FIDUCIARY MANAGEMENT ASSOCIATES - GROWTH PORTFOLIO
500 PLAZA DRIVE, SECAUCUS, NJ 07094, (201) 319-4000
ANNUAL REPORT
SEPTEMBER 30, 1995
LETTER TO SHAREHOLDERS FIDUCIARY MANAGEMENT ASSOCIATES - GROWTH PORTFOLIO
_______________________________________________________________________________
November 2, 1995
Dear Shareholder:
We are pleased to report on equity market activity and investment results for
Fiduciary Management Associates-Growth Portfolio's fiscal year ended September
30, 1995. The following table compares FMA's total returns over the twelve
months with that of the overall U.S. stock market, represented by the unmanaged
S&P 500-stock Index, and with the Russell 2000 Stock Index, also unmanaged,
which measures the performance of the smallest 2,000 stocks on the New York and
American Stock Exchanges and the NASDAQ:
Twelve Months
Through 9/30/95
---------------
FMA - GROWTH PORTFOLIO +30.94%
S&P 500 INDEX +29.64%
RUSSELL 2000 +20.18%
Also provided on the following page is a chart that shows the performance of a
hypothetical $10,000 initial investment in FMA over a ten-year period through
the end of September.
THE YEAR IN REVIEW
During the past year, the Portfolio benefited from a strong domestic equity
market. The Portfolio was invested to take advantage of the general rise in
stock prices by staying fully invested in small capitalization stocks. The
sectors of the market where we found the greatest reward versus risk
characteristics were in technology, energy and consumer services. In these
sectors we uncovered many companies whose valuations were modest compared to
their growth rates. As of the end of the fiscal year, our estimated earnings
growth for the companies held in FMA-Growth Portfolio was in excess of twice
the market's growth for valuations that were slightly below those of the
market. This is consistent with our investment philosophy of buying 'future'
growth stocks at reasonable valuations.
Three of the Portfolio's larger investments are examples of this strategy. Nine
West, at 3.9% of the total assets, is currently the biggest position. Nine West
has continued to grow internally while increasing its long-term growth rate by
acquiring the shoe division of U.S. Shoe, Inc. Through an excellent management
team and a proven strategy, we believe Nine West will continue to be a dominant
category leader in the retailing area.
Hummingbird Communications represents another example of our investment
philosophy. Hummingbird currently enjoys a 45% market share of an industry that
is growing at more than 40% annually and has recently made an acquisition to
enable it to compete in the Internet market. The company has excellent
management, is well positioned for the future and is trading at a market
multiple of about 20 times.
Another large position for the Portfolio is in Reading & Bates, which was
increased during the reporting period. There is currently a supply/demand
imbalance in deep-sea drilling rigs and we believe Reading & Bates is, and will
be, one of the main beneficiaries of this situation.
MARKET ENVIRONMENT AND OUTLOOK
The market has benefited from 1995's modest growth and modest inflation
economy. When economic growth follows such a path-neither too fast nor too
slow-we often see better corporate profits and higher market valuations. As
stock investors have accepted this scenario as opposed to a 'boom/bust'
scenario, higher stock prices have followed.
Looking forward, we still have a positive outlook for the equity market and
believe the U.S. economy continues to be characterized by moderate growth and
moderate inflation. This environment is allowing most leading U.S. companies to
show rising earnings and cash flow and improvements in their balance sheets.
Continual cost cutting by corporations coupled with a somewhat weak dollar has
placed the U.S. in a very competitive position in relation to Europe and Japan.
We should mention that any change in Washington that demonstrates fiscal
responsibility (through Social Security, Medicare, Medicaid or balanced
budgets) would be viewed positively by the markets. Finally, while valuations
have increased this year, we believe that considering current market conditions
the Fund's investments are still relatively cheap.
We continue to believe that FMA-Growth Portfolio's strategy will provide
superior relative investment results for long-term shareholders. We appreciate
your continued investment in the Portfolio and look forward to reporting to you
again in the coming months.
