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Previous: EASTCO INDUSTRIAL SAFETY CORP, SC 13D/A, 1995-10-05 |
Next: BANC ONE CORP /OH/, S-4, 1995-10-05 |
ENDOWMENTS, INC. (SM) AND BOND PORTFOLIO FOR ENDOWMENTS, INC. (SM)
ENDOWMENTS, INC. SEEKS TO PROVIDE LONG-TERM GROWTH OF PRINCIPAL WITH INCOME AS
A SECONDARY OBJECTIVE, PRIMARILY THROUGH INVESTMENTS IN STOCKS.
BOND PORTFOLIO FOR ENDOWMENTS, INC. SEEKS TO PROVIDE AS HIGH A LEVEL OF CURRENT
INCOME AS IS CONSISTENT WITH THE PRESERVATION OF CAPITAL THROUGH INVESTMENTS IN
FIXED-INCOME SECURITIES.
ANNUAL REPORT
For the Year Ended July 31, 1995
DEAR SHAREHOLDER:
Fiscal 1995 was marked by rising stock prices and by a turnaround in the
bond market. In this environment, both ENDI and BENDI recorded positive
results.
ENDOWMENTS, INC. ("ENDI"):
The 12-month period ended July 31 was a very rewarding one for ENDI. The
value of your holdings increased 18.6%, assuming reinvestment of income
dividends totaling 60.5 cents a share and a capital gain distribution of $1.35
a share. This total return was more than four percentage points above the
fund's average annual compound growth rate over the past two decades.
ENDI benefited during fiscal 1995 from solid showings by several of its
larger investments, including its holdings in the pharmaceutical industry.
Those holdings were built up a couple of years ago when the stocks were
generally out of favor and attractively priced. Six of the fund's biggest
gainers were drug companies, including American Home Products, our largest
single investment, which rose 37.7%. Only two of our ten largest investments
posted declines for the 12 months: Dun & Bradstreet (-2.8%), and Weingarten
Realty Investors
(-5.0%).
Nearly all of the gain for ENDI came in the final eight months of the fiscal
year. From August through November, the fund's share value fluctuated
moderately, and so did the market as a whole. After that, ENDI trailed the
unmanaged Standard & Poor's 500 Composite Index by a substantial margin. For
the year as a whole, the index was up 26.1%. There were two principal reasons
for this unusually large differential:
First, technology stocks, which account for more than 20% of the index,
soared in price to very high levels in the latter part of the fiscal year. June
and July saw a surge of speculative buying in those issues. ENDI owns a number
of technology stocks, several of which have done very well -- IBM was the
fund's strongest gainer in fiscal 1995, rising 76.3%. However, this is an area
where many companies are currently enjoying high profit margins that we feel
are probably unsustainable; therefore, it is not an area where our investments
are heavily concentrated. Currently, technology stocks account for less than
10% of the fund's portfolio.
Second, ENDI maintained a sizable buying reserve of cash and equivalent
investments during the year. On July 31, that reserve amounted to about 20% of
net assets. With valuations in the market at historically high levels, we feel
that this approach is prudent and in our shareholders' best interests.
BOND PORTFOLIO FOR ENDOWMENTS, INC. ("BENDI"):
BENDI also had a rewarding year in absolute terms, recording a total return
of 8.0%.
As with ENDI, nearly all of BENDI's fiscal 1995 gain came during the final
two-thirds of the fiscal year, a period that saw a major shift in the bond
market. Following the November 1994 election, investor confidence began to
improve; interest rates turned down, and prices of fixed-income securities
rose. The market continued rallying through the spring and well into the
summer. All sectors participated, with high-yielding corporate bonds showing
exceptional strength.
In July, the Federal Reserve lowered the target interest level on federal
funds by a quarter of one percent. This move signaled a shift in Fed policy,
which for more than a year had been focused on raising rates in an effort to
prevent an upsurge in inflation. The nation's central bank now appears to be
taking the view that inflationary pressures have subsided.
In the first half of fiscal '95, BENDI maintained a very cautious investment
approach. A relatively large portion of its portfolio was made up of bonds
maturing in the next few years. Because of this, BENDI's total return for
fiscal 1995 trailed the average return of 9.3% for 111 corporate A-rated bond
funds tracked by Lipper Analytical Services and a 10.1% total return recorded
by the unmanaged Lehman Aggregate Bond Index. In the spring and early summer,
the average maturity in the portfolio was lengthened; on July 31, it was about
7 1/2 years, compared with approximately 5 1/2 years on February 1.
