ANNUAL REPORT
SEPTEMBER 30, 1997
FIDUCIARY
CAPITAL GROWTH
FUND, INC.
A NO-LOAD
MUTUAL FUND
FIDUCIARY
CAPITAL GROWTH
FUND, INC.
October 27, 1997
Dear Fellow Shareholder:
It has been a wonderful period to be an equity investor and the Fiduciary
Capital Growth Fund has continued to perform well. Year-to-date through
September, your Fund was up 28.0% and over the past twelve months advanced
38.4%. The average annual total return for the five and ten year periods ending
September 30, 1997 were 19.1% and 12.1%, respectively. More importantly, these
results have been achieved with a high sensitivity to risk. Over the past few
years, when the market has experienced rough periods the Fund experienced very
strong relative performance. We continue to expect this superior downside
protection in the future.
The Morningstar, Inc., mutual fund rating service has given the Fund a four
star rating for the five year period ending, September 30, 1997. This rating
indicates the Fund has performed in the top 1/3 of all 1,187 domestic equity
funds for that period. This results from the strong fundamentals of the
securities in the Fiduciary Capital Growth Fund. Over the past three years, your
portfolio companies have achieved sales and earnings growth of 17% and 21%,
respectively. While these numbers compare favorably to the S&P 500, we believe
the relative fundamental performance will be even better over the next few
years. We expect the sales and earnings growth of the S&P 500 to regress to the
long term average, approximately 6-7%. In recent years exceptionally strong
stock market performance has accrued to the large companies in the S&P 500, many
of which now sell at valuations not seen in nearly 30 years. The S&P 500 P/E
multiple on projected 1998 earnings is currently 19. Your portfolio, however,
which we believe will experience earnings growth of over two times that of the
S&P 500 over the next three years, sells at a 1998 P/E multiple of 15.5. Twice
the growth rate of the S&P 500 at a 20% discount strikes us as quite attractive.
Our lengthy years of investment experience, however, lead us to always be
sensitive to the downside. We have not experienced a meaningful correction in
seven years. While the next several years may not be as hospitable to equity
investors as the last several, we are confident that value embedded in the
stocks of the Fiduciary Capital Growth Fund will yield very satisfactory long
term rates of return.
As is customary in our October quarterly letter, we highlight a few of your
stocks.
ARROW ELECTRONICS, INC.
Arrow is the largest electronics distributor in the world, yet has a modest
market value of less than $3 billion (the median market value of the S&P 500 is
$6.6 billion). We believe the Company can become much larger, as it is well
positioned to capitalize on two secular growth trends. The first is the
increasing amount of electronic content in a vast array of products, from
automobiles to lasers. The second is a continuing trend toward distribution as
opposed to direct sales. Distributors are increasingly more cost effective and
can reach a much broader audience than manufacturers' sales forces.
Additionally, Arrow has been positioning itself as a strategic partner to
manufacturers in materials management and logistics. While these trends bode
well for the long run, Arrow has been negatively affected recently by weak
European economies and negative currency comparisons. We view these as temporary
factors, more than adequately discounted by a P/E ratio below 13 on 1998
estimates. Arrow has also repurchased nearly 3 million shares over the past year
and has authorized an additional $50 million for share repurchases.
DENTSPLY INTERNATIONAL INC.
Dentsply is the world's leading producer of dental supplies, including
artificial teeth, impression materials, prophylaxis paste, sealants, ultrasonic
scalers, and crown and bridge materials. They are also the leading US producer
of dental x-ray equipment, handpieces, film mounts, and endodontic instruments.
Dentsply is number one or number two in nearly all of their markets.
Approximately 70% of their products are considered consumables, which accounts
for a high degree of recurring revenue. This recurring revenue, combined with
strong market positions, results in strong and consistent operating margins,
which currently run in the 18% range. We like the growth outlook for Dentsply
because they are investing aggressively in new products, international
expansion, and acquisitions; they have a good track record in all these areas.
Strong cash generation allows the Company to grow through internally generated
funds. The stock trades for less than 18 times next year's estimate, a slight
discount to the market P/E ratio. With superior earnings growth and consistency
expected over the next few years, we feel the stock should sell at a premium.
MINERALS TECHNOLOGIES INC.
