FEDERATED
[LOGO]
AMERICAN
LEADERS
FUND, INC.
26th SEMI-ANNUAL REPORT
September 30, 1994
Established 1969
President's Message
Dear Shareholder:
I am pleased to present the 26th Semi-Annual Report for American Leaders Fund,
Inc. ("American Leaders" or the "Fund"). The Fund consists of four classes of
shares: Class A Shares; Class B Shares*; Class C Shares; and Fortress Shares.
The report covers the period from April 1 to September 30, 1994. It begins with
an interview with the Fund's co-portfolio managers Peter R. Anderson, Senior
Vice President, and Michael P. Donnelly, Vice President of Federated Advisers.
It displays a series of investment charts. The report also contains a complete
listing of the Fund's stock and bond holdings, and its Financial Statements. In
addition, Financial Highlights tables have been included for Class A Shares,
Class B Shares, Class C Shares, and Fortress Shares.
The Fund's highly diversified portfolio included common stocks of more than 50
companies spanning virtually all major industries. As a shareholder, you are
participating in the growth and earnings of such household names as Ford,
General Motors, Mattel, Avon, Reebok, Sears, and Texaco.
Reflecting continued investor confidence in the Fund as a core stock holding,
assets increased from $254 million at the beginning of the period to $295.7
million at the period's end.
We encourage you to add to your investment in American Leaders. By reinvesting
your dividends, you may increase your share balance on which future dividends
will be paid.
Thank you for pursuing your long-term financial goals by participating in the
Fund. We welcome your comments and suggestions.
Sincerely,
John F. Donahue
President
November 15, 1994
* Class B Shares reflects operations for the period beginning July 18, 1994
(date of initial public offering).
Investment Review
Peter R. Anderson,
Senior Vice President
Federated Advisers
Before reporting on the Fund's performance and market conditions, could you
review the objectives of the American Leaders Fund, Inc.?
American Leaders is designed as a core equity fund. By this definition it is an
investment in which the average investor has ownership of larger capitalization,
high-quality, common stocks. It is designed to be the holding around which other
types of equity exposures can be built such as: international; equity income;
small-cap; or individual stocks.
The goal of the Fund is to provide equity market participation in a relatively
conservative way. The selection of stocks is "value" based. Stocks are selected
from the American Leaders List of 100 high quality corporations.
With that in mind, how has performance been during the past six months and in
recent years?
For the six months ended 9/30/94, the Class A shares of the Fund recorded a
total return of 5.38%, based on net asset value, compared to a total return of
5.31%* for the Standard &Poor's 500 Index (the "S&P 500").** The average growth
and income fund tracked by Morningstar, Inc. recorded a 3.65% total return for
this period.
Since the beginning of 1990, the Fund, on a net asset value basis, has provided
investors a 65.41% total return (11.18% annualized). This compares favorably to
both the S&P 500's total return of 51.74% (9.18% annualized) and the average
Morningstar growth and income fund return of 47.50% (8.53% annualized). Not only
has the Fund's total return been above average, it has also been consistent.
According to Morningstar, Inc., of the 1,000+ equity mutual funds that have
existed since the beginning of 1990, only 20 funds have outperformed the market
(S&P 500) each of those four calendar years and year-to-date 1994 (as of 9/30).
American Leaders is one of those 20 funds.*
*Performance quoted represents past performance. Investment return and principal
value will fluctuate, so that an investor's shares, when redeemed, may be worth
more or less than their original cost. For the six months ended 9/30/94, Class
B Shares, Class C Shares, and Fortress Shares recorded a total return of 1.30%,
4.98%, and 5.34%, respectively.
**This index is unmanaged.
In addition, the Fund has provided those returns in a risk-controlled fashion.
The Fund's five-year "beta" is 0.93, versus 1.0 for the market, and the Fund's
five-year Morningstar risk rating is 0.80. The Morningstar risk rating measures
the Fund's ability to avoid losses on a month-to-month basis relative to all
other equity funds. A rating of 1.0 is average, and any rating less than 1.0
implies that a fund has done a better job of avoiding losses on a month-to-month
basis.
Which stocks in the Fund have performed well in the past six months and where do
you currently see good values?
Three of the six top performing stocks for the past six months are from basic
industry: Praxair (industrial gasses), FMC (predominantly chemicals) and Phelps
Dodge (copper). Commodity prices have been going up, and these stocks have
responded positively. Although the move is cyclical, there still appears to be
momentum in the fundamentals of these companies.
Ironically, a few of the other cyclical stocks in the Fund, such as Ford,
General Motors and Deere, were some of the worst performing stocks for the Fund
over the past six months. Despite strong actual earnings and increased earnings
expectations, the stocks traded down on fears of a slowing economy due to the
tightening of Federal Reserve Board's (the "Fed") policy. We believe that the
concern in all three of these stocks is overdone, and that with current
depressed prices, they are attractive holdings.
Philip Morris was another favorable stock over the past six months. The company
raised its dividend by 20% and made a larger commitment to repurchase its
shares. The ongoing threat of litigation will keep a lid on the stock's
valuation, but continued strong fundamentals, driven by the restoration of the
tobacco oligopoly and strong free cash flow, make the stock an attractive
holding.
What are the Fund's top 10 holdings, and how is the Fund diversified by
industry?
The Fund's top 10 holdings as of 9/30/94 are as follows:
<TABLE>
<S> <C> <C> <C>
Phelps Dodge Corp. 2.9% Raytheon Co. 2.5%
Philip Morris 2.8% Textron,Inc. 2.4%
Mattel, Inc. 2.8% General Motors
Sears Roebuck & Co. 2.7% Corp., Class E 2.4%
AT&T Corp. 2.7% FMC Corp. 2.3%
Hewlett-Packard Co. 2.5%
</TABLE>
The Fund's industry breakdown as of 9/30/94 was as follows:
Basic Industry 8.3%
Transportation 1.7%
Consumer Durables 8.2%
Technology 11.8%
Consumer Non-Durables 6.5%
Industrial/Manufacturing 7.6%
Consumer Services 6.6%
Healthcare 8.4%
Energy 10.1%
Finance 13.9%
Utilities 7.0%
What is your current view on the market?
