Parking - 1.28%
Hertz Corp (The),
5.53%, 7-11-97 ........................ $ 6,965 $ 6,954,301
PHH Corp.,
5.53%, 7-10-97 ........................ 5,865 5,856,892
Total ................................. 12,811,193
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED SCIENCE AND TECHNOLOGY FUND
JUNE 30, 1997
Principal
Amount in
Thousands Value
SHORT-TERM SECURITIES (Continued)
Commercial Paper (Continued)
Chemicals and Allied Products - 2.10%
Abbott Laboratories,
5.48%, 7-9-97 ......................... $11,000 $ 10,986,604
PPG Industries Inc.,
5.5%, 7-29-97 ......................... 10,110 10,066,752
Total ................................. 21,053,356
Communication - 0.04%
Dominion Resources Inc.,
5.74%, 7-9-97 ......................... 360 359,541
Electric, Gas and Sanitary Services - 2.36%
Commonwealth Edison Co.,
5.82%, 7-8-97 ......................... 13,000 12,985,288
Pacific Gas & Electric Co.,
5.55%, 7-10-97 ........................ 1,620 1,617,752
Pacificorp,
5.6%, 7-24-97 ......................... 4,700 4,683,184
Tampa Electric Co.,
5.58%, 7-3-97 ......................... 4,300 4,298,667
Total ................................. 23,584,891
Food and Kindred Products - 0.70%
ConAgra, Inc.,
5.72%, 7-2-97 ......................... 6,765 6,763,925
General Mills, Inc.,
5.495%, Master Note ................... 234 234,000
Total ................................. 6,997,925
Instruments and Related Products - 1.29%
Hughes Electronics Corp.:
5.8%, 7-10-97 ......................... 7,760 7,748,748
5.82%, 7-10-97 ........................ 5,200 5,192,434
Total ................................. 12,941,182
Metal Mining - 0.59%
BHP Finance (USA) Inc.,
5.6%, 7-7-97 .......................... 5,858 5,852,533
See Notes to Schedules of Investments on page 33.
<PAGE>
THE INVESTMENTS OF UNITED SCIENCE AND TECHNOLOGY FUND
JUNE 30, 1997
Principal
Amount in
Thousands Value
SHORT-TERM SECURITIES (Continued)
Commercial Paper (Continued)
Nondepository Institutions - 2.43%
Associates Corp. of North America,
5.5%, 7-16-97 ......................... $ 4,180 $ 4,170,421
IBM Credit Corp.,
5.54%, 7-28-97 ........................ 12,385 12,333,540
Island Finance Puerto Rico Inc.,
5.55%, 7-7-97 ......................... 2,715 2,712,489
Textron Financial Corp.,
5.78%, 7-17-97 ........................ 5,115 5,101,860
Total ................................. 24,318,310
Oil and Gas Extraction - 1.36%
Enron Corp.:
5.77%, 7-7-97 ......................... 9,085 9,076,263
5.83%, 7-7-97 ......................... 4,525 4,520,603
Total ................................. 13,596,866
Textile Mill Products - 0.20%
Sara Lee Corporation,
5.5%, Master Note ..................... 1,997 1,997,000
TOTAL SHORT-TERM SECURITIES - 12.35% $ 123,512,797
(Cost: $123,512,797)
TOTAL INVESTMENT SECURITIES - 100.80% $1,008,275,762
(Cost: $696,640,511)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.80%) (7,972,333)
NET ASSETS - 100.00% $1,000,303,429
See Notes to Schedules of Investments on page 33.
<PAGE>
UNITED FUNDS, INC.
JUNE 30, 1997
Notes to Schedules of Investments
*No dividends were paid during the preceding 12 months.
