<PAGE> 1
MATHERS FUND, INC.
100 Corporate North * Bannockburn, Illinois 60015
800-962-FUND * 847-295-7400
[email protected]
DIRECTORS
KARL M. BECKER
TYLER R. CAIN
CHARLES G. FREUND
JON P. HEDRICH
ROBERT E. KOHNEN
ANNE E. MORRISSY
ROBERT J. REYNOLDS
JACK O. VANCE
HENRY G. VAN DER EB, JR.
OFFICERS
HENRY G. VAN DER EB, JR., CFA
Chairman
ROBERT J. REYNOLDS, CFA
President
ANNE E. MORRISSY, CFA
Executive Vice President and Secretary
LAWRENCE A. KENYON, CPA
Senior Vice President and Chief Financial Officer
EDITH L. COOK
Vice President and Treasurer
MARY ANNE KINNUCAN
Vice President
HEIDI M. STUBNER
Vice President
Investment Adviser
MATHERS AND COMPANY, INC.
Bannockburn, Illinois
Custodian
STATE STREET BANK AND TRUST CO.
Boston, Massachusetts
Transfer Agent
DST SYSTEMS, INC.
Kansas City, Missouri
Counsel
SIDLEY & AUSTIN
Chicago, Illinois
Auditors
ARTHUR ANDERSEN LLP
Chicago, Illinois
This report is submitted for the information of shareholders of the Fund. It is
not authorized for distribution to prospective investors unless preceded or
accompanied by a current prospectus.
MATHERS
FUND
SEMI-ANNUAL
REPORT
1998
<PAGE> 2
MOUNTAIN CHARTS PLOT POINTS
<TABLE>
<CAPTION>
MATHER S&P 500
<S> <C> <C> <C>
"1964" 10000 "1964" 10000
"1965" 12089 "1965" 10768
"1966" 12597 "1966" 9685
"1967" 24265 "1967" 12007
"1968" 30783 "1968" 13335
"1969" 28936 "1969" 12200
"1970" 29507 "1970" 12688
"1971" 35358 "1971" 14504
"1972" 41059 "1972" 17256
"1973" 25806 "1973" 14727
"1974" 17908 "1974" 10830
"1975" 28124 "1975" 14859
"1976" 40604 "1976" 18404
"1977" 46368 "1977" 17082
"1978" 53349 "1978" 18202
"1979" 78188 "1979" 21558
"1980" 109687 "1980" 28548
"1981" 101193 "1981" 27143
"1982" 116227 "1982" 32952
"1983" 135015 "1983" 40372
"1984" 131529 "1984" 42900
"1985" 167682 "1985" 56534
"1986" 191108 "1986" 67115
"1987" 242780 "1987" 70635
"1988" 276110 "1988" 82334
"1989" 304849 "1989" 108392
"1990" 336643 "1990" 105037
"1991" 368441 "1991" 136961
"1992" 379883 "1992" 147380
"1993" 387977 "1993" 162206
"1994" 365253 "1994" 164328
"1995" 390861 "1995" 226017
"1996" 390577 "1996" 277905
"1997" 402350 "1997" 370617
"98SA" 391875 "98SA" 436254
</TABLE>
<PAGE> 3
LETTER TO SHAREHOLDERS JULY 31, 1998
- --------------------------------------------------------------------------------
Did Federal Reserve Chairman Alan Greenspan's recent testimony on July 21st,
with the Dow Jones at 9325, mark the top of the bull market by sparking the
current sharp sell-off? If so, was it something he said on that Tuesday, during
his report to Congress that cracked confidence, or was the market coincidentally
about to turn down anyway? What is clear is that the world's most prominent
central banker continues to believe that the stock market is dangerously
overvalued on both current and overly optimistic projected earnings.
During his testimony, Mr. Greenspan made the following statements:
"Ultimately, history tells us that there will be a correction of some
significant dimension . . . The significant part of the rise in equity prices
has resulted from a continuous increase in long-term expected earnings . . .
History tells us that it is going to run into some difficulty sooner rather than
later . . . At some point, we are discounting the hereafter."