Despite strong gains in corporate earnings, the markets are being negatively
affected by inflationary expectations and currency concerns related to the trade
situation. Some market participants are fearing a slowdown in the economy in
1995 due to the recent and expected tightening by the Fed. We believe that we
are in a long-term, low inflation environment driven by demographics and gains
in productivity. However, on a cyclical basis, rebounding commodity prices,
tighter labor markets, and tighter capacity utilization may lead to some
increases in the inflation numbers. The overall level of this inflation does not
appear to be severe enough to cause the Fed to abort this recovery. Recovering
overseas economies and an inexpensive dollar appear to be the drivers for the
continuation of this moderate economic rebound. We believe that corporate
earnings can expand by 10% from 1994 to 1995.
By any historic measure such as absolute dividend yields, price-to-book ratios
or trailing P/Es, the market is by no means inexpensive. However, if you believe
we are in a continued moderate growth and inflation environment, these levels of
valuation are sustainable. We believe this scenario is currently intact, but
given the fact that the markets will be "fighting the Fed," investors should be
prepared to see increased volatility in comparison to 1992 and 1993. The Fund's
management believes that this anxious environment offers investment
opportunities, and calls for increased stock selectivity.
Two Ways You May Seek to Invest for Success
in American Leaders Fund, Inc.
- ------------------------------------------------------------------------------
Initial Investment:
A $26,000 investment (reinvesting all dividends and capital gains) grew to
$268,196.
If you had invested $26,000 in the Class A Shares of American Leaders Fund, Inc.
on 2/26/69, reinvested dividends and capital gains, and didn't redeem any
shares, your account would be worth $268,196 on 9/30/94. You would have earned a
9.55% average annual total return for the 26-year investment life span.*
One key to investing wisely is to reinvest all
distributions in Fund shares. This increases the number of shares on which you
can earn future dividends, and you gain the benefit of compounding.
As of 9/30/94, the Class A Shares' average annual one-year, five-year, and ten-
year total returns were -2.08%, 8.59%, and 12.01%, respectively. Class B Shares'
cumulative total return since inception on 7/26/94 was -4.19%. Class C Shares'
one-year and since inception on 4/22/93 total returns were 1.70% and 5.99%,
respectively. Fortress Shares' one-year and since inception on 7/28/93 total
returns were 1.46% and 2.51%, respectively.**
"Graphic representation "A" omitted. See Appendix."
*The total return stated for Class A Shares for 9/30/94 does not reflect the
new 5.5% sales load. The sales load reflected is 4.5%.
**The total return stated takes into account the 5.5% sales load for Class A
Shares effective 10/1/94, the 5.5% contingent deferred sales charge for
Class B Shares, the 1% contingent deferred sales charge for Class C Shares
and the 1% sales load and 1% contingent deferred sales charge for Fortress
Shares.
Data quoted represents past performance and does not guarantee future results.
Investment return and principal value will fluctuate so an investor's shares,
when redeemed, may be worth more or less than their original cost. Total return
represents the change in the value of an investment after reinvesting all income
and capital gains.
American Leaders Fund, Inc.
- -------------------------------------------------------------------------------
One Step at a Time:
$1,000 invested on inception date and on each anniversary date for 25 years
(reinvesting all dividends and capital gains) grew to $147,272.
With this approach, the key is consistency.
If you had started investing $1,000 on the inception date of the Fund and $1,000
on each anniversary date in the Class A Shares of American Leaders Fund, Inc. on
2/26/69, reinvested your dividends and capital gains and did not redeem any
shares, you would have invested only $26,000, but your account would have
reached a total value of $147,272 by 9/30/94. You would have earned an average
annual total return of 11.47%.*
A practical investment plan helps you pursue long-term performance from blue-
chip stocks. Through systematic investing, you buy shares on a regular basis and
reinvest all earnings. An investment plan works for you when you invest only
$1,000 annually. You can take it one step at a time. Put time and compounding to
work!
"Graphic representation "B" omitted. See Appendix."
*No method of investing can guarantee a profit or protect against loss in down
markets. However, by investing regularly over time and buying shares at various
prices, investors can purchase more shares at lower prices, and all accumulated
shares have the ability to pay income to the investor.
Because such a plan involves continuous investment, regardless of changing price
levels, the investor should consider whether or not to continue purchases
through periods of low price levels.
American Leaders Fund, Inc. --
Hypothetical Investor Profile: Investing for a College Education
- ---------------------------------------------------------------------------
David and Joan Rice are a fictional couple who, like many shareholders, are
searching for a way to make their money grow over time.
David and Joan are planning for the college education of their child in 15
years. On September 30, 1979, they invested $5,000 in the Class A Shares of
American Leaders Fund, Inc. Since then, David and Joan have made investments of
$250 every month.
As this chart shows, over 15 years, the original $5,000 investment along with
their additional monthly $250 investments totaling $50,000 has grown to
$162,854. This represents a 13.21% average annual total return.* For the Rices,
a dedicated program of monthly investment really paid off.
"Graphic representation "C" omitted. See Appendix."
*This hypothetical scenario is provided for illustrative purposes only and does
not represent the results obtained by any particular shareholder. Past
performance does not guarantee future results.
American Leaders Fund, Inc.
