SEMIANNUAL REPORT
MARCH 31, 1998
Fiduciary
Capital Growth
Fund, Inc.
A NO-LOAD
MUTUAL FUND
Fiduciary
Capital Growth
Fund, Inc.
May 5, 1998
Dear Fellow Shareholder:
Fiduciary Capital Growth Fund rose 6.4% during the March quarter, bringing 1
year, 5 year and 10 year returns to 38.1%, 17.8% and 14.5%, respectively. The
first quarter market increase continued to be driven by large-cap stocks, even
as more and more companies announced disappointing earnings or cautioned
analysts that a slowdown was occurring. Akin to the little boy who cried
"Wolf," we have, for several quarters, argued that the ability of companies with
modest revenue growth to expand margins was near an end; that the accounting
"rabbits" were pretty much "out of the hat;" and that earnings growth would slow
to the rate of sales gain, or less, as cost pressures impinged on margins.
Perhaps the wolf has arrived. S&P fourth quarter "reported" earnings
declined 7.6% with full year reported earnings rising only 2.9%. We look at
reported earnings after the "one-time charges" because we are skeptical about
corporate America's propensity to write-off against retained earnings items that
should be expensed through the income statement. Those more willing to look at
earnings before "one-time charges" saw operating earnings rise about 8%. As we
moved into 1998, the consensus among forecasts by the 25 largest securities
firms was a 10.4% first quarter earnings gain. As the quarter progressed,
however, the estimates came down, and at this writing, it appears as though the
first quarter earnings will be flat at best.
S&P 500 reported quarterly earnings for 1997 as follows:
PERIOD EARNINGS PER SHARE CHANGE FROM PRIOR YEAR
---------------- ------------------ ----------------------
1st Quarter 1997 $10.06 +12.8%
2nd Quarter 1997 $10.73 +6.8%
3rd Quarter 1997 $10.00 +0.9%
4th Quarter 1997 $9.10 -7.6%
Many investors have decided to view this as a temporary slowdown, related to
the turmoil in the Far East, and have concluded that earnings will improve in
the second half of the year. Perhaps. Asian Flu is certainly a contributing
factor, but we feel we are late in the economic and earnings cycle and normal
cyclical factors are working to slow earnings growth.
We continue to focus our efforts on finding companies that represent good
relative value, based both upon fundamental outlook, where your portfolio
companies should increase earnings this year at least twice as much as the S&P
(in fact, against the S&P 500's flat first quarter earnings, our companies
should experience an earnings increase of roughly 12%); and upon valuations,
where our median portfolio price/earnings ratio is about 17 times this year's
expected earnings, versus the S&P, which is selling at about 24 times expected
earnings. However, there are some values available in the market, and we have
discussed several below:
ARROW ELECTRONICS, INC. -- A cyclical slowing of the electronics industry in
the last 18 months has taken its toll on many technology stocks, including
Arrow, a distributor of electronic components. One industry analyst has tallied
over 60 earnings warnings from technology companies over the past month and,
given the continued fallout from Asia, more disappointments are expected. With
the near term looking weak, why would we want to make a major commitment to this
stock? The answer is twofold. First, the valuation is compelling. In the ten
years we have followed Arrow, there was just one other time the stock was such a
bargain. Like today, it was a period of lackluster earnings growth due to excess
semiconductor capacity and weakening demand. Also like today, investors were
worried and the stock had few sponsors. Yet the stock soared eight-fold coming
out of that period! While we don't expect that kind of move over the next few
years, we think the upside potential is great. The second part of the answer
reiterates our comments from last fall, when we first wrote up the stock.
Electronics is a growth industry and the distribution companies are the best
way to capture this secular trend without taking a "bet the farm" type of risk
on leading edge technology. Manufacturers are increasing their dependence on
the lower cost Arrow distribution model. The near term sentiment affords
investors the chance to buy the number one distributor in the US, Europe and
Asia for 12 times 1998 earnings.
