SEC File Nos.
811-1884
2-34371
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 42 (X)
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 21 (X)
ENDOWMENTS, INC.
(Exact name of registrant as specified in charter)
P.O. Box 7650, Four Embarcadero Center, San Francisco, California 94120
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (415) 421-9360
Patrick F. Quan
Secretary
Endowments, Inc.
P.0. Box 7650, Four Embarcadero Center
San Francisco, California 94120
(Name and address of agent for service)
The Registrant has filed a declaration
pursuant to Rule 24f-2. On
September 17, 1996, it filed its 24f-2
Notice for fiscal 1996.
Approximate date of proposed public offering:
[X] It is proposed that this filing will
become effective on December 1, 1996
pursuant to paragraph (a) of Rule 485.
ENDOWMENTS, INC.
Cross Reference Sheet
<TABLE>
<CAPTION>
Item Number Captions in
of Part "A" Prospectus
of Form N-1A (Part "A")
<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis Summary of Expenses
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Fund Organization
and Management;
Investment
Objectives and Policies;
Risks of
Investing in Certain
Securities;
Investment Techniques
5. Management of the Fund Fund Organization and
Management; Summary
of Expenses;
Investment Techniques
6. Capital Stock and Other Securities Investment Objectives
and Policies; Fund
Organization and
Management; Dividends,
Distributions
and Taxes; Shareholder
Services
7. Purchase of Securities Being Offered Purchasing Shares; Fund
Organization
and Management;
Shareholder
Services
8. Redemption or Repurchase Redeeming Shares
9. Legal Proceedings N/A
</TABLE>
<TABLE>
<CAPTION>
Captions in Statement
Item Number of Additional
of Part "B" Information
of Form N-1A (Part "B")
<S> <C> <C>
10. Cover Page Cover
11. Table of Contents Table of Contents
12. General Information and History None
13. Investment Objectives and Policies Description of Certain
Securities; Investment
Policies;
Fundamental Policies and
Investment
Restrictions
14. Management of the Fund Fund Officers and
Directors
15. Control Persons and Principal General Information
Holders of Securities
16. Investment Advisory and Other Services Fund Officers and
Directors; Summary of
Expenses (Part "A");
General Information;
Management
17. Brokerage Allocation and Other Practices Execution of Portfolio
Transactions; Fund
Organization and
Management (Part "A")
18. Capital Stock and Other Securities Part A
19. Purchase, Redemption and Pricing Purchase of Shares;
of Securities Being Offered Purchasing Shares
(Part "A");
General Information
20. Tax Status Dividends,
Distributions and
Federal Taxes
21. Underwriter None
22. Calculation of Performance Data Investment Results
23. Financial Statements Financial Statements
</TABLE>
<TABLE>
<CAPTION>
Item in
Part "C"
<S> <C>
24. Financial Statements and Exhibits
25. Persons Controlled by or under Common Control
with Registrant
26. Number of Holders of Securities
27. Indemnification
28. Business and Other Connections of Investment Adviser
29. Principal Underwriter
30. Location of Accounts and Records
31. Management Services
32. Undertakings
Signature Page
</TABLE>
<PAGE>
ENDOWMENTS, INC.SM
AN INVESTMENT FOR TAX-EXEMPT INSTITUTIONS SEEKING LONG-TERM
GROWTH OF PRINCIPAL WITH INCOME AND CAPITAL PRESERVATION
BOND PORTFOLIO FOR
ENDOWMENTS, INC.SM
AN INVESTMENT FOR TAX-EXEMPT INSTITUTIONS
SEEKING AS HIGH A LEVEL OF CURRENT INCOME AS IS CONSISTENT
WITH THE PRESERVATION OF CAPITAL
PROSPECTUS
DECEMBER 1, 1996
- --------------------------------------------------------------------------------
ENDOWMENTS, INC. The primary investment objective of the fund is long-term
growth of principal with income and preservation of capital as secondary
objectives. The fund strives to accomplish these objectives by investing
primarily in common stocks or securities convertible into common stock. Major
investment emphasis will be given to stocks of companies which appear to have
favorable prospects for long-term growth of capital and income.
BOND PORTFOLIO FOR ENDOWMENTS, INC. The investment objective of the fund is to
seek as high a level of current income as is consistent with the preservation of
capital. The fund strives to accomplish this objective by investing primarily in
quality-oriented bonds and debentures, as described further in this prospectus.
-------------------
Shares of the funds are available only to institutions exempt from federal
taxation under Section 501(c)(3) of the Internal Revenue Code.
You may purchase shares directly from the funds. There is no sales or redemption
charge.
This prospectus presents information shareholders should know before investing
in the funds. It should be retained for future reference.
You may obtain the statement of additional information for the funds dated
December 1, 1996, which contains the funds' financial statements, without
charge, by writing to or telephoning the Secretary of the funds at the address
or number below. These requests will be honored within three business days of
receipt.
SHARES OF THE FUNDS 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. THE PURCHASE OF FUND SHARES INVOLVES INVESTMENT
RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
----------------------------
FOUR EMBARCADERO CENTER, SUITE 1800
P.O. BOX 7650, SAN FRANCISCO, CA 94120
TELEPHONE NO. (415) 421-9360
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Summary of Expenses................. 2
Financial Highlights................ 3
Investment Objectives and
Policies............................ 4
Risks of Investing in Certain
Securities.......................... 5
Investment Techniques............... 9
Investment Results.................. 10
Dividends, Distributions and
Taxes............................... 11
Fund Organization and Management.... 11
Shareholder Guide................... 14-15
Purchasing Shares............... 14
Shareholder Services............ 14
Redeeming Shares................ 15
</TABLE>
SUMMARY
OF EXPENSES
AVERAGE ANNUAL
EXPENSES PAID OVER A
10-YEAR PERIOD FOR
ENDOWMENTS, INC. AND
BOND PORTFOLIO FOR
ENDOWMENTS, INC.
WOULD
BE APPROXIMATELY $9
EACH, ASSUMING A
$1,000
INVESTMENT AND A 5%
ANNUAL RETURN.
This table is designed to help you understand the costs of investing in the
funds. These are historical expenses; your actual expenses may vary.
<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
The funds have no sales charge on purchases or reinvested dividends,
deferred sales charge, redemption fees or exchange fees.
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets after fee waiver)
<CAPTION>
BOND PORTFOLIO
ENDOWMENTS, FOR ENDOWMENTS,
INC. INC.
--------- -----------------
<S> <C> <C>
Management fees....................... 0.50%(1) 0.45%(1)
12b-1 expenses........................ none none
Other expenses (including audit,
legal, shareholder services,
transfer agent and
custodian expenses)................. 0.22% 0.30%
Total fund operating expenses......... 0.72%(2) 0.75%(2)
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE
- ----------------------------------------
<S> <C> <C> <C>
<C>
You would pay the following cumulative expenses on a $1,000 investment, assuming
a 5% annual
return.(3)
<CAPTION>
1 YEAR 3 YEARS 5 YEARS
10 YEARS
----------- ----------- -----------
- -------------
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C> <C>
<C>
Endowments, Inc. $ 7 $ 23 $ 40
$ 89
Bond Portfolio for Endowments, Inc. $ 8 $ 24 $ 42
$ 93
</TABLE>
[FN]
(1) Capital Research and Management Company, the funds' investment adviser,
receives a management fee at the annual rates of 1/2 of 1% of the funds'
net assets up to $150,000,000 and 4/10 of 1% of such assets over
$150,000,000.
(2) Capital Research and Management Company has been voluntarily waiving fees
to the extent necessary to ensure that fund expenses do not exceed 0.75%
of average net assets per annum. Without such a waiver, fees for Bond
Portfolio for Endowments, Inc. (as a percentage of average net assets)
would have been 0.80%.
(3) Use of this assumed 5% return is required by the Securities and Exchange
Commission; it is not an illustration of past or future investment
results. THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES; ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN.
3
<PAGE>
FINANCIAL
HIGHLIGHTS The following information for the six years ended July
(FOR A SHARE* 31, 1996 hasbeen audited by Deloitte & Touche LLP,
OUTSTANDING independent accountants, andfor the four years ended
THROUGHOUT July 31, 1990 by KPMG Peat Marwick, independent
THE FISCAL YEAR) accountants. This information should be read in
conjunction with the financial statements and related
notes, which are included in the statement of
additional information.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
YEARENDED JULY 31
- ----------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
--------- ------ ------ ------ ------ ------ ------ ------ ------ ------
ENDOWMENTS, INC.
Net Asset Value, Beginning of Year.... $18.06 $17.18 $18.43 $18.26 $17.89 $16.91 $18.22 $16.71 $19.70 $19.84
--------- ------ ------ ------ ------ ------ ------ ------ ------ ------
Income from Investment Operations:
Net investment income............... .58 .63 .65 .66 .78 .78 .89 .98 .82 .86
Net realized and unrealized gain
(loss) on investments.............. 1.73 2.21 (.16) 1.05 1.74 1.60 (.16) 2.52 (1.16) 2.61
--------- ------ ------ ------ ------ ------ ------ ------ ------ ------
Total income from investment
operations....................... 2.31 2.84 .49 1.71 2.52 2.38 .73 3.50 (.34) 3.47
--------- ------ ------ ------ ------ ------ ------ ------ ------ ------
Less Distributions:
Dividends from net investment
income............................. (.61) (.61) (.66) (.69) (.73) (.87) (1.01) (.89) (.85) (.80)
Distributions from net realized
gains.............................. (1.15) (1.35) (1.08) (.85) (1.42) (.53) (1.03) (1.10) (1.80) (2.81)
--------- ------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions............... (1.76) (1.96) (1.74) (1.54) (2.15) (1.40) (2.04) (1.99) (2.65) (3.61)
--------- ------ ------ ------ ------ ------ ------ ------ ------ ------
Net Asset Value, End of Year.......... $18.61 $18.06 $17.18 $18.43 $18.26 $17.89 $16.91 $18.22 $16.71 $19.70
--------- ------ ------ ------ ------ ------ ------ ------ ------ ------
--------- ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Return.......................... 13.22% 18.57% 2.77% 10.05% 15.74% 15.03% 4.13% 23.22% (2.30)% 20.11%
Ratios/Supplemental Data:
Net assets, end of year (in
millions).......................... $59 $57 $53 $72 $58 $46 $39 $43 $36 $38
Ratio of expenses to average net
assets............................. .72% .73% .73% .64% .70% .69% .68% .69% .63% .61%
Ratio of net income to average net
assets............................. 3.12% 3.70% 3.78% 3.72% 4.37% 4.63% 5.08% 5.76% 4.86% 4.22%
Portfolio turnover rate............. 38.73% 24.04% 25.58% 29.70% 20.35% 34.43% 20.75% 19.70% 33.48% 12.98%
<CAPTION>
YEAR ENDED JULY 31
- ----------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
--------- ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
Net Asset Value, Beginning of Year.... $16.82 $16.86 $19.66 $19.44 $17.76 $17.50 $17.83 $17.10 $17.62 $18.42
--------- ------ ------ ------ ------ ------ ------ ------ ------ ------
Income from Investment Operations:
Net investment income............... 1.22 1.26 1.32 1.49 1.47 1.49 1.61 1.60 1.51 1.52
Net realized and unrealized gain
(loss) on investments.............. (.19) .01 (1.51) .64 1.70 .28 (.46) .61 (.09) (.72)
--------- ------ ------ ------ ------ ------ ------ ------ ------ ------
Total income from investment
operations....................... 1.03 1.27 (.19) 2.13 3.17 1.77 1.15 2.21 1.42 .80
--------- ------ ------ ------ ------ ------ ------ ------ ------ ------
Less Distributions:
Dividends from net investment
income............................. (1.22) (1.24) (1.35) (1.48) (1.49) (1.51) (1.48) (1.48) (1.40) (1.60)
Distributions from net realized
gains.............................. -- (.07) (1.26) (.43) -- -- -- -- (.54) --
--------- ------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions............... (1.22) (1.31) (2.61) (1.91) (1.49) (1.51) (1.48) (1.48) (1.94) (1.60)
--------- ------ ------ ------ ------ ------ ------ ------ ------ ------
Net Asset Value, End of Year.......... $16.63 $16.82 $16.86 $19.66 $19.44 $17.76 $17.50 $17.83 $17.10 $17.62
--------- ------ ------ ------ ------ ------ ------ ------ ------ ------
--------- ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Return.......................... 6.25% 7.97% (1.44)% 11.74% 18.69% 10.78% 6.86% 13.68% 8.62% 4.42%
Ratios/Supplemental Data:
Net assets, end of year (in
millions).......................... $41 $44 $46 $67 $65 $46 $39 $40 $33 $28
Ratio of expenses to average net
assets............................. .75%(1) .76% .77% .65% .68% .68% .69% .70% .64% .67%
Ratio of net income to average net
assets............................. 7.17% 7.52% 6.99% 7.69% 8.04% 8.76% 9.25% 9.28% 8.69% 8.12%
Portfolio turnover rate............. 54.43 % 69.22 % 82.12 % 35.97 %63.30 % 54.86 % 42.90 % 64.21 % 128.52% 83.76 %
* All per share data reflect the 100-for-1 stock split for Endowments, Inc. and 50-for-1 stock split for Bond Portfolio for
Endowments, Inc. effected on February 16, 1988.
(1) Had CRMC not waived management services fees, the fund's expense ratio would have been .80%.
</TABLE>
3
<PAGE>
INVESTMENT
OBJECTIVES ENDOWMENTS, INC. The fund's primary investment
AND POLICIES objective is long- term growth of principal with income
ENDOWMENTS, INC. and preservation of capital as secondary objectives.
AIMS TO PROVIDE The fund will ordinarily be invested in common stocks
SHAREHOLDERS or securities convertible into common stock. Major
WITH LONG-TERM investment emphasis will be given to stocks of
GROWTH OF companies which appear to have favorable prospects for
PRINCIPAL WITH long-term growth of both capital and income. The fund
INCOME AND will normally be invested in such securities, although
PRESERVATION OF preferred stocks and straight corporate debt securities
CAPITAL AS (rated in the top three quality categories by Moody's
SECONDARY Investors Service, Inc. or Standard & Poor's
OBJECTIVES. Corporation, or not rated but determined to be of
equivalent quality by the fund's investment adviser,
Capital Research and Management Company) may be
purchased to the extent deemed advisable by Capital
Research and Management Company. Cash and cash
equivalents and U.S. government securities may also be
held. The fund may from time to time invest up to 10%
in common stocks and other securities of issuers
domiciled outside the U.S. The fund will normally
diversify its investments among different industries
although the degree of diversification will vary from
time to time in accordance with the judgment of
management.
BOND PORTFOLIO FOR
ENDOWMENTS, INC. BOND PORTFOLIO FOR ENDOWMENTS, INC. The investment
AIMS TO PROVIDE objective of the fund is to seek as high a level of
SHAREHOLDERS WITH current income as is consistent with the preservation
AS HIGH A LEVEL OF of capital. Any capital appreciation is incidental to
CURRENT INCOME AS the fund's objective of current income.
IS CONSISTENT WITH The fund invests primarily in fixed-income securities,
THE PRESERVATION including bonds and debentures. A majority of the
OF CAPITAL. fund's assets will be invested in fixed- income
securities rated in the three highest categories (those
rated A or above) by Moody's Investors Service, Inc. or
Standard & Poor's Corporation or that are determined to
be of equivalent quality by the fund's investment
adviser, Capital Research and Management Company. In
addition, the fund may invest in securities rated BBB
by S&P or Baa by Moody's or in unrated securities of
equivalent quality. Securities rated BBB or Baa may
have speculative characteristics and changes in
economic conditions may lead to a weaker capacity to
make principal and interest payments than is the case
with higher rated securities. The fund has no current
intention of investing in securities rated BB or below
by S&P and Ba or below by Moody's (commonly known as
"junk" bonds) or in unrated securities of equivalent
quality. The fund may also invest up to 10% (measured
at the time of purchase) of its assets in obligations
of corporations or government entities outside the U.S.
and Canada. All Canadian and other non-U.S. securities
purchased by the fund will be liquid, U.S.
dollar-denominated and meet the quality standards set
forth above.
<PAGE>
The fixed-income securities in which the fund invests
may have stock conversion or purchase rights; however,
such securities will generally not exceed 20% of the
fund's assets. The fund will not acquire common stocks
except through the exercise of conversion or stock
purchase rights and will retain such common stocks only
when it is consistent with the fund's objective of
current income. In addition, the fund may hold cash or
cash equivalents. (See the statement of additional
information for more about these securities and for a
description of bond ratings.)
--------------------------------------------
As the funds' shareholders are non-profit institutions,
investments will be made consonant with the standards
generally considered prudent by fiduciaries and
trustees of such institutions. Because of the
shareholders' tax-exempt status, the funds will not be
affected by the usual tax considerations in making
investment decisions.
The funds' investment restrictions (which are described
in the statement of additional information) and
objectives cannot be changed without shareholder
approval. All other investment practices may be changed
by the funds' boards.
ACHIEVEMENT OF THE FUNDS' INVESTMENT OBJECTIVES CANNOT,
OF COURSE, BE ASSURED DUE TO THE RISK OF CAPITAL LOSS
FROM FLUCTUATING PRICES INHERENT IN ANY INVESTMENT IN
SECURITIES.
RISKS OF
INVESTING IN RISKS OF INVESTING IN STOCKS AND BONDS Because
CERTAIN Endowments, Inc. invests primarily in common stocks or
SECURITIES securities convertible into common stocks, the fund is
THE FUNDS ARE subject to stock market risks. For example, the fund is
SUBJECT subject to the possibility that stock prices in general
TO CERTAIN RISKS. will decline over short or even extended periods.
THERE Endowments, Inc. may also, and Bond Portfolio for
IS NO ASSURANCE Endowments, Inc. will, invest in fixed-income
THAT securities, including bonds, which have market values
THEIR OBJECTIVES which tend to vary inversely with the level of interest
WILL BE rates--when interest rates rise, their values will tend
REALIZED. to decline and vice versa. Although under normal market
conditions longer term securities yield more than
shorter term securities of similar quality, they are
subject to greater price fluctuations. These
fluctuations in the value of each fund's investments
will be reflected in its net asset value per share. See
the statement of additional information under
"Description of Certain Securities" (pages 1 to 4), for
a description of bond ratings and other securities.
U.S. GOVERNMENT SECURITIES Securities guaranteed by
the U.S. government include: (1) direct obligations of
the U.S. Treasury (such as Treasury bills, notes and
bonds) and (2) federal agency obligations guaranteed as
to principal and interest by the U.S. Treasury (such as
5
<PAGE>
securities issued by the Government National Mortgage
Association which are commonly known as "GNMA
certificates" (described below), and Federal Housing
Administration debentures).
Securities issued by U.S. government instrumentalities
and certain federal agencies are neither direct
obligations of, nor guaranteed by, the Treasury.
However, they generally involve federal sponsorship in
one way or another: some are backed by specific types
of collateral; some are supported by the issuer's right
to borrow from the Treasury; some are supported by the
discretionary authority of the Treasury to purchase
certain obligations of the issuer; others are supported
only by the credit of the issuing government agency or
instrumentality.
PRIVATE PLACEMENTS Private placements may be either
purchased from another institutional investor that
originally acquired the securities in a private
placement or directly from the issuers of the
securities. Generally, securities acquired in private
placements are subject to contractual restrictions on
resale and may not be resold except pursuant to a
registration statement under the Securities Act of 1933
or in reliance upon an exemption from the registration
requirements under the Act, for example, private
placements sold pursuant to Rule 144A. Accordingly, any
such obligation will be deemed illiquid unless it has
been specifically determined to be liquid under
procedures adopted by the funds' board of directors.
In determining whether these securities are liquid,
factors such as the frequency and volume of trading and
the commitment of dealers to make markets will be
considered. Additionally, the liquidity of any
particular security will depend on such factors as the
availability of "qualified" institutional investors and
the extent of investor interest in the security, which
can change from time to time.
INVESTING IN VARIOUS COUNTRIES The funds may invest in
non-U.S. issuers as described above. These issuers may
not be subject to uniform accounting, auditing and
financial reporting standards and practices or
regulatory requirements comparable to those applicable
to U.S. issuers. There may also be less public
information available about certain non-U.S. issuers.
Additionally, specific local political and economic
factors must be evaluated in making these investments
including trade balances and imbalances, and related
economic policies; expropriation or confiscatory
taxation; limitations on the removal of funds or other
assets; political or social instability; the diverse
structure and liquidity of the various securities
markets; and nationalization policies of governments
around the world. However, investing outside the U.S.
can also reduce certain of these risks due to greater
diversification opportunities.
--------------------------------------------
6
<PAGE>
APPLIES TO BOND PORTFOLIO FOR ENDOWMENTS, INC.:
MORTGAGE-RELATED SECURITIES The fund may invest in
Government National Mortgage Association (GNMA)
certificates which are securities representing part
ownership of a pool of mortgage loans on which timely
payment of interest and principal is guaranteed by the
U.S. government. GNMA certificates differ from typical
bonds because principal is repaid monthly over the term
of the loan rather than returned in a lump sum at
maturity. Although the mortgage loans in the pool will
have stated maturities of up to 30 years, the actual
average life or effective maturity of the GNMA
certificates typically will be substantially less
because the mortgages will be subject to normal
principal amortization and may be prepaid prior to
maturity.
The fund also may invest in securities representing
interests in pools of mortgage loans issued by private
institutions or governmental entities including the
Federal National Mortgage Association (FNMA) or by the
Federal Home Loan Mortgage Corporation (FHLMC).
OTHER MORTGAGE-RELATED SECURITIES The fund may invest
in mortgage-related securities issued by financial
institutions such as commercial banks, savings and loan
associations, mortgage bankers and securities
broker-dealers (or separate trusts or affiliates of
such institutions established to issue these
securities). These securities include mortgage
pass-through certificates, collateralized mortgage
obligations (including real estate mortgage investment
conduits as authorized under the Internal Revenue Code
of 1986) (CMOs) or mortgage-backed bonds. Each class of
bonds in a CMO series may have a different effective
maturity, bear a different coupon, and have a different
priority in receiving payments. All principal payments,
both regular principal payments as well as any
prepayment of principal, are passed through to the
holders of the various CMO classes dependent on the
characteristics of each class. In some cases, all
payments are passed through first to the holders of the
class with the shortest stated maturity until it is
completely retired. Thereafter, principal payments are
passed through to the next class of bonds in the
series, until all the classes have been paid off. In
other cases, payments are passed through to holders of
whichever class first has the shortest effective
maturity at the time payments are made. As a result, an
acceleration in the rate of prepayments that may be
associated with declining interest rates shortens the
expected life of each class. The impact of an
acceleration in prepayments affects the expected life
of each class differently depending on the unique
characteristics of that class. In the case of some CMO
series, each class may receive a differing proportion
of the monthly interest and principal repayments on the
underlying collateral. In these series the classes
would be more affected by an acceleration (or slowing)
in the rate of prepayments than CMOs which share
principal and interest proportionally.
7
<PAGE>
Mortgage-backed bonds are general obligations of the
issuer fully collateralized directly or indirectly by a
pool of mortgages. The mortgages serve as collateral
for the issuer's payment obligations on the bonds, but
interest and principal payments on the mortgages are
not passed through either directly (as with GNMA
certificates and FNMA and FHLMC pass-through
securities) or on a modified basis (as with CMOs).
Accordingly, a change in the rate of prepayments on the
pool of mortgages could change the effective maturity
of a CMO but not that of a mortgage-backed bond
(although, like many bonds, mortgage-backed bonds can
provide that they are callable by the issuer prior to
maturity).