Sincerely,
Alden M. Stewart
President
1
FIDUCIARY MANAGEMENT ASSOCIATES - GROWTH PORTFOLIO
_______________________________________________________________________________
FIDUCIARY MANAGEMENT ASSOCIATES - GROWTH PORTFOLIO
GROWTH OF A $10,000 INVESTMENT:
9/30/85 TO 9/30/95
This chart illustrates the total value of an assumed investment in FMA with
dividends and capital gains reinvested. Past performance is not indicative of
future results, and is not representative of future gain or loss in capital
value or dividend income.
The unmanaged Russell 2000 Stock Index is comprised of the smallest 2000 stocks
on The New York and American Stock Exchanges and the NASDAQ.
The unmanaged Standard and Poor's 500-stock Index includes 500 U.S. stocks. It
is a common measure of the performance of the overall U.S. stock market.
2
TEN LARGEST HOLDINGS
SEPTEMBER 30, 1995 FIDUCIARY MANAGEMENT ASSOCIATES - GROWTH PORTFOLIO
_______________________________________________________________________________
COMPANY VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
Nine West Group, Inc. $ 4,968,600 3.9%
Telephone and Data Systems, Inc. 4,288,200 3.3
Reading & Bates Corp. 3,805,200 3.0
Healthwise of America, Inc. 3,074,400 2.4
Informix Corp. 3,009,500 2.3
United States Cellular Corp. 2,978,400 2.3
Millicom International Cellular, S.A. 2,823,788 2.2
Community Health Systems, Inc. 2,749,537 2.1
Global Marine, Inc. 2,642,662 2.1
Twentieth Century Industries, Inc. 2,636,812 2.1
$32,977,099 25.7%
3
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1995 FIDUCIARY MANAGEMENT ASSOCIATES - GROWTH PORTFOLIO
_______________________________________________________________________________
COMPANY SHARES VALUE
- ----------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS-90.1%
CONSUMER PRODUCTS & SERVICES-26.4%
AIRLINES-4.5%
Alaska Air Group, Inc.* 135,400 $ 2,115,625
America West Airlines, Inc.* 76,000 1,178,000
Mesa Airlines, Inc.* 106,900 1,089,044
USAir Group, Inc.* 116,400 1,338,600
5,721,269
APPAREL-2.3%
Jones Apparel Group, Inc.* 29,000 1,033,125
Nautica Enterprises, Inc.* 57,625 1,973,656
3,006,781
BROADCASTING & CABLE-2.8%
Cablevision Systems Corp. Cl.A* 17,500 1,043,437
CD Radio, Inc.* 87,900 357,094
Infinity Broadcasting Corp. Cl.A* 57,500 1,883,125
Valuevision International, Inc.* 58,900 346,038
3,629,694
COSMETICS-1.0%
Jean Phillippe Fragrances, Inc.* 124,000 1,302,000
ENTERTAINMENT & LEISURE-1.0%
Heritage Media Corp.* 40,500 1,220,063
REAL ESTATE-0.5%
Summit Properties, Inc. 35,200 664,400
RESTAURANTS & LODGING-4.3%
HFS, Inc.* 34,000 1,780,750
Host Marriott Corp.* 150,400 1,861,200
La Quinta Inns, Inc. 42,300 1,184,400
Red Lion Hotels, Inc.* 33,700 707,700
5,534,050
RETAILING-9.2%
Bed Bath & Beyond, Inc.* 56,000 1,708,000
Corporate Express, Inc.* 51,800 1,262,625
Industrie Natuzzi S.p.A. (ADR)(a) 57,900 2,062,687
Musicland Stores, Inc.* 85,500 726,750
Nine West Group, Inc.* 109,200 4,968,600
Staples, Inc.* 36,600 1,033,950
11,762,612
OTHER-0.8%
Robert Mondavi Corp. Cl.A* 38,000 969,000
33,809,869
TECHNOLOGY-25.1%
COMMUNICATIONS EQUIPMENT-4.1%
Ascend Communications, Inc* 8,000 640,000
Dionex Corp.* 24,900 1,301,025
Orion Network Systems, Inc.* 166,667 2,000,004
Scientific-Atlanta, Inc. 39,000 658,125
Stratacom, Inc.* 11,000 607,750
5,206,904
COMPUTER PERIPHERALS-2.7%