During the fiscal year, BENDI added considerably to its investments in
corporate bonds. On July 31 they represented a little over half of the fund's
portfolio -- 51.4% compared with 44.1% a year earlier. During these 12 months,
the percentage of U.S. Treasury bonds in the portfolio declined by about the
same amount.
We believe BENDI is well positioned for the period ahead. An average
maturity in the 7 1/2-year range gives the fund an opportunity to take
advantage of further declines in interest rates, while not exposing
shareholders to great risk if interest rates move upward.
In our view, the outlook for rates and for the economy is very uncertain.
Elements that bear close watching in the months ahead include the pace of
inventory liquidation, the willingness of consumers to increase their spending,
and the impact on public confidence of the debate in Washington over budget
cuts involving major entitlement programs. Another factor that will be
monitored closely is the pace of economic growth outside the U.S.
A REVIEW OF THE PAST TWO DECADES
ENDI and BENDI have now completed 20 years under the stewardship of Capital
Research and Management Company. This seems an appropriate time, therefore, to
review briefly the purpose of the funds and the results that have been achieved
thus far.
ENDI and BENDI were formed to help Trustees, Directors and advisers of
501(c)(3) tax-exempt organizations fulfill their fiduciary responsibilities.
These funds are designed to place experienced, full-time professional
investment management within the reach of small as well as large nonprofit
institutions. From the outset, expenses have been kept low and the funds'
activities have been overseen by a Board of Directors made up primarily of
designated representatives of shareholders.
During the 20 years, ENDI and BENDI have pursued a value-oriented,
research-driven approach to investing. Both funds have built solid records
while fluctuating less than the comparable indexes and outdistancing inflation
by a comfortable margin. ENDI's average annual compound growth rate for the 20
years was 14.3% including reinvestment, while the return for the S&P 500 was
14.1%. BENDI's average annual compound return for the period was 10.0%; this
compares with an average return of 9.7% for 14 corporate A-rated bond funds in
existence throughout the 20-year period, according to Lipper. During this time,
inflation, as measured by the Consumer Price Index, increased at an average
annual rate of 5.3%.
The experience of these past two decades confirms our belief that ENDI and
BENDI provide a valuable service, within the framework of a prudent investment
strategy that limits our investors' risks. We believe this strategy will
continue to serve the funds and their shareholders well in the years ahead.
We look forward to reporting to you again in another six months.
Cordially,
Robert B. Egelston
Chairman of the Board
Thomas E. Terry
President
September 8, 1995
Here are the total returns and average annual compound returns with all
distributions reinvested for periods ended June 30, 1995 (the most recent
calendar quarter) -- For ENDI: 10 years: +224.44%, or +12.49% a year; 5 years:
+70.69%, or +11.29% a year; 12 months: +18.48%, and for BENDI: 10 years:
+159.72%, or +10.01% a year; 5 years: +58.61%, or +9.66% a year; 12 months:
+9.66%. BENDI's 30-day yield as of August 31, 1995, calculated in accordance
with the Securities and Exchange Commission formula, was 5.68%.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS. SHARE PRICE AND RETURN WILL
VARY, SO YOU MAY LOSE MONEY BY INVESTING IN THE FUNDS. THE SHORTER THE TIME
PERIOD OF YOUR INVESTMENT, THE GREATER THE POSSIBILITY OF LOSS. FUND SHARES ARE
NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED OR GUARANTEED BY, THE U.S.
GOVERNMENT, ANY FINANCIAL INSTITUTION, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, OR ANY OTHER AGENCY, ENTITY OR PERSON.
[chart]
ENDOWMENTS, INC.
AVERAGE ANNUAL COMPOUND RETURNS/1/
(for periods ended July 31, 1995)
10 YEARS +12.94%
5 YEARS +12.29%
1 YEAR +18.57%
[end chart]
[chart]
BOND PORTFOLIO FOR ENDOWMENTS, INC.
AVERAGE ANNUAL COMPOUND RETURNS/1/
(for periods ended July 31, 1995)
10 YEARS +10.05%
5 YEARS +9.35%
1 YEAR +7.97%
[end chart]
/1/With dividends reinvested.
