United
New Concepts
Fund, Inc.
SEMIANNUAL
REPORT
-------------------------------------------
For the six months ended September 30, 1995
<PAGE>
This report is submitted for the general information of the shareholders of
United 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, 1995
Dear Shareholder:
As President of your Fund, I would like to thank you for your continued
confidence in our products and services. We strive to provide the best service
possible to our shareholders: from the Fund's manager, to Waddell & Reed's
customer service representatives, to your personal account representative and
the Waddell & Reed office nearest you.
While personalized service has become increasingly rare in the investment
industry, we remain committed to locally based account representatives who
provide the personal service you need. They are ready to assist you through
regular reviews of your financial plan and to answer any financial questions you
may have. Your account representative is anxious to help you plan for your
retirement, fund a child's education or make plans for other long-term financial
goals.
We want to help you open the door to a better financial future. We will
continue to help you meet your specific financial needs through quality
investment products and personalized service that makes the investment process
more convenient and accessible for you.
Should you have any questions about your account or other financial issues,
contact your personal account representative or your local Waddell & Reed
office. They're ready to help you make the most of your financial future.
Respectfully,
Keith A. Tucker
President
<PAGE>
SHAREHOLDER SUMMARY
- --------------------------------------------------------------
United 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)
<PAGE>
PERFORMANCE SUMMARY
PER SHARE DATA
For the Six Months Ended September 30, 1995
- -------------------------------------------
NET ASSET VALUE ON
9/30/95 $15.14
3/31/95 12.25
------
CHANGE PER SHARE $ 2.89
======
Past performance is not necessarily indicative of future results.
TOTAL RETURN HISTORY
Average Annual Total Return
---------------------------
With Without
Period Sales Load* Sales Load**
- ------ ----------- ------------
1-year period ended 9-30-95 33.88% 42.05%
5-year period ended 9-30-95 27.57% 29.09%
10-year period ended 9-30-95 16.01% 16.70%
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, 1995, United New Concepts Fund, Inc. had net assets totaling
$422,663,116 invested in a diversified portfolio of:
79.21% Common Stocks
20.79% Cash and Cash Equivalents
As a shareholder of United New Concepts Fund, Inc., for every $100 you had
invested on September 30, 1995, your Fund owned:
$53.09 Technological Stocks
21.66 Consumer Stocks
20.79 Cash and Cash Equivalents
2.92 Basic Industries Stocks
1.54 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, 1995
Shares Value
COMMON STOCKS
Automotive - 2.92%
Gentex Corporation* .................... 60,000 $ 1,440,000
Harley-Davidson, Inc. .................. 260,000 6,337,500
O'Reilly Automotive, Inc.* ............. 80,000 2,430,000
Superior Industries International,
Inc. .................................. 80,000 2,150,000
Total ................................. 12,357,500
Biotechnology and Medical Services - 8.38%
American Healthcorp, Inc.* ............. 155,500 1,059,266
EP Technologies, Inc.* ................. 250,000 3,578,000
IMNET Systems, Inc.* ................... 60,000 1,545,000
OmniCare, Inc. ......................... 243,200 9,484,800
Owen Healthcare, Inc.* ................. 145,000 2,365,240
Physicians Resource Group, Inc.* ....... 150,000 3,318,750
Pyxis Corporation* .................... 170,000 3,283,040
St. Jude Medical, Inc.* ................ 60,000 3,798,720
