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Previous: FIDUCIARY CAPITAL GROWTH FUND INC, 497J, 1998-02-06 |
Next: HAWAIIAN ELECTRIC INDUSTRIES INC, 424B3, 1998-02-06 |
QUARTERLY REPORT
DECEMBER 31, 1997
FIDUCIARY
CAPITAL GROWTH
FUND, INC.
A NO-LOAD
MUTUAL FUND
FIDUCIARY
CAPITAL GROWTH
FUND, INC.
January 30, 1998
Dear Fellow Shareholder:
1997-- was more of the same.
But it was far from boring. Without reciting the litany of new financial
market records, we will simply report that 1997 was a very good year. However,
we note that the sledding became more difficult during the fourth quarter as
earnings disappointments and the turbulence in the Asian markets neutralized the
positive interest rate and inflation environment. Despite the year-end rally,
most stock indices hit their highs for the year from August to October. The
Fund did well, rising 29.2% for the year, which brought the 5 year and 10 year
annualized returns to 17.1% and 15.6%, respectively.
Positive surprises in 1997 included a stronger economy, better corporate
earnings (during the first half), and a generally better stock market than
expected. We should add that, along with most pundits, we didn't forecast the
turmoil in Asia. In the "about as expected" category would be lower long-term
interest rates, subdued inflation, a slowdown in consumer debt expansion,
problems in the credit card industry and a continuing rise in personal
bankruptcies.
As to 1998, we could pretty much duplicate last year's forecast.
ECONOMY
As we enter 1998 most forecasts are calling for continued economic growth -
although at a slower pace than was recorded in 1997 - as the Asian turmoil,
rising wages and leaner corporate profits put a check on growth. This would, in
our view, be a best case estimate. While a year ago we could not pinpoint
anything that was likely to upset the "nirvana" economy, the situation today is
not quite so positive.
The Asian flu should not be dismissed as irrelevant to our economic outlook,
especially with respect to the large multinationals and the technology
companies. For many companies, Asia was their greatest growth opportunity.
Both sales and profitability in the Pacific Rim will likely be affected, and low
cost imports, while benefiting the consumer, will depress profitability for
domestic competitors. This has increased the possibility that the persistent
disinflation may become deflation, a possibility that is increasingly being
discussed in the financial press.
The consumer has started to rein in his installment debt growth, an important
driver of economic growth and corporate profits on the margin (Chart A). Rising
delinquencies and personal bankruptcies have slowed the growth in credit card
issuances, and consumer spending has moderated. Another wave of mortgage
refinancings, given the decline in interest rates, would be a positive for the
consumer, and would work to offset the slowdown in debt expansion.
CHART A
S&P 500 Consumer
