United
New Concepts
Fund, Inc.
SEMIANNUAL
REPORT
-------------------------------------------
For the six months ended September 30, 1994
<PAGE>
This report is submitted for the general information of the shareholders of
United New Concepts Fund, Inc. It is not authorized for distribution to
prospective investors in the Fund unless accompanied with or preceded by the
United New Concepts Fund, Inc. current prospectus.
<PAGE>
PRESIDENT'S LETTER
SEPTEMBER 30, 1994
Dear Shareholder:
This report covers the investment performance of your Fund for the six
months ended September 30, 1994.
During the past six months, bond and equity markets have been affected by
increases in interest rates and the fear of higher inflation. We expect these
markets will continue to react to action, if any, taken by the Federal Reserve
to prevent increases in the inflation rate. Although markets have declined
since the beginning of 1994, historically such intermediate and short-term
fluctuations have had limited impact on achieving investors' long-term financial
goals.
Over time, interest rates follow inflation. Once it has been determined
that the rate of economic growth is manageable, the Federal Reserve Board's
actions will be seen as beneficial to combating inflation, which eventually
should lead to interest rates that are more favorable to the markets.
Based on our 57 years in the financial services industry, we believe that
our commitment to professional portfolio management is the key value-added
service we provide: we select and continuously supervise the Fund's investments
using the most up-to-date information and research available to ensure the
investments meet the Fund's stated objectives.
And, we believe our "hands-on" approach to investment management can help
reward the patient investor over the long term. We never forget that we manage
your money.
The following is an in-depth review of your Fund's recent performance. We
believe the information included in this review continues to reflect our aim of
achieving the goals and purposes of the Fund. Thank you for your continued
confidence in our products and services.
Respectfully,
Keith A. Tucker
President
<PAGE>
SHAREHOLDER SUMMARY
- --------------------------------------------------------------
United New Concepts Fund, Inc.
PORTFOLIO STRATEGY:
Common Stock in new & OBJECTIVE: Long-term appreciation
emerging companies of capital.
Maximum 10% Foreign STRATEGY: Invests primarily in
Securities common stocks of relatively new or
Cash Reserves unseasoned companies.
The use of cash reserves (often invested
in money market securities) for
defensive purposes is a strategy that
may be utilized by the New Concepts Fund
from time to time.
Moving into cash reserve positions at
times thought to be near a major stock
market peak allows the Fund the
opportunity to capture profits and
attempts to cushion the impact of market
declines. The added flexibility
provided by our CASH RESERVES STRATEGY
has from time to time been an important
element in our past success and, when
deemed appropriate, may be used in the
management of the portfolio in the
future.
FOUNDED: 1983
DIVIDENDS: PAID ANNUALLY (December)
<PAGE>
PERFORMANCE SUMMARY
PER SHARE DATA
For the Six Months Ended September 30, 1994
- -------------------------------------------
NET ASSET VALUE ON
9/30/94 $11.47
3/31/94 10.94
------
CHANGE PER SHARE $ 0.53
======
Past performance is not necessarily indicative of future results.
TOTAL RETURN HISTORY
Average Annual Total Return
---------------------------
With Without
Period Sales Load* Sales Load**
- ------ ----------- ------------
1-year period ended 9-30-94 -1.22% 4.80%
5-year period ended 9-30-94 15.98% 17.37%
10-year period ended 9-30-94 12.83% 13.50%
Performance data quoted represents past performance and is based on deduction of
5.75% sales load on the initial purchase in each of the three periods.
Performance data quoted in this column represents past performance without
taking into account the sales load deducted on an initial purchase.
Investment return and principal value will fluctuate and an investor's shares,
when redeemed, may be worth more or less than their original cost.
<PAGE>
PORTFOLIO HIGHLIGHTS
On September 30, 1994, United New Concepts Fund, Inc. had net assets totaling
$245,820,830 invested in a diversified portfolio of:
70.91% Common Stocks
29.09% Cash and Cash Equivalents
As a shareholder in United New Concepts Fund, Inc., for every $100 you had
invested on September 30, 1994, your Fund owned:
$36.46 Technological Stocks
29.09 Cash and Cash Equivalents
25.09 Consumer Stocks
7.79 Basic Industries Stocks
1.57 Financial Stock
<PAGE>
- -----------------------------------------------------------------
These STOCK CATEGORIES are provided as a reference only. Not all categories or
subcategories will be represented in a portfolio at all times. Refer to the
following pages for a more detailed portfolio listing.