Tecnol Medical Products, Inc.* ......... 145,550 2,765,450
Ventritex, Inc.* ....................... 150,000 3,243,750
Zoll Medical Corporation* .............. 100,900 958,550
Total ................................. 35,400,566
Computers and Office Equipment - 25.62%
Adobe Systems Incorporated ............. 110,000 5,713,070
America Online, Inc.* .................. 300,000 20,681,100
Broderbund Software, Inc.* ............. 112,200 8,548,182
Cerner Corporation* .................... 130,000 4,420,000
Checkfree Corporation* ................. 36,500 736,827
Digi International Inc.* ............... 120,000 3,360,000
Electronic Arts Inc.* .................. 60,000 2,201,220
HCIA Inc.* ............................. 30,000 750,000
HPR Inc.* .............................. 63,400 1,450,275
Health Management Systems, Inc.* ....... 120,000 3,330,000
Learning Company (The)* ................ 131,400 7,933,275
Macromedia, Inc.* ...................... 40,000 2,285,000
MapInfo Corporation* ................... 45,500 938,439
Medic Computer Systems, Inc.* .......... 30,000 1,548,750
Microsoft Corporation* ................. 40,000 3,622,480
MicroTouch Systems, Inc.* .............. 180,000 2,992,500
National Instruments Corporation* ...... 50,000 1,018,750
NETCOM On-Line Communication Services,
Inc.* ................................. 100,000 4,362,500
Parametric Technology Corporation* ..... 190,000 11,732,500
PHAMIS, Inc.* .......................... 65,000 1,767,155
Premenos Technology Corp.* ............. 46,000 1,477,750
QuickResponse Services, Inc.* .......... 141,000 3,718,875
See Notes to Schedule of Investments on page 10.
<PAGE>
THE INVESTMENTS OF
UNITED NEW CONCEPTS FUND, INC.
SEPTEMBER 30, 1995
Shares Value
COMMON STOCKS (Continued)
Computers and Office Equipment (Continued)
Synopsys, Inc.* ........................ 140,000 $ 4,340,000
Wall Data Incorporated* ................ 200,000 3,500,000
Wonderware Corporation* ............... 150,000 5,850,000
Total ................................. 108,278,648
Drugs and Hospital Supply - 2.69%
Forest Laboratories, Inc.* ............. 100,000 4,450,000
LUNAR CORPORATION* ...................... 60,000 1,965,000
Watson Pharmaceuticals Inc.* ........... 120,400 4,951,450
Total ................................. 11,366,450
Electronics - 12.61%
Atmel Corporation* ..................... 140,000 4,733,680
cisco Systems, Inc.* ................... 250,000 17,265,500
Concord EFS, Inc.* ...................... 168,750 5,083,595
Digital Link Corporation* ............... 44,300 1,151,800
FSI International, Inc.* ............... 50,000 1,656,250
LSI Logic Corporation* ................. 126,000 7,276,500
MEMC Electronic Materials, Inc.* ....... 125,000 3,390,625
Micron Technology, Inc. ................ 100,000 7,950,000
Silicon Valley Group, Inc.* ............ 80,000 3,084,960
Summa Four, Inc.* ...................... 70,100 1,699,925
Total ................................. 53,292,835
Financial - 1.54%
Mercury Finance Company ................ 266,667 6,499,985
Hospital Management - 6.77%
Assisted Living Concepts, Inc.* ........ 100,000 1,562,500
HEALTHSOUTH Corporation* ............... 84,636 2,158,218
PacifiCare Health Systems, Inc.* ....... 73,700 5,002,389
Sierra Health Services, Inc.* ......... 136,000 3,400,000
United HealthCare Corporation .......... 213,000 10,410,375
Vencor, Incorporated* .................. 190,150 6,084,800
Total ................................. 28,618,282
Leisure Time - 1.40%
Boston Chicken, Inc.* .................. 100,000 2,618,700
Longhorn Steaks, Inc.* ................. 95,000 1,662,500
Rock Bottom Restaurants, Inc.* ......... 100,000 1,612,500
Total ................................. 5,893,700
See Notes to Schedule of Investments on page 10.
<PAGE>
THE INVESTMENTS OF
UNITED NEW CONCEPTS FUND, INC.