Sales charges do not apply to either fund.
Past results are not predictive of future results.
In 1986, the funds' Board of Directors adopted a nonfundamental policy
prohibiting investements in securities of companies operating in South Africa
and issues of the government of South Africa. The 1986 policy was rescinded in
1994. The comparative indexes do not have such a policy and are unmanaged.
ENDOWMENTS, INC.
INVESTMENT PORTFOLIO, JULY 31, 1995
<TABLE>
<CAPTION>
Percent
of Net
INDUSTRY DIVERSIFICATION Assets
<S> <C> <C> <C>
- --------------------------------------------------- --------- ------------- ----------
Banking 10.20%
Insurance 9.53
Health & Personal Care 9.19
Utilities: Electric & Gas 6.93
Energy Sources 5.12
Real Estate 4.52
Transportation: Rail & Road 4.37
Merchandising 3.47
Business & Public Services 2.91
Chemicals 2.86
Forest Products & Paper 2.79
Telecommunications 2.68
Beverages & Tobacco 2.60
Data Processing & Reproduction 2.02
Financial Services 1.95
Food & Household Products 1.84
Aerospace & Military Technology 1.18
Broadcasting & Publishing 1.16
Electrical & Electronics 1.04
Automobiles 1.02
Metals: Nonferrous 1.00
Multi-Industry 1.00
----------
79.38
Short-Term Securities 20.52
Excess of cash and receivables over payables .10
----------
Net Assets 100.00%
==========
Percent
of Net
TEN LARGEST HOLDINGS Assets
- --------------------------------------------------- --------- ------------- ----------
American Home Products 3.48%
Ohio Casualty 2.50
Comerica 2.16
Texas Utilities 2.13
Wal-Mart Stores 2.11
Dun & Bradstreet 2.08
International Business Machines 2.02
Weingarten Realty Investors 2.01
Philip Morris 1.90
General Mills 1.84
----------
22.23%
==========
Percent
Number Market Of Net
COMMON STOCKS of shares Value Assets
- --------------------------------------------------- --------- ------------- ----------
ENERGY
Energy Sources-5.12%
Amoco Corp. 8,600 $ 578,350 1.02%
Atlantic Richfield Co. 5,000 576,250 1.01
Exxon Corp. 10,000 725,000 1.28
Phillips Petroleum Co. 29,000 1,025,875 1.81
Utilities: Electric & Gas-6.93%
Carolina Power & Light Co. 20,000 607,500 1.07
Consolidated Edison Co. of New York, Inc. 17,000 493,000 .87
Entergy Corp. 25,000 593,750 1.05
Houston Industries Inc. 10,000 437,500 .77
Pacific Gas and Electric Co. 20,000 590,000 1.04
Texas Utilities Co. 35,658 1,207,915 2.13
------------- ----------
6,835,140 12.05
------------- ----------
MATERIALS
Chemicals-2.86%
Armor All Products Corp. 28,000 472,500 .83
Dow Chemical Co. 8,000 593,000 1.05
Monsanto Co. 6,000 558,750 .98
Forest Products & Paper-2.79%
Louisiana-Pacific Corp. 30,000 738,750 1.30
Union Camp Corp. 15,000 843,750 1.49
Metals: Nonferrous-1.00%
Aluminum Co. of America 10,000 568,750 1.00
------------- ----------
3,775,500 6.65
------------- ----------
CAPITAL EQUIPMENT
Aerospace & Military Technology-1.18%
Boeing Co. 10,000 670,000 1.18
Data Processing & Reproduction-2.02%
International Business Machines Corp. 10,500 1,143,188 2.02
Electrical & Electronics-1.04%
General Electric Co. 10,000 590,000 1.04
------------- ----------
2,403,188 4.24
------------- ----------
CONSUMER GOODS
Automobiles-1.02%
Ford Motor Co., Class A 20,000 577,500 1.02
Beverages & Tobacco-2.60%
American Brands, Inc. 10,000 398,750 .70
Philip Morris Companies Inc. 15,000 1,074,375 1.90
Food & Household Products-1.84%
General Mills, Inc. 20,000 1,045,000 1.84
Health & Personal Care-9.19%
American Home Products Corp. 25,000 1,975,000 3.48
Johnson & Johnson 10,000 717,500 1.26
Merck & Co., Inc. 20,000 1,032,500 1.82
Schering-Plough Corp. 14,000 651,000 1.15