BLACK BOX CORP. -- Despite its name, Black Box is not a mysterious or
complicated company. It is the world's leading direct marketer of
communications, networking and connectivity equipment as well as the technical
support consulting related to these products. The Company mailed nearly 4
million catalogs in 11 languages last year, targeting resellers and corporate
technology users. Black Box has grown revenues at 14% over the past ten years
and has achieved 20% or more operating margins every year but the recession year
1991, when it earned 18%. The Company should be able to continue this
remarkable performance because it addresses the repair, replacement, and upgrade
niche of the market rather than the highly competitive original equipment
market. It also offers unparalleled customer service by a highly trained
engineering staff that mans the phones day and night. A typical order might come
from a network administrator who is adding six new employees to a remote site
and needs connector cable, interface cards and perhaps a LAN switch. Unique
conditions might also require consulting from a Black Box technician, whose
advice is "free." The slightly higher price to cover the higher cost of service
is not a large factor in the purchase decision, because the dollar difference is
small on an average order of $700; the customer is also willing to pay for same
or next day delivery. The stock trades at 16 times next 12-months earnings, or
roughly a 30% discount to the market.
NOBLE AFFILIATES, INC. -- Noble is a leading independent energy company
operating in the major basins of the US as well as Argentina, China, Ecuador,
Equatorial New Guinea and the North Sea. Despite the fact that Noble is not a
household name, it has over $1 billion in sales and has consistently grown its
production and cash flow, more than doubling both over the past five years
despite the volatility in commodity prices. Approximately 70% of the production
is natural gas, with the remainder oil. We are optimistic about natural gas
over the next several years due to strong secular demand, declining
deliverability and a return to normal weather patterns. Noble has supplemented
good internal growth with solid, strategically sound acquisitions. Management's
track record is excellent. With Wall Street focused on sexier names and
increased volatility in the price of oil, the entire exploration and production
sector has under-performed in recent years. Noble's strong balance sheet,
reserve base and outlook over the next few years is not reflected in the price
of the stock, which trades at a steep discount to asset value and just five
times cash flow.
CONSOLIDATED STORES CORP. -- The marriage of your MacFrugal's position into
Consolidated Stores in January solidified the Company's position as the number
one retailer of closeout merchandise in the United States. Consolidated, through
K-B Toys and other toy outlet stores, is also the number two toy retailer behind
Toys-R-Us. The closeout industry is very large, yet highly fragmented. The
added buying power of the MacFrugal's operation makes the Company a powerful,
even dominant player in the industry. MacFrugal's largely California-based
stores complement Consolidated's strong presence in the Midwest. This
combination should drive both cost savings and growth, after a period of
adjustment. The toy division has experienced rapid growth in recent years due
to both acquisitions and internal factors. With about 30% of K-B Toys' mix in
closeout, it differentiates the Company and provides better than average
margins. The Company has a strong balance sheet and an excellent, proven
management. We expect earnings to accelerate next year and remain strong for
some time due to growth in new stores, same-store-sales and the leveraging of
SG&A expenses. At less than 17 times next year's earnings, and 25-30% growth in
1998-99, the stock is attractive.
Thank you for your continuing confidence in Fiduciary Capital Growth Fund,
Inc.
Sincerely,
/s/ Ted D. Kellner /s/ Donald S. Wilson
Ted D. Kellner, C.F.A. Donald S. Wilson, C.F.A.
President Vice President
225 E. Mason St. o Milwaukee, WI 53202 o 414-226-4555
Fiduciary Capital Growth Fund, Inc.
