United
New Concepts
Fund, Inc.
ANNUAL
REPORT
----------------------------------------
For the fiscal year ended March 31, 1995
<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
MARCH 31, 1995
Dear Shareholder:
As President of your Fund, I would like to take this opportunity to share
my thoughts on a subject that I believe is very important to all of us; the need
for tax incentives that will help Americans take personal responsibility for
their futures.
Voters all across America sent two clear messages in the elections held in
November 1994. They want their taxes reduced and they want their concern for
financial security addressed without adding new bureaucracies or government
programs. One of the methods to do this is to expand the availability of tax
incentives for individuals to invest in Individual Retirement Accounts. This
could be done in several ways such as:
restoring the universal availability of fully tax-deductible Individual
Retirement Accounts,
allowing non-working spouses to make a full contribution of $2,000 to an
Individual Retirement Account instead of only $250 as currently allowed,
eliminating the taxation on the distribution of earnings from Individual
Retirement Accounts.
All of us recognize that future generations will need to supplement social
security benefits by private savings in order to provide an adequate level of
retirement income. Expanding the benefits of IRA's provides tax incentives to
encourage savings which allows all individuals the opportunity to provide
financial security for themselves and their families. Encouraging savings
through tax incentives has additional indirect benefits. Americans' personal
savings rate has fallen from 8% in the 1960's to just 2% of disposable income
today. Expanding the benefits of IRA's will help reverse this trend, will
increase the amount of U.S. capital available for investment and should make the
U.S. less dependent on capital from foreign sources.
Changes to our current IRA laws, such as the ones I mentioned above, are
being discussed in Congress. I urge you to write to your Members of Congress
and to the President to tell them that you support expanded IRA legislation that
provides incentives and opportunities for all Americans to improve their
financial well being.
Finally, I appreciate your continued confidence in our products and
services.
Respectfully,
Keith A. Tucker
President
<PAGE>
FUND MANAGER'S LETTER
- -----------------------------------------------------------------
MARCH 31, 1995
Dear Shareholder:
This report relates to the operation of United New Concepts Fund for the
fiscal year ended March 31, 1995. The following discussion, graphs and tables
provide you with information regarding the Fund's performance during that
period.
Stock market conditions during the past fiscal year were affected in
general by rising interest rates brought on by the credit tightening actions of
the Federal Reserve Bank. However, despite rising rates, a sharp advance in the
small cap sector of the market occurred beginning in June of 1994. The market
considered Congressional inaction on major health care reform and the November
election of a new party to power in Congress as positive developments. Also,
importantly, earnings for corporate America remained in a strong uptrend. The
primary beneficiaries of these developments were technology and health care
stocks.
The Fund's strategy was to identify well-financed companies experiencing
relatively high rates of growth. The Fund emphasized stocks of companies that
were achieving exceptional earnings, particularly companies in the technology
and health care industries. These companies included several that were making
their initial public offering of stock. The Fund continued to maintain its
holdings in certain companies that had grown larger in size than the typical
small-cap security but which still offered prospects for substantial growth.
The strategies and techniques we applied resulted in better performance by
the Fund than the indexes charted on the following page. Those indexes reflect
the performance of securities that generally represent the small companies
sector of the stock market (the NASDAQ Industrials Index) and the universe of
funds with similar investment objectives (the Lipper Small Company Growth Fund
Universe Average). The Fund's performance exceeded that of the indexes because
we selected stocks in the industries that produced the better returns during the
past fiscal year.
We anticipate that inflation will remain low and that the rate of growth in
the economy will continue to slow. We believe the long-term outlook for small
cap securities is extremely positive, so we expect to continue to pursue the
same strategies we have employed in the recent past in seeking to achieve the
Fund's objectives. As markets contend with current uncertainties in the
economy, short-term performance will depend largely upon the ability to select
those stocks that are most likely to appreciate. Our stock selection will focus
on companies that are likely to do well regardless of the macro-economic
backdrop.