REPURCHASE AGREEMENTS The fund may enter into
repurchase agreements, under which it buys a security
and obtains a simultaneous commitment from the seller
to repurchase the security at a specified time and
price. The seller must maintain with the fund's
custodian collateral equal to at least 100% of the
repurchase price including accrued interest, as
monitored daily by Capital Research and Management
Company. If the seller under the repurchase agreement
defaults, the fund may incur a loss if the value of the
collateral securing the repurchase agreement has
declined and may incur disposition costs in connection
with liquidating the collateral. If bankruptcy
proceedings are commenced with respect to the seller,
liquidation of the collateral by the fund may be
delayed or limited.
WHEN-ISSUED SECURITIES, FIRM COMMITMENT AGREEMENTS,
REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS
The fund may purchase securities on a delayed delivery
or "when-issued" basis and enter into firm commitment
agreements (transactions whereby the payment obligation
and interest rate are fixed at the time of the
transaction but the settlement is delayed). The fund as
purchaser assumes the risk of any decline in value of
the security beginning on the date of the agreement or
purchase. As the fund's aggregate commitments under
these transactions increase, the opportunity for
leverage similarly increases. The fund also may enter
into reverse repurchase agreements, which are the sale
of a security by the fund and its agreement to
repurchase the security at a specified time and price
at a later date, and "roll" transactions, which consist
of the sale of securities together with a commitment
(for which the fund typically receives a fee) to
purchase similar, but not identical, securities at a
later date.
8
<PAGE>
INVESTMENT
TECHNIQUES MULTIPLE PORTFOLIO COUNSELOR SYSTEM The basic
CAPITAL RESEARCH investment philosophy of Capital Research and
AND MANAGEMENT Management Company is to seek fundamental values at
COMPANY, THE reasonable prices, using a system of multiple portfolio
FUNDS' INVESTMENT counselors in managing mutual fund assets. Under this
ADVISER, USES A system the portfolios of the funds are divided into
SYSTEM segments which are managed by an individual counselor.
OF MULTIPLE Counselors decide how their respective segments will be
PORTFOLIO invested (within the limits provided by the funds'
COUNSELORS TO objectives and policies and by Capital Research and
MANAGE FUND Management Company's investment committee). In
ASSETS. addition, Capital Research and Management Company's
research professionals may make investment decisions
with respect to a portion of the funds' portfolios. The
primary individual portfolio counselors for the funds
are listed below.
ENDOWMENTS, INC.
<TABLE>
<CAPTION>
YEARS OF EXPERIENCE AS
INVESTMENT
PROFESSIONAL
(APPROXIMATE)
YEARS OF EXPERIENCE AS
PORTFOLIO COUNSELOR WITH CAPITAL
(AND RESEARCH RESEARCH AND
PROFESSIONAL, IF MANAGEMENT
PORTFOLIO APPLICABLE) COMPANY OR
COUNSELORS FOR FOR ENDOWMENTS, INC. ITS TOTAL
ENDOWMENTS, INC. PRIMARY TITLE(S) (APPROXIMATE) AFFILIATES YEARS
<S> <C> <C> <C> <C>
Claudia P. Huntington Vice President, Less than 1 year 18 years 20 years
Capital Research and
Management Company
Robert G. O'Donnell Senior Vice President 6 years (in addition 21 years 24 years
of the fund, Senior to 18 years as a
Vice President and research professional
Director, Capital prior to becoming a
Research and portfolio counselor
Management Company for the fund)
</TABLE>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
<TABLE>
<CAPTION>
YEARS OF EXPERIENCE AS
INVESTMENT
PROFESSIONAL
(APPROXIMATE)
YEARS OF EXPERIENCE AS WITH CAPITAL
PORTFOLIO COUNSELOR RESEARCH AND
PORTFOLIO FOR MANAGEMENT
COUNSELORS FOR BOND PORTFOLIO FOR COMPANY OR
BOND PORTFOLIO FOR ENDOWMENTS, INC. ITS TOTAL
ENDOWMENTS, INC. PRIMARY TITLE(S) (APPROXIMATE) AFFILIATES YEARS
<S> <C> <C> <C> <C>
Abner D. Goldstine Senior Vice President 20 years 28 years 43 years
of the fund, Senior
Vice President and
Director, Capital
Research and
Management Company
John H. Smet Vice President, 7 years 12 years 13 years Capital Research and
Management Company
</TABLE>
9
<PAGE>
INVESTMENT
RESULTS The funds may from time to time compare their
ENDOWMENTS, INC. investment results to various unmanaged indices or
HAS AVERAGED A other mutual funds in reports to shareholders, sales
TOTAL RETURN OF +% literature and advertisements. The results may be
A YEAR AND BOND calculated on a total return, yield and/or distribution
PORTFOLIO FOR rate basis for various periods. Total returns assume
ENDOWMENTS, INC. the reinvestment of all dividends and capital gain
HAS AVERAGED A distributions.
TOTAL RETURN OF +% The funds' distribution rates are calculated by
A YEAR UNDER dividing the dividends paid by each fund over the last
CAPITAL RESEARCH 12 months by the sum of their month-end price and the
AND MANAGEMENT capital gains paid over the last 12 months. The SEC
COMPANY'S yield reflects income the funds expect to earn based on
MANAGEMENT. their current portfolios of securities while the
(JULY 26, 1975 distribution rate is based solely on the funds' past
THROUGH dividends. Accordingly, the funds' SEC yields and
SEPTEMBER 30, distribution rates may differ.
1996)
ENDOWMENTS, INC. For the 30-day period ended September
30, 1996, the fund's SEC yield was % and the
distribution rate was %. The fund's total return
over the past 12 months and average annual total
returns over the past five- and ten-year periods were
+ %, + % and + %, respectively.
BOND PORTFOLIO FOR ENDOWMENTS, INC. For the 30-day
period ended September 30, 1996, the fund's SEC yield
was % and the distribution rate was %. The
fund's total return over the past 12 months and average
annual total returns over the past five- and ten-year
periods were + %, + % and + %, respectively.
These results were calculated in accordance with
Securities and Exchange Commission requirements. Of
course, past results are not an indication of future
results. Further information regarding the funds'
investment results are contained in the funds' annual
report which may be obtained without charge by writing
to the Secretary of the funds at the address indicated
on the cover of this prospectus.
10
<PAGE>
DIVIDENDS,
DISTRIBUTIONS AND DIVIDENDS AND DISTRIBUTIONS Dividends are usually paid
TAXES in March, June, September and December. Capital gains,
INCOME if any, are usually distributed in December. When a
DISTRIBUTIONS dividend or capital gain is distributed, the net asset
ARE USUALLY MADE value per share is reduced by the amount of the
IN payment.
MARCH, JUNE, FEDERAL TAXES The funds are tax-exempt organizations
SEPTEMBER under Section 501(c)(2) of the Internal Revenue Code.
AND DECEMBER. In addition, each fund intends to operate as a
"regulated investment company" under the Internal
Revenue Code. If the funds elect to be treated as
regulated investment companies, and so qualify and
distribute to shareholders all of their net investment
income and net capital gains, the funds themselves are
relieved of federal income tax.
Since all of the shareholders of the funds are exempt
from taxation under Section 501(c)(3) of the Internal
Revenue Code, it is not anticipated that there will be
any tax consequences to the shareholders from
distribution of either net investment income or capital
gains realized on the sale of securities except where a
shareholder is defined as a "private foundation" under
Section 509(a) and therefore may be subject to the
taxes assessed under Chapter 42 of the Internal Revenue
Code.
This is a brief summary of some of the tax laws that
affect your investment in the funds. Please see the
statement of additional information for further
information.
FUND
ORGANIZATION AND FUND ORGANIZATION AND VOTING RIGHTS The funds, which
MANAGEMENT are open-end, diversified management investment
THE FUNDS ARE companies, were organized as Delaware corporations
MANAGED BY ONE OF (Endowments, Inc. in 1969 and Bond Portfolio for
THE LARGEST AND Endowments, Inc. in 1970). The funds' boards supervise
MOST EXPERIENCED fund operations and perform duties required by
INVESTMENT applicable state and federal law. Shareholders have one
ADVISERS. vote per share owned and, at the request of the holders
of at least 10% of the shares of either fund, that fund
will hold a meeting at which any member of the board
could be removed and a successor elected. Since the
funds use a combined prospectus, each fund may be
liable for misstatements, inaccuracies, or incomplete
disclosure concerning any other fund contained in this
prospectus.
As of October 31, 1996, the following shareholders
owned 5% or more of the funds' outstanding stock:
Endowments, Inc.--California Institute of the Arts,
shares ( %); St. Mark's School of Texas,
shares ( %); and San Francisco Opera Association,
shares ( %).
As St. Mark's School of Texas owns in excess of 25% of
the voting shares of the fund, it is, pursuant to the
Investment Company Act of 1940, presumed to be a
controlling person of the fund.
11
<PAGE>
Bond Portfolio for Endowments, Inc.--California
Institute of the Arts, shares ( %);
Episcopal Homes Foundation, shares ( %);
St. Mark's School of Texas, shares ( %);
and San Francisco Opera Association, shares ( %).
THE INVESTMENT ADVISER Capital Research and Management
Company, a large and experienced investment management
organization founded in 1931, has been the funds'
investment adviser since July 25, 1975 and is the
investment adviser to the funds and other funds,
including those in The American Funds Group. Capital
Research and Management Company is located at 333 South
Hope Street, Los Angeles, CA 90071 and at 135 South
State College Boulevard, Brea, CA 92821. Capital
Research and Management Company manages the investment
portfolio and business affairs of the funds. (See
"Summary of Expenses" for management fees.)
Capital Research and Management Company is a wholly
owned subsidiary of The Capital Group Companies, Inc.
(formerly "The Capital Group, Inc."), which is located
at 333 South Hope Street, Los Angeles, CA 90071. The
research activities of Capital Research and Management
Company are conducted by affiliated companies which
have offices in Los Angeles, San Francisco, New York,
Washington, D.C., London, Geneva, Singapore, Hong Kong
and Tokyo.
Capital Research and Management Company and its
affiliated companies have adopted a personal investing
policy that is consistent with the recommendations
contained in the report dated May 9, 1994 issued by the
Investment Company Institute's Advisory Group on
Personal Investing. (See the statement of additional
information.) This policy has also been incorporated
into the funds' "code of ethics" which is available
from the funds' Secretary upon request.
PORTFOLIO TRANSACTIONS Orders for the funds' portfolio
securities transactions are placed by Capital Research
and Management Company, which strives to obtain the
best available prices, taking into account the costs
and quality of executions.
In the over-the-counter market, purchases and sales are
transacted directly with principal market-makers except
in those circumstances where it appears better prices
and executions are available elsewhere.
Fixed-income securities are generally traded on a "net"
basis with a dealer acting as principal for its own
account without a stated commission, although the price
of the security usually includes a profit to the
dealer. In underwritten offerings, securities are
usually purchased at a fixed price which includes an
amount of compensation to the underwriter, generally
12
<PAGE>
referred to as the underwriter's concession or
discount. On occasion, securities may be purchased
directly from an issuer, in which case no commissions
or discounts are paid.
Subject to the above policy, when two or more brokers
are in a position to offer comparable prices and
executions, preference may be given to brokers who have
provided investment research, statistical, and other
related services for the benefit of the funds and/or of
other funds served by Capital Research and Management
Company.
TRANSFER AGENT American Funds Service Company, a
wholly owned subsidiary of Capital Research and
Management Company, is the transfer agent and performs
shareholder service functions. An agent of American
Funds Service Company who performs transfer agent
services for the funds is located at Four Embarcadero
Center (Suite 1800), San Francisco, CA 94111.
13
<PAGE>
SHAREHOLDER GUIDE
PURCHASING SHARES
SHARES MAY BE Shares of the funds may be purchased directly from the
PURCHASED DIRECTLY funds only by institutional investors exempt from
FROM federal income taxation under Section 501(c)(3) of the
THE FUNDS ONLY Internal Revenue Code. The minimum initial purchase is
BY INSTITUTIONS $50,000 for either fund; there is no minimum on
EXEMPT subsequent investments. The minimum initial investment
FROM FEDERAL may be reduced by the boards for investments which meet
TAXATION certain standards. Any shareholder which loses its
UNDER SECTION tax-exempt status must immediately transfer its shares
501(C)(3) to another tax-exempt institution or, at the
OF THE INTERNAL shareholder's option, redeem its shares at net asset
REVENUE CODE. value.
The purchase of shares may be paid in cash or in a like
value of acceptable securities, said securities to be
valued in accordance with the valuation procedures
described in the statement of additional information
under "Purchase of Shares--Price of Shares." Acceptable
securities shall be those securities deemed acceptable
by Capital Research and Management Company; that is,
those securities which management deems to be
consistent with the investment objectives and policies
of the funds.
SHARE PRICE Shares are sold to eligible institutions
at net asset value. The net asset value is determined
as of the close of trading (currently 4:00 p.m., New
York time) on each day the New York Stock Exchange is
open. The current value of the fund's total assets,
less all liabilities, is divided by the total number of
shares outstanding and the result, rounded to the
nearer cent, is the net asset value per share.
SHARE CERTIFICATES Shares are credited to the
shareholder's account and certificates are not issued
unless specifically requested. This eliminates the
costly problem of lost or destroyed certificates.
All stock certificates issued by the funds shall bear
the legend that the shares may not be owned, held,
sold, transferred, assigned, pledged, hypothecated, or
otherwise transferred except by or to an organization
which has established its tax-exempt status under
Section 501(c)(3) of the Internal Revenue Code. Shares
of the funds are redeemable through the funds at net
asset value. (See "Redeeming Shares.")
SHAREHOLDER AUTOMATIC REINVESTMENT Dividends and capital gain
SERVICES distributions are reinvested in additional shares at no
sales charge unless you indicate otherwise. You also
may elect to have dividends and/or capital gain
distributions paid in cash.
EXCHANGE FEATURE As a shareholder of Endowments, Inc.
or Bond Portfolio for Endowments, Inc., you may
exchange all or part of your shares at net asset value
for shares of the other, and for shares of The Cash
Management Trust of America or The U.S. Treasury Money
Fund of America, whose shares may be similarly
exchanged for shares of Endowments, Inc. and/or Bond
Portfolio for Endowments, Inc. The Cash Management
Trust of America and The U.S. Treasury Money Fund of
14
<PAGE>
America are money market funds whose shares are sold at
net asset value. This feature is available only if the
fund for which you are exchanging is qualified in the
state where you reside.
As the funds' shareholders are tax-exempt institutions,
it is not expected that such an exchange will result in
tax consequences to the shareholder.
AUTOMATIC WITHDRAWALS Shareholders may authorize
automatic withdrawals from their accounts. All shares
owned or purchased by a shareholder will be credited to
the shareholder's withdrawal account, and a sufficient
number of shares will be sold from the account to meet
the requested withdrawal payments. All income dividends
and other distributions, if any, must be reinvested in
fund shares at net asset value and credited to the
withdrawal account. Liquidation of shares in excess of
investment income will reduce and may deplete a
shareholder's invested capital. Withdrawal payments,
therefore, should not be considered as a yield or
income on the investment.
These services are available only in states where the
funds may be legally offered and may be terminated or
modified at any time upon 60 days' written notice.
ACCOUNT STATEMENTS A shareholder account is opened in
accordance with your registration instructions.
Transactions in the account, such as additional
investments and dividend reinvestments, will be
reflected on regular confirmation statements from
American Funds Service Company.
REDEEMING SHARES Shareholders may redeem their shares, by tendering a
request in proper form, at the offices of the funds,
P.O. Box 7650, Four Embarcadero Center (Suite 1800),
San Francisco, CA 94120. Proper tender of shares
requires a written request for redemption and, if the
shareholder has received certificates for its shares,
the deposit of the stock certificates is also required.
Requests to redeem must be signed and the authorized
signature(s) of the shareholder guaranteed by an
"eligible guarantor" which includes a bank or savings
and loan association that is federally insured or a
member firm of the National Association of Securities
Dealers, Inc. Notarization by a Notary Public is not an
acceptable signature guarantee.
The funds do not have dealer agreements and do not
accept redemption orders from broker-dealers.
The price you receive for the shares you redeem is the
net asset value next determined after your order and
all required documents are received. (See "Purchasing
Shares--Share Price.") Because the funds' net asset
values fluctuate, reflecting the market value of the
funds' portfolios, the amount a shareholder receives
for shares redeemed may be more or less than the amount
paid for them.
15
<PAGE>
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<PAGE>
- --------------------------------------------------------------------------------
ENDOWMENTS, INC.
AN INVESTMENT FOR TAX-EXEMPT INSTITUTIONS SEEKING LONG-TERM
GROWTH OF PRINCIPAL WITH INCOME AND CAPITAL PRESERVATION
BOND PORTFOLIO FOR
ENDOWMENTS, INC.
AN INVESTMENT FOR TAX-EXEMPT INSTITUTIONS
SEEKING AS HIGH A LEVEL OF CURRENT INCOME AS IS CONSISTENT
WITH THE PRESERVATION OF CAPITAL
FOUR EMBARCADERO CENTER (SUITE 1800)
P.O. BOX 7650, SAN FRANCISCO, CA 94120 PHONE: (415) 421-9360
MANAGED BY
CAPITAL RESEARCH AND MANAGEMENT COMPANY
333 SOUTH HOPE STREET
LOS ANGELES, CA 90071
<TABLE>
<C> <S>
THIS PROSPECTUS HAS BEEN PRINTED ON RECYCLED
[LOGO] PAPER THAT MEETS THE GUIDELINES OF THE
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY.
</TABLE>
ENDOWMENTS, INC.
AND
BOND PORTFOLIO FOR ENDOWMENTS, INC.
Part B
Statement of Additional Information
December 1, 1996
This document is not a prospectus but should be read in conjunction
with the current Prospectus of Endowments, Inc. and Bond Portfolio for
Endowments, Inc. dated December 1, 1996. The Prospectus may be obtained by
writing to the funds at the following address:
Endowments, Inc.
Bond Portfolio for Endowments, Inc.
Attention: Secretary
Four Embarcadero Center
P.O. Box 7650
San Francisco, CA 94120
Telephone: (415) 421-9360
Table of Contents
Item Page No.
DESCRIPTION OF CERTAIN SECURITIES 1
FUNDAMENTAL POLICIES AND INVESTMENT RESTRICTIONS 4
FUND OFFICERS AND DIRECTORS 8
MANAGEMENT 10
DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAXES 11
PURCHASE OF SHARES 12
EXECUTION OF PORTFOLIO TRANSACTIONS 13
REDEMPTION OF SHARES 14
GENERAL INFORMATION 14
INVESTMENT RESULTS 15
FINANCIAL STATEMENTS ATTACHED
DESCRIPTION OF CERTAIN SECURITIES
BOND RATINGS - Endowments, Inc. may invest in debt securities, and a
majority of Bond Portfolio for Endowments, Inc.'s assets will ordinarily be
invested in bonds and debentures (including straight debt securities), which
are rated in the top three quality categories by any national rating service
(or determined to be equivalent by Capital Research and Management Company)
including bonds rated at least A by Standard & Poor's Corporation or Moody's
Investors Service, Inc. The top three rating categories for Standard & Poor's
and Moody's are described below:
Standard & Poor's Corporation:
"Debt rated 'AAA' has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong."
"Debt rated 'AA' has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in a small degree."
"Debt rated 'A' has a strong capacity to pay interest and repay principal,
although they are somewhat more susceptible to the adverse effects of change in
circumstances and economic conditions than debt in higher categories."
Moody's Investors Service, Inc.:
"Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as 'gilt
edge.' Interest payments are protected by a large or by an exceptionally
stable margin, and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues."
"Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, or fluctuation of
protective elements may be of greater amplitude, or there may be other elements
present which make the long-term risks appear somewhat larger than the Aaa
securities."
"Bonds rated A are judged to be of upper medium grade obligations. These
bonds possess many favorable investment attributes. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future."
BOND PORTFOLIO FOR ENDOWMENTS, INC.
Investments may also be made in securities rated BBB by S&P or Baa by
Moody's or in unrated securities of equivalent quality. S&P considers bonds
rated BBB as having an "adequate capacity to pay interest and repay principal.
Whereas they normally exhibit adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead to a weakened
capacity to pay interest and repay principal than for debt in higher rated
categories." Moody's considers bonds which are rated Baa as "medium grade
obligations, I.E., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and, in fact, have speculative characteristics as
well."
The fund has no current intention of investing in securities rated BB or
below by S&P and Ba or below by Moody's (commonly known as "junk" bonds) or
equivalent securities that are not rated. The fund is not normally required to
dispose of a security in the event that its rating is reduced below BBB or Baa
(or it is not rated and its quality becomes equivalent to such a security).
The fund, however, has no current intention to hold more than 5% of its net
assets in junk bonds. Junk bonds are subject to greater fluctuations in value
than are higher rated securities because the values of these securities tend to
reflect short-term corporate and market developments and investor perceptions
of the issuer's credit quality to a greater extent.
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES - Certificates
issued by the Government National Mortgage Association (GNMA) are
mortgage-backed securities representing part ownership of a pool of mortgage
loans, which are issued by lenders such as mortgage bankers, commercial banks
and savings and loan associations, and are either insured by the Federal
Housing Administration or guaranteed by the Veterans Administration. A pool of
these mortgages is assembled and, after being approved by GNMA, is offered to
investors through securities dealers. The timely payment of interest and
principal on each mortgage is guaranteed by GNMA and backed by the full faith
and credit of the U.S. government.
Principal is paid back monthly by the borrower over the term of the loan.
Reinvestment of prepayments may occur at higher or lower rates than the
original yield on the certificates. Due to the prepayment feature and the need
to reinvest prepayments of principal at current market rates, GNMA certificates
can be less effective than typical bonds of similar maturities at "locking in"
yields during periods of declining interest rates. GNMA certificates typically
appreciate or decline in market value during periods of declining or rising
interest rates, respectively. Due to the regular repayment of principal and
the prepayment feature, the effective maturities of mortgage pass-through
securities are shorter than stated maturities, will vary based on market
conditions and cannot be predicted in advance. The effective maturities of
newly-issued GNMA certificates backed by relatively new loans at or near the
prevailing interest rates are generally assumed to range between approximately
9 and 12 years.
FNMA AND FHLMC MORTGAGE-BACKED OBLIGATIONS - The Federal National
Mortgage Association (FNMA), a federally chartered and privately-owned
corporation, issues pass-through securities representing interests in a pool of
conventional mortgage loans. FNMA guarantees the timely payment of principal
and interest but this guarantee is not backed by the full faith and credit of
the U.S. government.
The Federal Home Loan Mortgage Corporation (FHLMC), a corporate
instrumentality of the U.S. government, issues participation certificates which
represent an interest in a pool of conventional mortgage loans. FHLMC
guarantees the timely payment of interest and the ultimate collection of
principal, and maintains reserves to protect holders against losses due to
default, but the certificates are not backed by the full faith and credit of
the U.S. government.
As is the case with GNMA certificates, the actual maturity of and realized
yield on particular FNMA and FHLMC pass-through securities will vary based on
the prepayment experience of the underlying pool of mortgages.
WHEN-ISSUED SECURITIES, FIRM COMMITMENT AGREEMENTS AND "ROLL"
TRANSACTIONS - The fund may purchase securities on a delayed delivery or
"when-issued" basis and enter into firm commitment agreements (transactions
whereby the payment obligation and interest rate are fixed at the time of the
transaction but the settlement is delayed). The fund as purchaser assumes the
risk of any decline in value of the security beginning on the date of the
agreement or purchase.
The fund will segregate liquid assets such as cash, U.S. government
securities or other appropriate high-grade debt obligations in an amount
sufficient to meet its payment obligations in these transactions. Although
these transactions will not be entered into for leveraging purposes, to the
extent the fund's aggregate commitments under these transactions exceed its
holdings of cash and securities that do not fluctuate in value (such as
short-term money market instruments), the fund temporarily will be in a
leveraged position (because it will have an amount greater than its net assets
subject to market risk). Should market values of the fund's portfolio
securities decline while the fund is in a leveraged position, greater
depreciation of its net assets would likely occur than were it not in such a
position. The fund will not borrow money to settle these transactions and,
therefore, will liquidate other portfolio securities in advance of settlement
if necessary to generate additional cash to meet its obligations thereunder.