Komag, Inc.* 23,500 1,536,312
Lam Research Corp.* 10,500 627,375
Quantum Corp.* 32,700 715,313
Read-Rite Corp.* 15,500 565,750
3,444,750
COMPUTER SOFTWARE & SERVICES-6.4%
Cadence Design Systems, Inc.* 22,000 863,500
Checkfree Corp.* 10,100 202,000
Computer Management Sciences, Inc.* 2,600 44,200
Hummingbird Communications, Ltd.* 27,900 1,039,275
Informix Corp.* 92,600 3,009,500
Intersolv, Inc.* 44,200 889,525
4
FIDUCIARY MANAGEMENT ASSOCIATES - GROWTH PORTFOLIO
_______________________________________________________________________________
COMPANY SHARES VALUE
- ----------------------------------------------------------------------
Mentor Graphics Corp.* 38,600 $ 805,775
Symantec Corp.* 33,700 1,011,000
Wang Labs, Inc.* 23,700 376,238
8,241,013
ELECTRONICS-0.7%
Kemet Corp.* 27,600 945,300
TELECOMMUNICATIONS-11.2%
Adtran, Inc.* 16,400 569,900
Glenayre Technologies, Inc.* 9,450 680,400
Millicom International Cellular, S.A.* 87,900 2,823,788
Ortel Corp.* 58,200 814,800
Telephone and Data Systems, Inc. 102,100 4,288,200
Tellabs, Inc.* 14,900 627,662
United States Cellular Corp.* 81,600 2,978,400
Vanguard Cellular Systems, Inc.* 59,800 1,532,375
14,315,525
32,153,492
HEALTH CARE-14.3%
BIOTECHNOLOGY-1.3%
Centocor, Inc.* 44,900 488,288
Cephalon, Inc.* 26,950 741,125
MedImmune, Inc.* 42,600 473,925
1,703,338
DRUGS, HOSPITAL SUPPLIES & MEDICAL SERVICES-13.0%
Apria Healthcare Group, Inc.* 59,060 1,461,735
Community Health Systems, Inc.* 68,100 2,749,537
Healthwise of America, Inc.* 109,800 3,074,400
Manor Care, Inc. 25,600 870,400
Medcath, Inc.* 79,200 1,465,200
Physician Reliance Network, Inc.* 67,300 2,490,100
Sun Healthcare Group, Inc.* 166,000 $2,137,250
Surgical Care Affiliates, Inc. 66,500 1,546,125
Ventritex, Inc.* 40,200 864,300
16,659,047
18,362,385
ENERGY-11.3%
OIL & GAS SERVICES-9.7%
Arethusa, Ltd. 83,400 1,720,125
BJ Services Co.* 37,500 946,875
Global Marine, Inc.* 370,900 2,642,662
Noble Drilling Corp.* 197,400 1,529,850
Reading & Bates Corp.* 317,100 3,805,200
Rowan Cos., Inc.* 235,700 1,767,750
12,412,462
OTHER-1.6%
Diamond Shamrock, Inc. 81,100 1,997,088
14,409,550
BASIC INDUSTRIES-6.3%
AIR FREIGHT-1.0%
Pittston Services Group 47,900 1,299,288
ELECTRONICS-1.4%
AVX Corp. 49,000 1,641,500
Zycon Corp.* 15,400 188,650
1,830,150
ENVIRONMENTAL CONTROL-1.3%
USA Waste Services, Inc.* 83,400 1,626,300
MACHINERY-0.8%
JLG Industries, Inc. 21,700 976,500
SURFACE TRANSPORTATION & SHIPPING-1.8%
Xtra Corp. 52,500 2,329,687
8,061,925
FINANCIAL SERVICES-6.0%
BANKING-1.0%
First USA, Inc. 24,000 1,302,000
INSURANCE-4.4%
National Re Corp. 44,700 1,581,262
PXRE Corp. 22,200 604,950
5
PORTFOLIO OF INVESTMENTS
(CONTINUED) FIDUCIARY MANAGEMENT ASSOCIATES - GROWTH PORTFOLIO
_______________________________________________________________________________
COMPANY SHARES VALUE
- ----------------------------------------------------------------------
Roosevelt Financial Group, Inc. 48,300 $ 851,288
Twentieth Century Industries, Inc.* 171,500 2,636,812
5,674,312
OTHER-0.6%
Union Acceptance Corp.* 39,200 735,000
7,711,312
RESTRICTED SECURITIES & PRIVATE PLACEMENTS-0.7%
Menlo Ventures III, A Limited
Partnership*(b) 1,000,000 285,000
Oak Investment Partners III*(b) 2,000,000 420,000
Oscco II, A Limited Partnership*(b) 750,000 75,750
RCS II, A Limited Partnership*(b) 1,000,000 73,200
853,950
