[LOGO] FEDERATED INVESTORS
American Leaders
Fund, Inc.
27TH SEMI-ANNUAL REPORT
SEPTEMBER 30, 1995
ESTABLISHED 1969
EQUITY
President's Message
Dear Fellow Shareholder:
I am pleased to present the 27th Semi-Annual Report for American Leaders Fund,
Inc. which covers the six-month period from April 1, 1995 to September 30,
1995.
This report begins with an interview with the fund's co-portfolio managers,
Peter R. Anderson, Senior Vice President, and Timothy E. Keefe, Vice
President, of Federated Advisers. Following this interview, there are three
items of shareholder interest: a complete listing of the fund's blue-chip
holdings, a series of graphs showing investment performance, and the fund's
financial statements.
Fund assets increased by an impressive 51% during the six months covered by
this report. They stood at $549.5 million on September 30, 1995 up $185.8
-
million from April 1, 1995. This robust growth reflects a sizable increase in
the value of fund shares as well as the confidence of new shareholders and
present shareholders who increased their holdings.
As a shareholder, you have ownership of over 60 high-quality, blue-chip
corporations--Sears, American Express, AT&T, MCI, Merck, Intel, and General
Electric.
Consistent with an extremely favorable stock market environment, American
Leaders recorded strong performance during the report period. The fund's net
asset value increased by approximately 15% in all share classes between the
first and last day of the reporting period.
Dividends earned per share during the reporting period totaled $0.09 for Class
A Shares, $0.04 for Class B Shares, $0.03 for Class C Shares, and $0.09 for
Fortress Shares. In addition, shares in all four classes earned a long-term
capital gain of $0.20.
Total returns based on net asset value for the period were: 17.07% for Class A
shares; 16.75% for Class B Shares; 16.63% for Class C Shares; and 17.05% for
Fortress Shares.*
* Performance quoted reflects 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. Total returns for the
period (based on offering price) for Class A Shares, Class B Shares, Class C
Shares, and Fortress Shares were 10.64%, 11.19%, 15.60% and 14.84%,
respectively.
We encourage you to reinvest your dividends and capital gains automatically in
shares of American Leaders Fund, Inc. It's a convenient way to increase your
opportunity to participate in the growth and earnings of blue-chip companies.
We trust you were pleased with the positive performance of your investment. As
always, we welcome your comments and suggestions.
Sincerely,
John F. Donahue
President
November 15, 1995
Investment Review
Timothy E. Keefe
Vice President
Federated Advisers
Q What are your comments on this record setting stock market?
A The equity market as measured by the S&P 500 has risen approximately 29.77%
and continues as one of the strongest intermediate rallies in the past
several decades. The market strength has been driven both by stronger than
expected earnings gains as well as a sharp decline in interest rates. We
continue to expect and hope for continued moderate growth in the economy
(2%-3%) coupled with a benign inflation and interest rate environment. This
combination of events, while providing a good backdrop for stocks, makes it
increasingly difficult for companies to continue to report stronger than
expected earnings gains, as we expect growth in corporate profits to moderate
from the double digit rate of the past couple of years.
Q How did American Leaders perform for its shareholders in this favorable
environment?
A Total returns based on net asset value for the period were 17.07% for Class A
Shares, 16.75% for Class B Shares, 16.63% for Class C Shares, and 17.05% for
Fortress Shares.* These returns compare favorably with the total return of
Growth & Income Funds in the Lipper universe, which were up an average of
15.81% over the same period.**
* Performance quoted reflects 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. Total returns for the
period (based on offering price) for Class A Shares, Class B Shares, Class C
Shares, and Fortress Shares were 10.64%, 11.19%, 15.60%, and 14.84%,
respectively.
** Lipper averages do not include the effect of sales charges.
Q Can you single out some of the fund's best performing holdings?
A Over the past few months, the best performing stocks in the fund were First
Interstate, General Dynamics, American Express, MCI, AT&T and Loews. Overall,
most stocks in the finance sector outperformed the market, and the fund's
overweight in this sector helped performance. 'our emphasis on companies with
excess cash flow and/or restructuring potential has also added to performance
in the past few months. Examples include: ITT, Loews, Textron, and Sears. We
have reduced our positions in the technology sector during July to a modest
overweight, which has also proven itself to be a timely move as this sector
has underperformed the market since mid-July.
Q Were there any stocks in the fund's portfolio that did not meet your
expectations?
A Fortunately, the underperforming stocks for the quarter were also some of
the fund's smallest exposures: General Instruments, Caterpillar, Toys R Us,
Intel and Deere.
Q As we approach the end of 1995, what is your outlook for the stock market?
A The outlook going forward gets a bit more difficult, as earnings estimates
have been raised to a higher level in the face of an economy that is showing
continued signs of slowing. We are mindful of the perils of investing in
cyclical businesses which appear statistically cheap in a strengthening
economy. These companies will have an increasingly difficult time exceeding
expectations going forward and, in our opinion, are vulnerable. We, therefore,
are investing in stocks which exhibit steady growth characteristics and are
also undervalued. We are also finding some attractive restructuring stocks
which are misunderstood, have plenty of upside, and have a catalyst.
Q What are your thoughts on the potential for a market correction?
A Our initial reaction is that it is long overdue because the market has not
experienced a correction of more than 10% in over five years. However, in
the stealth correction in 1994, the vast majority of stocks declined 20% or
more from their 1993-1994 highs. While valuation is a problem in certain
segments of the market, the market does not appear grossly overvalued. In any
event, market timing is very difficult at most and totally distracting at
least. 'our strategy, which has been successful in the past, is to find the
best relative values among stocks.
Q What is your strategy going forward?