Portfolio of Investments
- --------------------------------------------------------------------------------
September 30, 1994
(unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- ---------------------------------------------------------------------------------- --------------
COMMON STOCKS--90.1%
- -------------------------------------------------------------------------------------------------
BASIC INDUSTRY--8.3%
----------------------------------------------------------------------------------
110,700 **FMC Corp. $ 6,891,075
----------------------------------------------------------------------------------
108,300 Lubrizol Corp. 3,370,837
----------------------------------------------------------------------------------
139,400 Phelps Dodge Corp. 8,660,225
----------------------------------------------------------------------------------
234,500 Praxair, Inc. 5,715,938
---------------------------------------------------------------------------------- --------------
Total 24,638,075
---------------------------------------------------------------------------------- --------------
CONSUMER DURABLES--8.2%
----------------------------------------------------------------------------------
126,000 Eastman Kodak Co. 6,520,500
----------------------------------------------------------------------------------
187,400 Ford Motor Co. 5,200,350
----------------------------------------------------------------------------------
90,000 General Motors Corp. 4,218,750
----------------------------------------------------------------------------------
304,775 Mattel, Inc. 8,267,022
---------------------------------------------------------------------------------- --------------
Total 24,206,622
---------------------------------------------------------------------------------- --------------
CONSUMER NON-DURABLES--6.5%
----------------------------------------------------------------------------------
90,600 Avon Products, Inc. 5,413,350
----------------------------------------------------------------------------------
137,000 Philip Morris Cos., Inc. 8,374,125
----------------------------------------------------------------------------------
154,900 Reebok International, Ltd. 5,537,675
---------------------------------------------------------------------------------- --------------
Total 19,325,150
---------------------------------------------------------------------------------- --------------
CONSUMER SERVICES--6.6%
----------------------------------------------------------------------------------
243,200 American Stores Co. 6,140,800
----------------------------------------------------------------------------------
167,000 Sears, Roebuck & Co. 8,016,000
----------------------------------------------------------------------------------
244,100 **Tele-Communications, Inc. 5,415,969
---------------------------------------------------------------------------------- --------------
Total 19,572,769
---------------------------------------------------------------------------------- --------------
ENERGY--10.1%
----------------------------------------------------------------------------------
183,600 Baker Hughes, Inc. 3,419,550
----------------------------------------------------------------------------------
158,600 Chevron Corp. 6,601,725
----------------------------------------------------------------------------------
92,600 Mapco, Inc. 5,185,600
----------------------------------------------------------------------------------
110,000 Texaco, Inc. 6,600,000
----------------------------------------------------------------------------------
272,600 USX Marathon Group $ 4,838,650
----------------------------------------------------------------------------------
69,178 **Western Atlas, Inc. 3,026,538
---------------------------------------------------------------------------------- --------------
Total 29,672,063
---------------------------------------------------------------------------------- --------------
FINANCE--13.9%
----------------------------------------------------------------------------------
137,900 Bank of Boston Corp. 3,671,587
----------------------------------------------------------------------------------
137,000 Citicorp 5,822,500
----------------------------------------------------------------------------------
113,677 Dean Witter, Discover & Co. 4,277,097
----------------------------------------------------------------------------------
41,200 Federal National Mortgage Association 3,244,500
----------------------------------------------------------------------------------
10,100 First Interstate Bancorp. 819,362
----------------------------------------------------------------------------------
107,800 Mellon Bank Corp. 6,063,750
----------------------------------------------------------------------------------
67,400 Nationsbank Corp. 3,302,600
----------------------------------------------------------------------------------
164,000 PNC Financial Corp. 4,243,500
----------------------------------------------------------------------------------
10,000 Providian Corp. 315,000
----------------------------------------------------------------------------------
101,000 Transameria Corp. 5,075,250
----------------------------------------------------------------------------------
127,100 Travelers, Inc. 4,178,413
---------------------------------------------------------------------------------- --------------
Total 41,013,559
---------------------------------------------------------------------------------- --------------
HEALTHCARE--8.4%
----------------------------------------------------------------------------------
108,000 American Home Products Corp. 6,480,000
----------------------------------------------------------------------------------
110,700 Becton, Dickinson & Co. 5,341,275
----------------------------------------------------------------------------------
106,900 Bristol-Myers Squibb Co. 6,133,387
----------------------------------------------------------------------------------
146,000 U.S. Healthcare, Inc. 6,798,125
---------------------------------------------------------------------------------- --------------
Total 24,752,787
---------------------------------------------------------------------------------- --------------
INDUSTRIAL/MANUFACTURING--7.6%
----------------------------------------------------------------------------------
43,000 Deere & Co. 2,950,875
----------------------------------------------------------------------------------
88,900 General Electric Co. 4,278,312
----------------------------------------------------------------------------------
79,878 **Litton Industries, Inc. 2,975,455
----------------------------------------------------------------------------------
58,300 Loews Corp. 5,152,263
----------------------------------------------------------------------------------
141,900 Textron, Inc. $ 7,219,163
---------------------------------------------------------------------------------- --------------
Total 22,576,068
---------------------------------------------------------------------------------- --------------
TECHNOLOGY--11.8%
----------------------------------------------------------------------------------
188,800 General Motors Corp., Class E 7,174,400
----------------------------------------------------------------------------------
85,400 Hewlett-Packard Co. 7,461,825
----------------------------------------------------------------------------------
150,700 Martin-Marietta Corp. 6,706,150
----------------------------------------------------------------------------------
115,000 Raytheon Co. 7,374,375
----------------------------------------------------------------------------------
182,600 Rockwell International Corp. 6,254,050
---------------------------------------------------------------------------------- --------------
Total 34,970,800
---------------------------------------------------------------------------------- --------------
TRANSPORTATION--1.7%
----------------------------------------------------------------------------------
200,000 Ryder Systems, Inc. 5,125,000
---------------------------------------------------------------------------------- --------------
UTILITIES--7.0%
----------------------------------------------------------------------------------
148,400 American Telephone & Telegraph Co. 8,013,600
----------------------------------------------------------------------------------
57,300 Detroit Edison Co. 1,461,150
----------------------------------------------------------------------------------
80,000 Duke Power Co. 3,120,000