SEPTEMBER 30, 1995
Shares Value
COMMON STOCKS (Continued)
Retailing - 6.23%
Books-A-Million, Inc.* ................. 180,000 $ 3,206,160
Central Tractor Farm & Country, Inc.* ... 165,000 1,876,875
Fastenal Company ....................... 200,000 7,325,000
Hollywood Entertainment Corporation* ... 240,000 5,144,880
Leslie's Poolmart* .................... 95,917 1,522,682
Movie Gallery, Inc.* ................... 121,000 5,172,750
Williams-Sonoma, Inc.* ................ 100,000 2,100,000
Total ................................. 26,348,347
Services, Consumer and Business - 5.88%
CMG Information Services, Inc.* ........ 85,000 2,411,875
CUC International Inc.* ................ 300,000 10,462,500
Fusion Systems Corporation* ............ 105,000 3,045,000
Stewart Enterprises, Inc., Class A ..... 179,100 6,447,600
Varsity Spirit Corporation ............. 142,500 2,475,938
Total ................................. 24,842,913
Telecommunications - 3.79%
Applied Digital Access, Inc.* ......... 100,000 1,262,500
Ascend Communications, Inc.* ........... 65,000 5,195,905
MFS Communications Company, Inc.* ...... 105,000 4,606,875
Mobile Telecommunication Technologies
Corp.* ................................ 121,000 3,751,000
Ortel Corporation* ..................... 89,000 1,212,625
Total ................................. 16,028,905
Textiles and Apparel - 1.38%
Department 56, Inc.* ................... 125,000 5,843,750
TOTAL COMMON STOCKS - 79.21% $334,771,881
(Cost: $170,805,695)
Principal
Amount in
Thousands
SHORT-TERM SECURITIES
Banks and Savings and Loans - 1.83%
Dresdner Bank AG,
5.78%, 10-4-95 ........................ $7,530 7,526,373
U.S. Bancorp,
Master Note ........................... 205 205,000
Total ................................. 7,731,373
See Notes to Schedule of Investments on page 10.
<PAGE>
THE INVESTMENTS OF
UNITED NEW CONCEPTS FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
SHORT-TERM SECURITIES (Continued)
Financial - 9.07%
B.A.T. Capital Corp.,
5.75%, 10-27-95 ....................... $6,180 $ 6,154,336
BHP Finance (U.S.A.) Inc.:
5.72%, 10-4-95 ........................ 4,500 4,497,855
5.75%, 10-4-95 ........................ 2,670 2,668,721
Bell Atlantic Financial Services Inc.,
6.15%, 10-5-95 ........................ 5,610 5,606,167
Dana Credit Corp.,
5.87%, 10-23-95 ....................... 3,000 2,989,238
IBM Credit Corporation,
5.72%, 10-4-95 ........................ 3,375 3,373,391
Kerr-McGee Credit Corp.,
5.85%, 10-24-95 ....................... 2,865 2,854,292
Textron Financial Corp.,
5.87%, 10-27-95 ....................... 4,160 4,142,364
USL Capital Corporation,
5.75%, 10-5-95 ........................ 6,070 6,066,122
Total ................................. 38,352,486
Food and Related - 3.74%
ConAgra, Inc.,
5.85%, 11-1-95 ........................ 8,440 8,397,484
General Mills, Inc.,
Master Note ........................... 1,310 1,310,000
Quaker Oats Co.,
5.9%, 11-17-95 ........................ 6,030 5,983,552
Sara Lee Corporation,
Master Note ........................... 130 130,000
Total ................................. 15,821,036
Paper - 1.31%
Champion International Corporation,
5.88%, 10-12-95 ....................... 5,530 5,520,064
Public Utilities - Electric - 2.61%
Dominion Resources, Inc.,
5.83%, 10-31-95 ....................... 800 796,113
Public Service Company of Colorado,
7.0%, 10-2-95 ......................... 6,200 6,198,794
Western Resources Inc.,
5.83%, 10-11-95 ....................... 4,045 4,038,449
Total ................................. 11,033,356
Public Utilities - Pipelines - 1.26%
Enron Corp.,
5.85%, 10-27-95 ....................... 5,360 5,337,354
See Notes to Schedule of Investments on page 10.