Minerals Technologies (MTX) is the largest producer of precipitated calcium
carbonate (PCC), which is predominately used in the paper industry as a low-cost
filler, brightener, opacifier, and bulking agent. It replaces higher cost wood
pulp and titanium dioxide, while improving the strength and quality of the
paper. The economic and quality arguments for using PCC are compelling and MTX,
with an 80% market share, is exceptionally well positioned to grow as fill rates
expand from 15% to perhaps the 25% level, not to mention penetrating paper
plants that have yet to embrace PCC. Although the paper industry is quite
cyclical, we expect the Company to grow PCC revenues 15-20% over the next five
years. MTX is able to mitigate the extreme volatility in its end markets through
ten year production contracts. The Company actually co-locates its plants
within a paper company's facility, and through unique volume and price
arrangements, is able to produce relatively consistent results. MTX also
manufactures refractory products and processes minerals -- both non-strategic
and cyclical businesses, but positive cash generators. MTX is currently trading
at 17 times next years earnings, an attractive valuation for such a premium
quality company. The balance sheet is strong and the Company generates
significant free cash.
PEP BOYS - MANNY, MOE & JACK
Pep Boys is the nation's second largest automobile parts retailer and the
only national chain emphasizing the service side of the business. Pep Boys has
a good long-term track record in auto parts retailing, but this segment of the
market is maturing. Difficult same-store-sales trends have retarded the stock;
however, longer term we expect a shakeout, with companies such as AutoZone and
Pep Boys gaining market share. Pep Boys' recent growth has come primarily from
service, through its industry leading 5,500 service bays serving retail
customers, and its commercial business, where delivery to third party service
stations is made from the retail store network. It is estimated that the
service side of the industry is over three times the size of the do-it-yourself
parts retailing segment ($140 billion versus $40 billion). At 15 times earnings,
we feel the market has overly penalized the Company for slower do-it-yourself
sales, while not giving it enough credit for the vast opportunity in service.
WAUSAU PAPER MILLS CO.
Wausau is a niche producer of specialty and high performance papers and has a
long-term track record of superior financial and stock market performance. They
are the leading maker of specialty colored printing and writing grades and are
also a strong player in pressure sensitive products, medical and food packaging
papers. The Company is well known for its quality and service, for which they
get a premium, reflected in consistently high operating margins, currently about
15%. Wausau recently announced that it was merging with its neighbor, Mosinee
Paper, a specialty kraft grade producer who also has a highly successful
commercial towel and tissue division. We feel both companies are well managed
and are confident the corporate integration will be successful. Wausau produces
largely bleached grades, while Mosinee produces mostly unbleached, and this
complimentary offering provides marketing synergies. The combined entity will
also have more financial and stock market presence, which should aid in making
acquisitions. At 14 times next August's estimate, the stock trades at a
historically attractive relative multiple.
The Board of Directors has declared a distribution of $3.00065 from net long-
term realized capital gains and $0.73309 from ordinary income which includes
$0.72061 from net short-term capital gains. Your distribution confirmation is
enclosed.
As a final comment, you will notice Patrick English's name on this letter.
Pat has been with Fiduciary Management for eleven years, the last seven as
Director of Research. He will be taking a more direct role in the management of
the Fiduciary Capital Growth Fund.
Thank you for your continued confidence in Fiduciary Capital Growth Fund,
Inc.
Sincerely,
/s/ Ted D. Kellner /s/ Donald S. Wilson /s/ Patrick J. English
Ted D. Kellner, C.F.A Donald S. Wilson, C.F.A Patrick J. English, C.F.A.
225 E. Mason St. o Milwaukee, WI 53202 o 414-226-4555
REPORT OF INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
(PRICE WATERHOUSE LOGO)
100 East Wisconsin Avenue
Suite 1500
Milwaukee, WI 53202
October 27, 1997
To the Shareholders and Board of Directors
of Fiduciary Capital Growth Fund, Inc.