STATEMENT OF NET ASSETS
March 31, 1998 (Unaudited)
SHARES OR QUOTED
PRINCIPAL MARKET
AMOUNT COST VALUE
- ------ ------ ------
LONG-TERM INVESTMENTS -- 96.2% (A)<F2>
COMMON STOCKS -- 94.3% (A)<F2>
BANKS/SAVINGS & LOANS -- 2.2%
22,000 Associated Banc-Corp. $ 895,297 $ 1,186,636
CHEMICAL/SPECIALTY MATERIALS -- 9.3%
22,000 Cambrex Corporation 1,055,624 1,108,250
10,000 H.B. Fuller Co. 516,250 598,750
37,000 Minerals
Technologies Inc. 1,385,534 1,863,875
23,000 OM Group, Inc. 605,360 968,875
15,000 Sigma-Aldrich Corp. 495,000 558,750
---------- ---------
4,057,768 5,098,500
CONSUMER PRODUCTS-NON-DURABLE -- 2.6%
60,000 Jostens, Inc. 1,241,986 1,440,000
CONSUMER SERVICES -- 1.4%
2,100 Grey Advertising Inc. 466,200 779,100
DISTRIBUTION -- 9.2%
58,000 Arrow Electronics, Inc.*<F1> 1,321,914 1,569,654
34,500 Black Box Corp.*<F1> 950,100 1,272,187
82,000 Pioneer-Standard
Electronics, Inc. 1,270,301 1,004,500
50,000 Viking Office Products, Inc.*<F1>1,089,295 1,162,500
---------- ---------
4,631,610 5,008,841
ELECTRONICS -- 6.3%
63,400 Berg Electronics Corp.*<F1> 1,207,351 1,628,619
39,400 Fluke Corp. 817,970 940,675
58,500 Methode Electronics,
Inc. 905,250 873,873
---------- ---------
2,930,571 3,443,167
ENERGY/ENERGY SERVICES -- 10.1%
59,600 Burlington Resources Inc. 2,422,718 2,857,105
35,500 Noble Affiliates, Inc. 1,445,021 1,477,687
36,100 Pogo Producing
Company 1,093,727 1,146,175
---------- ---------
4,961,466 5,480,967
HEALTH INDUSTRIES -- 8.1%
55,000 Covance Inc.*<F1> 919,535 1,350,965
60,000 Dentsply
International Inc. 1,042,500 1,871,280
46,000 Sybron
International Corp.*<F1> 279,923 1,201,750
---------- ---------
2,241,958 4,423,995
INSURANCE -- 3.9%
48,000 Old Republic
International Corp. 760,194 2,127,024
MEDIA/COMMUNICATION -- 2.2%
28,000 Cox Communications, Inc.*<F1> 559,237 1,176,000
MISCELLANEOUS - FINANCE -- 3.8%
12,500 Delphi Financial
Group, Inc.*<F1> 534,637 665,625
22,000 Fannie Mae 277,495 1,391,500
----------- ----------
812,132 2,057,125
MISCELLANEOUS -
TECHNOLOGY MANUFACTURING -- 9.4%
51,600 Bell & Howell
Holdings Co.*<F1> 1,535,250 1,415,801
34,000 W. H. Brady Co. 778,907 1,139,000
61,700 Raychem Corp. 1,701,972 2,564,437
----------- ----------
4,016,129 5,119,238
PAPER/PACKAGING -- 4.8%
21,800 Liqui-Box Corp. 461,900 1,002,800
71,000 Wausau-Mosinee
Paper Corp. 1,373,568 1,637,473
----------- ----------
1,835,468 2,640,273
PRINTING/PUBLISHING/FORMS -- 4.8%
72,000 PRIMEDIA Inc.*<F1> 932,350 1,057,536
42,000 Thomas Nelson, Inc. 537,411 577,500
29,000 Wallace Computer
Services, Inc. 1,035,550 1,004,125
----------- ----------
2,505,311 2,639,161
PRODUCER MANUFACTURING -- 5.2%
36,000 Regal-Beloit Corp. 274,810 1,143,000
57,000 Watts Industries, Inc. 1,168,999 1,702,875
----------- ----------
1,443,809 2,845,875
RETAIL TRADE -- 7.8%
41,000 Autozone, Inc.*<F1> 964,140 1,388,875
66,000 Casey's General
Stores, Inc. 233,687 1,056,000
24,910 Consolidated Stores Corp.*<F1> 650,999 1,069,586
20,000 Stein Mart, Inc.*<F1> 515,000 712,500
----------- ----------
2,363,826 4,226,961
SOFTWARE/SERVICE -- 3.2%
17,000 Fair, Isaac and Company,
Incorporated 522,755 641,750
34,000 First Data Corporation 1,013,360 1,105,000
----------- ----------
1,536,115 1,746,750
----------- ----------
Total common stocks 37,259,077 51,439,613
REITS -- 1.9% (A) <F2>
30,000 Imperial Credit
Commercial Mortgage
Investment Corp. 516,618 450,000
23,600 Security Capital