Earnings Per Share Installment Credit
4 Qtr. Total, Yr. to Yr.
Yr. to Yr. % Change % Change
------------------- --------------
Dec-59 17.30104 15.75005
Jan-60 14.45995
Feb-60 13.7608
Mar-60 9.00322 13.69827
Apr-60 14.37577
May-60 13.60125
Jun-60 -4.11765 13.00404
Jul-60 12.22137
Aug-60 11.14273
Sep-60 -4.66472 10.52818
Oct-60 9.68152
Nov-60 9.27835
Dec-60 -3.53982 7.21104
Jan-61 8.40842
Feb-61 7.21942
Mar-61 -8.84956 6.29007
Apr-61 4.0712
May-61 3.67189
Jun-61 -7.05521 3.1627
Jul-61 2.72558
Aug-61 2.84556
Sep-61 -6.72783 2.75835
Oct-61 2.71391
Nov-61 3.17081
Dec-61 -2.44648 3.71315
Jan-62 2.63874
Feb-62 3.83508
Mar-62 9.06149 4.42392
Apr-62 6.30839
May-62 7.34603
Jun-62 14.52145 7.99283
Jul-62 8.47885
Aug-62 8.94026
Sep-62 15.7377 9.09583
Oct-62 9.56165
Nov-62 9.51788
Dec-62 15.04702 9.51723
Jan-63 10.28521
Feb-63 10.76945
Mar-63 10.08902 11.00983
Apr-63 10.86081
May-63 10.39027
Jun-63 10.66282 10.38604
Jul-63 10.99425
Aug-63 11.35631
Sep-63 12.1813 11.55101
Oct-63 12.0148
Nov-63 11.7408
Dec-63 9.53678 12.41284
Jan-64 12.86497
Feb-64 12.21776
Mar-64 12.66846 13.09839
Apr-64 12.9112
May-64 13.32465
Jun-64 12.76042 13.26227
Jul-64 13.19138
Aug-64 12.79427
Sep-64 12.87879 13.0996
Oct-64 12.53531
Nov-64 12.36395
Dec-64 13.18408 12.27752
Jan-65 12.57455
Feb-65 13.28306
Mar-65 11.96172 12.16502
Apr-65 12.66504
May-65 12.4306
Jun-65 11.77829 12.77215
Jul-65 12.67856
Aug-65 12.39742
Sep-65 11.4094 12.15063
Oct-65 12.18198
Nov-65 12.29815
Dec-65 14.06593 11.6456
Jan-66 11.33281
Feb-66 10.91615
Mar-66 14.10256 10.68158
Apr-66 9.72397
May-66 9.20419
Jun-66 12.80992 8.66391
Jul-66 7.98868
Aug-66 7.81577
Sep-66 10.64257 6.95051
Oct-66 6.56085
Nov-66 6.36077
Dec-66 6.93642 6.10663
Jan-67 5.30642
Feb-67 4.703
Mar-67 2.05993 4.27861
Apr-67 4.11626
May-67 3.78267
Jun-67 -2.38095 3.8853
Jul-67 4.11584
Aug-67 4.10489
Sep-67 -3.81125 4.52026
Oct-67 4.47037
Nov-67 4.83928
Dec-67 -3.96396 4.91085
Jan-68 4.5226
Feb-68 4.68476
Mar-68 -0.18349 5.82645
Apr-68 6.45243
May-68 6.91114
Jun-68 4.50281 7.05627
Jul-68 7.7305
Aug-68 7.82302
Sep-68 6.79245 8.22381
Oct-68 9.28714
Nov-68 9.2976
Dec-68 8.06754 9.87198
Jan-69 10.71435
Feb-69 11.55837
Mar-69 6.98529 10.7988
Apr-69 10.82928
May-69 10.95187
Jun-69 4.8474 10.98259
Jul-69 10.64198
Aug-69 10.51284
Sep-69 4.0636 10.22698
Oct-69 9.39915
Nov-69 8.99944
Dec-69 0.34722 8.27634
Jan-70 8.17556
Feb-70 7.16986
Mar-70 -3.2646 6.5219
Apr-70 5.60258
May-70 4.88224
Jun-70 -5.47945 4.73587
Jul-70 4.77979
Aug-70 4.54997
Sep-70 -8.9983 4.38693
Oct-70 4.00958
Nov-70 3.2355
Dec-70 -11.24567 3.42658
Jan-71 5.06762
Feb-71 5.38876
Mar-71 -7.28242 5.92537
Apr-71 6.78659
May-71 7.25779
Jun-71 -3.62319 7.40229
Jul-71 7.62469
Aug-71 8.39953
Sep-71 1.30597 8.96603
Oct-71 9.6966
Nov-71 11.28077
Dec-71 11.11111 11.71357
Jan-72 10.00037
Feb-72 9.91974
Mar-72 11.30268 11.03032
Apr-72 11.25988
May-72 11.9255
Jun-72 12.21805 12.50677
Jul-72 12.36272
Aug-72 12.4382
Sep-72 13.07551 12.46043
Oct-72 12.73245
Nov-72 12.62808
