Table of Contents
USAA Family of Funds 1
Message from the President 2
Investment Review 4
Message from the Manager 5
Financial Information:
Independent Auditors' Report 7
Statement of Assets and Liabilities 8
Portfolio of Investments in Securities 9
Notes to Portfolio of Investments 10
Statement of Operations 11
Statements of Changes in Net Assets 12
Notes to Financial Statements 13
Important Information:
Through our ongoing efforts to reduce expenses and respond to
shareholder requests, your annual and semiannual report mailings are now
"streamlined." One copy of each report will be sent to each address,
instead of our previous practice of sending one report to every
registered owner. For many shareholders and their families, this
eliminates duplicate copies, saving paper and postage costs to the Fund.
If you are the primary shareholder on at least one account, prefer not
to participate in streamlining, and would like to continue receiving one
report per registered account owner, you may request this in writing to:
USAA Investment Management Company
Attn: Report Mail
9800 Fredericksburg Road
San Antonio, TX 78284-8916
or phone a Mutual Fund Representative at 1-800-531-8448 during business hours.
This report is for the information of the shareholders and others who
have received a copy of the currently effective prospectus of the USAA
GNMA Trust, managed by USAA Investment Management Company (IMCO).
It may be used as sales literature only when preceded or accompanied by
a current prospectus which gives further details about the fund.
USAA with the eagle is registered in the U.S. Patent & Trademark Office.
(copyright)1995, USAA. All rights reserved.
USAA Family of Funds Performance Summary
If you own only one or two USAA funds, you may not be aware of the performance
of our other funds. This summary is a snapshot of the performance of all 29
funds by investment objective as of June 30, 1995. If you're interested in more
information, please call us at 1-800-531-1087 for a prospectus. Please read the
prospectus carefully before investing.
<TABLE>
<CAPTION>
Average Annual Total Return**
Investment Inception Since 7-Day 30-Day***
Objective Date 1 yr 5 yrs 10 yrs Inception Simple SEC
Capital Appreciation % % % % % %
<S> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth 10/19/81 39.72 11.12 9.78 - - -
Emerging Markets 11/7/94 - - - (0.50) - -
Gold 8/15/84 6.88 4.66 2.86 - - -
Growth 4/5/71 26.34 12.37 11.75 - - -
Growth & Income 6/1/93 21.19 - - 10.49 - -
International 7/11/88 4.23 7.89 - 9.33 - -
World Growth 10/1/92 7.88 - - 11.71 - -
Diversified/Balanced
Balanced Portfolio 1/11/89 11.09 8.59 - 8.93 - 4.06
Cornerstone 8/15/84 9.25 9.24 12.00 - - -
Income - Taxable
GNMA 2/1/91 11.00 - - 8.08 - 6.79
Income 3/4/74 15.07 10.00 10.04 - - 6.87
Income Stock 5/4/87 19.52 12.26 - 11.44 - -
Short-Term Bond 6/1/93 8.40 - - 4.83 - 6.77
Income - Tax Exempt
Long-Term 3/19/82 7.28 7.66 8.60 - - 5.79
Intermediate-Term 3/19/82 7.60 7.71 7.82 - - 5.22
Short-Term 3/19/82 5.23 5.52 5.76 - - 4.36
California Bond* 8/1/89 8.96 7.66 - 7.23 - 5.79
Florida Tax-Free Income* 10/1/93 7.82 - - 0.09 - 5.71
New York Bond* 10/15/90 7.36 - - 8.65 - 5.60
Texas Tax-Free Income* 8/1/94 - - - 8.40 - 5.63
Virginia Bond* 10/15/90 8.79 - - 8.31 - 5.78
Money Market
Money Market 2/2/81 5.33 4.76 6.06 - 5.75 -
Tax Exempt Money Market 2/6/84 3.34 3.57 4.45 - 3.82 -
Treasury Money Market Trust 2/1/91 5.06 - - 4.01 5.69 -
California Money Market* 8/1/89 3.31 3.36 - 3.71 3.74 -
Florida Tax-Free Money Market* 10/1/93 3.23 - - 2.72 3.74 -
New York Money Market* 10/15/90 3.15 - - 2.98 3.69 -
Texas Tax-Free Money Market* 8/1/94 - - - 3.06 3.72 -
Virginia Money Market* 10/15/90 3.25 - - 3.18 3.61 -
</TABLE>
* Shares of the state funds are authorized for sale only to residents of
the states listed above.