These comments reflect the fact that over the last 2 1/2 years the S&P 500 has
ballooned an improbable six times faster than the percentage increase in
operating earnings, which have been overstated due to excessive write-offs,
issuance of stock options, lower tax rates, and questionable accounting
practices. Additionally, the advance in the S&P 500 is at high risk because
earnings growth has decelerated to close to zero, while ironically being
ballyhooed as 'better than expected', and will likely turn negative as rising
wages, weak revenues, Y2K costs, a strong dollar, the Asian crisis, and lack of
pricing power cut into profit margins. With one third of world GDP already in
recession or worse, the reverse wealth effect of a bear market in the U.S. and
Europe would accelerate a decline in consumer confidence and spending, spreading
the deflationary Asian economic contraction to a global scale.
Mr. Greenspan's bearish view of stock valuations should not be a surprise, since
he had previously expressed his concern regarding the risks to the "real
economy" from the U.S. "financial asset bubble" on 12-5-96 (DJIA 6430) in his
famous "irrational exuberance" speech and again on 2-26-97 (DJIA 6983) when he
said, "Regrettably, history is strewn with visions of such 'new eras' that, in
the end, have proven to be a mirage."
The S&P 500 Index advanced 17.7% through June 30th, then shot up to all-time
record overvaluation in mid-July, making pre-crash September 1929 valuations
look like bargains. Chart #1 and its inset table on the next page provide the
long-term analytical perspective of four fundamental benchmarks. As shown in the
table, at the peak of the July "got to own 'em" buying panic, investors were
paying an incredible $74 for $1 of S&P 500 dividends (1.35% dividend yield), $30
for $1 of earnings (P/E of 30 and earnings yield of 3.3%) and $6.31 for $1 of
book value. Additionally, the market value of the U.S. stock bubble is now an
astounding 140% of GDP vs. 81% in August 1929. A 64% market drop would just
return this ratio to its 72-year average of 49.9%, assuming GDP stays constant,
which would be unlikely in a major decline.
The classic characteristics of a stock market mania increasingly fit the period
from late 1994 to today. In a mania, prices initially take off with a powerful
upward thrust, starting where a long-term bull market would normally end, then
continue upward in relentless price spurts with progressively fewer, shorter,
and smaller pullbacks. This pattern, starting in early 1995, is clearly shown on
Chart #2, and is marked on Chart #1 as the "Great Baby Boomer Stock Market Mania
of '95-'98." Other distinguishing features of a stock mania include: massive
public participation, gross overvaluation, novices outperforming professionals,
get rich quick urgency, irrational indifference to risk, total discrediting of
bearish views, and individuals being swept up by crowd psychology. The
speculative frenzy ultimately ends with a final price spurt terminated by an
abrupt and sharp trend reversal which eventually takes prices below the starting
point of the entire advance.
As a speculative bubble inflates, it becomes increasingly likely to burst
spontaneously since it requires proportionately larger amounts of new money
inflows to support its expanding size. Among many symptoms of an approaching
top, the $12 trillion U.S. stock bubble had sprung a leak several months before
mid-July, as secondary stocks ran out of buyers and began to decline, while new
cash was selectively pumped into a short list of jumbo blue chips, pushing the
weighted indices to minor new highs. Then the Chairman spoke.
Manias, whether in stocks, tulips, or Beanie Babies, stop when the confidence
that prices will continue to rise is broken. Skeptics look foolish as prices
rise far above fundamental value, but eventually regain respect as prices
collapse. If the market did make an historic top in July, the Fund, which
declined 2.6% in the first half, will have many opportunities for capital
appreciation in the months ahead.
/s/ Henry Vander Eb
----------------------
Henry Vander Eb
Chairman
<PAGE> 4
[ Contained here in paper format is a chart reflecting the Stock Market
Capitalization as a Percentage of Nominal GDP. This chart was prepared for
Mathers Fund by Topline Investment Graphics, Boulder CO. A hard copy is
available by calling the Fund at 800-962-3863. The line is the ratio of stock
market capitalization divided by nominal GDP. The chart's x-axis represents
years, from 1926 through 2000 and its y-axis shows percentage points, from 0 to
140. The average, since 1926, has been 49.9% The high points (August 1929,
81.4%; November 1968, 77.8% and December 1972, 78.10%) were all followed by
severe bear markets. The current value is a record high, 140.6%.