BASIC INDUSTRIES
Airlines
Automotive
Building
Chemicals Major
Electrical Equipment
Engineering and Construction
Machinery
Manufacturers
Metals and Mining
Multi-Industry
Paper
Precious Metals
Railroad Equipment
Railroads
Shipping
Steel
Tire and Rubber
Trucking
CONSUMER
Beverages
Consumer Electronics and Appliances
Food and Related
Hospital Management
Household Products
Leisure Time
Packaging and Containers
Publishing and Advertising
Retailing
Services, Consumer and Business
Textiles and Apparel
Tobacco
ENERGY AND ENERGY-RELATED
Canadian Oil
Coal
Domestic Oil
International Oil
Oil Services
Propane
FINANCIAL
Banks and Savings and Loans
Financial
Insurance
PUBLIC UTILITIES
Electric
Gas
Pipelines
TECHNOLOGICAL
Aerospace
Biotechnology and Medical Services
Chemicals Specialty and Miscellaneous Technology
Computers and Office Equipment
Drugs and Hospital Supply
Electronics
Telecommunications
<PAGE>
THE INVESTMENTS OF
UNITED NEW CONCEPTS FUND, INC.
SEPTEMBER 30, 1994
Shares Value
COMMON STOCKS
Automotive - 6.25%
Automotive Industries Holding, Inc.* ... 112,500 $ 2,714,063
Gentex Corporation* .................... 60,000 1,417,500
Harley-Davidson, Inc. .................. 260,000 7,182,500
O'Reilly Automotive, Inc.* ............. 80,000 2,020,000
Superior Industries International,
Inc. .................................. 70,000 2,021,250
Total ................................. 15,355,313
Biotechnology and Medical Services - 4.28%
American Healthcorp, Inc.* ............. 125,500 941,250
Pyxis Corporation* .................... 150,000 3,693,750
St. Jude Medical, Inc. ................. 35,000 1,255,625
Tecnol Medical Products, Inc.* ......... 110,550 1,630,613
Ventritex, Inc.* ....................... 120,000 2,370,000
Zoll Medical Corporation* .............. 70,000 630,000
Total ................................. 10,521,238
Building - 0.79%
NCI Building Systems, Inc.* ............ 100,000 1,925,000
Computers and Office Equipment - 21.27%
America Online, Inc.* .................. 85,000 5,822,500
Broderbund Software, Inc.* ............. 80,000 4,260,000
Cerner Corporation* .................... 50,000 2,037,500
Concord EFS, Inc.* ...................... 112,500 2,109,375
DSP Group, Inc.* ...................... 60,000 1,312,500
Digi International Inc.* ............... 120,000 1,725,000
Health Management Systems, Inc.* ....... 80,000 2,070,000
Integrated Silicon Systems, Inc.* ..... 40,000 1,160,000
Intuit* ................................ 74,000 3,256,000
Learning Company (The)* ................ 131,400 2,628,000
MapInfo Corporation* ................... 25,500 510,000
MEDSTAT Group (The)* ................... 150,000 2,250,000
Microsoft Corporation* ................. 50,000 2,809,350
Norand Corporation* .................... 50,000 1,862,500
Parametric Technology Corporation* ..... 120,000 3,960,000
Pinnacle Micro, Inc.* .................. 85,000 1,136,875
QuickResponse Services, Inc.* .......... 100,000 1,525,000
Spectrum HoloByte, Inc.* .............. 100,000 1,387,500
Synopsys, Inc.* ........................ 70,000 3,185,000
Wall Data Incorporated* ................ 125,000 4,140,625
Wonderware Corporation* ............... 150,000 3,131,250
Total ................................. 52,278,975
See Notes to Schedule of Investments on page 9.
<PAGE>
THE INVESTMENTS OF
UNITED NEW CONCEPTS FUND, INC.