** Total return equals income yield plus share price change and assumes
reinvestment of all dividends and capital gain distributions. No
adjustment has been made for taxes payable by shareholders on their
reinvested dividends and capital gain distributions. The performance
data quoted represents past performance and is not an indication of
future results. Investment return and principal value of an investment
will fluctuate, and an investor's shares, when redeemed, may be worth
more or less than their original cost.
An investment in any money market fund is neither insured nor guaranteed
by the U.S. government and there is no assurance that any of the funds
will maintain a stable net asset value of $1 per share.
Some tax-exempt income may be subject to state or local taxes or the
federal alternative minimum tax.
Foreign investing is subject to additional risks, which are discussed in
the funds' prospectuses.
*** Calculated as prescribed by the Securities and Exchange Commission.
Message from the President
[Photo of Michael J.C. Roth, President, appears here]
Most of these messages look back at events. This one looks forward.
On January 29, 1995, my wife and I became grandparents. Karl Joseph Marbach was
born to Alexandra, my wife's daughter, and her husband Keith Marbach. When my
wife learned of the name Alexandra and Keith had chosen, she smiled. She noted
that my middle names are Joseph Carl, and she said, "I think this kid's college
education is secure."
"Secure" may be an exaggeration, but I did decide to practice one thing I have
preached for many years. I told Alexandra to get the little fellow a social
security number, and as soon as she furnished that to me, (well, almost as
soon), I opened an InveStart (registered trademark) account for Karl Joseph.
This account, in the USAA Income Stock Fund, was opened for $100, and will
have $50 per month added to it by an electronic funds transfer from my checking
account.
InveStart is a program that we have offered for many years. For now it is
available for use with the Income Stock Fund, Cornerstone Fund and Money Market
Fund. (1) That lineup will soon expand. We originally intended it for young
USAA members as a good way to start investing. We found, however, that many
grandparents were using it as I just did.
The effect for Karl Joseph can be quite powerful. It is well documented that
the stock market, as measured by the S&P 500 stock index has produced a total
return of 10% for the last 18 years ended May 31, 1995 (Source: Lipper
Analytical Services, Inc.).
The chart on the next page shows the growth of an account with a $100 initial
investment and $50 subsequent monthly investments for 18 years at an 8% return
- - a hypothetical figure based upon and more conservative than historical
results. It is for illustrative purposes only and should not be considered an
indication of fund performance by any of the USAA Family of Funds.
"...I did decide to practice one thing I have preached for many years."
[A graph is shown here which shows the growth of an account with a $100 initial
investment and $50 subsequent monthly investments for 18 years at an 8% return
- - a hypothetical figure based upon and more conservative than historical
results. The horizontal axis shows the years, and the vertical axis shows the
dollar amount. The beginning value is $100 and the ending value is $24,209]
A systematic plan like this doesn't assure a profit or protect against loss in
declining markets. Since such a plan involves continuous investment in
securities regardless of fluctuating price levels of such securities, you
should consider your financial ability to continue purchases through periods of
low and high price levels.
In 18 years, college will cost more than it does now. This sum today
would go a long way toward an education in an in-state public university.
In 18 years it will not buy as much education as it does today, but it will be
quite meaningful. If we add to the cash flow on birthdays, or if other
relatives kick in, it will be even more meaningful. And it is relatively
painless.
I promise to keep you posted on the progress of Karl Joseph's education
fund. This is not theoretical; it is real.
Sincerely,
Michael Joseph Carl Roth
President and
Vice Chairman of the Board
(1) An investment in a money market fund is neither insured nor
guaranteed by the U.S. government, and there can be no assurance that
the fund can maintain a stable net asset value of $1 per share.
Investment Review
GNMA Trust
OBJECTIVE: Provide investors with a high level of current income
consistent with preservation of principal by investing in securities
backed by the full faith and credit of the U.S. government. While the
value of the Fund's shares is not insured or guaranteed by the U.S.
government, the Fund endeavors to maintain low-to-moderate fluctuations
of the share price.
TYPES OF INVESTMENTS: At least 65 percent of the Fund's total assets are
invested in Government National Mortgage Association (GNMA) pass-through
certificates. The remaining assets of the Fund are invested in other
obligations backed by the full faith and credit of the U.S. government.