The fund also may enter into "roll" transactions, which consist of the sale of
securities together with a commitment (for which the fund typically receives a
fee) to purchase similar, but not identical, securities at a later date. The
fund intends to treat roll transactions as two separate transactions: one
involving the purchase of a security and a separate transaction involving the
sale of a security. Since the fund does not intend to enter into roll
transactions for financing purposes, it may treat these transactions as not
falling within the definition of "borrowing" set forth in Section 2(a)(23) of
the Investment Company Act of 1940.
REVERSE REPURCHASE AGREEMENTS - This type of agreement involves the
sale of a security by the fund and its commitment to repurchase the security at
a specified time and price. The fund will maintain in a segregated account
with its custodian liquid assets such as cash, U.S. government securities or
other appropriate high-grade debt obligations in an amount sufficient to cover
its obligations under reverse repurchase agreements with broker-dealers (but no
collateral is required on reverse repurchase agreements with banks). Under the
Investment Company Act of 1940, as amended (the "1940 Act"), reverse repurchase
agreements may be considered borrowings by the fund. The use of reverse
repurchase agreements by the fund creates leverage which increases the fund's
investment risk. As the fund's aggregate commitments under these reverse
repurchase agreements increases, the opportunity for leverage similarly
increases. If the income and gains on securities purchased with the proceeds
of reverse repurchase agreements exceed the costs of the agreements, the fund's
earnings or net asset value will increase faster than otherwise would be the
case; conversely if the income and gains fail to exceed the costs, earnings or
net asset value would decline faster than otherwise would be the case.
ENDOWMENTS, INC.
CURRENCY TRANSACTIONS - The fund has the ability to hold a portion of
its assets in U.S. dollars and other currencies and to enter into certain
currency contracts in connection with investing in non-U.S. dollar denominated
securities. A forward currency contract is an obligation to purchase or sell a
specific currency at a future date, which may be any fixed number of days from
the date of the contract agreed upon by the parties, at a price set at the time
of the contract. The fund does not currently intend to engage in any
transactions other than purchasing and selling currencies and foreign exchange
contracts which will be used to facilitate settlement of trades. For example,
the fund might purchase a particular currency or enter into a forward currency
contract to preserve the U.S. dollar price of securities it intends or has
contracted to purchase.
ENDOWMENTS, INC. AND BOND PORTFOLIO FOR ENDOWMENTS, INC.
CASH EQUIVALENTS - These securities include (1) commercial paper
(short-term notes up to 9 months in maturity issued by corporations or
governmental bodies), (2) commercial bank obligations (E.G., certificates of
deposit, bankers' acceptances (time drafts on a commercial bank where the bank
accepts an irrevocable obligation to pay at maturity) and documented discount
notes (corporate promissory discount notes accompanied by a commercial bank
guarantee to pay at maturity)), (3) savings association and savings bank
obligations (E.G., certificates of deposit issued by savings banks or savings
associations), (4) securities of the U.S. government, its agencies or
instrumentalities that mature, or may be redeemed, in one year or less, and (5)
corporate bonds and notes that mature, or that may be redeemed, in one year or
less.
FUNDAMENTAL POLICIES AND INVESTMENT RESTRICTIONS
The funds have adopted certain fundamental policies and investment
restrictions which cannot be changed without shareholder approval. (Approval
requires the affirmative vote of 67% or more of the voting securities present
at a meeting of shareholders, provided more than 50% of such securities are
represented at the meeting, or the vote of more than 50% of the outstanding
voting securities, whichever is less.)
ENDOWMENTS, INC.
It is the fundamental policy of the fund:
1. To invest primarily in common stocks or senior securities with equity
provisions of well-known companies which appear to offer prospects for
long-term growth of both capital and income. Although common stocks and
convertible issues will ordinarily be used for the attainment of the fund's
investment objective, preferred stocks and bonds and other fixed income issues
may be purchased whenever and to the extent deemed advisable by the fund's
investment adviser in consideration of the fund's income objective and for
defensive purposes. The fund may also hold cash and cash equivalents
(commercial paper and other money market instruments) for cash needs and for
defensive purposes.
2. Not to concentrate its investments in one industry. (The amount
invested in an industry will not be 25% or more of the fund's total assets.)
3. Not to invest in companies for the purpose of exercising control or
management.
4. Not to invest more than 5% of the value of the total assets of the fund
in the securities of any one issuer, provided that this limitation shall apply
only to 75% of the value of the fund's total assets and, provided further, that
the limitation shall not apply to obligations of the government of the U.S. or
of any corporation organized as an instrumentality of the U.S. under a general
Act of Congress.
5. Not to acquire more than 10% of the outstanding voting securities of
any one corporation.
6. Not to borrow more than 5% of the value of its total assets at the time
of such borrowing, and to borrow only temporarily for extraordinary or
emergency purposes and not for purchase of investment securities, and each such
borrowing to be specifically approved by the board of directors of the fund.
7. Not to mortgage, pledge, hypothecate, or in any manner transfer as
security for any indebtedness, any securities owned or held by the fund except
to secure borrowings pursuant to policy #6 hereinabove, and in no event to an
extent greater than 15% of the gross assets of the fund taken at cost.
8. Not to underwrite the sale, or participate in any underwriting or
selling group in connection with the public distribution, of any security;
provided, however, that the fund may invest not more than 10% of its assets in,
and subsequently distribute, as permitted by law, securities and other assets
for which there is no ready market.
9. Not to participate on a joint or a joint and several basis in any
trading account in securities.
10. Not to purchase securities on margin, except that the fund may obtain
such short-term credits as may be necessary for clearance of purchases or sales
of securities.
11. Not to effect short sales, except for short sales "against the box"
(I.E., sales when the fund owns or has the right to acquire at no additional
cost securities identical to those sold short).
12. Not to make loans to any person or firm, provided, however, that the
acquisition of a portion of an issue of bonds, debentures, notes and other
evidences of indebtedness of any corporation or government shall not be
construed to be the making of a loan.
13. Not to purchase or sell securities from or to officers or directors of
the fund, or of the investment adviser.
14. Not to purchase securities if one or more of the officers or directors
of the fund or investment adviser owns beneficially more than 1/2 of 1% of the
securities of such issuer and if together they own beneficially more than 5% of
such securities.
15. Not to invest in real estate, commodities, or commodity contracts.
(Investments in real estate investment trusts are not deemed purchases of real
estate.)
16. Not to purchase puts, calls or hedges.
17. Not to invest more than 5% of the value of the fund's total assets in
the securities of companies which (together with predecessors) have a record of
less than three years' continuous operation.
18. Not to invest in securities of other investment companies, except by
purchase on the open market at regular brokerage rates or pursuant to a merger
or consolidation.
19. That the shares of the fund may not be owned, held, sold, transferred,
assigned, pledged, hypothecated, or otherwise transferred except by or to an
organization which has established its tax-exempt status under Section
501(c)(3) of the Internal Revenue Code.
For purposes of policy #8, restricted securities are treated as not
readily marketable by the fund, with the exception of those securities that
have been determined to be liquid pursuant to procedures adopted by the fund's
board of directors.
Although not fundamental policies, the fund has further agreed that it
will not invest more than 5% of the value of the fund's net assets in warrants,
valued at the lower of cost or market, with no more than 2% being unlisted on
the New York or American Stock Exchanges (warrants acquired by the fund in
units or attached to securities may be deemed to be without value); or invest
in oil, gas or other mineral leases. Pursuant to Ohio Administrative Code, the
fund will not invest in securities of registered investment companies that are
subject to the Investment Company Act of 1940.
If a percentage restriction on investment is adhered to at the time an
investment is made, a later change in percentage resulting from changing values
will not be considered a violation of the fund's investment policies or
restrictions.
The fund's portfolio turnover rate will depend primarily on market
conditions. Short-term trading profits are not the fund's objective and
changes in its investments are generally accomplished gradually, though
short-term transactions may occasionally be made.
BOND PORTFOLIO FOR ENDOWMENTS, INC.
It is the fundamental policy of the fund:
1. To invest primarily in bonds and debentures which appear to offer
attractive current yields without undue risk of principal. To attain its
investment objective, the fund may invest in domestic and foreign corporate
bonds and debentures (a portion of which may have conversion or stock purchase
rights), bonds and debentures issued or guaranteed by the U.S. government or
its agencies or instrumentalities, and bonds and debentures issued by foreign
governments. The fund may also invest in short- and medium-term obligations
and hold cash and cash equivalents as dictated by cash needs and market
conditions.
2. Not to concentrate its investments in one industry. (The amount
invested in an industry will not be 25% or more of the fund's total assets.)
3. Not to invest in companies for the purpose of exercising control or
management.
4. Not to invest more than 5% of the value of the total assets of the fund
in the securities of any one issuer, provided that this limitation shall apply
only to 75% of the value of the fund's total assets and, provided further, that
the limitation shall not apply to obligations of the government of the U.S. or
of any corporation organized as an instrumentality of the U.S. under a general
Act of Congress.
5. Not to acquire more than 10% of the outstanding voting securities of
any one corporation, and to acquire voting securities only through the exercise
of conversion or stock purchase rights attached to convertible debt securities
held in the fund's portfolio.
6. Not to borrow more than 5% of the value of its total assets at the time
of such borrowing, and to borrow only temporarily for extraordinary or
emergency purposes and not for purchase of investment securities, and each such
borrowing to be specifically approved by the board of directors of the fund.
7. Not to mortgage, pledge, hypothecate, or in any manner transfer as
security for any indebtedness, any securities owned or held by the fund except
to secure borrowings pursuant to policy #6 hereinabove, and in no event to an
extent greater than 15% of the gross assets of the fund taken at cost.
8. Not to underwrite the sale, or participate in any underwriting or
selling group in connection with the public distribution, of any security, nor
invest more than 15% of the value of its net assets in securities for which
there is no ready market.
9. Not to participate on a joint or a joint and several basis in any
trading account in securities.
10. Not to purchase securities on margin, except that the fund may obtain
such short-term credits as may be necessary for clearance of purchases or sales
of securities.
11. Not to effect short sales, except for short sales "against the box"
(I.E., sales when the fund owns or has the right to acquire at no additional
cost securities identical to those sold short).
12. Not to purchase puts, calls, or hedges.
13. Not to make loans to any person or firm, provided, however, that the
acquisition of a portion of an issue of publicly distributed bonds, debentures,
notes and other evidences of indebtedness of any corporation or government
shall not be construed to be the making of a loan.
14. Not to purchase or sell securities from or to officers or directors of
the fund, or of the investment adviser.
15. Not to purchase securities if one or more of the officers or directors
of the fund or investment adviser owns beneficially more than 1/2 of 1% of the
securities of such issuer and if together they own beneficially more than 5% of
such securities.
16. Not to invest in real estate, commodities, or commodity contracts.
(Investments in real estate investment trusts are not deemed purchases of real
estate.)
17. Not to invest more than 5% of the value of the fund's total assets in
the securities of companies which (together with predecessors) have a record of
less than three years' continuous operation.
18. Not to invest in securities of other investment companies, except by
purchase on the open market at regular brokerage rates or pursuant to a merger
or consolidation.
19. That the shares of the fund may not be owned, held, sold, transferred,
assigned, pledged, hypothecated, or otherwise transferred except by or to an
organization which has established its tax-exempt status under Section
501(c)(3) of the Internal Revenue Code.
For purposes of policy #8, restricted securities are treated as not
readily marketable by the fund, with the exception of those securities that
have been determined to be liquid pursuant to procedures adopted by the fund's
board of directors.
Although not fundamental policies, the fund has further agreed that it
will not invest more than 5% of the value of the fund's net assets in warrants,
valued at the lower of cost or market, with no more than 2% being unlisted on
the New York or American Stock Exchanges (warrants acquired by the fund in
units or attached to securities may be deemed to be without value); nor invest
in oil, gas or other mineral leases. Pursuant to Ohio Administrative Code, the
fund will not invest in securities of registered investment companies that are
subject to the Investment Company Act of 1940.
If a percentage restriction on investment is adhered to at the time an
investment is made, a later change in percentage resulting from changing values
will not be considered a violation of the fund's investment policies or
restrictions.
Management's appraisal of changing economic conditions and trends may
cause a change in emphasis within the portfolio, both among individual
securities and among various types of fixed-income securities in order to
achieve the objective of the fund. Major changes in economic conditions could
necessitate substantial portfolio turnover. Such turnover will normally
consist of shifts in grade, types of issuers, and maturity composition of the
fund's securities in order to preserve principal and maintain current income.
FUND OFFICERS AND DIRECTORS
(with their principal occupations for the past five years#)
Directors
(and the organization for which they serve as designated representative ++)
ROBERT B. EGELSTON+*. Senior Partner, The Capital Group Partners L.P.;
former Chairman of the Board, The Capital Group Companies, Inc.; (213)
486-9200.
FRANK L. ELLSWORTH+++, 333 South Grand Avenue, 26th Floor, Los Angeles, CA
90071-1504. President, Independent Colleges of Southern California; former
President, Pitzer College; (213) 680-1330; Designated Representative:
Independent Colleges of Southern California.
STEVEN D. LAVINE, 24700 McBean Parkway, Valencia, CA 91355. President,
California Institute of the Arts; (805) 255-1050; Designated Representative:
California Institute of the Arts.
PATRICIA A. McBRIDE, 4933 Mangold Circle, Dallas, TX 75229. Chief
Financial Officer, Kevin L. McBride, D.D.S., Inc.; (214) 368-0268; Designated
Representative: St. Mark's School of Texas.
JOHN R. METCALF, 2864 Broadway - A, San Francisco, CA 94115. Private
investor; former Vice President, Alexander & Alexander, Inc.; (415) 775-2864;
Designated Representative: Alpine Winter Foundation.
CHARLES R. REDMOND, Times Mirror Square, Los Angeles, CA 90053. Chairman,
Pfaffinger Foundation; former President and Chief Executive Officer, Times
Mirror Foundation and former Executive Vice President and Member of the
Management Committee, The Times Mirror Company; (213) 237-3977; Designated
Representative: Loyola Marymount University.
THOMAS E. TERRY+*. Consultant; former Vice President and Secretary,
Capital Research and Management Company (retired 1994); (213) 486-9410;
Designated Representative: Citizens' Scholarship Foundation of America.
ROBERT C. ZIEBARTH, P.O. Box 839, Dover, MA 02030. Management Consultant,
Ziebarth Company; (508) 785-1937; Designated Representative: Foundation for
Reproductive Research & Education.
Officers
ROBERT B. EGELSTON, Chairman of the Boards.
THOMAS E. TERRY, President.
Fund officers whose other positions are not described above are:
ABNER D. GOLDSTINE, 11100 Santa Monica Boulevard, Los Angeles, CA
90025, Senior Vice President. Senior Vice President and Director, Capital
Research and Management Company.
ROBERT G. O'DONNELL**, Senior Vice President. Senior Vice President and
Director, Capital Research and Management Company.
STEVEN N. KEARSLEY***, Vice President and Treasurer. Vice President and
Treasurer, Capital Research and Management Company; Director, American Funds
Service Company; (714) 671-7000.
PATRICK F. QUAN**, Secretary. Vice President - Fund Business Management
Group, Capital Research and Management Company; (415) 421-9360.
LISA G. HATHAWAY*, Assistant Vice President. Assistant Vice President -
Fund Business Management Group, Capital Research and Management Company; (213)
486-9200.
LOUISE M. PESCETTA**, Assistant Vice President and Assistant Secretary.
Assistant Vice President - Fund Business Management Group, Capital Research and
Management Company; (415) 421-9360.
MARY C. HALL***, Assistant Treasurer. Senior Vice President - Fund
Business Management Group, Capital Research and Management Company; (714)
671-7000.
ROBERT P. SIMMER, 5300 Robin Hood Road, Norfolk, VA 23513, Assistant
Treasurer. Vice President - Fund Business Management Group, Capital Research
and Management Company; (804) 670-4900.
_________________
* Address is 333 South Hope Street, Los Angeles, CA 90071.
** Address is P.O. Box 7650, San Francisco, CA 94120.
*** Address is 135 South State College Boulevard, Brea, CA 92821.
# Positions within the organizations listed may have changed during this
period.
+ An "interested person" within the meaning of the Investment Company Act of
1940 (the 1940 Act) on the basis of his affiliation with Capital Research and
Management Company, the funds' investment adviser.
++ The Certificate of Incorporation provides that no person shall serve as a
director of the funds (except for the Chairman of the Board or the President),
unless he or she is a designated representative of at least one charitable
institution which is a shareholder of the funds.
+++ Mr. Ellsworth serves as a director or trustee on the boards of a total
of three funds which are managed by Capital Research and Management Company.
Only Anchor Pathway Fund pays a directors fee. His total compensation from
that fund for the 12 months through July 31, 1996 was $13,000.
All of the officers listed are officers or employees of the investment
adviser or affiliated companies. The funds do not pay any salaries or fees to
their directors or officers. However, the fund reimburses certain expenses of
the directors who are not affiliated with the investment adviser.
The following directors serve or have served on boards of tax-exempt
501(c)(3) organizations and have had experience in dealing with the
administrative and financial needs of these institutions: Robert B. Egelston -
California Institute of the Arts, Claremont University Center, Los Angeles
Festival, The Los Angeles Philharmonic Association, The Music Center of Los
Angeles County, The Wharton School of Finance and Commerce, University of
Pennsylvania; Frank L. Ellsworth - Claremont University Center, English
Village, Seattle, Foundation for Independent Higher Education, Global Partners,
Canada, Graphic Arts Counsel, Independent Colleges of Southern California,
Inc., The Japanese-American National Museum, Los Angeles County Museum of Art,
The Los Angeles Dance Center, Pitzer College, The Seasons Fund, Southwestern
University School of Law; Steven D. Lavine - American Council on the Arts,
KCRW-FM National Public Radio, The Music Center Operating Company, The Music
Center of Los Angeles County; Patricia A. McBride - Dallas Museum of Art
League, Dallas Symphony Orchestra Association, Dallas Symphony Orchestra
League, Girl Scout Council, Inc., McDermott Foundation, St. Mark's School of
Texas, Southwest Museum of Science and Technology; John R. Metcalf - Radiology
Research and Education Foundation, The Yosemite Fund; Thomas E. Terry -
Citizens' Scholarship Foundation of America, Elvehjem Museum of Art, National
Football Scholarship Foundation; Charles R. Redmond - AMAN Folk Ensemble,
Catholic Charities of the Archdiocese of Los Angeles, Loyola Marymount
University, The Music Center of Los Angeles County, Pasadena Playhouse,
Pfaffinger Foundation, Times Mirror Foundation; Robert C. Ziebarth - Chicago
Maternity Center, Choate School, Foundation for Reproductive Research &
Education, Latin School of Chicago, National Association of Independent
Schools, Naval Historical Foundation, Northwestern Memorial Hospital.
MANAGEMENT
INVESTMENT ADVISER - The investment adviser, founded in 1931, maintains
research facilities in the U.S. and abroad, with a staff of professionals, many
of whom have a number of years of investment experience. The investment
adviser's professionals travel several million miles a year, making more than
5,000 research visits in more than 50 countries around the world. The
investment adviser believes that it is able to attract and retain quality
personnel.
An affiliate of the investment adviser compiles indices for major stock
markets around the world and compiles and edits the Morgan Stanley Capital
International Perspective, providing financial and market information about
more than 2,400 companies around the world.
The investment adviser is responsible for managing more than $100 billion
of stocks, bonds and money market instruments and serve over five million
investors of all types. These investors include privately owned businesses and
large corporations as well as schools, colleges, foundations and other
non-profit and tax-exempt organizations.
INVESTMENT ADVISORY AND SERVICE AGREEMENTS - The Investment Advisory
and Service Agreements (the Agreements) between the funds and the investment
adviser, dated July 28, 1975, may be renewed from year to year, provided that
any such renewal has been specifically approved at least annually by (i) the
boards of the funds, or by the vote of a majority (as defined in the 1940 Act)
of the outstanding voting securities of the funds, and (ii) the vote of a
majority of directors who are not parties to the Agreements or interested
persons (as defined in said Act) of any such party, cast in person, at a
meeting called for the purpose of voting on such approval. Renewal of the
Agreements was approved by the unanimous vote of the boards of the funds on May
23, 1996 for the period through July 27, 1997. The Agreements also provide
that either party has the right to terminate it without penalty, upon 60 days'
written notice to the other party, and that the Agreements automatically
terminate in the event of their assignment (as defined in said Act).
The investment adviser, in addition to providing investment advisory
services, furnishes the services and pays the compensation and travel expenses
of persons to perform the executive, administrative, clerical and bookkeeping
functions of the funds, and provides suitable office space, necessary small
office equipment and utilities, and provides general purpose accounting forms,
supplies, and postage used at the offices of the funds. The funds pay all
expenses not specifically assumed by the investment adviser, including, but not
limited to, custodian, stock transfer and dividend disbursing fees and
expenses; costs of the designing, printing and mailing of reports,
prospectuses, proxy statements, and notices to shareholders; taxes; expenses of
the issuance and redemption of shares of the funds (including stock
certificates, registration and qualification fees and expenses); legal and
auditing expenses; expenses paid to directors unaffiliated with the investment
adviser; association dues; and costs of stationery and forms prepared
exclusively for the funds.
The Agreements provide for an advisory fee reduction to the extent that
the funds' annual ordinary operating expenses exceed 1-1/2% of the first $30
million of the average net assets of the funds and 1% of the average net assets
in excess thereof. Expenses which are not subject to this limitation are
interest, taxes, and extraordinary expenses. Expenditures, including costs
incurred in connection with the purchase or sale of portfolio securities, which
are capitalized in accordance with generally accepted accounting principles
applicable to investment companies are accounted for as capital items and not
as expenses.
Effective December 1, 1995, the investment adviser has agreed to
voluntarily waive management fees to the extent that each fund's annual
operating expenses exceed 0.75% of its average net assets per annum. There can
be no assurance that this voluntary fee waiver will continue in the future.
During the years ended July 31, 1996, 1995 and 1994, the investment
adviser received from Endowments, Inc. advisory fees of $300,818, $273,381, and
$308,941, and from Bond Portfolio for Endowments, Inc. advisory fees of
$214,202, $223,573, and $250,998, respectively.
DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAXES
The funds are tax-exempt organizations under Section 501(c)(2) of the
Internal Revenue Code. In addition, each fund intends to operate as a
"regulated investment company" under Subchapter M of the Internal Revenue Code.
If, in the future, the funds elect to be treated as regulated investment
companies, they will be subject to the provisions described below.
To qualify as a "regulated investment company," each fund must (a) derive
at least 90% of its gross income from dividends, interest, certain payments
with respect to securities loans, and gains from the sale or other disposition
of stock, securities, currencies or other income derived with respect to its
business of investing in such stock, securities or currencies; (b) derive less
than 30% of its gross income from the gains on sale or other disposition of
stock or securities held less than three months; and (c) diversify its holdings
so that, at the end of each fiscal quarter, (i) at least 50% of the market
value of the fund's assets is represented by cash, cash items, U.S. government
securities, securities of other regulated investment companies, and other
securities (but such other securities must be limited, in respect of any one
issuer, to an amount not greater than 5% of the fund's assets and 10% of the
outstanding voting securities of such issuer), and (ii) not more than 25% of
the value of its assets is invested in the securities of any one issuer (other
than U.S. government securities or the securities of other regulated investment
companies), or in two or more issuers which the fund controls and which are
engaged in the same or similar trades or businesses or related trades or
businesses.
Under Subchapter M, if each fund distributes within specified times at
least 90% of the sum of its investment company taxable income (net investment
income and the excess of net short-term capital gains over long-term capital
losses) and its tax-exempt interest, if any, it will be taxed only on that
portion of such investment company taxable income that it retains.
