<PAGE>
UNITED
GOLD &
GOVERNMENT
FUND, INC.
SEMIANNUAL
REPORT
--------------------------------------
For the six months ended June 30, 1994
This report is submitted for the general information of the shareholders of
United Gold & Government Fund, Inc. It is not authorized for distribution to
prospective investors in the Fund unless accompanied with or preceded by the
United Gold & Government Fund, Inc. current prospectus.
<PAGE>
PRESIDENT'S LETTER
JUNE 30, 1994
Dear Shareholder:
This report covers the investment performance of your Fund for the six
months ended June 30, 1994.
During the past six months, bond and equity markets have been affected by
increases in interest rates and the fear of higher inflation. We expect these
markets will continue to react to action, if any, taken by the Federal Reserve
to prevent increases in the inflation rate. Although markets have declined
since the beginning of 1994, historically such intermediate and short-term
fluctuations have had limited impact on achieving investors' long-term financial
goals.
Over time, interest rates follow inflation. Once it has been determined
that the rate of economic growth is manageable, the Federal Reserve Board's
actions will be seen as beneficial to combating inflation, which eventually
should lead to interest rates that are more favorable to the markets.
Based on our 57 years in the financial services industry, we believe that
our commitment to professional portfolio management is the key value-added
service we provide: we select and continuously supervise the Fund's investments
using the most up-to-date information and research available to ensure the
investments meet the Fund's stated objectives.
And, we believe our "hands-on" approach to investment management can help
reward the patient investor over the long term. We never forget that we manage
your money.
The following is an in-depth review of your Fund's recent performance. We
believe the information included in this review continues to reflect our aim of
achieving the goals and purposes of the Fund. Thank you for your continued
confidence in our products and services.
Respectfully,
Keith A. Tucker
President
<PAGE>
SHAREHOLDER SUMMARY
- ----------------------------------------------------------------------
UNITED GOLD & GOVERNMENT FUND, INC.
PORTFOLIO STRATEGY:
Inflationary strategies: OBJECTIVE: High total return (income plus
appreciation of share value).
Up to 100% in minerals-related
securities.
Minimum of 25% so invested. STRATEGY: Invests in precious metals
Up to 100% in foreign securities. and minerals-related securities during
periods of
Disinflationary strategies: actual or expected inflation or when the
investment
Up to 100% in U.S. Government environment appears favorable;
Securities. invests in U.S. Government
Maximum of 25% in minerals- Securities during periods of
related securities. disinflation or low inflation.
FOUNDED: 1985
DIVIDENDS: PAID QUARTERLY (March, June, September,
December)
PERFORMANCE SUMMARY
PER SHARE DATA
For the Six Months Ended June 30, 1994
- --------------------------------------
DIVIDENDS PAID $ 0.02
======
NET ASSET VALUE ON
6/30/94 $ 8.99
12/31/93 9.97
------
CHANGE PER SHARE $(0.98)
======
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 6-30-94 -0.81% 5.24%
5-year period ended 6-30-94 3.78% 5.02%
Period from 9-4-85(+)
through 6-30-94 9.35% 10.09%
(+)Initial public offering of the Fund.
*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 June 30, 1994, United Gold & Government Fund, Inc. had net assets totaling
$42,672,824 invested in a diversified portfolio of:
58.59% Common Stocks and Warrants
13.62% Bullion
13.37% Cash and Cash Equivalents
9.74% U.S. Government Securities
4.68% Convertible Preferred Stocks
As a shareholder in United Gold & Government Fund, Inc. for every $100 you had
invested on June 30, 1994, your Fund owned:
Foreign Mining Stocks $49.43
Bullion 13.62
Cash and Cash Equivalents 13.37
U.S. Government Securities` 9.74
U.S. Mining Stocks 9.16
Convertible Preferred Stocks 4.68
Not all holdings will be represented in the portfolio at all times.
<PAGE>
THE INVESTMENTS OF
UNITED GOLD & GOVERNMENT FUND, INC.
JUNE 30, 1994
Troy
Ounces Value
BULLION
Gold* .................................. 12,446 $ 4,801,667
Platinum* .............................. 2,500 1,010,000
TOTAL BULLION - 13.62% $ 5,811,667
(Cost: $5,703,233)
Shares
COMMON STOCKS AND WARRANTS
Gold
Australia - 9.34%
Gold Mines of Kalgoorlie Limited* . ..... 231,660 205,946
Gold Mines of Kalgoorlie
Limited, Warrants* .................... 2,000,000 976,000
Normandy Poseiden Limited .............. 902,100 1,281,884
Nuigini Mining Limited* ................ 309,900 1,138,573
Resolute Resources Limited* ............ 415,200 381,154
Total ................................. 3,983,557
Canada - 24.20%
Agnico-Eagle Mines, Ltd. ............... 100,000 1,210,800
Euro-Nevada Mining Corporation Limited . 100,400 2,503,976
Franco-Nevada Mining Corporation Limited 36,000 1,912,788
International Musto Explorations Ltd.* . 100,000 1,030,100
Platinova Resources Ltd.* .............. 400,000 1,330,000
TVX Gold Inc.* ......................... 300,000 1,707,600
Venezuelan Goldfields Ltd.* ............ 93,400 632,972
Total ................................. 10,328,236
South Africa - 11.36%
Beatrix Mines Limited, ADR ............. 69,000 336,375
Driefontein Consolidated Limited, ADR .. 100,000 1,350,000
Free State Consolidated Gold Mines, ADR 45,000 624,375
Vaal Reefs Exploration & Mining Company
Limited, New Shares, ADR .............. 125,000 1,074,125
Western Deep Levels, Ltd., ADR ......... 35,000 1,461,250
Total.................................. 4,846,125
See Notes to Schedule of Investments on page 8.