A Looking ahead, we continue to seek the best relative values in a market that
appears fairly valued. Consolidation, restructuring, and asset value are major
themes in the value portfolios. Recent purchases including Chemical Bank and
CIGNA reflect these themes. Even AT&T, which is also owned by the fund, has
recognized the potential benefits of restructuring and is splitting the
company. We also continue to favor companies in good businesses with superior
management and industry positions. Federal National Mortgage Corporation,
Federal Home Loan Mortgage Association, General Electric, Citicorp, Merck and
Philip Morris are good examples of such companies. Two Ways You May Seek to
Invest for Success in American Leaders Fund, Inc.
Two Ways You May Seek to Invest for Success in
American Leaders Fund, Inc.
Initial Investment:
If you had made an initial investment of $27,000 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 $342,522 on
9/30/95. You would have earned a 10.02%* 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 9/30/95, the Class A Shares' average annual one-year, five-year, and
ten-year total returns were 17.44%, 16.83%, and 12.67%, respectively. Class B
Shares' average annual one-year and since inception (7/26/94) total returns
were 17.96% and 16.95%, respectively. Class C Shares' average annual one-year
and since inception (4/22/93) total returns were 22.54% and 12.86%,
respectively. Fortress Shares' average annual one-year and since inception
(7/28/93) total returns were 21.98% and 12.05%, respectively.
GRAPHIC REPRESENTATION "A" OMITTED. SEE APPENDIX.
* Total return represents the change in the value of an investment after
reinvesting all income and capital gains, and takes into account the 5.5%
sales charge applicable to an initial investment in Class A 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.
American Leaders Fund, Inc.
One Step at a Time:
$1,000 invested each year for 26 years (rein-vesting all dividends and capital
gains) grew to $182,460.
With this approach, the key is consistency.
If you had started investing $1,000 annually in the Class A Shares of American
Leaders Fund, Inc. on 2/26/69, reinvested your dividends and capital gains and
didn't redeem any shares, you would have invested only $27,000, but your
account would have reached a total value of $182,460* by 9/30/95. You would
have earned an average annual total return of 12.04%.
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, 1980, they invested $5,000 in the Class A Shares of
American Leaders Fund, Inc. Since then, David and Joan have made additional
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
$173,552. This represents a 13.88% 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, 1995 (unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--93.0%
- ------------------------------------------------------------------------------------------------
CONSUMER DURABLES--6.2%
---------------------------------------------------------------------------------
100,000 Chrysler Corp. $ 5,300,000
---------------------------------------------------------------------------------
180,000 Eastman Kodak Co. 10,665,000
---------------------------------------------------------------------------------
212,100 Ford Motor Co. 6,601,612
---------------------------------------------------------------------------------
387,218 Mattel, Inc. 11,374,529
--------------------------------------------------------------------------------- --------------
Total 33,941,141
--------------------------------------------------------------------------------- --------------
CONSUMER NON-DURABLES--7.1%
---------------------------------------------------------------------------------
120,000 Avon Products, Inc. 8,610,000
---------------------------------------------------------------------------------
160,000 IBP, Inc. 8,540,000
---------------------------------------------------------------------------------
160,000 Philip Morris Cos., Inc. 13,360,000
---------------------------------------------------------------------------------
240,000 Reebok International Ltd. 8,250,000
--------------------------------------------------------------------------------- --------------
Total 38,760,000
--------------------------------------------------------------------------------- --------------
CONSUMER SERVICES--1.3%
---------------------------------------------------------------------------------
130,000 Gannett Co., Inc. 7,101,250
--------------------------------------------------------------------------------- --------------
ELECTRONIC TECHNOLOGY--12.8%
---------------------------------------------------------------------------------
220,000 (a)Digital Equipment Corp. 10,037,500
---------------------------------------------------------------------------------
59,000 General Dynamics Corp. 3,237,625
---------------------------------------------------------------------------------
111,900 Hewlett-Packard Co. 9,329,663
---------------------------------------------------------------------------------
112,000 Intel Corp. 6,734,000
---------------------------------------------------------------------------------
108,000 International Business Machines Corp. 10,192,500
---------------------------------------------------------------------------------
81,078 (a)Litton Industries, Inc. 3,526,893
---------------------------------------------------------------------------------
200,000 Lockheed Martin Corp. 13,425,000
---------------------------------------------------------------------------------
60,500 Raytheon Co. 5,142,500
---------------------------------------------------------------------------------
185,500 Rockwell International Corp. 8,764,875
--------------------------------------------------------------------------------- --------------
Total 70,390,556
--------------------------------------------------------------------------------- --------------
ENERGY MINERALS--4.1%
---------------------------------------------------------------------------------
161,200 Chevron Corp. 7,838,350
---------------------------------------------------------------------------------
110,000 Mobil Corp. 10,958,750
---------------------------------------------------------------------------------
</TABLE>
American Leaders Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
ENERGY MINERALS--CONTINUED
---------------------------------------------------------------------------------
110,000 Tosco Corp. $ 3,795,000
--------------------------------------------------------------------------------- --------------
Total 22,592,100
--------------------------------------------------------------------------------- --------------
FINANCE--21.4%
---------------------------------------------------------------------------------
150,000 Aflac, Inc. 6,225,000
---------------------------------------------------------------------------------
102,800 Allstate Corp. 4,870,150
---------------------------------------------------------------------------------
200,000 American Express Co. 8,875,000
---------------------------------------------------------------------------------
81,000 CIGNA Corp. 8,434,125
---------------------------------------------------------------------------------
122,800 Chemical Banking Corp. 7,475,450
---------------------------------------------------------------------------------
146,571 Citicorp 10,369,919
---------------------------------------------------------------------------------
200,000 Dean Witter, Discover & Co. 11,250,000
---------------------------------------------------------------------------------
175,000 Federal Home Loan Mortgage Corp. 12,096,875
---------------------------------------------------------------------------------
100,000 Federal National Mortgage Association 10,350,000
---------------------------------------------------------------------------------
44,800 First Interstate Bancorp 4,513,600
---------------------------------------------------------------------------------
151,300 Lehman Brothers Holdings, Inc. 3,498,813
---------------------------------------------------------------------------------