Under the Internal Revenue Code, a nondeductible excise tax of 4% is
imposed on the excess of a regulated investment company's "required
distribution" for the calendar year ending within the regulated investment
company's taxable year over the "distributed amount" for such calendar year.
The term "required distribution" means the sum of (i) 98% of ordinary income
(generally net investment income) for the calendar year, (ii) 98% of capital
gain net income (both long-term and short-term) for the one-year period ending
on October 31 (as though the one-year period ending on October 31 were the
regulated investment company's taxable year), and (iii) the sum of any untaxed,
undistributed net investment income and net capital gains of the regulated
investment company for prior periods. The term "distributed amount" generally
means the sum of (i) amounts actually distributed by the fund from its current
year's ordinary income and capital gain net income and (ii) any amount on which
the fund pays income tax for the year. The funds intend to distribute net
investment income and net capital gains so as to minimize or avoid the excise
tax liability.
PURCHASE OF SHARES
The purchase of shares may be paid in cash or in a like value of
acceptable securities. Such securities will (i) be acquired for investment and
not for resale; (ii) be liquid securities which are not restricted as to
transfer either by law or liquidity of market; and (iii) have a value which is
readily ascertainable.
PRICE OF SHARES - The price you pay for shares is the net asset value per
share which is calculated once daily at the close of trading (currently 4:00
p.m., New York time) each day the New York Stock Exchange is open. The New
York Stock Exchange is currently closed on weekends and on the following
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas Day. Such net asset
value is effective for orders to purchase shares of the funds received by the
funds before the close of trading on the New York Stock Exchange; orders
received after the close of trading will be entered at the net asset value as
computed as of the close of trading on the next business day of the New York
Stock Exchange. Prices which appear in the newspaper are not always indicative
of prices at which you will be purchasing and redeeming shares of the funds,
since such prices generally reflect the previous day's closing price whereas
purchases and redemptions are made at the next calculated price. The net asset
value per share is determined as follows:
ENDOWMENTS, INC.
Common stocks, and convertible bonds and debentures, traded on a national
securities exchange (or reported on the NASDAQ national market) and securities
traded in the over-the-counter market are stated at the last reported sales
price on the day of valuation; other securities, and securities for which no
sale was reported on that date, are stated at the last quoted bid price.
Non-convertible bonds and debentures, and other long-term debt securities,
normally are valued at prices obtained from a bond pricing service provided by
a major dealer in bonds, when such prices are available; however, in
circumstances where the investment adviser deems it appropriate to do so, such
securities will be valued at the mean of their representative quoted bid and
asked prices or, if such prices are not available, at prices for securities of
comparable maturity, quality and type. 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. Cash and receivables are added and liabilities are deducted to
arrive at the net asset value. This figure is divided by the number of shares
outstanding to give the net asset value per share.
BOND PORTFOLIO FOR ENDOWMENTS, INC.
Bond and notes are valued at prices obtained from a bond pricing service
provided by a major dealer in bonds, when such prices are available; however,
in circumstances where the investment adviser deems it appropriate to do so,
such securities will be valued at the mean of their representative quoted bid
and asked prices or, if such prices are not available, at prices for securities
of comparable maturity, quality, and type. 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. Stocks
and convertible bonds and debentures traded on a national securities exchange
(or reported on the NASDAQ national market) and securities traded in the
over-the-counter market are stated at the last reported sales price on the day
of valuation; other securities, and securities for which no sale was reported
on that date, are stated at the last quoted bid price. 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.
Cash and receivables are added and liabilities are deducted to arrive at the
net asset value. This figure is divided by the number of shares outstanding to
give the net asset value per share.
EXECUTION OF PORTFOLIO TRANSACTIONS
There are occasions on which portfolio transactions for the funds may be
executed as part of concurrent authorizations to purchase or sell the same
security for other funds served by the investment adviser, or for trusts or
other accounts served by affiliated companies of the investment adviser.
Although such concurrent authorizations potentially could be either
advantageous or disadvantageous to the funds, they are effected only when the
investment adviser believes that to do so is in the interest of the funds.
When such concurrent authorizations occur, the objective is to allocate the
executions in an equitable manner. The funds will not pay a mark-up for
research in principal transactions.
BOND PORTFOLIO FOR ENDOWMENTS, INC.
The fund is required to disclose information regarding investments in
the securities of broker-dealers (or parents of broker-dealers that derive more
than 15% of their revenue from broker-dealer activities) which have certain
relationships with the fund. During the last fiscal year, Merrill Lynch,
Pierce, Fenner & Smith Inc. was among the top 10 dealers that acted as
principals in portfolio transactions. The fund held debt securities of Merrill
Lynch, Pierce, Fenner & Smith Inc. in the amount of $460,000 as of the close of
its most recent fiscal year.
_______________
Brokerage commissions paid on portfolio transactions, including
concessions on underwritings, during the fiscal years ended July 31, 1996, 1995
and 1994, amounted to $52,000, $38,000, and $100,000 for Endowments, Inc., and
$38,000, $24,000, and $3,000 for Bond Portfolio for Endowments, Inc.,
respectively.
REDEMPTION OF SHARES
For redemption requests received after the close of trading on the New
York Stock Exchange, the redemption price will be the net asset value
determined as of the close of trading on the next business day of the New York
Stock Exchange. There is no charge to the shareholder for redemption. Payment
in cash or in kind is made as soon as reasonably practicable after tender in
proper form (as described above), and must, in any event, be made within seven
days thereafter. The funds may, however, suspend the right of redemption
during any period when: (a) trading on the New York Stock Exchange is
restricted as determined by the Securities and Exchange Commission or such
exchange is closed for other than weekends or holidays; (b) the Securities and
Exchange Commission has by order permitted such suspension; or (c) any
emergency as determined by the Securities and Exchange Commission exists,
making disposal of portfolio securities or valuation of net assets of the funds
not reasonably practicable.
Although they would not normally do so, the funds have the right to pay
the redemption price in whole or in part in portfolio securities as selected by
the boards, taken at their value as used in determining net asset value for
purposes of computing the redemption price. A shareholder that redeems fund
shares, and is given by the fund a proportionate amount of the fund's portfolio
securities in lieu of cash, may incur brokerage commissions in the event of a
sale of the securities through a broker. However, the funds have elected to be
governed by Rule 18f-1 under the 1940 Act pursuant to which the funds are
obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of
the net asset value of the funds during any 90-day period for any one
shareholder.
GENERAL INFORMATION
CUSTODIAN OF ASSETS - Securities and cash owned by the funds, including
proceeds from the sale of shares of the funds and of securities in the funds'
portfolios, are held by The Chase Manhattan Bank N.A., One Chase Manhattan
Plaza, New York, NY 10081, as Custodian.
INDEPENDENT AUDITORS - Deloitte & Touche LLP, located at 1000 Wilshire
Boulevard, Los Angeles, CA 90017, serves as the funds' independent auditors,
providing audit services, preparing tax returns and reviewing certain documents
of the funds to be filed with the Securities and Exchange Commission. The
financial statements included in this statement of additional information from
the Annual Report have been so included in reliance on the report of Deloitte &
Touche LLP given on the authority of said firm as experts in auditing and
accounting.
COUNSEL - Morrison & Foerster LLP, 345 California Street, San
Francisco, CA 94104, has passed upon the legality of the shares offered
hereby.
REPORTS TO SHAREHOLDERS - The funds' fiscal year ends on July 31.
Shareholders are provided at least semi-annually with reports showing the
investment portfolio, financial statements and other information audited by the
funds' independent auditors, Deloitte & Touche LLP, whose selection is
determined annually by the boards.
The financial statements including the investment portfolio and the report
of Independent Auditors contained in the Annual Report are included in this
statement of additional information.
PERSONAL INVESTING POLICY - Capital Research and Management Company
and its affiliated companies have adopted a personal investing policy
consistent with Investment Company Institute guidelines. This policy includes:
a ban on acquisitions of securities pursuant to an initial public offering;
restrictions on acquisitions of private placement securities; pre-clearance and
reporting requirements; review of duplicate confirmation statements; annual
recertification of compliance with codes of ethics; disclosure of personal
holdings by certain investment personnel prior to recommendation for purchase
for the funds; blackout periods on personal investing for certain investment
personnel; ban on short-term trading profits for investment personnel;
limitations on service as a director of publicly traded companies; and
disclosure of personal securities transactions.
REMOVAL OF DIRECTORS BY SHAREHOLDERS - At any meeting of shareholders,
duly called and at which a quorum is present, the shareholders may, by the
affirmative vote of the holders of a majority of the votes entitled to be cast
thereon, remove any director or directors from office and may elect a successor
or successors to fill any resulting vacancies for the unexpired terms of
removed directors. The funds have made an undertaking, at the request of the
staff of the Securities and Exchange Commission, to apply the provisions of
section 16(c) of the 1940 Act with respect to the removal of directors as
though the funds were a common-law trust. Accordingly, the directors of the
funds shall promptly call a meeting of shareholders for the purpose of voting
upon the question of removal of any director when requested in writing to do so
by the record holders of not less than 10% of the outstanding shares.
INVESTMENT RESULTS
Endowments, Inc.'s yield is 3.05% and Bond Portfolio for Endowments,
Inc.'s yield is 6.64% based on a 30-day (or one month) period ended July 31,
1996, computed by dividing the net investment income per share earned during
the period by the maximum offering price per share on the last day of the
period, according to the following formula:
YIELD = 2[(a-b/cd+1)/6/-1]
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the period that
were entitled to receive dividends.
d = the maximum offering price per share on the last day of the period.
(Endowments, Inc. and Bond Portfolio for Endowments, Inc. do not have a sales
charge.)
Endowments, Inc.'s average annual total return for the one-, five- and
ten-year periods ended on July 31, 1996 was +13.21%, +11.94% and +11.78%,
respectively. Bond Portfolio for Endowments, Inc.'s average annual total
return for the one-, five- and ten-year periods ended on July 31, 1996 was
+6.25%, +8.44% and +8.63%, respectively. The average annual total return (T)
is computed by equating the value at the end of the period (ERV) with a
hypothetical initial investment of $1,000 (P) over a period of years (n)
according to the following formula as required by the Securities and Exchange
Commission: P(1+T)/n/ = ERV.
The following assumptions will be reflected in computations made in
accordance with the formula stated above: (1) reinvestment of dividends and
distributions at net asset value on the reinvestment date determined by the
boards; and (2) a complete redemption at the end of any period illustrated.
The funds may also calculate a distribution rate on a taxable and tax
equivalent basis. The distribution rate is computed by dividing the dividends
paid by the fund over the last 12 months by the sum of the month-end net asset
value and the capital gains paid over the last 12 months. The distribution
rate may differ from the yield.
The funds may include information on their investment results and/or
comparisons of their investment results to various unmanaged indices (such as
The Dow Jones Average of 30 Industrial Stocks, The Standard & Poor's 500 Stock
Composite Index and the Lipper Growth & Income Fund Index for Endowments, Inc.
and the Lehman Aggregate Bond Index for Bond Portfolio for Endowments, Inc.) or
results of other mutual funds or investment or savings vehicles in
advertisements or in reports furnished to present or prospective shareholders.
Total return for the unmanaged indices will be calculated assuming
reinvestment of dividends and interest, but will not reflect any deductions for
advisory fees, brokerage costs or administrative expenses.
The funds may refer to results compiled by organizations such as CDA
Investment Technologies, Ibbotson Associates, Lipper Analytical Services,
Morningstar, Inc., and Wiesenberger Investment Companies Services and by the
U.S. Department of Commerce. Additionally, the funds may, from time to time,
refer to results published in various newspapers and periodicals, including
Barrons, Forbes, Fortune, Institutional Investor, Kiplinger's Personal Finance
Magazine, Money, U.S. News and World Report and The Wall Street Journal.
The funds may, from time to time, compare their investment results with
the Consumer Price Index, which is a measure of the average change in prices
over time in a fixed market basket of goods and services (E.G. food, clothing,
fuels, transportation, and other goods and services that people buy for
day-to-day living).
The investment results for the funds set forth below were calculated as
described in the funds' prospectus. The percentage increases shown in the
table below or used in published reports of the funds are obtained by
subtracting the index results at the beginning of the period from the index
results at the end of the period and dividing the difference by the index
results at the beginning of the period.
ENDI vs. Various Unmanaged Indices
<TABLE>
<CAPTION>
10-Year Lipper Growth
8/1 - 7/31 ENDI DJIA/1/ S&P 500/2/ and Income/3/
<S> <C> <C> <C> <C>
1986 - 1996 +204% +330% +269% +220%
1985 - 1995 +238 +391 +306 +255
1984 - 1994 +271 +385 +327 +290
1983 - 1993 +260 +333 +294 +249
1982 - 1992 +411 +528 +478 +381
1981 - 1991 +325 +392 +343 +290
1980 - 1990 +326 +392 +344 +301
1979 - 1989 +379 +409 +416 +387
1978 - 1988 +328 +308 +326 +329
1977 - 1987 +384 +388 +417 +412
1976 - 1986 +329 +208 +271 +301
1975 - 1985 +335 +177 +250 +287
1975# - 1985 +333 +177 +248 +287
</TABLE>
BENDI vs. Various Unmanaged Indices
<TABLE>
<CAPTION>
Lehman Lipper Average of
10-Year Brothers Corporate A-Rated
8/1 - 7/31 BENDI Aggregate/4/ Debt Funds/5/
<S> <C> <C> <C>
1986 - 1996 +129% +126% +119%
1985 - 1995 +161 +160 +148
1984 - 1994 +191 +193 +178
1983 - 1993 +219 +218 +201
1982 - 1992 +254 +251 +232
1981 - 1991 +253 +269 +233
1980 - 1990 +204 +217 +188
1979 - 1989 +195 +201 +184
1978 - 1988 +178 +178 +164
1977 - 1987 +157 +164 +151
1976 - 1986 +178 +181 +168
1975 - 1985 +157 N/A +158
1975# - 1985 +158 N/A N/A
</TABLE>
________________
# From July 26, 1975
/1/ The Dow Jones Average of 30 Industrial Stocks is comprised of 30 industrial
companies such as General Motors and General Electric.
/2/ The Standard & Poor's 500 Stock Composite Index is comprised of industrial,
transportation, public utilities, and financial stocks and represents a large
portion of the value of issues traded on the New York Stock Exchange. Selected
issues traded on the American Stock Exchange are also included.
/3/ The Lipper Growth & Income Fund Index is a non-weighted index of the 30
largest funds within the Lipper Growth & Income investment objective. It is
calculated daily with adjustments for income dividends and capital gain
distributions as of the ex-dividend dates.
/4/ The Lehman Brothers Aggregate Bond Index covers all sectors of the fixed
income market and is a combination of the Lehman Brothers Treasury Bond Index,
the Agency Bond Index, the Corporate Bond Index, the Yankee Bond Index and the
Mortgage Backed Securities Index. Its inception date is December 31, 1975.
/5/ The Lipper Average of Corporate A-Rated Debt Funds is an average of the
cumulative total reinvestment performance of funds that invest at least 65% of
assets in corporate debt issues rated "A" or better or government issues.
SEE THE DIFFERENCE TIME CAN MAKE IN AN INVESTMENT PROGRAM
<TABLE>
<CAPTION>
. . . and had taken
all dividends and
capital gain
distributions
in shares, your
If you had investment would
invested $50,000 have been worth
in ENDI this many this much at
years ago . . . 7/31/96
| |
<S> <C> <C>
Number
Periods
of Years Value
8/1 - 7/31
1 1995 - 1996 $56,608
2 1994 - 1996 67,120
3 1993 - 1996
68,980
4 1992 - 1996
75,911
5 1991 - 1996
87,862
6 1990 - 1996
101,069
7 1989 - 1996
105,240
8 1988 - 1996
129,677
9 1987 - 1996
126,685
10 1986 - 1996
152,164
11 1985 - 1996
191,071
12 1984 - 1996
249,233
13 1983 - 1996
248,385
14 1982 - 1996
387,526
15 1981 - 1996
373,273
16 1980 - 1996
430,139
17 1979 - 1996
504,237
18 1978 - 1996
555,674
19 1977 - 1996
612,709
20 1976 - 1996
652,424
21 1975#- 1996
828,238
</TABLE>
# From July 26, 1975
SEE THE DIFFERENCE TIME CAN MAKE IN AN INVESTMENT PROGRAM
<TABLE>
<CAPTION>
. . . and had taken
all dividends and
capital gain
distributions
in shares, your
If you had investment would
invested $50,000 have been worth
in BENDI this many this much at
years ago . . . 7/31/96
| |
<S> <C> <C>
Number
Periods
of Years Value
8/1 - 7/31
1 1995 - 1996 $53,125
2 1994 - 1996 57,361
3 1993 - 1996
56,534
4 1992 - 1996
63,171
5 1991 - 1996
74,976
6 1990 - 1996
83,057
7 1989 - 1996
88,750
8 1988 - 1996
100,894
9 1987 - 1996
109,588
10 1986 - 1996
114,426
11 1985 - 1996
138,413
12 1984 - 1996
166,981
13 1983 - 1996
180,266
14 1982 - 1996
223,447
15 1981 - 1996
264,574
16 1980 - 1996
252,463
17 1979 - 1996
261,832
18 1978 - 1996
280,114
19 1977 - 1996
282,166
20 1976 - 1996
317,588
21 1975#- 1996
356,493
</TABLE>
# From July 26, 1975
Illustration of a $50,000 investment in ENDI with
dividends reinvested and capital gain distributions taken in shares
(for the period July 26, 1975 through July 31, 1996)
<TABLE>
<CAPTION>
COST OF SHARES VALUE OF SHARES
Year Total From From
Ended Annual Dividends Investment From Initial Capital Gains Dividends Total
July 31 Dividends (cumulative) Cost Investment Reinvested Reinvested Value
<S> <C> <C> <C> <C> <C> <C> <C>
1975# $ 0 $ 0 $50,000 $49,769 $ 0 $ 0 $49,770
1976 2,408 2,408 52,408 60,781 0 2,695 63,476
1977 2,454 4,862 54,862 62,331 0 5,259 67,590
1978 2,899 7,761 57,761 65,910 0 8,615 74,525
1979 3,511 11,272 61,272 69,263 0 12,868 82,131
1980 4,322 15,594 65,594 77,021 0 19,256 96,277
1981 6,326 21,920 71,920 79,847 4,739 26,356 110,942
1982 7,869 29,789 79,789 64,678 13,443 28,739 106,860
1983 6,722 36,511 86,511 96,477 20,052 50,197 166,726
1984 7,502 44,013 94,013 83,847 31,536 50,774 166,157
1985 9,036 53,049 103,049 95,601 53,303 67,832 216,736
1986 10,623 63,672 113,672 104,971 81,000 86,184 272,155
1987 12,851 76,523 126,523 104,222 123,158 99,505 326,885
1988 15,733 92,256 142,256 88,382 130,787 100,178 319,347
1989 17,918 110,174 160,174 96,368 167,745 129,388 393,501
1990 22,799 132,973 182,973 89,440 178,016 142,283 409,739
1991 21,836 154,809 204,809 94,623 202,831 173,872 471,326
1992 20,318 175,127 225,127 96,580 249,826 199,127 545,533
1993 21,415 196,542 246,542 97,479 279,694 223,176 600,349
1994 22,417 218,959 268,959 90,868 296,050 230,062 616,980
1995 22,961 241,920 291,920 95,522 369,066 266,973 731,561
1996 25,984 267,904 317,904 98,431 428,636 301,171 828,238
</TABLE>
# From July 26, 1975
The dollar amount of capital gain distributions during the period was
$383,674.
Illustration of a $50,000 investment in BENDI with
dividends reinvested and capital gain distributions taken in shares
(for the period July 26, 1975 through July 31, 1996)
<TABLE>
<CAPTION>
COST OF SHARES VALUE OF SHARES
Year Total From From
Ended Annual Dividends Investment From Initial Capital Gains Dividends Total
July 31 Dividends (cumulative) Cost Investment Reinvested Reinvested Value
<S> <C> <C> <C> <C> <C> <C> <C>
1975# $ 0 $ 0 $50,000 $50,065 $ 0 $ 0 $50,064
1976 3,466 3,466 53,466 52,455 0 3,668 56,123
1977 4,395 7,861 57,861 54,854 0 8,315 63,169
1978 4,798 12,659 62,659 51,161 0 12,472 63,633
1979 5,595 18,254 68,254 50,165 0 17,913 68,078
1980 7,331 25,585 75,585 46,568 0 24,036 70,604
1981 7,990 33,575 83,575 39,235 0 28,137 67,372
1982 9,678 43,253 93,253 40,739 0 39,032 79,771
1983 10,518 53,771 103,771 45,384 0 53,497 98,881
1984 11,193 64,964 114,964 43,796 0 62,950 106,746
1985 12,231 77,195 127,195 47,570 0 81,205 128,775
1986 13,557 90,752 140,752 52,296 0 103,480 155,776
1987 13,829 104,581 154,581 50,040 0 112,609 162,649
1988 13,553 118,134 168,134 48,557 5,210 122,900 176,667
1989 15,800 133,934 183,934 50,630 5,433 144,778 200,841
1990 17,213 151,147 201,147 49,693 5,332 159,584 214,609
1991 19,146 170,293 220,293 50,432 5,411 181,896 237,739
1992 20,570 190,863 240,863 55,202 5,923 221,039 282,164
1993 22,376 213,239 263,239 55,827 12,805 246,660 315,292
1994 22,971 236,210 286,210 47,876 29,925 232,942 310,743
1995 23,564 259,774 309,774 47,762 31,232 256,528 335,522
1996 25,003 284,777 334,777 47,223 30,879 278,391 356,493
</TABLE>
# From July 26, 1975
The dollar amount of capital gain distributions during the period was $33,339.
EXPERIENCE OF INVESTMENT ADVISER - Capital Research and Management
Company manages nine common stock funds that are at least 10 years old. In the
rolling 10-year periods since January 1, 1966 (121 in all), those funds have
had better total returns than the Standard & Poor's 500 Composite Stock Index
in 94 of the 121 periods.
Note that past results are not an indication of future investment results.
Also, the fund has different investment policies than the funds mentioned
above. These results are included solely for the purpose of informing
investors about the experience and history of Capital Research and Management
Company.
<TABLE>
ENDOWMENTS, INC.