Dec-72 12.63158 13.10925
Jan-73 14.62518
Feb-73 15.70738
Mar-73 17.03959 15.39491
Apr-73 15.47117
May-73 15.66425
Jun-73 21.10553 15.62877
Jul-73 15.87803
Aug-73 15.86586
Sep-73 25.2443 15.4135
Oct-73 15.4794
Nov-73 15.3689
Dec-73 27.1028 14.33645
Jan-74 12.96378
Feb-74 12.18173
Mar-74 22.94118 11.28241
Apr-74 10.81739
May-74 10.06628
Jun-74 20.8852 9.24089
Jul-74 8.66132
Aug-74 8.02454
Sep-74 18.46554 7.55675
Oct-74 6.36567
Nov-74 5.271
Dec-74 8.94608 4.63323
Jan-75 4.02844
Feb-75 3.55835
Mar-75 1.07656 3.06912
Apr-75 2.23144
May-75 1.5617
Jun-75 -8.92449 -0.4177
Jul-75 -0.4217
Aug-75 -0.66444
Sep-75 -14.81888 -0.29147
Oct-75 0.28506
Nov-75 1.07944
Dec-75 -10.46119 2.44673
Jan-76 3.11612
Feb-76 3.39107
Mar-76 2.48521 4.45108
Apr-76 5.6971
May-76 6.12412
Jun-76 16.20603 8.45997
Jul-76 8.59757
Aug-76 8.86953
Sep-76 23.06701 9.317
Oct-76 9.89211
Nov-76 10.40889
Dec-76 24.49749 10.42246
Jan-77 9.43868
Feb-77 10.25025
Mar-77 16.39723 11.15021
Apr-77 11.57387
May-77 12.64282
Jun-77 12.64865 13.284
Jul-77 13.7397
Aug-77 14.45116
Sep-77 12.1466 14.52735
Oct-77 15.11706
Nov-77 15.39337
Dec-77 9.889 14.51299
Jan-78 15.85815
Feb-78 15.692
Mar-78 8.33333 15.75276
Apr-78 15.73343
May-78 16.17407
Jun-78 7.77351 17.02688
Jul-78 17.04374
Aug-78 17.35792
Sep-78 8.02988 17.44194
Oct-78 16.6728
Nov-78 16.74107
Dec-78 13.22314 17.32855
Jan-79 17.46509
Feb-79 17.45029
Mar-79 21.79487 16.82088
Apr-79 16.61277
May-79 16.06619
Jun-79 24.48798 14.79548
Jul-79 14.65482
Aug-79 14.48783
Sep-79 26.44771 14.41765
Oct-79 14.68488
Nov-79 14.16234
Dec-79 20.51906 13.7232
Jan-80 14.10855
Feb-80 13.32569
Mar-80 14.96241 12.2131
Apr-80 10.17916
May-80 7.99591
Jun-80 6.86695 6.42619
Jul-80 5.39399
Aug-80 4.36312
Sep-80 0.06835 3.4306
Oct-80 2.66078
Nov-80 1.85081
Dec-80 -0.26918 1.91737
Jan-81 0.2881
Feb-81 -0.03961
Mar-81 -4.64356 0.59272
Apr-81 1.73522
May-81 3.15087
Jun-81 0.46854 4.22355
Jul-81 4.64326
Aug-81 4.6064
Sep-81 4.23497 5.66036
Oct-81 5.43216
Nov-81 5.60663
Dec-81 3.64372 4.98615
Jan-82 5.7197
Feb-82 5.55061
Mar-82 1.5775 5.09447
Apr-82 5.02679
May-82 4.88208
Jun-82 -5.59627 4.87709
Jul-82 4.47635
Aug-82 4.45145
Sep-82 -11.14024 3.59887
Oct-82 3.55658
Nov-82 3.6326
Dec-82 -17.70833 4.6359
Jan-83 4.1132
Feb-83 3.94674
Mar-83 -16.13774 4.80638
Apr-83 5.1863
May-83 5.16074
Jun-83 -11.15032 6.11827
Jul-83 7.33194
Aug-83 8.40898
Sep-83 -1.9174 9.14175
Oct-83 10.58922
Nov-83 11.7424
Dec-83 10.99684 12.75333
Jan-84 13.44036
Feb-84 15.74823
Mar-84 22.86634 15.99851
Apr-84 16.52854
May-84 18.58198
Jun-84 28.67355 19.18402
Jul-84 19.2993
Aug-84 19.5221
Sep-84 24.51128 19.46832
Oct-84 19.17678
Nov-84 18.69868
Dec-84 18.60299 18.2364
Jan-85 18.40908
Feb-85 18.07308
Mar-85 7.40498 18.72155
Apr-85 18.82222
May-85 17.73222
Jun-85 -3.64198 16.83133
Jul-85 16.51711
Aug-85 16.01233
Sep-85 -8.0314 16.92301
Oct-85 16.26014
Nov-85 16.11079
Dec-85 -12.19952 15.59101
Jan-86 15.58333
Feb-86 14.63543
Mar-86 -11.4094 13.18076
Apr-86 12.55587
May-86 12.44543