SEPTEMBER 30, 1994
Shares Value
COMMON STOCKS (Continued)
Drugs and Hospital Supply - 2.96%
Circa Pharmaceuticals, Inc.* ........... 140,000 $ 2,135,000
Forest Laboratories Inc.* .............. 80,000 3,940,000
OmniCare, Inc. ......................... 30,000 1,203,750
Total ................................. 7,278,750
Electronics - 5.42%
ADFlex Solutions, Inc.* ................ 20,000 350,000
Advanced Technology Materials, Inc.* ... 82,500 587,813
Atmel Corporation* ..................... 70,000 2,200,590
cisco Systems, Inc.* ................... 250,000 6,859,250
Mattson Technology, Inc.* .............. 36,000 621,000
Micron Technology, Inc. ................ 50,000 1,725,000
Summa Four, Inc.* ...................... 70,100 972,638
Total ................................. 13,316,291
Financial - 1.57%
Mercury Finance Company ................ 266,666 3,866,657
Hospital Management - 7.84%
ReLife, Inc.* .......................... 60,000 1,428,720
Sierra Health Services, Inc.* ......... 100,000 2,575,000
United HealthCare Corporation .......... 185,000 9,805,000
Vencor Incorporated* ................... 120,100 5,464,550
Total ................................. 19,273,270
Leisure Time - 3.77%
Avid Technology, Inc.* ................. 90,000 3,015,000
Boston Chicken, Inc.* .................. 140,000 2,905,000
Longhorn Steaks, Inc.* ................. 95,000 926,250
Radica Games Limited* .................. 200,000 1,137,400
Rock Bottom Restaurants, Inc.* ......... 100,000 1,287,500
Total ................................. 9,271,150
Machinery - 0.75%
Cognex Corporation* .................... 100,000 1,837,500
Retailing - 7.48%
Books-A-Million, Inc.* ................. 180,000 2,452,500
Fastenal Company ....................... 100,000 4,137,500
Hollywood Entertainment Corporation* ... 100,000 2,775,000
Leslie's Poolmart* .................... 66,150 859,950
Movie Gallery Inc.* .................... 100,000 2,056,200
Tommy Hilfiger Corporation* ............ 58,500 2,274,188
Williams-Sonoma, Inc.* ................ 112,500 3,839,063
Total ................................. 18,394,401
See Notes to Schedule of Investments on page 9.
<PAGE>
THE INVESTMENTS OF
UNITED NEW CONCEPTS FUND, INC.
SEPTEMBER 30, 1994
Shares Value
COMMON STOCKS (Continued)
Services, Consumer and Business - 5.05%
CUC International Inc.* ................ 200,000 $ 6,600,000
Fusion Systems Corporation* ............ 50,000 1,606,250
Stewart Enterprises, Inc., Class A ..... 110,000 2,695,000
Varsity Spirit Corporation* ............ 95,000 1,520,000
Total ................................. 12,421,250
Telecommunications - 2.53%
Applied Digital Access, Inc.* ......... 60,000 1,200,000
Ascend Communications, Inc.* ........... 15,000 365,625
MFS Communications Company, Inc.* ...... 70,000 2,397,500
Mobile Telecommunications Technologies
Corp.* ................................ 111,000 2,261,625
Total ................................. 6,224,750
Textiles and Apparel - 0.95%
Department 56, Inc.* ................... 60,000 2,340,000
TOTAL COMMON STOCKS - 70.91% $174,304,545
(Cost: $115,456,908)
Principal
Amount in
Thousands
SHORT-TERM SECURITIES
Banks and Savings and Loans - 3.51%
Abbey National North America,
4.82%, 11-30-94 ....................... $5,910 5,862,523
U.S. Bancorp,
Master Note ........................... 2,767 2,767,000
Total ................................. 8,629,523
Computers and Office Equipment - 2.32%
Electronic Data Systems Corp.:
4.79%, 10-14-94 ....................... 1,950 1,946,627
4.89%, 11-15-94 ....................... 3,770 3,746,956
Total ................................. 5,693,583
Consumer Electronics and Appliances - 0.20%
TDK (USA) Corp.,
4.8%, 10-20-94 ........................ 500 498,733
Electrical Equipment - 2.99%
General Electric Capital Corporation:
4.73%, 10-11-94 ....................... 5,805 5,797,373
4.75%, 10-11-94 ....................... 1,545 1,542,961
Total ................................. 7,340,334
See Notes to Schedule of Investments on page 9.
<PAGE>
THE INVESTMENTS OF
UNITED NEW CONCEPTS FUND, INC.