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- ----------------------------------------------------------------------
Total Common Stocks & Other Investments
(cost $97,174,247) $115,362,483
CORPORATE BONDS-0.6%
COMMUNICATION & EQUIPMENT-0.6%
Intelcom Group, Inc. 8.00%,9/17/98(b)(c)
(cost $908,620) $ 922 790,326
SHORT-TERM DEBT SECURITIES-10.2%
Federal Home Loan Mortgage Corp.
6.30%, 10/02/95
(amortized cost $13,097,707) 13,100 13,097,707
TOTAL INVESTMENTS-100.9%
(cost $111,180,574) 129,250,516
Other assets less liabilities-(0.9%) (1,115,598)
NET ASSETS-100% $128,134,918
* Non-income producing security.
(a) Country of origin-Italy.
(b) Illiquid security, valued at fair value (see Notes A & D).
(c) Interest on this bond is paid-in-kind.
Glossary:
ADR - American Depository Receipt.
See notes to financial statements.
6
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995 FIDUCIARY MANAGEMENT ASSOCIATES - GROWTH PORTFOLIO
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $111,180,574) $129,250,516
Cash 60,498
Receivable for investment securities sold 323,250
Receivable for shares of beneficial interest sold 153,387
Dividends and interest receivable 20,917
Total assets 129,808,568
LIABILITIES
Payable for investment securities purchased 1,334,941
Advisory fee payable 240,253
Accrued expenses 98,456
Total liabilities 1,673,650
NET ASSETS (equivalent to $32.90 per share, based on 3,
895,232 shares of beneficial interest outstanding) $128,134,918
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $38,952
Additional paid-in capital 89,230,462
Accumulated undistributed net realized gain 20,795,562
Net unrealized appreciation of investments 18,069,942
$128,134,918
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $32.90
See notes to financial statements.
7
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1995
FIDUCIARY MANAGEMENT ASSOCIATES - GROWTH PORTFOLIO
_______________________________________________________________________________
INVESTMENT INCOME
Interest $464,409
Dividends (net of foreign taxes withheld of $1,106) 452,155 $916,564
EXPENSES
Advisory fee 833,866
Administrative 117,759
Custodian 77,339
Audit and legal 74,803
Trustees' fees 33,500
Transfer agency 22,086
Printing 11,846
Registration 6,830
Miscellaneous 19,627
Total expenses 1,197,656
Net investment loss (281,092)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 20,853,916
Net change in unrealized appreciation of investments 9,662,236
Net gain on investments 30,516,152
NET INCREASE IN NET ASSETS FROM OPERATIONS $30,235,060
STATEMENTS OF CHANGES IN NET ASSETS
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
SEP. 30, SEP. 30,
1995 1994
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment loss $ (281,092) $ (534,084)
Net realized gain on investments 20,853,916 15,291,318
Net change in unrealized appreciation of
investments 9,662,236 (20,782,350)
Net increase (decrease) in net assets
from operations 30,235,060 (6,025,116)
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments (15,581,382) (971,941)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase (decrease) 7,046,188 (25,499,920)
Total increase (decrease) 21,699,866 (32,496,977)
NET ASSETS
Beginning of year 106,435,052 138,932,029
End of year $128,134,918 $106,435,052
See notes to financial statements.
