<PAGE>
----------------------------------------------------
PENN SERIES FUNDS, INC.
SEMI-ANNUAL REPORT
JUNE 30, 1995
<PAGE>
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PENN SERIES FUNDS, INC.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
MONEY MARKET FUND
Money Market interest rates fell dramatically during the second quarter of
1995. As was the case last quarter, the release of softer, non-inflationary
numbers, coupled with the market's increased perception that the Fed was done
tightening provided the impetus for significantly lower rates.
The expanding economy we became accustomed to during 1994 continued to show
signs of moderating in the second quarter. Consumer spending, rates of
production and employment levels all dropped. The market's fear of near-term
inflation had decreased. The feeling that the Fed would be on hold for awhile,
or possibly even ease, led to an anticipatory flattening of the Treasury Bill
Curve. After two consecutive meetings where the FOMC took no rate action, the
Fed did in fact ease 25 basis points at their most recent meeting on July 6th.
The Fund continued to outperform both its peer group of six selected funds
and the Donoghue first-tier money market index on a net basis. The Penn Series
Funds reported a net yield of 5.54% for the second quarter, 7 basis points
above the yield of its peer group (5.47%), and 8 basis points above the first-
tier index (5.46). The Fund ended the quarter with an average maturity of 44
days, equal to that of its peer group.
More recent economic releases suggest that the U.S. economy may reaccelerate.
Consumer confidence remains high, real disposable income continues to trend
upward and unemployment remains below 6.00%, a level widely accepted as the
rate of full employment. New Home sales jumped up 19.9% in May. Existing home
sales, which tends to lag new home sales, also rose 4.7%, due largely to
declining mortgage rates. In addition, the June employment number reflected the
biggest gain in four months.
The above factors could lead to a second half pick-up, the degree of which
remains uncertain. Any significant rebound would cause money market rates to
back-up. With this in mind, we plan to manage the Fund in a neutral fashion,
with a day count similar to our peer group. We believe we can outperform our
competitors without significant interest rate bets.
INDEPENDENCE CAPITAL MANAGEMENT, INC.INVESTMENT ADVISER
QUALITY BOND FUND
The U.S. Bond market continued its furious rally in the second quarter.
Outpacing the first quarter, 2 year treasuries fell 100 basis points while 30
year treasury rates fell 80 basis points over the period. Weakness in the
economy became more widespread as an inventory overhang built in the first
quarter spurred companies to quickly pare production. Shortly after the quarter
ended, the Federal Reserve eased 25 b.p.'s, belatedly following market yields
lower.
Spreads on callable corporates and mortgage-backed securities widened in the
second quarter as concern over duration shortening in a rally caused investors
to sell. Non-call corporates also widened slightly, partly in sympathy to their
callable counterparts but also to a surge in new issuance by corporations.
Quality spreads remain historically small, surprising given that the market
rallies on recognition of a weak economy. We maintain an above average
quality portfolio. In addition, we have added higher-grade callable corporates
to the portfolio to take advantage of the recent widening.
Performance for the quarter was excellent both on an absolute basis but
slightly sub-par on a relative basis. In the second quarter, the Penn Series
Quality Bond Fund posted +5.91% vs. +6.14% for the Lipper A Fund average. Over
the last 12 months our performance was +13.56% vs. +11.77% for the Lipper A
Fund average. Since 11-01-92, the inception of our management of the Penn
Series Quality Bond Fund, we have outperformed the competition. The Quality
Bond Fund posted a cumulative +21.37% vs. +20.04% for the Lipper A Fund
Average.
Our performance was hindered by the defensive position we had entering the
quarter. That position was quickly shifted to a neutral position in the
quarter. Our sector selection away from mortgage-backed and callable corporates
assisted performance.
We enter the new quarter slightly defensive in duration and wary of a modest
back up in yields. Our concern lies in a belief that the second quarter
represented an inventory correction, one which could well be over soon given
the sharp drop in production. Any pick-up in consumption would cause us concern
given the minimal amount of slack left in the economy. At the very least rates
may bounce higher as a reaction simply due to the massive rally over the last
eight months.
INDEPENDENCE CAPITAL MANAGEMENT, INC.INVESTMENT ADVISER
HIGH YIELD FUND
The high yield market posted strong returns in the second quarter of 1995,
following up on impressive gains during the first three months of the year.
However, the positive results masked a growing level of uncertainty in the
noninvestment-grade bond sector. As typically happens when the economy slows,
investors began to favor more creditworthy borrowers. As a result, high-yield
bonds lagged their investment-grade counterparts, and yield spreads widened
between high-yield and high-quality bonds, particularly in many cyclical
industries.
For the first six months of the year, the fund's returns were right in line
with the Lipper Average of our peer group. Second quarter returns were slightly
disappointing, as several sectors that had shown strong performance in the
first three months of the year suffered corrections. A number of cyclical
industries lagged in the second quarter, as well as several depressed issues
that have yet to recover from 1994 losses. Two gaming issues, Hemmeter and
Capital Gaming, lost ground when the companies announced cost overruns on a
joint venture riverboat project in New Orleans.
We continued realigning the portfolio to reduce potential volatility in the
slower-growth environment we anticipate. During the past six months, we
increased the number of higher-quality securities in the fund and trimmed many
of our riskiest issues. This defensive approach was generally beneficial,
except in April when the lower-quality tier of the junk bond market led the
advance. We also favored higher-coupon instruments, believing that most of our
market's second-half returns will come from income, rather than capital
appreciation.
2
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HIGH YIELD FUND (CONT'D)
Fears of a recession are premature, in our opinion, and we have a favorable
outlook for high-yield bonds in the second half of 1995. Lower interest rates
should rekindle growth later in the year, and the current strength of corporate
profits should help maintain positive credit quality trends for most of our
companies.
We feel the high-yield market is at a crossroads, with its direction
depending on the course of the economy over the next several months. A more
definitive tilt toward an easy policy by the Federal Reserve could be viewed
favorably as likely to stimulate growth, or less favorably if it is seen as
confirming concerns over a recession. The stock market will also be an
important influence, as high-yield bonds often take their cue from equity
performance.
Over the past 10 years, the greatest cumulative gains have come from the
upper tier of the high-yield market. Therefore, we see no point now in dipping
down in credit quality to pursue short-term price appreciation. Rather, we will
stick to our focus on BB- and B-rated bonds, which have performed best over
time and should weather economic changes better than weaker credits.
In summary, we expect to see economic growth rise gradually to its historical
trend of 2% to 2.5% by year-end. This should be a good environment for high-
yield bonds provided supply and demand conditions do not worsen.
T. ROWE PRICE ASSOCIATES, INC. INVESTMENT ADVISER
GROWTH EQUITY FUND
The Penn Series Growth Equity Fund posted a disappointing return in the second
quarter. Although the portfolio achieved a total return of 5.18% for the three
months, this result lagged considerably the 9.39% total return of the average
Lipper Growth Fund. Fortunately, the underperformance did not extend through
the entire period. In June, the Growth Equity Fund gained 4.07%, exceeding both
the S&P and the Lipper Growth average returns of 2.80% and 3.76%, respectively.
As is usually the case when the fund significantly lags the competition,
blame for the poor relative performance in April and May rested largely on the
severe price downdrafts experienced by several specific securities. Many of the
issues that declined by several percent or more in the first two months of the
quarter fell on company specific developments and/or concerns within the
investment community that the firms' longer term fundamentals were dimming. The
reality of the marketplace today is that share prices adjust almost immediately
(and sometimes overadjust) to negative corporate announcements. Sometimes, only
rumors of disappoint are necessary to send a share tumbling. Issues that
reacted in April and May to this reassessment process included Albertson,
Cintas, Danka, Paychex Systems, and Michael Stores. Of the names included in
this group, only Michael Stores announced that earnings would fall
significantly short of Wall Street expectations, necessitating that projections
of earnings would have to be revised downward. The other shares fell on more
ambiguous concerns related to raw materials cost pressures, competitive
threats, and other issues where the tie-ins to earnings (a good proxy for
fundamentals) were less clear.
In terms of sectors, the poorest performing stocks tended to be concentrated
in the various health care groupings. These stocks fell on
concerns that the marketplace, if not the Clinton administration, would impose
disciplines related to pricing on health care services and products. This poor
potential pricing environment would sharply curtail earnings growth of the
related entities. It is too early to reach conclusions as to the validity of
these concerns. Nonetheless, to reduce the portfolio's exposure to this risk,
the health care sector's weighting in the fund was reduced from over 24% at the
beginning of April to 17% by the end of the quarter.
High tech issues were the biggest contributors to the fund in the latest
period. Many firms in this sector, in particular semiconductor and
semiconductor equipment concerns, have posted very strong revenue and earnings
gains for more than two years. This growth is being fueled by the 30% to 40%
volume gains in shipments of such high tech products as personal computers and
telecommunications equipment and handsets. Investors have shown a very strong,
and continuing, appetite for equities with exposures to these markets despite
valuations that exceed parameters established in prior economic cycles.
Altogether, a total of $38.4 million in stocks were sold in the second
quarter. Besides the health care sector, most of the sales were concentrated in
high tech issues. We feel that a lower exposure to computer and related issues
is prudent given the extended price/earnings valuations accorded many high tech
shares. Offsetting the sales were purchases totaling $43.4 million. The new
additions were dispersed over a wide range of industries. In sum, the effect of
transactions in the quarter was to more broadly diversify the fund's holdings.
INDEPENDENCE CAPITAL MANAGEMENT, INC. INVESTMENT ADVISER
VALUE EQUITY FUND
The portfolio performed well even though we did not own many technology stocks.
By following our fundamental disciplines, we produced strong returns with
below-average risk through good stock selections, generating a total return of
10.2% vs. 9.5%.
Our returns were driven in part by our substantial holdings of financial
service companies, such as American International Group, Citicorp, Freddie Mac
and Exel. As a group, the financial stocks in the portfolio returned a
spectacular 29% in the half. The investments we made in these companies during
the past few years were not an interest rate play. Rather, they were based on
the exceptional opportunities we saw in terms of growth and high returns on
capital, combined with reasonable market valuations. Quite simply, we thought
many quality financial stocks were cheap. The market now appears to have agreed
with that assessment. Despite their considerable price advance in the first
half of 1995, we believe many of these stocks are still undervalued.
Based on such traditional valuation measures as average dividend yield and
price-to-book, the market is selling at its highest level ever. The dividend
yield on the S&P 500 has never been as low as it is today, in part because
dividend increases have badly lagged earnings, as some portion of cash flow is
being used to repurchase shares rather than pay dividends.
3
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PENN SERIES FUNDS, INC.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
VALUE EQUITY FUND (CONT'D)
However, on other traditional measures, including price/earnings ratios, the
market looks more modestly priced. As a result of strong profit advances, the
P/E on trailing 12-month earnings estimated through June for the S&P 500 was
about 16X, not a high valuation. If corporate profitability can be sustained,
these numbers would not appear to suggest an overvalued market. This may be a
big if since corporate profitability is at all-time highs.
The stock market through June 30th has now risen for 1,722 days without a
correction of 10% or more, the longest such advance in three and a half
decades. Throughout this period, there has been a confluence of positive
factors and an almost total absence of negatives. It's been a truly wonderful
time to own stocks.
Inevitably, market conditions will change. The market appears to have
tremendous upward momentum coming out of the first half, but is also vulnerable
to shocks, whatever they may be. In this environment, we will continue to do
what we do best: purchase companies with superior business characteristics at
reasonable prices, and thereby seek to preserve capital and outperform the
popular indices regardless of the broad market direction.
QUEST FOR VALUE ADVISORS INVESTMENT ADVISER
FLEXIBLY MANAGED FUND
We made good progress on the investment performance road during the first six
months of 1995. Our individual security selection and risk avoidance strategy
remained rewarding although our cautious asset allocation and the market's love
affair with technology meant that some other funds had better results. Your
fund's primary objective, to make money and minimize losses during the market's
inevitable weak periods, continues to be met.
The stock market surged to record levels during the second quarter, and the
bond market, which had suffered through a dismal 1994, rebounded strongly. As
is often the case, this performance was inspired less by actual events than by
a change in investor perceptions about the future. Six months ago, the Federal
Reserve was expected to continue its steady monetary tightening, whereas during
the past quarter, a mild stimulus was anticipated. The Fed's July reduction in
short-term interest rates has diminished the likelihood of a severe recession,
and it now seems probably that if a recession is avoided over the next six
months, it may not occur at all before the 1996 election.
The stock market was dominated by red-hot technology stocks. The
semiconductor group, for example, followed a strong first quarter with a mind-
numbing 46% gain in the second. Investors were rightly attracted to such
results and poured money into mutual funds specializing in the technology
sector. This cash flow further boosted performance. Unfortunately, all this
excitement pretty much passed us by. We like to buy out-of-favor securities
with good potential and, we hope, much less risk.
The fund's positive results continued to be helped by the absence of
significant "losers." On the other hand, we had some significant winners.
Student Loan Marketing (Sallie Mae), for example,
generated gains that offset the total of all losing positions for the first six
months. We purchased this stock as well as Loews and Philip Morris when many
investors were focusing on their problems. As concerns subsided, their share
prices rebounded. Other top contributors, Manville, Weyerhaeuser, and PHH,
continued to enhance fund performance as the companies prospered.
The biggest disappointment this year was the sale with only a modest profit
of Rockefeller Center Property bonds. This had been one of the fund's largest
positions and appeared to have good appreciation potential with limited risk.
Unfortunately, the march of events was worse than we anticipated. Pressure on
New York City real estate and unexpected actions by affiliated parties finally
caused us to preempt a possible loss. May all our disappointments end as
benignly!
We continue to believe that caution toward the broad stock market is sensible
given today's investment environment. We see one positive factor -- continued
economic growth and the accompanying increase in corporate earnings; one
neutral factor -- interest rates, which are unlikely to fall much further; and
one negative factor -- stock valuation levels, particularly dividend yields,
which are disturbingly low. We try not to over-analyze these "macro" factors,
since all are dynamic and often cancel each other out. Nevertheless, in our
current reading of these signals, the caution light predominates over the green
or red.
The most compelling lesson we draw from financial history is the superior
long-term returns generated by stocks versus money market securities and bonds.
But the stock market can suffer periodic debilitating losses, and investors are
wont to bail out during such times. Since major stock gains also tend to occur
in concentrated time periods, exiting the market increases the chance of not
being exposed to significant upward moves. By managing your fund to try to
cushion the effects of these inevitable downturns, we hope you will feel more
comfortable about remaining committed to the market and your long-term
financial goals.
In hindsight, we would probably have done better with a more aggressive
investment posture these past six months, but the next six months may be an
entirely different story. Our approach, which blends caution regarding the big
picture with a ceaseless search for attractively priced individual securities,
has served well in the past, and we will stick with it.
T. ROWE PRICE ASSOCIATES, INC. INVESTMENT ADVISER
INTERNATIONAL EQUITY FUND
At June 30, the Fund's net assets totaled $60,542,965. For the second quarter
the Fund gained a total return of 3.78% vs. the EAFE at 0.73%. Year to date the
Fund produced a positive return of 1.38% vs. the Financial Times World ex-US at
0.6% and the EAFE Index at 2.60%. During the quarter, we increased our
weighting in the UK and Switzerland by about 2% each. In the Pacific Basin, we
increased our weightings in Singapore and Hong Kong, and sold completely out of
Korea and Indonesia. In Latin America, we halved our exposure from 1.4% to
0.7%.
4
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INTERNATIONAL EQUITY FUND (CONT'D)
In Europe, industrial production, durable goods orders and residential
construction all slowed in the first half as the effects of last year's tight
monetary policy are still constraining regional GDP growth. With the "bond
vigilantes" limiting government action on fiscal stimulus, monetary policy
remains the main tool of macroeconomic management. Accordingly, European real
interest rates have been falling. Earnings momentum has improved dramatically
for European companies in the financial, pharmaceutical and consumer durable
areas, while shares of cyclical companies have begun to reflect above-trend
earnings growth expectations. We remain underweight in the energy, consumer
services, industrial and basic material sectors.
In Japan, the long-awaited upturn in the business cycle has failed to
materialize. With the economy choking on the effects of the strong yen,
prospects of a sustainable earnings recovery have dimmed. After Taiwan, Japan's
was the worst-performing market in the first half, posting a 23% fall in yen
terms. Investors continue to be spooked by 1) the deflationary effect of the
strong yen; 2) the scope of non-performing loans in the banking sector; 3) the
inability of insurance companies to meet their obligations due to insufficient
returns on their securities portfolios, and 4) the lack of policy leadership by
the current administration. We believe the Japanese economy can, in time, be
reflated through a combination of fiscal measures aimed at reviving private
consumption and a Bank of Japan recovery of the troubled banking sector. Its
high level of financial resources permits it to do so. The need for the
government to act is obvious; it has the wherewithal at its disposal. What is
lacking is political will and failure to acknowledge the mistakes of the past.
In Korea monetary conditions will remain tight due to a massive boom by the
Chaebol (conglomerates). Their expansion in the auto, steel and petrochemical
industries will result in structural overcapacities and will keep margins low.
Second, Korea's widening trade deficit reflects its dependency on imports of
components from Japan and the effects of the strong Yen. Korea is still
primarily an assembler of finished goods and lacks the strong manufacturing
capabilities that lead to innovation and absorption of technology. The Taiwan
market was disappointing during the first half, due to weakness in the banking
sector and perceived political uncertainty.
In Latin America, Mexico's foreign capital outflows and the domestic savings
shortfall have shrunken growth prospects and made valuations difficult. We took
advantage of a market recovery to substantially reduce positions.
With the U.S. dollar showing signs of forming a bottom, the portfolio's
exposure to the European currencies is fully hedged. We are awaiting signals
from our models to also hedge against a weakening Japanese Yen.