Also contained within the chart is a table of data as follows:
<TABLE>
<CAPTION>
S&P 500
1928 to 1997 Price/Book Dividend Yield P/E Ratio
- ------------ ---------- -------------- ----------
<S> <C> <C> <C>
Avg. of Five
Major Bottoms 0.9 7.14 7.8
Avg. of Six
Major Tops 2.4 2.94 20.2
Sept. 1929 Top 3.6 2.86 21.1
Current: 7/20/98 6.3 1.35 30.0]
</TABLE>
[Contained here in paper format is a chart reflecting the Standard & Poors 500
stock index. The x-axis reflects the years from 1972 through 6/30/98 and its
Y-axis is on an arithmetic scale and extends from 50 to 1200. The chart was
prepared internally by Mathers Fund. A hard copy is available by calling
Mathers Fund at 800-962-3863. The chart is a bar chart with monthly data and
shows the parabolic rise in level of the S&P 500 Index since 1972.
Three smaller charts appear in a box inset in the main chart. Each of these
charts shows a parabolic price rise, a top and the following sharp decline.
The first of the three charts reflects gold prices from Jan 1978 at about $150,
through its peak in late 1979 at over $800, to its decline in February 1980 at
about $470. The second of the three charts reflects the price of the Tokyo
Nikkei stock index and begins in January 1985 at about 11,000 Yen, continues
through its peak in November 1989 near 39,000 Yen to its year-end 1992 level of
15,000 Yen. The last of the three charts shows the Dow Jones Industrial
Average from its 1925 level of 125, through the 1929 peak of around 375 to its
year-end 1931 level of 80.]
<PAGE> 5
SCHEDULE OF INVESTMENTS June 30, 1998
(Unaudited)
- --------------------------------------------------------------------------------
COMMON STOCKS 8.7%
<TABLE>
<CAPTION>
Shares Market Value
------ ------------
<S> <C> <C>
AIRLINES 1.0%
30,000 KLM Royal Dutch Airlines........... $1,228,125
FARM EQUIPMENT 0.3%
20,000 AGCO Corp.......................... 411,250
FERTILIZER 2.1%
200,000 Agrium, Inc........................ 2,525,000
FOODS 0.4%
25,000 Archer Daniels Midland Co.......... 484,375
HEALTH CARE 0.6%
25,000 Columbia/HCA Healthcare Corp....... 728,125
METALS 0.4%
20,000 Asarco, Inc........................ 445,000
OIL & GAS 1.5%
50,000 Unocal Corp........................ 1,787,500
SPECIALTY RETAIL 0.5%
20,000 Saks Holdings, Inc. *.............. 552,500
TECHNOLOGY 1.9%
1,182,200 Aura Systems, Inc. *.............. 2,290,513
--------------
Total Common Stocks (Cost $13,467,178)........ $ 10,452,388
--------------
<CAPTION>
SHORT-TERM NOTES 2.4%
Par Value Market Value
--------- ------------
$ 2,914,000 State Street Bank Repo,
5.00%, due 7-1-98 **
(Cost $2,914,000)......... $2,914,000
-------------
<CAPTION>
U.S. TREASURIES 89.7%
Par Value
---------
$ 80,000,000 U.S. Treasury Notes, 7 7/8%
due 11-15-04 +............. $ 89,850,000
5,000,000 U.S. Treasury Bills
due 8-13-98 ............... 4,962,417
4,000,000 U.S. Treasury Bills
due 8-6-98 ................ 3,970,009
4,000,000 U.S. Treasury Bills
due 7-23-98 ............... 3,970,133
5,000,000 U.S. Treasury Bills
due 7-9-98 ................ 4,976,666
-------------
Total U.S. Treasuries (Cost $97,804,225) $ 107,729,225
-------------
TOTAL INVESTMENTS (Cost $114,185,403).......... $ 121,095,613
OTHER ASSETS (Net) (0.8%) (1,033,969)
-------------
TOTAL NET ASSETS - 100% ....................... $ 120,061,644
=============
</TABLE>
* Non-Income Producing ** Collateralized by a U.S. Treasury Bond
+ Portion pledged to broker for open short positions
SCHEDULE OF SECURITIES SOLD SHORT June 30, 1998
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Market Value
------- ------------
<S> <C> <C>
CHEMICALS 1.9%
30,000 E.I. du Pont de Nemours and Co. ........... $ 2,238,750
COMMUNICATIONS 1.4%
20,000 Time Warner Inc. .......................... 1,708,750
COMPUTERS AND COMPONENTS 3.7%
30,000 International Business Machines Corp....... 3,444,375
30,000 3Com Corp.................................. 920,625
--------------
4,365,000
CONSUMER ELECTRONICS 3.0%
100,000 Best Buy Co., Inc.......................... 3,612,500
<CAPTION>
Shares Market Value
------- ------------
ENTERTAINMENT 5.9%
100,000 Carnival Corp.............................. $ 3,962,500
30,000 The Walt Disney Co......................... 3,151,875
---------------
7,114,375
SEMICONDUCTORS 4.1%
35,000 Intel Inc.................................. 2,594,375
40,000 Texas Instruments, Inc..................... 2,332,500
---------------
4,926,875
---------------
TOTAL INVESTMENTS IN COMMON STOCK
SOLD SHORT - 20.0% (Proceeds $22,657,144).......... $ 23,966,250
===============
</TABLE>
SECURITIES SOLD SHORT ARE GENERALLY HELD FOR VERY SHORT TIME PERIODS,
THUS, THIS SCHEDULE MAY NOT BE REPRESENTATIVE OF POSITIONS AFTER 6-30-98.