200,000 Mellon Bank Corp. 8,925,000
---------------------------------------------------------------------------------
110,500 Providian Corp. 4,585,750
---------------------------------------------------------------------------------
157,132 The PMI Group, Inc. 5,558,544
---------------------------------------------------------------------------------
200,000 Travelers Group, Inc. 10,625,000
--------------------------------------------------------------------------------- --------------
Total 117,653,226
--------------------------------------------------------------------------------- --------------
HEALTH TECHNOLOGY--7.2%
---------------------------------------------------------------------------------
110,000 American Home Products Corp. 9,336,250
---------------------------------------------------------------------------------
112,700 Becton, Dickinson & Co. 7,086,012
---------------------------------------------------------------------------------
167,900 Bristol-Myers Squibb Co. 12,235,713
---------------------------------------------------------------------------------
100,000 Ivax Corp. 3,012,500
---------------------------------------------------------------------------------
140,000 Merck & Co., Inc. 7,840,000
--------------------------------------------------------------------------------- --------------
Total 39,510,475
--------------------------------------------------------------------------------- --------------
PROCESS INDUSTRIES--5.6%
---------------------------------------------------------------------------------
116,000 Du Pont (E.I.) de Nemours & Co. 7,975,000
---------------------------------------------------------------------------------
</TABLE>
American Leaders Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
PROCESS INDUSTRIES--CONTINUED
---------------------------------------------------------------------------------
122,000 Eastman Chemical Co. $ 7,808,000
---------------------------------------------------------------------------------
80,000 Great Lakes Chemical Corp. 5,410,000
---------------------------------------------------------------------------------
200,000 Scott Paper Co. 9,700,000
--------------------------------------------------------------------------------- --------------
Total 30,893,000
--------------------------------------------------------------------------------- --------------
PRODUCER MANUFACTURING--11.6%
---------------------------------------------------------------------------------
43,700 Deere & Co. 3,556,087
---------------------------------------------------------------------------------
112,600 (a)FMC Corp. 8,557,600
---------------------------------------------------------------------------------
116,500 General Electric Co. 7,426,875
---------------------------------------------------------------------------------
100,000 ITT Corp. 12,400,000
---------------------------------------------------------------------------------
58,300 Loews Corp. 8,482,650
---------------------------------------------------------------------------------
280,000 Philips Electronics N.V., ADR 13,650,000
---------------------------------------------------------------------------------
144,100 Textron, Inc. 9,834,825
--------------------------------------------------------------------------------- --------------
Total 63,908,037
--------------------------------------------------------------------------------- --------------
RETAIL TRADE--3.9%
---------------------------------------------------------------------------------
247,600 American Stores Co. 7,025,650
---------------------------------------------------------------------------------
169,500 Sears, Roebuck & Co. 6,250,313
---------------------------------------------------------------------------------
300,000 (a)Toys "R" Us, Inc. 8,100,000
--------------------------------------------------------------------------------- --------------
Total 21,375,963
--------------------------------------------------------------------------------- --------------
TECHNOLOGY SERVICES--3.7%
---------------------------------------------------------------------------------
274,500 Computer Associates International, Inc. 11,597,625
---------------------------------------------------------------------------------
192,200 General Motors Corp., Class E 8,745,100
--------------------------------------------------------------------------------- --------------
Total 20,342,725
--------------------------------------------------------------------------------- --------------
TRANSPORTATION--3.6%
---------------------------------------------------------------------------------
221,000 Consolidated Rail Corp. 15,193,750
---------------------------------------------------------------------------------
100,000 Kansas City Southern Industries, Inc. 4,550,000
--------------------------------------------------------------------------------- --------------
Total 19,743,750
--------------------------------------------------------------------------------- --------------
UTILITIES--4.5%
---------------------------------------------------------------------------------
191,500 AT&T Corp. 12,591,125
---------------------------------------------------------------------------------
</TABLE>
American Leaders Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
UTILITIES--CONTINUED
---------------------------------------------------------------------------------
200,000 Enron Corp. $ 6,700,000
---------------------------------------------------------------------------------
205,000 MCI Communications Corp. 5,342,813
--------------------------------------------------------------------------------- --------------
Total 24,633,938
--------------------------------------------------------------------------------- --------------
TOTAL COMMON STOCKS (IDENTIFIED COST $396,958,024) 510,846,161
--------------------------------------------------------------------------------- --------------
CONVERTIBLE PREFERRED STOCKS--2.2%
- ------------------------------------------------------------------------------------------------
CONSUMER NON-DURABLES--0.7%
---------------------------------------------------------------------------------
544,000 RJR Nabisco Holdings Corp., Conv. Pfd., Series C, $.60 3,672,000
--------------------------------------------------------------------------------- --------------
FINANCE--1.5%
---------------------------------------------------------------------------------
104,814 Citicorp, PERCS, Series 15, $1.22 2,122,483
---------------------------------------------------------------------------------
111,000 Merrill Lynch & Co., Inc., STRYPES, Series MGIC, $3.12 6,077,250
--------------------------------------------------------------------------------- --------------
Total 8,199,733
--------------------------------------------------------------------------------- --------------
TOTAL CONVERTIBLE PREFERRED STOCKS (IDENTIFIED COST $10,916,935) 11,871,733
--------------------------------------------------------------------------------- --------------
CONVERTIBLE SECURITIES--0.8%
- ------------------------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--0.8%
---------------------------------------------------------------------------------
3,425,000 General Instrument Corp., Conv. Jr. Sub. Note, 5.00%, 6/15/2000 4,580,698
--------------------------------------------------------------------------------- --------------
TOTAL CONVERTIBLE SECURITIES (IDENTIFIED COST $3,662,798) 4,580,698
--------------------------------------------------------------------------------- --------------
(b)REPURCHASE AGREEMENT--2.7%
- ------------------------------------------------------------------------------------------------
15,080,000 J.P. Morgan & Co., Inc., 6.48%, dated 9/29/1995, due 10/2/1995
(at amortized cost) 15,080,000
--------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS (IDENTIFIED COST $426,617,757)(c) $ 542,378,592
--------------------------------------------------------------------------------- --------------
</TABLE>
(a) Non-income producing security.
