<PAGE>
United
Government
Securities
Fund, Inc.
SEMIANNUAL
REPORT
-------------------------------------------
For the six months ended September 30, 1995
<PAGE>
This report is submitted for the general information of the shareholders of
United Government Securities Fund, Inc. It is not authorized for distribution
to prospective investors in the Fund unless accompanied with or preceded by the
United Government Securities Fund, Inc. current prospectus.
<PAGE>
PRESIDENT'S LETTER
- -----------------------------------------------------------------
SEPTEMBER 30, 1995
Dear Shareholder:
As President of your Fund, I would like to thank you for your continued
confidence in our products and services. We strive to provide the best service
possible to our shareholders: from the Fund's manager, to Waddell & Reed's
customer service representatives, to your personal account representative and
the Waddell & Reed office nearest you.
While personalized service has become increasingly rare in the investment
industry, we remain committed to locally based account representatives who
provide the personal service you need. They are ready to assist you through
regular reviews of your financial plan and to answer any financial questions you
may have. Your account representative is anxious to help you plan for your
retirement, fund a child's education or make plans for other long-term financial
goals.
We want to help you open the door to a better financial future. We will
continue to help you meet your specific financial needs through quality
investment products and personalized service that makes the investment process
more convenient and accessible for you.
Should you have any questions about your account or other financial issues,
contact your personal account representative or your local Waddell & Reed
office. They're ready to help you make the most of your financial future.
Respectfully,
Keith A. Tucker
President
<PAGE>
SHAREHOLDER SUMMARY
- -------------------------------------------------------------
United Government Securities Fund, Inc.
PORTFOLIO STRATEGY:
Long-term U.S. Government OBJECTIVE: As high a current income
Securities as is consistent with
safety of principal. (Fund shares are
not
Short-term U.S. Government guaranteed by the
Securities U.S. Government or any
government agency.
Intermediate-term U.S. Fund share value and
Government Securities yield will fluctuate due to changing
interest rates or other market
conditions and the investor may
experience a loss.)
STRATEGY: Invests primarily in debt securities
issued or guaranteed by the U.S.
Government or its agencies or
instrumentalities. (May purchase
securities subject to repurchase
agreements. May invest in certain
options and futures.)
FOUNDED: 1982
SCHEDULED DIVIDEND FREQUENCY: MONTHLY
PERFORMANCE SUMMARY
PER SHARE DATA
For the Six Months Ended September 30, 1995
- -------------------------------------------
DIVIDENDS PAID $0.17
=====
NET ASSET VALUE ON
9/30/95 $5.36
3/31/95 5.13
-----
CHANGE PER SHARE $ .23
=====
Past performance is not necessarily indicative of future results.
TOTAL RETURN HISTORY
Average Annual Total Return
---------------------------
With Without
Period Sales Load* Sales Load**
- ------ ------------ -------------
1-year period ended 9-30-95 8.91% 13.74%
5-year period ended 9-30-95 8.52% 9.46%
10-year period ended 9-30-95 8.59% 9.07%
Performance data quoted represents past performance and is based on deduction of
4.25% sales load on the initial purchase in each of the three periods.
Performance data quoted in this column represents past performance without
taking into account the sales load deducted on an initial purchase.
Investment return and principal value will fluctuate and an investor's shares,
when redeemed, may be worth more or less than their original cost.
<PAGE>
PORTFOLIO HIGHLIGHTS
On September 30, 1995, United Government Securities Fund, Inc. had net assets
totaling $151,981,890 invested in a diversified portfolio.