5/31/95
Net Assets $265.6 Million
Net Asset Value Per Share $10.09
Average Annual Total Return as of 5/31/95
1 Year 10.54%
Since inception on February 1, 1991 8.09%
30-Day SEC Yield* on May 31, 1995 6.78%
*Calculated as prescribed by the Securities and Exchange Commission.
[A graph is shown here which is a comparison of the change in value of a
$10,000 investment, for the period of 2/1/91 to 5/31/95, with dividends and
capital gains reinvested. The ending value of each item graphed is as follows:
Lehman Brothers GNMA 30-year Index - $14,206, USAA GNMA Trust - $14,013, and
the Lipper GNMA Funds Average - $13,695.]
The graph illustrates how the USAA GNMA Trust closely tracks the
broad-based unmanaged index of the Lehman Brothers Inc. GNMA 30-Year
Index and an unmanaged index of funds similar to the Trust as represented
by the Lipper GNMA Funds Average. It depicts a hypothetical investment
in the USAA GNMA Trust of $10,000 since the Trust's inception on February
1, 1991, to May 31, 1995.
Total return equals income yield plus share price change and assumes
reinvestment of all dividends and capital gain distributions. No
adjustment has been made for taxes payable by shareholders on their
reinvested income dividends and capital gain distributions. The
performance data quoted represents past performance and is not an
indication of future results. Investment return and principal value of
an investment will fluctuate, and an investor's shares, when redeemed,
may be worth more or less than their original cost.
Message from the Manager
[A photo of Portfolio Manager, Kenneth E. Willmann appears here]
Fund Performance
The GNMA Trust weathered the serious bear market of 1994 by being
invested in higher-coupon GNMA pass-through certificates, as well as
approximately 25% U.S. Treasury securities due to mature in about a
year.
The bond market bottomed November 7, 1994. Since that time, the yield on
the 10-year U.S. Treasury note, the standard against which most
mortgage-related securities are measured, fell almost 1.75% by
May 31, 1995. Bond prices move opposite to interest rates, so this
relatively large decline in interest rates led to a commensurate rise in
bond prices. The price of GNMA 8% pass-through certificates, for
example, rose about 8.7% in the same time frame.
When I took over the GNMA Trust on February 1, 1995, the portfolio was
still structured very conservatively to weather the bear market. I set
about restructuring the portfolio in a measured way to better position
it for a falling interest rate environment. The prices of bonds with
lower coupons generally rise faster than those of bonds with higher
coupons when interest rates are declining. They also fall faster when
interest rates rise.
First, I sold most of the Treasuries and used the proceeds to purchase
GNMA pass-through certificates with lower coupons. Next, I selectively
sold higher-coupon pass-throughs, again using the proceeds to buy
lower-coupon pass-throughs.
As of May 31, 1995, the breakdown of the Fund by coupon is illustrated
below:
[A graph is shown here which shows Fund Composition by Coupon Rate as of May
31, 1995. The vertical axis shows the coupon rate, and the horizontal axis
shows the category percentage. The values are:
Coupon Rate 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0
Category % 12.9 11.7 12.2 18.9 16.6 10.0 8.9 8.7 .6
The graph also shows the average coupon rate to be 7.54]
The economy appears to be softening, which should reduce the threat of
higher inflation and higher interest rates. I believe it is unlikely
that interest rates will rise substantially for the next several months.
On the contrary, they could even fall.
I will manage the GNMA Trust to both preserve principal and provide a
high level of income. This could mean changes in the portfolio holdings
from time to time, but I will always take into account the income needs
of our shareholders.
See page 9 for a complete listing of the Portfolio of Investments in
Securities
.
Independent Auditors' Report
The Shareholders and Board of Trustees
USAA Investment Trust:
We have audited the accompanying statement of assets and liabilities and
portfolio of investments in securities of the GNMA Trust of USAA
Investment Trust as of May 31, 1995, the related statement of operations
for the year ended May 31, 1995, the statements of changes in net assets
for the year ended May 31, 1995, and the eight-month period ended May
31, 1994, and the financial highlights information presented in note 8
to the financial statements for each of the periods in the five-year
period ended May 31, 1995. These financial statements and the financial
highlights information are the responsibility of the Trust's management.