SEPTEMBER 30, 1994
Principal
Amount in
Thousands Value
SHORT-TERM SECURITIES (Continued)
Electronics - 3.84%
Motorola, Inc.,
4.75%, 10-12-94 ....................... $9,455 $ 9,441,277
Financial - 8.42%
Associates Corporation of North America,
Master Note ........................... 4,208 4,208,000
International Business Machines Credit
Corporation,
4.76%, 10-5-94 ........................ 5,000 4,997,356
Merrill Lynch & Co. Inc.,
4.8%, 10-6-94 ......................... 6,430 6,425,713
PHH Corp.,
4.9%, 10-26-94 ........................ 5,075 5,057,731
Total ................................. 20,688,800
Food and Related - 0.25%
Sara Lee Corporation,
Master Note ........................... 619 619,000
Machinery - 2.07%
Caterpillar Financial Services Corp.,
4.92%, 10-21-94 ....................... 5,115 5,101,019
Public Utilities - Gas - 0.71%
Questar Corp.,
4.8%, 10-28-94 ........................ 1,750 1,743,700
Telecommunications - 3.89%
Bell South Telecommunications Inc.,
4.8%, 10-19-94 ........................ 6,025 6,010,540
Southwestern Bell Telephone Company,
4.81%, 10-14-94 ....................... 3,560 3,553,816
Total ................................. 9,564,356
Tobacco - 1.75%
Philip Morris Cos. Inc.,
4.77%, 11-1-94......................... 4,330 4,312,215
TOTAL SHORT-TERM SECURITIES - 29.95% $ 73,632,540
(Cost: $73,632,540)
TOTAL INVESTMENT SECURITIES - 100.86% $247,937,085
(Cost: $189,089,448)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.86%) (2,116,255)
NET ASSETS - 100.00% $245,820,830
See Notes to Schedule of Investments on page 9.
<PAGE>
THE INVESTMENTS OF
UNITED NEW CONCEPTS FUND, INC.
SEPTEMBER 30, 1994
Notes To Schedule of Investments
*No income dividends were paid during the preceding 12 months.
See Note 1 to financial statements for security valuation and other significant
accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and
depreciation of investments owned for Federal income tax purposes.
<PAGE>
UNITED NEW CONCEPTS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1994
Assets
Investment securities - at value
(Notes 1 and 3) ................................. $247,937,085
Cash ............................................ 10,100
Receivables:
Investment securities sold ...................... 1,227,150
Fund shares sold ................................ 498,456
Dividends and interest .......................... 49,296
Prepaid insurance premium ........................ 11,991
------------
Total assets .................................. 249,734,078
------------
Liabilities
Payable for investment securities purchased ...... 3,355,488
Payable for Fund shares redeemed ................. 439,365
Accrued transfer agency and dividend disbursing .. 52,800
Accrued service fee .............................. 48,141
Accrued accounting services fee .................. 4,167
Other ............................................ 13,287
------------
Total liabilities ............................. 3,913,248
------------
Total net assets ............................. $245,820,830
============
Net Assets
$1.00 par value capital stock, authorized --
100,000,000; shares outstanding -- 21,435,543
Capital stock ................................... $ 21,435,543
Additional paid-in capital ...................... 148,096,656
Accumulated undistributed income:
Accumulated undistributed net investment
income ........................................ 131,945
Accumulated undistributed net realized gain
on investment transactions .................... 17,309,049
Net unrealized appreciation in value of
investments at end of period .................. 58,847,637
------------
Net assets applicable to outstanding units
of capital ................................... $245,820,830
============
Net asset value per share (net assets divided by
shares outstanding) .............................. $11.47
======
See notes to financial statements.
<PAGE>
UNITED NEW CONCEPTS FUND, INC.
STATEMENT OF OPERATIONS
For the Six Months Ended SEPTEMBER 30, 1994
Investment Income
Income:
Interest ........................................ $ 1,459,658
Dividends ....................................... 86,733
-----------
Total income .................................. 1,546,391
-----------
Expenses (Note 2):
Investment management fee ....................... 862,472
Transfer agency and dividend disbursing.......... 303,783
Service fee ..................................... 130,593
Accounting services fee ......................... 25,000
Audit fees ...................................... 11,443
Custodian fees .................................. 10,187
Legal fees ...................................... 3,285
Other ........................................... 67,683
-----------
Total expenses ................................ 1,414,446
-----------
Net investment income ........................ 131,945
-----------
Realized and Unrealized Gain on Investments
Realized net gain on investments ................. 7,681,372
Unrealized appreciation in value of investments
during the period ............................... 4,044,751
-----------
Net gain on investments ......................... 11,726,123
-----------
Net increase in net assets resulting from
operations ................................... $11,858,068
===========
See notes to financial statements.