INVESTMENT PORTFOLIO, JULY 31, 1996
Percent
of Net
INDUSTRY DIVERSIFICATION Assets
- --------------------------------------------------- ----------
<S> <C> <C> <C>
Common Stocks
Banking 10.27%
Health & Personal Care 7.52
Energy Sources 6.48
Insurance 6.29
Forest Products & Paper 4.87
Utilities: Electric & Gas 4.35
Business & Public Services 3.74
Transportation: Rail & Road 3.66
Real Estate 3.22
Machinery & Engineering 3.04
Beverages & Tobacco 2.85
Merchandising 2.43
Food & Household Products 2.29
Telecommunications 2.25
Chemicals 2.06
Recreation & Other Consumer Products 1.96
Data Processing & Reproduction 1.91
Broadcasting & Publishing 1.11
Automobiles 1.10
Financial Services 1.09
Metals: Nonferrous .98
Multi-Industry .96
Electrical & Electronics .59
Electronic Instruments .07
----------
75.09
Common stocks in initial period of acquisition 2.93
Short-Term Securities 21.77
Excess of cash and receivables over payables .21
----------
Net Assets 100.00%
==========
Percent
of Net
TEN LARGEST HOLDINGS Assets
- --------------------------------------------------- ----------
American Home Products 2.87%
Wal-Mart Stores 2.43
General Mills 2.29
Weingarten Realty Investors 2.17
Dun & Bradstreet 2.04
Washington Mutual Savings Bank 2.03
Phillips Petroleum 2.00
Atlantic Richfield 1.96
International Business Machines 1.91
Warner-Lambert 1.84
----------
21.54%
==========
Percent
Number Market Of Net
COMMON STOCKS of shares Value Assets
- --------------------------------------------------- --------------------------------
ENERGY
Energy Sources-6.48%
Amoco Corp. 10000 $ 668,750 1.13%
Atlantic Richfield Co. 10000 1160000 1.96
Exxon Corp. 10000 822500 1.39
Phillips Petroleum Co. 30000 1185000 2.00
Utilities: Electric & Gas-4.35%
Consolidated Edison Co. of New York, Inc. 17000 459000 .77
Duke Power Co. 15000 718125 1.21
Entergy Corp. 25000 637500 1.07
Pacific Gas and Electric Co. 20000 395000 .67
Union Electric Co. 10000 376250 .63
-----------------------
6422125 10.83
-----------------------
MATERIALS
Chemicals-2.06%
Armor All Products Corp. 40000 627500 1.06
Dow Chemical Co. 8000 595000 1.00
Forest Products & Paper-4.87%
Georgia-Pacific Corp. 10000 747500 1.26
International Paper Co. 15000 568125 .96
Louisiana-Pacific Corp. 30000 611250 1.03
Union Camp Corp. 20000 960000 1.62
Metals: Nonferrous-0.98%
Aluminum Co. of America 10000 580000 .98
-----------------------
4689375 7.91
-----------------------
CAPITAL EQUIPMENT
Data Processing & Reproduction-1.91%
International Business Machines Corp. 10500 1132688 1.91
Electrical & Electronics-0.59%
Nokia Corp., Class A (American Depositary Receipts)
(Finland) 10000 352500 .59
Electronic Instruments-0.07%
Imation Corp. /1/ 1880 42770 .07
Machinery & Engineering-3.04%
Caterpillar Inc. 8000 527000 .89
Crompton & Knowles Corp. 50000 750000 1.27
Parker Hannifin Corp. 15000 523125 .88
-----------------------
3328083 5.61
-----------------------
CONSUMER GOODS
Automobiles-1.10%
Ford Motor Co., Class A 20000 650000 1.10
Beverages & Tobacco-2.85%
Anheuser-Busch Companies, Inc. 10000 747500 1.26
Philip Morris Companies Inc. 9000 941625 1.59
Food & Household Products-2.29%
General Mills, Inc. 25000 1356250 2.29
Health & Personal Care-7.52%
American Home Products Corp. 30000 1702500 2.87
Johnson & Johnson 10000 477500 .80
Merck & Co., Inc. 10000 642500 1.08
Schering-Plough Corp. 10000 551250 .93
Warner-Lambert Co. 20000 1090000 1.84
Recreation & Other Consumer Products-1.96%
American Greetings Corp., Class A 20000 485000 .82
Duracell International Inc. 15000 676875 1.14
-----------------------
9321000 15.72
-----------------------
SERVICES
Broadcasting & Publishing-1.11%
Gannett Co., Inc. 10000 656250 1.11
Business & Public Services-3.74%
Alexander & Baldwin, Inc. 30000 712500 1.20
Dun & Bradstreet Corp. 21000 1207500 2.04
WMX Technologies, Inc. 10000 296250 .50
Merchandising-2.43%
Wal-Mart Stores, Inc. 60000 1440000 2.43
Telecommunications-2.25%
AT&T Corp. 15000 781875 1.32
Ameritech Corp. 10000 555000 .93
Transportation: Rail & Road-3.66%
CSX Corp. 20000 965000 1.63
Union Pacific Corp. 6000 411000 .69
USFreightways Corp. 45000 795938 1.34
-----------------------
7821313 13.19
-----------------------
FINANCE
Banking-10.27%
H.F. Ahmanson & Co. 30000 757500 1.28
Boatmen's Bancshares, Inc. 15000 600000 1.01
Central Fidelity Banks, Inc. 23400 508950 .86
Comerica Inc. 15000 658125 1.11
First Hawaiian, Inc. 20000 541250 .91
Jefferson BankShares, Inc. 30000 682500 1.15
National City Corp. 15000 519375 .88
U.S. Bancorp 18000 616500 1.04
Washington Mutual Savings Bank 33150 1205831 2.03
Financial Services-1.09%
Beneficial Corp. 12000 648000 1.09
Insurance-6.29%
AMBAC Inc. 20000 955000 1.61
American General Corp. 27000 938250 1.58
General Re Corp. 5000 733750 1.24
Liberty Corp. 20000 617500 1.04
Trenwick Group Inc. 10000 487500 .82
Real Estate-3.22%
Security Capital Pacific Trust 30000 622500 1.05
Weingarten Realty Investors 32000 1288000 2.17
-----------------------
12380531 20.87
-----------------------
MULTI-INDUSTRY
Multi-Industry-0.96%
Minnesota Mining and Manufacturing Co. 8800 571999 .96
-----------------------
MISCELLANEOUS
Other common stocks in initial period of acquisition 1737500 2.93
-----------------------
TOTAL COMMON STOCKS (cost: $37,638,444) 46271926 78.02
-----------------------
Principal
Amount
SHORT-TERM SECURITIES (000)
Corporate Short-Term Notes-18.57%
American Brands Inc. 5.45% due 10/16/96 $1,400 1383650 2.33%
Associates Corp. of North America 5.70% due 8/1/96 1,300 1299794 2.19
H.J. Heinz Co. 5.28% due 8/21/96 770 767628 1.29
Hewlett-Packard Co. 5.37% due 10/4/96 1,500 1485321 2.51
National Rural Utilities Cooperative Finance Corp.
5.36% due 9/25/96 1,200 1189957 2.01
J.C. Penney Funding Corp. 5.34% due 8/29/96 1,400 1393978 2.35
Pitney Bowes Credit Corp. 5.33% due 8/15/96 1,200 1197320 2.02
Raytheon Co. 5.26% due 8/9/96 1,000 998685 1.68
Weyerhaeuser Co. 5.27% due 8/8/96 1,300 1298446 2.19
------------ ----------
11014779 18.57
------------ ----------
Federal Agency Discount Notes-3.20%
Federal National Mortgage Assn. 5.24% due 8/23/96 1900 1,893,640 3.20
----------- ----------
TOTAL SHORT-TERM SECURITIES (cost: $12,908,668) 12908419 21.77
------------ ----------
TOTAL INVESTMENT SECURITIES (cost: $50,547,112) 59180345 99.79
Excess of cash and receivables over payables 124552 .21
-----------------------
NET ASSETS $59,304,897 100.00%
=======================
/1/ Non-income-producing security.
See Notes to Financial Statements
Common stocks added to the portfolio
since January 31, 1996
- --------------------------------------
H.F. Ahmanson
Alexander & Baldwin
American Greetings
Ameritech
Anheuser-Busch
Crompton & Knowles
Duracell International
General Re
Imation
Jefferson BankShares
National City
Nokia
Parker Hannifin
USFreightways
Common stocks eliminated from the portfolio
since January 31, 1996
- --------------------------------------
Allstate
Boeing
General Electric
Huntington Bancshares
Integra Financial
J.P. Morgan
Ohio Casualty
Paul Revere
TNT Freightways
Western Investment Real Estate Trust
</TABLE>
<TABLE>
Endowments, Inc.
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
at July 31, 1996
<S> <C> <C>
Assets:
Investment securities at market
(cost: $50,547,112) $59,180,345
Cash 76,649
Receivables for dividends 79,241
------------
59,336,235
Liabilities:
Payables for-
Management services $25,305
Accrued expenses 6,033 31,338
------------ ------------
Net Assets at July 31, 1996-
Equivalent to $18.61 per share on
3,186,313 shares of $1 par value
capital stock outstanding (authorized
capital stock--6,000,000 shares) $59,304,897
=============
Statement of Operations
for the year ended July 31, 1996
Investment Income:
Income:
Dividends $ 1,574,072
Interest 730,449 $2,304,521
------------
Expenses:
Management services fee 300,818
Custodian fee 3,013
Registration statement and prospectus 13,660
Auditing fees 30,200
Legal fees 10,116
Taxes other than federal income tax 46,428
Other expenses 28,324 432,559
------------ -----------
Net investment income 1,871,962
------------
Realized Gain and Unrealized
Depreciation on Investments:
Net realized gain 6,351,802
Net change in unrealized
appreciation on investments:
Beginning of year 9,360,047
End of year 8,633,233
------------
Net unrealized depreciation on investments (726,814)
------------
Net realized gain and unrealized
depreciation on investments 5,624,988
------------
Net Increase in Net Assets Resulting
from Operations $7,496,950
============
Statement of Changes in Net Assets
Year ended July 31
1996 1995
Operations:
Net investment income $ 1,871,962 $ 2,026,933
Net realized gain on investments 6,351,802 2,706,488
Net unrealized appreciation (depreciation)
on investments (726,814) 4,723,583
------------ ------------
Net increase in net assets resulting
from operations 7,496,950 9,457,004
------------- -------------
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income (1,975,816) (1,942,631)
Distributions from net realized
gain on investments (3,710,692) (4,141,493)
------------- -------------
Total dividends and distributions (5,686,508) (6,084,124)
------------- -------------
Capital Share Transactions:
Proceeds from shares sold:
279,532 and 317,243
shares, respectively 5,201,405 5,302,616
Proceeds from shares issued in
reinvestment of net investment income
dividends and distributions of net
realized gain on investments:
283,073 and 362,222 shares,
respectively 5,156,184 5,645,016
Cost of shares repurchased:
518,349 and 618,230
shares, respectively (9,598,279) (10,507,091)
------------- -------------
Net increase in net assets resulting
from capital share transactions 759,310 440,541
------------- -------------
Total Increase in Net Assets 2,569,752 3,813,421
Net Assets:
Beginning of year 56,735,145 52,921,724
------------- -------------
End of year (including undistributed
net investment income: $157,540 and
$261,394, respectively) $59,304,897 $ 56,735,145
============= =============
See Notes to Financial Statements
</TABLE>
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 fund
seeks to provide long-term growth of principal with income as a secondary
objective, primarily through investments in stocks. The following paragraphs
summarize the significant accounting policies consistently followed by the fund
in the preparation of its financial statements:
Common stocks traded on a national securities exchange (or reported on the
NASDAQ national market) and securities traded in the over-the-counter market
are stated at the last reported sales price on the day of valuation; other
securities, and securities for which no sale was reported on that date, are
stated at the last quoted 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. 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 federal 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 $3,013 includes $2,586 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 investment income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision is
required.
As of July 31, 1996, net unrealized appreciation on investments for book
and federal income tax purposes aggregated $8,633,233, of which $9,435,862
related to appreciated securities and $802,629 related to depreciated
securities. There was no difference between book and tax realized gains on
securities transactions for the year ended July 31, 1996. The cost of portfolio
securities for book and federal income tax purposes was $50,547,112 at July 31,
1996.
3. The fee of $300,818 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, 1996, no such fee reduction
was required.
Effective December 1, 1995, CRMC has voluntarily agreed to waive its
management services fees to the extent necessary to ensure that the fund's
annual expenses do not exceed 0.75% of average net assets. As of July 31, 1996,
no such fee reduction was required.
No fees were paid by the fund to its officers and Directors.
4. As of July 31, 1996, accumulated undistributed net realized gain on
investments was $4,774,878 and additional paid-in capital was $42,552,933.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $18,036,311 and $22,375,618, respectively, during the
year ended July 31, 1996.
<TABLE>
ENDOWMENTS, INC.
PER-SHARE DATA AND RATIOS
Year ended July 31
----------------------------------------
1996 1995 1994 1993 1992
Net Asset Value, Beginning of Year $18.06 $ 17.18 $ 18.43 $ 18.26 $ 17.89
----------------------------------------
<S> <C> <C> <C> <C> <C>
Income from Investment Operations:
Net investment income .58 .63 .65 .66 .78
Net realized and unrealized
gain (loss) on investments 1.73 2.21 (.16) 1. 1.
----------------------------------------
Total income from investment operations 2.31 2.84 .49 1. 2.
----------------------------------------
Less Distributions:
Dividends from net investment income (.61) (.61) (.66) (.69) (.73)
Distributions from net realized gains (1.15) (1.35) (1.08) (.85) (1.42)
----------------------------------------
Total distributions (1.76) (1.96) (1.74) (1.54) (2.15)
----------------------------------------
Net Asset Value, End of Year $18.61 $ 18.06 $ 17.18 $ 18.43 $ 18.26
========================================
Total Return 13.22% 18.57% 2.77% 10.05% 15.74%
Ratios/Supplemental Data:
Net assets, end of year (in millions) $59 $57 $53 $72 $58
Ratio of expenses to average net assets .72% .73% .73% .64% .70%
Ratio of net income to average net assets 3.12% 3.70% 3.78% 3.72% 4.37%
Portfolio turnover rate 38.73% 24.04% 25.58% 29.70% 20.35%
</TABLE>
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, 1996, 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 the 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 the 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 the
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 at July 31, 1996 by correspondence with the custodian. 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 the per-share data and ratios
referred to above present fairly, in all material respects, the financial
position of Endowments, Inc. as of
July 31, 1996, 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.
Los Angeles, California
August 30, 1996
<TABLE>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
INVESTMENT PORTFOLIO, JULY 31, 1996
Principal Percent
Amount Market of Net
BONDS & NOTES (000) Value Assets
<S> <C> <C> <C>
Industrials - 17.28%
360/0/ Communications Co. 7.125% due 3/1/03 $550 $529,469
360/0/ Communications Co. 7.50% due 3/1/06 500 477035 2.43
General Motors Corp. 8.80% due 3/1/21 2000 2226140 5.37
Hanson America, Inc. 2.39% convertible
debentures due 3/1/01 /1/ 1000 855000 2.06
Inco Ltd. 9.875% due 6/15/19 300 323688
Inco Ltd. 9.60% due 6/15/22 700 729316 2.54
Philips Electronics N.V. 7.20% due 6/1/26 500 494130 1.19
TCI Communications, Inc. 8.75% due 8/1/15 500 479835 1.16
U S WEST, Inc. 0% convertible
debentures due 6/25/11 3000 1050000 2.53
------------- ---------
7164613 17.28
------------- ---------
Electric Utilities - 5.27%
Big Rivers Electric Corp. 10.70% due 9/15/17 2000 2186160 5.27
------------- ---------
Transportation /2/ - 10.63%
Airplanes Pass Through Trust, Class C, 8.15% due 3/15/19 1000 997500 2.41
Continental Airlines, Inc., Series 1996-A, 6.94% due 4/15/15 /1/ 500 481250 1.16
Delta Air Lines, Inc., Series 1993-A2, 10.50% due 4/30/16 500 588070 1.42
Jet Equipment Trust, Series 1994-A, 11.79% due 6/15/13 /1/ 750 860625
Jet Equipment Trust, Series 1995-B, Class A, 7.63%
due 2/15/15 /1/ 491 492743 4.46
Jet Equipment Trust, Series 1995-B, Class B, 7.83%
due 2/15/15 /1/ 491 494069
USAir, Inc., Series 1996-B, 7.50% due 4/15/08 /1/ 500 491250 1.18
-------------- ---------
4405507 10.63
-------------- ---------
Financial - 10.35%
American Re Corp. 10.875% due 9/15/04 1500 1625190 3.92
Equitable Life Assurance Society of the United States
7.70% due 12/1/15 /1/ 1000 965640 2.33
General Electric Capital Corp. 8.875% due 5/15/09 1000 1140770 2.75
Terra Nova (Bermuda) Holdings Ltd. 10.75% due 7/1/05 500 558125 1.35
------------- ---------
4289725 10.35
------------- ---------
Real Estate - 1.12%
Irvine Co. 7.46% due 3/15/06 /1/ /3/ 500 465000 1.12
------------- ---------
Collateralized Mortgage/Asset-Backed
Obligations /2/ - 5.39%
CSFB Finance Co. Ltd. 5.00% due 11/15/05 /1/ 500 481250 1.16
Green Tree Financial Corp., Series 1995-A, Class NIM,
7.25% due 7/15/05 389 386369 .93
Merrill Lynch Mortgage Investors, Inc., Series 1995-A,
7.251% due 6/15/21 /4/ 459 459555 1.11
Prudential Home Mortgage Securities Co., Inc.,
Series 1992-2033, Class A-12, 7.50% due 11/25/22 422 422186 1.02
Structured Asset Securities Corp, Series 1996-CFL,
Class A2A, 7.75% due 2/25/28 482 484715 1.17
-------------- ---------
2234075 5.39
-------------- ---------
Floating Rate Eurodollar Notes (Undated) /4/ - 6.10%
Bank of Nova Scotia 5.375% 1000 825000 1.99
Canadian Imperial Bank of Commerce 5.375% 1000 843750 2.04
Midland Bank 6.00% 1000 858800 2.07
-------------- ---------
2527550 6.10
-------------- ---------
Governments (excluding U.S. Government) &
Governmental Authorities - 5.81%
Ontario (Province of) 17.00% due 11/5/11 1100 1200694 2.90
Quebec (Province of) 13.25% due 9/15/14 1000 1207980 2.91
-------------- ---------
2408674 5.81
-------------- ---------
Federal Agency Obligations - Mortgage
Pass-Throughs /2/ - 12.85%
Federal Home Loan Mortgage Corp. 8.75% due 7/1/08 138 143639
Federal Home Loan Mortgage Corp. 12.50% due 12/1/12 60 69861 .91
Federal Home Loan Mortgage Corp. 9.00% due 3/1/20 155 162807
Federal National Mortgage Assn. 9.00% due 11/1/20 268 281818 .68
Government National Mortgage Assn. 8.50% due 12/15/08 417 434573
Government National Mortgage Assn. 7.50% due 1/15/24 626 614760
Government National Mortgage Assn 6.50% due 2/20/24 876 878136
Government National Mortgage Assn. 6.00% due 6/20/24 904 911445 11.26
Government National Mortgage Assn. 8.50% due 10/15/25 443 454854
Government National Mortgage Assn. 8.50% due 5/15/26 808 828526
Government National Mortgage Assn. 10.00% due 7/15/26 500 543750
------------------------
5324169 12.85
------------------------
U.S. Treasury Obligations - 19.99%
9.25% due 8/15/98 2500 2641399
11.625% due 11/15/04 500 652110
10.375% due 11/15/12 2300 2902669 19.99
8.875% due 8/15/17 1750 2087698
-------------- ---------
8283876 19.99
-------------- ---------
TOTAL BONDS & NOTES (cost: $40,020,767) 39289349 94.79
-------------- ---------
SHORT-TERM SECURITIES
Corporate Short-Term Notes - 2.66%
Associates Corp. of North America 5.70% due 8/1/96 1100 1099826 2.66
-------------- ---------
TOTAL SHORT-TERM SECURITIES (cost: $1,099,826) 1099826 2.66
-------------- ---------
TOTAL INVESTMENT SECURITIES (cost: $41,120,593) 40389175 97.45
Excess of cash and receivables over payables 1058892 2.55
-------------- ---------
NET ASSETS $41,448,067 100.00%
============== =========
/1/ Purchased in a private placement transaction; resale
to the public may require registration or sale only to
qualified institutional buyers.
/2/ Pass-through securities backed by a pool of
mortgages or other loans on which principal
payments are periodically made. Due to the possibility
of early principal payments, the effective maturity of
these securities is shorter than the stated maturity.
/3/ Valued under procedures established
by the Board of Directors.
/4/ Coupon rates may change periodically.
See Notes to Financial Statements
</TABLE>
<TABLE>
Bond Portfolio for Endowments, Inc.
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
at July 31, 1996
<S> <C> <C>
Assets:
Investment securities at market
(cost: $41,120,593) $40,389,175
Cash 139,590
Receivables for-
Sales of investments $ 2,770
Accrued interest 940,588 943,358
-----------------------------
41,472,123
Liabilities:
Payables for-
Management services 19,005
Accrued expenses 5,051 24,056
-----------------------------
Net Assets at July 31, 1996-
Equivalent to $16.63 per share on
2,492,949 shares of $1 par value
capital stock outstanding (authorized
capital stock - 5,000,000 shares) $41,448,067
===========
Statement of Operations
for the year ended July 31, 1996
Investment Income:
Interest income $ 3,396,478
Expenses:
Management services fee $ 214,202
Custodian fee 2,796
Registration statement and prospectus 13,855
Auditing fees 30,200
Legal fees 10,059
Taxes other than federal income tax 43,221
Other expenses 28,126
----------------
Total expenses before fee waiver 342,459
Fee waiver 21,023 321,436
-----------------------------
Net investment income 3,075,042
-------------
Realized Gain and Unrealized
Depreciation on Investments:
Net realized gain 123,217
Net change in unrealized depreciation
on investments:
Beginning of year (205,230)
End of year (731,418)
----------------
Net unrealized depreciation on
investments (526,188)
-------------
Net realized gain and unrealized
depreciation on investments (402,971)
-------------
Net Increase in Net Assets Resulting
from Operations $ 2,672,071
===========
Statement of Changes in Net Assets
Year ended July 31
1996 1995
Operations:
Net investment income $ 3,075,042 $ 3,372,869
Net realized gain (loss) on investments 123,217 (339,552)
Net unrealized appreciation (depreciation) on
investments (526,188) 381,338
-----------------------------
Net increase in net assets resulting
from operations 2,672,071 3,414,655
-----------------------------
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income (3,085,285) (3,338,883)
Distributions from net realized
gain on investments - (191,002)
-----------------------------
Total dividends and distributions (3,085,285) (3,529,885)
-----------------------------
Capital Share Transactions:
Proceeds from shares sold:
168,909 and 214,880
shares, respectively 2,838,556 3,539,415
Proceeds from shares issued in
reinvestment of net investment income
dividends and distributions of net
realized gain on investments:
94,993 and 130,272 shares,
respectively 1,596,233 2,134,210
Cost of shares repurchased:
377,703 and 484,790
shares, respectively (6,407,611) (8,030,465)
-----------------------------
Net decrease in net assets resulting
from capital share transactions (1,972,822) (2,356,840)
-----------------------------
Total Decrease in Net Assets (2,386,036) (2,472,070)
Net Assets:
Beginning of year 43,834,103 46,306,173
-----------------------------
End of year (including undistributed
net investment income: $299,593 and
$309,836, respectively) $41,448,067 $43,834,103
================ ===========
See Notes to Financial Statements
</TABLE>
Bond Portfolio for Endowments, Inc.
Notes to Financial Statements
1. Bond Portfolio for Endowments, Inc. (the "fund") is registered under the
Investment Company Act of 1940 as an open-end, diversified management
investment company. The fund seeks to provide as high a level of current income
as is consistent with the preservation of capital through investments in
fixed-income securities. The following paragraphs summarize the significant
accounting policies consistently followed by the fund in the preparation of its
financial statements:
Bonds and notes are valued at prices obtained from a bond-pricing service
provided by a major dealer in bonds, when such prices are available; however,
in circumstances where the investment adviser deems it appropriate to do so,
such securities will be valued at the mean of their representative quoted bid
and asked prices or, if such prices are not available, at prices for securities
of comparable maturity, quality, and type. 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. 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 federal 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 $2,796 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 investment income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision is
required.
As of July 31, 1996, net unrealized depreciation on investments for book
and federal income tax purposes aggregated $731,418, of which $388,952 related
to appreciated securities and $1,120,370 related to depreciated securities.
There was no difference between book and tax realized gains on securities
transactions for the year ended July 31, 1996. During the year ended July 31,
1996, the fund utilized a capital loss carryforward totaling $123,217 to
offset, for tax purposes, capital gains realized during the year. The fund has
available at July 31, 1996 a net capital loss carryforward totaling $326,488,
which may be used to offset capital gains realized during subsequent years
through July 31, 2003. It is the intention of the fund not to make
distributions from capital gains until the capital loss carryforward is
utilized. The cost of portfolio securities for book and federal income tax
purposes was $41,120,593 at July 31, 1996.
3. The fee of $214,202 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, 1996, no such fee reduction
was required.
Effective December 1, 1995, CRMC has voluntarily agreed to waive its
management services fees to the extent necessary to ensure that the fund's
expenses do not exceed 0.75% of average net assets. Fee reductions were $21,023
for the year ended July 31, 1996.