Thank you very much for your continued support and confidence in our
organization.
Respectfully,
Mark G. Seferovich
Manager, United New Concepts Fund
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
UNITED NEW CONCEPTS FUND, INC.,
THE NASDAQ INDUSTRIALS INDEX,
AND THE LIPPER SMALL COMPANY GROWTH FUND UNIVERSE AVERAGE
Average Annual Total Return*
1 year 5 years 10 years
13.57% 19.99% 14.31%
SOME OF THESE NUMBERS MAY NOT BE RIGHT!!!!
Lipper
Small
United Company
New NASDAQ Growth Fund
ConceptsIndustrials Universe
Fund Index Average
------------------ ----------
03/31/85 Purchase 9,425 10,000 10,000
03/31/86 13,687 12,642 12,952
03/31/87 16,337 15,276 14,663
03/31/88 13,875 12,906 12,957
03/31/89 13,547 13,409 14,570
03/31/90 14,440 15,154 16,332
03/31/91 19,295 18,333 18,680
03/31/92 26,594 22,740 23,004
03/31/93 27,444 24,002 25,742
03/31/94 31,619 26,204 28,559
03/31/95 38,102 26,966 30,760
- ---------- Lipper Small Company Growth Fund Universe Average -- $30,760
+++++ NASDAQ Industrials Index -- $26,966
===== United New Concepts Income Fund** -- $38,102
Past performance is not predictive of future performance. Indexes are
unmanaged.
*Performance data quoted represents past performance and is based on deduction
of a 5.75% sales load on the initial purchase in each of the three periods.
Investment return and principal value will fluctuate and an investor's shares,
when redeemed, may be worth more or less than their original cost.
**The value of the investment in the Fund is impacted by the sales load at the
time of the investment and by the ongoing expenses of the Fund.
<PAGE>
SHAREHOLDER SUMMARY
- --------------------------------------------------------------
United New Concepts Fund, Inc.
PORTFOLIO STRATEGY:
Common Stock in new & OBJECTIVE: Growth of capital.
emerging companies
STRATEGY: Invests primarily in
Maximum 10% Foreign common stocks of
Securities relatively new or
unseasoned companies,
Cash Reserves companies in their early stages of
development or smaller companies in new
or emerging industries. (May purchase
securities subject to repurchase
agreements. May invest in certain
options and futures.)
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
SCHEDULED DIVIDEND FREQUENCY: ANNUALLY (December)
PERFORMANCE SUMMARY
PER SHARE DATA
For the Fiscal Year Ended March 31, 1995
- ----------------------------------------
DIVIDENDS PAID $0.015
======
CAPITAL GAINS
DISTRIBUTION $0.825
======
NET ASSET VALUE ON
3/31/95 $12.25 adjusted to:$13.08 (A)
3/31/94 10.94
------
CHANGE PER SHARE $ 2.14
======
(A)This number includes the capital gains distribution of $0.825 paid in
December 1994 added to the actual net asset value on March 31, 1995.
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 3-31-95 13.57% 20.50%
5-year period ended 3-31-95 19.99% 21.41%
10-year period ended 3-31-95 14.31% 14.99%
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 March 31, 1995, United New Concepts Fund, Inc. had net assets totaling
$303,623,910 invested in a diversified portfolio of:
72.37% Common Stocks
27.63% Cash and Cash Equivalents
As a shareholder of United New Concepts Fund, Inc., for every $100 you had
invested on March 31, 1995, your Fund owned:
$43.44 Technological Stocks
27.63 Cash and Cash Equivalents
22.71 Consumer Stocks
4.80 Basic Industries Stocks
1.42 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.