The accompanying Notes to Financial Statements are an integral part
of these schedules.
<PAGE> 6
BALANCE SHEET
June 30, 1998
(Unaudited)
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
INVESTMENTS AT MARKET VALUE:
Common Stocks
(Cost $13,467,178) ................... $ 10,452,388
U.S. Treasuries:
Notes
(Cost $79,925,000) ................... 89,850,000
Bills (Amortized
Cost $17,879,225) .................... 17,879,225
Repurchase Agreement
(Cost $2,914,000) .................... 2,914,000 $ 121,095,613
------------- -------------
CASH ....................................... 1,921,628
RECEIVABLES FOR:
Proceeds on Securities
Sold Short ............................. $ 22,657,144
Dividends and Accrued
Interest ............................... 939,131
Investments Sold ......................... 685,515
Subscriptions to Capital
Stock .................................. 913
Other .................................... 48,517 24,331,220
-------------
TOTAL ASSETS ............................... $ 147,348,461
=============
</TABLE>
<TABLE>
<S> <C>
LIABILITIES:
PAYABLES FOR:
Investments in Securities Sold Short
(Proceeds $22,657,144) ............................... $ 23,966,250
Investments Purchased ..................................... 3,175,530
Accrued Expenses .......................................... 82,000
Redemptions of Capital Stock .............................. 45,937
Dividends on Securities Sold Short ........................ 17,100
-------------
TOTAL LIABILITIES ........................................... $ 27,286,817
=============
CAPITAL:
Capital Stock, $1.00 par value;
9,435,472 shares outstanding
(100 million shares authorized) ........................ $ 9,435,472
Paid-In Surplus ............................................ 142,801,890
Accumulated Undistributed Net Investment
Income ................................................. 3,115,760
Accumulated Undistributed Net Realized
Loss on Investments .................................... (40,892,582)
Net Unrealized Appreciation on Investments 5,601,104
-------------
TOTAL CAPITAL (NET ASSETS) ................................... $ 120,061,644
-------------
TOTAL LIABILITIES AND CAPITAL ................................ $ 147,348,461
=============
Net Asset Value (Capital) Per Share at
June 30, 1998 .......................................... $ 12.72
=============
</TABLE>
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1998
(Unaudited)
- --------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Interest .............. $3,648,290
Dividends ............. 61,775 $3,710,065
---------- ----------
OPERATING EXPENSES:
Management Fee ........ $ 449,735
Legal and Auditing .... 113,590
Transfer Agent ........ 87,639
Other ................. 64,560
Printing .............. 24,376
Custodian ............. 18,034
Dividends on Securities
Sold Short ......... 17,850
Registration .......... 15,462
Taxes ................. 8,345 799,591
---------- ----------
NET INVESTMENT INCOME ............................. $ 2,910,474
-----------
</TABLE>
<TABLE>
<S> <C>
REALIZED AND UNREALIZED GAINS/(LOSSES)
ON INVESTMENTS AND SECURITIES SOLD SHORT:
Net Realized Loss on Investments Sold ........... $(7,237,790)
Net Realized Gain on Securities Sold Short ...... 403,134
Net Change in Unrealized Appreciation on
Investments and Securities Sold Short ........ 593,568
------------
Net Realized and Unrealized Loss on
Investments and Securities Sold Short ........ (6,241,088)
------------
Net Decrease in Net Assets Resulting from
Operations ................................... $ (3,330,614)
============
</TABLE>
The accompanying Notes to Financial Statements are an
integral part of these statements.