<PAGE>
UNITED NEW CONCEPTS FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the For the
six months fiscal year
ended ended
September 30, March 31,
1994 1994
------------ ------------
Increase in Net Assets
Operations:
Net investment income (loss) ........$ 131,945 $ (219,191)
Realized net gain on investments .... 7,681,372 12,880,184
Unrealized appreciation ............. 4,044,751 14,982,107
------------ ------------
Net increase in net assets
resulting from operations ........ 11,858,068 27,643,100
------------ ------------
Dividends to shareholders from:*
Net investment income ............... --- ---
Realized gains on securities
transactions ...................... --- (4,451,708)
------------ ------------
--- (4,451,708)
------------ ------------
Capital share transactions:
Proceeds from sale of shares
(4,612,108 and 3,653,867
shares, respectively) ............. 50,495,605 39,432,809
Proceeds from reinvestment of
dividends and/or capital gains
distribution (0 and 410,178
shares, respectively) ............. --- 4,417,621
Payments for shares redeemed
(3,377,722 and 2,419,485
shares, respectively) ............. (37,585,429) (25,948,382)
------------ ------------
Net increase in net assets
resulting from capital share
transactions ..................... 12,910,176 17,902,048
------------ ------------
Total increase ................... 24,768,244 41,093,440
Net Assets
Beginning of period ............ ...... 221,052,586 179,959,146
------------ ------------
End of period ........................$245,820,830 $221,052,586
============ ============
Undistributed net
investment income .................. $131,945 $---
======== ====
*See "Financial Highlights" on page 13.
See notes to financial statements.
<PAGE>
UNITED NEW CONCEPTS FUND, INC.
FINANCIAL HIGHLIGHTS
For a Share of Capital Stock Outstanding
Throughout Each Period:
For the
six months For the fiscal year ended March 31,
ended -----------------------------------
9-30-94 1994 1993 1992 1991 1990
------- ------ ------ ------ ------ ------
Net asset value,
beginning of
period ........... $10.94 $ 9.70 $9.41 $6.84 $5.21 $5.06
------ ------ ----- ----- ----- -----
Income from investment
operations:
Net investment
income (loss) ... 0.01 (0.01) .01 .02 .07 .14
Net realized and
unrealized gain
on investments .. 0.52 1.48 .29 2.57 1.65 .19
------ ------ ----- ----- ----- -----
Total from investment
operations ....... 0.53 1.47 .30 2.59 1.72 .33
------ ------ ----- ----- ----- -----
Less distributions:
Dividends from
net investment
income .......... (0.00) (0.00) (0.01) (0.02) (0.09) (0.18)
Distribution from
capital gains ... (0.00) (0.23) (0.00) (0.00) (0.00) (0.00)
------ ------ ----- ----- ----- -----
Total distributions. (0.00) (0.23) (0.01) (0.02) (0.09) (0.18)
------ ------ ----- ----- ----- -----
Net asset value,
end of period .... $11.47 $10.94 $9.70 $9.41 $6.84 $5.21
====== ====== ===== ===== ===== =====
Total return* ...... 4.84% 15.21% 3.19% 37.83% 33.62% 6.59%
Net assets, end
of period (000
omitted) ..........$245,821$221,053$179,959$152,426$78,274$68,111
Ratio of expenses
to average net
assets ........... 1.25%** 1.19% 1.18% 1.16% 1.36% 1.27%
Ratio of net investment
income to average
net assets ....... 0.12%**-0.11% 0.15% 0.22% 1.12% 2.39%
Portfolio turnover
rate ............. 57.53%**55.23% 57.10% 71.56% 89.64% 130.41%
*Total return calculated without taking into account the sales load deducted on
an initial purchase.
**Annualized.
See notes to financial statements.
<PAGE>
UNITED NEW CONCEPTS FUND, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1994
NOTE 1 -- Significant Accounting Policies
United New Concepts Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements. The policies are in conformity with generally accepted accounting
principles.
A. Security valuation -- Each stock and convertible bond is valued at the
latest sale price thereof on the last business day of the fiscal period as
reported by the principal securities exchange on which the issue is traded
or, if no sale is reported for a stock, the average of the latest bid and
asked prices. Bonds, other than convertible bonds, are valued using a
pricing system provided by a major dealer in bonds. Convertible bonds are
valued using this pricing system only on days when there is no sale
reported. Stocks which are traded over-the-counter are priced using NASDAQ
(National Association of Securities Dealers Automated Quotations) which
provides information on bid and asked or closing prices quoted by major
dealers in such stocks. Short-term debt securities are valued at amortized
cost, which approximates market.