On average, stronger than expected earnings are being reported by European,
Far Eastern and Japanese companies. As falling government bond yields around
the globe increase the attractiveness of stock investments, we are optimistic
that equity returns will improve during the second half of 1995.
VONTOBEL USA INC.
INVESTMENT ADVISER
SMALL CAPITALIZATION ACCUMULATION TRUST
The small capitalization company sector, as measured by the Russell 2000,
appreciated 9.4% for the second quarter of 1995 and 14.4% for the first half,
with technology and financial services contributing nearly half of the index's
second quarter increase. Small cap companies tracked larger companies' stock
performance during the quarter but continue to lag for the half. Our funds'
performance lagged the Russell 2000 in the second quarter and year-to-date as a
result of our underweighting in technology stocks, and our overweighting in
high quality Real Estate Investment Trusts (the worst-performing sector in the
second quarter). We are obviously dissatisfied with this, but we remain
committed to rigorously pursuing our value-oriented stock selection
methodology, of investing in superior companies in good industries with strong
management, which we believe produces the best long-term returns. This is
sometimes difficult in any one quarter or period when one sector so completely
dominates the performance of the market, but we are confident this approach
serves our investors the best long-term result.
It is worth emphasizing how our value-oriented investment discipline has led
to this underweighting in technology and why in the long-run we believe our
strategy is the correct one. Our underweighting in technology is a result of
our company-specific bottoms-up stock selection and our conservative approach
to preservation of capital -- and is not a sector allocation decision. As you
know, we emphasize investment into companies with ongoing, sustainable
franchises with high competitive barriers. Over extended periods of time, such
companies can achieve returns in excess of their cost of capital and grow
shareholder value by protecting their businesses against competitors. In the
technology sector, this describes very few companies, perhaps an Intel or a
Microsoft. Most small technology companies rely on only a few products, which
have increasingly and dangerously shorter life-cycles in the current whirlwind
pace of innovation and obsolescence. Meanwhile, these small companies also have
little protection against competitors who can leapfrog them quickly with a
better product or increased capacity, while our resource-constrained company
focuses on commercial development! Also, many small tech companies only have a
short history of company performance, not sustainable proven franchises. A few
companies will be successful but many will simply disappear. This is unlikely
to happen to most of the companies in our portfolio. The burst of excitement
over Technology has lifted the prices of most technology stocks and the Russell
2000 index, the same way that "a rising tide lifts all boats", seemingly no
matter the quality of the product or company! We believe this is a shorter-term
phenomenon, while our longer-term emphasis drives us to invest only in
companies that seem likely to produce superior returns over many years.
QUEST FOR VALUE ADVISORS
INVESTMENT ADVISER
5
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PENN SERIES FUNDS, INC.
SCHEDULE OF INVESTMENTS - JUNE 30, 1995 (UNAUDITED)
THE MONEY MARKET FUND
<TABLE>
<CAPTION>
PAR
MATURITY RATING (000) VALUE
-------- ------ ----- -----------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER (34.6%)
- ------------------------
BANKS (2.6%)
U.S. Bancorporation 5.90%................... 08/14/95 A $500 $ 496,394
-----------
BEVERAGES (3.6%)
Pepsico, Inc. 5.85%......................... 07/20/95 NR 700 697,839
-----------
ELECTRICAL EQUIPMENT (2.0%)
General Electric Capital Corp. 6.12%........ 07/17/95 AAA 400 398,912
-----------
FINANCIAL SERVICES (13.2%)
American Express Credit Corp. 5.70%......... 03/08/96 A+ 500 480,129
Chrysler Financial Corp. 5.95%.............. 07/10/95 A- 500 499,256
Countrywide Funding Corp. 6.07%............. 07/07/95 A 500 499,494
Dean Witter, Reynolds 6.00%................. 07/11/95 A 565 564,058
Hanson Finance UK 6.10%..................... 07/06/95 NR 500 499,576
-----------
2,542,513
-----------
OFFICE EQUIPMENT (3.6%)
Xerox Credit Corp. 5.96%.................... 07/18/95 A 700 698,030
-----------
TELECOMMUNICATIONS (2.6%)
American Telephone & Telegraph 5.98%........ 07/10/95 A 500 499,253
-----------
TRANSPORTATION - MISC. (2.6%)
PHH Corp. 6.00%............................. 07/13/95 A+ 500 499,000
-----------
UTILITIES - ELECTRIC (4.4%)
Pennsylvania Power & Light Co. 6.00%........ 07/11/95 A 350 349,417
Potomac Electric Power Co. 5.97%............ 08/16/95 A 500 496,186
-----------
845,603
-----------
TOTAL COMMERCIAL PAPER
(Cost $6,677,544)................................................. 6,677,544
-----------
MEDIUM TERM NOTES (9.4%)
- ------------------------
Associates Corp. of
North America 8.875%....................... 08/01/95 AA- 500 500,945
Ford Motor Credit 7.95%..................... 10/02/95 A+ 500 501,716
General Electric Capital Corp. 5.25%........ 11/15/95 AAA 300 298,476
General Motors Acceptance Corp. 8.60%....... 04/12/96 NR 500 507,256
-----------
TOTAL MEDIUM TERM NOTES
(Cost $1,808,393)................................................. 1,808,393
-----------
MUNICIPAL NOTES (3.6%)
- ----------------------
Richmond County Georgia Industrial
Development Authority Monsanto County
Project 6.27% (Cost $700,000).............. 06/01/96 A-1 700 700,000
-----------
VARIABLE RATE DEMAND NOTES (39.9%)*
- -----------------------------------
Adventist Health System West 6.15%.......... 07/07/95 A1 500 500,000
Baylis Group Partnership 6.40%.............. 07/05/95 A+ 700 700,000
Barton Healthcare 6.15%..................... 07/07/95 A-1 500 500,000
Community Health Systems Inc. 6.40%......... 07/07/95 A-1 700 700,000
Durham Risk Management Co. 6.18%............ 07/07/95 AAA 500 500,000
</TABLE>
<TABLE>
<CAPTION>
PAR
MATURITY RATING (000) VALUE
-------- ------ ----- -----------
<S> <C> <C> <C> <C>
Fairview Hospital and Healthcare Services
6.17%...................................... 07/07/95 AAA $500 $ 500,000
Health Insurance Plan of Greater NY 6.17%... 07/07/95 AAA 500 500,000
Illinois Development Finance Authority
6.15%...................................... 07/07/95 Aa2 500 500,000
Mississippi Business Finance Corp. 6.10%.... 07/07/95 A-1+ 700 700,000
Montgomery County PA Indust. Dev. Author.
6.40%...................................... 07/07/95 A-1+ 700 700,000
San Bernardino County California 6.17%...... 07/07/95 AA- 700 700,000
Saint Francis Health 6.40%.................. 07/07/95 NR 500 500,000
South Central Texas Industrial Corp. 6.15%.. 07/07/95 NR 700 700,000
-----------
TOTAL VARIABLE RATE DEMAND NOTES
(Cost $7,700,000)................................................. 7,700,000
-----------
VARIABLE RATE OBLIGATIONS (10.3%)**
- -----------------------------------
American Honda Corp. 6.29%.................. 08/09/95 A-2 500 499,619
C.I.T. Group Holdings 6.20%................. 07/01/95 A+ 500 499,855
C.S. First Boston 6.50%..................... 07/01/95 A-1+ 500 500,000
Student Loan Marketing Assoc. 5.68%......... 07/05/95 Aaa 500 499,603
-----------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $1,999,077)................................................. 1,999,077
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
-------
<S> <C> <C>
SHORT-TERM INVESTMENTS (2.2%)
- -----------------------------
Temporary Investment Fund Class B
(Cost $425,617).......................................... 425,617 425,617
-----------
TOTAL INVESTMENTS (100.0%)
(Cost $19,310,631) (a)............................................ $19,310,631
===========
</TABLE>
- -------
(a) Cost for Federal income tax purposes.
* Reset Demand Notes - The rate shown is the rate as of June 30, 1995, and the
maturity shown is the next date the principal can be recovered through
demand.
** Floating Rate Securities - The rate shown is the rate as of June 30, 1995,
and the maturity shown is the next interest readjustment date.
The Standard & Poor's Corporation & Moody's Investor Service, Inc. ratings
are the most recent ratings available at June 30, 1995.
<TABLE>
<CAPTION>
PERCENTAGE OF PORTFOLIO
MATURITY -----------------------
SCHEDULE AMOUNT PAR (CUM)
-------- ----------- -----
<S> <C> <C> <C>
1 - 7 days $10,625,617 54.9% 54.9%
8 - 14 days 2,415,000 12.5% 67.4%
15 - 30 days 1,800,000 9.3% 76.7%
31 - 60 days 2,000,000 10.3% 87.0%
61 - 90 days 0 0.0% 87.0%
91 - 120 days 500,000 2.6% 89.6%
121 - 150 days 300,000 1.6% 91.2%
Over 150 days 1,700,000 8.8% 100.0%
----------- -----------
$19,340,617 100.0%
=========== ===========
</TABLE>
Average Weighted Maturity - 42 days
The accompanying notes are an integral part of these financial statements.
6
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PENN SERIES FUNDS, INC.
SCHEDULE OF INVESTMENTS - JUNE 30, 1995 (UNAUDITED)
THE QUALITY BOND FUND
<TABLE>
<CAPTION>
PAR
MATURITY RATING (000) VALUE
-------- ------ ------ -----------
<S> <C> <C> <C> <C>
CORPORATE BONDS (43.2%)
- -----------------------
AEROSPACE (1.5%)
Martin-Marietta Corp. Note 8.50%........... 03/01/96 A $ 175 $ 177,187
Northrop Gruman 9.375%..................... 10/15/24 BBB 325 359,125
-----------
536,312
-----------
AIRCRAFT MANUFACTURING (0.8%)
Boeing Co. 8.75%........................... 09/15/31 AA- 250 291,875
-----------
BROADCASTING (7.9%)
Cox Communication 6.875%................... 06/15/05 A- 1,000 990,000
News America Holdings 8.50%................ 02/23/25 BBB- 360 392,850
9.25%..................................... 02/01/13 BBB- 1,200 1,357,500
-----------
2,740,350
-----------
CANADIAN - GOV'T AGENCY (3.6%)
Hydro Quebec 8.05%......................... 07/07/06 A+ 1,150 1,252,062
-----------
CHEMICALS (3.1%)
E.I. Dupont Nemour 8.25%................... 07/15/92 AA- 1,000 1,072,500
-----------
ELECTRIC POWER (2.2%)
Korea Electric Power 7.75%................. 04/01/13 A+ 500 499,375
Minnesota Power & Light First Mortgage
7.375%.................................... 03/01/97 A- 250 255,312
-----------
754,687
-----------
ELECTRICAL EQUIPMENT (1.5%)
General Electric Capital Corp. 8.125%...... 02/01/99 NR 500 528,125
-----------
ENTERTAINMENT (1.4%)
Time Warner Inc.
Notes 9.125%.............................. 01/15/13 BBB- 465 485,925
-----------
FINANCE & CREDIT (0.7%)
American Express Credit Corp. Senior Note
7.75%..................................... 03/01/97 A+ 250 256,250
-----------
FINANCIAL (3.9%)
Associates Corp. N.A. 7.75%................ 02/15/05 AA- 500 530,000
General Motors Acceptance Corp. Note 8.60%. 05/10/96 BBB+ 500 510,715
6.40%..................................... 07/30/97 BBB+ 300 300,375
-----------
1,341,090
-----------
HEALTH CARE (3.5%)
Becton Dickinson 8.70%..................... 01/15/25 A+ 250 278,750
Columbia Healthcare 9.00%.................. 12/15/14 BBB+ 820 926,600
-----------
1,205,350
-----------
MACHINERY (NON-ELECTRIC) (2.0%)
Ingersoll-Rand 7.20%....................... 06/01/25 A 715 702,488
-----------
OIL - INTERNATIONAL (0.6%)
Phillips Petroleum 7.65%................... 09/15/21 BBB 200 222,500
-----------
PAPER & FOREST PRODUCTS (0.9%)
International Paper Debentures 8.125%...... 06/15/24 A- 300 313,500
-----------
RAILROADS (0.8%)
Union Pacific Co. 8.35%.................... 05/01/25 A- 250 271,875
-----------
RETAIL (0.6%)
Penney (J.C.) Inc.
Note 9.45%................................ 07/15/02 A+ 175 196,000
-----------
</TABLE>
<TABLE>
<CAPTION>
PAR
MATURITY RATING (000) VALUE
-------- ------ ------ -----------
<S> <C> <C> <C> <C>
SERVICES - EQUIPMENT RENTING & LEASING (0.3%)
Service Co. Int'l. 7.00%................... 06/01/15 BBB+ $ 100 $ 101,750
-----------
TELEPHONE (7.9%)
AT&T Corp. 8.35%........................... 01/15/25 AAA 1,000 1,067,500
Bellsouth Telephone 7.625%................. 05/15/35 AAA 750 749,063
New York Telephone 9.375%.................. 07/15/31 A 800 910,000
-----------
2,726,563
-----------
TOTAL CORPORATE BONDS
(Cost $14,490,969)................................................ 14,999,202
-----------
VARIABLE RATE DEMAND NOTES (13.0%)*
- -----------------------------------
Community Health Systems Inc. 6.40%........ 07/07/95 NR 1,500 1,500,000
Mississippi Business Finance Authority
6.20%..................................... 07/07/95 A+ 1,500 1,500,000
Illinois Development Finance Authority
6.15%..................................... 07/07/95 NR 1,500 1,500,000
-----------
TOTAL VARIABLE RATE DEMAND NOTES
(Cost $4,500,000)................................................. 4,500,000
-----------
MUNICIPAL BONDS (4.3%)
- ----------------------
Columbia County Georgia 6.10%
(Cost $1,500,000)......................... 03/01/10 NR 1,500 1,500,000
-----------
U.S. TREASURY OBLIGATIONS (21.9%)
- ---------------------------------
U.S. Treasury Bills 5.4599%................ 09/28/95 N/A 50 49,316
U.S. Treasury Bonds 7.25%.................. 05/15/16 N/A 3,505 3,723,642
U.S. Treasury Notes 7.50%.................. 02/15/05 N/A 3,500 3,814,930
8.00%..................................... 10/15/96 N/A 10 10,266
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $7,043,279)................................................. 7,598,154
-----------
AGENCY OBLIGATIONS (11.5%)
- --------------------------
Federal Home Loan Bank Discount Note 6.09%
(Cost $3,998,647)......................... 07/03/95 N/A 4,000 3,998,647
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
---------
<S> <C> <C>
PREFERRED STOCK (2.6%)
- ----------------------
Cleveland Electric Illuminating 9.125%
(Cost $897,412)........................................ 8,900 885,550
-----------
SHORT-TERM INVESTMENTS (3.5%)
- -----------------------------
Temporary Investment Fund Class B
(Cost $1,201,807)...................................... 1,201,807 1,201,807
-----------
TOTAL INVESTMENTS (100.0%)
(Cost $33,632,114) (a) (b)........................................ $34,683,360
===========
</TABLE>
- -------
(a) Cost for Federal income tax purposes.
(b) At June 30, 1995, the excess of value over tax cost was $1,111,266, and the
excess of tax cost over value was $60,020.
* Reset Demand Notes - The rate shown is the rate as of June 30, 1995, and the
maturity shown is the next date the principal can be recovered through
demand.
The Standard & Poor's corporation ratings are the most recent ratings
available at June 30, 1995.
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.