<PAGE> 7
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6 MOS. ENDED FULL YEAR ENDED
JUNE 30, 1998 DEC. 31, 1997
------------- -------------
<S> <C> <C>
OPERATIONS:
Net Investment Income ........................................................... $ 2,910,474 $ 5,991,494
Net Realized Gain/(Loss) on Investments Sold .................................... (7,237,790) 3,088,393
Net Realized Gain on Securities Sold Short ...................................... 403,134 0
Net Change in Unrealized Appreciation ........................................... 593,568 (4,616,313)
------------- -------------
Net Increase/(Decrease) in Net Assets Resulting from Operations ............... (3,330,614) 4,463,574
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS: Dividends from Net Investment Income ................ 0 (6,033,168)
------------- -------------
CAPITAL STOCK ISSUED AND REDEEMED:
Net Proceeds from Sales of Shares, 153,553 and 752,707 shares, respectively ..... 1,980,439 9,989,029
Net Proceeds from Dividend Reinvestment Plan, 0 and 419,098 shares, respectively 0 5,473,417
Cost of Shares Redeemed, 1,312,688 and 3,507,039 shares, respectively ........... (16,991,996) (47,084,701)
------------- -------------
Decrease in Net Assets Derived from Capital Stock Transactions, (1,159,135) and
(2,335,234) shares, respectively ......................................... (15,011,557) (31,622,255)
------------- -------------
Net Decrease in Net Assets .................................................... (18,342,171) (33,191,849)
TOTAL NET ASSETS:
Beginning of Period ............................................................. 138,403,815 171,595,664
------------- -------------
End of Period (including undistributed net investment income of $3,115,760 and
$201,267 respectively) ........................................................ $ 120,061,644 $ 138,403,815
============= =============
</TABLE>
The accompanying Notes to Financial Statements are an
integral part of these statements
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
1. The Fund is registered under the Investment Company Act of 1940 as a
diversified, open-end investment company. The investment objective is
capital appreciation over the long term. The Fund may pursue its objective
by investing in common stocks and other equity securities and by engaging in
certain investment strategies designed to capitalize on potential declines
in the prices of equity securities, such as short sales. The Fund may also
invest all or any portion of its assets in fixed-income securities. The
following is a summary of the significant accounting policies of the Fund:
(a) The Fund intends to distribute all taxable income to its shareholders
and otherwise comply with the provisions of the Internal Revenue Code
applicable to regulated investment companies. Therefore, no provision
has been made for Federal income taxes since the Fund has elected to be
taxed as a regulated investment company. The Fund intends to utilize
provisions of the Federal income tax laws which allow it to carry a
realized capital loss forward to eight years following the year of the
loss and offset such losses against any future realized gains. At
December 31, 1997, the Fund had a capital loss carryforward of
$33,885,284, of which $11,658,398 expires on December 31, 2003 and
$22,226,885 expires on December 31, 2004.
(b) Common stocks traded on securities exchanges and stocks traded on the
NASDAQ National Market are valued at the last sales price as of the
close of the New York Stock Exchange on the day of valuation. In the
event a security does not trade on a given date, the current bid price
is used as the valuation. Fixed income securities with a maturity of
greater than 60 days are valued at the current bid price, and those of
60 days or less are carried at amortized cost which approximates market
value. Financial futures are valued at the settlement price established
each day by the exchange on which they are traded.
(c) During the six months ended June 30, 1998, the Fund entered into S&P 500
index futures contracts to hedge against possible declines of its
portfolio securities. Risks of entering into futures contracts include
the possibility that changes in the value of the futures contract may
not correlate with changes in the value of the portfolio securities
being hedged. Upon entering into a futures contract, the Fund deposits
with its custodian, in a segregated account, a U.S. Treasury Bill to
cover margin requirements. Subsequent payments are made or received by
the Fund equal to the daily change in the contract value and are
recorded as unrealized gains or losses. The Fund recognizes a realized
gain or loss when the contract is closed or expires.
(d) Realized gains or losses are determined on the specific identification
method. Dividends associated with common stocks are recognized as income
or expense on the ex-dividend date. Dividends to shareholders are
recorded on the declaration date which coincides with the ex-dividend
date.