Our responsibility is to express an opinion on these financial statements
and the financial highlights information based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and the
financial highlights information are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation
of securities owned as of May 31, 1995, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and the financial highlights
information referred to above present fairly, in all material respects,
the financial position of the GNMA Trust of USAA Investment Trust as of
May 31, 1995, the results of its operations for the year ended May 31,
1995, the changes in its net assets for the year ended May 31, 1995, and
the eight-month period ended May 31, 1994, and the financial highlights
information for each of the periods in the five-year period ended May
31, 1995, in conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
San Antonio, Texas
July 7, 1995
<TABLE>
<CAPTION>
GNMA Trust
Statement of Assets and Liabilities
(In Thousands)
May 31, 1995
<S> <C>
Assets
Investments in securities, at market value (identified cost of $273,478) $ 277,156
Cash 101
Receivables:
Capital shares sold 326
Interest 1,777
Securities sold 18,993
------------
Total assets 298,353
------------
Liabilities
Securities purchased 32,050
Capital shares redeemed 99
USAA Investment Management Company 28
USAA Transfer Agency Company 25
Accounts payable and accrued expenses 56
Dividends on capital shares 524
------------
Total liabilities 32,782
------------
Net assets applicable to capital shares outstanding $ 265,571
============
Represented By:
Paid-in capital $ 271,138
Accumulated net realized loss investments (9,245)
Net unrealized appreciation of investments 3,678
-----------
Net assets applicable to capital shares outstanding $ 265,571
===========
Capital shares outstanding, unlimited number of shares authorized,
no par value 26,315
===========
Net asset value, redemption price, and offering price per share $ 10.09
===========
</TABLE>
See accompanying notes to financial statements.
GNMA Trust
Portfolio of Investments in Securities
(In Thousands)
May 31, 1995
U.S. Government & Agency Issues (104.0%)
Principal Market
Amount Security Value
Government National Mortgage Assn. I, (53.8%)
$ 24,079 6.00%, 12/15/23 $ 22,431(a)
14,253 7.00%, 2/15/24 - 6/15/24 14,039
20,483 7.50%, 5/15/23 - 7/15/23 20,623
19,936 8.00%, 3/15/17 - 8/15/24 20,447
21,600 8.50%, 3/15/20 - 9/15/22 22,424
22,598 9.00%, 11/15/16 - 8/15/22 23,699
18,109 9.50%, 2/15/17 - 7/15/24 19,134
---------
(cost: $142,105) 142,797
---------
Government National Mortgage Assn. II, (46.8%)
12,697 6.00%, 2/20/24 - 5/20/24 11,732
32,523 6.50%, 1/20/24 - 5/20/24 30,988
18,954 7.00%, 5/20/24 - 5/20/25 18,551
29,559 7.50%, 10/20/23 - 5/20/25 29,596
23,116 8.00%, 6/20/16 - 7/20/25 23,622(a)
4,034 8.50%, 4/20/22 - 9/20/22 4,163
3,868 9.50%, 12/20/15 - 12/20/21 4,044
1,554 10.00%, 9/20/19 1,664
---------
(cost: $121,339) 124,360
---------
U.S. Treasury Note (3.4%)
8,975 4.63%, 2/29/96 (cost: $8,929) 8,894
---------
Total U.S. Government & agency issues (cost: $272,373) 276,051
---------
Repurchase Agreement (0.4%)
1,105 State Street Bank and Trust Co., 6.00%, acquired
on 5/31/95 and due 6/01/95 at $1,105 (collateralized
by a $1,070 U.S. Treasury Note, 9.25%, due 1/15/96;
market value of $1,128) (cost: $1,105) 1,105
---------
Total investments (cost: $273,478) $277,156
=========
GNMA Trust
Notes to Portfolio of Investments
(In Thousands)
May 31, 1995
General Notes
Market values of securities are determined by procedures and practices
discussed in note 1 to the financial statements.
The cost of securities for federal income tax purposes is approximately
the same as that reported in the financial statements.
The percentages shown represent the percentage of the investments to net
assets.
Specific Notes
(a) At May 31, 1995, the cost of securities purchased on a delayed delivery
basis was $32,050.
See accompanying notes to financial statements.
GNMA Trust
Statement of Operations
(In Thousands)
Year ended May 31, 1995
Net investment income:
Interest income $19,534
---------
Expenses:
Management fees 319
Transfer agent's fees 232
Custodian's fees 115
Postage 24
Shareholder reporting fees 17
Trustees' fees 3
Registration fees 50
Audit fees 40
Legal fees 5
Other 13
--------
Total expenses 818
--------
Net investment income 18,716
--------
Net realized and unrealized gain oninvestments:
Net realized loss (3,161)
Change in net unrealized appreciation/depreciation 9,950
--------
Net realized and unrealized gain 6,789
--------
Increase in net assets resulting from operations $25,505
========
See accompanying notes to financial statements.