----------------------------------------------------------------------------------
96,400 Enron Corp. 2,916,100
----------------------------------------------------------------------------------
202,000 MCI Communications Corp. 5,176,250
---------------------------------------------------------------------------------- --------------
Total 20,687,100
---------------------------------------------------------------------------------- --------------
TOTAL COMMON STOCKS (IDENTIFIED COST $218,952,483) 266,539,993
---------------------------------------------------------------------------------- --------------
CONVERTIBLE PREFERRED STOCKS--2.2%
- -------------------------------------------------------------------------------------------------
CONSUMER NON-DURABLES--1.3%
----------------------------------------------------------------------------------
534,000 RJR Nabisco Holdings Corp., Conv. Pfd., Series C, $.60 3,738,000
---------------------------------------------------------------------------------- --------------
FINANCE--0.8%
----------------------------------------------------------------------------------
119,400 Citicorp, PERCS, Series 15, $1.22 2,328,300
---------------------------------------------------------------------------------- --------------
UTILITIES--0.1%
----------------------------------------------------------------------------------
5,000 Nacional Financiera, SNC, PRIDES, $6.79 332,500
---------------------------------------------------------------------------------- --------------
TOTAL CONVERTIBLE PREFERRED STOCKS (IDENTIFIED COST $5,660,275) 6,398,800
---------------------------------------------------------------------------------- --------------
</TABLE>
American Leaders Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OR SHARES VALUE
<C> <S> <C>
- ------------- ---------------------------------------------------------------------------------- --------------
CONVERTIBLE SECURITIES--1.5%
- -------------------------------------------------------------------------------------------------
TECHNOLOGY--1.5%
----------------------------------------------------------------------------------
$ 3,425,000 General Instrument Corp., Conv. Jr. Sub. Note, 5.00%, 6/15/2000 $ 4,469,625
---------------------------------------------------------------------------------- --------------
TOTAL CONVERTIBLE SECURITIES (IDENTIFIED COST $3,662,798) 4,469,625
---------------------------------------------------------------------------------- --------------
*REPURCHASE AGREEMENT--8.2%
- -------------------------------------------------------------------------------------------------
24,105,000 Morgan (J.P.) Securities, Inc., 4.90%, dated 9/30/94, due 10/3/94
(at amortized cost) 24,105,000
---------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS (IDENTIFIED COST $252,380,556) $ 301,513,418+
---------------------------------------------------------------------------------- --------------
</TABLE>
The cost of investments for federal tax purposes amounts to $252,380,556. The
net appreciation on a federal tax basis amounts to $49,132,862, which is
comprised of $52,641,879 appreciation and $3,509,017 depreciation at
September 30, 1994.
*The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
**Non-income producing.
Note: The categories of investments are shown as a percentage of net assets
($295,709,435) at September 30, 1994.
The following abbreviations are used in this portfolio:
PERCS -- Preferred Equity Redeemable Preferred Stock.
PRIDES -- Preferred Redeemable Increased Dividend Equity Securities.
(See Notes which are an integral part of the Financial Statements)
American Leaders Fund, Inc.
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
September 30, 1994
(unaudited)
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value (identified and tax cost $252,380,556) $301,513,418
- ---------------------------------------------------------------------------------------------------
Cash 9,370
- ---------------------------------------------------------------------------------------------------
Receivable for fund shares sold 2,536,094
- ---------------------------------------------------------------------------------------------------
Dividends and interest receivable 664,145
- ---------------------------------------------------------------------------------------------------
Prepaid expenses 41,465
- --------------------------------------------------------------------------------------------------- ------------
Total assets 304,764,492
- ---------------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------------------------
Payable for investments purchased $8,915,548
- ----------------------------------------------------------------------------------------
Payable for Fund shares redeemed 139,509
- ---------------------------------------------------------------------------------------- ----------
Total
liabilities 9,055,057
- --------------------------------------------------------------------------------------------------- ------------
NET ASSETS for 19,562,455 shares of capital stock outstanding $295,709,435
- --------------------------------------------------------------------------------------------------- ------------
NET ASSETS CONSIST OF:
- ---------------------------------------------------------------------------------------------------
Paid-in capital $240,191,286
- ---------------------------------------------------------------------------------------------------
Unrealized appreciation of investments 49,132,862
- ---------------------------------------------------------------------------------------------------
Accumulated undistributed net realized gain on investments 4,986,883
- ---------------------------------------------------------------------------------------------------
Undistributed net investment income 1,398,404
- --------------------------------------------------------------------------------------------------- ------------
Total Net Assets $295,709,435
- --------------------------------------------------------------------------------------------------- ------------
NET ASSET VALUE:
- ---------------------------------------------------------------------------------------------------
Class A Shares (net assets of $244,441,677 / 16,169,581 shares of capital stock outstanding) $15.12
- --------------------------------------------------------------------------------------------------- ------------
Class B Shares (net assets of $11,900,677 / 787,099 shares of capital stock outstanding) $15.12
- --------------------------------------------------------------------------------------------------- ------------
Class C Shares (net assets of $16,732,739 / 1,108,893 shares of capital stock outstanding) $15.09
- --------------------------------------------------------------------------------------------------- ------------
Fortress Shares (net assets of $22,634,342 / 1,496,882 shares of capital stock outstanding) $15.12
- --------------------------------------------------------------------------------------------------- ------------
OFFERING PRICE PER SHARE:
- ---------------------------------------------------------------------------------------------------
Class A Shares (100/95.5 of $15.12)* $15.83
- --------------------------------------------------------------------------------------------------- ------------
Class B Shares $15.12
- --------------------------------------------------------------------------------------------------- ------------
Class C Shares $15.09
- --------------------------------------------------------------------------------------------------- ------------
Fortress Shares (100/99.0 of $15.12)* $15.27
- --------------------------------------------------------------------------------------------------- ------------
COMPUTATION OF PROCEEDS ON REDEMPTION:
- ---------------------------------------------------------------------------------------------------
Class A Shares $15.12
- --------------------------------------------------------------------------------------------------- ------------
Class B Shares (99.0/100 of $15.12)** $14.97
- --------------------------------------------------------------------------------------------------- ------------
Class C Shares (99.0/100 of $15.09)** $14.94
- --------------------------------------------------------------------------------------------------- ------------
Fortress Shares (99.0/100 of $15.12)** $14.97
- --------------------------------------------------------------------------------------------------- ------------
</TABLE>
*See "What Shares Cost" in the prospectus.