(b) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investment in the repurchase agreement is through participation in a joint
account with other Federated funds.
(c) The cost of investments for federal tax purposes amounts to $426,617,757.
The net unrealized appreciation of investments on a federal tax basis
amounts to $115,760,835 which is comprised of $118,173,076 appreciation and
$2,412,241 depreciation at September 30, 1995.
Note: The categories of investments are shown as a percentage of net assets
($549,486,642) at September 30, 1995.
The following acronym(s) are used throughout this portfolio:
ADR--American Depositary Receipt.
PERCS--Preferred Equity Redemption Cumulative Stock.
STRYPES--Structured Yield Product Exchangeable for Stock.
(See Notes which are an integral part of the Financial Statements)
American Leaders Fund, Inc.
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
September 30, 1995 (unaudited)
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------------------------
Total investments in securities, at value (identified and tax cost $426,617,757) $542,378,592
- ---------------------------------------------------------------------------------------------------
Cash 1,298,838
- ---------------------------------------------------------------------------------------------------
Income receivable 1,423,221
- ---------------------------------------------------------------------------------------------------
Receivable for investments sold 3,857,601
- ---------------------------------------------------------------------------------------------------
Receivable for shares sold 3,945,835
- --------------------------------------------------------------------------------------------------- -----------
Total assets 552,904,087
- ---------------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------------------------
Payable for investments purchased $2,591,200
- ----------------------------------------------------------------------------------------
Payable for shares redeemed 202,650
- ----------------------------------------------------------------------------------------
Accrued expenses 623,595
- ---------------------------------------------------------------------------------------- ---------
Total liabilities 3,417,445
- --------------------------------------------------------------------------------------------------- -----------
NET ASSETS for 30,485,342 shares outstanding $549,486,642
- --------------------------------------------------------------------------------------------------- -----------
NET ASSETS CONSIST OF:
- ---------------------------------------------------------------------------------------------------
Paid in capital $417,492,246
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 115,760,835
- ---------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments 14,077,292
- ---------------------------------------------------------------------------------------------------
Undistributed net investment income 2,156,269
- --------------------------------------------------------------------------------------------------- -----------
Total Net Assets $549,486,642
- --------------------------------------------------------------------------------------------------- -----------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- ---------------------------------------------------------------------------------------------------
CLASS A SHARES:
- ---------------------------------------------------------------------------------------------------
Net Asset Value Per Share ($363,153,568 / 20,150,695 shares outstanding) $18.02
- --------------------------------------------------------------------------------------------------- -----------
Offering Price Per Share (100/94.50 of $18.02)* $19.07
- --------------------------------------------------------------------------------------------------- -----------
Redemption Proceeds Per Share $18.02
- --------------------------------------------------------------------------------------------------- -----------
FORTRESS SHARES:
- ---------------------------------------------------------------------------------------------------
Net Asset Value Per Share ($39,365,986 / 2,184,373 shares outstanding) $18.02
- --------------------------------------------------------------------------------------------------- -----------
Offering Price Per Share (100/99.00 of $18.02)* $18.20
- --------------------------------------------------------------------------------------------------- -----------
Redemption Proceeds Per Share (99.00/100 of $18.02)** $17.84
- --------------------------------------------------------------------------------------------------- -----------
CLASS C SHARES:
- ---------------------------------------------------------------------------------------------------
Net Asset Value Per Share ($29,158,287 / 1,618,182 shares outstanding) $18.02
- --------------------------------------------------------------------------------------------------- -----------
Offering Price Per Share $18.02
- --------------------------------------------------------------------------------------------------- -----------
Redemption Proceeds Per Share (99.00/100 of $18.02)** $17.84
- --------------------------------------------------------------------------------------------------- -----------
CLASS B SHARES:
- ---------------------------------------------------------------------------------------------------
Net Asset Value Per Share ($117,808,801 / 6,532,092 shares outstanding) $18.04
- --------------------------------------------------------------------------------------------------- -----------
Offering Price Per Share $18.04
- --------------------------------------------------------------------------------------------------- -----------
Redemption Proceeds Per Share (94.50/100 of $18.04)** $17.05
- --------------------------------------------------------------------------------------------------- -----------
</TABLE>
*See "What Shares Cost" in the Prospectus.