<PAGE>
THE INVESTMENTS OF
UNITED NEW CONCEPTS FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
SHORT-TERM SECURITIES (Continued)
Publishing and Advertising - 0.86%
American Greetings Corporation,
5.74%, 10-5-95 ........................ $3,640 $ 3,637,679
Retailing - 2.34%
K Mart Corporation:
5.9%, 10-20-95 ........................ 5,000 4,984,431
5.9%, 10-25-95 ........................ 4,915 4,895,668
Total ................................. 9,880,099
Tobacco - 0.48%
Philip Morris Companies, Inc.,
5.7%, 10-20-95 ........................ 2,030 2,023,893
TOTAL SHORT-TERM SECURITIES - 23.50% $ 99,337,340
(Cost: $99,337,340)
TOTAL INVESTMENT SECURITIES - 102.71% $434,109,221
(Cost: $270,143,035)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (2.71%) (11,446,105)
NET ASSETS - 100.00% $422,663,116
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, 1995
Assets
Investment securities - at value
(Notes 1 and 3) ................................. $434,109,221
Cash ............................................ 28,022
Receivables:
Investment securities sold ...................... 1,866,525
Fund shares sold ................................ 933,820
Dividends and interest .......................... 22,699
Prepaid insurance premium ........................ 12,588
------------
Total assets .................................. 436,972,875
------------
Liabilities
Payable for Fund shares redeemed ................. 10,789,968
Payable for investment securities purchased ...... 3,288,550
Accrued service fee .............................. 87,390
Accrued transfer agency and dividend disbursing .. 79,336
Accrued accounting services fee .................. 5,000
Other ............................................ 59,515
------------
Total liabilities ............................. 14,309,759
------------
Total net assets ............................. $422,663,116
============
Net Assets
$1.00 par value capital stock, authorized --
200,000,000; shares outstanding -- 27,915,902
Capital stock ................................... $ 27,915,902
Additional paid-in capital ...................... 218,911,034
Accumulated undistributed income:
Accumulated undistributed net investment
income ........................................ 1,027,525
Accumulated undistributed net realized gain
on investment transactions .................... 10,842,469
Net unrealized appreciation in value of
investments at end of period .................. 163,966,186
------------
Net assets applicable to outstanding units
of capital ................................... $422,663,116
============
Net asset value per share (net assets divided by
shares outstanding) .............................. $15.14
======
See notes to financial statements.
<PAGE>
UNITED NEW CONCEPTS FUND, INC.
STATEMENT OF OPERATIONS
For the Six Months Ended SEPTEMBER 30, 1995
Investment Income
Income:
Interest ........................................ $ 2,624,521
Dividends ....................................... 117,110
-----------
Total income .................................. 2,741,631
-----------
Expenses (Note 2):
Investment management fee ....................... 1,373,615
Transfer agency and dividend disbursing.......... 391,676
Service fee ..................................... 223,864
Accounting services fee ......................... 27,500
Audit fees ...................................... 14,416
Custodian fees .................................. 9,044
Legal fees ...................................... 8,782
Other ........................................... 87,320
-----------
Total expenses ................................ 2,136,217
-----------
Net investment income ........................ 605,414
-----------
Realized and Unrealized Gain on Investments
Realized net gain on investments ................. 5,390,856
Unrealized appreciation in value of investments
during the period ............................... 73,012,776
-----------
Net gain on investments ......................... 78,403,632
-----------
Net increase in net assets resulting from
operations ................................... $79,009,046
===========
See notes to financial statements.