GNMA Trust
Statements of Changes in Net Assets
(In Thousands)
<TABLE>
<CAPTION>
Year ended May 31, 1995
and Eight-month period ended May 31, 1994
1995 1994
<S> <C> <C>
From operations:
Net investment income $ 18,716 $ 13,193
Net realized loss on investments (3,161) (5,164)
Change in net unrealized appreciation/depreciation of
investments 9,950 (9,807)
--------- ----------
Increase (decrease) in net assets resulting from operations 25,505 (1,778)
--------- ----------
Distributions to shareholders from:
Net investment income (18,716) (13,193)
--------- ----------
From capital share transactions:
Shares sold 49,044 50,601
Shares issued for dividends reinvested 12,952 9,225
Shares redeemed (64,465) (72,483)
--------- ----------
Decrease in net assets from capital share transactions (2,469) (12,657)
--------- ----------
Net increase (decrease) in net assets 4,320 (27,628)
Net assets:
Beginning of period 261,251 288,879
--------- ---------
End of period $265,571 $261,251
========= =========
Change in shares outstanding:
Shares sold 5,022 4,982
Shares issued for dividends reinvested 1,327 911
Shares redeemed (6,635) (7,147)
--------- ----------
Decrease in shares outstanding (286) (1,254)
========= ==========
</TABLE>
See accompanying notes to financial statements.
GNMA Trust
Notes to Financial Statements
(In Thousands)
May 31, 1995
(1) Summary of Significant Accounting Policies
USAA INVESTMENT TRUST (the Trust), registered under the Investment
Company Act of 1940, is a diversified, open-end management investment
company organized as a Massachusetts business trust consisting of eight
separate funds. The information presented in this annual report pertains
only to the GNMA Trust (the Fund).
On November 8, 1993, the Board of Trustees of the Trust voted to change
the Fund's fiscal year end from September 30 to May 31. The financial
information for the eight-month period ended May 31, 1994 reflects this change.
A. Security valuation - The value of each security is determined (as of the
close of trading on the New York Stock Exchange on each business day the
Exchange is open) as set forth below:
1. Government securities are valued each business day by a pricing service
(the Service) approved by the Fund's Board of Trustees. The Service uses the
mean between quoted bid and asked prices or the last sale price to price
securities when, in the Service's judgement, these prices are readily available
and are representative of the securities' market values. For many securities,
such prices are not readily available. The Service generally prices these
securities based on methods which include consideration of yields or prices of
securities of comparable quality, coupon, maturity and type, indications
as to values from dealers in securities, and general market conditions.
2. Securities purchased with maturities of 60 days or less are stated at
amortized cost which approximates market value. Repurchase agreements are
valued at cost.
3. Securities which cannot be valued by the methods set forth above, and all
other assets, are valued in good faith at fair value, using methods determined
by the Manager under the general supervision of the Board of Trustees.
B. Federal taxes - The Fund's policy is to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its income to its shareholders. Therefore, no
federal income or excise tax provision is required.
C. Investments in securities - As is common in the industry, security
transactions are accounted for on the date the securities are purchased or sold
(trade date). Gain or loss from sales of investment securities is computed on
the identified cost basis. Distributions to shareholders are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Discounts
and premiums on short-term securities are amortized over the life of the
respective securities. Amortization of market discounts on long-term securities
is recognized as interest income upon disposition of the security to the extent
there is a gain on disposition.
(2) Line of Credit
The Fund participates with other USAA funds in a joint $150 million
short-term revolving loan agreement (the Agreement) through January 15,
1996, for temporary or emergency purposes, including the meeting of
redemption requests that otherwise might require the untimely
disposition of securities. Subject to availability under this Agreement, the
Fund may borrow up to 5% of the market value of its assets at the time of the
borrowing. Borrowings under this Agreement will bear interest at .125%
over the Federal Funds Rate as published by the Federal Reserve Bank of
New York or at .125% over the London Interbank Offered Rate. The Fund
had no borrowings under this Agreement during the year ended May 31, 1995.