MARCH 31, 1995
Shares Value
COMMON STOCKS
Automotive - 4.63%
Automotive Industries Holding, Inc.* ... 112,500 $ 2,446,875
Gentex Corporation* .................... 60,000 1,252,500
Harley-Davidson, Inc. .................. 260,000 6,240,000
O'Reilly Automotive, Inc.* ............. 80,000 2,070,000
Superior Industries International,
Inc. .................................. 80,000 2,040,000
Total ................................. 14,049,375
Biotechnology and Medical Services - 4.68%
American Healthcorp, Inc.* ............. 155,500 1,185,688
EP Technologies, Inc. .................. 250,000 2,109,250
Pyxis Corporation* .................... 150,000 3,103,050
St. Jude Medical, Inc. ................. 50,000 2,150,000
Tecnol Medical Products, Inc.* ......... 110,550 2,058,994
Ventritex, Inc.* ....................... 110,000 2,103,750
Zoll Medical Corporation* .............. 100,900 1,500,888
Total ................................. 14,211,620
Building - 0.17%
NCI Building Systems, Inc.* ............ 30,000 528,750
Computers and Office Equipment - 22.49%
America Online, Inc.* .................. 150,000 11,156,250
Broderbund Software, Inc.* ............. 112,200 5,820,375
Cerner Corporation* .................... 50,000 2,400,000
Concord EFS, Inc.* ...................... 112,500 3,079,688
Digi International Inc.* ............... 120,000 2,640,000
Electronic Arts Inc.* .................. 60,000 1,353,720
Health Management Systems, Inc.* ....... 80,000 2,950,000
Integrated Silicon Systems, Inc.* ..... 40,000 1,155,000
Learning Company (The)* ................ 131,400 3,942,000
Macromedia, Inc.* ...................... 30,000 1,005,000
MapInfo Corporation* ................... 25,500 774,563
Microsoft Corporation* ................. 50,000 3,553,100
MicroTouch Systems, Inc.* .............. 60,000 1,785,000
National Instruments Corporation* ...... 50,000 887,500
Norand Corporation* .................... 50,000 1,743,750
Parametric Technology Corporation* ..... 145,000 5,781,875
PHAMIS, Inc.* .......................... 26,500 573,063
QuickResponse Services, Inc.* .......... 141,000 2,679,000
Spectrum HoloByte, Inc.* .............. 46,600 745,600
Synopsys, Inc.* ........................ 70,000 3,342,500
Wall Data Incorporated* ................ 135,000 6,193,125
Wonderware Corporation* ............... 150,000 4,725,000
Total ................................. 68,286,109
See Notes to Schedule of Investments on page 12.
<PAGE>
THE INVESTMENTS OF
UNITED NEW CONCEPTS FUND, INC.
MARCH 31, 1995
Shares Value
COMMON STOCKS (Continued)
Drugs and Hospital Supply - 6.20%
Circa Pharmaceuticals, Inc.* ........... 140,000 $ 3,185,000
Forest Laboratories, Inc.* ............. 100,000 4,762,500
LUNAR CORPORATION* ...................... 50,000 956,250
OmniCare, Inc. ......................... 121,600 6,384,000
PacifiCare Health Systems Inc., Class B* 48,700 3,524,663
Total ................................. 18,812,413
Electronics - 7.09%
Atmel Corporation* ..................... 70,000 2,708,090
cisco Systems, Inc.* ................... 250,000 9,515,500
Digital Link Corporation* ............... 44,300 1,356,688
Micron Technology, Inc. ................ 60,000 4,560,000
Silicon Valley Group, Inc.* ............ 60,000 1,695,000
Summa Four, Inc.* ...................... 70,100 1,682,400
Total ................................. 21,517,678
Financial - 1.42%
Mercury Finance Company ................ 266,666 4,299,989
Hospital Management - 7.01%
Assisted Living Concepts, Inc.* ........ 100,000 850,000
HEALTHSOUTH Corporation* ............... 42,318 1,719,169
Sierra Health Services, Inc.* ......... 111,000 3,649,125
United HealthCare Corporation .......... 185,000 8,648,750
Vencor, Incorporated* .................. 180,150 6,417,844
Total ................................. 21,284,888
Leisure Time - 2.90%
Avid Technology, Inc.* ................. 115,000 3,450,000
Boston Chicken, Inc.* .................. 140,000 2,266,180
Longhorn Steaks, Inc.* ................. 95,000 1,021,250
Rock Bottom Restaurants, Inc.* ......... 100,000 2,075,000
Total ................................. 8,812,430
Retailing - 6.51%
Books-A-Million, Inc.* ................. 180,000 2,610,000
Central Tractor Farm & Country, Inc.* ... 125,000 1,562,500
Fastenal Company ....................... 200,000 4,937,400
Hollywood Entertainment Corporation* ... 120,000 4,185,000
Leslie's Poolmart* .................... 66,150 1,008,788
Movie Gallery, Inc.* ................... 109,000 2,943,000
Williams-Sonoma, Inc.* ................ 100,000 2,525,000
Total ................................. 19,771,688
See Notes to Schedule of Investments on page 12.