Warner-Lambert Co. 10,000 840,000 1.48
------------- ----------
8,311,625 14.65
------------- ----------
SERVICES
Broadcasting & Publishing-1.16%
Gannett Co., Inc. 12,000 657,000 1.16
Business & Public Services-2.91%
Dun & Bradstreet Corp. 21,000 1,181,250 2.08
WMX Technologies, Inc. 15,000 468,750 .83
Merchandising-3.47%
Melville Corp. 8,000 288,000 .51
Super Food Services, Inc. 40,000 480,000 .85
Wal-Mart Stores, Inc. 45,000 1,198,125 2.11
Telecommunications-2.68%
Ameritech Corp. 10,000 483,750 .85
AT&T Corp. 10,000 527,500 .93
Sprint Corp. 15,000 513,750 .90
Transportation: Rail & Road-4.37%
CSX Corp. 10,000 838,750 1.48
TNT Freightways Corp. 45,000 990,000 1.74
Union Pacific Corp. 10,000 651,250 1.15
------------- ----------
8,278,125 14.59
------------- ----------
FINANCE
Banking-10.20%
Bankers Trust New York Corp. 10,000 645,000 1.14
Central Fidelity Banks, Inc. 15,000 476,250 .84
Comerica Inc. 35,000 1,225,000 2.16
First Hawaiian, Inc. 20,000 545,000 .96
Huntington Bancshares Inc. 28,800 612,002 1.08
J.P. Morgan & Co. Inc. 14,000 1,023,750 1.80
U.S. Bancorp 18,000 470,250 .83
Washington Mutual Savings Bank 33,150 791,456 1.39
Financial Services-1.95%
Beneficial Corp. 12,000 568,500 1.00
Student Loan Marketing Assn. 10,000 538,750 .95
Insurance-9.53%
Allstate Corp. 15,000 468,750 .83
AMBAC Inc. 20,000 797,500 1.41
American General Corp. 27,000 982,125 1.73
Liberty Corp. 25,000 709,375 1.25
Ohio Casualty Corp. 44,000 1,419,000 2.50
Paul Revere Corp. 30,000 562,500 .99
Trenwick Group Inc. 10,000 465,000 .82
Real Estate-4.52%
Security Capital Pacific Trust
(formerly Property Trust of America) 30,000 543,750 .96
Weingarten Realty Investors 32,000 1,140,000 2.01
Western Investment Real Estate Trust 75,000 881,250 1.55
------------- ----------
14,865,208 26.20
------------- ----------
MULTI-INDUSTRY
Multi-Industry-1.00%
Minnesota Mining and Manufacturing Co. 10,000 566,250 1.00
------------- ----------
TOTAL COMMON STOCKS (cost: $35,674,988) 45,035,036 79.38
------------- ----------
Principal
Amount
SHORT-TERM SECURITIES (000)
Corporate Short-Term Notes-18.76%
Abbott Laboratories 5.72% due 8/24/95 $1,000 996,187 1.76
Associates Corp. of North America 5.86% due 8/1/95 1,120 1,119,818 1.97
Coca-Cola Co. 5.70% due 8/18/95 1,600 1,595,440 2.81
John Deere Capital Corp. 5.72% due 8/8/95 1,350 1,348,284 2.38
Emerson Electric Co. 5.69% due 9/7/95 1,600 1,590,390 2.80
H.J. Heinz Co. 5.72% due 8/16/95 1,300 1,296,695 2.29
PepsiCo, Inc. 5.91%-5.93% due 8/10-8/11/95 1,500 1,497,370 2.64
Wal-Mart Stores, Inc. 5.70% due 8/2/95 1,200 1,199,620 2.11
------------ ----------
10,643,804 18.76
------------ ----------
FEDERAL AGENCY DISCOUNT NOTES-1.76%
Federal National Mortgage Assn. 5.87% due 8/8/95 1,000 998,695 1.76
------------ ----------
TOTAL SHORT-TERM SECURITIES (cost: $11,642,500) 11,642,499 20.52
------------ ----------
TOTAL INVESTMENT SECURITIES (cost: $47,317,488) 56,677,535 99.90
Excess of cash and receivables over payables 57,610 .10
------------- ----------
NET ASSETS $56,735,145 100.00%
============= ==========
</TABLE>
See Notes to Financial Statements
Common Stocks added to the portfolio
since January 31, 1995
- --------------------------------------
AT&T
CSX
Central Fidelity Banks
Ford Motor
Louisiana-Pacific
Wal-Mart Stores
Common Stocks eliminated from the portfolio
since January 31, 1995
- --------------------------------------
Allegheny Power System
American Express
AmSouth Bancorporation
Central and South West
Delta Air Lines
Deluxe
First Union
Honeywell
James River Corp. of Virginia
Xerox
ENDOWMENTS, INC.
