TABLE OF CONTENTS
USAA Family of Funds 1
Message from the President 2
Investment Review 4
Message from the Managers 5
Financial Information:
Distributions to Shareholders 8
Independent Auditors' Report 9
Statement of Assets and Liabilities 10
Portfolio of Investments in Securities 11
Notes to Portfolio of Investments in Securities 19
Statement of Operations 20
Statements of Changes in Net Assets 21
Notes to Financial Statements 22
IMPORTANT INFORMATION
Through our ongoing efforts to reduce expenses and respond to shareholder
requests, your annual and semiannual report mailings are "streamlined." One copy
of each report is sent to each address, rather than 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 World Growth
Fund, 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)1997, USAA. All rights reserved.
<TABLE>
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 33
funds by investment objective as of June 30, 1997.
<CAPTION>
Average Annual Total Return(%)*
Investment Inception Since
Objective Date 1 yr 5 yrs 10 yrs Inception
--------- ---- ---- ----- ------ ---------
<S> <C> <C> <C> <C> <C>
Capital Appreciation
====================
Aggressive Growth 10/19/81 -1.72 18.38 10.88 -
Emerging Markets(1) 11/7/94 15.35 - - 10.25
Gold(1) 8/15/84 -22.26 3.54 -4.75 -
Growth 4/5/71 21.60 16.94 11.97 -
Growth & Income 6/1/93 31.29 - - 18.53
International(1) 7/11/88 21.81 15.39 - 11.77
S&P 500 Index(4)(+) 5/1/96 34.59 - - 33.24
World Growth(1) 10/1/92 21.85 - - 15.50
Asset Allocation
=================
Balanced Strategy(1) 9/1/95 22.38 - - 15.48
Cornerstone Strategy(1) 8/15/84 20.45 14.33 9.22 -
Growth and Tax Strategy(2)** 1/11/89 15.72 11.23 - 10.45
Growth Strategy(1) 9/1/95 15.37 - - 21.37
Income Strategy 9/1/95 14.48 - - 10.36
Income - Taxable
================
GNMA 2/1/91 9.37 6.85 - 7.67
Income 3/4/74 8.21 7.44 9.45 -
Income Stock 5/4/87 20.77 14.21 12.89 -
Short-Term Bond 6/1/93 7.71 - - 5.69
Income - Tax Exempt
===================
Long-Term(2)** 3/19/82 9.22 6.71 8.09 -
Intermediate-Term(2)** 3/19/82 8.20 6.76 7.54 -
Short-Term(2)** 3/19/82 5.50 4.80 5.59 -
California Bond(2)** 8/1/89 8.90 7.13 - 7.58
Florida Tax-Free Income(2)** 10/1/93 9.79 - - 4.29
New York Bond(2)** 10/15/90 8.86 6.46 - 8.31
Texas Tax-Free Income(2)** 8/1/94 10.37 - - 9.24
Virginia Bond(2)** 10/15/90 8.50 6.93 - 8.08
Money Market
============
Money Market(3) 2/2/81 5.28 4.48 5.80 -
Tax Exempt Money Market(2),(3)** 2/6/84 3.36 3.04 4.15 -
Treasury Money Market Trust(3) 2/1/91 5.13 4.28 - 4.38
California Money Market(2),(3)** 8/1/89 3.29 2.94 - 3.62
Florida Tax-Free Money Market(2),(3)** 10/1/93 3.26 - - 3.04
New York Money Market(2),(3)** 10/15/90 3.21 2.82 - 3.08
Texas Tax-Free Money Market(2),(3)** 8/1/94 3.31 - - 3.33
Virginia Money Market(2),(3)** 10/15/90 3.22 2.87 - 3.20
Non-deposit investment products offered by USAA Investment Management Company
are not insured by the FDIC, are not deposits or other obligations of, or
guaranteed by, USAA Federal Savings Bank, and are subject to investment risks,
including possible loss of the principal amount invested.
For more complete information about the mutual funds managed and distributed
by USAA IMCO, including charges and expenses, please call 1-800-531-8181 for
a prospectus. Read it carefully before you invest.
(1) Foreign investing is subject to additional risks, which are discussed in the
funds' prospectuses.
(2) Some income may be subject to state or local taxes or the federal
alternative minimum tax.
(3) An investment in a money market fund is neither insured nor guaranteed by
the U.S. government and there is no assurance that any of the funds will be
able to maintain a stable net asset value of $1 per share.
(4) S&P 500(Registered Trademark) is a trademark of The McGraw-Hill Companies,
Inc., and has been licensed for use. The product is not sponsored, sold
or promoted by Standard & Poor's, and Standard & Poor's makes no
representation regarding the advisability of investing in the product.
* Total return equals income return 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 represent past
performance and are 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.
** IRAs are not available for tax-exempt funds. The Growth and Tax Strategy Fund
is not available as an investment for your IRA because the majority of its
income is tax-exempt. California, Florida, New York, Texas, and Virginia
funds available to residents only.
+ Includes account maintenance fee through December 31, 1996.
</TABLE>
MESSAGE FROM THE PRESIDENT
(PHOTO OF THE PRESIDENT, MICHAEL J. C. ROTH, APPEARS HERE)
I HAVE A FEELING
THAT WE WILL REMEMBER 1997
The year began with an atmosphere of looking over your shoulder. The market had
risen about 61% in two years and all history told us that was unusual. Then it
advanced another 10% in January and February, before it encountered a loss of
confidence. By April it had lost all of the advance for this year(1) and it felt
so shaky that I sent shareholders a letter encouraging them to remember how
important we think asset allocation is in establishing your level of risk. But
by the time that letter arrived in early May the market was again setting record
highs. Indeed, one shareholder wrote me asking, "Why did you send this letter?"
The market has now driven upward to a return of 20% for the year, but as I write
this, it has fallen 192 points on the Dow; its second worst one-day decline in
points.