(A) 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>
UNITED FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES United
JUNE 30, 1997 United United United Science and
Bond Income Accumulative Technology
Fund Fund Fund Fund
Assets ----------------------------------------
Investment securities --
at value(Notes1 and3)$506,561,283$6,118,155,780$1,525,385,642$1,008,275,76
Cash .............. 4,750 ---- 11,587 5,486
Receivables:
Investment securities sold --- 2,080,374 38,458,910 41,915
Dividends and interest 7,320,569 6,567,766 1,820,167
Fund shares sold .. 378,367 12,000,963 1,006,576 1,510,606
Prepaid insurance
premium ........... 13,368 39,792 29,324 8,457
-----------------------------------------------------
Total assets .... 514,278,337 6,138,844,675 1,566,712,2061,010,043,252
Liabilities -----------------------------------------------------
Payable for investment
securities purchased --- 7,812,000 62,844,481
Payable to Fund
shareholders ...... 2,298,539 13,399,452 3,475,392 2,126,242
Due to custodian ... --- 2,706 --- ---
Accrued service fee (Note 2)132,232 1,417,572 372,217 248,332
Accrued transfer agency
and dividend disbursing
(Note 2) .......... 77,607 751,770 169,212 214,630
Accrued accounting
services fee (Note 2) 5,000 8,333 8,333
Accrued management
fee (Note 2) ...... 6,011 91,777 22,543 16,389
Other .............. 47,477 271,112 79,212
-----------------------------------------------------
Total liabilities 2,566,866 23,754,722 66,971,390 9,739,823
-----------------------------------------------------
Total net assets$511,711,471$6,115,089,953$1,499,740,816$1,000,303,429
Net Assets ====================================================
$1.00 par value capital stock
Capital stock ..... $ 83,512,297$ 155,297,305$ 163,731,256$ 42,601,756
Additional paid-in
capital .......... 445,015,350 2,788,656,038 976,916,044 508,196,219
Accumulated undistributed
income (loss):
Accumulated undistributed
net investment
income ......... 1,116,320 4,271,821 4,214,695 (15,271)
Accumulated undistributed net
realized gain (loss) on
investment
transactions ..... (25,756,761) 322,464,103 235,673,056 137,888,828
Net unrealized appreciation
of investments .. 7,824,265 2,844,400,686 119,205,765 311,631,897
------------------------------------------------------
Net assets applicable to
outstanding units
of capital ... $511,711,471$6,115,089,953$1,499,740,816$1,000,303,429
======================================================
Net asset value per share
(net assets divided by
shares outstanding)
Class A ............ $6.13 $39.38 $9.16 $23.48
Class Y ............ $6.13 $39.38 $9.16 $23.54
Capital shares
outstanding
Class A ............ 82,817,156 148,353,953 163,375,698 42,452,421
Class Y ............ 695,141 6,943,352 355,558 149,335
Capital shares authorized 400,000,000 600,000,000 600,000,000
See notes to financial statements.
<PAGE>
UNITED FUNDS, INC.
STATEMENT OF OPERATIONS
For the Six Months Ended JUNE 30, 1997
United
United United United Science and
Bond Income Accumulative Technology
Fund Fund Fund Fund
------------ --------------------------------------
Investment Income
Income (Note 1B):
Dividends ......... $ --- $ 36,882,834 $ 9,721,968$ 1,500,548
Interest and
amortization .... 18,473,837 8,950,754 5,371,049 3,434,573
----------- ------------ ------------------------
Total income .... 18,473,837 45,833,588 15,093,017 4,935,121
----------- ------------ ------------------------
Expenses (Note 2):
Investment
management fee ... 1,099,775 14,934,948 3,784,724 2,821,407
Transfer agency and
dividend disbursing
-- Class A ..... 420,786 3,428,004 765,189 1,068,957
Service fee -- Class A 329,989 3,579,267 887,598
Custodian fees .... 7,906 182,518 27,718 28,903
Accounting services fee 30,000 50,000 50,000 43,750
Audit fees ........ 9,120 12,413 10,080 10,395
Shareholder servicing
fee -- Class Y ... 4,318 148,831 2,377 2,816
Legal fees ........ 3,965 43,429 11,205 7,380
Other ............. 66,952 490,300 118,012 161,364
----------- ------------ ------------------------
Total expenses .. 1,972,811 22,869,710 5,656,903 4,858,612
----------- ------------ ------------------------
Net investment
income ....... 16,501,026 22,963,878 9,436,114 76,509
----------- ------------ ------------------------
Realized and Unrealized
Gain (Loss) on Investments (Notes 1 and 3)
Realized net gain
on securities ..... 459,671 250,081,449 181,957,908 117,477,811
Realized net gain (loss) on foreign
currency transactions --- 49,759 --- (91,780)
----------- ------------ ------------------------
Realized net gain
on investments .. 459,671 250,131,208 181,957,908 117,386,031
Unrealized appreciation
(depreciation) in value
of investments during
the period......... (2,299,935) 748,404,979 46,709,391(108,866,831)
----------- ------------ ------------------------
Net gain (loss) on
investments .... (1,840,264) 998,536,187 228,667,299 8,519,200
----------- ------------ ------------------------
Net increase
in net assets
resulting from
operations .... $14,660,762$1,021,500,065 $238,103,413 $8,595,709
============ ============ ========================
See notes to financial statements.