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Fiduciary Capital Growth Fund, Inc. (the "Fund") at September 30, 1997, the
results of its operations for the year then ended, the changes in its net as-
sets for each of the two years in the period then ended and the financial
highlights for each of the ten years in the period then ended, in conformity
with generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at September 30, 1997 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
STATEMENT OF NET ASSETS
September 30, 1997
QUOTED
MARKET
SHARES COST VALUE
------ ------ -------
LONG-TERM INVESTMENTS -- 96.7% (A)<F2>
COMMON STOCKS -- 95.6% (A)<F2>
BANKS/SAVINGS & LOANS -- 3.4%
38,000 First Financial Corp. (Wis.) $1,203,382 $1,294,394
9,000 Southwest Bancorporation
of Texas, Inc.*<F1> 249,750 265,500
12,500 Sterling Bancshares, Inc. 245,312 248,437
----------- ----------
1,698,444 1,808,331
CHEMICAL/SPECIALTY MATERIALS -- 7.2%
10,000 H.B. Fuller Co. 516,250 541,880
19,000 M. A. Hanna Company 492,955 504,697
30,500 Minerals Technologies Inc. 1,112,079 1,359,171
23,000 OM Group, Inc. 605,360 918,574
15,000 Sigma-Aldrich Corp. 495,000 494,070
----------- ----------
3,221,644 3,818,392
CONSUMER PRODUCTS - NON-DURABLE -- 4.1%
60,000 Jostens, Inc. 1,241,986 1,627,500
15,700 Oneida Ltd. 501,796 557,350
----------- ----------
1,743,782 2,184,850
CONSUMER SERVICES -- 1.4%
2,100 Grey Advertising Inc. 466,200 722,400
DISTRIBUTION -- 3.9%
17,000 Arrow Electronics, Inc.*<F1> 634,950 986,000
12,500 Black Box Corp.*<F1> 247,750 546,875
30,000 Pioneer-Standard
Electronics, Inc. 496,527 515,640
----------- ----------
1,379,227 2,048,515
ELECTRONICS -- 8.2%
27,600 Berg Electronics Corp.*<F1> 887,497 1,483,500
19,700 Fluke Corp. 817,970 1,063,800
42,000 Methode Electronics, Inc. 670,125 1,081,500
29,000 Tollgrade
Communications Inc.*<F1> 680,625 681,500
----------- ----------
3,056,217 4,310,300
ENERGY/ENERGY SERVICES -- 7.5%
45,700 Burlington Resources Inc. 1,798,376 2,345,004
35,500 Noble Affiliates, Inc. 1,445,020 1,588,625
----------- ----------
3,243,396 3,933,629
HEALTH INDUSTRIES -- 11.2%
55,000 Covance Inc.*<F1> 919,535 1,189,375
30,000 Dentsply International Inc. 1,042,500 1,680,000
26,000 Haemonetics Corp.*<F1> 519,562 490,750
10,000 Patterson Dental Co.*<F1> 230,000 405,000
28,600 Quest Diagnostics
Incorporated*<F1> 466,933 484,427
38,000 Sybron International Corp.*<F1> 462,548 1,631,644
----------- ----------
3,641,078 5,881,196
INSURANCE -- 5.6%
23,000 Fidelity National
Financial, Inc. 522,960 544,824
48,000 Old Republic
International Corp. 760,194 1,872,000
9,000 The PMI Group, Inc. 517,959 515,817
----------- ----------
1,801,113 2,932,641
LEISURE/RESTAURANTS -- 1.1%
25,000 International Game
Technology 435,095 568,750
MEDIA/COMMUNICATION -- 3.6%
30,000 Comcast Corp.