Industrial Trust 497,252 604,750
----------- ----------
Total REITS 1,013,870 1,054,750
WARRANTS -- 0.0% (A)<F2>
1,098 Security Capital
Group Inc. Warrants,
9/18/98*<F1> 8,647 3,638
----------- ----------
Total long-term
investments 38,281,594 52,498,001
SHORT-TERM INVESTMENTS -- 3.8% (A)<F2>
VARIABLE RATE DEMAND NOTES
$2,000,000 General Mills, Inc. 2,000,000 2,000,000
68,358 Johnson Controls, Inc. 68,358 68,358
----------- ----------
Total variable rate
demand notes 2,068,358 2,068,358
----------- ----------
Total investments $40,349,952 54,566,359
-----------
-----------
Liabilities, less cash and
receivables (0.0%) (A)<F2> (17,118)
----------
Net Assets $54,549,241
----------
----------
Net Asset Value Per Share
($0.01 par value 10,000,000
shares authorized), offering
and redemption price
($54,549,241 / 2,261,552
shares outstanding) $24.12
---------
---------
*<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.
Fiduciary Capital Growth Fund, Inc.
STATEMENT OF OPERATIONS
For the Period Ending March 31, 1998 (Unaudited)
INCOME:
Dividends $205,259
Interest 105,431
----------
Total income 310,690
----------
EXPENSES:
Management fees 231,424
Administrative services 20,414
Professional fees 18,524
Registration fees 15,629
Transfer agent fees 10,536
Printing and postage expense 10,393
Custodian fees 6,236
Other expenses 2,382
----------
Total expenses 315,538
---------
NET INVESTMENT LOSS (4,848)
----------
NET REALIZED GAIN ON INVESTMENTS 6,043,511
NET DECREASE IN UNREALIZED APPRECIATION ON INVESTMENTS (2,294,080)
----------
NET GAIN ON INVESTMENTS 3,749,431
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $3,744,583
----------
----------
STATEMENTS OF CHANGES IN NET ASSETS
For the Period Ending March 31, 1998 (Unaudited) and For the Year Ended
September 30, 1997
1998 1997
------ ------
OPERATIONS:
Net investment (loss) income $ (4,848) $ 54,095
Net realized gain on investments 6,043,511 8,190,081
Net (decrease) increase in ---------- ----------
unrealized appreciation on
investments (2,294,080) 6,869,858
---------- ----------
Net increase in net assets
resulting from operations 3,744,583 15,114,034
------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net
investment income ($0.01248
and $0.1492 per share, respectively) (24,737) (309,757)
Distributions from net realized
gains ($3.85996 and $2.50232 per
share, respectively) (7,692,320) (5,193,478)
------------ -----------
Total distributions (7,717,057) (5,503,235)*<F3>
------------ -----------
FUND SHARE ACTIVITIES:
Proceeds from shares issued
(53,686 and 137,861 shares,
respectively) 1,247,199 2,981,658
Net asset value of shares issued
in distributions (332,984 and
270,000 shares, respectively) 7,128,996 5,367,989
Cost of shares redeemed (110,527
and 529,154 shares, respectively) (2,531,989) (11,117,853)
------------ -----------
Net increase (decrease) in
net assets derived from Fund
share activities 5,844,206 (2,768,206)
------------ -----------
TOTAL INCREASE 1,871,732 6,842,593
NET ASSETS AT THE BEGINNING
OF THE PERIOD 52,677,509 45,834,916
------------ -----------
NET ASSETS AT THE END OF THE PERIOD
(including undistributed net
investment income of $0 and
$24,724, respectively) $54,549,241 $52,677,509
------------ -----------
------------ -----------
*<F3> Total distributions include $2,175,099 of ordinary income, of which 25% is
eligible for the corporate dividends received deduction.