<PAGE>
UNITED FUNDS, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended June 30, 1997 United
United United United Science and
Bond Income Accumulative Technology
Fund Fund Fund Fund
----------------------------------------------------
Increase (Decrease) in Net Assets
Operations:
Net investment
income .......... $16,501,026$ 22,963,878 $ 9,436,114$ 76,509
Realized net gain
on investments .. 459,671 250,131,208 181,957,908 117,386,031
Unrealized
appreciation
(depreciation) .. (2,299,935) 748,404,979 46,709,391(108,866,831)
----------------------------------------------------
Net increase in net
assets resulting
from operations. 14,660,762 1,021,500,065 238,103,413 8,595,709
----------------------------------------------------
Distributions to shareholders
from net investment
income (Note 1E):*
Class A ......... (16,009,474) (20,750,059) (6,516,463) ---
Class Y ......... (177,892) (929,729) (15,187) ---
----------------------------------------------------
(16,187,366) (21,679,788) (6,531,650) ---
----------------------------------------------------
Capital share
transactions (Note 5)(17,414,336) 113,506,363 (19,697,739) 8,070,373
----------------------------------------------------
Total increase (decrease)(18,940,940)1,113,326,640211,874,024 16,666,082
Net Assets
Beginning of period 530,652,411 5,001,763,313 1,287,866,792 983,637,347
----------------------------------------------------
End of period $511,711,471$6,115,089,953$1,499,740,816$1,000,303,429
====================================================
Undistributed
net investment
income (loss) ... $1,116,320 $4,271,821 $4,214,695 ($15,271)
========== ========== ========== ========
*See "Financial Highlights" on pages 40 - 57.
See notes to financial statements.
<PAGE>
UNITED FUNDS, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the Fiscal Year Ended DECEMBER 31, 1996 United
United United United Science and
Bond Income Accumulative Technology
Fund Fund Fund Fund
----------------------------------------------------
Increase (Decrease) in Net Assets
Operations:
Net investment
income (loss) ... $ 34,027,031$ 47,099,480$ 16,547,981$ (3,044,925)
Realized net gain
on investments .. 1,490,998 276,135,291 155,572,364 71,735,912
Unrealized
appreciation
(depreciation) .. (19,287,816) 518,056,427 (28,379,142) 2,339,175
----------------------------------------------------
Net increase in net
assets resulting
from operations. 16,230,213 841,291,198 143,741,203 71,030,162
----------------------------------------------------
Distributions to shareholders
from (Note 1E):*
Net investment income
Class A ......... (33,563,721) (44,582,972) (16,526,936) ---
Class Y ......... (498,286) (1,535,780) (39,149) ---
Realized net gain on
investment transactions
Class A ......... --- (223,378,753) (126,903,435)(57,680,201)
Class Y ......... --- (6,868,127) (256,540) (174,464)
----------------------------------------------------
(34,062,007) (276,365,632) (143,726,060)(57,854,665)
----------------------------------------------------
Capital share
transactions (Note 5)(17,992,840) 353,417,280 81,068,885 149,679,267
----------------------------------------------------
Total increase (decrease)(35,824,634)918,342,846 81,084,028 162,854,764
Net Assets
Beginning of period 566,477,045 4,083,420,467 1,206,782,764 820,782,583
----------------------------------------------------
End of period $530,652,411$5,001,763,313$1,287,866,792$983,637,347
====================================================
Undistributed
net investment
income .......... $802,660 $2,937,972 $1,310,231 $---
======== ========== ========== ====
*See "Financial Highlights" on pages 40 - 47.