<PAGE>
THE INVESTMENTS OF
UNITED NEW CONCEPTS FUND, INC.
MARCH 31, 1995
Shares Value
COMMON STOCKS (Continued)
Services, Consumer and Business - 4.98%
CUC International Inc.* ................ 200,000 $ 7,775,000
Fusion Systems Corporation* ............ 75,000 2,231,250
Stewart Enterprises, Inc., Class A ..... 120,000 3,255,000
Varsity Spirit Corporation ............. 142,500 1,870,313
Total ................................. 15,131,563
Telecommunications - 2.98%
Applied Digital Access, Inc.* ......... 60,000 967,500
Ascend Communications, Inc.* ........... 15,000 973,125
MFS Communications Company, Inc.* ...... 105,000 3,688,125
Mobile Telecommunication Technologies
Corp.* ................................ 111,000 2,580,750
Ortel Corporation* ..................... 50,000 825,000
Total ................................. 9,034,500
Textiles and Apparel - 1.31%
Department 56, Inc.* ................... 100,000 3,987,500
TOTAL COMMON STOCKS - 72.37% $219,728,503
(Cost: $128,775,093)
Principal
Amount in
Thousands
SHORT-TERM SECURITIES
Banks and Savings and Loans - 0.29%
U.S. Bancorp,
Master Note ........................... $ 874 874,000
Drugs and Hospital Supply - 1.99%
SmithKline Beecham Corp.,
5.975%, 4-28-95 ....................... 6,085 6,057,731
Financial - 12.12%
AT&T Capital Corp.,
5.97%, 4-24-95 ........................ 5,934 5,911,367
B.A.T. Capital Corp.,
6.0%, 4-6-95 .......................... 5,000 4,995,833
Bell Atlantic Financial Services Inc.,
5.98%, 4-18-95 ........................ 7,334 7,313,289
Kerr-McGee Credit Corp.,
6.12%, 4-24-95 ........................ 7,930 7,898,994
Merrill Lynch & Co. Inc.,
6.02%, 5-5-95 ......................... 7,295 7,253,524
PHH Corp.,
5.97%, 5-3-95 ......................... 3,435 3,416,772
Total ................................. 36,789,779
See Notes to Schedule of Investments on page 12.
<PAGE>
THE INVESTMENTS OF
UNITED NEW CONCEPTS FUND, INC.