**See "Contingent Deferred Sales Charge" 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, 1995 (unaudited)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------------------
Dividends $4,568,045
- ----------------------------------------------------------------------------------------------------
Interest 669,159
- ---------------------------------------------------------------------------------------------------- ----------
Total income 5,237,204
- ----------------------------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------------------------
Investment advisory fee $1,490,891
- -----------------------------------------------------------------------------------------
Administrative personnel and services fee 167,887
- -----------------------------------------------------------------------------------------
Custodian fees 26,738
- -----------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 297,448
- -----------------------------------------------------------------------------------------
Directors'/Trustees' fees 5,217
- -----------------------------------------------------------------------------------------
Auditing fees 10,380
- -----------------------------------------------------------------------------------------
Legal fees 8,328
- -----------------------------------------------------------------------------------------
Portfolio accounting fees 67,260
- -----------------------------------------------------------------------------------------
Distribution services fee--Class C Shares 90,979
- -----------------------------------------------------------------------------------------
Distribution services fee--Class B Shares 295,348
- -----------------------------------------------------------------------------------------
Shareholder services fee--Class A Shares 383,801
- -----------------------------------------------------------------------------------------
Shareholder services fee--Fortress Shares 41,871
- -----------------------------------------------------------------------------------------
Shareholder services fee--Class C Shares 30,326
- -----------------------------------------------------------------------------------------
Shareholder services fee--Class B Shares 98,449
- -----------------------------------------------------------------------------------------
Share registration costs 65,100
- -----------------------------------------------------------------------------------------
Printing and postage 103,089
- -----------------------------------------------------------------------------------------
Insurance premiums 4,971
- -----------------------------------------------------------------------------------------
Taxes 27,450
- -----------------------------------------------------------------------------------------
Miscellaneous 5,580
- ----------------------------------------------------------------------------------------- ---------
Total expenses 3,221,113
- -----------------------------------------------------------------------------------------
Waivers--
- ------------------------------------------------------------------------------
Waiver of shareholder services fee--Class A Shares $(132,430)
- ------------------------------------------------------------------------------
Waiver of shareholder services fee--Fortress Shares (3,350)
- ------------------------------------------------------------------------------
Waiver of shareholder services fee--Class C Shares (3,184)
- ------------------------------------------------------------------------------
Waiver of shareholder services fee--Class B Shares (47,256)
- ------------------------------------------------------------------------------ ---------
Total waivers (186,220)
- ----------------------------------------------------------------------------------------- ---------
Net expenses 3,034,893
- ---------------------------------------------------------------------------------------------------- ----------
Net investment income 2,202,311
- ---------------------------------------------------------------------------------------------------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ----------------------------------------------------------------------------------------------------
Net realized gain on investments 14,103,251
- ----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments 53,156,263
- ---------------------------------------------------------------------------------------------------- ----------
Net realized and unrealized gain on investments 67,259,514
- ---------------------------------------------------------------------------------------------------- ----------
Change in net assets resulting from operations $69,461,825
- ---------------------------------------------------------------------------------------------------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
American Leaders Fund, Inc.
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
SEPTEMBER 30, 1995 MARCH 31, 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- --------------------------------------------------------------------------
OPERATIONS--
- --------------------------------------------------------------------------
Net investment income $ 2,202,311 $ 4,809,826
- --------------------------------------------------------------------------
Net realized gain (loss) on investments ($14,103,251 net gain and
$9,972,646 net gain, respectively, as computed for federal tax
purposes) 14,103,251 9,972,646
- --------------------------------------------------------------------------
Net change in unrealized appreciation 53,156,263 20,096,284
- -------------------------------------------------------------------------- --------------------- ----------------
Change in net assets resulting from operations 69,461,825 34,878,756
- -------------------------------------------------------------------------- --------------------- ----------------
NET EQUALIZATION CREDITS (DEBITS)-- 393,446 200,306
- -------------------------------------------------------------------------- --------------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- --------------------------------------------------------------------------
Distributions from net investment income
- --------------------------------------------------------------------------
Class A Shares (1,694,060) (3,982,898)
- --------------------------------------------------------------------------
Fortress Shares (175,646) (364,849)
- --------------------------------------------------------------------------
Class C Shares (36,760) (139,250)
- --------------------------------------------------------------------------
Class B Shares (179,334) (190,153)
- --------------------------------------------------------------------------
Distributions from net realized gains
- --------------------------------------------------------------------------
Class A Shares (3,548,844) (5,729,133)
- --------------------------------------------------------------------------
Fortress Shares (386,709) (557,910)
- --------------------------------------------------------------------------
Class C Shares (162,883) (380,985)
- --------------------------------------------------------------------------
Class B Shares (948,390) (393,441)
- -------------------------------------------------------------------------- --------------------- ----------------
Change in net assets resulting from distributions to shareholders (7,132,626) (11,738,619)
- -------------------------------------------------------------------------- --------------------- ----------------
SHARE TRANSACTIONS (EXCLUSIVE OF AMOUNTS ALLOCATED TO
NET INVESTMENT INCOME)--
- --------------------------------------------------------------------------
Proceeds from sale of shares 151,202,170 130,916,674
- --------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment
of distributions declared 5,797,878 9,247,755
- --------------------------------------------------------------------------
Cost of shares redeemed (33,927,686) (53,847,424)
- -------------------------------------------------------------------------- --------------------- ----------------
Change in net assets resulting from share transactions 123,072,362 86,317,005
- -------------------------------------------------------------------------- --------------------- ----------------
Change in net assets 185,795,007 109,657,448
- --------------------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------------------