See notes to financial statements.
<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 --------------------------------------
6/30/97 1996 1995 1994 1993 1992
---------- ----- ----- ----- ----- -----
Net asset value,
beginning of period $6.14 $6.34 $5.62 $6.39 $6.31 $6.32
---- ---- ---- ---- ---- ----
Income from investment
operations:
Net investment income 0.19 0.39 0.40 0.39 0.41 0.45
Net realized and
unrealized gain
(loss) on
investments ..... (0.01) (0.20) 0.72 (0.75) 0.41 0.00
---- ---- ---- ---- ---- ----
Total from investment
operations ....... 0.18 0.19 1.12 (0.36) 0.82 0.45
---- ---- ---- ---- ---- ----
Less distributions:
Dividends from net
investment income (0.19) (0.39) (0.40) (0.39) (0.41) (0.46)
Distribution from
capital gains ... (0.00) (0.00) (0.00) (0.02) (0.33) (0.00)
---- ---- ---- ---- ---- ----
Total distributions (0.19) (0.39) (0.40) (0.41) (0.74) (0.46)
---- ---- ---- ---- ---- ----
Net asset value,
end of period .... $6.13 $6.14 $6.34 $5.62 $6.39 $6.31
===== ===== ===== ===== ===== =====
Total return* ...... 3.03% 3.20% 20.50% -5.76% 13.19% 7.50%
Net assets, end of
period (000
omitted) .........$507,451$518,873$563,445$517,836$641,668$589,946
Ratio of expenses to
average net assets 0.78%** 0.77% 0.74% 0.72% 0.65% 0.64%
Ratio of net investment
income to average
net assets ....... 6.47%** 6.34% 6.54% 6.60% 6.14% 7.29%
Portfolio turnover
rate ............. 14.54% 55.74% 66.38% 127.11%175.39% 115.17%
*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 For the
six months fiscal year period from
ended ended 6/19/95* to
6/30/97 12/31/96 12/31/95
---------- ---------- -----------
Net asset value,
beginning of period $6.14 $6.34 $6.11
---- ---- ----
Income from investment
operations:
Net investment income 0.22 0.40 0.21
Net realized and
unrealized gain (loss)
on investments .. (0.03) (0.20) 0.22
---- ---- ----
Total from investment
operations ....... 0.19 0.20 0.43
---- ---- ----
Less distributions:
Dividends from net
investment income (0.20) (0.40) (0.20)
Distribution from
capital gains ... (0.00) (0.00) (0.00)
---- ---- ----
Total distributions (0.20) (0.40) (0.20)
---- ---- ----
Net asset value,
end of period .... $6.13 $6.14 $6.34
==== ==== ====
Total return ....... 3.10% 3.35% 7.20%
Net assets, end of
period (000
omitted) ......... $4,260 $11,779 $3,032
Ratio of expenses to
average net assets 0.63%** 0.62% 0.63%**
Ratio of net investment
income to average
net assets ....... 6.60%** 6.52% 6.41%**
Portfolio turnover
rate ............. 14.54% 55.74% 66.38%**
*Commencement of operations.