No fees were paid by the fund to its officers and Directors.
4. As of July 31, 1996, accumulated net realized loss on investments was
$326,488 and additional paid-in capital was $39,713,431.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $22,109,357 and $24,176,328, respectively, during the
year ended July 31, 1996.
<TABLE>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
PER-SHARE DATA AND RATIOS
Year ended July 31
-----------------------------------------------------------------------
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year 16.82 16.86 19.66 19.44 17.76
-----------------------------------------------------------------------
Income from Investment Operations
Net investment income 1.22 1.26 1.32 1.49 1.47
Net realized and unrealized
gain (loss) on investments (.19) .01 (1.51) .64 1.7
-----------------------------------------------------------------------
Total income from investment oper 1.03 1.27 (.19) 2.13 3.17
-----------------------------------------------------------------------
Less Distributions:
Dividends from net investment inco (1.22) (1.24) (1.35) (1.48) (1.49)
Distributions from net realized ga - (.07) (1.26) (.43) -
-----------------------------------------------------------------------
Total distributions (1.22) (1.31) (2.61) (1.91) (1.49)
-----------------------------------------------------------------------
Net Asset Value, End of Year 16.63 16.82 16.86 19.66 19.44
===================================================================
Total Return 6.25% /1/ 7.97% (1.44)% 11.74% 18.69%
Ratios/Supplemental Data:
Net assets, end of year (in million $41 $44 $46 $67 $65
Ratio of expenses to average net as .75% /1/ .76% .77% .65% .68%
Ratio of net income to average net 7.17% 7.52% 6.99% 7.69% 8.04%
Portfolio turnover rate 54.43% 69.22% 82.12% 35.97% 63.30%
/1/ Had CRMC not waived management services fees,
the fund's expense ratio would have been .80%.
</TABLE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of
Bond Portfolio for Endowments, Inc.:
We have audited the accompanying statement of assets and liabilities of
Bond Portfolio for Endowments, Inc. (the "fund"), including the schedule of
portfolio investments, as of July 31, 1996, 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, 1996 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 Bond Portfolio for Endowments, Inc. as of July 31, 1996, 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.
Los Angeles, California
August 30, 1996
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
Included in Prospectus - Part A
Financial Highlights
Included in Statement of Additional Information - Part B
Investment Portfolio
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Notes to Financial Statements
Selected Per-Share Data and Ratios
Independent Auditors' Report
(b) Exhibits.
1. On file (see SEC files nos. 811-1884 and 2-34371)
2. On file (see SEC files nos. 811-1884 and 2-34371)
3. None
4. On file (see SEC files nos. 811-1884 and 2-34371)
5. On file (see SEC files nos. 811-1884 and 2-34371)
6. None
7. None
8. On file (see SEC files nos. 811-1884 and 2-34371)
9. On file (see SEC files nos. 811-1884 and 2-34371)
10. Not applicable to this filing
11. Consent of Independent Auditors
12. None
13. None
14. None
15. None
16. Updates to previously filed schedule for computation of each performance
quotation provided in the Registration Statement in response to Item 22 (see
SEC files nos. 811-1884 and 2-34371)
Item 25. Persons Controlled by or under Common Control with Registrant.
None.
Item 26. Number of Holders of Securities.
As of August 31, 1996
<TABLE>
<CAPTION>
<S> <C>
Title of Class Number of Record-Holders
Common Stock 58
($1.00 Par Value)
</TABLE>
Item 27. Indemnification.
Registrant is a joint-insured under Investment Adviser/Mutual Fund Errors
and Omissions Policies written by American International Surplus Lines
Insurance Company, Chubb Custom Insurance Company, and ICI Mutual Insurance
Company which insures its officers and directors against certain liabilities.
The following are certain provisions of the Delaware Corporation Law
applicable to the Registrant:
Subsection (a) of Section 145 of the Delaware Corporation Law empowers a
corporation to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal administrative or investigative (other than
an action by or in the right of the corporation) by reason of the fact that he
is or was a director, officer, employee or agent of the corporation or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation or enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that such person acted in
any of the capacities set forth above, against expenses actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that a court of equity or the court in which such
action or suit was brought shall determine that despite the adjudication of
liability such person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper.
Section 145 further provides that to the extent a director or officer of a
corporation has been successful on the merits or otherwise in the defense of
any action, suit or proceeding referred to in subsections (a) and (b) or in the
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith; that indemnification provided for by Section 145 shall
not be deemed exclusive of any other rights to which the indemnified party may
be entitled; that the scope of indemnification extends to directors, officers,
employees or agents of a constituent corporation absorbed in a consolidation or
merger and persons serving in that capacity at the request of the constituent
corporation for another; and empowers the corporation to purchase and maintain
insurance on behalf of a director or officer of the corporation against any
liability asserted against him or incurred by him in any such capacity or
arising out of his status as such whether or not the corporation would have the
power to indemnify him against such liabilities under Section 145.
The By-Laws of the Corporation state:
Section 11.01. The corporation shall indemnify its directors and officers and
may indemnify its employees and agents to the full extent permitted by the law
of the State of Delaware; provided, however, that the corporation shall not
indemnify any of its directors or officers against any liability to the
corporation or to its stockholders to which he or she would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or her office
as described in Section 17(h) of the Investment Company Act of 1940 ("disabling
conduct"). The corporation shall indemnify any of its directors or officers
against any liability to the corporation or to its stockholders if:
(1) a court or other body before whom a proceeding relating to liability
was brought renders a final decision on the merits finding such director or
officer not liable by reason of disabling conduct or
(2) in the absence of such a decision either:
(a) a majority of a quorum of directors, who are neither interested
persons of the corporation as defined in Section 2(a)(19) of the Investment
Company Act of 1940 nor parties to the proceeding, or
(b) independent legal counsel in a written opinion makes a reasonable
determination, based on a review of the facts, that such director or officer is
not liable by reason of disabling conduct.
The corporation may advance funds to cover expenses, including attorneys'
fees, incurred by any director or officer in connection with the defense of any
such proceeding, provided that such director or officer undertakes to repay any
advance, unless a determination is made pursuant to the foregoing procedures
set forth herein that such indemnification is proper. As a condition to such
an advance (i) the director or officer shall provide security for his
undertaking; (ii) the corporation shall be insured against losses arising by
reason of any lawful advance; or (iii) a majority of a quorum of the directors,
who are neither "interested persons" of the corporation as defined in Section
2(a)(19) of the Investment Company Act of 1940 nor parties to the proceeding,
or independent legal counsel in a written opinion, shall determine, based on
review of readily available facts, that there is reason to believe that such
director or officer will be found entitled to indemnification.
Item 28. Business and Other Connections of Investment Adviser.
None.
Item 29. Principal Underwriters.
(a) Not Applicable.
(b) Not Applicable.
(c) Not Applicable.
Item 30. Location of Accounts and Records.
Accounts, books and other records required by Rules 31a-1 and 31a-2 under
the Investment Company Act of 1940 are maintained and held in the offices of
its investment adviser, Capital Research and Management Company, 333 South Hope
Street, Los Angeles, California 90071, and/or 135 South State College
Boulevard, Brea, California 92821, and/or the offices of the Registrant, Four
Embarcadero Center (Suite 1800), San Francisco, California 94111.
Registrant's records covering shareholder accounts are maintained and kept
by the fund's transfer agent, American Funds Service Company, 135 South State
College Boulevard, Brea, California 92821, 8332 Woodfield Crossing Boulevard,
Indianapolis, IN 46240, 8000 IH-10, Suite 1400, San Antonio, Texas 78230 and
5300 Robin Hood Road, Norfolk, VA 23513.
Registrant's records covering portfolio transactions are also maintained
and kept by the fund's custodian, The Chase Manhattan Bank, One Chase Manhattan
Plaza, New York, New York 10081.
Item 31. Management Services.
None.
Item 32. Undertakings.
As reflected in the prospectus, the fund undertakes to provide each person
to whom a prospectus is delivered with a copy of the fund's latest annual
report to shareholders, upon request and without charge.
SIGNATURE OF REGISTRANT
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City and County of San Francisco, and State of California on
the 30th day of September, 1996.
ENDOWMENTS, INC.
By /s/ Patrick F. Quan
Patrick F. Quan, Secretary
ATTEST:
/s/ Louise M. Pescetta
Louise M. Pescetta
Pursuant to the requirements of the Securities Act of 1933, this amendment
to its registration statement has been signed below on September 30, 1996 by
the following persons in the capacities indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
Signature Title
(1) Principal Executive Officer:
Chairman of
/s/ Robert B. Egelston the Board
(Robert B. Egelston)
(2 ) Principal Financial Officer and Vice
Principal Accounting Officer: President
and
/s/ Steven N. Kearsley Treasurer
(Steven N. Kearsley)
(3) Directors:
Frank L. Ellsworth * Director
Steven D. Lavine* Director
Patricia A. McBride* Director
John R. Metcalf* Director
Charles R. Redmond* Director
/s/ Steven N. Kearsley President and
(Thomas E. Terry) Director
Robert C. Ziebarth* Director
</TABLE>
*By /s/ Patrick F. Quan
Patrick F. Quan, Attorney-in-Fact
CONSENT OF INDEPENDENT AUDITORS
Endowments, Inc.
We consent to (a) the use in this Post-Effective Amendment No. 42 to
Registration Statement No. 2-34371 on Form N-1A of our report dated August 30,
1996 appearing in the Financial Statements, which are included in Part B, the
Statement of Additional Information of such Registration Statement, (b) the
reference to us under the heading "General Information" in such Statement of
Additional Information and (c) the reference to us under the heading "Financial
Highlights" in the Prospectus, which is a part of such Registration Statement.
Deloitte & Touche LLP
Los Angeles, California
September 25, 1996
EXHIBIT 16
SCHEDULE FOR COMPUTATION OF EACH PERFORMANCE QUOTATION
PROVIDED IN THE REGISTRATION STATEMENT
(1) ENDING REDEMPTION VALUE AND TOTAL RETURN
Value of an initial investment at the end of a period and total return for the
period are computed as set forth below.
(A) INITIAL INVESTMENT divided by
PUBLIC OFFERING PRICE FOR ONE SHARE AT
BEGINNING OF PERIOD equals
NUMBER OF SHARES INITIALLY PURCHASED
(B) NUMBER OF SHARES INITIALLY PURCHASED plus
NUMBER OF SHARES ACQUIRED AT NET ASSET
VALUE THROUGH REINVESTMENT OF DIVIDENDS
AND CAPITAL GAIN DISTRIBUTIONS DURING
PERIOD equals
NUMBER OF SHARES PURCHASED DURING PERIOD
(C) NUMBER OF SHARES PURCHASED DURING PERIOD multiplied by
NET ASSET VALUE OF ONE SHARE AS OF THE LAST
DAY OF THE PERIOD equals
VALUE OF INVESTMENT AT END OF PERIOD
(D) VALUE OF INVESTMENT AT END OF PERIOD divided by
INITIAL INVESTMENT minus one
and then
multiplied by
100 equals
TOTAL RETURN FOR THE PERIOD EXPRESSED AS A
PERCENTAGE
(2) AVERAGE ANNUAL TOTAL RETURN
Average annual total return quotations for the 1-, 5-, and 10-year periods
ended on the date of the most recent balance sheet are computed according to
the formula set forth below.
P(1+T)/n/ = ERV
WHERE: P = a hypothetical initial investment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 investment as of the
end of 1-, 5-, and 10-year periods (computed in accordance with the formula
shown in (1), above)
THUS:
AVG. ANNUAL TOTAL RETURN AT PUBLIC OFFERING PRICE:
1 Year Total Return 1,000(1+T)/1/ = 1,132.14
T = +13.21%
5 Year Avg. Annual Total Return 1,000(1+T)/5/ = 1,757.32
T = +11.94%
10 Year Avg. Annual Total Return 1,000(1+T)/10/ = 3,045.14
T = +11.78%
Hypothetical illustrations based on $1,000 and $10,000 initial investments used
to obtain ending values over various time periods are attached.
(3) YIELD
Yield is computed as set forth below.
(A) DIVIDENDS AND INTEREST EARNED DURING
THE PERIOD minus
EXPENSES ACCRUED FOR THE PERIOD equals
NET INVESTMENT INCOME
(B) NET INVESTMENT INCOME divided by
AVERAGE DAILY NUMBER OF SHARES OUTSTANDING
DURING THE PERIOD THAT WERE ENTITLED
TO RECEIVE DIVIDENDS equals
NET INVESTMENT INCOME PER SHARE EARNED
DURING THE PERIOD
(C) NET INVESTMENT INCOME PER SHARE EARNED
DURING THE PERIOD divided by
MAXIMUM OFFERING PRICE PER SHARE ON
LAST DAY OF THE PERIOD equals
CURRENT MONTH'S YIELD
(D) CURRENT MONTH'S YIELD plus one, raised
to the sixth
power equals
SEMIANNUAL COMPOUNDED YIELD
(E) SEMIANNUAL COMPOUNDED YIELD minus one,
multiplied by
two equals
ANNUALIZED RATE
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/95 1000.00 18.06 0.00 % 55.371 18.060 1000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/96 1000 36 36 1036 64 1030 66 1096 36 1132.14 60.835
TOTAL $ 64
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/95 1000.00 16.82 0.00 % 59.453 16.820 1000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/96 1000 74 74 1074 0 989 0 989 73 1062.51 63.891
TOTAL $ 0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/91 1000.00 17.89 0.00 % 55.897 17.890 1000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/92 1000 42 42 1042 80 1021 91 1112 45 1157.46 63.388
7/31/93 1000 44 86 1086 54 1030 150 1180 93 1273.77 69.114
7/31/94 1000 48 134 1134 75 960 215 1175 134 1309.06 76.197
7/31/95 1000 48 182 1182 104 1010 349 1359 193 1552.18 85.946
7/31/96 1000 55 237 1237 100 1040 462 1502 255 1757.32 94.429
TOTAL $ 413
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/91 1000.00 17.76 0.00 % 56.306 17.760 1000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/92 1000 87 87 1087 0 1095 0 1095 91 1186.85 61.052
7/31/93 1000 94 181 1181 27 1107 29 1136 190 1326.20 67.457
7/31/94 1000 97 278 1278 86 949 104 1053 254 1307.07 77.525
7/31/95 1000 99 377 1377 6 947 110 1057 354 1411.28 83.905
7/31/96 1000 105 482 1482 0 936 109 1045 454 1499.48 90.167
TOTAL $ 119
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/86 1000.00 1984.65 0.00 % 0.504 1984.650 1000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/87 1000 47 47 1047 142 993 158 1151 51 1202.00 0.610
7/31/88 1000 58 105 1105 110 842 231 1073 101 1174.11 70.264
7/31/89 1000 67 172 1172 78 918 344 1262 184 1446.74 79.404
7/31/90 1000 84 256 1256 83 852 401 1253 253 1506.44 89.086
7/31/91 1000 80 336 1336 48 901 478 1379 353 1732.88 96.863
7/31/92 1000 75 411 1411 139 920 645 1565 440 2005.71 109.842
7/31/93 1000 79 490 1490 94 929 752 1681 526 2207.25 119.764
7/31/94 1000 83 573 1573 130 866 831 1697 571 2268.41 132.038
7/31/95 1000 84 657 1657 180 910 1086 1996 693 2689.69 148.931
7/31/96 1000 96 753 1753 173 938 1297 2235 810 3045.14 163.629
TOTAL $ 1177
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/86 1000.00 920.83 0.00 % 1.086 920.830 1000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/87 1000 88 88 1088 0 957 0 957 87 1044.10 1.185
7/31/88 1000 88 176 1176 33 928 33 961 172 1133.97 66.314
7/31/89 1000 102 278 1278 0 968 35 1003 286 1289.16 72.303
7/31/90 1000 111 389 1389 0 950 34 984 393 1377.53 78.716
7/31/91 1000 122 511 1511 0 964 35 999 526 1525.99 85.923
7/31/92 1000 132 643 1643 0 1055 38 1093 718 1811.13 93.165
7/31/93 1000 143 786 1786 41 1067 82 1149 874 2023.74 102.937
7/31/94 1000 148 934 1934 132 915 192 1107 887 1994.52 118.299
7/31/95 1000 151 1085 2085 8 913 200 1113 1040 2153.55 128.035
7/31/96 1000 160 1245 2245 0 903 198 1101 1187 2288.17 137.593
TOTAL $ 214
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/86 10000.00 1984.65 0.00 % 5.039 1984.650 10000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/87 10000 472 472 10472 1416 9929 1570 11499 513 12012.11 6.096
7/31/88 10000 579 1051 11051 1097 8420 2299 10719 1015 11734.10 702.220
7/31/89 10000 658 1709 11709 782 9180 3431 12611 1847 14458.81 793.568
7/31/90 10000 838 2547 12547 826 8520 4005 12525 2530 15055.48 890.330
7/31/91 10000 801 3348 13348 478 9014 4769 13783 3535 17318.43 968.051
7/31/92 10000 747 4095 14095 1390 9200 6441 15641 4404 20045.10 1097.760
7/31/93 10000 787 4882 14882 942 9286 7513 16799 5260 22059.24 1196.920
7/31/94 10000 823 5705 15705 1304 8656 8301 16957 5713 22670.33 1319.577
7/31/95 10000 843 6548 16548 1796 9100 10852 19952 6928 26880.47 1488.398
7/31/96 10000 955 7503 17503 1725 9377 12958 22335 8097 30432.77 1635.291
TOTAL $ 11756
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/86 10000.00 920.83 0.00 % 10.860 920.830 10000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/87 10000 887 887 10887 0 9568 0 9568 873 10441.04 11.850
7/31/88 10000 870 1757 11757 328 9285 334 9619 1721 11340.58 663.192
7/31/89 10000 1014 2771 12771 0 9681 349 10030 2862 12892.41 723.074
7/31/90 10000 1105 3876 13876 0 9502 342 9844 3932 13776.21 787.212
7/31/91 10000 1229 5105 15105 0 9643 347 9990 5271 15261.01 859.291
7/31/92 10000 1320 6425 16425 0 10556 380 10936 7176 18112.71 931.724
7/31/93 10000 1437 7862 17862 408 10675 822 11497 8742 20239.32 1029.467
7/31/94 10000 1474 9336 19336 1320 9155 1921 11076 8871 19947.29 1183.113
7/31/95 10000 1513 10849 20849 84 9133 2005 11138 10399 21537.91 1280.494
7/31/96 10000 1605 12454 22454 0 9030 1982 11012 11872 22884.11 1376.074
TOTAL $ 2140
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
7/26/75 50000.00 945.33 0.00 % 52.892 945.330 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/75 50000 0 0 50000 0 49769 0 49769 0 49769.79 52.892
7/31/76 50000 2408 2408 52408 0 60781 0 60781 2695 63476.15 55.237
7/31/77 50000 2454 4862 54862 0 62331 0 62331 5258 67589.97 57.354
7/31/78 50000 2899 7761 57761 0 65910 0 65910 8614 74524.80 59.805
7/31/79 50000 3511 11272 61272 0 69263 0 69263 12868 82131.10 62.718
7/31/80 50000 4322 15594 65594 0 77021 0 77021 19256 96277.32 66.115
7/31/81 50000 6326 21920 71920 4496 79847 4739 84586 26355 110941.93 73.489
7/31/82 50000 7869 29789 79789 10435 64678 13443 78121 28739 106860.32 87.387
7/31/83 50000 6722 36511 86511 0 96477 20052 116529 50197 166726.38 91.404
7/31/84 50000 7502 44013 94013 14899 83847 31536 115383 50774 166157.44 104.814
7/31/85 50000 9036 53049 103049 15303 95601 53303 148904 67831 216735.52 119.909
7/31/86 50000 10623 63672 113672 18586 104971 81000 185971 86184 272155.05 137.130
7/31/87 50000 12851 76523 126523 38534 104222 123158 227380 99504 326884.59 165.890
7/31/88 50000 15733 92256 142256 29860 88382 130787 219169 100177 319346.83 19111.121
7/31/89 50000 17918 110174 160174 21276 96368 167745 264113 129387 393500.60 21597.179
7/31/90 50000 22799 132973 182973 22490 89440 178016 267456 142283 409739.40 24230.597
7/31/91 50000 21836 154809 204809 13007 94623 202831 297454 173872 471326.11 26345.786
7/31/92 50000 20318 175127 225127 37831 96580 249826 346406 199127 545533.44 29875.873
7/31/93 50000 21415 196542 246542 25629 97479 279694 377173 223175 600348.90 32574.547
7/31/94 50000 22417 218959 268959 35491 90868 296050 386918 230062 616980.44 35912.715
7/31/95 50000 22961 241920 291920 48882 95522 369066 464588 266972 731560.88 40507.247
7/31/96 50000 25984 267904 317904 46955 98431 428636 527067 301170 828237.75 44504.984
TOTAL $ 383674
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
7/26/75 50000.00 880.40 0.00 % 56.792 880.400 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/75 50000 0 0 50000 0 50065 0 50065 0 50064.42 56.792
7/31/76 50000 3466 3466 53466 0 52455 0 52455 3668 56123.45 60.764
7/31/77 50000 4395 7861 57861 0 54854 0 54854 8314 63168.86 65.401
7/31/78 50000 4798 12659 62659 0 51161 0 51161 12472 63633.34 70.637
7/31/79 50000 5595 18254 68254 0 50165 0 50165 17912 68077.70 77.072
7/31/80 50000 7331 25585 75585 0 46568 0 46568 24036 70604.34 86.106