Beginning of period 363,691,635 254,034,187
- -------------------------------------------------------------------------- --------------------- ----------------
End of period (including undistributed net investment income of
$2,156,269 and $1,646,312, respectively) $ 549,486,642 $ 363,691,635
- -------------------------------------------------------------------------- --------------------- ----------------
</TABLE>
(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>
SIX MONTHS
ENDED
(UNAUDITED)
SEPTEMBER 30, YEAR ENDED MARCH 31,
1995 1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 15.66 $ 14.58 $ 14.90 $ 13.88 $ 13.18 $ 12.21 $ 13.04 $ 12.55 $ 14.21
- ----------------------
INCOME FROM INVESTMENT
OPERATIONS
- ----------------------
Net investment income 0.10 0.25 0.23 0.29 0.29 0.37 0.55 0.50 0.45
- ----------------------
Net realized and
unrealized gain
(loss) on investments 2.55 1.42 0.18 2.05 1.34 1.28 0.36 1.08 (1.21)
- ---------------------- ------ --------- --------- --------- --------- --------- --------- --------- ---------
Total from investment
operations 2.65 1.67 0.41 2.34 1.63 1.65 0.91 1.58 (0.76)
- ---------------------- ------ --------- --------- --------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
- ----------------------
Distributions from
net investment income (0.09) (0.24) (0.24) (0.28) (0.28) (0.38) (0.56) (0.50) (0.43)
- ----------------------
Distributions from
net realized gain
on investment
transactions (0.20) (0.35) (0.49) (1.04) (0.65) (0.30) (1.18) (0.59) (0.47)
- ---------------------- ------ --------- --------- --------- --------- --------- --------- --------- ---------
Total distributions (0.29) (0.59) (0.73) (1.32) (0.93) (0.68) (1.74) (1.09) (0.90)
- ---------------------- ------ --------- --------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END
OF PERIOD $ 18.02 $ 15.66 $ 14.58 $ 14.90 $ 13.88 $ 13.18 $ 12.21 $ 13.04 $ 12.55
- ---------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN (a) 17.07% 11.87% 2.76% 18.31% 12.91% 14.17% 7.13% 13.23% (5.32%)
- ----------------------
RATIOS TO AVERAGE NET
ASSETS
- ----------------------
Expenses 1.19%* 1.23% 1.18% 1.13% 1.02% 1.02% 1.01% 1.01% 1.00%
- ----------------------
Net investment income 1.16%* 1.71% 1.48% 2.07% 2.12% 3.06% 4.23% 3.85% 3.35%
- ----------------------
Expense waiver/
reimbursement (b) 0.09%* -- -- 0.06% 0.16% 0.30% 0.35% 0.12% 0.11%
- ----------------------
SUPPLEMENTAL DATA
- ----------------------
Net assets, end of
period (000 omitted) $363,154 $268,470 $226,857 $202,866 $171,210 $149,360 $147,235 $149,049 $158,818
- ----------------------
Portfolio turnover 24 % 34% 27% 39% 67% 57% 50% 27% 65%
- ----------------------
<CAPTION>
1987
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 13.64
- ----------------------
INCOME FROM INVESTMENT
OPERATIONS
- ----------------------
Net investment income 0.46
- ----------------------
Net realized and
unrealized gain
(loss) on investments 1.81
- ---------------------- ---------
Total from investment
operations 2.27
- ---------------------- ---------
LESS DISTRIBUTIONS
- ----------------------
Distributions from
net investment income (0.47)
- ----------------------
Distributions from
net realized gain
on investment
transactions (1.23)
- ---------------------- ---------
Total distributions (1.70)
- ---------------------- ---------
NET ASSET VALUE, END
OF PERIOD $ 14.21
- ---------------------- ---------
TOTAL RETURN (a) 18.38%
- ----------------------
RATIOS TO AVERAGE NET
ASSETS
- ----------------------
Expenses 1.00%
- ----------------------
Net investment income 3.44%
- ----------------------
Expense waiver/
reimbursement (b) 0.12%
- ----------------------
SUPPLEMENTAL DATA
- ----------------------
Net assets, end of
period (000 omitted) $157,999
- ----------------------
Portfolio turnover 28%
- ----------------------
</TABLE>
* Computed on an annualized basis.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(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>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
SEPTEMBER 30, MARCH 31,
<S> <C> <C> <C>
1995 1995 1994(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.66 $ 14.58 $ 14.95
- -------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------
Net investment income 0.11 0.25 0.16
- -------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 2.54 1.42 (0.20)
- ------------------------------------------------------------------------- ------- --------- -----------
Total from investment operations 2.65 1.67 (0.04)
- ------------------------------------------------------------------------- ------- --------- -----------
LESS DISTRIBUTIONS
- -------------------------------------------------------------------------
Distributions from net investment income (0.09) (0.24) (0.16)
- -------------------------------------------------------------------------
Distributions from net realized gain on investment transactions (0.20) (0.35) (0.17)
- ------------------------------------------------------------------------- ------- --------- -----------
Total distributions (0.29) (0.59) (0.33)
- ------------------------------------------------------------------------- ------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 18.02 $ 15.66 $ 14.58
- ------------------------------------------------------------------------- ------- --------- -----------
TOTAL RETURN (b) 17.05% 11.80% (0.30%)
- -------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------------------
Expenses 1.26%* 1.27% 1.35%*
- -------------------------------------------------------------------------
Net investment income 1.10%* 1.69% 1.51%*
- -------------------------------------------------------------------------
Expense waiver/reimbursement (c) 0.02%* -- --
- -------------------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------------------
Net assets, end of period (000 omitted) $39,366 $28,495 $15,282
- -------------------------------------------------------------------------
Portfolio turnover 24% 34% 27%
- -------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from July 27, 1993 (date of initial
public offering) to March 31, 1994.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) 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 C Shares
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
SEPTEMBER 30, MARCH 31,
1995 1995 1994(a)
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.66 $ 14.55 $ 14.70
- -------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------
Net investment income 0.04 0.14 0.12
- -------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 2.55 1.45 0.35
- ------------------------------------------------------------------------- ------- --------- -----------
Total from investment operations 2.59 1.59 0.47
- ------------------------------------------------------------------------- ------- --------- -----------
LESS DISTRIBUTIONS
- -------------------------------------------------------------------------
Distributions from net investment income (0.03) (0.13) (0.13)
- -------------------------------------------------------------------------
Distributions from net realized gain on investment transactions (0.20) (0.35) (0.49)
- ------------------------------------------------------------------------- ------- --------- -----------
Total distributions (0.23) (0.48) (0.62)
- ------------------------------------------------------------------------- ------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 18.02 $ 15.66 $ 14.55
- ------------------------------------------------------------------------- ------- --------- -----------
TOTAL RETURN (b) 16.63% 11.23% 3.16%
- -------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------------------
Expenses 2.00%* 2.04% 2.11%*
- -------------------------------------------------------------------------
Net investment income 0.36%* 0.91% 0.71%*
- -------------------------------------------------------------------------
Expense waiver/reimbursement (c) 0.03%* -- --
- -------------------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------------------
Net assets, end of period (000 omitted) $29,158 $20,055 $11,895
- -------------------------------------------------------------------------
Portfolio turnover 24% 34% 27%
- -------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from April 21, 1993 (date of initial
public offering) to March 31, 1994.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are integral part of the Financial Statements)
American Leaders Fund, Inc.