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
<S> <C> <C>
at July 31, 1995
- ---------------------------------------- ------------ ------------
Assets:
Investment securities at market
(COST: $47,317,488) $56,677,535
Cash 53,507
Receivables for--
Sales of investments $84,218
Dividends and accrued interest 54,271 138,489
------------ ------------
56,869,531
Liabilities:
Payables for--
Repurchased of fund's shares 110,000
Management services 23,918
Accrued expenses 468 134,386
------------ ------------
NET ASSETS AT JULY 31, 1995--
EQUIVALENT TO $18.06 PER SHARE ON
3,142,057 SHARES OF $1 PAR VALUE
CAPITAL STOCK OUTSTANDING (AUTHORIZED
CAPITAL STOCK -- 10,000,000 SHARES) $56,735,145
=============
Statement of Operations
FOR THE YEAR ENDED JULY 31, 1995
------------ ------------
Investment Income:
Income:
Dividends $ 1,797,707
Interest 627,464 $2,425,171
Expenses: ------------
Management services fee 273,381
Custodian fee 2,715
Registration statement and prospectus 23,974
Auditing fees 29,700
Legal fees 5,642
Taxes other than federal income tax 38,982
Other expenses 23,844 398,238
------------ ------------
Net investment income 2,026,933
------------
REALIZED GAIN AND UNREALIZED
APPRECIATION ON INVESTMENTS:
NET REALIZED GAIN 2,706,488
Net increase in unrealized
appreciation on investments:
Beginning of year 4,636,464
End of year 9,360,047
Net unrealized appreciation on ------------
investments 4,723,583
------------
NET REALIZED GAIN AND UNREALIZED
appreciation on investments 7,430,071
------------
NET INCREASE IN NET ASSETS RESULTING
from Operations $9,457,004
============
Statement of Changes in Net
Assets
- ---------------------------------------- ------------- -------------
Year ended July 31
1995 1994
Operations: ------------- -------------
Net investment income $ 2,026,933 $ 2,298,858
NET REALIZED GAIN ON INVESTMENTS 2,706,488 4,620,262
NET UNREALIZED APPRECIATION
(depreciation) on investments 4,723,583 (5,114,351)
NET INCREASE IN NET ASSETS RESULTING ------------- -------------
from operations 9,457,004 1,804,769
------------- -------------
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income (1,942,631) (2,366,161)
Distributions from net realized
gain on investments (4,141,493) (4,366,435)
------------- -------------
Total dividends and distributions (6,084,124) (6,732,596)
------------- -------------
Capital Share Transactions:
Proceeds from shares sold:
317,243 AND 529,049
shares, respectively 5,302,616 9,373,981
Proceeds from shares issued in
reinvestment of net investment income
dividends and distributions of net
realized gain on investments:
362,222 and 340,985 shares,
respectively 5,645,016 5,905,920
Cost of shares repurchased:
618,230 and 1,670,177
shares, respectively (10,507,091) (28,940,446)
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING
from capital share transactions 440,541 (13,660,545)
------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 3,813,421 (18,588,372)
Net Assets:
Beginning of year 52,921,724 71,510,096
------------- -------------
End of year (including undistributed
NET INVESTMENT INCOME: $261,394 AND
$177,092, RESPECTIVELY) $56,735,145 $ 52,921,724
============= =============
</TABLE>
See Notes to Financial Statements
ENDOWMENTS, INC.
NOTES TO FINANCIAL STATEMENTS
1. Endowments, Inc. (the "fund") is registered under the Investment Company
Act of 1940 as an open-end, diversified management investment company. The
following paragraphs summarize the significant accounting policies consistently
followed by the fund in the preparation of its financial statements:
Common stocks are stated at market value based upon closing sales prices
reported on recognized securities exchanges on the last business day of the
year or, for listed securities having no sales reported, upon last-reported bid
prices on that date. Securities traded in the over-the-counter market are
valued at the last available sale price prior to the time of valuation or,
lacking any sales, at the last reported bid price. Short-term securities with
original or remaining maturities in excess of 60 days are valued at the mean of
their quoted bid and asked prices. Short-term securities with 60 days or less
to maturity are valued at amortized cost, which approximates market value.