7/31/81 50000 7990 33575 83575 0 39235 0 39235 28136 67371.69 97.520
7/31/82 50000 9678 43253 93253 0 40739 0 40739 39032 79771.40 111.206
7/31/83 50000 10518 53771 103771 0 45384 0 45384 53496 98880.71 123.737
7/31/84 50000 11193 64964 114964 0 43796 0 43796 62949 106745.51 138.422
7/31/85 50000 12231 77195 127195 0 47570 0 47570 81204 128774.86 153.739
7/31/86 50000 13557 90752 140752 0 52296 0 52296 103479 155775.89 169.169
7/31/87 50000 13829 104581 154581 0 50040 0 50040 112609 162649.30 184.598
7/31/88 50000 13553 118134 168134 5103 48557 5210 53767 122899 176666.56 10331.378
7/31/89 50000 15800 133934 183934 0 50630 5433 56063 144777 200840.94 11264.214
7/31/90 50000 17213 151147 201147 0 49693 5332 55025 159583 214608.71 12263.355
7/31/91 50000 19146 170293 220293 0 50432 5411 55843 181896 237739.20 13386.216
7/31/92 50000 20570 190863 240863 0 55202 5923 61125 221038 282163.71 14514.594
7/31/93 50000 22376 213239 263239 6361 55827 12805 68632 246660 315292.32 16037.249
7/31/94 50000 22971 236210 286210 20561 47876 29925 77801 232941 310742.85 18430.774
7/31/95 50000 23564 259774 309774 1314 47762 31232 78994 256527 335521.54 19947.773
7/31/96 50000 25003 284777 334777 0 47223 30879 78102 278391 356493.10 21436.747
TOTAL $ 33339
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/76 50000.00 1149.16 0.00 % 43.510 1149.160 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/77 50000 1932 1932 51932 0 51275 0 51275 1964 53239.74 45.177
7/31/78 50000 2283 4215 54215 0 54219 0 54219 4483 58702.69 47.108
7/31/79 50000 2765 6980 56980 0 56978 0 56978 7716 64694.71 49.403
7/31/80 50000 3405 10385 60385 0 63360 0 63360 12477 75837.96 52.079
7/31/81 50000 4983 15368 65368 3541 65684 3732 69416 17972 87388.53 57.887
7/31/82 50000 6198 21566 71566 8220 53206 10589 63795 20379 84174.19 68.835
7/31/83 50000 5295 26861 76861 0 79365 15795 95160 36172 131332.32 72.000
7/31/84 50000 5909 32770 82770 11736 68975 24841 93816 37067 130883.82 82.563
7/31/85 50000 7118 39888 89888 12054 78644 41988 120632 50095 170727.41 94.455
7/31/86 50000 8368 48256 98256 14641 86352 63806 150158 64225 214383.88 108.021
7/31/87 50000 10123 58379 108379 30354 85736 97015 182751 74744 257495.75 130.676
7/31/88 50000 12394 70773 120773 23522 72705 103026 175731 75826 251557.42 15054.304
7/31/89 50000 14114 84887 134887 16759 79275 132138 211413 98557 309970.19 17012.634
7/31/90 50000 17960 102847 152847 17716 73575 140228 213803 108958 322761.91 19087.044
7/31/91 50000 17201 120048 170048 10246 77839 159776 237615 133660 371275.28 20753.230
7/31/92 50000 16005 136053 186053 29801 79449 196795 276244 153486 429730.27 23533.969
7/31/93 50000 16869 152922 202922 20189 80189 220323 300512 172397 472909.76 25659.781
7/31/94 50000 17659 170581 220581 27957 74750 233207 307957 178053 486010.86 28289.340
7/31/95 50000 18087 188668 238668 38506 78579 290723 369302 206966 576268.72 31908.567
7/31/96 50000 20468 209136 259136 36987 80972 337648 418620 233803 652423.50 35057.684
TOTAL $ 302229
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/77 50000.00 1178.47 0.00 % 42.428 1178.470 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/78 50000 2144 2144 52144 0 52871 0 52871 2260 55131.28 44.242
7/31/79 50000 2597 4741 54741 0 55560 0 55560 5198 60758.26 46.397
7/31/80 50000 3198 7939 57939 0 61784 0 61784 9439 71223.23 48.910
7/31/81 50000 4680 12619 62619 3326 64051 3505 67556 14515 82071.58 54.365
7/31/82 50000 5821 18440 68440 7720 51882 9944 61826 17225 79051.71 64.646
7/31/83 50000 4973 23413 73413 0 77391 14833 92224 31115 123339.29 67.618
7/31/84 50000 5549 28962 78962 11022 67259 23329 90588 32329 122917.89 77.538
7/31/85 50000 6684 35646 85646 11321 76688 39432 116120 44214 160334.29 88.705
7/31/86 50000 7858 43504 93504 13749 84204 59923 144127 57205 201332.82 101.445
7/31/87 50000 9507 53011 103011 28506 83604 91110 174714 67106 241820.50 122.721
7/31/88 50000 11639 64650 114650 22090 70897 96754 167651 68593 236244.58 14137.916
7/31/89 50000 13256 77906 127906 15739 77303 124095 201398 89703 291101.61 15977.037
7/31/90 50000 16867 94773 144773 16637 71745 131692 203437 99677 303114.66 17925.172
7/31/91 50000 16154 110927 160927 9622 75903 150050 225953 122721 348674.90 19489.933
7/31/92 50000 15031 125958 175958 27986 77473 184816 262289 141282 403571.55 22101.399
7/31/93 50000 15842 141800 191800 18960 78194 206911 285105 159017 444122.60 24097.808
7/31/94 50000 16582 158382 208382 26255 72891 219011 291902 164524 456426.23 26567.301
7/31/95 50000 16986 175368 225368 36162 76625 273026 349651 191538 541189.88 29966.217
7/31/96 50000 19222 194590 244590 34736 78958 317095 396053 216655 612708.96 32923.641
TOTAL $ 283831
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/78 50000.00 1246.13 0.00 % 40.124 1246.130 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/79 50000 2356 2356 52356 0 52544 0 52544 2559 55103.71 42.079
7/31/80 50000 2900 5256 55256 0 58429 0 58429 6165 64594.56 44.358
7/31/81 50000 4245 9501 59501 3016 60573 3179 63752 10680 74432.80 49.305
7/31/82 50000 5280 14781 64781 7001 49065 9018 58083 13610 71693.89 58.629
7/31/83 50000 4510 19291 69291 0 73189 13452 86641 25217 111858.66 61.324
7/31/84 50000 5033 24324 74324 9996 63607 21157 84764 26711 111475.48 70.320
7/31/85 50000 6062 30386 80386 10267 72524 35761 108285 37124 145409.76 80.448
7/31/86 50000 7127 37513 87513 12469 79632 54344 133976 48615 182591.77 92.002
7/31/87 50000 8622 46135 96135 25853 79064 82629 161693 57618 219311.60 111.298
7/31/88 50000 10556 56691 106691 20034 67048 87748 154796 59457 214253.40 12821.867
7/31/89 50000 12021 68712 118712 14274 73106 112543 185649 78354 264003.97 14489.790
7/31/90 50000 15297 84009 134009 15089 67850 119434 187284 87614 274898.75 16256.579
7/31/91 50000 14650 98659 148659 8727 71782 136082 207864 108353 316217.97 17675.683
7/31/92 50000 13632 112291 162291 25381 73267 167612 240879 125125 366004.50 20044.058
7/31/93 50000 14367 126658 176658 17195 73949 187650 261599 141181 402780.79 21854.628
7/31/94 50000 15039 141697 191697 23811 68933 198624 267557 146382 413939.09 24094.243
7/31/95 50000 15405 157102 207102 32796 72464 247611 320075 170737 490812.38 27176.765
7/31/96 50000 17433 174535 224535 31502 74671 287578 362249 193424 555673.96 29858.891
TOTAL $ 257411
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/79 50000.00 1309.53 0.00 % 38.182 1309.530 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/80 50000 2631 2631 52631 0 55600 0 55600 3012 58612.45 40.250
7/31/81 50000 3851 6482 56482 2737 57640 2885 60525 7016 67541.29 44.740
7/31/82 50000 4790 11272 61272 6353 46690 8183 54873 10182 65055.09 53.200
7/31/83 50000 4093 15365 65365 0 69646 12207 81853 19648 101501.64 55.646
7/31/84 50000 4567 19932 69932 9070 60528 19197 79725 21430 101155.44 63.810
7/31/85 50000 5501 25433 75433 9316 69013 32450 101463 30486 131949.31 73.001
7/31/86 50000 6467 31900 81900 11315 75777 49313 125090 40600 165690.49 83.486
7/31/87 50000 7824 39724 89724 23460 75236 74979 150215 48794 199009.64 100.995
7/31/88 50000 9578 49302 99302 18179 63801 79625 143426 50994 194420.45 11634.976
7/31/89 50000 10909 60211 110211 12953 69567 102125 171692 67873 239565.76 13148.505
7/31/90 50000 13880 74091 124091 13692 64565 108378 172943 76509 249452.04 14751.747
7/31/91 50000 13293 87384 137384 7919 68307 123485 191792 95154 286946.44 16039.488
7/31/92 50000 12370 99754 149754 23032 69720 152096 221816 110308 332124.35 18188.628
7/31/93 50000 13037 112791 162791 15603 70369 170280 240649 124847 365496.35 19831.598
7/31/94 50000 13647 126438 176438 21607 65596 180238 245834 129787 375621.77 21863.898
7/31/95 50000 13979 140417 190417 29760 68956 224690 293646 151733 445379.10 24661.080
7/31/96 50000 15819 156236 206236 28586 71056 260957 332013 172223 504236.65 27094.930
TOTAL $ 233582
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/80 50000.00 1456.21 0.00 % 34.336 1456.210 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/81 50000 3286 3286 53286 2335 51835 2461 54296 3319 57615.41 38.165
7/31/82 50000 4087 7373 57373 5419 41987 6981 48968 6528 55496.15 45.383
7/31/83 50000 3491 10864 60864 0 62630 10414 73044 13542 86586.30 47.469
7/31/84 50000 3896 14760 64760 7737 54431 16377 70808 15482 86290.46 54.433
7/31/85 50000 4692 19452 69452 7947 62062 27682 89744 22814 112558.45 62.273
7/31/86 50000 5517 24969 74969 9652 68144 42067 110211 31129 141340.82 71.217
7/31/87 50000 6674 31643 81643 20012 67658 63962 131620 38145 169765.60 86.154
7/31/88 50000 8170 39813 89813 15508 57375 67924 125299 40551 165850.26 9925.210
7/31/89 50000 9306 49119 99119 11049 62560 87118 149678 54683 204361.42 11216.324
7/31/90 50000 11840 60959 110959 11680 58062 92452 150514 62280 212794.92 12583.969
7/31/91 50000 11340 72299 122299 6755 61427 105340 166767 78012 244779.48 13682.475
7/31/92 50000 10552 82851 132851 19647 62697 129746 192443 90875 283318.49 15515.799
7/31/93 50000 11121 93972 143972 13310 63281 145258 208539 103247 311786.43 16917.332
7/31/94 50000 11642 105614 155614 18432 58989 153752 212741 107682 320423.91 18650.984
7/31/95 50000 11924 117538 167538 25387 62010 191672 253682 126248 379930.35 21037.118
7/31/96 50000 13494 131032 181032 24386 63899 222610 286509 143629 430138.70 23113.310
TOTAL $ 199256
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/81 50000.00 1509.64 0.00 % 33.120 1509.640 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/82 50000 3547 3547 53547 4703 40501 4329 44830 3330 48160.33 39.384
7/31/83 50000 3029 6576 56576 0 60414 6457 66871 8269 75140.33 41.194
7/31/84 50000 3381 9957 59957 6715 52504 11970 64474 10410 74884.51 47.238
7/31/85 50000 4072 14029 64029 6897 59865 21466 81331 16348 97679.11 54.041
7/31/86 50000 4788 18817 68817 8376 65732 33697 99429 23226 122655.34 61.802
7/31/87 50000 5792 24609 74609 17366 65263 52717 117980 29341 147321.71 74.764
7/31/88 50000 7090 31699 81699 13458 55344 56578 111922 32002 143924.12 8613.053
7/31/89 50000 8076 39775 89775 9589 60345 73021 133366 43977 177343.97 9733.478
7/31/90 50000 10277 50052 100052 10136 56007 77835 133842 50820 184662.51 10920.314
7/31/91 50000 9840 59892 109892 5862 59252 88880 148132 64286 212418.58 11873.593
7/31/92 50000 9157 69049 119049 17050 60478 110007 170485 75377 245862.54 13464.542
7/31/93 50000 9652 78701 128701 11551 61041 123444 184485 86081 270566.92 14680.788
7/31/94 50000 10102 88803 138803 15995 56901 130993 187894 90168 278062.49 16185.244
7/31/95 50000 10348 99151 149151 22030 59815 163775 223590 106111 329701.93 18255.921
7/31/96 50000 11710 110861 160861 21162 61637 190545 252182 121090 373272.55 20057.633
TOTAL $ 170890
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/82 50000.00 1222.84 0.00 % 40.888 1222.840 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/83 50000 3146 3146 53146 0 74583 0 74583 3428 78011.40 42.768
7/31/84 50000 3510 6656 56656 6971 64819 6601 71420 6324 77744.32 49.042
7/31/85 50000 4227 10883 60883 7160 73906 15642 89548 11861 101409.79 56.105
7/31/86 50000 4970 15853 65853 8696 81149 27690 108839 18500 127339.11 64.162
7/31/87 50000 6012 21865 71865 18030 80570 47489 128059 24888 152947.46 77.619
7/31/88 50000 7361 29226 79226 13971 68325 52600 120925 28494 149419.77 8941.937
7/31/89 50000 8383 37609 87609 9955 74499 69115 143614 40501 184115.71 10105.143
7/31/90 50000 10668 48277 98277 10523 69142 74595 143737 47976 191713.71 11337.298
7/31/91 50000 10216 58493 108493 6086 73149 85701 158850 61679 220529.64 12326.978
7/31/92 50000 9506 67999 117999 17701 74662 107500 182162 73088 255250.64 13978.677
7/31/93 50000 10019 78018 128018 11992 75357 121387 196744 84154 280898.36 15241.365
7/31/94 50000 10488 88506 138506 16606 70246 129683 199929 88751 288680.11 16803.266
7/31/95 50000 10742 99248 149248 22872 73844 163394 237238 105053 342291.36 18953.010
7/31/96 50000 12158 111406 161406 21970 76093 190983 267076 120449 387525.71 20823.520
TOTAL $ 172533
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/83 50000.00 1824.06 0.00 % 27.411 1824.060 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/84 50000 2249 2249 52249 4468 43454 4231 47685 2144 49829.48 31.433
7/31/85 50000 2710 4959 54959 4589 49546 10026 59572 5425 64997.70 35.960
7/31/86 50000 3185 8144 58144 5574 54402 17749 72151 9465 81616.75 41.124
7/31/87 50000 3854 11998 61998 11556 54014 30438 84452 13577 98029.91 49.749
7/31/88 50000 4719 16717 66717 8955 45804 33714 79518 16252 95770.86 5731.350
7/31/89 50000 5374 22091 72091 6381 49943 44300 94243 23766 118009.28 6476.909
7/31/90 50000 6837 28928 78928 6745 46353 47812 94165 28714 122879.24 7266.661
7/31/91 50000 6548 35476 85476 3901 49039 54931 103970 37378 141348.85 7900.998
7/31/92 50000 6094 41570 91570 11345 50053 68902 118955 44648 163603.32 8959.656
7/31/93 50000 6421 47991 97991 7686 50519 77803 128322 51720 180042.25 9768.977
7/31/94 50000 6723 54714 104714 10643 47093 83121 130214 54816 185030.01 10770.082
7/31/95 50000 6886 61600 111600 14660 49505 104728 154233 65159 219392.21 12147.963
7/31/96 50000 7792 69392 119392 14082 51012 122411 173423 74962 248385.19 13346.867
TOTAL $ 110585
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/84 50000.00 1585.26 0.00 % 31.541 1585.260 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/85 50000 2719 2719 52719 4605 57009 5220 62229 2991 65220.02 36.083
7/31/86 50000 3197 5916 55916 5593 62597 12493 75090 6806 81896.58 41.265
7/31/87 50000 3867 9783 59783 11595 62150 25264 87414 10950 98364.89 49.919
7/31/88 50000 4735 14518 64518 8985 52704 29353 82057 14040 96097.74 5750.912
7/31/89 50000 5392 19910 69910 6402 57467 39570 97037 21375 118412.07 6499.016
7/31/90 50000 6861 26771 76771 6768 53335 43445 96780 26518 123298.64 7291.463
7/31/91 50000 6571 33342 83342 3914 56426 50326 106752 35079 141831.28 7927.964
7/31/92 50000 6115 39457 89457 11384 57593 64246 121839 42322 164161.71 8990.236
7/31/93 50000 6443 45900 95900 7712 58129 73132 131261 49395 180656.78 9802.321
7/31/94 50000 6745 52645 102645 10680 54187 78802 132989 52672 185661.55 10806.842
7/31/95 50000 6909 59554 109554 14710 56962 100247 157209 62932 220141.05 12189.427
7/31/96 50000 7819 67373 117373 14130 58697 117844 176541 72692 249233.01 13392.424
TOTAL $ 106478
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/85 50000.00 1807.50 0.00 % 27.663 1807.500 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/86 50000 2451 2451 52451 4288 54900 5184 60084 2702 62786.39 31.636
7/31/87 50000 2965 5416 55416 8890 54509 15005 69514 5896 75410.65 38.270
7/31/88 50000 3629 9045 59045 6889 46224 18804 65028 8643 73671.87 4408.849
7/31/89 50000 4134 13179 63179 4908 50401 26302 76703 14075 90778.82 4982.372
7/31/90 50000 5259 18438 68438 5188 46777 29563 76340 18185 94525.02 5589.889
7/31/91 50000 5038 23476 73476 3001 49488 34621 84109 24623 108732.79 6077.853
7/31/92 50000 4688 28164 78164 8727 50512 45211 95723 30129 125852.08 6892.228
7/31/93 50000 4940 33104 83104 5913 50982 51986 102968 35529 138497.75 7514.799
7/31/94 50000 5171 38275 88275 8188 47524 56609 104133 38201 142334.58 8284.900
7/31/95 50000 5297 43572 93572 11277 49958 72855 122813 45954 168767.79 9344.839
7/31/96 50000 5994 49566 99566 10832 51480 86223 137703 53367 191070.69 10267.098
TOTAL $ 78101
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/86 50000.00 1984.65 0.00 % 25.193 1984.650 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/87 50000 2361 2361 52361 7079 49643 7850 57493 2561 60054.62 30.477
7/31/88 50000 2890 5251 55251 5486 42098 11498 53596 5074 58670.50 3511.101
7/31/89 50000 3292 8543 58543 3909 45902 17156 63058 9236 72294.04 3967.840
7/31/90 50000 4189 12732 62732 4132 42602 20025 62627 12650 75277.45 4451.653
7/31/91 50000 4011 16743 66743 2390 45071 23849 68920 17672 86592.18 4840.256
7/31/92 50000 3733 20476 70476 6950 46003 32206 78209 22016 100225.58 5488.805
7/31/93 50000 3935 24411 74411 4709 46431 37565 83996 26300 110296.29 5984.606
7/31/94 50000 4118 28529 78529 6520 43282 41508 84790 28561 113351.85 6597.896
7/31/95 50000 4219 32748 82748 8981 45499 54262 99761 34641 134402.61 7442.005
7/31/96 50000 4774 37522 87522 8627 46885 64794 111679 40485 152164.11 8176.470
TOTAL $ 58783
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/87 50000.00 1970.49 0.00 % 25.374 1970.490 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/88 50000 2407 2407 52407 4567 42400 4030 46430 2416 48846.44 2923.186
7/31/89 50000 2741 5148 55148 3254 46232 8240 54472 5716 60188.80 3303.447
7/31/90 50000 3487 8635 58635 3440 42908 11063 53971 8701 62672.65 3706.248
7/31/91 50000 3340 11975 61975 1990 45395 13922 59317 12775 72092.82 4029.783
7/31/92 50000 3108 15083 65083 5787 46333 20756 67089 16354 83443.36 4569.735
7/31/93 50000 3275 18358 68358 3920 46765 25162 71927 19900 91827.79 4982.517
7/31/94 50000 3429 21787 71787 5429 43593 28859 72452 21919 94371.72 5493.115
7/31/95 50000 3513 25300 75300 7477 45826 39186 85012 26885 111897.63 6195.882
7/31/96 50000 3974 29274 79274 7182 47222 47772 94994 31691 126685.06 6807.365
TOTAL $ 43046
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/88 50000.00 16.71 0.00 % 2992.220 16.710 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/89 50000 2805 2805 52805 3331 54518 3936 58454 3156 61610.24 3381.462
7/31/90 50000 3570 6375 56375 3521 50598 7149 57747 6405 64152.74 3793.775
7/31/91 50000 3419 9794 59794 2037 53531 9834 63365 10430 73795.36 4124.950
7/31/92 50000 3181 12975 62975 5923 54638 16738 71376 14037 85413.96 4677.654
7/31/93 50000 3353 16328 66328 4013 55147 21206 76353 17643 93996.41 5100.185
7/31/94 50000 3509 19837 69837 5557 51406 25299 76705 19895 96600.43 5622.842
7/31/95 50000 3595 23432 73432 7653 54039 35653 89692 24848 114540.26 6342.207
7/31/96 50000 4069 27501 77501 7352 55685 44306 99991 29685 129676.94 6968.132
TOTAL $ 39387
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/89 50000.00 18.22 0.00 % 2744.237 18.220 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/90 50000 2898 2898 52898 2858 46405 2837 49242 2821 52063.37 3078.851
7/31/91 50000 2775 5673 55673 1653 49094 4844 53938 5950 59888.87 3347.617
7/31/92 50000 2583 8256 58256 4807 50110 10383 60493 8824 69317.97 3796.165
7/31/93 50000 2721 10977 60977 3257 50576 13979 64555 11728 76283.06 4139.070
7/31/94 50000 2848 13825 63825 4510 47146 17520 64666 13730 78396.34 4563.233
7/31/95 50000 2918 16743 66743 6211 49561 25768 75329 17626 92955.45 5147.035
7/31/96 50000 3302 20045 70045 5966 51070 32694 83764 21475 105239.66 5655.006
TOTAL $ 29262
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/90 50000.00 16.91 0.00 % 2956.830 16.910 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/91 50000 2665 2665 52665 1587 52898 1769 54667 2848 57515.35 3214.944
7/31/92 50000 2479 5144 55144 4616 53992 7029 61021 5549 66570.81 3645.718
7/31/93 50000 2613 7757 57757 3127 54494 10455 64949 8310 73259.90 3975.035
7/31/94 50000 2735 10492 60492 4331 50798 14057 64855 10434 75289.43 4382.388
7/31/95 50000 2802 13294 63294 5965 53400 21836 75236 14035 89271.54 4943.053
7/31/96 50000 3172 16466 66466 5730 55027 28399 83426 17642 101068.90 5430.892
TOTAL $ 25356
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/91 50000.00 17.89 0.00 % 2794.857 17.890 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/92 50000 2155 2155 52155 4013 51034 4540 55574 2298 57872.18 3169.342
7/31/93 50000 2272 4427 54427 2719 51509 7504 59013 4674 63687.19 3455.626
7/31/94 50000 2378 6805 56805 3765 48016 10743 58759 6692 65451.52 3809.751
7/31/95 50000 2435 9240 59240 5186 50475 17430 67905 9701 77606.64 4297.156
7/31/96 50000 2756 11996 61996 4981 52012 23088 75100 12762 87862.46 4721.250
TOTAL $ 20664
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/92 50000.00 18.26 0.00 % 2738.226 18.260 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/93 50000 1963 1963 51963 2349 50465 2524 52989 2035 55024.02 2985.568
7/31/94 50000 2054 4017 54017 3253 47043 5591 52634 3914 56548.37 3291.523
7/31/95 50000 2104 6121 56121 4480 49452 11180 60632 6418 67050.06 3712.628
7/31/96 50000 2382 8503 58503 4304 50958 15950 66908 9002 75910.84 4079.035
TOTAL $ 14386
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/93 50000.00 18.43 0.00 % 2712.968 18.430 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/94 50000 1868 1868 51868 2956 46609 2942 49551 1834 51385.16 2990.987
7/31/95 50000 1913 3781 53781 4071 48996 7911 56907 4020 60927.97 3373.642
7/31/96 50000 2163 5944 55944 3911 50488 12177 62665 6314 68979.70 3706.593
TOTAL $ 10938
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/94 50000.00 17.18 0.00 % 2910.361 17.180 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/95 50000 1861 1861 51861 3961 52561 4688 57249 2036 59285.56 3282.700
7/31/96 50000 2106 3967 53967 3805 54162 8748 62910 4210 67120.26 3606.677
TOTAL $ 7766
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/95 50000.00 18.06 0.00 % 2768.549 18.060 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/96 50000 1775 1775 51775 3209 51523 3303 54826 1781 56607.58 3041.783