**See "Redeeming Shares" in the prospectus.
(See Notes which are an integral part of the Financial Statements)
American Leaders Fund, Inc.
Statement of Operations
- --------------------------------------------------------------------------------
Six Months Ended September 30, 1994
(unaudited)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Dividends $ 3,351,884
- ---------------------------------------------------------------------------------------------------
Interest 516,576
- --------------------------------------------------------------------------------------------------- -------------
Total income 3,868,460
- ---------------------------------------------------------------------------------------------------
Expenses--
- ---------------------------------------------------------------------------------------------------
Investment advisory fee $ 914,842
- -------------------------------------------------------------------------------------
Directors' fees 4,750
- -------------------------------------------------------------------------------------
Administrative personnel and services 103,434
- -------------------------------------------------------------------------------------
Custodian, and recordkeeping fees and expenses 57,798
- -------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 196,913
- -------------------------------------------------------------------------------------
Capital stock registration costs 37,750
- -------------------------------------------------------------------------------------
Auditing fees 10,550
- -------------------------------------------------------------------------------------
Legal fees 8,750
- -------------------------------------------------------------------------------------
Distribution services fee--Class B Shares 6,622
- -------------------------------------------------------------------------------------
Distribution services fee--Class C Shares 52,553
- -------------------------------------------------------------------------------------
Printing and postage 23,000
- -------------------------------------------------------------------------------------
Taxes 22,500
- -------------------------------------------------------------------------------------
Shareholder services fee--Class A Shares 185,546
- -------------------------------------------------------------------------------------
Shareholder services fee--Class B Shares 1,148
- -------------------------------------------------------------------------------------
Shareholder services fee--Class C Shares 17,518
- -------------------------------------------------------------------------------------
Shareholder services fee--Fortress Shares 23,647
- -------------------------------------------------------------------------------------
Miscellaneous 2,000
- ------------------------------------------------------------------------------------- ------------
Net expenses 1,669,321
- --------------------------------------------------------------------------------------------------- -------------
Net investment income $ 2,199,139
- --------------------------------------------------------------------------------------------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ---------------------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investments (identified cost basis) 5,017,174
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments 3,159,031
- --------------------------------------------------------------------------------------------------- -------------
Net realized and unrealized gain (loss) on investments 8,176,205
- --------------------------------------------------------------------------------------------------- -------------
Change in net assets resulting from operations $ 10,375,344
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
American Leaders Fund, Inc.
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
-----------------------
1995* 1994
-------- ---------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------------------------------------
Net investment income $ 2,199,139 $ 3,364,968
- ------------------------------------------------------------------------------------
Net realized gain on investments ($5,017,174 net gain and $4,928,604 net gain,
respectively, as computed for federal tax purposes) 5,017,174 4,928,604
- ------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments 6,624,572 (3,465,543)
- ------------------------------------------------------------------------------------ ------------- -------------
Change in net assets resulting from operations 13,840,885 4,828,029
- ------------------------------------------------------------------------------------ ------------- -------------
Net equalization credits 60,081 151,939
- ------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------
Dividends to shareholders from net investment income:
- ------------------------------------------------------------------------------------
Class A Shares (1,935,689) (3,432,521)
- ------------------------------------------------------------------------------------
Class B Shares (22,796)** --
- ------------------------------------------------------------------------------------
Class C Shares (61,084) (48,153)***
- ------------------------------------------------------------------------------------
Fortress Shares (154,575) (82,470)****
- ------------------------------------------------------------------------------------
Distributions to shareholders from net realized gain on
investment transactions:
- ------------------------------------------------------------------------------------
Class A Shares (1,881,651) (7,004,322)
- ------------------------------------------------------------------------------------
Class C Shares (107,454) (111,800)***
- ------------------------------------------------------------------------------------
Fortress Shares (150,876) (97,411)****
- ------------------------------------------------------------------------------------ ------------- -------------
Change in net assets from distributions to shareholders (4,314,125) (10,776,677)
- ------------------------------------------------------------------------------------ ------------- -------------
CAPITAL STOCK TRANSACTIONS--
- ------------------------------------------------------------------------------------
Proceeds from sale of shares 52,505,560 90,270,028
- ------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders
in payment of dividends declared 3,395,595 8,479,636
- ------------------------------------------------------------------------------------
Cost of shares redeemed (23,812,748) (41,784,861)
- ------------------------------------------------------------------------------------ ------------- -------------
Change in net assets from Fund share transactions 32,088,407 56,964,803
- ------------------------------------------------------------------------------------ ------------- -------------
Change in net assets 41,675,248 51,168,094
- ------------------------------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------------------------------
Beginning of period 254,034,187 202,866,093
- ------------------------------------------------------------------------------------ ------------- -------------
End of period (including undistributed net income of
$1,398,404 and $1,313,328, respectively) $ 295,709,435 $ 254,034,187
- ------------------------------------------------------------------------------------ ------------- -------------
</TABLE>
* Six months ended September 30, 1994.
** For the period from July 18, 1994 (date of initial public offering) to
September 30, 1994.
*** For the period from April 21, 1993 (date of initial public offering) to
March 31, 1994.
**** For the period from July 27, 1993 (date of initial public offering) to
March 31, 1994.
(See Notes which are an integral part of the Financial Statements)
American Leaders Fund, Inc.