B. Security transactions and related investment income -- Security
transactions are accounted for on the trade date (date the order to buy or
sell is executed). Securities gains and losses are calculated on the
identified cost basis. Dividend income is recorded on the ex-dividend
date. Interest income is recorded on the accrual basis. See Note 3 --
Investment Security Transactions.
C. Federal income taxes -- It is the Fund's policy to distribute all of its
taxable income and capital gains to its shareholders and otherwise qualify
as a regulated investment company under the Internal Revenue Code. In
addition, the Fund intends to pay distributions as required to avoid
imposition of excise tax. Accordingly, provision has not been made for
Federal income taxes. See Note 4 -- Federal Income Tax Matters.
D. Dividends and distributions -- Dividends and distributions to shareholders
are recorded by the Fund on the record date. Net investment income
distributions and capital gains distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences are due to differing treatments
for items such as deferral of wash sales and post-October losses, foreign
currency transactions, net operating losses and expiring capital loss
carryforwards.
NOTE 2 -- Investment Management And Payments to Affiliated Persons
The Fund pays a fee for investment management services. The fee is
computed daily based on the net asset value at the close of business. The fee
consists of two elements: (i) a "Specific" fee computed on net asset value as of
the close of business each day at the annual rate of .35% of net assets and (ii)
a "Group" fee computed each day on the combined net asset values of all of the
funds in the United Group of mutual funds (approximately $11.2 billion of
combined net assets at September 30, 1994) at annual rates of .51% of the first
$750 million of combined net assets, .49% on that amount between $750 million
and $1.5 billion, .47% between $1.5 billion and $2.25 billion, .45% between
$2.25 billion and $3 billion, .43% between $3 billion and $3.75 billion, .40%
between $3.75 billion and $7.5 billion, .38% between $7.5 billion and $12
billion, and .36% of that amount over $12 billion. The Fund accrues and pays
this fee daily.
Pursuant to assignment of the Investment Management Agreement between the
Fund and Waddell & Reed, Inc. ("W&R"), Waddell & Reed Investment Management
Company ("WRIMCO"), a wholly-owned subsidiary of W&R, serves as the Fund's
investment manager.
The Fund has an Accounting Services Agreement with Waddell & Reed Services
Company ("WARSCO"), a wholly-owned subsidiary of W&R. Under the agreement,
WARSCO acts as the agent in providing accounting services and assistance to the
Fund and pricing daily the value of shares of the Fund. For these services, the
Fund pays WARSCO a monthly fee of one-twelfth of the annual fee shown in the
following table.
Accounting Services Fee
Average
Net Asset Level Annual Fee
(all dollars in millions) Rate for Each Level
------------------------- -------------------
From $ 0 to $ 10 $ 0
From $ 10 to $ 25 $ 10,000
From $ 25 to $ 50 $ 20,000
From $ 50 to $ 100 $ 30,000
From $ 100 to $ 200 $ 40,000
From $ 200 to $ 350 $ 50,000
From $ 350 to $ 550 $ 60,000
From $ 550 to $ 750 $ 70,000
From $ 750 to $1,000 $ 85,000
$1,000 and Over $100,000
Presently, the Fund operates under state expense requirements which limit
the amount of aggregate annual expenses, adjusted for certain excess custodian
fees, that the Fund may incur during its fiscal year. The Manager will
reimburse the Fund for any expenses in excess of the limitation. No such
reimbursement is required for the period ended September 30, 1994.
The Fund also pays WARSCO a monthly per account charge for transfer agency
and dividend disbursement services of $1.0208 for each shareholder account which
was in existence at any time during the prior month, plus $0.30 for each account
on which a dividend or distribution of cash or shares had a record date in that
month. The Fund also reimburses W&R and WARSCO for certain out-of-pocket costs.
As principal underwriter for the Fund's shares, W&R received direct and
indirect gross sales commissions (which are not an expense of the Fund) of
$778,377, out of which W&R paid sales commissions of $442,093 and all expenses
in connection with the sale of Fund shares, except for registration fees and
related expenses.