SCHEDULE OF INVESTMENTS - JUNE 30, 1995 (UNAUDITED)
THE HIGH YIELD BOND FUND
<TABLE>
<CAPTION>
PAR
MATURITY RATING (000) VALUE
-------- ------ ----- -----------
<S> <C> <C> <C> <C>
CORPORATE BONDS (92.0%)
- -----------------------
AEROSPACE & DEFENSE (2.5%)
Tracor, Inc. 10.875%......................... 08/15/01 B $250 $ 257,500
K&F Industries 11.875%....................... 12/01/03 B+ 550 561,000
-----------
818,500
-----------
AUTOMOBILES & RELATED (1.6%)
Exide Corp. 10.75%........................... 12/15/02 BB- 500 528,750
-----------
BEVERAGES (2.4%)
Texas Bottling Group 9.00%................... 11/15/03 B 500 492,500
Dr. Pepper Bottling Co. 21.03%++............. 02/15/03 CCC+ 400 300,000
-----------
792,500
-----------
BROADCAST MEDIA/ADVERTISING (6.4%)
Heritage Media 11.00%........................ 10/01/02 B 550 583,000
* Spectravision, Inc. 12.65%.................. 12/01/02 D 454 22,700
Granite Broadcasting 10.375%................. 05/15/05 B- 500 500,000
Infinity Broadcasting Corp. 10.375%.......... 03/15/02 BB- 500 530,000
Young Broadcasting 11.75%.................... 11/15/04 B 250 272,500
10.125%..................................... 02/15/05 B 250 251,875
-----------
2,160,075
-----------
BUILDING PRODUCTS (5.2%)
* Acme Holdings 11.75%........................ 06/01/00 D 500 260,000
Maxxam Group, Inc. 11.25%.................... 08/01/03 B- 500 467,500
Overhead Door, Inc. 12.25%................... 02/01/00 B- 750 753,750
Southdown, Inc. 14.00%....................... 10/15/01 B 250 280,000
-----------
1,761,250
-----------
CABLE OPERATORS (6.3%)
Continental Cablevision, Inc. 11.00%......... 06/01/07 BB- 500 555,000
Rogers Cable Systems 10.00%.................. 03/15/05 NR 500 513,750
Summit Communications Group 10.50%........... 04/15/05 BB+ 500 545,000
Videotron Group LTD. 10.625%................. 02/15/05 BB+ 500 526,250
-----------
2,140,000
-----------
CONGLOMERATES (2.9%)
Interlake Corp. 12.125%...................... 03/01/02 CCC+ 500 493,750
Jordan Industries 10.375%.................... 08/01/03 B+ 300 276,750
4.58%++..................................... 08/01/05 B- 350 208,250
-----------
978,750
-----------
CONTAINER (7.6%)
Owens, Inc. 10.00%........................... 08/01/02 B+ 500 508,750
Plastic Containers 10.75%.................... 04/01/01 B+ 750 780,000
Riverwood International Corp. 10.375%........ 06/30/04 B 250 275,000
11.25%...................................... 06/15/02 B 250 272,500
Silgan Corp. 11.75%.......................... 06/15/02 B- 375 391,875
1.32%++..................................... 12/15/02 B- 375 343,125
-----------
2,571,250
-----------
</TABLE>
<TABLE>
<CAPTION>
PAR
MATURITY RATING (000) VALUE
-------- ------ ----- -----------
<S> <C> <C> <C> <C>
ENERGY (2.9%)
Maxus Energy Corp. 9.375%.................... 11/01/03 BB- $500 $ 462,500
Petroleum Heat & Power 12.25%................ 02/01/05 B+ 500 530,000
-----------
992,500
-----------
FOOD/PROCESSING (1.5%)
Mafco, Inc. 11.875%.......................... 11/15/02 B 500 498,750
-----------
FOOD/TOBACCO (1.5%)
Consolidated Cigar 10.50%.................... 03/01/03 B 500 497,500
-----------
HEALTHCARE (7.1%)
HillHaven Corp. 10.125%...................... 09/01/01 B- 500 520,000
National Medical 10.125%..................... 03/01/05 B+ 500 528,125
Quorum Health Group 11.875%.................. 12/15/02 B+ 490 536,550
Wright Medical Technology, Inc. 10.75%....... 07/01/00 NR 800 804,000
-----------
2,388,675
-----------
HOTEL GAMING (5.5%)
*Capital Gaming Prom Notes 45.70%++........... 08/01/95 NR 5 500
* Belle Casinos, Inc. 12.00%.................. 10/15/00 NR 350 140,000
*@ Elsinore Corp. 12.50%...................... 10/01/00 NR 500 250,000
Hollywood Casino 14.00%...................... 04/01/98 NR 500 548,750
Player Intl. 10.875%......................... 04/15/05 BB 500 495,000
President Riverboat Casino 13.00%............ 09/15/01 B 500 430,000
-----------
1,864,250
-----------
MANUFACTURING (5.3%)
American Standard 9.875%..................... 06/01/01 B 750 772,500
Coltec Industries 10.25%..................... 04/01/02 BB- 250 258,750
IMO Industries 12.25%........................ 08/15/97 B- 250 250,625
12.00%...................................... 11/01/01 B- 500 517,500
-----------
1,799,375
-----------
MEDIA & ADVERTISING (1.6%)
America Media 11.625%........................ 11/15/04 B 500 535,000
-----------
METALS (1.6%)
UCAR Global Enterprises 12.00%............... 01/15/05 B 500 540,000
-----------
MISCELLANEOUS (2.7%)
Pronet, Inc. 11.875%......................... 06/15/05 B- 500 502,500
Transtexas Gas 11.50%........................ 06/15/02 BB- 400 408,000
-----------
910,500
-----------
NATURAL RESOURCE (2.2%)
Gulf Canada Resources 9.625%................. 07/01/05 B+ 750 743,438
-----------
PAPER & PAPER PRODUCTS (6.1%)
Container Corp. 11.25%....................... 05/01/04 B+ 250 260,000
Repap Wisconsin 9.875%....................... 05/01/06 B+ 500 483,750
S.D. Warren Co. 12.00%....................... 12/15/04 B+ 500 538,750
Stone Container Corp. 10.75%................. 04/01/02 B 250 253,750
10.75%...................................... 10/01/02 BB- 500 523,750
-----------
2,060,000
-----------
</TABLE>
8
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
MATURITY RATING (000) VALUE
-------- ------ ----- -----------
<S> <C> <C> <C> <C>
RESTAURANTS (1.4%)
Flagstar Corp. 10.75%........................ 09/15/01 B- $500 $ 470,000
-----------
RETAIL - SPECIALTY (1.4%)
Loehmanns Holdings 10.50%.................... 10/01/97 NR 500 480,000
-----------
SAVINGS & LOAN HOLDING COMPANY (1.5%)
First Federal Financial 11.75%............... 10/01/04 B+ 500 502,500
-----------
SERVICE (1.9%)
Anacomp International 9.00%.................. 01/15/96 NR 100 60,000
Solon Automated Services 12.75%.............. 07/15/01 B+ 500 492,500
13.75%...................................... 10/15/02 B- 100 98,000
-----------
650,500
-----------
SPECIALTY CHEMICALS (4.6%)
Agricultural Minerals, Inc. 10.75%........... 09/30/03 B+ 750 770,625
IMC Fertilizer 10.75%........................ 06/15/03 BB- 500 533,750
IMC Fertilizer Group 9.45%................... 12/15/11 BB- 250 251,250
-----------
1,555,625
-----------
SUPERMARKETS (3.1%)
Penn Traffic Co. 9.63%....................... 04/15/05 B 550 518,375
Pathmark Stores 6.25%++...................... 11/01/03 B 875 525,000
-----------
1,043,375
-----------
TELE COMMUNICATIONS (1.2%)
Mobilemedia Communications 21.73%++.......... 12/01/03 B- 600 399,000
-----------
TEXTILES & APPAREL (1.8%)
Dan River Inc. 10.125%....................... 12/15/03 B 500 495,000
Plaid Clothing, Inc. 11.00%.................. 08/01/03 D 375 108,750
-----------
603,750
-----------
TRANSPORTATION - MISCELLANEOUS (1.6%)
Sea Containers LTD. 12.50%................... 12/01/04 BB- 500 545,000
-----------
UTILITIES - GAS (0.6%)
Crown Central Petroleum 10.875%.............. 02/01/05 BB- 200 209,000
-----------
TOTAL CORPORATE BONDS
(Cost $31,894,964)................................................. 31,039,813
-----------
COMMERCIAL PAPER (3.8%)
- -----------------------
Siemens Corp. 6.20%.......................... 07/03/95 NR 664 663,771
Southwestern Bell Telephone Co. 6.00%........ 08/04/95 AA 639 635,321
-----------
TOTAL COMMERCIAL PAPER
(Cost $1,299,150).................................................. 1,299,092
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
-------- -----------
<S> <C> <C>
COMMON STOCK (2.6%)
- -------------------
+ Berg Electronics........................................ 30,820 $ 154,100
Borg Warner Automotive................................... 6,100 173,088
+ Capital Gaming International, Inc. ..................... 13,335 9,161
+ Dr. Pepper Bottling Co. Class B......................... 7,000 28,000
+ Dr. Pepper Class A...................................... 53,000 212,000
Exide Corp............................................... 3,800 163,400
+ Gaylord Containers Corp. Class A........................ 10,000 118,750
+ Loehmanns Holdings, Class B............................. 11,080 2,216
Protection One, Inc...................................... 4,200 25,200
-----------
TOTAL COMMON STOCK
(Cost $696,814)................................................... 885,915
-----------
PREFERRED STOCK (1.3%)
- ----------------------
Berg Electronics Holdings................................ 15,662 422,874
Loehmanns Holdings, Sr. A................................ 19,895 5,968
-----------
TOTAL PREFERRED STOCK
(Cost $285,470)................................................... 428,842
-----------
<CAPTION>
WARRANTS
--------
<S> <C> <C>
WARRANTS (0.3%)
- ---------------
+ Belle Casino............................................ 350 3
+ Capital Gaming International............................ 11,375 1,422
+ Elsinore Corp. ......................................... 26,647 5,329
+ Loehmann's Holdings, Inc................................ 31,735 30,148
+ President Riverboat Casinos............................. 3,000 0
+ President Riverboat..................................... 4,415 13,245
+ Sam Houston............................................. 2,000 0
+ Wright Medical Technology Units Inc..................... 2,676 44,162
-----------
TOTAL WARRANTS
(Cost $130,879)................................................... 94,309
-----------
TOTAL INVESTMENTS (100.0%)
(Cost $34,307,277) (a) (b)........................................ $33,747,971
===========
</TABLE>
- -------
+ Non-income producing.
++ Effective Yield.
* Security in default.
(a) Cost for Federal income tax purposes.
(b) At June 30, 1995 the excess of value over tax cost was $1,369,538, and the
excess of tax cost over value was $1,928,844.
@ Restricted Security.
The Standard & Poor's Corporation ratings are the most recent ratings
available at June 30, 1995.
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.
SCHEDULE OF INVESTMENTS - JUNE 30, 1995 (UNAUDITED)
THE GROWTH EQUITY FUND
<TABLE>
<CAPTION>
SHARES VALUE
------ -----------
<S> <C> <C>
COMMON STOCK (95.7%)
- --------------------
AEROSPACE - DEFENSE (1.3%)
United Technologies Corp.................................... 15,000 $ 1,171,875
-----------
BROADCAST MEDIA (4.9%)
Capital Cities/ABC, Inc..................................... 22,000 2,376,000
TCA Cable T.V., Inc......................................... 75,000 2,015,625
-----------
4,391,625
-----------
BUILDING MATERIALS (1.2%)
Sherwin Williams............................................ 30,000 1,068,750
-----------
BEVERAGES - SOFT DRINKS (2.0%)
Pepsico, Inc................................................ 40,000 1,825,000
-----------
CHEMICALS (1.1%)
Sigma Aldrich Corp.......................................... 20,000 982,500
-----------
COMMUNICATION EQUIPMENT (0.7%)
+ DSC Communications Corp.................................... 15,000 698,437
-----------
COMPUTER SOFTWARE & SERVICES (10.8%)
+ Arrow Electronics, Inc..................................... 15,000 746,250
+ Cadence Design Systems, Inc................................ 45,000 1,456,875
Computer Associates International........................... 20,000 1,355,000
General Motors Corp. CL E................................... 45,000 1,957,500
+ Microsoft Corp. ........................................... 15,000 1,356,563
+ Oracle Corp................................................ 15,000 578,438
+ Parametric Technology Corp................................. 15,000 744,375
Paychex, Inc................................................ 40,000 1,460,000
-----------
9,655,001
-----------
COMPUTER SYSTEMS (8.7%)
+ Adaptec, Inc. ............................................. 30,000 1,106,250
+ Cabletron Systems, Inc..................................... 25,000 1,331,250
+ Cisco Sytems............................................... 35,000 1,769,687
+ Computer Science Corp...................................... 30,000 1,706,250
+ EMC Corp. ................................................. 80,000 1,940,000
-----------
7,853,437
-----------
DRUGS (11.2%)
Abbott Laboratories......................................... 20,000 810,000
+ Amgen, Inc................................................. 25,000 2,009,375
Cardinal Health, Inc. ...................................... 30,000 1,417,500
Merck & Company, Inc........................................ 30,000 1,470,000
Mylan Laboratories, Inc. ................................... 20,000 615,000
Pfizer, Inc................................................. 25,000 2,309,375
Schering Plough Corp. ...................................... 20,000 882,500
+ Watson Pharmaceuticals, Inc. .............................. 15,000 583,125
-----------
10,096,875
-----------
ELECTRICAL EQUIPMENT (0.9%)
+ American Power Conversion Corp............................. 35,000 802,813
-----------
ELECTRONICS - SEMICONDUCTORS (7.5%)
Intel Corp.................................................. 6,000 379,875
+ LAM Research Corp. ........................................ 12,000 766,500
Motorola Inc................................................ 45,000 3,020,625
+ Vishay Intertechnology, Inc. .............................. 70,000 2,528,750
-----------
6,695,750
-----------
ENTERTAINMENT (4.1%)
+ Circus Circus Enterprises, Inc. ........................... 15,000 528,750
Mattel, Inc................................................. 85,000 2,210,000
+ Mirage Resorts, Inc........................................ 30,000 918,750
-----------
3,657,500
-----------
FOODS (1.4%)
CPC International, Inc...................................... 20,000 1,235,000
-----------
HEALTH CARE - DIVERSIFIED (1.5%)
Johnson & Johnson, Inc...................................... 20,000 1,352,500
-----------
HEALTH CARE - MISCELLANEOUS (2.2%)
+ Idexx Lab Corp............................................. 75,000 1,964,062
-----------
HOSPITAL SUPPLIES (1.1%)
+ Sybron Intl. Corp. ........................................ 25,000 996,875
-----------
HOTEL - MOTEL (1.1%)
+ Promus Companies, Inc...................................... 25,000 975,000
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
--------- -----------
<S> <C> <C>
HOUSEHOLD PRODUCTS (1.2%)
Procter & Gamble Co. ................................... 15,000 $ 1,078,125
-----------
INFORMATION PROCESSING (0.8%)
International Business Machines Corp.................... 8,000 768,000
-----------
MACHINERY - DIVERSIFIED (1.7%)
+ Crown Cork & Seal Co., Inc. ........................... 30,000 1,503,750
-----------
MAJOR REGIONAL BANK (2.8%)
MBNA Corp............................................... 35,000 1,181,250
Green Tree Financial Corp............................... 30,000 1,331,250
-----------
2,512,500
-----------
MANUFACTURING - DIVERSIFIED (1.4%)
Eastman Kodak Co........................................ 20,000 1,212,500
-----------
MISCELLANEOUS - FINANCIAL (11.2%)
Advanta Corp............................................ 50,000 1,881,250
First Data Corp......................................... 50,000 2,843,750
First Financial Management Corp......................... 18,000 1,539,000
First USA Inc........................................... 20,000 887,500
+ Fiserv, Inc............................................ 70,000 1,955,625
Mercury Finance Co...................................... 50,000 962,500
-----------
10,069,625
-----------
MISCELLANEOUS - SERVICES (3.5%)
Browning Ferris Industries.............................. 30,000 1,083,750
Danka Business Systems.................................. 45,000 1,091,250
Omnicom Group, Inc...................................... 16,000 970,000
-----------
3,145,000
-----------
MONEY CENTER BANKS (1.0%)
Citicorp................................................ 15,000 868,125
-----------
OFFICE EQUIPMENT & SUPPLIES (0.9%)
Alco Standard Corp...................................... 10,000 798,750
-----------
OIL SERVICE (0.6%)
+ Input Output, Inc...................................... 15,000 540,000
-----------
PUBLISHING & PRINTING (1.2%)
+ Scholastic Corp........................................ 20,000 1,090,000
-----------
RESTAURANTS (3.2%)
+ Lone Star Steakhouse................................... 45,000 1,361,250
McDonald's Corp......................................... 40,000 1,565,000
-----------
2,926,250
-----------
RETAIL STORES - DEPARTMENT (0.7%)
+ Consolidated Stores Corp............................... 30,000 626,250
-----------
RETAIL STORES - GENERAL MERCHANDISE (0.9%)
Wal Mart Stores, Inc. .................................. 30,000 802,500
-----------
RETAIL - SPECIALTY (1.0%)
Circuit City Store, Inc................................. 15,000 474,375
Home Depot, Inc......................................... 10,000 406,250
-----------
880,625
-----------
SHOES (1.9%)
Nike, Inc............................................... 20,000 1,680,000
-----------
TOTAL COMMON STOCK
(Cost $74,910,379)................................................ 85,925,000
-----------
SHORT-TERM INVESTMENTS (4.3%)
- -----------------------------
Temporary Investment Fund, Inc.
(Cost $3,840,092)...................................... 3,840,092 3,840,092
-----------
TOTAL INVESTMENTS (100.0%)
(Cost $78,750,471) (a) (b)........................................ $89,765,092
===========
</TABLE>
- -------
+ Non-income producing.
(a) Cost for Federal income tax purposes.
(b) At June 30, 1995 the excess of value over tax cost was $11,555,588, and the
excess of tax cost over value was $540,967.
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.