It would not be unusual if the market were to finish 1997 with a return well
below that of '95 and '96. We believe that the long-term return on the stock
market is around 10% to 12%.(2) Years such as '95 and '96 are necessary to
achieve such a long-term record, but by themselves they are exceptional. It is
important that investors have a position in stocks, but the risk that such a
position carries should, for most people, be offset by holding some different
assets including fixed income securities. Most of the funds in the USAA
Investment Trust are structured like that.
The Roth family will remember 1997 for another reason. We have a new
granddaughter, Katharine Sophia Broyles, who was born on January 3. She now has
an InveStart(Registered Trademark) account in the Cornerstone Strategy Fund,
our oldest asset strategy fund. I am confident that our monthly additions to
that account has the potential to build a meaningful college fund for her,
regardless of what 1997 serves up.
Sincerely,
Michael J.C. Roth
PRESIDENT AND
VICE CHAIRMAN OF THE BOARD
Past performance is no guarantee of future results.
A systematic plan, such as InveStart, does not assure a profit or protect
against loss in declining markets. Since such a plan involves continuous
investment in securities regardless of fluctuating price levels, you should
consider your financial ability to continue purchases through periods of low and
high price levels.
(1) S&P 500 Index is an unmanaged index representing the average performance of
a group of 500 widely held publicly traded stocks. It is not possible to
invest directly in the S&P 500 Index.
(2) Source: (Copyright) Computed using data from Stocks, Bonds, Bills &
Inflation 1997 Yearbook(TM), Ibbotson Associates, Chicago (annually updates
work by Roger G. Ibbotson and Rex Sinquefield). Used with permission. All
rights reserved.
For more complete information about the mutual funds managed and distributed by
USAA IMCO, including charges and expenses please call for a prospectus. Read it
carefully before you invest.
INVESTMENT REVIEW
WORLD GROWTH FUND
OBJECTIVE: Capital appreciation.
TYPES OF INVESTMENTS: At least 65 percent of the Fund's assets are invested in
common stocks and other equity securities of both foreign and domestic issuers,
including securities which are convertible into common stocks and REITs. The
remainder of the Fund's assets may be invested in U.S. government guaranteed
securities which mature in less than one year and in repurchase agreements
collateralized by such securities.
5/31/97 5/31/96
Net Assets................................$306.8 MILLION $267.2 MILLION
Net Asset Value Per Share................. $16.84 $15.50
AVERAGE ANNUAL TOTAL RETURNS AS OF 5/31/97
1 Year............................................................16.52%
Since inception on October 1, 1992................................14.68%
[A graph is shown here which is a comparison of the change in value of a $10,000
investment, for the period of 10/1/92 to 5/31/97, with dividends and capital
gains reinvested. The ending value of each item graphed is as follows: USAA
World Growth Fund - $18,998, the Morgan Stanley Capital Index - World - $19,332,
and the Lipper Global Funds Average - $18,988.]
The graph illustrates how a $10,000 hypothetical investment in the USAA World
Growth Fund compared closely to its benchmark, the Morgan Stanley Capital Index
(MSCI)-World, an unmanaged index which reflects the movements of world stock
markets by representing a broad selection of domestically listed companies
within each market, and the Lipper Global Funds Average, an average performance
level of all global funds, as reported by Lipper Analytical Services, an
independent organization that monitors the performance of mutual funds.
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 represent past
performance and are 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 MANAGERS
[PHOTO OF PORTFOLIO MANAGERS APPEARS HERE:
FROM L TO R: W. TRAVIS SELMIER, II, CFA (FOREIGN STOCKS), ALBERT C. SEBASTIAN,
CFA (FOREIGN STOCKS), DAVID G. PEEBLES, CFA (ALLOCATION MANAGER, FOREIGN
STOCKS), AND R. DAVID ULLOM, CFA, (DOMESTIC STOCKS)]
MARKET CONDITIONS
Your Fund's total return of 16.52% has outperformed the Lipper Global Fund
Index(1) return of 15.30% for the fiscal year ended May 31, 1997.(2) The
performance in most emerging markets, Europe, and the United States has been
favorable while the Japanese equity market has continued to underperform.
EUROPE
The European markets provided favorable returns over the period reflecting
accelerating earnings growth and further corporate restructuring. We increased
our exposure to stocks which benefit from stronger economic growth as well
as from increased export opportunities due to a stronger U.S. dollar. Our
holdings in Spain, Portugal, the Netherlands, and Switzerland made significant
contributions to our European performance.
JAPAN
Since our last report, some political stability has returned and the economic
growth has picked up. However, continued problems in the banking system,
rising interest rates, and higher equity valuation levels vis-a-vis other
developed markets lead us to maintain an underweighted position. We continue to
hold large capitalization stocks with an emphasis on export-related companies.
EMERGING MARKETS
Emerging markets have shown some rebound since the beginning of the year, with
Latin American and East European markets showing stronger performance than Asian
markets. Economic recovery in Argentina and Mexico and economic structural
reform in Brazil continue to support those markets. While concerns about the
Asian growth miracle have caused worries, we continue to believe that Asian
growth prospects are still bright. Hong Kong, China, Taiwan, and Indonesia
have remained strong performers, while Thailand, the Philippines, and Korea
have suffered because of concerns over currency weakness.
(1) Lipper Analytical Services is an independent organization that monitors the
performance of mutual funds.
(2) Past performance is no guarantee of future results and the value of your
investment may vary according to the Fund's performance.
UNITED STATES
Over the last six months, the domestic stock weighting in the Fund declined only
slightly, from 25% as of November 30, 1996, to 24% as of May 31, 1997. This
decline does not reflect a change in our outlook toward U.S. equities.
During this reporting period, we slightly reduced our exposure in Healthcare,
Tobacco, Paper & Forest Products, and Specialty Retailing. In turn, weightings
were increased in Semiconductors, Communication Equipment, and Banks. Given our
increased exposure to technology and technology-related industries, we continue
to believe that the future will produce strong earnings growth for these
companies.
OUTLOOK
For the balance of 1997, we expect continuing economic improvement with
accelerating earnings growth in Europe. In the United States we see slower
economic and earnings growth. Japan is still a market with selective
opportunities. The continuation of low inflation and good economic growth
provides a favorable backdrop for most emerging markets. The portfolio continues
to be overweighted in emerging markets, Europe, and other developed markets at
the expense of Japan and the United States.