Jun-86 -5.76553 12.06223
Jul-86 11.70136
Aug-86 11.17874
Sep-86 -2.49508 10.73927
Oct-86 11.03522
Nov-86 9.88556
Dec-86 -0.8898 9.04075
Jan-87 7.73551
Feb-87 6.80253
Mar-87 3.99449 5.98864
Apr-87 5.85225
May-87 5.0975
Jun-87 -1.97145 5.00993
Jul-87 4.91927
Aug-87 5.01556
Sep-87 6.80135 4.42348
Oct-87 4.02658
Nov-87 4.56673
Dec-87 20.85635 4.64195
Jan-88 5.75825
Feb-88 6.49612
Mar-88 23.11258 7.30616
Apr-88 7.30967
May-88 7.48716
Jun-88 50.27739 7.22384
Jul-88 6.93445
Aug-88 7.02486
Sep-88 43.31652 6.51776
Oct-88 6.33179
Nov-88 6.24181
Dec-88 35.71429 6.31699
Jan-89 7.8674
Feb-89 7.79348
Mar-89 34.26573 8.12723
Apr-89 8.04254
May-89 8.01411
Jun-89 16.3821 8.12173
Jul-89 8.15719
Aug-89 7.79062
Sep-89 4.22349 7.95308
Oct-89 8.05314
Nov-89 8.07709
Dec-89 -3.70526 8.34185
Jan-90 6.21105
Feb-90 5.77638
Mar-90 -13.18109 4.73191
Apr-90 4.11628
May-90 3.61306
Jun-90 -15.70182 3.48907
Jul-90 3.62346
Aug-90 3.56482
Sep-90 8.23132 3.30681
Oct-90 3.2064
Nov-90 2.6194
Dec-90 -6.68999 1.32502
Jan-91 0.72826
Feb-91 0.62862
Mar-91 -3.69174 0.73297
Apr-91 0.71466
May-91 0.61429
Jun-91 -8.98401 -0.02509
Jul-91 -0.75435
Aug-91 -1.21845
Sep-91 -18.03128 -1.57576
Oct-91 -2.03286
Nov-91 -2.21373
Dec-91 -25.44517 -1.53219
Jan-92 -1.18953
Feb-92 -1.18331
Mar-92 -22.37662 -1.38855
Apr-92 -1.5283
May-92 -1.54865
Jun-92 -11.8863 -1.38079
Jul-92 -1.05106
Aug-92 -0.61456
Sep-92 1.23457 -0.48633
Oct-92 -0.19743
Nov-92 0.17865
Dec-92 19.98743 0.34919
Jan-93 0.94957
Feb-93 1.47499
Mar-93 22.46914 1.45738
Apr-93 2.50663
May-93 2.49373
Jun-93 13.37243 3.0841
Jul-93 3.71832
Aug-93 4.14276
Sep-93 13.13747 4.91825
Oct-93 5.88524
Nov-93 6.53403
Dec-93 14.66737 7.52308
Jan-94 7.59737
Feb-94 7.9863
Mar-94 9.4323
Apr-94 9.8181
May-94 11.25803
Jun-94 30.3673 12.12112
Jul-94 12.16263
Aug-94 13.26162
Sep-94 33.90495 13.85567
Oct-94 14.24137
Nov-94 14.49099
Dec-94 39.78986 14.44332
Jan-95 15.14196
Feb-95 14.96395
Mar-95 43.32893 15.26693
Apr-95 15.17092
May-95 15.18173
Jun-95 36.62698 15.10995
Jul-95 15.08366
Aug-95 14.66273
Sep-95 28.72302 14.90836
Oct-95 14.23787
Nov-95 14.51414
Dec-95 10.98039 14.00878
Jan-96 13.36099
Feb-96 13.64778
Mar-96 4.57757 12.92675
Apr-96 12.73293
May-96 12.15167
Jun-96 1.39413 11.77679
Jul-96 11.9449
Aug-96 11.36707
Sep-96 2.33087 9.8353
Oct-96 9.51213
Nov-96 8.4925
Dec-96 14.04594 7.83177
Jan-97 7.92991
Feb-97 7.36826
Mar-97 18.21387 6.59127
Apr-97 6.46329
May-97 5.97361
Jun-97 16.15583 5.27486
Jul-97 4.70334
Aug-97 4.46779
Sep-97 12.88889 4.53209
Oct-97 4.91732
Nov-97 4.36856
Sources: Standard & Poor's Corporation; Federal Reserve Board
Much of the decline in long-term rates which we envisioned a year ago is
behind us as the recent flight to quality has driven the long Treasury bond
yield to a 20-year low. We feel that economic growth will be below consensus
estimates of 2.0-2.5%, and while we may see somewhat lower long rates, we should
see lower short-term rates as the yield curve becomes positively sloping again.