Financial Highlights--Class B Shares
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) PERIOD ENDED
SEPTEMBER 30, 1995 MARCH 31, 1995(a)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.67 $ 14.97
- ----------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------
Net investment income 0.05 0.13
- ----------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 2.56 0.92
- ---------------------------------------------------------------------- ------- -------
Total from investment operations 2.61 1.05
- ---------------------------------------------------------------------- ------- -------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------------
Distributions from net investment income (0.04) (0.12)
- ----------------------------------------------------------------------
Distributions from net realized gain on investment transactions (0.20) (0.23)
- ---------------------------------------------------------------------- ------- -------
Total distributions (0.24) (0.35)
- ---------------------------------------------------------------------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 18.04 $ 15.67
- ---------------------------------------------------------------------- ------- -------
TOTAL RETURN (b) 16.75% 7.28%
- ----------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------
Expenses 1.90%* 1.95%*
- ----------------------------------------------------------------------
Net investment income 0.46%* 1.09%*
- ----------------------------------------------------------------------
Expense waiver/reimbursement (c) 0.12%* 0.12%*
- ----------------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------------
Net assets, end of period (000 omitted) $117,809 $46,671
- ----------------------------------------------------------------------
Portfolio turnover 24% 34%
- ----------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from July 25, 1994 (date of initial
public offering) to March 31, 1995.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) 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, 1995 (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 offers four classes of shares: Class A
Shares, Fortress Shares, Class C Shares and Class B Shares.
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.
INVESTMENT VALUATIONS--Short-term securities with remaining maturities of
sixty days or less at the time of purchase may be valued at amortized cost,
which approximates fair market value. All other securities are valued at
prices provided by an independent pricing service.
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 under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
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 and/or
standards reviewed or established by the Board of Directors (the
"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.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--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"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date.
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 income. Accordingly, no
provisions for federal tax are necessary.
EQUALIZATION--The Fund follows the accounting practice known as
equalization. With equalization, a portion of the proceeds from sales and
costs of redemptions of fund shares (equivalent, on a per share basis, to
the amount of undistributed net investment income on
American Leaders Fund, Inc.
- --------------------------------------------------------------------------------
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 fund shares.
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.
OTHER--Investment transactions are accounted for on the trade date.
3. CAPITAL STOCK
At September 30, 1995, par value shares ($0.20 per share) authorized were as
follows:
<TABLE>
<CAPTION>
NUMBER OF PAR VALUE
CLASS NAME SHARES AUTHORIZED
<S> <C>
Class A Shares 30,000,000
Fortress Shares 25,000,000
Class C Shares 25,000,000
Class B Shares 20,000,000
-----------------
Total shares authorized 1,000,000,000
-----------------
</TABLE>
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1995 MARCH 31, 1995
CLASS A SHARES SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Shares sold 4,226,014 $ 71,656,533 3,930,179 $ 58,226,085
- ------------------------------------------------------
Shares issued to shareholders in
payment of distributions declared 257,009 4,273,596 534,011 7,763,914
- ------------------------------------------------------
Shares redeemed (1,476,717) (24,687,914) (2,880,782) (42,703,397)
- ------------------------------------------------------ ----------- -------------- ----------- --------------
Net change resulting from
Class A Share transactions 3,006,306 $ 51,242,215 1,583,408 $ 23,286,602
- ------------------------------------------------------ ----------- -------------- ----------- --------------
</TABLE>
American Leaders Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1995 MARCH 31, 1995
FORTRESS SHARES SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Shares sold 521,023 $ 8,775,827 1,145,830 $ 17,066,187
- ------------------------------------------------------
Shares issued to shareholders in
payment of distributions declared 25,256 422,907 45,561 661,854
- ------------------------------------------------------
Shares redeemed (181,721) (3,038,132) (419,627) (6,224,206)
- ------------------------------------------------------ ----------- -------------- ----------- --------------
Net change resulting from
Fortress Share transactions 364,558 $ 6,160,602 771,764 $ 11,503,835
- ------------------------------------------------------ ----------- -------------- ----------- --------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1995 MARCH 31, 1995
CLASS C SHARES SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Shares sold 437,588 $ 7,383,766 689,500 $ 10,271,475
- --------------------------------------------------------
Shares issued to shareholders in
payment of distributions declared 11,184 185,626 20,770 300,523
- --------------------------------------------------------
Shares redeemed (111,268) (1,874,337) (246,875) (3,662,616)
- -------------------------------------------------------- ---------- -------------- ---------- -------------
Net change resulting from
Class C Share transactions 337,504 $ 5,695,055 463,395 $ 6,909,382
- -------------------------------------------------------- ---------- -------------- ---------- -------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1995 MARCH 31, 1995 (a)
CLASS B SHARES SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Shares sold 3,755,849 $ 63,386,044 3,026,730 $ 45,352,927
- --------------------------------------------------------
Shares issued to shareholders in
payment of distributions declared 55,046 915,749 36,359 521,464
- --------------------------------------------------------
Shares redeemed (257,248) (4,327,303) (84,644) (1,257,205)
- -------------------------------------------------------- ---------- -------------- ---------- -------------
Net change resulting from
Class B Share transactions 3,553,647 $ 59,974,490 2,978,445 $ 44,617,186
- -------------------------------------------------------- ---------- -------------- ---------- -------------
Net change resulting from
share transactions 7,262,015 $ 123,072,362 5,797,012 $ 86,317,005
- -------------------------------------------------------- ---------- -------------- ---------- -------------
</TABLE>
(a) Reflects operations for the period from July 25, 1994 (date of initial
public offering) to March 31, 1995.