As a shareholder of United Government Securities Fund, Inc., for every $100 you
had invested on September 30, 1995, your Fund owned:
$46.58 Federal National Mortgage Association Bonds
16.47 United States Treasury
16.02 Government National Mortgage Association Bonds
14.18 Miscellaneous U.S. Government Backed Bonds
5.85 Federal Home Loan Mortgage Corporation Bonds
0.90 Cash and Cash Equivalents
<PAGE>
THE INVESTMENTS OF
UNITED GOVERNMENT SECURITIES FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
UNITED STATES GOVERNMENT SECURITIES
Federal Home Loan Mortgage Corporation:
11.0%, 1-1-2003 ....................... $ 151 $ 157,981
7.5%, 9-1-2007 ........................ 225 225,288
7.0%, 1-15-2021 ....................... 5,000 4,923,400
8.0%, 2-1-2023 ........................ 3,495 3,576,236
Total ................................. 8,882,905
Federal National Mortgage Association:
8.5%, 8-1-2001 ........................ 4,884 5,060,632
7.2%, 1-10-2002 ....................... 5,000 5,025,800
7.5%, 4-25-2002 ....................... 3,388 3,445,156
7.0%, 11-25-2003 ...................... 6,720 6,743,050
7.7%, 8-10-2004 ....................... 5,000 5,185,950
7.5%, 12-25-2006 ...................... 5,000 5,137,500
6.0%, 6-25-2007 ....................... 5,000 4,839,050
8.4%, 2-25-2009 ....................... 5,000 5,382,800
8.0%, 5-25-2019 ....................... 3,398 3,427,600
11.0%, 10-15-2020 ..................... 6,349 7,143,199
7.0%, 10-1-2023 ....................... 4,700 4,634,984
7.0%, 11-1-2023 ....................... 945 931,783
7.0%, 12-1-2023 ....................... 10,162 10,022,643
7.0%, 5-1-2024 ........................ 3,862 3,808,999
Total ................................. 70,789,146
Government National Mortgage Association:
9.5%, 5-20-2014 ....................... 35 36,740
8.5%, 5-15-2023 ....................... 2,178 2,268,703
7.5%, 6-15-2023 ....................... 831 839,582
7.0%, 7-15-2023 ....................... 4,521 4,470,156
7.5%, 7-15-2023 ....................... 3,300 3,333,345
7.5%, 9-15-2023 ....................... 4,517 4,561,679
7.5%, 2-15-2024 ....................... 4,454 4,498,774
9.75%, 11-15-2028 ..................... 2,966 3,207,177
10.5%, 3-15-2029 ...................... 1,039 1,137,539
Total ................................. 24,353,695
United States Treasury:
7.875%, 11-15-2004 .................... 7,500 8,340,225
7.5%, 11-15-2024 ...................... 15,000 16,694,550
Total ................................. 25,034,775
See Notes to Schedule of Investments on page 7.
<PAGE>
THE INVESTMENTS OF
UNITED GOVERNMENT SECURITIES FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
UNITED STATES GOVERNMENT SECURITIES (Continued)
Miscellaneous United States Government
Backed Securities:
National Archives Facility Trust,
8.5%, 9-1-2019 ...................... $4,038 $ 4,666,938
Resolution Funding Corporation,
8.625%, 1-15-2021 ................... 5,000 6,051,550
U.S. Government Guaranteed Development
Company Participation Certificates,
Series 1995-20 F, Guaranteed by the U.S.
Small Business Administration (an
Independent Agency of the United States),
6.8%, 6-1-2015 ...................... 5,000 4,960,950
Synthetic Off-the-Run Treasuries,
Series 1994-2,
6.0%, 2-15-2009 ..................... 6,200 5,865,200
Total ............................... 21,544,638
TOTAL UNITED STATES GOVERNMENT
SECURITIES - 99.10% $150,605,159
(Cost: $145,820,411)
SHORT-TERM SECURITIES - 0.27%
J. P. Morgan Securities, 6.0% Repurchase
Agreement dated 9-29-95, to be repurchased
at $415,208 on 10-2-95*................ 415 $ 415,000
(Cost: $415,000)
TOTAL INVESTMENT SECURITIES - 99.37% $151,020,159
(Cost: $146,235,411)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.63% 961,731
NET ASSETS - 100.00% $151,981,890
Notes to Schedule of Investments
*Collateralized by $448,000 U.S. Treasury Notes, 6.25% due 8-15-2023; market
value and accrued interest aggregate $430,033.
See Note 1 to financial statements for security valuation and other significant
accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and
depreciation of investments owned for Federal income tax purposes.