EARNINGS
While the first half of 1997 saw better-than-expected corporate earnings, the
third quarter brought a significant slowdown. Reported third quarter earnings
for the S&P 500 were only about 1% higher than a year earlier, and the trailing
four-quarter total was up about 12% from the prior year. While many analysts
see full year 1997 earnings for the S&P rising about 12%, we suspect that the
final number may drop to a high single-digit increase, with operating earnings
for the S&P up close to 5% in 1998. Corporate profit margins are at a 30-year
high. If real economic growth slows, low inflation continues, and employment
costs rise further, we will likely see margin pressure, and only modestly
growing, if not declining, S&P earnings. With some major Wall Street analysts
forecasting a 1998 "bottom-up" earnings increase of 18% for the S&P, the
potential for downward earnings estimate revisions is high.
MARKET
" 'The time has come,' the walrus said, . . .". The time has come, in our
view, for mid-cap and smaller-cap stocks to take over the leadership in the
stock market. 1997 marked the fourth year in a row in which the S&P not only
outperformed the Russell 2000, but also outperformed 89% of all mutual fund
managers. While the Fund's portfolio significantly outperformed the Russell, we
slightly lagged the S&P. Investors will migrate to the mid-cap and smaller-cap
stocks because of the compelling relative valuations. The two-tiering of the
market is reflected in Table 1. Of stocks with a market value over $4 billion,
44, or 7.2% have declined by 33% or more from their 52-week high. Of those with
market caps between $300 million and $4 billion, 418, or 16.5% have declined by
33% or more, and 3,218, or 50% of market caps under $300 million are down over
33%. Investors are paying a high price for the perceived safety of the large-
cap stocks at the very time that the fundamentals of those companies are coming
under pressure.
TABLE 1
# OF # DOWN OVER 33%,
MARKET VALUE COMPANIES FROM 52-WEEK HIGH % OF TOTAL
------------ ----------- ----------------- ----------
Over $4 Billion 611 44 7.2%
$300 Million - $4 Billion 2,533 418 16.5%
Under $300 Million 6,423 3,218 50.1%
Of the 33% return on the S&P 500 during 1997, two thirds came from higher
valuation on earnings and only one third from earnings growth. If earnings
growth for the S&P is as hard to come by in 1998 as we expect, a P/E contraction
is more likely than a further expansion. The 20% discount in price/earnings
ratio on our stocks, coupled with better earnings growth potential in this
environment, make this the most compelling time to own these companies versus
the S&P 500 since 1991.
We feel that returns in 1998 for all sectors of the market will be much
reduced from recent years. We have no illusions (nor should you) that the gains
of recent years will be repeated in 1998. However, the best opportunities will
be in the mid- and small-cap area, and the market will be increasingly
selective. We also feel that we will see a better buying opportunity in the
next three to six months, and have done some selective selling which has
temporarily raised our portfolio cash levels.
On December 29, 1997, a distribution of $0.1387 from net long-term realized
capital gains was declared. This distribution was paid on December 30, 1997 to
shareholders of record on December 26, 1997.
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. Milwaukee, WI 53202 414-226-4555
Fiduciary Capital Growth Fund, Inc.