Under a Service Plan adopted by the Fund pursuant to Rule 12b-1 under the
Investment Company Act of 1940, the Fund may pay monthly a fee to W&R in an
amount not to exceed .25% of the Fund's average annual net assets. The fee is
to be paid to reimburse W&R for amounts it expends in connection with the
provision of personal services to Fund shareholders and/or maintenance of
shareholder accounts.
The Fund paid Directors' fees of $3,989.
W&R is an indirect subsidiary of Torchmark Corporation, a holding company,
and United Investors Management Company, a holding company, and a direct
subsidiary of Waddell & Reed Financial Services, Inc., a holding company.
NOTE 3 -- Investment Security Transactions
Purchases of investment securities, other than U.S. Government and short-
term securities, aggregated $46,217,166 while proceeds from maturities and sales
aggregated $47,997,165. Purchases of short-term securities aggregated
$367,368,354 while proceeds from maturities and sales aggregated $353,659,997.
No U.S. Government securities were bought or sold during the period ended
September 30, 1994.
For Federal income tax purposes, cost of investments owned at September 30,
1994 was $189,310,300, resulting in net unrealized appreciation of $58,626,785,
of which $64,392,746 related to appreciated securities and $5,765,961 related to
depreciated securities.
NOTE 4 -- Federal Income Tax Matters
For Federal income tax purposes, the Fund realized capital gain net income
of $13,051,036 during the year ended March 31, 1994, of which a portion was paid
to shareholders during the period ended March 31, 1994. Remaining capital gain
net income will be distributed to the Fund's shareholders.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
United New Concepts Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of United New Concepts Fund, Inc. (the
"Fund") at September 30, 1994, the results of its operations for the six months
then ended and the changes in its net assets and the financial highlights for
the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at September 30, 1994 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
PRICE WATERHOUSE LLP
Kansas City, Missouri
October 31, 1994
- -----------------------------------------------------------------
<PAGE>
DIRECTORS
Ronald K. Richey, Birmingham, Alabama, Chairman of the Board
Henry L. Bellmon, Red Rock, Oklahoma
Dodds I. Buchanan, Boulder, Colorado
Jay B. Dillingham, Kansas City, Missouri
John F. Hayes, Hutchinson, Kansas
Glendon E. Johnson, Miami, Florida
William T. Morgan, Los Angeles, California
Doyle Patterson, Kansas City, Missouri
Keith A. Tucker, Overland Park, Kansas
Frederick Vogel, III, Milwaukee, Wisconsin
Paul S. Wise, Carefree, Arizona
Leslie S. Wright, Birmingham, Alabama
OFFICERS
Keith A. Tucker, President
Robert L. Hechler, Vice President
Henry J. Herrmann, Vice President
Theodore W. Howard, Vice President and Treasurer
Sharon K. Pappas, Vice President and Secretary
Mark G. Seferovich, Vice President
Carl E. Sturgeon, Vice President
To all IRA Planholders:
As required by law, income tax will automatically be withheld from any
distribution or withdrawal from an IRA unless you make a written election not to
have taxes withheld. The election may be made by submitting forms provided by
Waddell & Reed, Inc. which can be obtained from your Waddell & Reed
representative or by submitting Internal Revenue Service form W-4P. Once made,
an election can be revoked by providing written notice to Waddell & Reed, Inc.
If you elect not to have tax withheld you may be required to make payments of
estimated tax. Penalties may be imposed by the IRS if withholding and estimated
tax payments are not adequate.
<PAGE>
The United Group of Mutual Funds
United Cash Management, Inc.
United Government Securities Fund, Inc.
United Bond Fund
United Municipal Bond Fund, Inc.
United Continental Income Fund, Inc.
United Income Fund
United Municipal High Income Fund, Inc.
United High Income Fund, Inc.
United High Income Fund II, Inc.
United Accumulative Fund
United Vanguard Fund, Inc.
United New Concepts Fund, Inc.
United Science and Technology Fund
United International Growth Fund, Inc.
United Gold & Government Fund, Inc.
United Retirement Shares, Inc.
FOR MORE INFORMATION:
Contact your representative, or your
local office as listed on your
Account Statement, or contact:
WADDELL & REED
CUSTOMER SERVICE
6300 Lamar Avenue
P.O. Box 29217
Shawnee Mission, KS 66201-9217
(913) 236-1303
NUR1012SA(9-94)
printed on recycled paper