[A pie chart is shown here depicting the Asset Allocation as of May 31, 1997 of
the USAA World Growth Fund to be: Netherlands - 3.0%*, Denmark - 3.1%*,
Switzerland - 3.8%*, France - 4.5%*, Canada - 4.8%*, United Kingdom - 6.0%*,
Japan - 10.5%*, U.S.A. - 23.9%*, and Other - 40.7%*.]
* Percentages are of the Net Assets in the Portfolio and may or may not equal
100%.
TOP 10 EQUITY HOLDINGS
(% OF NET ASSETS)
Elf Aquitaine ADS 1.3
Novartis AG 1.2
Autoliv SDR 1.1
Nokia ADS 1.1
Telefonica de Espana S.A. ADR 1.0
VA Technologie AG 1.0
Veba AG 1.0
Canadian Occidential .9
Canon .9
National Westminister Bank .9
TOP 10 INDUSTRIES
(% OF NET ASSETS)
Oil Related 8.7
Telecommunications Related 8.0
Bank Related 7.8
Healthcare Related 7.7
Retail Related 5.1
Electronics Related 3.8
Auto Parts 2.9
Computer Software & Services 2.9
Specialized Services 2.6
Steel 2.5
Foreign investing is subject to additional risks, which are discussed in the
Fund's prospectus. Since return on any investment is generally commensurate with
risk, investors should be aware of the potential volatility associated with
foreign markets.
See page 11 for a complete listing of the Portfolio of Investments in
Securities.
DISTRIBUTIONS TO SHAREHOLDERS
The following per share information describes the federal tax treatment of
distributions made during the fiscal year ended May 31, 1997. These figures are
provided for information purposes only and should not be used for reporting to
federal or state revenue agencies. Distributions for the calendar year will be
reported to you on Form 1099-DIV in January 1998.
The Fund has elected under Section 853 of the Internal Revenue Code to pass
through the credit for taxes paid in foreign countries. Per share foreign gross
income earned and foreign taxes paid during the fiscal year by the Fund are
$.21 and $.03, respectively.
Ordinary income $ .49 *
Long-term capital gains .56
-----
Total $1.05
=====
10.63% of ordinary income distributions qualify for deduction by corporations.
* Includes distribution of short-term capital gains, if any, which are taxable
as ordinary income.
INDEPENDENT AUDITORS' REPORT
The Shareholders and the Board of Trustees
USAA INVESTMENT TRUST:
We have audited the accompanying statement of assets and liabilities and
portfolio of investments in securities of the World Growth Fund of USAA
Investment Trust as of May 31, 1997, the related statement of operations for the
year then ended, the statements of changes in net assets for each of the years
in the two-year period then ended, and the financial highlights information
presented in note 8 to the financial statements for each of the periods in the
five-year period then ended. 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, 1997, 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 World Growth Fund of USAA Investment Trust as of May
31, 1997, the results of its operations for the year then ended, the changes in
its net assets for each of the years in the two-year period then ended, and the
financial highlights information for each of the periods in the five-year period
then ended, in conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
San Antonio, Texas
July 9, 1997
WORLD GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
(IN THOUSANDS)
May 31, 1997
<TABLE>
<S> <C>
ASSETS
Investments in securities, at market value (identified cost of $235,375) $ 307,638
Cash 48
Cash denominated in foreign currencies (identified cost of $1,210) 1,198
Receivables:
Capital shares sold 239
Dividends and interest 838
Securities sold 940
Unrealized appreciation on foreign currency contracts held, at value 3
----------
Total assets 310,904
----------
LIABILITIES
Securities purchased 3,488
Unrealized depreciation on foreign currency contracts held, at value 7
Capital shares redeemed 276
USAA Investment Management Company 192
USAA Transfer Agency Company 52
Accounts payable and accrued expenses 90
----------
Total liabilities 4,105
----------
Net assets applicable to capital shares outstanding $ 306,799
==========
REPRESENTED BY:
Paid-in capital $ 224,643
Accumulated undistributed net investment income 1,048
Accumulated net realized gain on investments 8,861
Net unrealized appreciation of investments 72,263
Net unrealized depreciation on foreign currency translations (16)
----------
Net assets applicable to capital shares outstanding $ 306,799
==========
Capital shares outstanding, unlimited number of shares authorized,
no par value 18,221
==========
Net asset value, redemption price, and offering price per share $ 16.84
==========
</TABLE>
See accompanying notes to financial statements.
WORLD GROWTH FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES
May 31, 1997
MARKET
NUMBER VALUE
OF SHARES SECURITY (000)
--------- -------- -------
Foreign Securities (72.6%)
Foreign Stocks (72.1%)
Argentina (0.8%)
26,600 Disco S.A. ADS * $ 898
15,608 IRSA Inversiones y
Representaciones S.A. GDS 610
80,000 Quilmes Industrial (Quinsa)
S.A. ADS 930
--------
2,438
--------
Australia (1.8%)
120,000 Broken Hill Proprietary Co.
Ltd. 1,724
243,600 CSL Ltd. 1,494
275,000 Pasminco Ltd. 559
231,500 Village Roadshow Ltd.
(Preferred) 591
144,419 Woodside Petroleum Ltd. 1,219
--------
5,587
--------
Austria (2.3%)
3,150 Austria Mikro Systeme
International AG 245
24,000 Boehler Uddeholm AG 1,816
42,897 VA Stahl AG 1,935
17,800 VA Technologie AG 3,146
--------
7,142
--------
Belgium (1.0%)
3,662 Colruyt S.A. 1,473
20,800 Union Miniere S.A. * 1,674
--------
3,147
--------
Brazil (2.5%)
38,780,000 Companhia Energetica de Minas
Gerais (Cemig) (Preferred) 1,775
60,000 Multicanal Participacoes S.A.
ADS (Preferred) * 701
7,000,000 Petroleo Brasileiro S.A.