**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 --------------------------------------
6/30/97 1996 1995 1994 1993 1992
---------- ----- ----- ----- ----- -----
Net asset value,
beginning of period $32.91 $28.96 $23.34 $24.77 $22.05 $20.44
----- ----- ----- ----- ----- -----
Income from investment
operations:
Net investment income 0.15 0.33 0.36 0.36 0.40 0.46
Net realized and
unrealized gain
(loss) on
investments ..... 6.46 5.53 6.53 (0.80) 3.11 1.96
----- ----- ----- ----- ----- -----
Total from investment
operations ....... 6.61 5.86 6.89 (0.44) 3.51 2.42
----- ----- ----- ----- ----- -----
Less distributions:
Dividends from net
investment income (0.14) (0.32) (0.35) (0.36) (0.40) (0.46)
Distribution from
capital gains ... (0.00) (1.59) (0.92) (0.63) (0.39) (0.35)
----- ----- ----- ----- ----- -----
Total distributions (0.14) (1.91) (1.27) (0.99) (0.79) (0.81)
----- ----- ----- ----- ----- -----
Net asset value,
end of period .... $39.38 $32.91 $28.96 $23.34 $24.77 $22.05
====== ====== ====== ====== ====== ======
Total return* ...... 20.10% 20.36% 29.60% -1.82% 16.05% 11.96%
Net assets, end of
period (000
omitted) .........$5,841,641$4,850,419$3,975,717$3,144,904$3,060,073
$2,537,161
Ratio of expenses to
average net assets 0.85%** 0.86% 0.83% 0.74% 0.66% 0.65%
Ratio of net investment
income to average
net assets ....... 0.84%** 1.03% 1.31% 1.45% 1.70% 2.19%
Portfolio turnover
rate ............. 13.95% 22.24% 17.59% 18.54% 21.70% 19.25%
Average commission
rate paid ........ $0.0468 $0.0496
*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 For the
six months fiscal year period from
ended ended 6/19/95* to
6/30/97 12/31/96 12/31/95
---------- ---------- -----------
Net asset value,
beginning of period $32.91 $28.96 $27.73
----- ----- -----
Income from investment
operations:
Net investment income 0.16 0.36 0.21
Net realized and
unrealized gain
on investments .. 6.47 5.54 2.14
----- ----- -----
Total from investment
operations ....... 6.63 5.90 2.35
----- ----- -----
Less distributions:
Dividends from net
investment income (0.16) (0.36) (0.20)
Distribution from
capital gains ... (0.00) (1.59) (0.92)
----- ----- -----
Total distributions (0.16) (1.95) (1.12)
----- ----- -----
Net asset value,
end of period .... $39.38 $32.91 $28.96
===== ===== =====
Total return ....... 20.17% 20.53% 8.45%
Net assets, end of
period (000
omitted) ......... $273,449 $151,344 $107,703
Ratio of expenses to
average net assets 0.72%** 0.73% 0.74%**
Ratio of net investment
income to average
net assets ....... 0.96%** 1.17% 1.36%**
Portfolio turnover
rate ............. 13.95% 22.24% 17.59%**
Average commission
rate paid ........ $0.0468 $0.0496
*Commencement of operations.
**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 --------------------------------------
6/30/97 1996 1995 1994 1993 1992
---------- ----- ----- ----- ----- -----
Net asset value,
beginning of period $7.75 $7.78 $6.58 $7.19 $7.50 $7.15
---- ---- ---- ---- ---- ----
Income from investment
operations:
Net investment
income........... 0.06 0.11 0.11 0.13 0.11 0.16
Net realized and
unrealized gain
(loss) on
investments ..... 1.39 0.82 2.12 (0.13) 0.55 0.85
---- ---- ---- ---- ---- ----
Total from investment
operations ....... 1.45 0.93 2.23 0.00 0.66 1.01
---- ---- ---- ---- ---- ----
Less distributions:
Dividends from net
investment income (0.04) (0.11) (0.11) (0.13) (0.11) (0.16)
Distribution from
capital gains ... (0.00) (0.85) (0.92) (0.48) (0.84) (0.50)
Distribution in
excess of capital
gains............ (0.00) (0.00) (0.00) (0.00) (0.02) (0.00)
---- ---- ---- ---- ---- ----
Total distributions (0.04) (0.96) (1.03) (0.61) (0.97) (0.66)
---- ---- ---- ---- ---- ----
Net asset value,
end of period .... $9.16 $7.75 $7.78 $6.58 $7.19 $7.50
==== ==== ==== ==== ==== ====
Total return* ...... 18.71% 12.18% 34.21% 0.04% 9.06% 14.20%
Net assets, end of
period (000
omitted) .........$1,496,484$1,285,227$1,206,128$967,020$1,033,774
$992,924
Ratio of expenses to
average net assets 0.82%** 0.83% 0.80% 0.71% 0.65% 0.62%