SCHEDULE OF INVESTMENTS - JUNE 30, 1995 (UNAUDITED)
THE VALUE EQUITY FUND
<TABLE>
<CAPTION>
SHARES VALUE
------- ------------
<S> <C> <C>
COMMON STOCK (84.9%)
- --------------------
AEROSPACE - DEFENSE (8.3%)
Allied-Signal Inc. ....................................... 57,000 $ 2,536,500
+ Coltec Industries, Inc................................... 155,000 2,673,750
McDonnell Douglas Corp.................................... 46,500 3,568,875
------------
8,779,125
------------
BANK & TRUST (5.2%)
Citicorp.................................................. 57,000 3,298,875
Mellon Bank Corp.......................................... 52,201 2,172,867
------------
5,471,742
------------
CAPITAL GOODS (4.0%)
General Electric Co. ..................................... 42,000 2,367,750
Sundstrand Corp........................................... 31,000 1,852,250
------------
4,220,000
------------
CHEMICALS (2.4%)
Hercules, Inc............................................. 21,000 1,023,750
Monsanto Co. ............................................. 17,000 1,532,125
------------
2,555,875
------------
COMPUTER SERVICES & SOFTWARE (3.1%)
Intel Corp. .............................................. 52,000 3,292,250
------------
CONSUMER CYCLICAL (8.4%)
May Department Stores Co. ................................ 124,000 5,161,500
Penny (J.C.) Co., Inc. ................................... 26,000 1,248,000
Warnaco Group, Inc. ...................................... 124,000 2,480,000
------------
8,889,500
------------
CONSUMER NON-DURABLE (6.4%)
Avon Products, Inc........................................ 25,000 1,675,000
Dole Food Co. ............................................ 33,000 961,125
Mattel, Inc. ............................................. 83,625 2,174,250
Sara Lee Corp. ........................................... 69,000 1,966,500
------------
6,776,875
------------
CONSUMER PRODUCTS (2.2%)
Hasbro, Inc. ............................................. 75,000 2,381,250
------------
DRUGS & COSMETICS (2.8%)
Becton Dickinson & Co..................................... 51,000 2,970,750
------------
ELECTRONIC COMPONENTS (2.4%)
+ Arrow Electronics, Inc................................... 51,000 2,537,250
------------
FINANCIAL SERVICES (8.1%)
American Express Co. ..................................... 51,000 1,791,375
Federal Home Loan Mortgage Corp........................... 45,000 3,093,750
Morgan Stanley Group, Inc. ............................... 22,000 1,782,000
Transamerica Corp. ....................................... 33,000 1,922,250
------------
8,589,375
------------
HEALTH CARE - MISCELLANEOUS (1.4%)
Columbia HCA Healthcare Corp. ............................ 35,000 1,513,750
------------
INSURANCE (12.5%)
AFLAC, Inc................................................ 30,250 1,323,437
American International Group, Inc......................... 25,000 2,850,000
Exel LTD. ................................................ 103,800 5,397,600
General Re Corp........................................... 9,000 1,204,875
Progressive Corp. Ohio.................................... 63,000 2,417,625
------------
13,193,537
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------- ------------
<S> <C> <C>
MEDICAL (1.8%)
+ Tenet Healthcare Corp. .................................. 135,000 $ 1,940,625
------------
MINING (1.2%)
Freeport McMoran Copper & Gold............................ 2,511 51,789
+ Freeport McMoran, Inc.................................... 67,000 1,180,875
------------
1,232,664
------------
OIL (2.3%)
+ Triton Energy Corp....................................... 52,000 2,411,500
------------
PAPER & PAPER PRODUCTS (3.9%)
Champion International Corp. ............................. 40,000 2,085,000
Temple Inland, Inc. ...................................... 44,000 2,095,500
------------
4,180,500
------------
PHARMACEUTICALS (2.0%)
Warner Lambert Co......................................... 25,000 2,159,375
------------
RAILROADS (2.0%)
CSX Corp.................................................. 28,000 2,103,500
------------
TELECOMMUNICATIONS (2.3%)
Sprint Corp. ............................................. 72,250 2,429,406
------------
TEXTILE - APPAREL (2.2%)
Shaw Industries, Inc. .................................... 140,000 2,380,000
------------
TOTAL COMMON STOCK
(Cost $69,972,962)................................................ 90,008,849
------------
</TABLE>
<TABLE>
<CAPTION>
PAR
MATURITY (000)
-------- ------
<S> <C> <C> <C>
COMMERCIAL PAPER (13.1%)
- ------------------------
Beneficial Corp. 5.91%............................ 07/05/95 $2,225 2,223,539
Ford Motor Credit Co. 5.94%....................... 07/12/95 2,600 2,595,281
5.96%............................................ 07/26/95 2,190 2,180,936
Household Finance Corp. 5.93%..................... 07/19/95 1,000 997,035
John Deere Credit Corp. 5.94%..................... 08/02/95 1,000 994,720
Prudential Funding Corp. 5.93%.................... 07/26/95 5,000 4,979,410
------------
TOTAL COMMERCIAL PAPER
(Cost $13,970,921)................................................ 13,970,921
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
---------
<S> <C> <C>
SHORT-TERM INVESTMENTS (2.0%)
- -----------------------------
Temporary Investment Fund, Inc.
(Cost $2,077,896)..................................... 2,007,896 2,077,896
------------
TOTAL INVESTMENTS (100.0%)
(Cost $86,021,779) (a) (b)....................................... $106,057,666
============
</TABLE>
- -------
+ Non-income producing.
(a) Cost for Federal income tax purposes.
(b) At June 30, 1995, the excess of value over tax cost was $20,429,948, and
the excess of tax cost over value was $394,061.
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.
SCHEDULE OF INVESTMENTS - JUNE 30, 1995 (UNAUDITED)
THE FLEXIBLY MANAGED FUND
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
COMMON STOCK (51.1%)
- --------------------
AEROSPACE & DEFENSE (1.0%)
+ Litton Industries, Inc.................................... 13,000 $ 479,375
Teledyne, Inc. ............................................ 69,000 1,690,500
-----------
2,169,875
-----------
CHEMICALS (0.7%)
Great Lakes Chemical Corp. ................................ 27,000 1,626,750
-----------
CONSTRUCTION (1.6%)
+ Manville Corp............................................. 255,000 3,506,250
-----------
DIVERSIFIED CHEMICALS (0.3%)
Cabot Corp. ............................................... 11,000 580,250
-----------
DRUGS & COSMETICS (0.8%)
Schering Plough Corp....................................... 40,000 1,765,000
-----------
ELECTRIC UTILITIES (5.5%)
Centerior Energy Corp...................................... 260,000 2,502,500
Entergy Corp. ............................................. 250,000 6,031,250
+ Public Service Co. of New Mexico.......................... 150,000 2,137,500
SCE Corp. ................................................. 75,000 1,284,375
-----------
11,955,625
-----------
ENERGY SERVICES (0.4%)
Helmerich & Payne, Inc..................................... 32,000 944,000
-----------
FINANCIAL SERVICES (4.2%)
American Express Co. ...................................... 74,000 2,599,250
Federal National Mortgage Assoc. .......................... 21,000 1,981,875
Green Point Financial Corp. ............................... 7,000 165,375
Student Loan Marketing Assoc............................... 97,200 4,556,250
-----------
9,302,750
-----------
FOREST PRODUCTS (1.5%)
Weyerhaeuser Co. .......................................... 70,000 3,298,750
-----------
GENERAL MERCHANDISERS (0.5%)
+ Hills Stores Co........................................... 48,000 1,152,000
-----------
HOSPITAL SUPPLIES/HOSPITAL MANAGEMENT (0.0%)
Lynx Therapeutics, Inc. ................................... 1,620 324
-----------
INSURANCE (5.6%)
+ Fund American Enterprises Holdings, Inc. ................. 15,000 1,070,625
Home Beneficial Corp. ..................................... 26,000 526,500
Kemper Corp. .............................................. 55,000 2,564,375
Loews Corp. ............................................... 50,000 6,050,000
Unitrin, Inc. ............................................. 42,000 1,995,000
-----------
12,206,500
-----------
INSURANCE (LIFE) (0.0%)
UNUM Corp.................................................. 2,000 93,750
-----------
INTEGRATED PETROLEUM - DOMESTIC (4.8%)
Atlantic Richfield Co. .................................... 24,000 2,634,000
Kerr McGee Corp............................................ 9,000 482,625
Murphy Oil Corp............................................ 60,000 2,460,000
+ Oryx Energy Co. .......................................... 70,000 962,500
Pennzoil Co. .............................................. 30,000 1,413,750
Sun Company, Inc........................................... 17,000 465,375
Union Texas Petroleum Holding, Inc. ....................... 75,000 1,584,375
Unocal Corp. .............................................. 16,000 442,000
-----------
10,444,625
-----------
INTEGRATED PETROLEUM INTERNATIONAL (1.7%)
Texaco, Inc. .............................................. 55,000 3,609,375
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
MEDIA & COMMUNICATIONS (5.7%)
+ Chris-Craft Industries, Inc............................... 60,000 $ 2,100,000
Meredith Corp.............................................. 50,000 1,268,750
New York Times Co., Class A................................ 210,000 4,935,000
Washington Post Co., Class B............................... 16,000 4,176,000
-----------
12,479,750
-----------
MINING (1.8%)
Homestake Mining Co. ...................................... 80,000 1,320,000
Newmont Mining Corp. ...................................... 60,000 2,512,500
+ Santa Fe Pacific Gold Corp. .............................. 17,000 206,125
-----------
4,038,625
-----------
MISCELLANEOUS CONSUMER DURABLES (1.4%)
Polaroid Corp.............................................. 75,000 3,056,250
-----------
MISCELLANEOUS CONSUMER PRODUCTS (2.0%)
Philip Morris Companies, Inc............................... 59,000 4,388,125
-----------
PETROLEUM - INTERNATIONAL (0.7%)
Petro Canada............................................... 150,000 1,419,937
-----------
PHARMACEUTICALS (3.5%)
Eli Lilly & Co............................................. 25,000 1,962,500
+ Genentech, Inc. .......................................... 90,000 4,376,250
Upjohn Co. ................................................ 32,000 1,212,000
-----------
7,550,750
-----------
PUBLISHING (0.3%)
Times Mirror Co. Series A.................................. 30,000 716,250
-----------
SPECIALTY MERCHANDISERS (3.4%)
+ Petrie Stores Corp. ...................................... 633,677 4,277,320
+ Toys R Us, Inc. .......................................... 108,988 3,187,899
-----------
7,465,219
-----------
TRANSPORTATION SERVICES (2.4%)
Overseas Shipholding Group, Inc............................ 60,000 1,245,000
PHH Corp................................................... 73,000 3,248,500
Ryder System, Inc.......................................... 30,000 716,250
-----------
5,209,750
-----------
UTILITIES - ELECTRIC (0.7%)
Niagara Mohawk Power Corp. ................................ 110,000 1,622,500
-----------
MISCELLANEOUS (0.6%)
Lonrho LTD. ............................................... 300,000 706,298
+Republic of Austria Stock Index
Growth Notes............................................. 37,100 575,050
-----------
1,281,348
-----------
TOTAL COMMON STOCK
(Cost $96,011,231)................................................. 111,884,328
-----------
PREFERRED STOCK (5.6%)
- ----------------------
+ Cleveland Electric Illum. 0.00%........................... 2,500 177,500
Cleveland Electric Illum. 8.80%............................ 1,850 1,581,750
Cleveland Electric Illum. 9.00%............................ 2,650 2,279,000
GATX Corp. $3.875 Convertible.............................. 1,500 84,000
Gulf Canadian Resources LTD. .............................. 118,400 333,000
Gulf States Utilities Co. Depositary 8.75%................. 7,426 366,195
Kemper Corp. .............................................. 46,000 2,256,898
Manville Corp. Series B 2.70%.............................. 145,000 3,625,000
Newmont Mining, Inc........................................ 20,000 1,167,500
Rouse Corp. 6.50% Convertible.............................. 7,000 357,000
Teledyne, Inc. Series E.................................... 1,440 21,060
-----------
TOTAL PREFERRED STOCK
(Cost $11,112,728)................................................. 12,248,903
-----------
</TABLE>
12
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF CONTRACTS VALUE
------------ ------------
<S> <C> <C>
PUT OPTIONS (0.2%)
- ------------------
+ American Express $40 October 21, 1995............... 75 $ 37,969
+ Champion $50 December 16, 1995...................... 100 23,750
+ Champion $55 December 16, 1995...................... 20 10,500
+ Champion Int'l $45 September 16, 1995............... 20 375
+ Kerr McGee $55 October 21, 1995..................... 30 7,875
+ Kerr McGee $60 October 21, 1995..................... 30 19,500
+ Microsoft $65 July 21, 1995......................... 40 125
+ Microsoft $65 October 21, 1995...................... 80 3,000
+ Microsoft $80 October 21, 1995...................... 40 7,500
+ Pennzoil $55 October 21, 1995....................... 30 24,000
+ Teledyne $30 October 21, 1995....................... 30 17,250
+ Toys R Us $25 December 16, 1995..................... 245 15,312
+ Toys R Us $25 September 15, 1995.................... 200 5,000
+ Toys R Us $30 December 16, 1995..................... 510 121,125
+ Toys R Us $30 September 16, 1995.................... 550 110,000
------------
TOTAL PUT OPTIONS
(Cost $767,704)................................................... 403,281
------------
</TABLE>
<TABLE>
<CAPTION>
PAR
MATURITY RATING (000)
-------- ------ ------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS (4.1%)
- ----------------------------------
U.S. Treasury Notes 4.625%................. 08/15/95 N/A $ 500 499,295
5.125%.................................... 11/15/95 N/A 500 498,905
4.25%..................................... 12/31/95 N/A 1,000 993,440
4.625%.................................... 02/15/96 N/A 500 496,640
4.625%.................................... 02/29/96 N/A 1,500 1,489,680
4.25%..................................... 05/15/96 N/A 500 493,515
5.75%..................................... 10/31/97 N/A 2,500 2,492,975
7.375%.................................... 11/15/97 N/A 2,000 2,065,000
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Cost $8,908,984)................................................. 9,029,450
------------
COMMERCIAL PAPER (21.6%)
- ------------------------
A.O.N. Corp. 5.87%......................... 07/17/95 AA 1,500 1,496,087
Abbott Laboratories 5.90%.................. 07/07/95 AAA 5,300 5,294,788
Albertson's Inc. 5.95%..................... 07/11/95 A+ 4,700 4,692,232
Coca Cola Financial Corp. 6.02%............ 07/06/95 NR 4,500 4,496,176
Falcon Asset Securitization Corp. 5.95%.... 07/03/95 NR 2,500 2,499,174
General Electric Capital Corp. 5.95%....... 07/10/95 AAA 1,448 1,445,810
5.84%..................................... 07/19/95 AAA 6,000 5,982,480
Met Life Funding Inc. 5.85%................ 08/22/95 AA+ 6,500 6,445,075
Motorola, Inc. 6.02%....................... 07/12/95 NR 1,000 998,161
Northern States Power Co. 5.95%............ 07/05/95 AA- 1,000 999,339
Preferred Receivable Fund Co. 5.98%........ 07/27/95 NR 3,850 3,833,372
5.90%..................................... 08/15/95 NR 5,850 5,806,856
Prudential Funding Corp. 5.95%............. 07/03/95 AA- 1,300 1,299,570
Vulcan Materials 5.95%..................... 07/05/95 AA- 2,000 1,998,678
------------
TOTAL COMMERCIAL PAPER
(Cost $47,287,895)................................................ 47,287,798
------------
</TABLE>
<TABLE>
<CAPTION>
PAR
MATURITY RATING (000) VALUE
-------- ------ ------- ------------
<S> <C> <C> <C> <C>
CONVERTIBLE BONDS (17.2%)
- -------------------------
ADT Operations 6.50%++................... 07/06/10 BB+ $ 1,600 $ 632,000
Alza Corp. 5.07%++....................... 07/14/14 BBB- 2,000 763,760
Automatic Data Processing, Inc. 5.19%++.. 02/20/12 AA 23,000 10,235,000
Champion International Subordinated
Debenture 6.50%......................... 04/15/11 BBB- 1,600 2,352,000
CHUBB Capital Euro Bond 6.00%............ 05/15/98 AA 1,200 1,237,500
Cigna Corp. 8.20%........................ 07/10/10 BBB 2,000 2,303,760
Comcast Corp. 3.375%..................... 09/09/05 B+ 1,300 1,228,500
Cooper Industries, Inc. 7.05%............ 01/01/15 BBB+ 594 614,790
Delta Air Lines, Inc. 3.23%.............. 06/15/03 B+ 3,000 2,861,250
Federated Department Stores, Inc. 9.72%.. 02/15/04 BB- 450 454,784
Fifth Third Bank 4.25%................... 11/15/98 A+ 200 201,500
Food Lion, Inc. 5.00%.................... 06/01/03 NR 1,000 955,630
Homestake Mining Co. 5.50%............... 06/23/00 BBB- 600 589,500
IBM (France) 5.75%....................... 01/01/98 NR 4,797 1,381,249
International Paper Corp. 5.75%.......... 09/23/02 BBB+ 1,500 1,822,500
Lonrho Conv. Euro Bond 6.00%............. 02/27/04 NR 250 353,944
Manville Deferred Interest Subordinate
Debenture 9.00%......................... 12/31/03 B 518 518,000
Potomac Electric Debenture 5.00%......... 09/01/02 A- 1,400 1,211,000
Price Co. Subordinated Debenture 6.75%... 03/01/01 BBB 1,300 1,287,000
5.50%................................... 02/28/12 BBB 1,800 1,687,500
Rockefeller Euro Debenture 13.00%........ 12/31/95 NR 200 204,500
Rouse Company Euro Bond 5.75%............ 07/23/02 BBB- 3,400 3,094,000
U.S. West, Inc. 7.01%++.................. 06/25/11 A 2,000 643,760
WMX Technologies 2.00%................... 01/24/05 A 1,171 985,104
------------
TOTAL CONVERTIBLE BONDS
(Cost $34,030,527)............................................... 37,618,531
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
-------
<S> <C> <C>
SHORT-TERM INVESTMENTS (0.2%)
- -----------------------------
Temporary Investment Fund, Inc.
(Cost $601,208)......................................... 601,208 601,208
------------
TOTAL INVESTMENTS (100.0%)
(Cost $198,720,277) (a) (b)...................................... $219,073,499
============
</TABLE>
- -------
+ Non-income producing.
++ Effective Yield.
(a) Cost for Federal income tax purposes.
(b) At June 30, 1995, the excess of value over tax cost was $24,225,293, and
the excess of tax cost over value was $3,872,071.
The Standard & Poor's Corporation ratings are the most recent rating
available at June 30, 1995.
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.