American Leaders Fund, Inc.
- --------------------------------------------------------------------------------
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Advisers, the Fund's investment adviser, (the
"Adviser"), receives for its services an annual investment advisory fee equal to
(a) a maximum of .55 of 1% of the average daily net assets of the Fund, and (b)
4.5% of the gross income of the Fund, excluding capital gains or losses.
ADMINISTRATIVE FEE--Federated Administrative Services, under the Administrative
Services Agreement, provides the Fund with administrative personnel and
services. This 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 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 Shares and Class C Shares. The Plan provides that the Fund
may incur distribution expenses according to the following schedule, annually,
to compensate FSC.
<TABLE>
<CAPTION>
% OF AVERAGE DAILY
SHARE CLASS NAME NET ASSETS OF CLASS
<S> <C>
Class B Shares 0.75 of 1%
Class C Shares 0.75 of 1%
</TABLE>
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets for each class of shares of the Fund for the
period. This fee is to obtain certain services for shareholders and to maintain
shareholder accounts. FSS may voluntarily choose to waive a portion of this fee.
FSS can modify or terminate this voluntary waiver at any time at its sole
discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated Services
Company ("FServ") serves as transfer and dividend disbursing agent for the Fund.
This fee is based on the size, type, and number of accounts and transactions
made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Directors of the Corporation are Officers
and Directors or Trustees of the above companies.
American Leaders Fund, Inc.
- --------------------------------------------------------------------------------
5. INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended September 30, 1995, were as follows:
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------------
PURCHASES $ 223,136,960
- -------------------------------------------------------------------------------------------------- --------------
SALES $ 102,766,057
- -------------------------------------------------------------------------------------------------- --------------
</TABLE>
Directors Officers
- -----------------------------------------------------------------------
<TABLE>
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley President
John T. Conroy, Jr. J. Christopher Donahue
William J. Copeland Executive Vice President
J. Christopher Donahue Edward C. Gonzales
James E. Dowd Executive Vice President
Lawrence D. Ellis, M.D. John W. McGonigle
Edward L. Flaherty, Jr. Executive Vice President and Secretary
Peter E. Madden Richard B. Fisher
Gregor F. Meyer Vice President
John E. Murray, Jr. David M. Taylor
Wesley W. Posvar Treasurer
Marjorie P. Smuts 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 FUNDS
Where Experts Invest
Federated Securities Corp., is the distributor of the fund.
A Subsidiary of Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
Cusip 027128107
Cusip 027128206
Cusip 027128404
Cusip 027128305
AMERICAN LEADERS FUND, INC. APPENDIX
A. The graphic presentation here displayed consists of a boxed legend in the
upper left quadrant indicating the components of the corresponding mountain
chart. The color-coded mountain chart is a visual representation of the
narrative text above it, which shows that an initial investment of $27,000 in
American Leaders Fund, Inc. - Class A Shares on February 26, 1969, would have
grown to $342,522 by September 30, 1995.. The "x" axis reflects the cost of
investment, the "y" axis reflects computation periods from 1969 to 1995, and the
right margin reflects a total investment range from $0 to $350,000. The chart
further indicates the ending market value attributable to principal, as well as
the ending market value attributable to capital gains and reinvested dividends.
B. The graphic presentation here displayed consists of a boxed legend in the
upper left quadrant indicating the components of the corresponding mountain
chart. The color-coded mountain chart is a visual representation of the
narrative text above it, which shows that $1,000 invested each year for 26 years
in American Leaders Fund, Inc. - Class A Shares beginning on February 26, 1969,
would have grown to $182,460 by September 30, 1995.. The "x" axis reflects the
cost of investment, the "y" axis reflects computation periods from 1969 to 1995,
and the right margin reflects a total investment range from $0 to $200,000. The
chart further indicates the ending market value attributable to principal, as
well as the ending market value attributable to capital gains and reinvested
dividends.
C. The graphic presentation here displayed consists of a boxed legend in the
upper left quadrant indicating the components of the corresponding mountain
chart. The color-coded mountain chart is a visual representation of the
narrative text above it, which shows that an initial investment of $5,000
invested in American Leaders Fund, Inc. - Class A Shares on September 30, 1980,
would have grown to $173,552 by September 30, 1995.. The "x" axis reflects the
cost of investment, the "y" axis reflects computation periods from 1980 to 1995,
and the right margin reflects a total investment range from $0 to $200,000. The
chart further indicates the ending market value attributable to principal, as
well as the ending market value attributable to capital gains and reinvested