Ratio of net investment
income to average
net assets ....... 1.37%** 1.34% 1.42% 1.76% 1.34% 2.13%
Portfolio turnover
rate ............. 169.82% 240.37%229.03% 205.40%230.29% 194.41%
Average commission
rate paid ........ $0.0561 $0.0575
*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 For the
six months fiscal year period from
ended ended 7/11/95* to
6/30/97 12/31/96 12/31/95
---------- ---------- -----------
Net asset value,
beginning of period $7.75 $7.78 $7.84
---- ---- ----
Income from investment
operations:
Net investment income 0.06 0.12 0.05
Net realized and
unrealized gain
on investments .. 1.39 0.82 0.87
---- ---- ----
Total from investment
operations ....... 1.45 0.94 0.92
---- ---- ----
Less distributions:
Dividends from net
investment income (0.04) (0.12) (0.06)
Distribution from
capital gains ... (0.00) (0.85) (0.92)
---- ---- ----
Total distributions (0.04) (0.97) (0.98)
---- ---- ----
Net asset value,
end of period .... $9.16 $7.75 $7.78
==== ==== ====
Total return ....... 18.75% 12.27% 11.92%
Net assets, end of
period (000
omitted) ......... $3,257 $2,640 $655
Ratio of expenses to
average net assets 0.75%** 0.74% 0.76%**
Ratio of net investment
income to average
net assets ....... 1.45%** 1.45% 1.24%**
Portfolio turnover
rate ............. 169.82% 240.37% 229.03%**
Average commission
rate paid ........ $0.0561 $0.0575
*Commencement of operations.
**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 --------------------------------------
6/30/97 1996 1995 1994 1993 1992
---------- ----- ----- ----- ----- -----
Net asset value,
beginning of period $23.35 $22.89 $15.21 $14.83 $14.64 $15.42
----- ----- ----- ----- ----- -----
Income from investment
operations:
Net investment
income (loss) ... 0.00 (0.07) (0.01) 0.00 0.01 0.03
Net realized and
unrealized gain
(loss) on
investments ..... 0.13 2.00 8.40 1.40 1.21 (0.66)
----- ----- ----- ----- ----- -----
Total from investment
operations ....... 0.13 1.93 8.39 1.40 1.22 (0.63)
----- ----- ----- ----- ----- -----
Less distributions:
Dividends from net
investment income (0.00) (0.00) (0.00) (0.00) (0.01) (0.03)
Distribution from
capital gains ... (0.00) (1.47) (0.71) (1.02) (0.95) (0.12)
Distribution in
excess of capital
gains ........... (0.00) (0.00) (0.00) (0.00) (0.07) (0.00)
----- ----- ----- ----- ----- -----
Total distributions (0.00) (1.47) (0.71) (1.02) (1.03) (0.15)
----- ----- ----- ----- ----- -----
Net asset value,
end of period .... $23.48 $23.35 $22.89 $15.21 $14.83 $14.64
====== ====== ====== ====== ====== ======
Total return* ...... 0.56% 8.35% 55.37% 9.78% 8.51% -4.03%
Net assets, end of
period (000
omitted) .........$996,788$980,547$820,783$496,503$446,611$428,806
Ratio of expenses to
average net assets 1.04%** 0.98% 0.93% 0.96% 0.91% 0.87%
Ratio of net investment
income to average
net assets ....... 0.02%**-0.33% -0.07% 0.00% 0.06% 0.24%
Portfolio turnover
rate ............. 44.19% 33.90% 32.89% 64.39% 68.38% 45.79%
Average commission
rate paid ........ $0.0599 $0.0538
*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 Each Period:
For the For the
six months period from
ended 2/27/96* to
6/30/97 12/31/96
---------- ----------
Net asset value,
beginning of period $23.38 $24.05
----- -----
Income from investment
operations:
Net investment
income (loss) ... 0.02 (0.02)
Net realized and
unrealized gain
on investments .. 0.14 0.82
----- -----
Total from investment
operations ....... 0.16 0.80
----- -----
Less distributions:
Dividends from net
investment income (0.00) (0.00)
Distribution from
capital gains ... (0.00) (1.47)
----- -----
Total distributions (0.00) (1.47)
----- -----
Net asset value,
end of period .... $23.54 $23.38
===== =====
Total return ....... 0.68% 3.25%
Net assets, end of
period (000
omitted) ......... $3,515 $3,090
Ratio of expenses to
average net assets 0.88%** 0.80%**
Ratio of net investment
income to average
net assets ....... 0.18%** -0.12%**
Portfolio turnover
rate ............. 44.19% 33.90%**
Average commission
rate paid ........ $0.0599 $0.0538
*Commencement of operations.