SCHEDULE OF INVESTMENTS - JUNE 30, 1995 (UNAUDITED)
THE INTERNATIONAL EQUITY FUND
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
COMMON STOCK (92.2%)
- --------------------
AUSTRALIA (2.8%)
Broken Hill Proprietary Co. Limited....................... 50,000 $ 615,275
News Corp. Limited........................................ 120,308 671,844
Westpac Banking Corp. .................................... 110,584 399,909
-----------
1,687,028
-----------
BRAZIL (0.3%)
Centrais Eletrocas Brasileiras SA (ADR)................... 5,000 67,500
Telecomunicacoes Brasileiras SA (ADR)..................... 4,000 136,000
Telecomunicacoes Brasileiras SA (ADR) 144A................ 91 3,106
-----------
206,606
-----------
FINLAND (0.9%)
Cultor OY, Series II...................................... 10,000 325,146
Vaisala OY A.............................................. 7,000 193,216
-----------
518,362
-----------
FRANCE (7.5%)
Alcatel Alsthom........................................... 4,000 360,374
AXA SA.................................................... 20,000 1,080,791
Compagnie Bancaire SA..................................... 6,050 723,759
Compagnie Generale Des Eaux............................... 5,500 612,586
Credit Local De France SA................................. 5,000 464,080
Lafarge SA................................................ 7,000 544,603
Total SA - B.............................................. 7,000 421,591
Valeo SA.................................................. 8,000 389,250
-----------
4,597,034
-----------
GERMANY (6.1%)
Bayer AG Bearer........................................... 1,500 372,857
BMW....................................................... 600 329,356
Bayerische Hypotheken-und Wechsel-Bank AG................. 1,500 408,982
Deutsche Bank AG.......................................... 7,000 340,204
Gehe AG................................................... 600 276,850
+ Gehe AG - New............................................ 150 66,717
Karstadt AG............................................... 1,200 525,928
Mannesmann AG............................................. 787 240,477
Muenchener Rueckversicherungs-Gesellschaft................ 150 284,227
Siemens AG................................................ 1,000 495,625
Veba AG................................................... 1,000 392,710
-----------
3,733,933
-----------
HONG KONG (5.5%)
Bank of East Asia Limited................................. 150,000 451,655
Cheung Kong Holdings Limited.............................. 115,000 569,189
Hutchison Whampoa......................................... 100,000 483,317
Sun Hung Kai Properties Limited........................... 150,000 1,109,754
Swire Pacific Limited A................................... 43,000 327,854
Wharf Holdings............................................ 125,000 407,879
-----------
3,349,648
-----------
IRELAND (2.0%)
Allied Irish Banks PLC.................................... 83,433 395,511
CRH PLC................................................... 60,000 406,599
Greencore Group PLC....................................... 55,607 419,288
-----------
1,221,398
-----------
ITALY (0.7%)
Banca Commerciale Italiana................................ 90,000 203,608
Stet (Societa Finanziaria Telefonica)..................... 80,000 221,339
-----------
424,947
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
JAPAN (25.3%)
Amada Metrecs............................................ 20,000 $ 257,303
Bridgestone Corp. ....................................... 30,000 442,608
Canon Inc. .............................................. 46,000 749,248
Hitachi ................................................. 80,000 797,876
Honda Motor Co. ......................................... 30,000 460,313
Ito-Yokado Co. .......................................... 7,000 369,312
Itochu Fuel Corp. ....................................... 25,000 212,452
Jaccs Co. Limited ....................................... 30,000 279,729
Kumagai Gumi Co. ........................................ 70,000 293,302
Kyocera Corp. ........................................... 10,000 823,842
Kyosei Rentemu Co. Limited .............................. 10,000 135,733
Marubeni Corp. .......................................... 95,000 483,269
Matsushita Electric Industrial .......................... 12,000 186,958
Matsushita Electric Industries (ADR) .................... 1,000 155,000
Max Co. ................................................. 12,000 256,359
Minebea Co. ............................................. 30,000 192,623
Mitsubishi Bank ......................................... 11,000 237,592
Mitsubishi Electric Corp. ............................... 100,000 703,452
Mitsubishi Heavy Industries ............................. 80,000 543,877
Murata Manufacturing Co. ................................ 18,000 681,971
Nippon Denso ............................................ 20,000 363,529
Nippon Telegraph & Telephone Corp. ...................... 50 419,003
Nippon Yusen Kabushiki Kaish ............................ 65,000 364,414
Nomura Securities Co. Limited ........................... 12,000 209,619
Omron Corp. ............................................. 50,000 956,034
Rohm Co. ................................................ 20,000 1,033,933
Sony Corp. .............................................. 8,700 417,929
Sony Music Entertainment (Japan)......................... 7,300 309,318
Suzuki Motor Corp. ...................................... 47,000 524,225
Taisho Pharmaceutical Co. ............................... 10,000 193,567
Tanabe Management Consulting Co. ........................ 1,300 15,190
Teijin................................................... 100,000 479,197
Toda Construction Co. ................................... 35,000 307,347
Tokyo Broadcasting System................................ 20,000 285,630
Tokyo Denpa Co. Limited.................................. 7,000 330,481
Tokyo Electron Limited................................... 10,000 342,284
Topre Corp. ............................................. 35,000 256,123
York-Benimaru Co. Limited................................ 8,000 302,154
-----------
15,372,796
-----------
MALAYSIA (3.7%)
Genting Berhad........................................... 75,000 741,538
Malayan Banking Berhad................................... 44,500 352,349
Pilecon Engineering Berhad............................... 150,000 192,000
Sime Darby Berhad........................................ 132,000 368,246
Telekom Malaysia Berhad.................................. 35,000 265,641
United Engineers Berhad.................................. 50,000 317,949
-----------
2,237,723
-----------
MEXICO (0.3%)
Fomento Economico Mexicano, S.A. ........................ 90,000 211,511
-----------
NETHERLANDS (2.2%)
Aegon N.V. (ADR)......................................... 9,397 327,720
Akzo Nobel N.V. (ADR).................................... 4,000 239,500
Elsevier N.V. ........................................... 40,000 472,350
Polygram N.V. (ADR)...................................... 5,000 295,625
-----------
1,335,195
-----------
NORWAY (1.0%)
+ Petroleum Geo-Services A/S (ADR)..........................15,000 431,250
Tomra Systems A/S........................................ 50,000 196,365
-----------
627,615
-----------
</TABLE>
14
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
PHILIPPINES (1.3%)
Manila Electric Co. - B.................................... 52,500 $ 421,563
San Miguel Corp. - B....................................... 90,000 373,678
-----------
795,241
-----------
SINGAPORE (6.3%)
City Developments.......................................... 66,000 403,937
Cycle & Carriage Limited................................... 50,000 447,387
Development Bank of Singapore Limited (Foreign)............ 10,000 113,815
Hong Kong Land Holdings Limited............................ 200,000 364,000
Jardine Matheson Holdings Limited.......................... 78,730 578,666
Keppel Corp. Limited....................................... 50,000 408,017
Singapore Press Holdings (Foreign)......................... 30,000 448,819
United Overseas Bank Limited (Foreign)..................... 114,700 1,083,780
-----------
3,848,421
-----------
SPAIN (1.5%)
Banco Intercontinental Espanol SA.......................... 2,600 234,060
Cubiertas Y Mzov SA........................................ 6,000 374,133
Empresa Nacional De Electricidad SA (ADR).................. 3,500 172,375
Omsa Alimentacion SA....................................... 24,000 104,063
-----------
884,631
-----------
SWEDEN (2.5%)
Astra AB B-F............................................... 25,000 752,805
Electrolux B-F............................................. 7,000 318,584
+ Foreningsbanken AB A...................................... 125,000 213,123
Hennes & Mauritz AB B...................................... 4,000 234,298
-----------
1,518,810
-----------
SWITZERLAND (7.3%)
CS Holding................................................. 2,500 229,109
Nestle AG R................................................ 500 520,761
+ Pharma Vision 2000 Limited B.............................. 150 601,981
Roche Holding AG-Genusschein............................... 250 1,611,362
Swiss Bank Corp. Schweizerischer Bankverein B.............. 1,000 354,413
Union Bank of Switzerland B................................ 1,102 1,142,014
-----------
4,459,640
-----------
THAILAND (0.7%)
Bangkok Bank Public Co. Limited (Foreign) ................. 20,000 220,377
Siam Cement Co. Limited (Foreign).......................... 3,000 191,533
-----------
411,910
-----------
UNITED KINGDOM (14.3%)
BAA PLC.................................................... 50,301 393,683
Barclays PLC............................................... 42,497 456,655
British Gas PLC............................................ 90,000 414,473
BTR PLC.................................................... 75,000 381,186
Dixons Group PLC........................................... 180,000 735,886
General Accident PLC....................................... 70,000 641,395
GKN PLC.................................................... 75,000 764,758
Grand Metropolitan PLC (ADR)............................... 91 2,275
HSBC Holdings PLC.......................................... 68,956 890,155
Lloyds Abbey Life PLC...................................... 100,000 621,988
Marks & Spencer PLC........................................ 67,000 431,120
Powergen PLC............................................... 49,854 383,444
Powerscreen International PLC.............................. 115,000 586,315
Rank Organisation PLC (REGD)............................... 110,000 694,685
Reuters Holdings PLC....................................... 60,000 500,135
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------- ----------
<S> <C> <C>
Severn Trent PLC......................................... 40,265 $ 347,162
Vodafone Group PLC....................................... 125,819 467,345
----------
8,712,660
----------
TOTAL COMMON STOCK
(Cost $50,050,489)............................................... 56,155,109
----------
</TABLE>
<TABLE>
PAR
MATURITY (000)
-------- -----
<S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS (1.2%)
- ----------------------------------
U.S. Treasury Bills
5.65% (Cost $749,411) ............................ 07/06/95 $750 749,411
-----------
CORPORATE BONDS (0.0%)
- ----------------------
Michelin France
2.50% (Cost $8,599)............................... 01/01/01 11 10,519
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
---------
<S> <C> <C>
INTERNATIONAL INVESTMENT COMPANIES (1.1%)
- -----------------------------------------
First Philippine Fund, Inc. ............................ 20,000 335,000
Taiwan Fund, Inc. ...................................... 15,000 328,125
-----------
TOTAL INTERNATIONAL INVESTMENT COMPANIES
(Cost $595,700)................................................... 663,125
-----------
<CAPTION>
RIGHTS (0.0%) RIGHTS
- ------------- ---------
<S> <C> <C>
Taiwan Fund, Inc. (Cost $0) ............................ 15,000 0
-----------
<CAPTION>
SHARES
---------
<S> <C> <C>
SHORT TERM INVESTMENTS (5.5%)
- -----------------------------
Temporary Cash Investment Fund, Inc. ................... 1,672,310 1,672,310
Temporary Investment Fund, Inc. ........................ 1,672,309 1,672,309
-----------
TOTAL SHORT-TERM INVESTMENTS
(Cost $3,344,619)................................................. 3,344,619
-----------
TOTAL INVESTMENTS (100.0%)
(Cost $54,748,818) (a) (b)........................................ $60,922,783
===========
</TABLE>
- -------
+ Non-income producing.
(a) Cost for Federal income tax purposes.
(b) At June 30, 1995, the Excess of value over tax cost was $7,565,115, and the
excess of tax cost over value was $1,391,150.
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.
SCHEDULE OF INVESTMENTS - JUNE 30, 1995 (UNAUDITED)
SMALL CAPITALIZATION FUND
<TABLE>
<CAPTION>
SHARES VALUE
------ ----------
<S> <C> <C>
COMMON STOCK (82.6%)
- --------------------
ADVERTISING (5.1%)
+ Katz Media Group, Inc. .................................... 4,000 $ 63,500
True North Communications, Inc. ............................ 3,000 56,625
----------
120,125
----------
AUTO-PARTS/EQUIPMENT (1.4%)
Stant Corp. ................................................ 3,000 32,250
----------
BROADCAST MEDIA/ADVERTISING (0.5%)
+ Home Shopping Network, Inc. ............................... 1,500 12,750
----------
BUILDING PRODUCTS (1.6%)
+ Falcon Building Products, Inc. ............................ 2,000 21,250
Martin Marietta Materials, Inc. ............................ 800 16,000
----------
37,250
----------
COMPUTER SOFTWARE & SERVICES (4.0%)
+ Banctec, Inc. ............................................. 4,000 62,500
+ Exabyte Corp. ............................................. 2,400 33,150
----------
95,650
----------
CONSTRUCTION (1.1%)
+ Insituform Technology, Inc. Cl. A.......................... 2,000 26,750
----------
CONSUMER DURABLES (1.6%)
Singer Co. NV............................................... 1,500 38,812
----------
ELECTRONICS (7.7%)
+ Marshall Industries........................................ 5,400 180,900
----------
ENTERTAINMENT (0.4%)
+ Hollywood Park, Inc. ...................................... 800 10,150
----------
FOODS (0.5%)
+ Sylvan Foods Holdings, Inc. ............................... 1,000 11,563
----------
FOOD PROCESSING (1.0%)
+ Ralcorp Holdings, Inc. .................................... 1,000 22,875
----------
HOME BUILDER (1.2%)
+ D.R. Horton, Inc. ......................................... 2,180 28,749
----------
HOSPITAL MANAGEMENT (1.1%)
+ Corvel Corp. .............................................. 1,200 26,250
----------
HOUSEHOLD APPLIANCES (0.9%)
Libbey, Inc. ............................................... 1,000 20,750
----------
INSURANCE (6.2%)
+ Capsure Holdings Corp. .................................... 5,000 70,000
E.W. Blanch Holdings, Inc. ................................. 1,500 27,938
Walshire Assurance Corp. ................................... 3,000 48,563
----------
146,501
----------
IRON/STEEL (3.7%)
+ Olympic Steel, Inc. ....................................... 2,000 18,250
Rouge Steel Co. ............................................ 1,000 23,250
+ Steel of West Virginia, Inc. .............................. 4,000 46,000
----------
87,500
----------
MACHINERY (0.8%)
+ Baldwin Technology Co., Inc. .............................. 3,800 19,237
----------
MANUFACTURING (1.4%)
Harmon Industries, Inc. .................................... 2,000 33,750
----------
MEDICAL SUPPLIES (2.1%)
+ Spacelabs Medical, Inc. ................................... 2,000 50,750
----------
OIL & GAS (5.1%)
+ Global Natural Resources, Inc. ............................ 5,000 53,750
St. Mary Land & Exploration Co. ............................ 2,200 27,087
+ Swift Energy Co. .......................................... 1,000 9,125
+ Tesoro Petroleum Corp. .................................... 3,000 30,000
----------
119,962
----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------ ----------
<S> <C> <C>
OFFICE EQUIPMENT & SERVICES (2.7%)
+ Nu Kote Holdings, Inc. Cl. A............................... 2,000 $ 63,000
----------
PUBLISHING/PRINTING (1.3%)
+ Intl Imaging Materials, Inc. .............................. 500 12,750
Merrill Corp. .............................................. 1,000 18,750
----------
31,500
----------
REAL ESTATE (7.9%)
Post Properties, Inc. ...................................... 1,000 30,250
Security Capital Pacific Trust.............................. 8,400 145,950
Taubman Centers, Inc. ...................................... 1,000 9,500
----------
185,700
----------
RESTAURANT/FOOD SERVICE (0.9%)
+ IHOP Corp. ................................................ 800 20,800
----------
RETAIL (3.2%)
Baker (J), Inc. ............................................ 800 8,000
Blair Corp. ................................................ 2,000 68,750
----------
76,750
----------
SPECIALTY RETAILER (6.1%)
+ Finish Line, Inc. Cl. A.................................... 6,000 59,250
+ Maxim Group, Inc. ......................................... 2,000 21,000
+ Roberds, Inc. ............................................. 5,000 46,250
+ Trend-Lines, Inc. Cl. A.................................... 1,200 18,075
----------
144,575
----------
TEXTILES (9.1%)
+ Collins & Aikman Corp. .................................... 3,000 27,000
Culp, Inc. ................................................. 2,700 21,937
Fab Industries, Inc. ....................................... 300 9,150
+ Mohawk Industries, Inc. ................................... 4,500 66,375
Warnaco Group, Inc. Cl. A................................... 4,500 90,000
----------
214,462
----------
UTILITIES - ELECTRIC (2.1%)
+ Sithe Energies, Inc. ...................................... 5,000 48,750
----------
WHOLESALE SPECIAL LINE (1.9%)
+ Amerisourse Health Corp. .................................. 2,000 46,000
----------
TOTAL COMMON STOCK
(Cost $1,788,144).................................................. 1,954,061
----------
</TABLE>
<TABLE>
<CAPTION>
PAR
MATURITY (000)
-------- -----
<S> <C> <C> <C>
AGENCY OBLIGATIONS (15.2%)
- --------------------------
Federal Home Loan Bank Discount Note 5.85%
(Cost $359,766)...................................... 07/05/95 $360 359,766
---------
</TABLE>
<TABLE>
<CAPTION>
SHARES
------
<S> <C> <C>
SHORT-TERM INVESTMENTS (2.2%)
- -----------------------------
Temporary Investment Fund, Class B
(Cost $51,751).............................................. 51,751 51,751
----------
TOTAL INVESTMENTS (100.0%)
(Cost $2,199,661) (a) (b)........................................... $2,365,578
==========
</TABLE>
- -------
+ Non-income producing.
(a) Cost for Federal income tax purposes.
(b) At June 30, 1995 the excess of value over tax cost was $196,214, and the
excess of tax cost over value was $30,297.