Special Cl A NV 457,500 772,500
40,000 Cox Communications, Inc.*<F1> 799,837 1,102,520
----------- ----------
1,257,337 1,875,020
MISCELLANEOUS - FINANCE -- 6.6%
10,000 Delphi Financial Group, Inc.*<F1> 431,000 429,380
40,000 Fannie Mae 506,500 1,880,000
14,500 Financial Security
Assurance Holdings Ltd. 416,984 674,250
10,000 Sirrom Capital Corp. 390,000 518,750
----------- ----------
1,744,484 3,502,380
MISCELLANEOUS - TECHNOLOGY MANUFACTURING -- 9.1%
35,000 Bell & Howell Holdings Co.*<F1> 1,021,895 1,135,330
29,500 W. H. Brady Co. 644,750 921,875
14,500 Corning Inc. 329,270 685,125
24,000 Raychem Corp. 1,105,789 2,028,000
----------- ----------
3,101,704 4,770,330
PAPER/PACKAGING -- 3.7%
21,800 Liqui-Box Corp. 461,900 822,950
45,000 Wausau Paper Mills Co. 834,625 1,102,500
----------- ----------
1,296,525 1,925,450
PRINTING/PUBLISHING/FORMS -- 1.0%
15,000 Wallace Computer
Services, Inc. 525,320 553,125
SHARES QUOTED
OR PRINCIPAL MARKET
AMOUNT COST VALUE
--------- ----- -------
PRODUCER MANUFACTURING -- 5.1%
36,000 Regal-Beloit Corp. 274,810 1,107,000
57,000 Watts Industries, Inc. 1,168,999 1,581,750
----------- ----------
1,443,809 2,688,750
RETAIL TRADE -- 11.3%
41,000 Autozone, Inc.*<F1> 964,140 1,230,000
53,000 Casey's General Stores, Inc. 386,125 1,305,125
69,750 Family Dollar Stores, Inc. 691,355 1,591,207
41,000 Mac Frugal's Bargains o
Close-outs Inc.*<F1> 1,049,699 1,250,500
22,000 Pep Boys-Manny,
Moe & Jack 650,540 599,500
----------- ----------
3,741,859 5,976,332
SOFTWARE/SERVICE -- 1.6%
35,200 SunGard Data
Systems Inc.*<F1> 99,000 853,600
----------- ----------
Total common stocks 33,896,234 50,353,991
REITS -- 1.1% (A)<F2>
23,600 Security Capital
Industrial Trust 497,252 550,187
WARRANTS -- 0.0% (A)<F2>
1,098 Security Capital Group Inc.
Warrants, 09/18/98*<F1> 8,646 8,441
----------- ----------
Total long-term
investments 34,402,132 50,912,619
SHORT-TERM INVESTMENTS -- 1.3% (A)<F2>
VARIABLE RATE DEMAND NOTES
$689,936 Wisconsin Electric
Power Co. 689,936 689,936
----------- ----------
Total variable rate
demand notes 689,936 689,936
----------- ----------
Total investments $35,092,068 51,602,555
===========
Cash and receivables, less
liabilities 2.0% (A)<F2> 1,074,954
-----------
Net Assets $52,677,509
===========
Net Asset Value Per Share
($0.01 par value
10,000,000 shares
authorized), offering
and redemption price
($52,677,509 / 1,985,409
shares outstanding) $26.53
======
*<F1>Non-income producing security.
(a)<F2>Percentages for the various classifications relate to net assets.
The accompanying notes to financial statements are an integral part of this
statement.
STATEMENT OF OPERATIONS
For the Year Ended September 30, 1997
INCOME:
Dividends $463,746
Interest 138,227
-----------
Total income 601,973
-----------
EXPENSES:
Management fees 416,417
Administrative services 42,531
Professional fees 27,405
Transfer agent fees 17,009
Registration fees 14,053
Printing and postage expense 11,423
Custodian fees 10,611
Other expenses 8,429
-----------
Total expenses 547,878
-----------
NET INVESTMENT INCOME 54,095
-----------
NET REALIZED GAIN ON INVESTMENTS 8,190,081
NET INCREASE IN UNREALIZED APPRECIATION ON INVESTMENTS 6,869,858
-----------
NET GAIN ON INVESTMENTS 15,059,939
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $15,114,034
==========
STATEMENTS OF CHANGES INNET ASSETS
For the Years Ended September 30, 1997 and 1996
1997 1996
----- -----
OPERATIONS:
Net investment income $54,095 $280,398
Net realized gain on investments 8,190,081 4,399,359
Net increase in unrealized appreciation
on investments 6,869,858 640,021
----------- ----------
Net increase in net assets resulting from
operations 15,114,034 5,319,778
----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income
($0.1492 and $0.11362 per share, respectively) (309,757) (222,238)
Distributions from net realized gains ($2.50232
and $2.07307 per share, respectively) (5,193,478) (4,054,872)
----------- ----------
Total distributions (5,503,235)*(4,277,110)**
<F3> <F4>
----------- ----------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (137,861 and 194,324
shares, respectively) 2,981,658 3,955,578
Net asset value of shares issued in distributions
(270,000 and 223,475 shares, respectively) 5,367,989 4,149,937
Cost of shares redeemed (529,154 and 266,012 shares,
respectively) (11,117,853) (5,509,816)
----------- ----------
Net (decrease) increase in net assets derived from
Fund share activities (2,768,206) 2,595,699
----------- ----------
TOTAL INCREASE 6,842,593 3,638,367
NET ASSETS AT THE BEGINNING OF THE YEAR 45,834,916 42,196,549
----------- ----------
NET ASSETS AT THE END OF THE YEAR
(including undistributed net investment income
of $24,724 and $280,386, respectively) $52,677,509 $45,834,916
=========== ===========
*<F3>Total distributions include $2,175,099 of ordinary income, of which 25% is
eligible for the corporate dividends received deduction.