Financial Highlights--Class A Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1995* 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.58 $ 14.90 $ 13.88 $ 13.18 $ 12.21 $ 13.04 $ 12.55 $ 14.21
- --------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------
Net investment income 0.12 0.23 0.29 0.29 0.37 0.55 0.50 0.45
- --------------------------------------
Net realized and unrealized gain
(loss) on investments 0.66 0.18 2.05 1.34 1.28 0.36 1.08 (1.21)
- -------------------------------------- --------- --------- --------- --------- --------- --------- --------- ---------
Total from investment operations 0.78 0.41 2.34 1.63 1.65 0.91 1.58 (.76)
- --------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------
Dividends to shareholders from net
investment income (0.12) (0.24) (0.28) (0.28) (0.38) (0.56) (0.50) (0.43)
- --------------------------------------
Dividends to shareholders from net
realized gain on investment
transactions (0.12) (0.49) (1.04) (0.65) (0.30) (1.18) (0.59) (0.47)
- -------------------------------------- --------- --------- --------- --------- --------- --------- --------- ---------
Total distributions (0.24) (0.73) (1.32) (.93) (.68) (1.74) (1.09) (0.90)
- -------------------------------------- --------- --------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 15.12 $ 14.58 $ 14.90 $ 13.88 $ 13.18 $ 12.21 $ 13.04 $ 12.55
- -------------------------------------- --------- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN** 5.38% 2.76% 18.31% 12.91% 14.17% 7.13% 13.23% (5.32%)
- --------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------
Expenses 1.18%(a) 1.18% 1.13% 1.02% 1.02% 1.01% 1.01% 1.00%
- --------------------------------------
Net investment income 1.68%(a) 1.48% 2.07% 2.12% 3.06% 4.23% 3.85% 3.35%
- --------------------------------------
Expense waiver/reimbursement (b) -- -- 0.06% 0.16% 0.30% 0.35% 0.12% 0.11%
- --------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------
Net assets, end of period (000
omitted) 244,442 226,857 202,866 171,210 149,360 147,235 149,049 158,818
- --------------------------------------
Portfolio turnover rate 14% 27% 39% 67% 57% 50% 27% 65%
- --------------------------------------
<CAPTION>
<S> <C> <C>
1987 1986
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.64 $ 11.59
- --------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------
Net investment income 0.46 0.53
- --------------------------------------
Net realized and unrealized gain
(loss) on investments 1.81 2.88
- -------------------------------------- --------- ---------
Total from investment operations 2.27 3.41
- --------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------
Dividends to shareholders from net
investment income (0.47) (0.52)
- --------------------------------------
Dividends to shareholders from net
realized gain on investment
transactions (1.23) (0.84)
- -------------------------------------- --------- ---------
Total distributions (1.70) (1.36)
- -------------------------------------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 14.21 $ 13.64
- -------------------------------------- --------- ---------
TOTAL RETURN** 18.38% 31.80%
- --------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------
Expenses 1.00% 1.09%
- --------------------------------------
Net investment income 3.44% 4.42%
- --------------------------------------
Expense waiver/reimbursement (b) 0.12% 0.18%
- --------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------
Net assets, end of period (000
omitted) 157,999 112,472
- --------------------------------------
Portfolio turnover rate 28% 31%
- --------------------------------------
</TABLE>
* For six months ended September 30, 1994 (unaudited).
** Based on net asset value which does not reflect sales load or contingent
deferred sales charge, if applicable.
(a) Computed on an annualized basis.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
American Leaders Fund, Inc.
Financial Highlights--Class B Shares
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
PERIOD ENDED
SEPTEMBER 30, 1994*
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.93
- ----------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------
Net investment income (c) 0.03
- ----------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.21
- ---------------------------------------------------------------------------------------- -------
Total from investment operations 0.24
- ----------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.05)
- ----------------------------------------------------------------------------------------
Distributions for shareholders from net realized gain on investment transactions --
- ---------------------------------------------------------------------------------------- -------
Total distributions (0.05)
- ---------------------------------------------------------------------------------------- -------
NET ASSET VALUE, END OF PERIOD $ 15.12
- ---------------------------------------------------------------------------------------- -------
TOTAL RETURN** 1.30%
- ----------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------------------------
Expenses 1.90%(a)
- ----------------------------------------------------------------------------------------
Net investment income 1.12%(a)
- ----------------------------------------------------------------------------------------
Expense waiver/reimbursement (b) -- (a)
- ----------------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- ----------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) 11,901
- ----------------------------------------------------------------------------------------
Portfolio turnover rate 14%
- ----------------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from July 18, 1994 (date of initial
public offering) to September 30, 1994 (unaudited).
** Based on net asset value which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(a) Computed on an annualized basis.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(c) Per share information presented is based upon the monthly average number of
shares outstanding due to large fluctuations in the number of shares
outstanding during the period.
(See Notes which are an integral part of the Financial Statements)
American Leaders Fund, Inc.
Financial Highlights--Class C Shares
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1995* 1994**
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.55 $ 14.70
- -------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------
Net investment income 0.06 0.12
- -------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.66 0.35
- ------------------------------------------------------------------------------------- --------- -----------
Total from investment operations 0.72 0.47
- -------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- -------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.06) (0.13)
- -------------------------------------------------------------------------------------
Distributions for shareholders from net realized gain on investment
transactions (0.12) (0.49)
- ------------------------------------------------------------------------------------- --------- -----------
Total distributions (0.18) (0.62)
- ------------------------------------------------------------------------------------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 15.09 $ 14.55
- ------------------------------------------------------------------------------------- --------- -----------
TOTAL RETURN*** 4.98% 3.16%
- -------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------------------------------
Expenses 2.03(a) 2.11%(a)
- -------------------------------------------------------------------------------------
Net investment income 0.86(a) 0.71%(a)
- -------------------------------------------------------------------------------------
Expense waiver/reimbursement (b) -- (a) -- (a)
- -------------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- -------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) 16,733 11,895
- -------------------------------------------------------------------------------------
Portfolio turnover rate 14% 27%
- -------------------------------------------------------------------------------------
</TABLE>
* For six months ended September 30, 1994 (unaudited).
** Reflects operations for the period from April 21, 1993 (date of initial
public offering) to March 31, 1994.