(3) Distributions
As required by Federal Law (Internal Revenue Code of 1986, as amended,
and the Regulations thereunder), the distributions related to earnings
for the fiscal year ended May 31, 1995 were $.72 per share, which were
entirely derived from taxable interest income.
Net investment income is accrued daily as dividends and distribued to
shareholders monthly. All net investment income available for distribution
was distributed as of May 31, 1995. Distributions of realized gains from
security transactions not offset by capital losses are made in the succeeding
fiscal year. At May 31, 1995, the Fund had capital loss carryovers for federal
income tax purposes of approximately $9,245 which, if not offset by subsequent
capital gains, will expire in or before 2003. It is unlikely that the Board of
Trustees of the Trust will authorize a distribution of capital gains realized
in the future until the capital loss carryovers have been utilized or expire.
(4) Investment Transactions
Purchases and sales of securities, excluding short-term securities, for
the year ended May 31, 1995 were $250,074 and $240,098, respectively.
Gross unrealized appreciation and depreciation of investments at May 31,
1995 was $5,336 and $1,658, respectively.
(5) Transactions with Manager
A. Management fees - The investment policy of the Fund and the
management of the Fund's portfolio is carried out by USAA Investment
Management Company (the Manager). The Fund's management fees are
computed at .125% of its annual average net assets.
B. Transfer agent's fees - USAA Transfer Agency Company, d/b/a USAA
Shareholder Account Services, an affiliate of the Manager, provides
transfer agent services to the Fund. Shareholder accounting service fees
are based on an annual charge per shareholder account plus out-of-pocket
expenses.
C. Underwriting agreement - The Trust has an agreement with the
Manager for exclusive underwriting and distribution of the Fund's shares
on a continuing best efforts basis. This agreement provides that the
Manager will receive no fee or other remuneration for such services.
(6) Transactions with Affiliates
USAA Investment Management Company is wholly owned by United Services
Automobile Association (the Association), a large, diversified financial
services institution. At May 31, 1995, the Association and its affiliates
owned 342 shares (1.3%) of the Fund.
(7) Repurchase Agreements
The Fund may enter into repurchase agreements with commercial banks or
recognized security dealers. These agreements are secured by obligations
backed by the full faith and credit of the U.S. Government. Obligations pledged
as collateral are required to maintain a value equal to or in excess of the
resale price of the repurchase agreement and are held by the Fund's custodian
until maturity of the repurchase agreement. The Fund's Manager monitors the
creditworthiness of sellers with which the Fund may enter into repurchase
agreements.
(8) Financial Highlights
Per share operating performance for a share outstanding throughout each period
is as follows:
<TABLE>
<CAPTION>
Eight-month
Year ended period ended
May 31, May 31, Year ended September 30,
1995 1994 1993 1992 1991*
<S> <C> <C> <C> <C> <C>
Net asset value at
beginning of period $ 9.82 $ 10.37 $ 10.47 $ 10.19 $ 10.00
Net investment income .72 .49 .79 .82 .53
Net realize and
unrealized gain (loss) .27 (.55) (.10) .28 .19
Distributions from net
investment income (.72) (.49) (.79) (.82) (.53)
----------- ---------- ---------- --------- ---------
Net asset value at
end of period $ 10.09 $ 9.82 $ 10.37 $ 10.47 $ 10.19
=========== ========== ========== ========= =========
Total return (%)** 10.54 (.66) 6.79 11.18 7.48
Net assets at
end of period (000) $ 265,571 $261,251 $288,879 $218,544 $ 69,431
Ratio of expenses to
average net assets (%) .32 .31(a) .32 .375(b) .375(a)(b)
Ratio of net investment
income to average net
assets (%) 7.34 7.20(a) 7.53 7.92(b) 8.35(a)(b)
Portfolio turnover (%) 93.78 90.05 81.44 36.11 5.39
</TABLE>
* Fund commenced operations February 1, 1991.
** Assumes reinvestment of all dividend income and capital gain distributions
during the period.
(a) Annualized. The ratio is not necessarily indicative of 12 months of
operations.
(b) The information contained in the above table is based on actual expenses
for the period, after giving effect to reimbursements of expenses by the
Manager. Absent such reimbursements the Fund's ratios would have been:
Year Ended
September 30,
1992 1991*
Ratio of expenses to average net assets (%) .40 .91(a)
Ratio of net investment income to average
net assets (%) 7.89 7.82(a)