**Annualized.
See notes to financial statements.
<PAGE>
UNITED FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997
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 Subchapter M
of 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 $16.9 billion of combined net assets at June 30, 1997) 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, 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
gross sales commissions for Class A shares (which are not an expense of the
Corporation) of $13,910,652, out of which W&R paid sales commissions of
$8,040,370 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 $152,572, which are included
in other expenses.
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, 1997
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 $ 55,466,201 $808,979,412$2,046,417,673$366,652,452
Purchases of U.S. Government
securities 16,762,207 --- --- ---
Purchases of short-term
securities 111,847,539 951,396,5571,514,678,145 888,561,322
Proceeds from maturities
and sales of investment
securities, excluding
short-term and U.S.
Government securities 65,360,441 740,230,2732,077,496,410 416,284,795
Proceeds from maturities and
sales of U.S. Government
securities 22,447,556 --- --- ---
Proceeds from maturities and sales
of short-term securities 113,504,478 955,044,7841,489,245,070 835,797,161
For Federal income tax purposes, cost of investments owned at June 30,
1997 and the related appreciation were as follows:
Aggregate
Cost AppreciationDepreciation Appreciation
-------------- --------------------------------------
United Bond Fund $498,737,018 $10,241,469$(2,417,204) $ 7,824,265
United Income Fund 3,273,736,7652,849,172,014 (4,752,999) 2,844,419,015
United Accumulative
Fund 1,406,179,874 142,374,972(23,169,204) 119,205,768
United Science and
Technology Fund 696,640,511 334,481,213(22,845,962) 311,635,251
NOTE 4 -- Federal Income Tax Matters
The Corporation's income and expenses attributed to each Fund and the
gains and losses on security transactions of each Fund have been attributed
to that Fund for Federal income tax purposes as well as for accounting
purposes. For Federal income tax purposes, United Income Fund, United
Accumulative Fund and United Science and Technology Fund realized capital
gain net income of $276,362,531, $155,754,021 and $71,640,888,
respectively, during the year ended December 31, 1996, a portion of which
was paid to shareholders during the period ended December 31, 1996.
Remaining capital gain net income will be distributed to each Fund's
shareholders. For Federal income tax purposes, United Bond Fund realized
capital gain net income of $1,229,324 during the year ended December 31,
1996, which was entirely offset by utilization of capital loss
carryforwards. Remaining prior year capital loss carryforwards of United
Bond Fund aggregated $26,199,056 as of December 31, 1996, and are available
to offset future capital gain net income as follows: $26,118,153 through
December 31, 2002 and $80,903 through December 31, 2003.