*** Based on net asset value which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(a) Computed on an annualized basis.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
American Leaders Fund, Inc.
Financial Highlights--Fortress Shares
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1995* 1994**
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.58 $ 14.95
- -------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------
Net investment income 0.12 0.16
- -------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.66 (0.20)
- ------------------------------------------------------------------------------------- --------- -----------
Total from investment operations 0.78 (0.04)
- -------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- -------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.12) (0.16)
- -------------------------------------------------------------------------------------
Distributions for shareholders from net realized gain on investment
transactions (0.12) (0.17)
- ------------------------------------------------------------------------------------- --------- -----------
Total distributions (0.24) (0.33)
- ------------------------------------------------------------------------------------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 15.12 $ 14.58
- ------------------------------------------------------------------------------------- --------- -----------
TOTAL RETURN*** 5.34% (0.30%)
- -------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------------------------------
Expenses 1.28(a) 1.35%(a)
- -------------------------------------------------------------------------------------
Net investment income 1.61(a) 1.51%(a)
- -------------------------------------------------------------------------------------
Expense waiver/reimbursement (b) -- (a) -- (a)
- -------------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- -------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) 22,634 15,282
- -------------------------------------------------------------------------------------
Portfolio turnover rate 14% 27%
- -------------------------------------------------------------------------------------
</TABLE>
* For six months ended September 30, 1994 (unaudited).
** Reflects operations for the period from July 27, 1993 (date of initial
public offering) to March 31, 1994.
*** Based on net asset value which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(a) Computed on an annualized basis.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
American Leaders Fund, Inc.
Notes to Financial Statements
- --------------------------------------------------------------------------------
September 30, 1994
(unaudited)
(1) ORGANIZATION
American Leaders Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as a diversified, open-end
management investment company. The Fund provides four classes of shares (Class
A, Class B, Class C, and Fortress).
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
A. INVESTMENT VALUATIONS--Listed equity securities are valued at the last sale
price reported on national securities exchanges. Unlisted securities and
short-term obligations (and private placement securities) are generally
valued at the prices provided by an independent pricing service. Short-term
securities with remaining maturities of sixty days or less may be stated at
amortized cost, which approximates value.
B. REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral in support of
repurchase agreement investments. Additionally, procedures have been
established by the Fund to monitor, on a daily basis, the market value of
each repurchase agreement's underlying collateral to ensure that the value
of collateral at least equals the principal amount of the repurchase
agreement, including accrued interest.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines
established by the Board of Directors. Risks may arise from the potential
inability of counterparties to honor the terms of the repurchase agreement.
Accordingly, the Fund could receive less than the repurchase price on the
sale of collateral securities.
C. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and
distributions to shareholders are recorded on the ex-dividend date.
Interest income and expenses are accrued daily. Bond premium and discount,
if applicable, are amortized as required by the Internal Revenue Code, as
amended (the "Code").
D. FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its taxable income.
Accordingly, no provisions for federal tax are necessary.
E. EQUALIZATION--The Fund follows the accounting practice known as
equalization by
which a portion of the proceeds from sales and costs of redemptions
of capital stock
equivalent, on a per share basis, to the amount of undistributed net
investment
income on the date of the transaction is credited or charged to
undistributed net
investment income. As a result, undistributed net investment
income per share is unaffected by sales or redemptions of capital stock.
F. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
G. OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At September 30, 1994, there were 100,000,000 shares of $.20 per share par value
capital stock authorized of these shares, 30,000,000 have been designated as
Class A Shares of the Fund, 20,000,000 have been designated as Class B Shares of
the Fund, 25,000,000 have been designated as Class C Shares of the Fund and
25,000,000 as Fortress Shares of the Fund. Transactions in capital stock were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1995* 1994
--------------------------- ---------------------------
CLASS A SHARES SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ------------------------------------------------------ ----------- -------------- ----------- --------------
Shares sold 1,731,824 $ 25,713,793 4,010,791 $ 59,786,383
- ------------------------------------------------------
Shares issued to shareholders
in payment of dividends declared 203,554 3,051,050 564,327 8,249,042
- ------------------------------------------------------
Shares redeemed (1,326,779) (19,678,174) (2,631,678) (39,327,244)
- ------------------------------------------------------ ----------- -------------- ----------- --------------
Net change resulting from Class
A Shares transactions 608,599 $ 9,086,669 1,943,440 $ 28,708,181
- ------------------------------------------------------ ----------- -------------- ----------- --------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------
1995**
------------------------
CLASS B SHARES SHARES AMOUNT
<S> <C> <C>
- ------------------------------------------------------------------------------------- --------- -------------
Shares sold 790,626 $ 11,689,272
- -------------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 1,367 20,846
- -------------------------------------------------------------------------------------
Shares redeemed (4,894) (73,773)
- ------------------------------------------------------------------------------------- --------- -------------
Net change resulting from Class B Shares transactions 787,099 $ 11,936,345
- ------------------------------------------------------------------------------------- --------- -------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1995* 1994***
------------------------ -------------------------
CLASS C SHARES SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ----------------------------------------------------------- --------- ------------- ---------- -------------
Shares sold 371,580 $ 5,545,641 868,693 $ 12,978,745
- -----------------------------------------------------------
Shares issued to shareholders
in payment of dividends declared 6,802 101,634 6,285 93,101
- -----------------------------------------------------------
Shares redeemed (86,773) (1,290,631) (47,694) (710,025)
- ----------------------------------------------------------- --------- ------------- ---------- -------------
Net change resulting from Class
C Shares transactions 291,609 $ 4,356,644 817,284 $ 12,353,821
- ----------------------------------------------------------- --------- ------------- ---------- -------------
<CAPTION>
YEAR ENDED MARCH 31,
---------------------------------------------------
1995* 1994****
------------------------ -------------------------
FORTRESS SHARES SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------- --------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
Shares sold 619,644 $ 9,256,854 1,152,663 $ 17,504,900
- -----------------------------------------------------------
Shares issued to shareholders in payment of
dividends declared 14,805 222,065 9,223 137,493
- -----------------------------------------------------------
Shares redeemed (185,618) (2,770,170) (113,835) (1,739,592)
- ----------------------------------------------------------- --------- ------------- ---------- -------------
Net change resulting from Fortress Shares
transactions 448,831 $ 6,708,749 1,048,051 $ 15,902,801
- ----------------------------------------------------------- --------- ------------- ---------- -------------
</TABLE>
* Six months ended September 30, 1994.