MARCH 31, 1995
Principal
Amount in
Thousands Value
SHORT-TERM SECURITIES (Continued)
Food and Related - 3.62%
General Mills, Inc.,
Master Note ........................... $1,035 $ 1,035,000
Heinz (H.J.) Company:
6.0%, 4-27-95 ......................... 1,500 1,493,500
5.99%, 5-5-95 ......................... 5,000 4,971,714
Quaker Oats Co.,
6.1%, 4-25-95 ......................... 3,500 3,485,767
Total ................................. 10,985,981
Machinery - 2.60%
Caterpillar Financial Services Corp.,
6.1%, 4-6-95 .......................... 7,895 7,888,311
Public Utilities - Electric - 2.79%
PS Colorado Credit Corp.,
6.13%, 4-3-95 ......................... 1,520 1,519,482
Puget Sound Power & Light Company,
6.125%, 4-28-95 ....................... 7,000 6,967,844
Total ................................. 8,487,326
Public Utilities - Pipelines - 1.11%
Enron Corp.,
6.13%, 4-17-95 ........................ 3,385 3,375,778
Railroads - 2.14%
Burlington Northern Railroad Co.,
6.12%, 4-21-95 ........................ 6,520 6,497,832
TOTAL SHORT-TERM SECURITIES - 26.66% $ 80,956,738
(Cost: $80,956,738)
TOTAL INVESTMENT SECURITIES - 99.03% $300,685,241
(Cost: $209,731,831)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.97% 2,938,669
NET ASSETS - 100.00% $303,623,910
See Notes to Schedule of Investments on page 12.
<PAGE>
THE INVESTMENTS OF
UNITED NEW CONCEPTS FUND, INC.
MARCH 31, 1995
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
MARCH 31, 1995
Assets
Investment securities - at value
(Notes 1 and 3) ................................. $300,685,241
Cash ............................................ 11,114
Receivables:
Investment securities sold ...................... 2,111,837
Fund shares sold ................................ 1,613,737
Dividends and interest .......................... 27,964
Prepaid insurance premium ........................ 8,292
------------
Total assets .................................. 304,458,185
------------
Liabilities
Payable for Fund shares redeemed ................. 685,638
Accrued service fee .............................. 69,803
Accrued transfer agency and dividend disbursing .. 55,098
Accrued accounting services fee .................. 4,167
Other ............................................ 19,569
------------
Total liabilities ............................. 834,275
------------
Total net assets ............................. $303,623,910
============
Net Assets
$1.00 par value capital stock, authorized --
100,000,000; shares outstanding -- 24,781,508
Capital stock ................................... $ 24,781,508
Additional paid-in capital ...................... 182,015,268
Accumulated undistributed income:
Accumulated undistributed net investment
income ........................................ 422,111
Accumulated undistributed net realized gain
on investment transactions .................... 5,451,613
Net unrealized appreciation in value of
investments at end of period .................. 90,953,410
------------
Net assets applicable to outstanding units
of capital ................................... $303,623,910
============
Net asset value per share (net assets divided by
shares outstanding) .............................. $12.25
Sales load (offering price x 5.75%) ................ .75
------
Offering price per share (net asset value
divided by 94.25%) ............................... $13.00
======
On sales of $100,000 or more the sales load
is reduced as set forth in the Prospectus.
See notes to financial statements.
<PAGE>
UNITED NEW CONCEPTS FUND, INC.
STATEMENT OF OPERATIONS
For the Fiscal Year Ended MARCH 31, 1995
Investment Income
Income:
Interest ........................................ $ 3,657,435
Dividends ....................................... 183,409
-----------
Total income .................................. 3,840,844
-----------
Expenses (Note 2):
Investment management fee ....................... 1,903,913
Transfer agency and dividend disbursing.......... 643,524
Service fee ..................................... 331,380
Accounting services fee ......................... 50,000
Custodian fees .................................. 20,291
Audit fees ...................................... 18,633
Legal fees ...................................... 6,522
Other ........................................... 114,629
-----------
Total expenses ................................ 3,088,892
-----------
Net investment income ........................ 751,952
-----------
Realized and Unrealized Gain on Investments
Realized net gain on investments ................. 13,964,808
Unrealized appreciation in value of investments
during the period ............................... 36,150,524
-----------
Net gain on investments ......................... 50,115,332
-----------
Net increase in net assets resulting from
operations ................................... $50,867,284
===========
See notes to financial statements.