<PAGE>
UNITED NEW CONCEPTS FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the For the
six months fiscal year
ended ended
September 30, March 31,
1995 1995
------------ ------------
Increase in Net Assets
Operations:
Net investment income ...............$ 605,414 $ 751,952
Realized net gain on investments .... 5,390,856 13,964,808
Unrealized appreciation ............. 73,012,776 36,150,524
------------ ------------
Net increase in net assets
resulting from operations ........ 79,009,046 50,867,284
------------ ------------
Dividends to shareholders from:*
Net investment income ............... --- (329,841)
Realized gains on securities
transactions ...................... --- (18,140,872)
------------ ------------
--- (18,470,713)
------------ ------------
Capital share transactions:
Proceeds from sale of shares
(21,526,851 and 20,385,599
shares, respectively) ............. 293,908,983 235,348,087
Proceeds from reinvestment of
dividend and/or capital gains
distribution (-0- and 1,662,837
shares, respectively) ............. --- 18,341,093
Payments for shares redeemed
(18,392,457 and 17,468,085
shares, respectively) .............(253,878,823) (203,514,427)
------------ ------------
Net increase in net assets
resulting from capital share
transactions ..................... 40,030,160 50,174,753
------------ ------------
Total increase ................... 119,039,206 82,571,324
Net Assets
Beginning of period ............ ...... 303,623,910 221,052,586
------------ ------------
End of period ........................$422,663,116 $303,623,910
============ ============
Undistributed net
investment income .................. $1,027,525 $422,111
========== ========
*See "Financial Highlights" on page 14.
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 -----------------------------------
9-30-95 1995 1994 1993 1992 1991
------- ------ ------ ------ ------ ------
Net asset value,
beginning of
period ........... $12.25 $10.94 $ 9.70 $9.41 $6.84 $5.21
------ ------ ----- ----- ----- -----
Income from investment
operations:
Net investment
income (loss) ... .02 .03 (0.01) .01 .02 .07
Net realized and
unrealized gain
on investments .. 2.87 2.12 1.48 .29 2.57 1.65
------ ------ ----- ----- ----- -----
Total from investment
operations ....... 2.89 2.15 1.47 .30 2.59 1.72
------ ------ ----- ----- ----- -----
Less distributions:
Dividends from
net investment
income .......... (0.00) (0.01) (0.00) (0.01) (0.02) (0.09)
Distribution from
capital gains ... (0.00) (0.83) (0.23) (0.00) (0.00) (0.00)
------ ------ ----- ----- ----- -----
Total distributions. (0.00) (0.84) (0.23) (0.01) (0.02) (0.09)
------ ------ ----- ----- ----- -----
Net asset value,
end of period .... $15.14 $12.25 $10.94 $9.70 $9.41 $6.84
====== ====== ===== ===== ===== =====
Total return* ...... 23.59% 20.50% 15.21% 3.19% 37.83% 33.62%
Net assets, end
of period (000
omitted) ..........$422,663$303,624$221,053$179,959$152,426$78,274
Ratio of expenses
to average net
assets ........... 1.18%** 1.24% 1.19% 1.18% 1.16% 1.36%
Ratio of net investment
income to average
net assets ....... 0.34%** 0.30% -0.11% 0.15% 0.22% 1.12%
Portfolio turnover
rate ............. 20.13%**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.
**Annualized.
See notes to financial statements.
<PAGE>
UNITED NEW CONCEPTS FUND, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 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 $13.3 billion of
combined net assets at September 30, 1995) at annual rates of .51% of the first
$750 million of combined net assets, .49% on that amount between $750 million
and $1.5 billion, .47% between $1.5 billion and $2.25 billion, .45% between
$2.25 billion and $3 billion, .43% between $3 billion and $3.75 billion, .40%
between $3.75 billion and $7.5 billion, .38% between $7.5 billion and $12
billion, and .36% of that amount over $12 billion. The Fund accrues and pays
this fee daily.
Pursuant to assignment of the Investment Management Agreement between the
Fund and Waddell & Reed, Inc. ("W&R"), Waddell & Reed Investment Management
Company ("WRIMCO"), a wholly-owned subsidiary of W&R, serves as the Fund's
investment manager.