<PAGE>
UNITED GOVERNMENT SECURITIES FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995
Assets
Investment securities - at value
(Notes 1 and 3) ................................. $151,020,159
Cash ............................................ 5,176
Receivables:
Interest ........................................ 1,649,071
Fund shares sold ................................ 27,543
Investment securities sold ...................... 3,400
Prepaid insurance premium ........................ 13,674
------------
Total assets .................................. 152,719,023
------------
Liabilities
Payable for Fund shares redeemed ................. 547,839
Dividends payable ................................ 99,299
Accrued service fee .............................. 30,124
Accrued transfer agency and dividend disbursing .. 26,771
Accrued accounting services fee .................. 3,333
Other ............................................ 29,767
------------
Total liabilities ............................. 737,133
------------
Total net assets.............................. $151,981,890
============
Net Assets
$0.01 par value capital stock, authorized --
3,000,000,000; shares outstanding -- 28,344,681
Capital stock ................................... $ 283,447
Additional paid-in capital ...................... 161,324,185
Accumulated undistributed gain (loss):
Accumulated undistributed net realized loss on
investment transactions ....................... (14,410,490)
Net unrealized appreciation in value of
investments at end of period ................... 4,784,748
------------
Net assets applicable to outstanding units
of capital ................................... $151,981,890
============
Net asset value per share (net assets divided by
shares outstanding) .............................. $5.36
=====
See notes to financial statements.
<PAGE>
UNITED GOVERNMENT SECURITIES FUND, INC.
STATEMENT OF OPERATIONS
For the Six Months Ended SEPTEMBER 30, 1995
Investment Income
Interest ......................................... $ 5,556,493
-----------
Expenses (Note 2):
Investment management fee ....................... 313,514
Transfer agency and dividend disbursing ......... 145,554
Service fee ..................................... 79,657
Accounting services fee ......................... 20,000
Audit fees ...................................... 11,365
Legal fees ...................................... 7,728
Custodian fees .................................. 5,139
Other ........................................... 42,624
-----------
Total expenses ................................ 625,581
-----------
Net investment income ........................ 4,930,912
-----------
Realized and Unrealized Gain (Loss) on Investments
Realized net loss on securities .................. (250,989)
Realized net loss on options ..................... (261,401)
-----------
Net realized loss on investments ................ (512,390)
Unrealized appreciation in value of investments
during the period ............................... 7,313,676
-----------
Net gain on investments ......................... 6,801,286
-----------
Net increase in net assets resulting from
operations ................................... $11,732,198
===========
See notes to financial statements.
<PAGE>
UNITED GOVERNMENT SECURITIES FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the For the
six months fiscal year
ended ended
September 30, March 31,
1995 1995
------------ ------------
Increase (Decrease) in Net Assets
Operations:
Net investment income ............ $ 4,930,912 $ 10,053,860
Realized net loss on
investments .................... (512,390) (3,955,179)
Unrealized appreciation........... 7,313,676 243,620
------------ ------------
Net increase in net assets
resulting from operations ..... 11,732,198 6,342,301
------------ ------------
Dividends to shareholders from
net investment income* ........... (4,930,912) (10,053,860)
------------ ------------
Capital share transactions:
Proceeds from sale of shares
(1,383,809 and 3,328,430
shares, respectively) .......... 7,327,143 16,881,689
Proceeds from reinvestment of
dividends (836,046 and 1,794,421
shares, respectively) .......... 4,430,304 9,097,091
Payments for shares redeemed
(3,047,159 and 9,750,153
shares, respectively) .......... (16,109,784) (49,383,242)
------------ ------------
Net decrease in net
assets resulting from capital
share transactions ............ (4,352,337) (23,404,462)
------------ ------------
Total increase (decrease) ..... 2,448,949 (27,116,021)
Net Assets
Beginning of period ............... 149,532,941 176,648,962
------------ ------------
End of period ..................... $151,981,890 $149,532,941
============ ============
Undistributed net investment
income ......................... $--- $---
==== ====
*See "Financial Highlights" on page 11.
See notes to financial statements.
<PAGE>
UNITED GOVERNMENT SECURITIES FUND, INC.