(Preferred) 1,674
14,000,000 Telebras PN (Preferred) 1,932
45,000 Uniao de Bancos Brasileiros
S.A. (Unibanco) GDR * 1,552
--------
7,634
--------
Canada (4.8%)
44,000 Alliance Forest Products,
Inc.* 1,059
93,300 Anderson Exploration Ltd. * 1,236
375,000 Beau Canada Exploration Ltd.* 928
59,200 Canadian National Railway Co. 2,472
125,100 Canadian Occidental
Petroleum Ltd. 2,829
119,400 Gulf Canada Resources Ltd. * 1,080
185,000 National Bank of Canada 2,176
76,000 OSF, Inc. * 685
17,600 St. Laurent Paperboard, Inc.* 283
82,400 Suncor, Inc. 2,042
--------
14,790
--------
Chile (0.7%)
17,100 Madeco S.A. ADS 438
48,000 Maderas y Sinteticos S.A. ADS 744
15,000 Sociedad Quimica y Minera
de Chile S.A. ADS 975
--------
2,157
--------
China (0.3%)
265,000 New World
Infrastructure Ltd.* 826
--------
Colombia (0.1%)
75,000 Banco de Colombia GDS 450
--------
Czech Republic (0.3%)
21,200 Komercni Banka A.S. GDR 514
5,700 SPT Telecom A.S. * 525
--------
1,039
--------
Denmark (3.1%)
32,500 Carli Gry International A/S 1,947
43,000 ISS International Service
System A/S "B" * 1,427
12,560 Novo Nordisk A/S "B" 1,345
90,000 SAS Danmark A/S 919
22,550 Tele Danmark A/S "B" 1,109
43,000 Tele Danmark A/S ADS 1,064
30,000 Unidanmark A/S 1,567
--------
9,378
--------
Egypt (0.1%)
27,100 Suez Cement Co. S.A.E. GDS * 497
--------
Finland (1.5%)
53,000 Nokia Corp. ADS 3,498
13,760 Raision Tehtaat 1,122
--------
4,620
--------
France (4.5%)
7,600 Accor S.A. 1,053
35,000 Bouygues Offshore S.A. ADR * 437
60,700 Coflexip ADS * 1,726
74,800 Elf Aquitaine ADS 3,899
20,000 Eramet Group 1,001
7,000 Essilor International 1,775
18,500 Louis Dreyfus Citrus * 670
6,200 Pathe S.A. * 1,428
30,000 Valeo S.A. 1,780
--------
13,769
--------
Germany (2.3%)
27,000 Leica Camera AG * 727
9,500 Pfeiffer Vacuum Technology
AG ADS * 215
67,700 Rofin-Sinar Technologies,
Inc.* 1,049
4,200 SAP AG 749
7,200 SAP AG (Preferred) 1,310
52,250 Veba AG 2,953
--------
7,003
--------
Hong Kong (1.0%)
1,020,000 Amoy Properties Ltd. 1,158
49,000 Asia Satellite
Telecommunications
Holdings Ltd. ADR 1,354
486,000 Cosco Pacific Ltd. 696
--------
3,208
--------
Hungary (0.4%)
60,000 Mol Magyar Olay Es
Gazipari GDS 1,121
--------
India (0.9%)
33,000 Hindalco Industries Ltd. GDR 1,089
75,000 Larsen & Toubro Ltd. GDR 992
36,900 Videsh Sanchar Nigam
Ltd. GDR * 760
--------
2,841
--------
Indonesia (1.1%)
156,500 PT Astra International, Inc. 598
1,208,500 PT Bank Dagang Nasional
Indonesia 1,304
265,500 PT Bank Dagang Nasional
Indonesia Warrants * 108
145,000 PT HM Sampoerna 586
300,000 PT Jaya Real Property 419
112,000 PT Modern Photo Film 408
--------
3,423
--------
Israel (1.2%)
32,300 Blue Square - Israel Ltd. ADS * 561
32,800 ECI Telecommunications Ltd. 758
8,900 Koor Industries Ltd. ADS 156
35,000 Teva Pharmaceutical
Industries Ltd. ADR 2,100
--------
3,575
--------
Italy (2.0%)
32,700 Eni S.p.A. ADS 1,660
13,800 Fila Holdings S.p.A. ADS 588
55,143 Instituto Bancario San Paulo
di Torino S.p.A. 347
55,100 Instrumentation Laboratory
S.p.A. ADS * 217
27,700 SAES Getters S.p.A. ADR 249
1,144,000 SEAT S.p.A. * 340
1,144,000 SEAT S.p.A. Savings * 220
632,000 STET S.p.A. 2,480
--------
6,101
--------
Japan (10.0%)
65,000 Bridgestone Corp. 1,468
105,000 Canon, Inc. 2,660
55,000 Daibiru Corp. 676
143,000 Hitachi Ltd. 1,523
60,000 Honda Motor Co. Ltd. 1,762
43,000 Hoya Corp. 1,953
30,000 Ito-Yokado Co. Ltd. 1,711
14,000 Kyocera Corp. 1,009
78,600 Laox Co. Ltd. 1,175
186,000 Minebea Co. Ltd. 1,821
200,000 Mitsubishi Heavy
Industries Ltd. 1,439
63,000 Namco 2,207
3,800 Nippon Television Network 1,517
598,000 NKK Corp. 1,176
125,000 Nomura Securities Co. Ltd. 1,481
39 NTT Data Communications
Systems Corp. 1,430
154,000 Shiseido Co. Ltd. 2,248
149,000 Terumo Corp. 2,623
27,000 Tostem Corp. 721
--------
30,600
--------
Korea (0.7%)
33,000 Korea Electric Power Corp. 1,018
11,033 Samsung Electronics Co. Ltd. 1,078
--------
2,096
--------
Malaysia (0.6%)
110,000 Edaran Otomobil Nasional Bhd 959
112,000 Telekom Malaysia Bhd 829
--------
1,788
--------
Mexico (2.0%)
720,000 Controladora Comercial
Mexicana, S.A. de C.V. 572
12,500 Controladora Comercial
Mexicana, S.A. de C.V. GDR 198
53,714 Desc, Sociedad de Fomento
Industrial, S.A. de C.V. ADS 1,430
82,000 Panamerican Beverages,
Inc. "A" 2,378
87,000 Tubos de Acero de Mexico,
S.A. ADS * 1,523
--------
6,101
--------
Netherlands (3.0%)
16,400 Akzo Nobel N.V. 2,181
21,000 EVC International N.V. 590
48,650 ING Group N.V. 2,149
10,900 Oce-van der Grinten N.V. 1,420
23,000 Philips Electronics N.V. 1,288
72,100 Verenigd Besit VNU 1,628
--------
9,256
--------
Norway (1.4%)
573,000 Christiania Bank og
Kreditkasse 1,970
99,000 Nycomed ASA 1,355
54,400 Schibsted ASA 1,016
--------
4,341
--------
Peru (0.3%)
37,100 Telefonica del Peru S.A.