8
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995 FIDUCIARY MANAGEMENT ASSOCIATES - GROWTH PORTFOLIO
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Fiduciary Management Associates - Growth Portfolio (the 'Fund') is registered
under the Investment Company Act of 1940, as a diversified, open-end investment
company. The Fund was organized as a Massachusetts business trust on March 12,
1986. The following is a summary of significant accounting policies followed by
the Fund.
1. SECURITY VALUATION
Portfolio securities traded on national securities exchanges are valued at the
last reported sales price, or, if no sale occurred, at the mean of the bid and
ask price at the regular close of the New York Stock Exchange. Over-the-counter
securities not traded on national securities exchanges are valued at the mean
of the closing bid and asked price. Securities which mature in 60 days or less
are valued at amortized cost which approximates market value. Securities for
which current market quotations are not readily available (including
investments which are subject to limitations as to their sale) are valued at
their fair value as determined in good faith by the Board of Trustees. In
determining fair value, consideration is given to cost, operating, and other
financial data.
2. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
3. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Security transactions are accounted for on the date securities are
purchased or sold. Security gains and losses are determined on the identified
cost basis.
4. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date and are determined in accordance with income tax regulations.
5. RECLASSIFICATION OF NET ASSETS
As the Fund may not utilize net investment losses in future periods for tax
purposes, the Fund reclassified net investment losses of $281,092 to additional
paid-in capital at September 30, 1995. This reclassification had no effect on
net assets.
NOTE B: ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the Fund pays Alliance
Capital Management L.P. (the 'Adviser'), an advisory fee at a quarterly rate
equal to .1875 of 1% (approximately .75 of 1% on an annual basis) of the net
assets of the Fund valued on the last business day of the previous quarter. The
Adviser has agreed, under the terms of the Investment Advisory Agreement, to
reimburse the Fund to the extent that its aggregate expenses (excluding
interest, taxes, brokerage and extraordinary expenses) exceed the limits
prescribed by any state in which the Fund's shares are qualified for sale. The
Fund believes that the most restrictive expense limitation imposed by any state
is 2.5% of the first $30 million of its average daily net assets, 2% of the
next $70 million of its average daily net assets and 1.5% of its average daily
net assets in excess of $100 million. No reimbursement was required for the
year ended September 30, 1995. Pursuant to the advisory agreement, the Fund
paid $117,759 to the Adviser representing the cost of certain legal and
accounting services provided to the Fund by the Adviser for the year ended
September 30, 1995.
The Fund compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary of
the Adviser) for providing personnel and facilities to perform transfer agency
services for the Fund. Such compensation amounted to $18,016 for the year ended
September 30, 1995.
Brokerage commissions paid on securities transactions for the year ended
September 30, 1995 amounted to $470,250, of which $6,616 was paid to affiliated
brokers.
9
NOTES TO FINANCIAL STATEMENTS
(CONTINUED) FIDUCIARY MANAGEMENT ASSOCIATES - GROWTH PORTFOLIO
_______________________________________________________________________________
NOTE C: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
aggregated $162,364,199 and $175,683,412, respectively, for the year ended
September 30, 1995. At September 30, 1995, the cost of securities for federal
income tax purposes was $111,461,239. Accordingly, gross unrealized
appreciation of investments was $23,396,722 and gross unrealized depreciation
of investments was $5,607,445 resulting in net unrealized appreciation of
$17,789,277.
NOTE D: ILLIQUID SECURITIES
DATE
ACQUIRED COST VALUE
-------- ---------- ----------
Intelcom Group, Inc., 8%, 9/17/98 9/16/93 $ 908,620 $ 790,326
Menlo Ventures III, A Limited Partnership 7/28/83 482,157 285,000
Oak Investment Partners III 9/28/83 1,510,517 420,000
Oscco II, A Limited Partnership 2/16/84 663,779 75,750
RCS II, A Limited Partnership 12/29/82 147,462 73,200
---------- ----------
$3,712,535 $1,644,276
The securities shown above are restricted as to sale and have been valued at
fair value in accordance with procedures described in Note A.