TOTAL $ 3209
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/96 50000.00 18.61 0.00 % 2686.728 18.610 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/96 50000 0 0 50000 0 50000 0 50000 0 50000.01 2686.728
TOTAL $ 0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/76 50000.00 923.63 0.00 % 54.134 923.630 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/77 50000 3916 3916 53916 0 52287 0 52287 3989 56276.42 58.265
7/31/78 50000 4276 8192 58192 0 48767 0 48767 7922 56689.59 62.929
7/31/79 50000 4985 13177 63177 0 47817 0 47817 12831 60648.26 68.661
7/31/80 50000 6531 19708 69708 0 44388 0 44388 18511 62899.08 76.709
7/31/81 50000 7118 26826 76826 0 37399 0 37399 22620 60019.67 86.878
7/31/82 50000 8622 35448 85448 0 38832 0 38832 32233 71065.88 99.070
7/31/83 50000 9370 44818 94818 0 43260 0 43260 44829 88089.39 110.233
7/31/84 50000 9972 54790 104790 0 41746 0 41746 53349 95095.60 123.315
7/31/85 50000 10896 65686 115686 0 45344 0 45344 69377 114721.27 136.961
7/31/86 50000 12077 77763 127763 0 49848 0 49848 88927 138775.53 150.707
7/31/87 50000 12319 90082 140082 0 47698 0 47698 97200 144898.66 164.452
7/31/88 50000 12074 102156 152156 4546 46285 4642 50927 106459 157386.38 9203.882
7/31/89 50000 14075 116231 166231 0 48261 4840 53101 125821 178922.52 10034.914
7/31/90 50000 15334 131565 181565 0 47367 4750 52117 139070 191187.80 10925.017
7/31/91 50000 17057 148622 198622 0 48071 4821 52892 158901 211793.99 11925.337
7/31/92 50000 18325 166947 216947 0 52618 5277 57895 193475 251370.30 12930.571
7/31/93 50000 19935 186882 236882 5667 53214 11408 64622 216261 280883.50 14287.055
7/31/94 50000 20463 207345 257345 18317 45635 26659 72294 204536 276830.56 16419.369
7/31/95 50000 20992 228337 278337 1171 45527 27824 73351 225554 298905.07 17770.813
7/31/96 50000 22274 250611 300611 0 45013 27509 72522 245065 317587.95 19097.291
TOTAL $ 29701
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/77 50000.00 965.87 0.00 % 51.767 965.870 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/78 50000 3799 3799 53799 0 46634 0 46634 3733 50367.42 55.911
7/31/79 50000 4429 8228 58228 0 45726 0 45726 8159 53885.72 61.005
7/31/80 50000 5803 14031 64031 0 42447 0 42447 13438 55885.06 68.155
7/31/81 50000 6324 20355 70355 0 35763 0 35763 17563 53326.71 77.190
7/31/82 50000 7661 28016 78016 0 37134 0 37134 26006 63140.82 88.022
7/31/83 50000 8326 36342 86342 0 41368 0 41368 36897 78265.81 97.940
7/31/84 50000 8860 45202 95202 0 39920 0 39920 44570 84490.60 109.563
7/31/85 50000 9681 54883 104883 0 43361 0 43361 58566 101927.46 121.687
7/31/86 50000 10731 65614 115614 0 47668 0 47668 75631 123299.14 133.900
7/31/87 50000 10945 76559 126559 0 45612 0 45612 83126 128738.40 146.111
7/31/88 50000 10728 87287 137287 4039 44261 4124 48385 91447 139832.58 8177.344
7/31/89 50000 12505 99792 149792 0 46150 4300 50450 108516 158966.73 8915.689
7/31/90 50000 13624 113416 163416 0 45296 4220 49516 120348 169864.01 9706.515
7/31/91 50000 15154 128570 178570 0 45969 4283 50252 137919 188171.91 10595.265
7/31/92 50000 16281 144851 194851 0 50317 4688 55005 168329 223334.18 11488.384
7/31/93 50000 17712 162563 212563 5035 50887 10135 61022 188533 249555.66 12693.574
7/31/94 50000 18182 180745 230745 16274 43639 23685 67324 178630 245954.76 14588.064
7/31/95 50000 18651 199396 249396 1040 43536 24720 68256 197311 265567.26 15788.779
7/31/96 50000 19790 219186 269186 0 43044 24441 67485 214681 282166.38 16967.311
TOTAL $ 26388
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/78 50000.00 900.85 0.00 % 55.503 900.850 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/79 50000 4396 4396 54396 0 49026 0 49026 4465 53491.76 60.559
7/31/80 50000 5760 10156 60156 0 45511 0 45511 9965 55476.71 67.657
7/31/81 50000 6278 16434 66434 0 38344 0 38344 14593 52937.07 76.626
7/31/82 50000 7605 24039 74039 0 39814 0 39814 22866 62680.30 87.380
7/31/83 50000 8264 32303 82303 0 44354 0 44354 33341 77695.24 97.226
7/31/84 50000 8795 41098 91098 0 42802 0 42802 41073 83875.22 108.765
7/31/85 50000 9610 50708 100708 0 46491 0 46491 54694 101185.33 120.801
7/31/86 50000 10652 61360 111360 0 51109 0 51109 71292 122401.33 132.925
7/31/87 50000 10866 72226 122226 0 48904 0 48904 78897 127801.79 145.048
7/31/88 50000 10648 82874 132874 4009 47455 4094 51549 87266 138815.49 8117.865
7/31/89 50000 12415 95289 145289 0 49481 4269 53750 104060 157810.46 8850.839
7/31/90 50000 13526 108815 158815 0 48565 4190 52755 115873 168628.50 9635.914
7/31/91 50000 15044 123859 173859 0 49287 4252 53539 133264 186803.23 10518.200
7/31/92 50000 16164 140023 190023 0 53949 4654 58603 163106 221709.74 11404.822
7/31/93 50000 17583 157606 207606 4998 54560 10061 64621 183119 247740.52 12601.247
7/31/94 50000 18049 175655 225655 16156 46789 23513 70302 173863 244165.78 14481.956
7/31/95 50000 18515 194170 244170 1033 46678 24540 71218 192417 263635.60 15673.936
7/31/96 50000 19646 213816 263816 0 46151 24263 70414 209699 280113.99 16843.896
TOTAL $ 26196
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/79 50000.00 883.30 0.00 % 56.606 883.300 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/80 50000 5384 5384 55384 0 46415 0 46415 5440 51855.72 63.241
7/31/81 50000 5869 11253 61253 0 39106 0 39106 10375 49481.44 71.624
7/31/82 50000 7108 18361 68361 0 40605 0 40605 17982 58587.93 81.675
7/31/83 50000 7725 26086 76086 0 45235 0 45235 27387 72622.43 90.878
7/31/84 50000 8222 34308 84308 0 43652 0 43652 34747 78399.21 101.664
7/31/85 50000 8983 43291 93291 0 47414 0 47414 47165 94579.86 112.915
7/31/86 50000 9957 53248 103248 0 52124 0 52124 62287 114411.29 124.248
7/31/87 50000 10157 63405 113405 0 49875 0 49875 69584 119459.54 135.580
7/31/88 50000 9955 73360 123360 3748 48398 3827 52225 77530 129755.33 7588.031
7/31/89 50000 11605 84965 134965 0 50464 3990 54454 93056 147510.55 8273.166
7/31/90 50000 12642 97607 147607 0 49530 3917 53447 104175 157622.52 9007.001
7/31/91 50000 14064 111671 161671 0 50266 3975 54241 120370 174611.01 9831.701
7/31/92 50000 15108 126779 176779 0 55021 4351 59372 147867 207239.23 10660.454
7/31/93 50000 16435 143214 193214 4672 55644 9405 65049 166522 231571.07 11778.793
7/31/94 50000 16872 160086 210086 15102 47719 21979 69698 158531 228229.67 13536.754
7/31/95 50000 17306 177392 227392 965 47606 22939 70545 175883 246428.74 14650.936
7/31/96 50000 18364 195756 245756 0 47068 22680 69748 192083 261831.63 15744.536
TOTAL $ 24487
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/80 50000.00 819.97 0.00 % 60.978 819.970 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/81 50000 5658 5658 55658 0 42127 0 42127 5584 47711.48 69.062
7/31/82 50000 6854 12512 62512 0 43741 0 43741 12751 56492.61 78.754
7/31/83 50000 7449 19961 69961 0 48729 0 48729 21296 70025.29 87.628
7/31/84 50000 7928 27889 77889 0 47024 0 47024 28571 75595.27 98.028
7/31/85 50000 8661 36550 86550 0 51076 0 51076 40120 91196.72 108.876
7/31/86 50000 9601 46151 96151 0 56150 0 56150 54168 110318.20 119.803
7/31/87 50000 9793 55944 105944 0 53728 0 53728 61457 115185.32 130.729
7/31/88 50000 9598 65542 115542 3614 52136 3690 55826 69286 125112.37 7316.513
7/31/89 50000 11189 76731 126731 0 54362 3848 58210 84022 142232.26 7977.132
7/31/90 50000 12190 88921 138921 0 53356 3777 57133 94849 151982.39 8684.708
7/31/91 50000 13559 102480 152480 0 54148 3833 57981 110382 168363.01 9479.899
7/31/92 50000 14568 117048 167048 0 59270 4195 63465 136358 199823.72 10278.998
7/31/93 50000 15847 132895 182895 4505 59941 9069 69010 154274 223284.89 11357.319
7/31/94 50000 16268 149163 199163 14561 51404 21193 72597 147466 220063.03 13052.374
7/31/95 50000 16688 165851 215851 931 51282 22118 73400 164210 237610.93 14126.690
7/31/96 50000 17706 183557 233557 0 50703 21869 72572 179890 252462.64 15181.157
TOTAL $ 23611
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/81 50000.00 690.85 0.00 % 72.375 690.850 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/82 50000 7182 7182 57182 0 51916 0 51916 7286 59202.68 82.532
7/31/83 50000 7806 14988 64988 0 57836 0 57836 15548 73384.79 91.832
7/31/84 50000 8308 23296 73296 0 55812 0 55812 23409 79221.27 102.730
7/31/85 50000 9077 32373 82373 0 60622 0 60622 34948 95570.77 114.098
7/31/86 50000 10061 42434 92434 0 66645 0 66645 48965 115610.21 125.550
7/31/87 50000 10263 52697 102697 0 63769 0 63769 56941 120710.70 137.000
7/31/88 50000 10058 62755 112755 3787 61880 3867 65747 65367 131114.13 7667.493
7/31/89 50000 11726 74481 124481 0 64522 4032 68554 80501 149055.27 8359.802
7/31/90 50000 12774 87255 137255 0 63328 3958 67286 91987 159273.14 9101.322
7/31/91 50000 14209 101464 151464 0 64269 4016 68285 108154 176439.54 9934.659
7/31/92 50000 15266 116730 166730 0 70348 4396 74744 134665 209409.45 10772.091
7/31/93 50000 16607 133337 183337 4721 71144 9504 80648 153348 233996.07 11902.140
7/31/94 50000 17048 150385 200385 15260 61012 22209 83221 147398 230619.66 13678.509
7/31/95 50000 17488 167873 217873 975 60867 23179 84046 164963 249009.32 14804.359
7/31/96 50000 18556 186429 236429 0 60179 22918 83097 181476 264573.50 15909.411
TOTAL $ 24743
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/82 50000.00 717.33 0.00 % 69.703 717.330 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/83 50000 6593 6593 56593 0 55701 0 55701 6276 61977.35 77.557
7/31/84 50000 7017 13610 63610 0 53752 0 53752 13154 66906.61 86.761
7/31/85 50000 7666 21276 71276 0 58385 0 58385 22329 80714.74 96.362
7/31/86 50000 8498 29774 79774 0 64185 0 64185 33453 97638.37 106.033
7/31/87 50000 8667 38441 88441 0 61415 0 61415 40531 101946.79 115.704
7/31/88 50000 8495 46936 96936 3198 59596 3266 62862 47871 110733.00 6475.614
7/31/89 50000 9903 56839 106839 0 62140 3406 65546 60339 125885.27 7060.307
7/31/90 50000 10789 67628 117628 0 60990 3343 64333 70181 134514.80 7686.560
7/31/91 50000 12002 79630 129630 0 61896 3392 65288 83724 149012.78 8390.359
7/31/92 50000 12892 92522 142522 0 67751 3713 71464 105393 176857.67 9097.617
7/31/93 50000 14026 106548 156548 3987 68518 8027 76545 121077 197622.42 10052.005
7/31/94 50000 14398 120946 170946 12888 58760 18757 77517 117253 194770.87 11552.246
7/31/95 50000 14770 135716 185716 824 58620 19576 78196 132105 210301.96 12503.089
7/31/96 50000 15671 151387 201387 0 57958 19355 77313 146133 223446.75 13436.365
TOTAL $ 20897
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/83 50000.00 799.12 0.00 % 62.569 799.120 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/84 50000 5660 5660 55660 0 48251 0 48251 5726 53977.34 69.995
7/31/85 50000 6185 11845 61845 0 52409 0 52409 12708 65117.42 77.741
7/31/86 50000 6855 18700 68700 0 57615 0 57615 21155 78770.56 85.543
7/31/87 50000 6993 25693 75693 0 55129 0 55129 27117 82246.28 93.345
7/31/88 50000 6853 32546 82546 2580 53496 2634 56130 33203 89333.87 5224.203
7/31/89 50000 7989 40535 90535 0 55780 2747 58527 43030 101557.99 5695.905
7/31/90 50000 8703 49238 99238 0 54748 2696 57444 51075 108519.86 6201.135
7/31/91 50000 9682 58920 108920 0 55561 2736 58297 61919 120216.11 6768.925
7/31/92 50000 10401 69321 119321 0 60817 2995 63812 78868 142680.00 7339.506
7/31/93 50000 11316 80637 130637 3216 61505 6475 67980 91451 159431.96 8109.459
7/31/94 50000 11616 92253 142253 10397 52745 15132 67877 89254 157131.49 9319.780
7/31/95 50000 11915 104168 154168 665 52620 15793 68413 101248 169661.17 10086.871
7/31/96 50000 12643 116811 166811 0 52026 15614 67640 112625 180265.74 10839.792
TOTAL $ 16858
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/84 50000.00 771.16 0.00 % 64.837 771.160 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/85 50000 5729 5729 55729 0 54309 0 54309 6009 60318.69 72.012
7/31/86 50000 6351 12080 62080 0 59704 0 59704 13261 72965.65 79.239
7/31/87 50000 6478 18558 68558 0 57128 0 57128 19057 76185.19 86.466
7/31/88 50000 6348 24906 74906 2390 55436 2440 57876 24874 82750.42 4839.206
7/31/89 50000 7401 32307 82307 0 57802 2544 60346 33727 94073.68 5276.146
7/31/90 50000 8062 40369 90369 0 56733 2497 59230 41292 100522.50 5744.143
7/31/91 50000 8968 49337 99337 0 57576 2534 60110 51246 111356.80 6270.090
7/31/92 50000 9635 58972 108972 0 63022 2774 65796 66369 132165.19 6798.621
7/31/93 50000 10481 69453 119453 2979 63735 5998 69733 77949 147682.62 7511.832
7/31/94 50000 10760 80213 130213 9631 54658 14016 68674 76877 145551.67 8632.958
7/31/95 50000 11037 91250 141250 616 54528 14629 69157 88001 157158.01 9343.520
7/31/96 50000 11710 102960 152960 0 53912 14464 68376 98605 166981.07 10040.954
TOTAL $ 15616
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/85 50000.00 837.62 0.00 % 59.693 837.620 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/86 50000 5264 5264 55264 0 54967 0 54967 5515 60482.88 65.683
7/31/87 50000 5369 10633 60633 0 52595 0 52595 10556 63151.08 71.673
7/31/88 50000 5261 15894 65894 1981 51037 2023 53060 15533 68593.18 4011.297
7/31/89 50000 6134 22028 72028 0 53216 2109 55325 22654 77979.20 4373.483
7/31/90 50000 6683 28711 78711 0 52231 2070 54301 29023 83324.73 4761.413
7/31/91 50000 7434 36145 86145 0 53007 2101 55108 37197 92305.45 5197.379
7/31/92 50000 7987 44132 94132 0 58021 2300 60321 49232 109553.87 5635.487
7/31/93 50000 8688 52820 102820 2470 58678 4972 63650 58766 122416.51 6226.679
7/31/94 50000 8919 61739 111739 7983 50321 11619 61940 58710 120650.13 7155.998
7/31/95 50000 9148 70887 120887 510 50202 12126 62328 67942 130270.80 7744.994
7/31/96 50000 9708 80595 130595 0 49635 11989 61624 76789 138413.30 8323.109
TOTAL $ 12944
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/86 50000.00 920.83 0.00 % 54.299 920.830 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/87 50000 4439 4439 54439 0 47843 0 47843 4363 52206.06 59.251
7/31/88 50000 4351 8790 58790 1638 46425 1672 48097 8608 56705.67 3316.121
7/31/89 50000 5071 13861 63861 0 48407 1744 50151 14314 64465.06 3615.539
7/31/90 50000 5525 19386 69386 0 47511 1712 49223 19661 68884.18 3936.239
7/31/91 50000 6146 25532 75532 0 48217 1737 49954 26354 76308.50 4296.650
7/31/92 50000 6603 32135 82135 0 52778 1901 54679 35888 90567.69 4658.832
7/31/93 50000 7183 39318 89318 2042 53376 4110 57486 43715 101201.17 5147.567
7/31/94 50000 7373 46691 96691 6600 45774 9605 55379 44361 99740.91 5915.831
7/31/95 50000 7563 54254 104254 422 45665 10025 55690 52004 107694.29 6402.752
7/31/96 50000 8025 62279 112279 0 45149 9911 55060 59365 114425.64 6880.676
TOTAL $ 10702
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/87 50000.00 881.10 0.00 % 56.747 881.100 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/88 50000 4166 4166 54166 1569 48519 1601 50120 4188 54308.37 3175.928
7/31/89 50000 4857 9023 59023 0 50590 1670 52260 9479 61739.71 3462.687
7/31/90 50000 5291 14314 64314 0 49654 1639 51293 14679 65972.03 3769.830
7/31/91 50000 5886 20200 70200 0 50392 1663 52055 21027 73082.49 4115.005
7/31/92 50000 6323 26523 76523 0 55158 1821 56979 29759 86738.85 4461.875
7/31/93 50000 6880 33403 83403 1955 55782 3936 59718 37204 96922.80 4929.949
7/31/94 50000 7061 40464 90464 6321 47838 9199 57037 38487 95524.26 5665.733
7/31/95 50000 7243 47707 97707 404 47724 9601 57325 45816 103141.40 6132.069
7/31/96 50000 7686 55393 105393 0 47185 9492 56677 52911 109588.19 6589.789
TOTAL $ 10249
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/88 50000.00 17.10 0.00 % 2923.977 17.100 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/89 50000 4472 4472 54472 0 52135 0 52135 4706 56841.83 3187.988
7/31/90 50000 4872 9344 59344 0 51170 0 51170 9568 60738.39 3470.765
7/31/91 50000 5420 14764 64764 0 51930 0 51930 15354 67284.77 3788.557
7/31/92 50000 5821 20585 70585 0 56842 0 56842 23015 79857.79 4107.911
7/31/93 50000 6334 26919 76919 1800 57485 1929 59414 29819 89233.85 4538.853
7/31/94 50000 6501 33420 83420 5819 49298 7015 56313 31633 87946.28 5216.268
7/31/95 50000 6668 40088 90088 372 49181 7389 56570 38389 94959.13 5645.608
7/31/96 50000 7076 47164 97164 0 48626 7305 55931 44963 100894.48 6067.016
TOTAL $ 7991
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/89 50000.00 17.83 0.00 % 2804.262 17.830 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/90 50000 4286 4286 54286 0 49075 0 49075 4352 53427.52 3053.001
7/31/91 50000 4767 9053 59053 0 49804 0 49804 9381 59185.91 3332.540
7/31/92 50000 5122 14175 64175 0 54515 0 54515 15730 70245.53 3613.453
7/31/93 50000 5571 19746 69746 1584 55132 1697 56829 21664 78493.02 3992.524
7/31/94 50000 5718 25464 75464 5119 47280 6171 53451 23909 77360.42 4588.400
7/31/95 50000 5866 31330 81330 327 47168 6499 53667 29862 83529.15 4966.061
7/31/96 50000 6224 37554 87554 0 46635 6426 53061 35689 88750.10 5336.747
TOTAL $ 7030
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/90 50000.00 17.50 0.00 % 2857.143 17.500 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/91 50000 4461 4461 54461 0 50743 0 50743 4645 55388.96 3118.748
7/31/92 50000 4793 9254 59254 0 55543 0 55543 10196 65739.08 3381.640
7/31/93 50000 5213 14467 64467 1482 56171 1588 57759 15698 73457.47 3736.392
7/31/94 50000 5352 19819 69819 4790 48171 5775 53946 18451 72397.53 4294.041
7/31/95 50000 5490 25309 75309 306 48057 6082 54139 24031 78170.51 4647.474
7/31/96 50000 5825 31134 81134 0 47514 6014 53528 29528 83056.52 4994.379
TOTAL $ 6578
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/91 50000.00 17.76 0.00 % 2815.315 17.760 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/92 50000 4326 4326 54326 0 54730 0 54730 4613 59343.11 3052.629
7/31/93 50000 4705 9031 59031 1338 55349 1433 56782 9528 66310.55 3372.866
7/31/94 50000 4832 13863 63863 4324 47466 5213 52679 12674 65353.71 3876.258
7/31/95 50000 4956 18819 68819 276 47354 5491 52845 17720 70565.05 4195.306
7/31/96 50000 5260 24079 74079 0 46819 5429 52248 22727 74975.64 4508.457
TOTAL $ 5938
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/92 50000.00 19.44 0.00 % 2572.016 19.440 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/93 50000 3966 3966 53966 1127 50566 1208 51774 4096 55870.48 2841.835
7/31/94 50000 4070 8036 58036 3644 43364 4392 47756 7308 55064.29 3265.972
7/31/95 50000 4175 12211 62211 233 43261 4626 47887 11568 59455.13 3534.788
7/31/96 50000 4431 16642 66642 0 42773 4574 47347 15824 63171.33 3798.637
TOTAL $ 5004
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/93 50000.00 19.66 0.00 % 2543.235 19.660 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/94 50000 3643 3643 53643 3261 42879 3004 45883 3395 49278.56 2922.809
7/31/95 50000 3737 7380 57380 208 42777 3216 45993 7215 53208.03 3163.379
7/31/96 50000 3966 11346 61346 0 42294 3179 45473 11060 56533.77 3399.505
TOTAL $ 3469
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/94 50000.00 16.86 0.00 % 2965.599 16.860 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/95 50000 3792 3792 53792 211 49881 222 50103 3884 53987.04 3209.693
7/31/96 50000 4023 7815 57815 0 49318 219 49537 7824 57361.43 3449.274
TOTAL $ 211
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/95 50000.00 16.82 0.00 % 2972.652 16.820 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/96 50000 3727 3727 53727 0 49435 0 49435 3690 53125.23 3194.542
TOTAL $ 0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO FOR ENDOWMENTS, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
8/01/96 50000.00 16.63 0.00 % 3006.615 16.630 50000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/96 50000 0 0 50000 0 50000 0 50000 0 50000.01 3006.615
TOTAL $ 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-START> AUG-1-1995
<PERIOD-END> JUL-31-1996
<INVESTMENTS-AT-COST> 50,547
<INVESTMENTS-AT-VALUE> 59,180
<RECEIVABLES> 79
<ASSETS-OTHER> 77
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 59,336
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 31
<TOTAL-LIABILITIES> 31
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 42,553
<SHARES-COMMON-STOCK> 3,186,313
<SHARES-COMMON-PRIOR> 3,142,057
<ACCUMULATED-NII-CURRENT> 158
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,775
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 8,633
<NET-ASSETS> 59,305
<DIVIDEND-INCOME> 1,574
<INTEREST-INCOME> 731
<OTHER-INCOME> 0
<EXPENSES-NET> 433
<NET-INVESTMENT-INCOME> 1,872
<REALIZED-GAINS-CURRENT> 6,352
<APPREC-INCREASE-CURRENT> (727)
<NET-CHANGE-FROM-OPS> 7,497
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,976
<DISTRIBUTIONS-OF-GAINS> 3,711
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 279,532
<NUMBER-OF-SHARES-REDEEMED> 518,349
<SHARES-REINVESTED> 283,073
<NET-CHANGE-IN-ASSETS> 2,570
<ACCUMULATED-NII-PRIOR> 261
<ACCUMULATED-GAINS-PRIOR> 2,134
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 301
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 433
<AVERAGE-NET-ASSETS> 59,959
<PER-SHARE-NAV-BEGIN> 18.06
<PER-SHARE-NII> .58
<PER-SHARE-GAIN-APPREC> 1.73
<PER-SHARE-DIVIDEND> .61
<PER-SHARE-DISTRIBUTIONS> 1.15
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.61
<EXPENSE-RATIO> .007
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