Securities for which market quotations are not readily available are valued at
fair value as determined in good faith by the Valuation Committee of the Board
of Directors.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. Realized gains
and losses from securities transactions are reported on an identified cost
basis. Dividend and interest income is reported on the accrual basis.
Discounts on securities purchased are amortized over the life of the respective
securities. The fund does not amortize premiums on securities purchased.
Dividends and distributions paid to shareholders are recorded on the
ex-dividend date.
Shares of the fund may be owned only by organizations exempt from federal
income taxation under Section 501(c)(3) of the Internal Revenue Code. The fund
itself is exempt from taxation under Section 501(c)(2) of the Internal Revenue
Code.
Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
The custodian fee of $2,715 includes $1,737 that was paid by these credits
rather than in cash.
2. It is the fund's policy to continue to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its net taxable income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision
is required.
As of July 31, 1995, net unrealized appreciation on investments for book
and federal income tax purposes aggregated $9,360,047, of which $10,056,079
related to appreciated securities and $696,032 related to depreciated
securities. There was no difference between book and tax realized gains on
securities transactions for the year ended July 31, 1995. The cost of
portfolio securities for book and federal income tax purposes was $47,317,488
at July 31, 1995.
3. The fee of $273,381 for management services was paid pursuant to an
agreement with Capital Research and Management Company (CRMC), with which
certain officers and Directors of the fund are affiliated. The Investment
Advisory and Service Agreement provides for monthly fees, accrued daily, based
on an annual rate of 0.50% of the first $150 million of average net assets and
0.40% of such assets in excess of $150 million. The Investment Advisory and
Service Agreement provides for a fee reduction to the extent the fund's annual
ordinary operating expenses exceed 1.50% of the first $30 million of the
average net assets of the fund and 1.00% of the average net assets in excess
thereof. Expenses which are not subject to this limitation are interest,
taxes, and extraordinary expenses. As of July 31, 1995, no such fee reduction
was required.
No fees were paid by the fund to its officers and Directors.
4. As of July 31, 1995, accumulated undistributed net realized gain on
investments was $2,133,768 and additional paid-in capital was $41,837,879.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $10,445,633 and $16,423,506, respectively, during the
year ended July 31, 1995.
ENDOWMENTS, INC.
<TABLE>
<CAPTION>
PER-SHARE DATA AND RATIOS
- ------------------------------ -------- -------- --------
Year ended
-------- -------- --------
<S> <C> <C> <C>
1995 1994 1993
-------- -------- --------
Net Asset Value, Beginning
of Year $17.18 $18.43 $18.26
-------- -------- --------
Income from Investment
Operations:
Net investment income .63 .65 .66
Net realized and unrealized
gain (loss) on investments 2.21 (.16) 1.05
Total income from investment -------- -------- --------
operations 2.84 .49 1.71
-------- -------- --------
Less Distributions:
Dividends from net investment
income (.61) (.66) (.69)
Distributions from net realized
gains (1.35) (1.08) (.85)
-------- -------- --------
Total distributions (1.96) (1.74) (1.54)
-------- -------- --------
Net Asset Value, End of Year $18.06 $17.18 $18.43
======== ======== ========
Total Return 18.57% 2.77% 10.05%
Ratios/Supplemental Data:
Net assets, end of year (in
millions) $57 $53 $72
Ratio of expenses to average
net assets .73% .73% .64%
Ratio of net income to
average net assets 3.70% 3.78% 3.72%
Portfolio turnover rate 24.04% 25.58% 29.70%
</TABLE>
- ---------------
ENDOWMENTS, INC.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of
Endowments, Inc.:
We have audited the accompanying statement of assets and liabilities of
Endowments, Inc. (the "fund"), including the schedule of portfolio investments,
as of July 31, 1995, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the per-share data and ratios for each of the five years
in the period then ended. These financial statements and per-share data and
ratios are the responsibility of the fund's management. Our responsibility is
to express an opinion on these financial statements and per-share data and
ratios based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
per-share data and ratios are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of July 31, 1995 by correspondence with the custodian and brokers;
where replies were not received from brokers, we performed other procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and per-share data and ratios
referred to above present fairly, in all material respects, the financial
position of Endowments, Inc. as of July 31, 1995, the results of its operations
for the year then ended, the changes in its net assets for each of the two
years in the period then ended, and the per-share data and ratios for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.