"B" ADS 941
--------
Philippines (0.3%)
21,650 Metropolitan Bank and
Trust Co. 489
1,400,000 SM Prime Holdings, Inc. 398
--------
887
--------
Poland (0.4%)
80,000 Elektrim S.A. 714
115,000 Polifarb-Cieszyn S.A. 649
--------
1,363
--------
Portugal (1.8%)
69,200 Banco Totta E Acores S.A. 986
88,000 Cimentos de Portugal S.A. 1,933
67,900 Portugal Telecom S.A. ADS 2,614
--------
5,533
--------
Russia (0.2%)
36,600 RAO Gazprom ADR 659
--------
Singapore (0.7%)
180,000 Overseas Union Bank Ltd. 1,233
178,000 Singapore Land Ltd. 909
--------
2,142
--------
South Africa (1.2%)
29,299 Ellerine Holdings Ltd. 189
23,556 Foodcorp Ltd. 178
155,100 Gencor Ltd. 680
210,030 Malbak Ltd. 307
47,317 Nedcor Ltd. GDR 935
79,313 New Clicks Holdings Ltd. 89
34,200 South African Breweries Ltd. 961
34,633 South African Druggists Ltd. 260
--------
3,599
--------
Spain (2.4%)
65,739 Autopistas del Mare
Nostrum S.A. 951
38,000 Corporacion Bancaria
de Espana S.A. 1,893
11,100 Corporacion Mapfre 594
34,200 Telefonica de Espana S.A. ADR 2,988
33,948 Vallehermoso S.A. 857
--------
7,283
--------
Sweden (2.3%)
86,000 Autoliv, Inc. SDR * 3,256
77,500 NK Cityfastigheter AB * 535
22,600 Nordbanken AB 700
89,300 Volvo AB 2,471
--------
6,962
--------
Switzerland (3.8%)
360 Ares-Serono Group S.A. 489
2,752 Novartis AG 3,730
12,600 Oerlikon Buhrle AG * 1,459
4,300 Selecta Group * 682
1,030 SGS Group AG 2,280
3,139 Sulzer AG P.C. 2,469
49,900 Tag Heuer International
S.A. ADR * 711
--------
11,820
--------
Taiwan (1.1%)
1,233,075 China Steel Corp. 1,301
708,241 Far East Department Store * 1,042
400,000 Microtek International, Inc. * 1,069
--------
3,412
--------
Thailand (0.1%)
48,200 Bank Of Ayudhya
Public Co. Ltd. 102
125,000 Finance One Public Co. * 34
--------
136
--------
Turkey (0.4%)
4,040,000 Erciyas Biracilik ve Malt
Sanayi A.S. 295
6,005,000 Olmuksa Mukavva Sanayi
ve Ticaret A.S. 174
27,085,085 Yapi Ve Kredi Bankasi A.S. 643
--------
1,112
--------
United Kingdom (6.0%)
587,000 Avis Europe plc * 1,258
130,000 Cadbury Schweppes plc 1,165
350,000 Cookson Group plc 1,346
490,000 Corporate Services Group plc 1,447
71,400 DFS Furniture Co. plc 701
24,200 Doncasters plc ADS * 539
12,000 Dr. Solomon's Group plc ADR * 243
75,000 Harvey Nichols plc 347
255,000 Medeva plc 1,143
215,000 National Westminster Bank plc 2,627
58,000 Northern Ireland Electricity plc 384
115,300 Reuters Holdings plc 1,294
176,000 Safeway plc 1,039
590,000 Tomkins plc 2,563
7,400 Vodafone Group plc ADR 330
508,000 WPP Group plc 1,990
--------
18,416
--------
Venezuela (0.3%)
22,000 Compania Anonima
Nacional Telefonos
De Venezuela ADS * 817
--------
Other Holdings (0.4%)
1,072,000 Central European Growth
Fund plc 1,175
--------
Total foreign stocks
(cost: $172,304) 221,185
--------
PRINCIPAL MARKET
AMOUNT VALUE
(000) SECURITY (000)
- --------- -------- ---------
Foreign Bonds (0.5%)
Japan
$ 1,450 MBL International Finance
(Bermuda) Trust, Convertible
Notes, 3.00%, 11/30/02
(cost: $1,486) $ 1,524
---------
Total foreign securities
(cost: $173,790) 222,709
---------
NUMBER
OF SHARES
---------
Domestic Stocks (23.9%)
Aerospace/Defense (1.6%)
40,000 B.F. Goodrich Co. 1,720
16,000 Boeing Co. 1,684
21,000 Precision Castparts Corp. 1,313
---------
4,717
---------
Aluminum (0.5%)
22,000 Aluminum Co. of America 1,620
---------
Auto Parts (0.4%)
28,000 Lear Corp. * 1,071
---------
Automobiles (0.3%)
25,000 Ford Motor Co. 938
---------
Bank Holding Companies -
Major Regional (0.5%)
36,000 SouthTrust Corp. 1,399
---------
Bank Holding Companies -
Money Center (0.5%)
16,800 Bankers Trust New York
Corp. 1,422
---------
Beverages -
Soft Drinks (0.5%)
40,000 PepsiCo, Inc. 1,470
---------
Biotechnology (0.3%)
15,000 Amgen, Inc. * 1,003
---------
Brokerage Firms (0.4%)
26,000 Dean Witter, Discover & Co. 1,072
---------
Chemicals (1.3%)
56,000 Avery Dennison Corp. 2,107
8,000 Dow Chemical Co. 667
28,000 Monsanto Co. 1,232
---------
4,006
---------
Communication - Equipment
Manufacturers (1.0%)
14,500 Cisco Systems, Inc. * 983
35,133 Lucent Technologies, Inc. 2,235
---------
3,218
---------
Computer Software
& Service (0.9%)
14,000 Microsoft Corp. * 1,736