**<F4>Total distributions include $912,199 of ordinary income, of which 40% is
eligible for the corporate dividends received deduction.
The accompanying notes to financial statements are an integral part of these
statements.
FINANCIAL HIGHLIGHTS
(Selected Data for each share of the Fund outstanding throughout each year)
<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
-----------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of year $21.76 $21.58 $19.52 $20.08 $18.65 $17.55 $14.16 $18.79 $15.19 $21.96
Income from
investment operations:
Net investment income 0.03 0.13 0.11 0.06 0.07 0.10 0.19 0.23 0.14 0.03
Net realized and unrealized
gains (losses) on investments 7.39 2.24 3.87 0.72 3.33 2.39 4.35 (4.66) 3.49 (3.21)
------ ------ ------ ------ ------ ------ ------ ------- ------ -------
Total from investment operations 7.42 2.37 3.98 0.78 3.40 2.49 4.54 (4.43) 3.63 (3.18)
Less distributions:
Dividends from net
investment income (0.15) (0.12) (0.04) (0.05) (0.11) (0.16) (0.23) (0.20) (0.03) (0.14)
Distributions from net
realized gains (2.50) (2.07) (1.88) (1.29) (1.86) (1.23) (0.92) -- -- (3.45)
------ ------ ------ ------ ------ ------ ------ ------- ------ -------
Total from distributions (2.65) (2.19) (1.92) (1.34) (1.97) (1.39) (1.15) (0.20) (0.03) (3.59)
------ ------ ------ ------ ------ ------ ------ ------- ------ -------
Net asset value, end of year $26.53 $21.76 $21.58 $19.52 $20.08 $18.65 $17.55 $14.16 $18.79 $15.19
======= ====== ======= ======= ======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN 38.4% 12.7% 22.7% 4.1% 20.1% 15.3% 34.9% (23.8%) 24.0% (11.1%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's $)52,678 45,835 42,197 38,871 47,420 38,476 30,684 19,460 40,387 41,606
Ratio of expenses to
average net assets 1.2% 1.2% 1.2% 1.2% 1.2% 1.3% 1.5% 1.4% 1.3% 1.3%
Ratio of net investment
income to average
net assets 0.1% 0.6% 0.5% 0.3% 0.4% 0.6% 1.2% 1.1% 0.8% 0.3%
Portfolio turnover rate 60.7% 43.7% 28.6% 20.9% 32.5% 58.9% 62.7% 55.1% 42.2% 43.4%
Average commission rate paid*<F5> $0.0703 $0.0601
*<F5>Disclosure required for fiscal years beginning after September 1, 1995.
The accompanying notes to financial statements are an integral part of this
statement.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --
The following is a summary of significant accounting policies of the
Fiduciary Capital Growth Fund, Inc. (the "Fund"), which is registered under
the Investment Company Act of 1940. The Fund was incorporated under the laws
of Wisconsin on July 29, 1981. The investment objective of the Fund is to
produce long-term capital appreciation principally through investing in common
stocks.
(a) Each security, excluding short-term investments, is valued at the last sale
price reported by the principal security exchange on which the issue is
traded, or if no sale is reported, the latest bid price. Securities which
are traded over-the-counter are valued at the latest bid price. Securities
for which quotations are not readily available are valued at fair value as
determined by the investment adviser under the supervision of the Board of
Directors. Short-term investments are valued at amortized cost which
approximates quoted market value. Investment transactions are recorded no
later than the first business day after the trade date. Cost amounts as
reported on the statement of net assets is the same for federal income tax
purposes.
(b) Net realized gains and losses on common stock are computed on the basis of
the cost of specific certificates.