Deloitte & Touche LLP
Los Angeles, California
August 23, 1995
ENDOWMENTS, INC.
BOND PORTFOLIO FOR ENDOWMENTS, INC.
BOARD OF DIRECTORS
ROBERT B. EGELSTON, Los Angeles, California
Chairman of the Board and Chief Executive Officer of the funds
Former Chairman of the Board,
The Capital Group Companies, Inc.
FRANK L. ELLSWORTH, PH.D., Los Angeles, California
President, Independent Colleges of Southern California
STEVEN D. LAVINE, PH.D., Los Angeles, California
President, California Institute of the Arts
PATRICIA A. MCBRIDE, Dallas, Texas
Chief Financial Officer, Kevin L. McBride, D.D.S., Inc.
JOHN R. METCALF, San Francisco, California
Private investor; former Vice President,
Alexander & Alexander, Inc.
CHARLES R. REDMOND, Los Angeles, California
Chairman, Pfaffinger Foundation; President and
Chief Executive Officer, Times Mirror Foundation;
former Executive Vice President and Member of the
Management Committee, The Times Mirror Company
THOMAS E. TERRY, Los Angeles, California
President of the funds
Consultant; former Vice President and Secretary,
Capital Research and Management Company
ROBERT C. ZIEBARTH, Dover, Massachusetts
Management Consultant, Ziebarth Company
OTHER OFFICERS
ABNER D. GOLDSTINE, Los Angeles, California
Senior Vice President of the funds
Senior Vice President and Director,
Capital Research and Management Company
GEORGE A. MILLER, San Francisco, California
Senior Vice President of the funds
Senior Vice President and Director,
Capital Research and Management Company
ROBERT G. O'DONNELL, San Francisco, California
Senior Vice President of the funds
Senior Vice President and Director,
Capital Research and Management Company
STEVEN N. KEARSLEY, Los Angeles, California
Vice President and Treasurer of the funds
Vice President and Treasurer,
Capital Research and Management Company
LOUISE M. PESCETTA, San Francisco, California
Assistant Vice President and Assistant Secretary of the funds
Assistant Vice President --
Fund Business Management Group,
Capital Research and Management Company
PATRICK F. QUAN, San Francisco, California
Secretary of the funds
Vice President -- Fund Business Management Group,
Capital Research and Management Company
MARY C. CREMIN, Los Angeles, California
Assistant Treasurer of the funds
Senior Vice President -- Fund Business Management Group,
Capital Research and Management Company
ROBERT P. SIMMER, Los Angeles, California
Assistant Treasurer of the funds
Vice President -- Fund Business Management Group,
Capital Research and Management Company
OFFICE OF THE FUNDS
Four Embarcadero Center, Suite 1800
P.O. Box 7650
San Francisco, California 94120-7650
INVESTMENT ADVISER
Capital Research and Management Company
333 South Hope Street
Los Angeles, California 90071-1443
TRANSFER AGENT FOR SHAREHOLDER ACCOUNTS
American Funds Service Company
Four Embarcadero Center, Suite 1800
P.O. Box 7650
San Francisco, California 94120-7650
135 South State College Boulevard
Brea, California 92621-5804
CUSTODIAN OF ASSETS
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081-0001
COUNSEL
Morrison & Foerster
345 California Street
San Francisco, California 94104-2675
INDEPENDENT AUDITORS
Deloitte & Touche LLP
1000 Wilshire Boulevard
Los Angeles, California 90017-2472
This report is for the information of shareholders of Endowments, Inc. and Bond
Portfolio for Endowments, Inc., but it may also be used as sales literature
when preceded or accompanied by the current prospectus, which gives details
about charges, expenses, investment objectives and operating policies of the
funds.
(c) 1995 Endowments, Inc.
Printed in USA DT/WS/2730
(c) 1995 Bond Portfolio for Endowments, Inc.
Lit. No. ENDI-BENDI-011-0995 (NLS)
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