32,400 Sterling Commerce, Inc. * 1,077
---------
2,813
---------
Containers - Metals
& Glass (0.4%)
43,000 Ball Corp. 1,252
---------
Electrical Equipment (.5%)
25,000 Rockwell International Corp. 1,612
---------
Electronics -
Semiconductors (2.0%)
22,000 Applied Materials, Inc. * 1,436
10,000 Intel Corp. 1,515
25,000 Motorola, Inc. 1,659
59,000 National Semiconductor
Corp. * 1,659
---------
6,269
---------
Finance - Consumer (0.3%)
22,000 Associates First Capital Corp. 1,040
---------
Foods (0.4%)
36,000 Dean Foods Co. 1,368
---------
Gaming Companies (0.2%)
13,000 Anchor Gaming * 553
---------
Healthcare -
Diversified (0.4%)
18,000 Bristol-Myers Squibb Co. 1,321
---------
Healthcare - Miscellaneous (1.0%)
45,800 COHR, Inc. * 738
23,300 Total Renal Care
Holdings, Inc. * 839
24,000 United HealthCare Corp. 1,356
---------
2,933
---------
Household Products (0.7%)
16,000 Procter & Gamble Co. 2,206
---------
Insurance -
Property/Casualty (0.7%)
15,000 American International
Group, Inc. 2,031
---------
Machinery - Diversified (1.0%)
60,000 BW/IP, Inc. 1,148
36,000 Deere & Co. 1,840
---------
2,988
---------
Medical Products
& Supplies (0.6%)
16,000 Medtronic, Inc. 1,184
19,000 St. Jude Medical, Inc. * 644
---------
1,828
---------
Office Equipment
& Supplies (0.6%)
42,000 IKON Office Solutions, Inc. 1,218
10,100 Xerox Corp. 684
---------
1,902
---------
Oil - Domestic (0.4%)
28,000 Unocal Corp. 1,193
---------
Oil - Exploration
& Production (0.5%)
45,000 Apache Corp. 1,541
---------
Oil & Gas Drilling (0.3%)
15,000 Transocean Offshore, Inc. 1,035
---------
Oil Well Equipment
& Service (0.8%)
30,000 Halliburton Co. 2,321
---------
Paper & Forest Products (0.4%)
23,000 Kimberly-Clark Corp. 1,153
---------
Pollution Control (0.8%)
32,000 Browning-Ferris
Industries, Inc. 1,048
42,000 Waste Management, Inc. 1,333
---------
2,381
---------
Publishing (0.6%)
42,000 American Greetings Corp. 1,439
17,000 Dun & Bradstreet Corp. 444
---------
1,883
---------
Restaurants (0.2%)
40,000 Brinker International, Inc. * 555
---------
Retail - General
Merchandising (0.5%)
45,702 Dollar General Corp. 1,537
---------
Retail - Specialty (0.5%)
39,700 Abercrombie & Fitch Co. * 690
60,000 Phillips-Van Heusen Corp. 840
---------
1,530
---------
Specialized Services (0.1%)
60,000 Leap Group, Inc. * 188
---------
Telephones (0.9%)
55,000 360 Communications Co. * 1,038
37,000 Sprint Corp. 1,808
---------
2,846
---------
Tobacco (0.5%)
24,000 Philip Morris Co., Inc. 1,056
19,000 RJR Nabisco Holdings Corp. 615
---------
1,671
---------
Transportation -
Miscellaneous (0.4%)
45,000 APL Ltd. 1,361
---------
Total domestic stocks
(cost: $49,903) 73,247
---------
Principal Market
Amount Value
(000) Security (000)
----- -------- -----
U.S. GOVERNMENT & AGENCY ISSUE
Discount Note (3.8%)
$11,685 Federal National Mortgage
Assn., 5.52%, 6/02/97
(cost: $11,682) 11,682
---------
Total investments
(cost: $235,375) $307,638
========
- ----------------------
*Non-income producing.
PORTFOLIO SUMMARY BY INDUSTRY
-----------------------------
Oil Related 8.7 %
Telecommunications Related 8.0
Bank Related 7.8
Healthcare Related 7.7
Retail Related 5.1
Electronics Related 3.8
U.S. Government & Agency Issues 3.8
Auto Parts 2.9
Computer Software & Services 2.9
Specialized Services 2.6
Steel 2.5
Automobiles 2.2
Conglomerates 2.2
Manufacturing - Diversified 2.2
Electric Power 2.0
Beverages - Soft Drinks 1.9
Engineering & Construction 1.9
Machinery - Diversified 1.8
Publishing 1.8
Electrical Equipment 1.7
Metals - Miscellaneous 1.6
Aerospace / Defense 1.5
Building Materials 1.5
Chemicals Related 1.5
Office Equipment & Supplies 1.5
Real Estate 1.5
Broadcasters 1.2
Other 16.5
-----
100.3%
=====
WORLD GROWTH FUND
NOTES TO PORTFOLIO OF INVESTMENTS IN SECURITIES
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.
ADS/ADR -- American Depositary Shares/Receipts are foreign shares held by a U.S.
bank which issues a receipt evidencing ownership. Dividends are paid in U.S.
dollars.
GDS/GDR -- Global Depositary Shares/Receipts are foreign shares held by a
non-U.S. bank which issues a receipt evidencing ownership. Dividends are paid
in U.S. dollars.