FINANCIAL HIGHLIGHTS
For a Share of Capital Stock Outstanding
Throughout Each Period:
For the
six months For the fiscal year ended March 31,
ended -----------------------------------
9-30-95 1995 1994 1993 1992 1991
------- ------ ------ ------ ------ ------
Net asset value,
beginning of
period ........... $5.13 $5.23 $5.44 $5.01 $4.85 $4.76
----- ----- ----- ----- ----- -----
Income from investment
operations:
Net investment
income .......... .17 .32 .30 .33 .37 .39
Net realized and
unrealized gain
(loss) on
investments ..... .23 (0.10) (0.21) .43 .16 .09
----- ----- ----- ----- ----- -----
Total from investment
operations ....... .40 .22 .09 .76 .53 .48
----- ----- ----- ----- ----- -----
Less dividends declared
from net investment
income ........... (0.17) (0.32) (0.30) (0.33) (0.37) (0.39)
----- ----- ----- ----- ----- -----
Net asset value,
end of period .... $5.36 $5.13 $5.23 $5.44 $5.01 $4.85
===== ===== ===== ===== ===== =====
Total return* ...... 7.93% 4.49% 1.56% 15.62% 11.22% 10.68%
Net assets, end
of period (000
omitted) .........$151,982$149,533$176,649$177,167$138,753$118,703
Ratio of expenses
to average net
assets ........... 0.82%** 0.82% 0.75% 0.71% 0.75% 0.80%
Ratio of net investment
income to average
net assets ....... 6.48%** 6.30% 5.50% 6.29% 7.40% 8.27%
Portfolio turnover
rate ............. 47.17%**41.57%122.62% 81.41%124.51% 187.55%
*Total return calculated without taking into account the sales load deducted
on an initial purchase.
**Annualized.
See notes to financial statements.
<PAGE>
UNITED GOVERNMENT SECURITIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
NOTE 1 -- Significant Accounting Policies
United Government Securities Fund, Inc. (the "Fund") is registered under
the Investment Company Act of 1940 as a diversified, open-end management
investment company. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its financial
statements. The policies are in conformity with generally accepted accounting
principles.
A. Security valuation -- The Fund invests in securities issued or guaranteed
by the U.S. Government or its agencies or instrumentalities and in options
and futures contracts on those securities. Government debt securities are
valued using a pricing system provided by a major dealer in bonds. Other
securities are valued at the latest sale price thereof on the last business
day of the fiscal period as reported by the principal securities exchange
on which the issue is traded or, if no sale is reported, the average of the
latest bid and asked prices. Short-term debt securities are valued at
amortized cost, which approximates market.
B. Security transactions and related investment income -- Security
transactions are accounted for on the trade date (date the order to buy or
sell is executed). Securities gains and losses are calculated on the
identified cost basis. Interest income is recorded on the accrual basis
and includes differences between cost and face amount on principal
reductions of securities. See Note 3 -- Investment Security Transactions.
C. Federal income taxes -- It is the Fund's policy to distribute all of its
taxable income and capital gains to its shareholders and otherwise qualify
as a regulated investment company under the Internal Revenue Code. In
addition, the Fund intends to pay distributions as required to avoid
imposition of excise tax. Accordingly, provision has not been made for
Federal income taxes. See Note 4 -- Federal Income Tax Matters.
D. Dividends and distributions -- All of the Fund's net investment income is
declared and recorded by the Fund as dividends payable on each day to
shareholders of record at the time of the previous determination of net
asset value. Net investment income distributions and capital gains
distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. These
differences are due to differing treatments for items such as deferral of
wash sales and post-October losses, net operating losses and expiring
capital loss carryforwards.
E. Repurchase Agreements -- Repurchase agreements are collateralized by the
value of the resold securities which, during the entire period of the
agreement, remains at least equal to the value of the loan, including
accrued interest thereon. The collateral for the repurchase agreement is
held by the Fund's custodian bank.
NOTE 2 -- Investment Management and Payments to Affiliated Persons
The Fund pays a fee for investment management services. The fee is
computed daily based on the net asset value at the close of business. The fee
consists of a "Group" fee computed each day on the combined net asset values of
all of the funds in the United Group of mutual funds (approximately $13.3
billion of combined net assets at September 30, 1995) at annual rates of .51% of
the first $750 million of combined net assets, .49% on that amount between $750
million and $1.5 billion, .47% between $1.5 billion and $2.25 billion, .45%
between $2.25 billion and $3 billion, .43% between $3 billion and $3.75 billion,
.40% between $3.75 billion and $7.5 billion, .38% between $7.5 billion and $12
billion, and .36% of that amount over $12 billion. The Fund accrues and pays
this fee daily.