<PAGE>
UNITED NEW CONCEPTS FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the fiscal year
ended March 31,
-------------------------
1995 1994
------------ ------------
Increase in Net Assets
Operations:
Net investment income (loss) ........$ 751,952 $ (219,191)
Realized net gain on investments .... 13,964,808 12,880,184
Unrealized appreciation ............. 36,150,524 14,982,107
------------ ------------
Net increase in net assets
resulting from operations ........ 50,867,284 27,643,100
------------ ------------
Dividends to shareholders from:*
Net investment income ............... (329,841) ---
Realized gains on securities
transactions ...................... (18,140,872) (4,451,708)
------------ ------------
(18,470,713) (4,451,708)
------------ ------------
Capital share transactions:
Proceeds from sale of shares
(20,385,599 and 3,653,867
shares, respectively) ............. 235,348,087 39,432,809
Proceeds from reinvestment of
dividend and/or capital gains
distribution (1,662,837 and 410,178
shares, respectively) ............. 18,341,093 4,417,621
Payments for shares redeemed
(17,468,085 and 2,419,485
shares, respectively) .............(203,514,427) (25,948,382)
------------ ------------
Net increase in net assets
resulting from capital share
transactions ..................... 50,174,753 17,902,048
------------ ------------
Total increase ................... 82,571,324 41,093,440
Net Assets
Beginning of period ............ ...... 221,052,586 179,959,146
------------ ------------
End of period ........................$303,623,910 $221,052,586
============ ============
Undistributed net
investment income .................. $422,111 $---
======== ====
*See "Financial Highlights" on page 16.
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 fiscal year ended March 31,
-----------------------------------
1995 1994 1993 1992 1991
------ ----- ----- ----- -----
Net asset value,
beginning of
period ........... $10.94 $ 9.70 $9.41 $6.84 $5.21
------ ----- ----- ----- -----
Income from investment
operations:
Net investment
income (loss) ... .03 (0.01) .01 .02 .07
Net realized and
unrealized gain
on investments .. 2.12 1.48 .29 2.57 1.65
------ ----- ----- ----- -----
Total from investment
operations ....... 2.15 1.47 .30 2.59 1.72
------ ----- ----- ----- -----
Less distributions:
Dividends from
net investment
income .......... (0.01) (0.00) (0.01) (0.02) (0.09)
Distribution from
capital gains ... (0.83) (0.23) (0.00) (0.00) (0.00)
------ ----- ----- ----- -----
Total distributions. (0.84) (0.23) (0.01) (0.02) (0.09)
------ ----- ----- ----- -----
Net asset value,
end of period .... $12.25 $10.94 $9.70 $9.41 $6.84
====== ===== ===== ===== =====
Total return* ...... 20.50% 15.21% 3.19% 37.83% 33.62%
Net assets, end
of period (000
omitted) .......... $303,624$221,053$179,959$152,426$78,274
Ratio of expenses
to average net
assets ........... 1.24% 1.19% 1.18% 1.16% 1.36%
Ratio of net investment
income to average
net assets ....... 0.30% -0.11% 0.15% 0.22% 1.12%
Portfolio turnover
rate ............. 44.01% 55.23% 57.10% 71.56% 89.64%
*Total return calculated without taking into account the sales load deducted on
an initial purchase.
See notes to financial statements.
<PAGE>
UNITED NEW CONCEPTS FUND, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1995
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 $11.5 billion of
combined net assets at March 31, 1995) at annual rates of .51% of the first $750
million of combined net assets, .49% on that amount between $750 million and
$1.5 billion, .47% between $1.5 billion and $2.25 billion, .45% between $2.25
billion and $3 billion, .43% between $3 billion and $3.75 billion, .40% between
$3.75 billion and $7.5 billion, .38% between $7.5 billion and $12 billion, and
.36% of that amount over $12 billion. The Fund accrues and pays this fee daily.
Pursuant to assignment of the Investment Management Agreement between the
Fund and Waddell & Reed, Inc. ("W&R"), Waddell & Reed Investment Management
Company ("WRIMCO"), a wholly-owned subsidiary of W&R, serves as the Fund's
investment manager.