The value of these securities at September 30, 1995 represents 1.28% of net
assets.
NOTE E: SHARES OF BENEFICIAL INTEREST
There is an unlimited number of $0.01 par value shares of beneficial interest
authorized. Transactions in shares were as follows:
SHARES AMOUNT
------------------------ ---------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEP. 30, SEP. 30, SEP. 30, SEP. 30,
1995 1994 1995 1994
---------- ------------ ------------ -------------
Shares sold 673,646 2,099 $15,835,914 $ 60,000
Shares issued in
reinvestment of
distributions -0- 30,620 -0- 947,370
Shares redeemed (332,821) (918,537) (8,789,726) (26,507,290)
Net increase (decrease) 340,825 (885,818) $ 7,046,188 $(25,499,920)
10
FINANCIAL HIGHLIGHTS FIDUCIARY MANAGEMENT ASSOCIATES - GROWTH PORTFOLIO
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------------
1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $29.94 $31.29 $27.41 $30.93 $23.09
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.07) (.20) (.10) (.07) .07
Net realized and unrealized gain (loss) on investments 7.51 (.93) 7.29 (2.24) 8.28
Net increase (decrease) in net asset value from operations 7.44 (1.13) 7.19 (2.31) 8.35
LESS: DISTRIBUTIONS
Dividends from net investment income -0- -0- -0- (.07) (.10)
Distributions from net realized gains (4.48) (.22) (3.31) (1.14) (.41)
Total dividends and distributions (4.48) (.22) (3.31) (1.21) (.51)
Net asset value, end of year $32.90 $29.94 $31.29 $27.41 $30.93
TOTAL RETURN
Total investment return based on net asset value (a) 30.94% (3.63)% 27.79% (7.52)% 37.03%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $128,135 $106,435 $138,932 $129,188 $182,538
Ratio of expenses to average net assets 1.11% .98% .97% .92% .96%
Ratio of net investment income (loss) to average net assets (.26)% (.42)% (.31)% (.19)%. 25%
Portfolio turnover rate 159% 116% 100% 122% 102%
</TABLE>
(a) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
11
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS FIDUCIARY MANAGEMENT ASSOCIATES - GROWTH PORTFOLIO
_______________________________________________________________________________
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES FIDUCIARY MANAGEMENT
ASSOCIATES-GROWTH PORTFOLIO
We have audited the accompanying statement of assets and liabilities of
Fiduciary Management Associates-Growth Portfolio (the sole portfolio of
Fiduciary Management Associates), including the portfolio of investments, as of
September 30 1995, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the years indicated
therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Fiduciary Management Associates-Growth Portfolio at September 30, 1995, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with generally
accepted accounting principles.
New York, New York
November 3, 1995
12
FIDUCIARY MANAGEMENT ASSOCIATES - GROWTH PORTFOLIO
_______________________________________________________________________________
BOARD OF TRUSTEES
JOHN D. CARIFA, CHAIRMAN
RUTH BLOCK (1)
DAVID H. DIEVLER (1)
JOHN H. DOBKIN (1)
WILLIAM H. FOULK, JR. (1)
DR. JAMES M. HESTER (1)
CLIFFORD L. MICHEL (1)
HENRY UGARTE (1)
OFFICERS
ALDEN M. STEWART, PRESIDENT
THOMAS BARDONG, VICE PRESIDENT
RANDALL E. HAASE, VICE PRESIDENT
TIMOTHY D. RICE, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
PATRICK J. FARRELL, CONTROLLER
CUSTODIAN
STATE STREET BANK & TRUST COMPANY
225 Franklin Street
Boston, MA 02110
DISTRIBUTOR
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-free 1-(800) 221-5672
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
(1) Member of the Audit Committee.
13