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES - JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY QUALITY HIGH YIELD GROWTH EQUITY
MARKET FUND BOND FUND BOND FUND FUND
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments at value (1)
(See accompanying sched-
ule) (Note 1)........... $19,310,631 $34,683,360 $33,747,971 $89,765,092
Cash..................... 383 2,217 679 120
Interest, dividends and
reclaims receivable..... 109,623 523,353 758,604 76,996
Receivable for investment
securities sold......... -- -- 763,838 1,228,510
Receivable for capital
stock sold.............. -- 14,498 5,806 7,161
Forward foreign currency
contracts............... -- -- -- --
Other assets............. 541 -- 847 2,380
----------- ----------- ----------- -----------
Total Assets............ 19,421,178 35,223,428 35,277,745 91,080,259
----------- ----------- ----------- -----------
LIABILITIES:
Payable for investment
securities purchased.... -- -- 744,120 2,512,220
Payable for capital stock
redeemed................ -- -- 55,554 556,697
Dividends payable........ 83,189 -- -- --
Payable to the investment
advisor................. 5,274 11,592 14,690 32,632
Payable to The Penn Mu-
tual Life Insurance
Co. .................... 6,346 13,191 12,649 31,725
Forward foreign currency
contracts............... -- -- -- --
Other liabilities........ 7,038 15,558 4,574 24,705
----------- ----------- ----------- -----------
Total Liabilities....... 101,847 40,341 831,587 3,157,979
----------- ----------- ----------- -----------
NET ASSETS............... $19,319,331 $35,183,087 $34,446,158 $87,922,280
=========== =========== =========== ===========
Shares of $.10 par value
capital stock issued and
outstanding............. 19,320,750 3,455,628 3,959,976 4,241,342
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
SHARE................... $ 1.00 $ 10.18 $ 8.70 $ 20.73
=========== =========== =========== ===========
NET ASSETS CONSIST OF:
Capital paid in......... $19,321,057 $34,907,560 $37,536,809 $72,682,981
Undistributed net in-
vestment income........ -- 1,050,812 1,577,074 214,366
Accumulated net realized
gain (loss) on
investment transactions
and foreign exchange... (1,726) (1,837,469) (4,108,419) 4,010,312
Net unrealized apprecia-
tion (depreciation) in
value of investments,
futures contracts and
foreign currency re-
lated items............ -- 1,062,184 (559,306) 11,014,621
----------- ----------- ----------- -----------
TOTAL NET ASSETS........ $19,319,331 $35,183,087 $34,446,158 $87,922,280
=========== =========== =========== ===========
(1) Investments at cost... $19,310,631 $33,632,114 $34,307,277 $78,750,471
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FLEXIBLY SMALL
VALUE EQUITY MANAGED INTERNATIONAL CAPITALIZATION
FUND FUND EQUITY FUND FUND
- ------------ ------------ ------------- --------------
<S> <C> <C> <C>
$106,057,666 $219,073,499 $60,922,783 $2,365,578
-- -- -- 14,067
74,022 754,329 434,213 1,316
-- 181,720 152,839 --
76,920 91,398 26,668 --
-- -- 15,151,455 --
2,474 4,978 1,582 36
- ------------ ------------ ----------- ----------
106,211,082 220,105,924 76,689,540 2,380,997
- ------------ ------------ ----------- ----------
-- 1,014,560 -- 25,200
145,515 896,548 77,471 26
-- -- -- --
43,049 88,471 37,720 733
37,025 76,876 22,508 524
-- -- 15,661,951 --
31,874 60,985 346,925 2,010
- ------------ ------------ ----------- ----------
257,463 2,137,440 16,146,575 28,493
- ------------ ------------ ----------- ----------
$105,953,619 $217,968,484 $60,542,965 $2,352,504
============ ============ =========== ==========
6,832,874 12,711,772 4,589,417 223,161
$ 15.51 $ 17.15 $ 13.19 $ 10.54
============ ============ =========== ==========
$ 83,272,421 $189,619,991 $55,955,889 $2,238,200
868,493 3,425,923 528,000 9,489
1,776,818 4,566,328 (1,615,635) (61,102)
20,035,887 20,356,242 5,674,711 165,917
- ------------ ------------ ----------- ----------
$105,953,619 $217,968,484 $60,542,965 $2,352,504
============ ============ =========== ==========
$ 86,021,779 $198,720,277 $54,748,818 $2,199,661
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.
STATEMENT OF OPERATIONS - FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY QUALITY HIGH YIELD GROWTH EQUITY
MARKET FUND BOND FUND BOND FUND FUND
----------- ---------- ----------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.................. $ -- $ 34,649 $ 1,906 $ 175,904
Interest................... 499,907 1,140,490 1,716,335 364,919
Foreign tax withheld....... -- -- -- --
-------- ---------- ----------- -----------
Total investment income... 499,907 1,175,139 1,718,241 540,823
-------- ---------- ----------- -----------
EXPENSES:
Investment advisory fees
(Note 3).................. 32,298 73,162 82,026 208,084
Administration fees (Note
3)........................ 12,112 24,387 24,608 62,075
Accounting fees............ 6,056 13,638 13,637 31,213
Custodian fees and ex-
penses.................... 4,154 7,626 6,926 15,701
Other expenses............. 7,679 13,643 13,970 29,843
-------- ---------- ----------- -----------
Total expenses............ 62,299 132,456 141,167 346,916
Less: Expense waivers..... (4,040) (8,129) -- (20,459)
-------- ---------- ----------- -----------
Net expenses.............. 58,259 124,327 141,167 326,457
-------- ---------- ----------- -----------
NET INVESTMENT INCOME....... $441,648 $1,050,812 $ 1,577,074 $ 214,366
-------- ---------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY RE-
LATED ITEMS:
Net realized gain (loss) on
investment transactions... (303) 1,262,985 (1,180,305) 4,010,312
Net realized foreign ex-
change loss............... -- -- -- --
Change in net unrealized
appreciation (deprecia-
tion) of investments,
futures contracts and for-
eign currency related
items..................... -- 1,560,856 2,575,022 6,230,194
-------- ---------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS. (303) 2,823,841 1,394,717 10,240,506
-------- ---------- ----------- -----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS.. $441,345 $3,874,653 $ 2,971,791 $10,454,872
======== ========== =========== ===========
</TABLE>
- -----------------------
+ Period from March 1, 1995 (commencement of operations) through June 30, 1995.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
20
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FLEXIBLY INTERNATIONAL SMALL
VALUE EQUITY MANAGED EQUITY CAPITALIZATION+
FUND FUND FUND FUND
------------ ----------- ------------- ---------------
<S> <C> <C> <C>
$ 719,528 $ 1,846,447 $ 133,482 $ 7,157
520,948 2,363,186 801,573 9,086
-- (2,095) (51,001) --
----------- ----------- ---------- --------
1,240,476 4,207,538 884,054 16,243
----------- ----------- ---------- --------
227,501 480,757 217,534 3,450
68,250 144,227 43,507 1,035
34,037 60,473 24,693 935
11,489 25,925 34,380 790
30,706 70,233 35,940 984
----------- ----------- ---------- --------
371,983 781,615 356,054 7,194
-- -- -- (440)
----------- ----------- ---------- --------
371,983 781,615 356,054 6,754
----------- ----------- ---------- --------
$ 868,493 $ 3,425,923 $ 528,000 $ 9,489
----------- ----------- ---------- --------
1,776,818 4,637,264 (712,357) (61,102)
-- (5,418) (452,311) --
15,838,240 15,474,321 1,483,928 165,917
----------- ----------- ---------- --------
17,615,058 20,106,167 319,260 104,815
----------- ----------- ---------- --------
$18,483,551 $23,532,090 $ 847,260 $114,304
=========== =========== ========== ========
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
21
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.
STATEMENT OF CHANGES IN NET ASSETS - FOR THE SIX MONTHS ENDED JUNE 30, 1995
(UNAUDITED)AND THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
MONEY MARKET FUND QUALITY BOND FUND
-------------------------- --------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
06/30/95 12/31/94 06/30/95 12/31/94
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income.... $ 441,648 $ 537,489 $ 1,050,812 $ 1,984,269
Net realized gain (loss)
on investment transac-
tions................... (303) 138 1,262,985 (3,102,230)
Net realized foreign ex-
change loss............. -- -- -- --
Net change in unrealized
appreciation/depreciation
of investments and for-
eign currency related
items................... -- -- 1,560,856 (802,018)
------------ ------------ ------------ ------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ 441,345 537,627 3,874,653 (1,919,979)
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHARE-
HOLDERS FROM:
Net investment income.... (441,648) (537,489) -- (1,982,402)
Net realized capital
gains................... -- -- -- --
In excess of net invest-
ment income............. -- -- -- --
In excess of net realized
capital gains........... -- -- -- --
Return of capital........ -- -- -- --
------------ ------------ ------------ ------------
TOTAL DISTRIBUTIONS..... (441,648) (537,489) -- (1,982,402)
------------ ------------ ------------ ------------
CAPITAL SHARE TRANSAC-
TIONS:
Net increase (decrease)
in net assets from capi-
tal share transactions
(Note 4)................ 2,788,542 3,525,126 (29,196) 2,213,017
------------ ------------ ------------ ------------
TOTAL INCREASE
(DECREASE) IN NET
ASSETS................. 2,788,239 3,525,264 3,845,457 (1,689,364)
Net Assets, beginning of
period................... 16,531,092 13,005,828 31,337,630 33,026,994
------------ ------------ ------------ ------------
NET ASSETS, END OF PERIOD. $ 19,319,331 $ 16,531,092 $ 35,183,087 $ 31,337,630
============ ============ ============ ============
<CAPTION>
FLEXIBLY MANAGED FUND INTERNATIONAL EQUITY FUND
-------------------------- --------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
06/30/95 12/31/94 06/30/95 12/31/94
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income.... $ 3,425,923 $ 4,467,412 $ 528,000 $ 435,065
Net realized gain (loss)
on investment transac-
tions................... 4,637,264 7,507,141 (712,357) (64,795)
Net realized foreign ex-
change loss............. (5,418) (2,076) (452,311) (542,428)
Net change in unrealized
appreciation/depreciation
of investments and for-
eign currency related
items................... 15,474,321 (6,337,661) 1,483,928 (3,753,499)
------------ ------------ ------------ ------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ 23,532,090 5,634,816 847,260 (3,925,657)
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHARE-
HOLDERS FROM:
Net investment income.... -- (4,467,412) -- (99,627)
Net realized capital
gains................... -- (7,356,357) -- --
In excess of net invest-
ment income............. -- (214,225) -- --
In excess of net capital
gains................... -- -- -- --
Return of capital........ -- -- -- (129,984)
------------ ------------ ------------ ------------
TOTAL DISTRIBUTIONS..... -- (12,037,994) -- (229,611)
------------ ------------ ------------ ------------
CAPITAL SHARE TRANSAC-
TIONS:
Net increase (decrease)
in net assets from capi-
tal share transactions
(Note 4)................ 24,589,225 62,758,743 302,899 22,749,790
------------ ------------ ------------ ------------
TOTAL INCREASE IN NET
ASSETS................. 48,121,315 56,355,565 1,150,159 18,594,522
Net Assets, beginning of
period................... 169,847,169 113,491,604 59,392,806 40,798,284
------------ ------------ ------------ ------------
NET ASSETS, END OF PERIOD. $217,968,484 $169,847,169 $ 60,542,965 $ 59,392,806
============ ============ ============ ============
</TABLE>
- -----------------------
+ For the period from March 1, 1995 (commencement of operations) through June
30, 1995.
The accompanying notes are an integral part of these financial statements.
22
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH YIELD BOND FUND GROWTH EQUITY FUND VALUE EQUITY FUND
-------------------------- ------------------------ ------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
06/30/95 12/31/94 06/30/95 12/31/94 06/30/95 12/31/94
----------- ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
$ 1,577,074 $ 3,267,476 $ 214,366 $ 562,875 $ 868,493 $ 1,192,404
(1,180,305) (1,538,281) 4,010,312 1,678,399 1,776,818 1,120,950
-- -- -- -- -- --
2,575,022 (4,448,669) 6,230,194 (9,254,862) 15,838,240 (248,954)
----------- ----------- ----------- ----------- ------------ -----------
2,971,791 (2,719,474) 10,454,872 (7,013,588) 18,483,551 2,064,400
----------- ----------- ----------- ----------- ------------ -----------
-- (3,267,476) -- (562,875) -- (1,192,404)
-- -- -- (1,678,399) -- (1,120,950)
-- (34,447) -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
----------- ----------- ----------- ----------- ------------ -----------
-- (3,301,923) -- (2,241,274) -- (2,313,354)
----------- ----------- ----------- ----------- ------------ -----------
(606,715) 2,797,426 (2,610,497) 5,394,570 8,449,194 9,289,649
----------- ----------- ----------- ----------- ------------ -----------
2,365,076 (3,223,971) 7,844,375 (3,860,292) 26,932,745 9,040,695
32,081,082 35,305,053 80,077,905 83,938,197 79,020,874 69,980,179
----------- ----------- ----------- ----------- ------------ -----------
$34,446,158 $32,081,082 $87,922,280 $80,077,905 $105,953,619 $79,020,874
=========== =========== =========== =========== ============ ===========
</TABLE>
<TABLE>
<CAPTION>
SMALL CAPITALIZATION FUND
PERIOD
ENDED
06/30/95+
---------
<S> <C>
$ 9,489
(61,102)
--
165,917
-----------
114,304
-----------
--
--
--
--
--
-----------
--
-----------
2,238,200
-----------
2,352,504
0
-----------
$ 2,352,504
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
23
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE MONEY MARKET FUND
The table below sets forth financial data for a share outstanding throughout
each period
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1995 -------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
---------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income.... 0.0270 0.0365 0.0250 0.0306 0.0536 0.0740
------- ------- ------- ------- ------- -------
Total from investment
operations............. 0.0270 0.0365 0.0250 0.0306 0.0536 0.0740
------- ------- ------- ------- ------- -------
LESS DIVIDENDS:
Dividends from net in-
vestment income......... (0.0270) (0.0365) (0.0250) (0.0306) (0.0536) (0.0740)
------- ------- ------- ------- ------- -------
Total dividends......... (0.0270) (0.0365) (0.0250) (0.0306) (0.0536) (0.0740)
------- ------- ------- ------- ------- -------
Net asset value, end of
period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= =======
Total return............. 2.74% 3.71% 2.53% 3.08% 5.49% 7.65%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands).......... $19,319 $16,531 $13,005 $11,862 $12,811 $15,348
------- ------- ------- ------- ------- -------
Ratio of expenses to av-
erage net assets........ 0.72%(a)(b) 0.73%(b) 0.74%(b) 0.77%(b) 0.79%(b) 0.82%(b)
------- ------- ------- ------- ------- -------
Ratio of net investment
income to average net
assets.................. 5.47%(a)(b) 3.74%(b) 2.51%(b) 3.07%(b) 5.47%(b) 7.40%(b)
------- ------- ------- ------- ------- -------
</TABLE>
- -----------------------
(a) Annualized.
(b) Had fees not been waived by the investment advisor and administrator of the
Fund, the ratios of expenses to average net assets would have been .77%,
.79%, .82%, .84%, .83% and .87%, and the ratios of net investment income to
average net assets would have been 5.42%, 3.68%, 2.43%, 3.00%, 5.43% and
7.35%, for the six months ended June 30, 1995 and the years ended December
31, 1994, 1993, 1992, 1991 and 1990, respectively.
Note: The Fund changed to its current investment advisor on November 1, 1992.
- --------------------------------------------------------------------------------
THE QUALITY BOND FUND
The table below sets forth financial data for a share outstanding throughout
each period
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1995 ----------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
---------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period......... $ 9.04 $ 10.19 $ 10.03 $ 10.51 $ 9.73 $ 9.68
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income... 0.30 0.61 0.46 0.75 0.71 0.72
Net realized and
unrealized gain (loss)
on investment
transactions........... 0.84 (1.15) 0.71 (0.06) 0.81 0.05
------- ------- ------- ------- ------- -------
Total from investment
operations............ 1.14 (0.54) 1.17 0.69 1.52 0.77
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividend from net in-
vestment income........ 0.00 (0.61) (0.46) (0.75) (0.71) (0.72)
Distribution from net
realized gain.......... 0.00 0.00 (0.54) (0.42) (0.03) 0.00
Distribution in excess
of net realized gain... 0.00 0.00 (0.01) 0.00 0.00 0.00
------- ------- ------- ------- ------- -------
Total distributions.... 0.00 (0.61) (1.01) (1.17) (0.74) (0.72)
------- ------- ------- ------- ------- -------
Net asset value, end of
period................. $ 10.18 $ 9.04 $ 10.19 $ 10.03 $ 10.51 $ 9.73
======= ======= ======= ======= ======= =======
Total return............ 12.61% (5.29)% 11.67% 6.57% 15.62% 7.95%
RATIOS/SUPPLEMENTAL DA-
TA:
Net assets, end of pe-
riod (in thousands).... $35,183 $31,338 $33,027 $20,314 $21,153 $16,568
------- ------- ------- ------- ------- -------
Ratio of expenses to av-
erage net assets....... 0.76%(a)(b) 0.78%(b) 0.79%(b) 0.84%(b) 0.83% 0.86%
------- ------- ------- ------- ------- -------
Ratio of net investment
income to average net
assets................. 6.46%(a)(b) 6.14%(b) 5.21%(b) 6.25%(b) 7.41% 7.76%
------- ------- ------- ------- ------- -------
Portfolio turnover rate. 223.3% 380.9% 389.4% 190.8% 44.1% 13.9%
------- ------- ------- ------- ------- -------
</TABLE>
- -----------------------
(a) Annualized.
(b) Had fees not been waived by the investment advisor and administrator of the
Fund, the ratio of expenses to average net assets .81%, .83%, .84% and
.87%, and the ratio of net investment income to average net assets would
have been 6.41%, 6.09%, 5.16% and 6.22% for the six months ended June 30,
1995, and the years ended December 31, 1994, 1993 and 1992, respectively.
Note: The Fund changed to its current investment advisor on November 1, 1992.
24
<PAGE>
- -------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
THE HIGH YIELD BOND FUND
The table below sets forth financial data for a share outstanding throughout
each year
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1995 -------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
---------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period.......... $ 7.94 $ 9.55 $ 8.63 $ 8.23 $ 6.70 $ 8.63
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income.... 0.40 0.90 0.77 0.87 0.93 1.15
Net realized and
unrealized gain (loss)
on investment
transactions............ 0.36 (1.60) 0.94 0.43 1.55 (1.93)
------- ------- ------- ------- ------- -------
Total from investment
operations............. 0.76 (0.70) 1.71 1.30 2.48 (0.78)
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividend from net invest-
ment income............. 0.00 (0.90) (0.77) (0.87) (0.93) (1.15)
Distribution in excess of
net investment income... 0.00 (0.01) (0.02) (0.03) (0.02) 0.00
------- ------- ------- ------- ------- -------
Total distributions..... 0.00 (0.91) (0.79) (0.90) (0.95) (1.15)
------- ------- ------- ------- ------- -------
Net asset value, end of
period.................. $ 8.70 $ 7.94 $ 9.55 $ 8.63 $ 8.23 $ 6.70
======= ======= ======= ======= ======= =======
Total return............. 9.57% (7.33)% 19.81% 15.80% 37.01% (9.04)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands).......... $34,446 $32,081 $35,305 $19,840 $15,304 $11,459
------- ------- ------- ------- ------- -------
Ratio of expenses to av-
erage net assets........ 0.86%(a) 0.86% 0.87% 0.88%(b) 0.90%(b) 0.90%(b)
------- ------- ------- ------- ------- -------
Ratio of net investment
income to average net
assets.................. 9.61%(a) 9.18% 9.21% 9.87%(b) 11.37%(b) 12.22%(b)
------- ------- ------- ------- ------- -------
Portfolio turnover rate.. 42.3% 90.7% 118.7% 94.3% 83.7% 52.8%
------- ------- ------- ------- ------- -------
</TABLE>
- -----------------------
(a) Annualized.