The Fund has an Accounting Services Agreement with Waddell & Reed Services
Company ("WARSCO"), a wholly-owned subsidiary of W&R. Under the agreement,
WARSCO acts as the agent in providing accounting services and assistance to the
Fund and pricing daily the value of shares of the Fund. For these services, the
Fund pays WARSCO a monthly fee of one-twelfth of the annual fee shown in the
following table.
Accounting Services Fee
Average
Net Asset Level Annual Fee
(all dollars in millions) Rate for Each Level
------------------------- -------------------
From $ 0 to $ 10 $ 0
From $ 10 to $ 25 $ 10,000
From $ 25 to $ 50 $ 20,000
From $ 50 to $ 100 $ 30,000
From $ 100 to $ 200 $ 40,000
From $ 200 to $ 350 $ 50,000
From $ 350 to $ 550 $ 60,000
From $ 550 to $ 750 $ 70,000
From $ 750 to $1,000 $ 85,000
$1,000 and Over $100,000
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, 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
$1,704,586, out of which W&R paid sales commissions of $979,103 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 $6,171.
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 $64,249,345 while proceeds from maturities and sales
aggregated $27,585,710. Purchases of short-term securities aggregated
$570,056,623 while proceeds from maturities and sales aggregated $554,170,910.
No U.S. Government securities were bought or sold during the period ended
September 30, 1995.
For Federal income tax purposes, cost of investments owned at September 30,
1995 was $270,143,035, resulting in net unrealized appreciation of $163,966,186
of which $172,570,823 related to appreciated securities and $8,604,637 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.
NOTE 5 -- Commencement of Multiclass Operations
On July 18, 1995, the Fund was authorized to offer investors a choice of
two classes of shares, Class A and Class Y. A comprehensive discussion of the
terms under which shares of either class are offered is contained in the
prospectus and the Statement of Additional Information for the Fund.
The Fund commenced multiclass operations on September 7, 1995. The
following class specific information is presented in footnote format in lieu of
presentation in the principal financial statements due to the small amount of
Class Y share transactions during the reporting period:
Class A Class Y Total
------------ ---------- ------------
Value issued from sale
of shares.......... $293,056,361 $852,622 $293,908,983
Value issued from
reinvestment of
dividends ......... --- --- ---
Value redeemed ..... (253,878,823) --- (253,878,823)
----------- ---------- -----------
Increase in outstanding
capital............ $39,177,538 $852,622 $ 40,030,160
============= ============ =============
Shares outstanding . 27,859,593 56,309 27,915,902
Net asset value per share $15.14 $15.14
<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, 1995, the results of its operations for the six months
then ended and the changes in its net assets and the financial highlights for
the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at September 30, 1995 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
Price Waterhouse LLP
Kansas City, Missouri
November 3, 1995
<PAGE>
DIRECTORS
Ronald K. Richey, Birmingham, Alabama, Chairman of the Board
Henry L. Bellmon, Red Rock, Oklahoma
Dodds I. Buchanan, Boulder, Colorado
Jay B. Dillingham, Kansas City, Missouri
Linda Graves, Topeka, Kansas
John F. Hayes, Hutchinson, Kansas
Glendon E. Johnson, Miami, Florida
James B. Judd, Kansas City, Missouri
William T. Morgan, Los Angeles, California
Doyle Patterson, Kansas City, Missouri
Eleanor B. Schwartz, Kansas City, Missouri
Keith A. Tucker, Overland Park, Kansas
Frederick Vogel III, Milwaukee, Wisconsin
Paul S. Wise, Carefree, Arizona
Leslie S. Wright, Birmingham, Alabama
OFFICERS
Keith A. Tucker, President
Robert L. Hechler, Vice President
Henry J. Herrmann, Vice President
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
Our INTERNET address is:
http://www.waddell.com
NUR1012SA(9-95)
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