(c) Provision has not been made for Federal income taxes since the Fund has
elected to be taxed as a "regulated investment company" and intends to
distribute substantially all net investment company taxable income and net
capital gains to its shareholders and otherwise comply with the provisions
of the Internal Revenue Code applicable to regulated investment companies.
(d) Dividend income is recorded on the ex-dividend date. Interest income is
recorded on the accrual basis.
(e) The Fund has investments in short-term variable rate demand notes, which
are unsecured instruments. The Fund may be susceptible to credit risk with
respect to these notes to the extent the issuer defaults on its payment
obligation. The Fund's policy is to monitor the creditworthiness of the
issuer and does not anticipate nonperformance by these counterparties.
(f) Generally accepted accounting principles require that permanent financial
reporting and tax differences be reclassified to capital stock.
(g) The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
(2) INVESTMENT ADVISER AND MANAGEMENT AGREEMENT AND TRANSACTIONS WITH RELATED
PARTIES --
The Fund has a management agreement with Fiduciary Management, Inc. ("FMI"),
with whom certain officers and directors of the Fund are affiliated, to serve
as investment adviser and manager. Under the terms of the agreement, the Fund
will pay FMI a monthly management fee at the annual rate of 1% of the daily
net assets up to and including $30,000,000 and 0.75% of the daily net assets
of the Fund in excess of $30,000,000. The Fund has an administrative
agreement with FMI to supervise all aspects of the Fund's operations except
those performed by FMI pursuant to the management agreement. Under the terms
of the agreement, the Fund will pay FMI a monthly administrative fee at the
annual rate of 0.1% of the daily net assets up to and including $30,000,000
and 0.05% of the daily net assets of the Fund in excess of $30,000,000.
(3) DISTRIBUTION TO SHAREHOLDERS --
Net investment income and net realized gains are distributed to shareholders.
On October 27, 1997, a dividend from net investment income of $24,724
($0.01248 per share) was declared. In addition, the Fund distributed
$1,428,327 from net short-term realized gains ($0.72061 per share) and
$5,947,620 from net long-term realized gains ($3.00065 per share). The
distributions will be paid on October 28, 1997, to shareholders of record on
October 24, 1997.
(4) INVESTMENT TRANSACTIONS --
For the year ended September 30, 1997, purchases and proceeds of sales of
investment securities (excluding short-term investments) were $26,161,775 and
$30,785,422, respectively.
(5) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES --
As of September 30, 1997, liabilities of the Fund included the following:
Payable to brokers for investments purchased $646,065
Payable to FMI for management and administrative fees 38,051
Other liabilities 27,379
(6) SOURCES OF NET ASSETS --
As of September 30, 1997, the sources of net assets were as follows:
Fund shares issued and outstanding $28,766,351
Net unrealized appreciation on investments 16,510,487
Accumulated net realized gains on investments 7,375,947
Undistributed net investment income 24,724
-----------
$52,677,509
===========
Aggregate net unrealized appreciation as of September 30,1997, consisted of
the following:
Aggregate gross unrealized appreciation $16,619,484
Aggregate gross unrealized depreciation (108,997)
------------
Net unrealized appreciation $16,510,487
===========
FIDUCIARY CAPITAL GROWTH FUND, INC.
225 East Mason Street
Milwaukee, Wisconsin 53202
414-226-4555
BOARD OF DIRECTORS
BARRY K. ALLEN
TED D. KELLNER
THOMAS W. MOUNT
DONALD S. WILSON
INVESTMENT ADVISER
AND ADMINISTRATOR
FIDUCIARY MANAGEMENT, INC.
225 East Mason Street
Milwaukee, Wisconsin 53202
CUSTODIAN, TRANSFER AGENT
AND DIVIDEND DISBURSING AGENT
FIRSTAR TRUST COMPANY
615 East Michigan Street
Milwaukee, Wisconsin 53202
800-811-5311
or
414-765-4124
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
100 East Wisconsin Avenue
Suite 1500
Milwaukee, Wisconsin 53202
LEGAL COUNSEL
FOLEY & LARDNER
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
This report is not authorized for use as an offer of sale or a solicitation of
an offer to buy shares of Fiduciary Capital Growth Fund unless accompanied or
preceded by the Fund's current prospectus. Past performance is not indicative of
future performance. Investment return and principal value of an investment may
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original cost.