Pursuant to assignment of the Investment Management Agreement between the
Fund and Waddell & Reed, Inc. ("W&R"), Waddell & Reed Investment Management
Company ("WRIMCO"), a wholly-owned subsidiary of W&R, serves as the Fund's
investment manager.
The Fund has an Accounting Services Agreement with Waddell & Reed Services
Company ("WARSCO"), a wholly-owned subsidiary of W&R. Under the agreement,
WARSCO acts as the agent in providing accounting services and assistance to the
Fund and pricing daily the value of shares of the Fund. For these services, the
Fund pays WARSCO a monthly fee of one-twelfth of the annual fee shown in the
following table.
Accounting Services Fee
Average
Net Asset Level Annual Fee
(all dollars in millions) Rate for Each Level
------------------------- -------------------
From $ 0 to $ 10 $ 0
From $ 10 to $ 25 $ 10,000
From $ 25 to $ 50 $ 20,000
From $ 50 to $ 100 $ 30,000
From $ 100 to $ 200 $ 40,000
From $ 200 to $ 350 $ 50,000
From $ 350 to $ 550 $ 60,000
From $ 550 to $ 750 $ 70,000
From $ 750 to $1,000 $ 85,000
$1,000 and Over $100,000
The Fund also pays WARSCO a monthly per account charge for transfer agency
and dividend disbursement services of $1.0208 for each shareholder account which
was in existence at any time during the prior month and $0.75 for each
shareholder check which was processed, plus $0.30 for each account on which a
dividend or distribution of cash or shares was paid in that month. The Fund
also reimburses W&R and WARSCO for certain out-of-pocket costs.
As principal underwriter for the Fund's shares, W&R received direct and
indirect gross sales commissions (which are not an expense of the Fund) of
$169,917, out of which W&R paid sales commissions of $95,160 and all expenses in
connection with the sale of Fund shares, except for registration fees and
related expenses.
Under a Service Plan adopted by the Fund pursuant to Rule 12b-1 under the
Investment Company Act of 1940, the Fund may pay monthly a fee to W&R in an
amount not to exceed .25% of the Fund's average annual net assets. The fee is
to be paid to reimburse W&R for amounts it expends in connection with the
provision of personal services to Fund shareholders and/or maintenance of
shareholder accounts.
The Fund paid Directors' fees of $2,912.
W&R is an indirect subsidiary of Torchmark Corporation, a holding company,
and United Investors Management Company, a holding company, and a direct
subsidiary of Waddell & Reed Financial Services, Inc., a holding company.
NOTE 3 -- Investment Security Transactions
Purchases of U.S. Government securities aggregated $50,263,048 while
proceeds from maturities and sales aggregated $34,361,817. Purchases of options
aggregated $584,297 while proceeds from options aggregated $322,894. Purchases
of short-term securities aggregated $554,505,000 while proceeds from maturities
and sales aggregated $575,225,000.
For Federal income tax purposes, cost of investments owned at September 30,
1995 was $146,473,302, resulting in net unrealized appreciation of $4,546,857,
of which $5,589,507 related to appreciated securities and $1,042,650 related to
depreciated securities.
NOTE 4 -- Federal Income Tax Matters
For Federal income tax purposes, the Fund realized net capital losses of
$3,786,038 during the year ended March 31, 1995 of which $2,174,332 was deferred
to the year ending March 31, 1996 (see discussion below). Capital loss
carryovers aggregated $11,490,480 at March 31, 1995 and are available to offset
future realized capital gain net income for Federal income tax purposes through
March 31, 1996; $4,096,629 of this amount is available through March 31, 1997;
$2,371,140 is available through March 31, 1998 and $1,611,706 is available
through March 31, 2003.
Internal Revenue Code regulations permit the Fund to defer into its next
fiscal year net capital losses incurred between each November 1 and the end of
its fiscal year ("post-October losses"). From November 1, 1994 through March
31, 1995, the Fund incurred net long-term capital losses of $2,174,332 which
have been deferred to the fiscal year ending March 31, 1996.