STATEMENT OF NET ASSETS
December 31, 1997 (Unaudited)
QUOTED
MARKET
SHARES VALUE (B)<F2>
------ --------
LONG-TERM INVESTMENTS -- 94.2% (A)<F1>
COMMON STOCKS -- 92.3% (A)<F1>
BANKS/SAVINGS & LOANS -- 3.4%
22,000 Associated Banc-Corp. $1,212,750
12,500 Sterling Bancshares, Inc. 253,125
9,000 Southwest Bancorporation
of Texas, Inc. 280,125
-----------
1,746,000
CHEMICAL/SPECIALTY MATERIALS -- 7.9%
10,000 H.B. Fuller Co. 495,000
19,000 M. A. Hanna Company 479,750
37,000 Minerals Technologies Inc. 1,681,206
23,000 OM Group, Inc. 842,375
15,000 Sigma-Aldrich Corp. 596,250
-----------
4,094,581
CONSUMER PRODUCTS-NON-DURABLE -- 2.7%
60,000 Jostens, Inc. 1,383,780
CONSUMER SERVICES -- 1.3%
2,100 Grey Advertising Inc. 688,800
DISTRIBUTION -- 5.0%
45,000 Arrow Electronics, Inc. 1,459,710
12,500 Black Box Corp. 442,187
46,700 Pioneer-Standard
Electronics, Inc. 712,175
-----------
2,614,072
ELECTRONICS -- 5.5%
50,000 Berg Electronics Corp. 1,137,500
39,400 Fluke Corp. 1,026,882
42,000 Methode Electronics, Inc. 682,500
-----------
2,846,882
ENERGY/ENERGY SERVICES -- 7.3%
45,700 Burlington Resources Inc. 2,047,954
35,500 Noble Affiliates, Inc. 1,251,375
16,500 Pogo Producing Company 486,750
-----------
3,786,079
HEALTH INDUSTRIES -- 10.0%
55,000 Covance Inc. 1,093,125
60,000 Dentsply International Inc. 1,830,000
28,600 Quest Diagnostics 482,625
Incorporated
38,000 Sybron International Corp. 1,783,644
-----------
5,189,394
INSURANCE -- 6.2%
25,300 Fidelity National Financial, Inc. 787,463
48,000 Old Republic
International Corp. 1,785,024
9,000 The PMI Group, Inc. 650,817
-----------
3,223,304
LEISURE/RESTAURANTS -- 1.2%
25,000 International Game Technology 631,250
MEDIA/COMMUNICATION -- 3.8%
27,000 Comcast Corp. Special Cl A NV 852,201
28,000 Cox Communications, Inc. 1,121,764
-----------
1,973,965
MISCELLANEOUS-FINANCE -- 4.2%
12,500 Delphi Financial Group, Inc. 562,500
28,000 Fannie Mae 1,597,764
-----------
2,160,264
MISCELLANEOUS-TECHNOLOGY
MANUFACTURING -- 9.2%
51,600 Bell & Howell Holdings Co. 1,248,101
29,500 W. H. Brady Co. 914,500
14,500 Corning Inc. 538,312
48,000 Raychem Corp. 2,067,024
-----------
4,767,937
PAPER/PACKAGING -- 4.2%
21,800 Liqui-Box Corp. 877,450
65,400 Wausau-Mosinee Paper Corp. 1,316,175
-----------
2,193,625
PRINTING/PUBLISHING/FORMS -- 1.1%
15,000 Wallace Computer Services, Inc. 583,125
PRODUCER MANUFACTURING -- 5.2%
36,000 Regal-Beloit Corp. 1,064,268
57,000 Watts Industries, Inc. 1,613,841
-----------
2,678,109
RETAIL TRADE -- 10.1%
41,000 Autozone, Inc. 1,189,000
53,000 Casey's General Stores, Inc. 1,344,875
17,900 Family Dollar Stores, Inc. 524,703
41,000 Mac Frugal's Bargains o
Close-outs Inc. 1,686,125
22,000 Pep Boys-Manny, Moe & Jack 525,250
-----------
5,269,953
SOFTWARE/SERVICE -- 4.0%
34,000 First Data Corp. 994,500
35,200 SunGard Data Systems Inc. 1,091,200
-----------
2,085,700
-----------
Total common stocks 47,916,820
REITS -- 1.9% (A)<F1>
30,000 Imperial Credit Commercial
Mortgage Investment Corp. 438,750
23,600 Security Capital Industrial Trust 587,050
-----------
Total REITS 1,025,800
RIGHTS/WARRANTS -- 0.0% (A) <F1>
1,250 Delphi International Ltd.,
Rights, 01/22/98 0
1,098 Security Capital Group Inc.
Warrants 09/18/98 5,765
-----------
Total rights and warrants 5,765
-----------
Total long-term investments 48,948,385
QUOTED
PRINCIPAL MARKET
AMOUNT VALUE (B)<F2>
---------- ---------
SHORT-TERM INVESTMENTS -- 5.0% (A)<F1>
VARIABLE RATE DEMAND NOTES
$2,000,000 American Family
Financial Services $2,000,000
621,118 Wisconsin Electric
Power Company 621,118
-----------
Total variable rate
demand notes 2,621,118
-----------
Total investments 51,569,503
Cash and receivables, less
liabilities 0.8% (A)<F1> 409,917
-----------
NET ASSETS $51,979,420
===========
Net Asset Value Per Share
($0.01 par value
10,000,000 shares
authorized),offering and
redemption price
($51,979,420 / 2,293,538
shares outstanding) $22.66
======
(a)<F1>Percentages for the various classifications relate to net assets.
(b)<F2>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. Short-term
investments are valued at cost which approximates quoted market value.
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.
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