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, 1997
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 ............ 2,939,766 11,245,276 3,851,009 14,918,867
Class Y ............ 88,183 2,539,751 33,512 31,264
Shares issued from
reinvestment of
dividends:
Class A ............ 2,256,881 517,457 654,086 ---
Class Y ............ 22,831 24,745 1,658 ---
Shares redeemed:
Class A ............ (6,830,637) (10,814,124) (6,937,417)(14,465,972)
Class Y ............ (1,332,828) (220,436) (20,170) (14,093)
--------- ---------- -------- ---------
Increase (decrease) in
outstanding capital
shares:
Class A ............ (1,633,990) 948,609 (2,432,322) 452,895
Class Y ............ (1,221,814) 2,344,060 15,000 17,171
--------- ---------- ---------- ---------
Total for Fund .... (2,855,804) 3,292,669 (2,417,322) 470,066
========= ========== ========== =========
Value issued from sale
of shares:
Class A ............ $17,925,474 $396,209,852 $32,438,196$328,784,872
Class Y ............ 535,641 88,179,698 277,173 702,052
Value issued from
reinvestment of
dividends:
Class A ............ 13,720,338 19,199,771 5,995,259 ---
Class Y ............ 138,775 929,729 15,186 ---
Value redeemed:
Class A ............(41,581,486) (383,260,733) (58,255,075)(321,091,248)
Class Y ............ (8,153,078) (7,751,954) (168,478) (325,303)
----------- ------------ -----------------------
Increase (decrease) in
outstanding capital:
Class A ............ (9,935,674) 32,148,890 (19,821,620) 7,693,624
Class Y ............ (7,478,662) 81,357,473 123,881 376,749
----------- ------------ -----------------------
Total for Fund .... ($17,414,336) $113,506,363 ($19,697,739)$ 8,070,373
=========== ============ =======================
Transactions in capital stock for the fiscal year ended December 31,
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 ............ 6,465,124 16,133,571 8,009,525 27,427,545
Class Y ............ 1,782,344 1,298,483 379,703 139,882
Shares issued from
reinvestment of
dividends and/or capital
gains distribution:
Class A ............ 4,659,208 7,718,525 17,504,459 2,334,666
Class Y ............ 44,921 258,999 38,631 7,370
Shares redeemed:
Class A ............ (15,509,353) (13,716,661) (14,780,542)(23,624,041)
Class Y ............ (388,283) (677,004) (161,934) (15,088)
--------- ---------- -------- ---------
Increase (decrease) in
outstanding capital
shares:
Class A ............ (4,385,021) 10,135,435 10,733,442 6,138,170
Class Y ............ 1,438,982 880,478 256,400 132,164
--------- ---------- ---------- ---------
Total for Fund .... (2,946,039) 11,015,913 10,989,842 6,270,334
========= ========== ========== =========
Value issued from sale
of shares:
Class A ............ $39,560,061 $509,911,318 $64,177,016$676,558,274
Class Y ............ 10,740,902 40,986,800 3,050,529 3,450,514
Value issued from
reinvestment of
dividends and/or capital
gains distribution:
Class A ............ 28,366,563 250,527,856 133,871,990 55,192,015
Class Y ............ 272,967 8,403,907 295,689 174,465
Value redeemed:
Class A ............(94,554,914) (435,082,498) (118,996,801)(585,325,217)
Class Y ............ (2,378,419) (21,330,103) (1,329,538) (370,784)
----------- ------------ -----------------------
Increase (decrease) in
outstanding capital:
Class A ............ (26,628,290) 325,356,676 79,052,205 146,425,072
Class Y ............ 8,635,450 28,060,604 2,016,680 3,254,195
----------- ------------ -----------------------
Total for Fund .... $(17,992,840) $353,417,280 $81,068,885$149,679,267
=========== ============ =======================
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
United Funds, Inc.:
We have audited the accompanying statements of assets and
liabilities, including the schedules of investments, of United Bond
Fund, United Income Fund, United Accumulative Fund, and United
Science and Technology Fund (collectively the _Funds_) comprising
United Funds, Inc. as of June 30, 1997, the related statements of
operations for the six-month period then ended and changes in net
assets for the six-month period then ended and the year ended
December 31, 1996, and the financial highlights for the periods
presented. These financial statements and the financial highlights
are the responsibility of the Funds' management. Our responsibility
is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements and the financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of
securities owned at June 30, 1997 by correspondence with the
custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial positions of
each of the respective funds comprising United Funds, Inc. as of
June 30, 1997, the results of their operations, the changes in their
net assets, and their financial highlights for the periods presented
in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Kansas City, Missouri
August 1, 1997
<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
James M. Concannon, Topeka, Kansas
John A. Dillingham, Kansas City, Missouri
Linda Graves, Topeka, Kansas
John F. Hayes, Hutchinson, Kansas
Glendon E. Johnson, Miami, Florida
William T. Morgan, Coronado, California
William L. Rogers, Los Angeles, California
Frank J. Ross, Jr., 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
James D. Wineland, 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
(800) 366-5465
Our INTERNET address is:
http://www.waddell.com
NUR1000SA(3-97)
printed on recycled paper