See accompanying notes to financial statements.
WORLD GROWTH FUND
STATEMENT OF OPERATIONS
(IN THOUSANDS)
Year ended May 31, 1997
<TABLE>
<S> <C>
Net investment income:
Income (net of foreign taxes withheld of $484):
Dividends $ 4,264
Interest 611
---------
Total income 4,875
---------
Expenses:
Management fees 1,995
Transfer agent's fees 684
Custodian's fees 313
Postage 99
Shareholder reporting fees 20
Trustees' fees 4
Registration fees 38
Audit fees 18
Legal fees 4
Other 26
---------
Total expenses 3,201
---------
Net investment income 1,674
---------
Netrealized and unrealized gain on investments and foreign currency:
Net realized gain (loss) on:
Investments 16,932
Foreign currency transactions (44)
Change in net unrealized appreciation/depreciation of:
Investments 23,641
Translation of assets and liabilities in foreign currencies (14)
---------
Net realized and unrealized gain 40,515
---------
Increase in net assets resulting from operations $ 42,189
=========
</TABLE>
See accompanying notes to financial statements.
WORLD GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
(IN THOUSANDS)
Years ended May 31,
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
From operations:
Net investment income $ 1,674 $ 2,196
Net realized gain on investments 16,932 13,086
Net realized loss on foreign currency transactions (44) (16)
Change in net unrealized appreciation/depreciation of:
Investments 23,641 31,375
Foreign currency translations (14) (11)
-------- --------
Increase in net assets resulting from operations 42,189 46,630
-------- --------
Distributions to shareholders from:
Net investment income (2,331) (1,299)
-------- --------
Net realized gains (15,223) (3,705)
-------- --------
From capital share transactions:
Proceeds from shares sold 79,486 70,067
Shares issued for dividends reinvested 17,378 4,957
Cost of shares redeemed (81,892) (50,203)
-------- --------
Increase in net assets from capital share transactions 14,972 24,821
-------- --------
Net increase in net assets 39,607 66,447
Net assets:
Beginning of period 267,192 200,745
-------- --------
End of period $306,799 $267,192
======== ========
Undistributed net investment income included in net assets:
Beginning of period $ 1,639 $ 573
======== ========
End of period $ 1,048 $ 1,639
======== ========
Change in shares outstanding:
Shares sold 5,168 4,996
Shares issued for dividends reinvested 1,176 371
Shares redeemed (5,363) (3,613)
-------- --------
Increase in shares outstanding 981 1,754
======== ========
</TABLE>
See accompanying notes to financial statements.
WORLD GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1997
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USAA INVESTMENT TRUST (the Trust), registered under the Investment Company Act
of 1940, as amended, is a diversified, open-end management investment company
organized as a Massachusetts business trust consisting of eleven separate
funds. The information presented in this annual report pertains only to the
World Growth Fund (the Fund). The Fund's investment objective is capital
appreciation.
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. Portfolio securities, except as otherwise noted, traded primarily on a
domestic securities exchange are valued at the last sales price on that
exchange. Portfolio securities traded primarily on foreign securities exchanges
are generally valued at the closing values of such securities on the exchange
where primarily traded. If no sale is reported, the latest bid price is
generally used depending upon local custom or regulation.
2. Over-the-counter securities are priced at the last sales price or, if not
available, at the average of the bid and asked prices.
3. Securities purchased with maturities of 60 days or less are stated at
amortized cost which approximates market value.
4. 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 reguired. As a result of certain
permanent differences between book and tax basis accounting for investments in
passive foreign investment companies, reclassifications were made to the
statementof assets and liabilities at May 31, 1997 to increase accumulated
undistributed net investment income by $110,706 and to decrease accumulated net
realized gain on investments by $110,706. A similar reclassification was made
in 1996 in the amount of $184,506.
C. Investments in securities -- 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. Dividend
income, less foreign taxes, if any, is recorded on the ex-dividend date. If the
ex-dividend date has passed, certain dividends from foreign securities are
recorded upon notification. Interest income is recorded on the accrual basis.
Discounts and premiums on short-term securities are amortized over the life of
the respective securities.
D. Foreign currency translations -- The assets of the Fund may be invested in
the securities of foreign issuers. Since the accounting records of the Fund are
maintained in U.S. dollars, foreign currency amounts are translated into U.S.
dollars on the following basis:
1. Market value of securities, other assets, and liabilities at the mean
between the bid and asked translation rates of such currencies against U.S.
dollars.
2. Purchases and sales of securities, income, and expenses at the rate of
exchange obtained from an independent pricing service on the respective dates of
such transactions.
Net realized and unrealized foreign currency gains/losses occurring during the
holding period of investments are a component of realized gain/loss on
investments and unrealized appreciation/depreciation on investments,
respectively.
Net realized foreign currency gains/losses arise from sales of foreign currency,
currency gains/losses realized between the trade and settlement dates on
security transactions, and from the difference between amounts of dividends,
interest, and foreign withholding taxes recorded on the Fund's books and the
U.S. dollar equivalent of the amounts received. Net realized foreign currency
gains/losses have been reclassified from accumulated net realized gain/loss to
accumulated undistributed net investment income on the statement of assets and
liabilities as such amounts are treated as ordinary income/loss for tax
purposes. Net unrealized foreign currency exchange gains/losses arise from
changes in the value of assets and liabilities other than investments in
securities resulting from changes in the exchange rate.
E. Use of estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that may affect the reported amounts in the financial
statements.
(2) LINES OF CREDIT
The Fund participates with other USAA funds in two joint short-term revolving
loan agreements totaling $850 million through January 13, 1998, one with USAA
Capital Corporation (CAPCO), an affiliate of the Manager ($750 million
uncommitted), and one with an unaffiliated bank ($100 million committed). The
purpose of the agreements is to meet temporary or emergency cash need, including
redemption requests that might otherwise require the untimely disposition of
securities. Subject to availability under these agreements, the Fund may borrow
up to a maximum of 25% of its total assets, of which only 5% may be borrowed
from CAPCO, at the lending institution's borrowing rate plus a markup. The Fund
had no borrowings under either of these agreements during the year ended May 31,
1997.