(b) Had fees not been waived by the investment advisor and administrator of
the Fund, the ratios of expenses to average net assets would have been
.93%, .98%, and 1.01%, and the ratios of net investment income to average
net assets would have been 9.82%, 11.29% and 12.11% for the years ended
December 31, 1992, 1991 and 1990, respectively.
- --------------------------------------------------------------------------------
THE GROWTH EQUITY FUND
The table below sets forth financial data for a share outstanding throughout
each year
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1995 -------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
---------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period.......... $ 18.30 $ 20.49 $ 18.82 $ 21.47 $ 16.35 $ 18.86
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income.... 0.05 0.13 0.06 0.16 0.23 0.41
Net realized and
unrealized gain (loss on
investment transactions. 2.38 (1.80) 2.28 1.12 5.45 (2.51)
------- ------- ------- ------- ------- -------
Total from investment
operations............. 2.43 (1.67) 2.34 1.28 5.68 (2.10)
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividend from net invest-
ment income............. 0.00 (0.13) (0.06) (0.16) (0.23) (0.41)
Distribution from capital
gains................... 0.00 (0.39) (0.61) (3.77) (0.33) 0.00
------- ------- ------- ------- ------- -------
Total distributions..... 0.00 (0.52) (0.67) (3.93) (0.56) (0.41)
------- ------- ------- ------- ------- -------
Net asset value, end of
period.................. $ 20.73 $ 18.30 $ 20.49 $ 18.82 $ 21.47 $ 16.35
======= ======= ======= ======= ======= =======
Total return............. 13.28% (8.12)% 12.43% 5.96% 34.74% (11.13)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands).......... $87,922 $80,078 $83,938 $73,977 $59,670 $39,896
------- ------- ------- ------- ------- -------
Ratio of expenses to av-
erage net assets........ 0.78%(a)(b) 0.79%(b) 0.77%(b) 0.88%(b) 0.87% 0.91%
------- ------- ------- ------- ------- -------
Ratio of net investment
income to average net
assets.................. 0.52%(a)(b) 0.70%(b) 0.30%(b) 0.81%(b) 1.28% 2.43%
------- ------- ------- ------- ------- -------
Portfolio turnover rate.. 87.7% 156.2% 185.3% 120.7% 41.7% 34.0%
------- ------- ------- ------- ------- -------
</TABLE>
- -----------------------
(a) Annualized.
(b) Had fees not been waived by the investment advisor and administrator of
the Fund, the ratio of expenses to average net assets would have been
.83%, .84%, .82% and .89% and the ratio of net investment income to
average net assets would have been .47%, .65%, .25% and .80% for the six
months ended June 30, 1995, and the years ended December 31, 1994, 1993
and 1992, respectively.
Note: The Fund changed to its current investment advisor on November 1, 1992.
25
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE VALUE EQUITY FUND
The table below sets forth financial data for a share outstanding throughout
each year
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1995 ------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
---------------- -------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period......... $ 12.67 $ 12.68 $ 12.14 $ 11.89 $ 9.68 $ 11.18
-------- -------- -------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income... 0.13 0.20 0.17 0.45 0.47 0.59
Net realized and
unrealized gain (loss)
on investment transac-
tions.................. 2.71 0.17 0.69 1.32 2.21 (1.50)
-------- -------- -------- ------- ------- -------
Total from investment
operations............ 2.84 0.37 0.86 1.77 2.68 (0.91)
-------- -------- -------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividend from net in-
vestment income........ 0.00 (0.20) (0.17) (0.45) (0.47) (0.59)
Distribution from net
realized gain.......... 0.00 (0.18) (0.15) (1.07) 0.00 0.00
-------- -------- -------- ------- ------- -------
Total distributions.... 0.00 (0.38) (0.32) (1.52) (0.47) (0.59)
-------- -------- -------- ------- ------- -------
Net asset value, end of
period................. $ 15.51 $ 12.67 $ 12.68 $ 12.14 $ 11.89 $ 9.68
======== ======== ======== ======= ======= =======
Total return............ 22.42% 2.92% 7.08% 14.89% 27.69% (8.14)%
RATIOS/SUPPLEMENTAL DA-
TA:
Net assets, end of pe-
riod (in thousands).... $105,954 $ 79,021 $ 69,980 $49,199 $33,610 $22,780
-------- -------- -------- ------- ------- -------
Ratio of expenses to av-
erage net assets....... 0.82%(a) 0.82% 0.83% 0.88%(b) 0.88% 0.91%
-------- -------- -------- ------- ------- -------
Ratio of net investment
income to average net
assets................. 1.91%(a) 1.59% 1.49% 3.87%(b) 4.44% 5.42%
-------- -------- -------- ------- ------- -------
Portfolio turnover rate. 18.9% 30.6% 17.2% 117.4% 32.4% 21.3%
-------- -------- -------- ------- ------- -------
</TABLE>
- -----------------------
(a) Annualized.
(b) Had fees not been waived by the investment advisor and administrator of the
Fund, the ratio of expenses to average net assets and the ratio of net
investment income to average net assets would have been .90% and 3.85%,
respectively, for the year ended December 31, 1992.
Note: The Fund changed to its current investment advisor on November 1, 1992.
- --------------------------------------------------------------------------------
THE FLEXIBLY MANAGED FUND
The table below sets forth financial data for a share outstanding throughout
each year
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1995 ------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
---------------- -------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period......... $ 15.19 $ 15.70 $ 14.31 $ 13.73 $ 12.30 $ 13.41
-------- -------- -------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income... 0.27 0.43 0.34 0.58 0.52 0.54
Net realized and
unrealized gain (loss)
on investment transac-
tions.................. 1.69 0.22 1.92 0.74 2.14 (0.65)
-------- -------- -------- ------- ------- -------
Total from investment
operations............ 1.96 0.65 2.26 1.32 2.66 (0.11)
-------- -------- -------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividend from net in-
vestment income........ 0.00 (0.43) (0.34) (0.58) (0.52) (0.54)
Distribution in excess
of net investment in-
come................... 0.00 (0.02) 0.00 0.00 0.00 (0.01)
Distribution from capi-
tal gains.............. 0.00 (0.71) (0.53) (0.16) (0.71) (0.45)
-------- -------- -------- ------- ------- -------
Total distributions.... 0.00 (1.16) (0.87) (0.74) (1.23) (1.00)
-------- -------- -------- ------- ------- -------
Net asset value, end of
period................. $ 17.15 $ 15.19 $ 15.70 $ 14.31 $ 13.73 $ 12.30
======== ======== ======== ======= ======= =======
Total return............ 12.90% 4.14% 15.79% 9.61% 21.63% (0.82)%
RATIOS/SUPPLEMENTAL DA-
TA:
Net assets, end of pe-
riod (in thousands).... $217,968 $169,847 $113,492 $70,979 $47,141 $29,315
-------- -------- -------- ------- ------- -------
Ratio of expenses to av-
erage net assets....... 0.81%(a) 0.82% 0.85% 0.89%(b) 0.91% 0.90%
-------- -------- -------- ------- ------- -------
Ratio of net investment
income to average net
assets................. 3.56%(a) 3.14% 2.62% 4.56%(b) 4.45% 4.11%
-------- -------- -------- ------- ------- -------
Portfolio turnover rate. 20.9% 37.3% 42.6% 29.5% 53.6% 43.3%
-------- -------- -------- ------- ------- -------
</TABLE>
- -----------------------
(a) Annualized.
(b) Had fees not been waived by the investment advisor and administrator of the
Fund, the ratio of expenses to average net assets and the ratio of net
investment income to average net assets would have been .90% and 4.55%,
respectively, for the year ended December 31, 1992.
26
<PAGE>
- -------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
THE INTERNATIONAL EQUITY FUND
The table below sets forth financial data for a share outstanding throughout
each period
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1995 --------------------------
(UNAUDITED) 1994 1993 1992+
---------------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period.................. $ 13.01 $ 13.94 $ 10.12 $ 10.00
------- ------- ------- -------
INCOME FROM INVESTMENT OPER-
ATIONS:
Net investment income....... 0.12 0.09 0.03 0.03
Net realized and unrealized
gain (loss) on investments
and foreign currency re-
lated transactions......... 0.06 (0.97) 3.83 0.17
------- ------- ------- -------
Total from investment oper-
ations.................... 0.18 (0.88) 3.86 0.20
------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividend from net investment
income..................... 0.00 (0.02) (0.01) (0.03)
Distribution in excess of
net investment income...... 0.00 0.00 0.00 (0.05)
Distribution from capital
gains...................... 0.00 0.00 (0.03) 0.00
Distribution from return of
capital.................... 0.00 (0.03) 0.00 0.00
------- ------- ------- -------
Total distributions........ 0.00 (0.05) (0.04) (0.08)
------- ------- ------- -------
Net asset value, end of pe-
riod....................... $ 13.19 $ 13.01 $ 13.94 $ 10.12
======= ======= ======= =======
Total return................ 1.38% (6.31)% 38.14% 2.00%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands)............. $60,543 $59,393 $40,798 $11,137
------- ------- ------- -------
Ratio of expenses to average
net assets................. 1.23%(a) 1.22% 1.21% 1.54%(a)(b)
------- ------- ------- -------
Ratio of net investment in-
come to average net assets. 1.82%(a) 0.82% 0.63% 1.56%(a)(b)
------- ------- ------- -------
Portfolio turnover rate..... 39.5% 15.6% 11.1% 0.0%
------- ------- ------- -------
</TABLE>
- -----------------------
(a) Annualized.
(b) Had fees not been waived by the investment advisor and administrator of
the Fund, the ratio of expenses to average net assets and the ratio of net
investment income to average net assets would have been 1.90% annualized
and 1.20% annualized, respectively, for the period ended December 31,
1992.
+ For the period from November 2, 1992 (commencement of operations) to
December 31, 1992.
- -------------------------------------------------------------------------------
THE SMALL CAPITALIZATION FUND
The table below sets forth financial data for a share outstanding throughout
the period
<TABLE>
<CAPTION>
PERIOD ENDED
JUNE 30, 1995++
(UNAUDITED)
---------------
<S> <C>
Net asset value, beginning of period......................... $10.00
------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income........................................ 0.04
Net realized and unrealized gain (loss) on investment trans-
actions..................................................... 0.50
------
Total from investment operations............................ 0.54
------
LESS DISTRIBUTIONS:
Dividend from net investment income.......................... 0.00
Distribution from capital gains.............................. 0.00
------
Total distributions......................................... 0.00
------
Net asset value, end of period............................... $10.54
======
Total return................................................. 5.40%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)..................... $2,353
------
Ratio of expenses to average net assets...................... 1.00%(a)(b)
------
Ratio of net investment income to average net assets......... 1.37%(a)(b)
------
Portfolio turnover rate...................................... 26.8%
------
</TABLE>
- -----------------------
(a) Annualized.
(b) Had fees not been waived by the investment advisor and administrator of
the Fund, the ratio of expenses to average net assets and the ratio of net
investment income to average net assets would have been 1.06% and 1.31%,
respectively, for the period March 1 (commencement of operations) through
June 30, 1995.
++ For the period March 1, 1995 (commencement of operations) through June 30,
1995.
27
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
1 - SIGNIFICANT ACCOUNTING POLICIES
Penn Series Funds, Inc. (Penn Series) was incorporated in Maryland on April
22, 1982. Penn Series is registered under the Investment Company Act of 1940,
as amended, as an open-end, diversified management investment company.
Penn Series is presently offering shares in its Money Market, Quality Bond,
High Yield Bond, Growth Equity, Value Equity, Flexibly Managed, International
Equity and Small Capitalization Funds (the Funds). It is authorized under its
Articles of Incorporation to issue a separate class of shares in each of two
additional funds. Each Fund would have its own investment objective and policy.
The following is a summary of significant accounting policies followed by
Penn Series in the preparation of its financial statements.
INVESTMENT VALUATION:
MONEY MARKET FUND - Investments in securities are valued under the amortized
cost method, which approximates current market value. Under this method,
securities are valued at cost on the date of purchase and thereafter a
proportionate amortization of any discount or premium until maturity is
assumed. Penn Series has agreed to maintain a dollar weighted average portfolio
maturity appropriate to the objective of maintaining a stable net asset value
per share. The Penn Series Board of Directors (The Board) has established
procedures reasonably designed to stabilize the net asset value per share for
purposes of sales and redemptions at $1.00. The Board performs regular review
and monitoring of the valuation in an attempt to avoid dilution or unfair
results to shareholders.
QUALITY BOND, HIGH YIELD BOND, GROWTH EQUITY, VALUE EQUITY, FLEXIBLY MANAGED,
INTERNATIONAL EQUITY AND SMALL CAPITALIZATION FUNDS - Portfolio securities
listed on a national securities exchange are valued at the last sale price on
the securities exchange or securities market on which such securities primarily
are traded or, if there has been no sale on that day, at the mean between the
current closing bid and asked prices. All other securities for which over-the-
counter market quotations are readily available will be valued on the basis of
the mean between the last current bid and asked prices. When market quotations
are not readily available, or when restricted or other assets are being valued,
the securities or assets will be valued at fair value as determined by The
Board.
The high yield securities in which the High Yield Bond Fund may invest are
predominantly speculative as to the issuer's continuing ability to meet
principal and interest payments. The value of the lower quality securities in
which the High Yield Bond Fund may invest will be affected by the credit
worthiness of individual issuers, general economic and specific industry
conditions, and will fluctuate inversely with changes in interest rates. In
addition, the secondary trading market for lower quality bonds may be less
active and less liquid than the trading market for higher quality bonds.
FOREIGN CURRENCY TRANSLATION - The books and records of the Funds are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars on the following basis: market value of investment securities, assets
and liabilities at the current rate of exchange; and purchase and sales of
investment securities, income and expenses at the relevant rates of exchange
prevailing on the respective dates of such transactions.
The Funds report certain foreign currency related security transactions as
components of realized gains for financial reporting purposes, whereas such
components are treated as ordinary income for Federal income tax purposes. The
Funds do not isolate that portion of gains and losses on investments in equity
securities which are due to changes in the foreign exchange rate from that
which is due to changes in market prices of equity securities.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of U.S. dollar denominated
transactions as a result of, among other factors, the level of governmental
supervision and regulation of foreign securities markets and the possibility of
political or economic instability.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: Security transactions are
accounted for on the trade date. Dividend income is recorded on the ex-dividend
date and interest income is accrued as earned. The cost of investment
securities sold is determined by using the specific identification method for
both financial reporting and income tax purposes.
DIVIDENDS TO SHAREHOLDERS: Dividends of investment income and realized
capital gains from investment transactions of the Quality Bond, High Yield
Bond, Growth Equity, Value Equity, Flexibly Managed, International Equity and
Small Capitalization Funds will be declared and paid annually. Dividends of net
investment income and realized capital gains, if any, of the Money Market Fund
are declared daily and paid monthly. Income distributions and capital gain
distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principles. These differences are
primarily due to differing treatments for mortgage--backed securities, market
discount and foreign currency transactions.
FEDERAL INCOME TAXES: It is the policy of each of the Funds to comply with
the requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income, including
realized gains, to its shareholders. Therefore, no provision is made for
federal income or excise taxes.
28
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2 - DERIVATIVE FINANCIAL INSTRUMENTS
OFF-BALANCE SHEET RISK
The Funds may trade financial instruments with off-balance sheet risk in the
normal course of investing activities and to assist in managing exposure to
market risks such as interest rates and foreign currency exchange rates. These
financial instruments include written options, forward foreign currency
exchange contracts and futures contracts.
The notional or contractual amounts of these instruments represent the
investment the Funds have in particular classes of financial instruments and
do not necessarily represent the amounts potentially subject to risk. The
measurement of the risks associated with these instruments is meaningful only
when all related and offsetting transactions are considered.
DERIVATIVE FINANCIAL INSTRUMENTS HELD OR ISSUED FOR PURPOSES OTHER THAN
TRADING
FUTURES CONTRACTS - Each of the Funds, other than Money Market, may enter
into financial futures contracts for the delayed delivery of securities,
currency or contracts based on financial indices on a future date. A Fund is
required to deposit either in cash or securities an amount equal to a certain
percentage of the contract amount. Subsequent payments are made or received by
a Fund each day, dependent on daily fluctuations in the value of the
underlying security, and are recorded for financial statement purposes as
unrealized gains or losses by a Fund. A Fund's investment in financial futures
contracts is designed only to hedge against anticipated future changes in
interest or exchange rates. Should interest or exchange rates move
unexpectedly, a Fund may not achieve the anticipated benefits of the financial
futures contracts and may realize a loss. The Quality Bond Fund has entered
into futures contracts during the six months ended June 30, 1995. Open futures
contracts held by the Quality Bond Fund at June 30, 1995 were as follows:
<TABLE>
<CAPTION>
NUMBER OF CONTRACT
FUTURES CONTRACTS CONTRACTS VALUE
----------------- --------- ----------
<S> <C> <C>
September 1995 10 Year Treasury Notes.................. 10 $1,100,938
</TABLE>
WRITTEN OPTIONS - Each of the Funds, other than Money Market, may write
covered calls. Additionally, each of the Funds may buy put or call options for
which premiums are paid whether or not the option is exercised. Premiums
received from writing options which expire are treated as realized gains.