The Fund has an Accounting Services Agreement with Waddell & Reed Services
Company ("WARSCO"), a wholly-owned subsidiary of W&R. Under the agreement,
WARSCO acts as the agent in providing accounting services and assistance to the
Fund and pricing daily the value of shares of the Fund. For these services, the
Fund pays WARSCO a monthly fee of one-twelfth of the annual fee shown in the
following table.
Accounting Services Fee
Average
Net Asset Level Annual Fee
(all dollars in millions) Rate for Each Level
------------------------- -------------------
From $ 0 to $ 10 $ 0
From $ 10 to $ 25 $ 10,000
From $ 25 to $ 50 $ 20,000
From $ 50 to $ 100 $ 30,000
From $ 100 to $ 200 $ 40,000
From $ 200 to $ 350 $ 50,000
From $ 350 to $ 550 $ 60,000
From $ 550 to $ 750 $ 70,000
From $ 750 to $1,000 $ 85,000
$1,000 and Over $100,000
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 March 31, 1995.
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
$1,810,181, out of which W&R paid sales commissions of $1,048,758 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 $8,460.
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 $83,903,883 while proceeds from maturities and sales
aggregated $78,589,832. Purchases of short-term securities aggregated
$902,874,612 while proceeds from maturities and sales aggregated $884,064,216.
No U.S. Government securities were bought or sold during the period ended March
31, 1995.
For Federal income tax purposes, cost of investments owned at March 31,
1995 was $209,731,831, resulting in net unrealized appreciation of $90,953,410,
of which $95,093,734 related to appreciated securities and $4,140,324 related to
depreciated securities.
NOTE 4 -- Federal Income Tax Matters
For Federal income tax purposes, the Fund realized capital gain net income
of $13,743,956 during the year ended March 31, 1995 of which a portion was paid
to shareholders during the period ended March 31, 1995. 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 March 31, 1995, the results of its operations for the year 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 March
31, 1995 by correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Kansas City, Missouri
May 5, 1995
- -----------------------------------------------------------------
<PAGE>
INCOME TAX INFORMATION
The amount of the dividend and capital gain below, multiplied by the number of
shares owned by you on the record date, will give you the total amount to be
reported in your Federal income tax return for the year in which they were
received or reinvested.
PER-SHARE AMOUNTS REPORTABLE AS:
----------------------------------------------
For Individuals For Corporations
---------------- ----------------------------
Record Ordinary Long-Term Non- Long-Term
Date Total IncomeCapital GainQualifyingQualifyingCapital Gain
- ---------------- ------------------------------------------------
12-16-94 $0.840 $0.0678 $0.7722 $0.0037 $0.0641 $0.7722
------- ------- ------- ------ ------- -------
Total $0.840 $0.0678 $0.7722 $0.0037 $0.0641 $0.7722
======= ======= ======= ======= ======= =======
CORPORATION DEDUCTIONS -- Under Federal tax law, the amounts reportable as
Qualifying Dividends are eligible for the dividends received deduction in the
year received as provided by Section 243 of the Internal Revenue Code.
The tax status of dividends paid will be reported to you on Form 1099-DIV after
the close of the applicable calendar year.
Shareholders are advised to consult with their tax advisor concerning the tax
treatment of dividends and distributions from the Fund.
<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 Municipal High Income Fund, Inc.
United High Income Fund, Inc.
United High Income Fund II, Inc.
United Continental Income Fund, Inc.
United Retirement Shares, Inc.
United Asset Strategy Fund, Inc.
United Income Fund
United Accumulative Fund
United Vanguard Fund, Inc.
United New Concepts Fund, Inc.
United Science and Technology Fund
United International Growth Fund, Inc.
United Gold & Government Fund, Inc.
FOR MORE INFORMATION:
Contact your representative, or your
local office as listed on your
Account Statement, or contact:
WADDELL & REED
CUSTOMER SERVICE
6300 Lamar Avenue
P.O. Box 29217
Shawnee Mission, KS 66201-9217
(913) 236-1303
NUR1012A(3-95)
printed on recycled paper