(3) DISTRIBUTIONS
Distributions of net investment income and realized gains from security
transactions not offset by capital losses are made in the succeeding fiscal year
or as otherwise required to avoid the payment of federal taxes. Distributions
of net investmnet income of $.0600 per share, short-term capital gains of $.2842
per share, and long-term capital gains of $.2134 per share, declared and paid in
July 1997, are not reflected in the accompanying financial statements.
(4) INVESTMENT TRANSACTIONS
Purchases and sales of securities, excluding short-term securities, for the year
ended May 31, 1997 were $133,030,071 and $128,158,729, respectively.
Gross unrealized appreciation and depreciation of investments at May 31, 1997
was $81,294,805 and $9,031,921, respectively.
(5) FOREIGN CURRENCY CONTRACTS
A forward currency contract (currency contract) is a commitment to purchase or
sell a foreign currency at a specified date, at a negotiated price. The Fund
currently enters into currency contracts only in connection with the purchase or
sale of a security denominated in a foreigh currency. These contracts allow the
Fund to "lock in" the U.S. dollar price of the security. Currency contracts are
valued on a daily basis using foreign currency exchange rates obtained from an
independent pricing service. Risks of entering into currency contracts include
the potential inability of the counterparty to meet the terms of the contract
and the Fund giving up the opportunity for potential profit.
At May 31, 1997, the terms of open foreign currency contracts were as follows
(in thousands):
<TABLE>
<CAPTION>
U.S. DOLLAR U.S. DOLLAR UNREALIZED
EXCHANGE CURRENCY TO BE VALUE AS OF CURRENCY TO BE VALUE AS OF APPRECIATION
DATE DELIVERED 5/31/97 RECEIVED 5/31/97 (DEPRECIATION)
---- --------- ------- -------- ------- --------------
<S> <C> <C> <C> <C> <C>
6/02/97 25,010 Japanese Yen $ 215 216 U.S. Dollar $ 216 $ 1
6/02/97 407 U.S. Dollar 407 249 British Pound 407 -
6/03/97 13,995 Japanese Yen 120 121 U.s. Dollar 121 1
6/03/97 514 U.S. Dollar 514 315 British Pound 515 1
6/03/97 35 U.S. Dollar 35 22 British Pound 35 -
6/03/97 186 U.S. Dollar 186 114 British Pound 186 -
6/03/97 177 U.S. Dollar 177 296,907 Italian Lira 175 (2)
6/03/97 172 U.S. Dollar 172 289,264 Italian Lira 171 (1)
6/04/97 34,162 Japanese Yen 293 293 U.S. Dollar 293 -
6/04/97 516 U.S. Dollar 516 315 British Pound 515 (1)
6/04/97 36 U.S. Dollar 36 22 British Pound 36 -
6/06/97 35 U.S. Dollar 35 22 British Pound 35 -
6/06/97 280 U.S. Dollar 280 171 British Pound 279 (1)
6/09/97 26,234 Indonesian Rupiah 11 11 U.S. Dollar 11 -
6/09/97 99 U.S. Dollar 99 1,190 Austrian Schilling 99 -
6/09/97 59 U.S. Dollar 59 702 Austrian Schilling 59 -
6/09/97 58 U.S. Dollar 58 693 Austrian Schilling 58 -
6/09/97 37 U.S. Dollar 37 437 Austrian Schilling 37 -
6/30/97 349 U.S. Dollar 349 2,005 French Franc 347 (2)
------ ------ ----
$3,599 $3,595 $ (4)
====== ====== ====
</TABLE>
(6) TRANSACTIONS WITH MANAGER
A. Management fees -- The investment policies of the Fund and management of the
Fund's portfolio are carried out by USAA Investment Management Company (the
Manager). The Fund's management fees are computed at .75% 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 based on an annual charge per shareholder account
plus out-of-pocket expenses.
C. Underwriting services -- The Manager provides exclusive underwriting and
distribution of the Fund's shares on a continuing best efforts basis. The
Manager receives no commissions or fees for this service.
(7) TRANSACTIONS WITH AFFILIATES
Certain trustees and officers of the Fund are also directors, officers, and/or
employees of the Manager. None of the affiliated trustees or Fund officers
received any compensation from the Fund.
(8) Financial Highlights
Per share operating performance for a share outstanding throughout each period
is as follows:
<TABLE>
<CAPTION>
Eight-month
Period Ended Year Ended
Year Ended May 31, May 31, September 30,
------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value at
beginning of period $ 15.50 $ 12.96 $ 12.71 $ 11.80 $ 10.00
Net investment income .11 .12 .07 .04(b) .05
Net realized and
unrealized gain 2.28 2.73 .46 .93 1.75
Distributions from net
investment income (.14) (.08) - (.01) -
Distributions of realized
capital gains (.91) (.23) (.28) (.05) -
---------- ---------- ---------- ---------- ---------
Net asset value at
end of period $ 16.84 $ 15.50 $ 12.96 $ 12.71 $ 11.80
========== ========== ========== ========== =========
Total return (%) * 16.52 22.43 4.26 8.25 18.00
Net assets at end
of period (000) $ 306,799 $ 267,192 $ 200,745 $ 143,367 $ 68,818
Ratio of expenses to
average net assets (%) 1.20 1.27 1.28 1.28(a) 1.70
Ratio of net investment
income to average
net assets (%) .63 .96 .69 .42(a) .75
Portfolio turnover (%) 50.02 60.97 58.88 37.64 45.57
Average commission rate
paid per share (+) $ .0088 $ .0006
* Assumes reinvestment of all dividend income and capital gain distributions
during the period.
+ Calculated by aggregating all commissions paid on the purchase and sale of
securities and dividing by the actual number of shares purchased or sold for
which commissions were charged.
(a) Annualized. The ratio is not necessarily indicative of 12 months of
operations.
(b) Calculated using weighted average shares.
</TABLE>