Premiums received from writing options which are exercised or are closed are
offset against the proceeds or amount paid on the transaction to determine the
realized gain or loss. If a put option is exercised, the premium increases the
cost basis of the securities purchased by a Fund. As writer of an option, the
Fund may have no control over whether the underlying securities may be sold
(call) and, as a result, bears the market risk of an unfavorable change in the
price of the securities underlying the written option. The Flexibly Managed
Fund has entered into put options during the six months ended June 30, 1995.
Purchased put options open and outstanding at June 30, 1995 are disclosed in
the schedule of investments.
FORWARD FOREIGN CURRENCY CONTRACTS - The Funds will generally enter into
forward foreign currency exchange contracts as a way of managing foreign
exchange rate risk. A Fund may enter into these contracts to fix the U.S.
dollar value of a security that it has agreed to buy or sell for the period
between the date the trade was entered into and the date the security is
delivered and paid for. A Fund may also use these contracts to hedge the U.S.
dollar value of securities it already owns denominated in foreign currencies.
Forward foreign currency contracts are valued at the forward rate, and are
marked-to-market daily. The change in market value is recorded by the Fund as
an unrealized gain or loss. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.
The use of forward foreign currency contracts does not eliminate
fluctuations in the underlying prices of the Fund's portfolio securities, but
it does establish a rate of exchange that can be achieved in the future.
Although forward foreign currency contracts limit the risk of loss due to a
decline in the value of the hedged currency, they also limit any potential
gain that might result should the value of the currency increase. In addition,
the Funds could be exposed to risks if the counterparties to the contracts are
unable to meet the terms of their contracts. The Flexibly Managed and
International Equity funds have entered into forward foreign currency
contracts for the six months ended June 30, 1995.
At June 30, 1995 there were no open contracts in the Flexibly Managed Fund.
Open forward foreign currency contracts held by the International Equity Fund
at June 30, 1995 were as follows:
<TABLE>
<CAPTION>
UNREALIZED
FOREIGN FOREIGN
FORWARD EXPIRATION CURRENCY CONTRACT CONTRACT EXCHANGE
CURRENCY CONTRACT DATE TO BE SOLD AMOUNT VALUE LOSS
----------------- ---------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Italian Lira............ 07/31/95 252,566,172 $ 151,455 $ 153,608 $ (2,153)
British Pound........... 08/16/95 3,196,727 5,000,000 5,079,982 (79,982)
Deutsche Mark........... 08/16/95 5,750,400 4,000,000 4,166,504 (166,504)
Swiss Franc............. 08/16/95 3,585,000 3,000,000 3,127,372 (127,372)
French Franc............ 08/17/95 15,217,800 3,000,000 3,134,485 (134,485)
----------- ----------- ---------
$15,151,455 $15,661,951 $(510,496)
----------- ----------- ---------
</TABLE>
29
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
3 - INVESTMENT ADVISORY AND OTHER CORPORATE SERVICES
INVESTMENT ADVISORY SERVICES
Under investment advisory agreements, the following advisors manage the
investments of their respective Fund and provide guidance on certain accounting
matters:
<TABLE>
<CAPTION>
ADVISOR PENN SERIES FUND
------- ----------------
<S> <C>
Independence Capital Management, Inc. Money Market Fund
(A wholly owned subsidiary of Penn Quality Bond Fund
Mutual) Growth Equity Fund
T. Rowe Price Associates Flexibly Managed Fund
High Yield Bond Fund
Vontobel USA Inc. International Equity Fund
Quest for Value Advisors Value Equity Fund
Small Capitalization Fund
</TABLE>
Each of the Funds pays their respective advisors, on a monthly basis, an
annual advisory fee based on the average daily net assets of each Fund, at the
following rates pursuant to the investment advisory agreements: Money Market
Fund: 0.40% for first $100 million and 0.35% thereafter; Quality Bond Fund:
0.45% for first $100 million and 0.40% thereafter; Growth Equity Fund: 0.50%
for the first $100 million and 0.45% thereafter; Flexibly Managed Fund: 0.50%;
High Yield Bond Fund: 0.50%; International Equity Fund: 0.75%; Value Equity
Fund: 0.50%; Small Capitalization Fund: 0.50%. Independence Capital Management
currently waives receipt of a portion of its fees equal to 0.05% of the average
daily net assets of each of the Funds that it manages.
ADMINISTRATIVE AND CORPORATE SERVICES
Under an administrative and corporate services agreement, The Penn Mutual
Life Insurance Company ("Penn Mutual") serves as administrative and corporate
services agent for Penn Series. Each of the Funds pays Penn Mutual, on a
quarterly basis, an annual fee equal to 0.15% of each of the Fund's average
daily net assets.
EXPENSES AND LIMITATIONS THEREON
Each Fund bears all expenses of its operations other than those incurred by
the investment advisors under their respective investment advisory agreements
and those incurred by Penn Mutual under its administrative and corporate
services agreement. The investment advisors and Penn Mutual have each
voluntarily agreed to waive fees or reimburse expenses to the extent each of
the Fund's expense ratio (excluding interest, taxes, brokerage, other expenses
which are capitalized in accordance with generally accepted accounting
principles, and extraordinary expenses, but including investment advisory and
administrative and corporate services fees) exceeds the applicable expense
limitations for each Fund. The expense limitations for the Funds are as
follows: Money Market, 0.80%; Quality Bond: 0.90%; High Yield Bond: 0.90%;
Growth Equity: 1.00%; Value Equity: 1.00%; Flexibly Managed: 1.00%;
International Equity: 1.50%; and Small Capitalization 1.00%.
Fees were paid to non-affiliated Directors of Penn Series for the six months
ended June 30, 1995. However, no person received compensation from Penn Series
who is an officer, director, or employee of Penn Series, the investment
advisors, administrator, accounting agent or any parent or subsidiary thereof.
- --------------------------------------------------------------------------------
4 - CAPITAL STOCK
At June 30, 1995, there were one billion shares of $.10 par value capital
stock authorized for Penn Series. The shares are divided into ten classes of
100 million shares of capital stock. Eight of the classes designated are Penn
Series Money Market Fund Common Stock, Penn Series Quality Bond Fund Common
Stock, Penn Series High Yield Bond Fund Common Stock, Penn Series Growth Equity
Fund Common Stock, Penn Series Value Equity Fund Common Stock, Penn Series
Flexibly Managed Fund Common Stock, Penn Series International Equity Fund
Common Stock and Penn Series Small Capitalization Fund Common Stock. Two of the
classes of common stock are presently designated Class H and I, and no shares
have been issued.
Shares of the Growth Equity Fund are presently offered to Penn Mutual
Variable Annuity Accounts I, II, III ("Account I," "Account II," "Account III,"
respectively), Penn Mutual Variable Life Account I - Cornerstone VUL,
Cornerstone VUL II ("Cornerstone VUL", "Cornerstone VUL II"), Penn Mutual
Variable Life Account I - Momentum Builder ("Momentum Builder"), Penn Mutual
Variable Estate Max ("Estate Max"), Penn Mutual Separate Account P ("Account
P"), Penn Insurance and Annuity Variable Annuity Account I - Pennant
("Pennant") and Penn Mutual. Shares of the Money Market and Quality Bond Funds
are presently offered to Account III, Cornerstone VUL, Cornerstone VUL II,
Momentum Builder, Estate Max, Account P, Pennant and Penn Mutual. Shares of the
High Yield Bond, Flexibly Managed and Value Equity Funds are presently offered
to Account III, Cornerstone VUL, Cornerstone VUL II, Estate Max, Penn Mutual
Separate Account E ("Account E"), Account P, Momentum Builder, Pennant and Penn
Mutual. Shares of the International Equity Fund are
30
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4 - CAPITAL STOCK, CONTINUED
currently offered to Account III, Cornerstone VUL, Cornerstone VUL II, Estate
Max, Account E, Account P, Pennant and Penn Mutual. Shares of the Small
Capitalization Fund are currently offered to Account III, Cornerstone VUL,
Cornerstone VUL II, Estate Max, Pennant and Penn Mutual. At June 30, 1995 the
following shares of the Funds were owned by Penn Mutual and the respective Penn
Mutual variable and separate accounts:
<TABLE>
<CAPTION>
MONEY QUALITY HIGH YIELD GROWTH VALUE
MARKET BOND BOND EQUITY EQUITY
FUND FUND FUND FUND FUND
---------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C>
Account I................... 141,072
Account II.................. 36,097
Account III................. 15,133,532 3,197,769 3,487,223 3,884,224 5,839,931
Cornerstone VUL............. 3,288,678 180,756 194,525 134,876 260,631
Cornerstone VUL II.......... 101 400 132 576
Momentum Builder............ 89,663 63,215 43,743 44,638 56,723
Estate Max.................. 556,590
Account P................... 101,502
Pennant..................... 252,186 13,488 6,283 303 24,579
Account E................... 228,202 548,932
Penn Mutual.................
---------- --------- --------- --------- ---------
19,320,750 3,455,628 3,959,976 4,241,342 6,832,874
---------- --------- --------- --------- ---------
</TABLE>
<TABLE>
<S> <C> <C> <C>
<CAPTION>
FLEXIBLY INTERNATIONAL SMALL
MANAGED EQUITY CAPITALIZATION
FUND FUND FUND
---------- ------------- --------------
<S> <C> <C> <C>
Account I...............................
Account II..............................
Account III............................. 10,608,275 3,309,048 13,604
Cornerstone VUL......................... 677,395 319,213 2,577
Cornerstone VUL II...................... 2,016 489 114
Momentum Builder........................ 52,891
Estate Max..............................
Account P............................... 177,783 113,993
Pennant................................. 61,749 12,239 6,866
Account E............................... 1,131,663 834,435
Penn Mutual............................. 200,000
---------- --------- -------
12,711,772 4,589,417 223,161
---------- --------- -------
</TABLE>
Transactions in capital stock of the Money Market Fund were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31, 1994
----------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Shares sold................ 9,619,652 $ 9,619,652 24,124,114 $ 24,124,114
Shares issued to
shareholders in
reinvestment of net
investment income......... 430,599 430,599 495,077 495,077
Shares reacquired.......... (7,261,709) (7,261,709) (21,094,065) (21,094,065)
---------- ----------- ----------- ------------
2,788,542 $ 2,788,542 3,525,126 $ 3,525,126
---------- ----------- ----------- ------------
</TABLE>
31
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
4 - CAPITAL STOCK, CONTINUED
Transactions in capital stock of the Quality Bond Fund were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31, 1994
---------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Shares sold.................. 235,256 $ 2,309,913 811,401 $ 8,015,437
Shares issued to shareholders
in reinvestment of
Net investment income....... 0 0 219,293 1,982,404
Net realized gain from
investment transactions.... 0 0 0 0
Distribution in excess of
net investment income...... 0 0 0 0
Shares reacquired............ (245,126) (2,339,109) (805,049) (7,784,824)
--------- ----------- ---------- ------------
(9,870) $ (29,196) 225,645 $ 2,213,017
--------- ----------- ---------- ------------
Transactions in capital stock of the High Yield Bond Fund were as follows:
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31, 1994
---------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Shares sold.................. 296,573 $ 2,502,293 1,131,826 $ 10,655,899
Shares issued to shareholders
in reinvestment of
Net investment income....... 0 0 415,895 3,301,923
Distribution in excess of
net investment income...... 0 0 0 0
Shares reacquired............ (376,743) (3,109,008) (1,205,884) (11,160,396)
--------- ----------- ---------- ------------
(80,170) $ (606,715) 341,837 $ 2,797,426
--------- ----------- ---------- ------------
Transactions in capital stock of the Growth Equity Fund were as follows:
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31, 1994
---------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Shares sold.................. 140,534 $ 2,762,329 504,163 $ 9,676,502
Shares issued to shareholders
in reinvestment of
Net investment income....... 0 0 30,758 562,875
Net realized gain from
investment transactions.... 0 0 91,716 1,678,399
Shares reacquired............ (275,611) (5,372,826) (347,606) (6,523,206)
--------- ----------- ---------- ------------
(135,077) $(2,610,497) 279,031 $ 5,394,570
--------- ----------- ---------- ------------
Transactions in capital stock of the Value Equity Fund were as follows:
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31, 1994
---------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Shares sold.................. 812,557 $11,490,694 1,013,563 $ 13,157,473
Shares issued to shareholders
in reinvestment of
Net investment income....... 0 0 94,112 1,192,404
Net realized gain from
investment transactions.... 0 0 88,473 1,120,950
Shares reacquired............ (216,758) (3,041,500) (478,034) (6,181,178)
--------- ----------- ---------- ------------
595,799 $ 8,449,194 718,114 $ 9,289,649
--------- ----------- ---------- ------------
Transactions in capital stock of the Flexibly Managed Fund were as follows:
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31, 1994
---------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Shares sold.................. 1,806,784 $29,200,391 3,432,665 $ 55,075,210
Shares issued to shareholders
in reinvestment of
Net investment income....... 0 0 308,205 4,681,637
Net realized gain from
investment transactions.... 0 0 484,289 7,356,357
Shares reacquired............ (278,062) (4,611,166) (270,932) (4,354,461)
--------- ----------- ---------- ------------
1,528,722 $24,589,225 3,954,227 $ 62,758,743
--------- ----------- ---------- ------------
</TABLE>
32
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4 - CAPITAL STOCK, CONTINUED
Transactions in capital stock of the International Equity Fund were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31, 1994
--------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Shares sold................... 461,682 $ 5,875,873 2,799,905 $ 38,625,161
Shares issued to shareholders
in reinvestment of
Net investment income........ 0 0 17,649 229,611
Distribution in excess of net
investment income........... 0 0 0 0
Shares reacquired............. (438,599) (5,572,974) (1,177,992) (16,104,982)
-------- ----------- ---------- ------------
23,083 $ 302,899 1,639,562 $ 22,749,790
-------- ----------- ---------- ------------
</TABLE>
Transactions in capital stock of the Small Capitalization Fund were as follows:
<TABLE>
<CAPTION>
PERIOD ENDED+
JUNE 30, 1995
-------------------
SHARES AMOUNT
------- ----------
<S> <C> <C>
Shares sold................................................ 224,045 $2,247,249
Shares issued to shareholders in reinvestment of
Net investment income..................................... 0 0
Net realized gain from investment transactions............ 0 0
Shares reacquired.......................................... (884) (9,049)
------- ----------
223,161 $2,238,200
------- ----------
</TABLE>
+ For the period March 1, 1995 (commencement of operations) through June 30,
1995.
- --------------------------------------------------------------------------------
5 - PURCHASES AND SALES OF INVESTMENTS
During the period ended June 30, 1995 the Funds made the following purchases
and sales of portfolios securities:
<TABLE>
<CAPTION>
QUALITY BOND FUND HIGH YIELD BOND FUND
----------------------- -------------------------
PURCHASES SALES PURCHASES SALES
----------- ----------- -------------------------
<S> <C> <C> <C> <C>
Long Term U.S. Govt. and
Agency Obligations.......... $31,120,266 $34,517,584 $ 0 $ 0
Other Long-Term Securities... 26,637,091 27,174,996 17,783,068 13,083,145
----------- ----------- ------------ ------------
Totals...................... $57,757,357 $61,692,580 $ 17,783,068 $ 13,083,145
----------- ----------- ------------ ------------
<CAPTION>
GROWTH EQUITY FUND VALUE EQUITY FUND
----------------------- -------------------------
PURCHASES SALES PURCHASES SALES
----------- ----------- -------------------------
<S> <C> <C> <C> <C>
Long Term U.S. Govt. and
Agency Obligations.......... $ 0 $ 3,813,750 $ 0 $ 0
Other Long-Term Securities... 75,755,611 61,462,432 21,958,206 14,154,642
----------- ----------- ------------ ------------
Totals...................... $75,755,611 $65,276,182 $ 21,958,206 $ 14,154,642
----------- ----------- ------------ ------------
<CAPTION>
FLEXIBLY MANAGED FUND INTERNATIONAL EQUITY FUND
----------------------- -------------------------
PURCHASES SALES PURCHASES SALES
----------- ----------- -------------------------
<S> <C> <C> <C> <C>
Long Term U.S. Govt. and
Agency Obligations.......... $ 2,435,547 $ 0 $ 0 $ 0
Other Long-Term Securities... 56,142,196 31,451,040 25,607,265 20,992,944
----------- ----------- ------------ ------------
Totals...................... $58,577,743 $31,451,040 $ 25,607,265 $ 20,992,944
----------- ----------- ------------ ------------
</TABLE>
<TABLE>
<CAPTION>
SMALL
CAPITALIZATION FUND
-------------------
PURCHASES SALES
---------- --------
<S> <C> <C>
Long Term U.S. Govt. and Agency Obligations................ $ 0 $ 0
Other Long-Term Securities................................. 2,320,292 471,046
---------- --------
Totals.................................................... $2,320,292 $471,046
---------- --------
</TABLE>
33
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
6 - CAPITAL LOSS CARRYOVERS
Capital loss carryovers expire as follows:
<TABLE>
<CAPTION>
MONEY QUALITY HIGH YIELD INTERNATIONAL
MARKET BOND BOND EQUITY
FUND FUND FUND FUND
------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
1997........................... $ (62) $ 0 $ 0 $ 0
1998........................... (1,117) 0 0 0
1999........................... 0 0 (1,355,386) 0
2000........................... (61) 0 0 0
2001........................... (183) 0 0 0
2002........................... 0 (2,938,019) (1,572,728) (64,796)
------- ----------- ----------- --------
Total......................... $(1,423) $(2,938,019) $(2,928,114) $(64,796)
------- ----------- ----------- --------
</TABLE>
34