NOTE 5 -- Options
Options purchased by the Fund are accounted for in the same manner as
marketable portfolio securities. The cost of portfolio securities acquired
through the exercise of call options is increased by the premium paid to
purchase the call. The proceeds from securities sold through the exercise of
put options are decreased by the premium paid to purchase the put.
NOTE 6 -- Commencement of Multiclass Operations
On July 31, 1995, the Fund was authorized to offer investors a choice of
two classes of shares, Class A and Class Y. A comprehensive discussion of the
terms under which shares of either class are offered is contained in the
prospectus and the Statement of Additional Information for the Fund.
The Fund commenced multiclass operations on September 28, 1995. The
following class specific information is presented in footnote format in lieu of
presentation in the principal financial statements due to the small amount of
Class Y share transactions during the reporting period:
Class A Class Y Total
------------ ---------- ------------
Value issued from sale
of shares.......... $7,325,859 $1,284 $7,327,143
Value issued from
reinvestment of
dividends ......... 4,430,304 --- 4,430,304
Value redeemed ..... (16,109,784) --- (16,109,784)
----------- ---------- -----------
Increase (decrease) in
outstanding capital ($4,353,621) $1,284 ($4,352,337)
============= ============ =============
Shares outstanding . 28,344,442 239 28,344,681
Net asset value per share $5.36 $5.36
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
United Government Securities Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of United Government Securities Fund,
Inc. (the "Fund") at September 30, 1995, the results of its operations for the
six months then ended and the changes in its net assets and the financial
highlights for the periods indicated, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at September 30, 1995 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
Price Waterhouse LLP
Kansas City, Missouri
November 3, 1995
<PAGE>
DIRECTORS
Ronald K. Richey, Birmingham, Alabama, Chairman of the Board
Henry L. Bellmon, Red Rock, Oklahoma
Dodds I. Buchanan, Boulder, Colorado
Jay B. Dillingham, Kansas City, Missouri
Linda Graves, Topeka, Kansas
John F. Hayes, Hutchinson, Kansas
Glendon E. Johnson, Miami, Florida
James B. Judd, Kansas City, Missouri
William T. Morgan, Los Angeles, California
Doyle Patterson, Kansas City, Missouri
Eleanor B. Schwartz, Kansas City, Missouri
Keith A. Tucker, Overland Park, Kansas
Frederick Vogel III, Milwaukee, Wisconsin
Paul S. Wise, Carefree, Arizona
Leslie S. Wright, Birmingham, Alabama
OFFICERS
Keith A. Tucker, President
Robert L. Hechler, Vice President
Henry J. Herrmann, Vice President
John M. Holliday, Vice President
Theodore W. Howard, Vice President and Treasurer
Sharon K. Pappas, Vice President and Secretary
John E. Sundeen, Jr., Vice President
To all IRA Planholders:
As required by law, income tax will automatically be withheld from any
distribution or withdrawal from an IRA unless you make a written election not to
have taxes withheld. The election may be made by submitting forms provided by
Waddell & Reed, Inc. which can be obtained from your Waddell & Reed
representative or by submitting Internal Revenue Service form W-4P. Once made,
an election can be revoked by providing written notice to Waddell & Reed, Inc.
If you elect not to have tax withheld you may be required to make payments of
estimated tax. Penalties may be imposed by the IRS if withholding and estimated
tax payments are not adequate.
<PAGE>
The United Group of Mutual Funds
United Cash Management, Inc.
United Government Securities Fund, Inc.
United Bond Fund
United Municipal Bond Fund, Inc.
United Municipal High Income Fund, Inc.
United High Income Fund, Inc.
United High Income Fund II, Inc.
United Continental Income Fund, Inc.
United Retirement Shares, Inc.
United Asset Strategy Fund, Inc.
United Income Fund
United Accumulative Fund
United Vanguard Fund, Inc.
United New Concepts Fund, Inc.
United Science and Technology Fund
United International Growth Fund, Inc.
United Gold & Government Fund, Inc.
FOR MORE INFORMATION:
Contact your representative, or your
local office as listed on your
Account Statement, or contact:
WADDELL & REED
CUSTOMER SERVICE
6300 Lamar Avenue
P.O. Box 29217
Shawnee Mission, KS 66201-9217
(913) 236-1303
Our INTERNET address is:
http://www.waddell.com
NUR1011SA(9-95)
printed on recycled paper