** For the period from July 18, 1994 (date of initial public offering) to
September 30, 1994.
*** For the period from April 21, 1993 (date of initial public offering) to
March 31, 1994.
**** For the period from July 27, 1993 (date of initial public offering) to
March 31, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
ADVISORY FEE--Federated Advisers, the Fund's investment adviser (the "Adviser"),
receives for its services an annual investment advisory fee equal to a maximum
of 0.55 of 1% of the average daily net assets of the Fund, and 4.5% of the gross
income of the Fund excluding capital gains or losses.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with administrative personnel and services. The FAS fee is based on the level of
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors for the period. The administrative fee received during the
period of the Administrative Services Agreement shall be at least $125,000 per
portfolio and $30,000 per each additional class of shares.
DISTRIBUTION AND SHAREHOLDER SERVICES FEE--The Fund has adopted a Distribution
Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the
Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal
distributor, from the net assets of the Fund to finance activities intended to
result in the sale of the Fund's Class B and Class C Shares. The Plan provides
that the Fund may incur distribution expenses up to 0.75 of 1% of the average
daily net assets of the Class B and Class C Shares, annually, to compensate FSC.
The distributor may voluntarily choose to waive a portion of its fee. The
distributor can modify or terminate this voluntary waiver at any time at its
sole discretion.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to 0.25 of
1% of average net assets of the Fund for the period. This fee is to obtain
certain personal services for shareholders and the maintenance of shareholder
accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer agent and dividend disbursing agent for the Fund.
The FServ fee is based on the size, type and number of accounts and transactions
made by shareholders.
Certain of the Officers and Directors of the Fund are Officers and Directors or
Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the six
months ended September 30, 1994, were as follows:
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------------
PURCHASES $ 63,999,561
- -------------------------------------------------------------------------------------------------- --------------
SALES $ 35,053,130
- -------------------------------------------------------------------------------------------------- --------------
</TABLE>
(6) SUBSEQUENT EVENT
As of October 1, 1994, the maximum sales load as a percentage of the public
offering price is 5.5% for Class A Shares.
THIS PAGE INTENTIONALLY LEFT BLANK
Directors Officers
- -----------------------------------------------------------------------
<TABLE>
<S> <C>
John F. Donahue John F. Donahue
John T. Conroy, Jr. President
William J. Copeland J. Christopher Donahue
J. Christopher Donahue Vice President
James E. Dowd Richard B. Fisher
Lawrence D. Ellis, M.D. Vice President
Edward L. Flaherty, Jr. Edward C. Gonzales
Peter E. Madden Vice President and Treasurer
Gregor F. Meyer John W. McGonigle
Wesley W. Posvar Vice President and Secretary
Marjorie P. Smuts David M. Taylor
Assistant Treasurer
Charles H. Field
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board,
or any other government agency. Investment in mutual funds
involves investment risk, including possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
[LOGO] FEDERATED SECURITIES CORP.
-----------------------------------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
027128107
027128206
027128404
8110101 (11/94)
[LOGO]
APPENDIX
A. The graphic representation here displayed consists of a boxed legend in
the upper left quadrant indicating the components of the corresponding
mountain chart. The lighter shaded portion represents the value of reinvested
income for American Leaders Fund, Inc.-Class A Shares (the "Fund"). The dark
shaded portion reflects the principal value of a $26,000 investment in the
Fund. The color-coded mountain chart is a visual representation of the
narrative text above it, which shows that an initial investment of $26,000 in
the Fund on February 26, 1969, would have grown to $268,196 on September 30,
1994. The "x" axis reflects computation periods from February 26, 1969 (the
Fund's inception date) to September 30, 1994. The right margin of the chart
reflects the ending value of a hypothetical investment of $26,000 in the Fund
measured in increments of $50,000 ranging from $0 to $300,000.
B. The graphic representation here displayed consists of a boxed legend in
the upper left quadrant indicating the components of the corresponding
mountain chart. The lighter shaded portion represents the value of reinvested
income for the Fund. The dark shaded portion reflects the principal value of
annual $1,000 investments in the Fund. The color-coded mountain chart is a
visual representation of the narrative text beneath it, which shows that an
annual investment of $1,000 in the Fund starting on February 26, 1969, would
grow to $147,272 on September 30, 1994. The "x" axis reflects computation
periods from February 26, 1969 (the Fund's inception date) to September 30,
1994. The right margin of the chart reflects the ending value of a
hypothetical annual $1,000 investment in the Fund measured in increments of
$30,000 ranging from $0 to $150,000.
C. The graphic representation here displayed consists of a boxed legend in
the upper left quadrant indicating the components of the corresponding
mountain chart. The lighter shaded portion represents the value of reinvested
income for the Fund. The dark shaded portion reflects the principal value of
an initial investment of $5,000 in the Fund coupled with additional $250
monthly investments over 15 years. The color-coded mountain chart is a visual
representation of the narrative text beneath it, which shows that an initial
investment of $5,000 in the Fund on September 30, 1979, coupled with $250
monthly investments over 15 years would grow to $162,854 on September 30,
1994. The "x" axis reflects computation periods from September 30, 1979 to
September 30, 1994. The right margin of the chart reflects the ending value
of a hypothetical $5,000 investment in the Fund, coupled with additional $250
monthly investments over 15 years, measured in increments of $40,000 ranging
from $0 to $200,00.