(e) The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts in these financial
statements. Actual results could differ from those estimates.
2. The Fund has an agreement dated May 1, 1988 with Mathers and Company, Inc.,
of which certain officers and directors of the Fund are officers, directors
and shareholders, to serve as its investment adviser and manager. Under the
agreement, the Fund pays an annual management fee of 0.75% of the first
$200,000,000 of the Fund's average monthly net asset value plus 0.625% of
any excess over $200,000,000 but not exceeding $500,000,000, plus 0.50% of
any excess over $500,000,000. The adviser is required to reimburse the Fund
to the extent expenses, other than taxes but including the management fee,
in any year exceed the sum of 1 1/2% of the first $30,000,000 of the Fund's
average monthly net asset value plus 1% of such value in excess of
$30,000,000. Under the agreement, Mathers and Company, Inc. also provides
office facilities and bookkeeping services to the Fund.
3. Cost of U.S. Treasury obligations and of other investment securities
purchased during the six months ended June 30, 1998, amounted to $73,678,591
and $88,007,814, respectively. Proceeds of U.S. Treasury obligations and
other investment securities sold or matured during the six months were
$75,648,605 and $124,314,562, respectively. The cost of investments is the
same for financial statement and Federal income tax purposes. At June 30,
1998, gross unrealized appreciation on investments was $10,485,956 and gross
unrealized depreciation on investments was $4,884,852.
<PAGE> 8
MATHERS FUND
TOTAL RETURN INVESTMENT PERFORMANCE
(All Periods Ended 6-30-98)
PERCENT CHANGE
<TABLE>
<CAPTION>
1 YR. 5 YR. 10 YR. 20 YR. 33 YR.+
----- ------ ------ ------- --------
<S> <C> <C> <C> <C> <C>
MATHERS FUND ................................................ 0.47 2.37 42.56 634.84 3818.75
Standard & Poor's 500 ....................................... 30.15 182.27 447.96 2385.04 4262.54
Value Line Composite * ...................................... 15.49 91.68 158.97 780.54 1104.30
Dow Jones Industrial Average ................................ 18.68 185.97 459.97 2327.19 3674.55
Long-Term U.S. Treasury Bonds ............................... 21.05 55.95 197.10 688.25 1086.31
30-Day U.S. Treasury Bills .................................. 5.04 26.19 69.30 305.57 702.51
Consumer Price Index ........................................ 1.69 12.88 38.12 150.01 416.13
<CAPTION>
COMPOUND ANNUAL RETURNS
1 YR 5 YR. 10 YR. 20 YR. 33 YR.+
------ ------ ------- ------- -------
MATHERS FUND ................................................ 0.47 0.47 3.61 10.49 11.81
Standard & Poor's 500 ....................................... 30.15 23.08 18.56 17.42 12.18
Value Line Composite * ...................................... 15.49 13.90 9.98 11.49 7.87
Dow Jones Industrial Average ................................ 18.68 23.39 18.80 17.29 11.68
Long-Term U.S. Treasury Bonds ............................... 21.05 9.29 11.50 10.87 7.82
30-Day U.S. Treasury Bills .................................. 5.04 4.76 5.41 7.25 6.54
Consumer Price Index ........................................ 1.69 2.45 3.28 4.69 5.12
</TABLE>
* Unweighted average of 1600 stocks + From date of initial public offering:
8-19-65
THE FUND'S DAILY PRICE AND ASSET MIX PERCENTAGES ARE AVAILABLE VIA RECORDED
MESSAGE (AFTER 4:30 P.M. CENTRAL TIME) MONDAY THROUGH FRIDAY AT 800-962-FUND.
THE FUND'S PRICE CAN BE E-MAILED TO YOU DAILY. PLEASE PROVIDE YOUR E-MAIL
ADDRESS BY CALLING 800-962-FUND OR VIA E-MAIL AT [email protected].
SHAREHOLDER ACCOUNT BALANCES MAY BE OBTAINED FROM THE FUND'S TRANSFER AGENT AT
800-235-7458 BETWEEN 8:00 A.M. AND 4:30 P.M. CENTRAL TIME.
The results shown reflect past performance and should not be considered
representative of future performance. The investment return and principal value
of an investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Results reflect
income dividends reinvested and capital gains distributions accepted in shares.