The accompanying notes to financial statements are an integral part of these
statements.
Fiduciary Capital Growth Fund, Inc.
FINANCIAL HIGHLIGHTS
(Selected Data for each share of the Fund outstanding throughout each period)
<TABLE>
(UNAUDITED)
FOR THE PERIOD
ENDING
MARCH 31, YEARS ENDED SEPTEMBER 30,
---------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
------ ----- ----- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of period $26.53 $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 0.00 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 1.46 7.39 2.24 3.87 0.72 3.33 2.39 4.35 (4.66) 3.49 (3.21)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from
investment operations 1.46 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 (0.01) (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 (3.86) (2.50) (2.07) (1.88) (1.29) (1.86) (1.23) (0.92) -- -- (3.45)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from distributions (3.87) (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 period $24.12 $26.53 $21.76 $21.58 $19.52 $20.08 $18.65 $17.55 $14.16 $18.79 $15.19
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL INVESTMENT RETURN 7.5%**<F5>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
period (in 000's $) 54,549 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%***<F6> 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 0.0%***<F6> 0.1% 0.6% 0.5% 0.3% 0.4% 0.6% 1.2% 1.1% 0.8% 0.3%
Portfolio turnover rate 28.4% 60.7% 43.7% 28.6% 20.9% 32.5% 58.9% 62.7% 55.1% 42.2% 43.4%
Average commission rate paid*<F4> $0.0642 $0.0703 $0.0601
</TABLE>
*<F4> Disclosure required for fiscal years beginning after September 1, 1995.
**<F5> Not Annualized.
***<F6> Annualized.
The accompanying notes to financial statements are an integral part of this
statement.
Fiduciary Capital Growth Fund, Inc.
NOTES TO FINANCIAL STATEMENTS
March 31, 1997 (Unaudited)
(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.
(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 December 29, 1997, the Fund distributed $316,364 from net long-term
realized gains ($0.1387 per share). The distribution was paid on December 30,
1997, to shareholders of record on December 26, 1997.
(4) INVESTMENT TRANSACTIONS --
For the period ending March 31, 1998, purchases and proceeds of sales of
investment securities (excluding short-term investments) were $13,728,926 and
$15,892,977, respectively.
(5) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES --
As of March 31, 1998, liabilities of the Fund included the following:
Payable to FMI for management and administrative fees $40,869
Other liabilities 21,305
(6) SOURCES OF NET ASSETS --
As of March 31, 1998, the sources of net assets were as follows:
Fund shares issued and outstanding
$34,605,696
Net unrealized appreciation on investments 14,216,407
Accumulated net realized gains on investments 5,727,138
-----------
$54,549,241
-----------
-----------
Aggregate net unrealized appreciation as of March 31, 1998, consisted of the
following:
Aggregate gross unrealized appreciation $14,896,517
Aggregate gross unrealized depreciation (680,110)
-----------
Net unrealized appreciation $14,216,407
-----------
-----------
Fiduciary Capital Growth Fund, Inc.
225 East Mason Street
Milwaukee, Wisconsin 53202
414-226-4555
BOARD OF DIRECTORS
BARRY K. ALLEN
GEORGE D. DALTON
PATRICK J. ENGLISH
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.