<PAGE>
THE INVESTMENTS OF
UNITED GOLD & GOVERNMENT FUND, INC.
JUNE 30, 1994
Shares Value
COMMON STOCKS AND WARRANTS (Continued)
Gold (Continued)
United States - 3.59%
Battle Mountain Gold Company ........... 100,000 $ 1,025,000
Canyon Resources Corporation* .......... 200,000 506,200
Total ................................. 1,531,200
Total Gold Securities - 48.49% 20,689,118
Other Metals
South Africa - 1.83%
De Beers Consolidated Mines Limited,
ADR ................................... 35,000 783,125
United Kingdom - 2.70%
RTZ Corporation PLC (The) .............. 90,344 1,150,350
United States - 5.57%
AMAX Inc. .............................. 106,137 835,829
Cyprus Minerals Company ................ 12,500 371,875
Newmont Mining Corporation ............. 30,000 1,170,000
Total ................................. 2,377,704
Total Other Metals Securities - 10.10% 4,311,179
TOTAL COMMON STOCKS AND WARRANTS - 58.59% $25,000,297
(Cost: $16,795,587)
PREFERRED STOCKS - 4.68%
Gold
United States
Battle Mountain Gold Company,
Convertible ........................... 10,000 612,500
Echo Bay Finance Corp., Convertible .... 40,000 1,385,000
Total ................................. $ 1,997,500
(Cost: $1,498,700)
See Notes to Schedule of Investments on page 8.
<PAGE>
THE INVESTMENTS OF
UNITED GOLD & GOVERNMENT FUND, INC.
JUNE 30, 1994
Principal
Amount in
Thousands Value
UNITED STATES GOVERNMENT SECURITIES
United States Treasury:
6.5%, 4-30-99 ......................... $1,000 $ 982,030
9.25%, 2-15-2016 ...................... 2,750 3,175,398
TOTAL UNITED STATES GOVERNMENT SECURITIES - 9.74% $ 4,157,428
(Cost: $4,224,494)
TOTAL SHORT-TERM SECURITIES - 13.12%
J. P. Morgan Securities, 4.35%
Repurchase Agreement dated
6-30-94, to be repurchased
at $5,600,597 on 7-1-94** ............. 5,600 $ 5,600,000
(Cost: $5,600,000)
TOTAL INVESTMENTS - 99.75% $42,566,892
(Cost: $33,822,014)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.25% 105,932
NET ASSETS - 100.00% $42,672,824
Notes To Schedule Of Investments
*Non-income producing.
**Collateralized by $5,539,000 U.S. Treasury Notes, 6.75% due 2-28-97, market
value and accrued interest aggregate $5,710,017.
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 GOLD & GOVERNMENT FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1994
Assets
Investments -- at value (Notes 1 and 3):
Bullion (cost -- $5,703,233) .................... $ 5,811,667
Securities (cost -- $28,118,781) ................ 36,755,225
-----------
42,566,892
Cash ............................................. 1,065
Receivables:
Interest and dividends .......................... 249,937
Fund shares sold ................................ 90,770
Prepaid insurance premium ........................ 12,050
-----------
Total assets .................................. 42,920,714
-----------
Liabilities
Payable for Fund shares redeemed ................. 196,656
Accrued transfer agency and dividend disbursing .. 20,061
Accrued service fee ............................... 9,179
Accrued accounting services fee .................. 1,667
Other ............................................ 20,327
-----------
Total liabilities ............................. 247,890
-----------
Total net assets ............................. $42,672,824
===========
Net Assets
$1.00 par value capital stock, authorized --
100,000,000; shares outstanding -- 4,747,678
Capital stock ................................... $ 4,747,678
Additional paid-in capital ...................... 62,119,156
Accumulated undistributed income (loss):
Accumulated undistributed net investment income . 69,950
Accumulated net realized loss on investment
transactions and foreign currency
transactions .................................. (33,008,838)
Net unrealized appreciation in value of
investments at end of period .................. 8,744,878
-----------
Net assets applicable to outstanding units
of capital.................................... $42,672,824
===========
Net asset value per share (net assets divided by
shares outstanding) .............................. $8.99
=====
See notes to financial statements.
<PAGE>
UNITED GOLD & GOVERNMENT FUND, INC.
STATEMENT OF OPERATIONS
For the Six Months Ended JUNE 30, 1994
Investment Income
Income:
Dividends (net of foreign withholding taxes
of $46,122) .................................... $ 385,341
Interest ........................................ 131,855
----------
Total income .................................. 517,196
----------
Expenses (Note 2):
Investment management fee ....................... 160,592
Transfer agency and dividend disbursing ......... 97,603
Service fee ..................................... 30,245
Custodian fees .................................. 17,390
Accounting services fee ......................... 10,000
Audit fees ...................................... 9,189
Legal fees ...................................... 3,213
Other ........................................... 31,659
----------
Total expenses ................................ 359,891
----------
Net investment income ........................ 157,305
----------
Realized and Unrealized Gain (Loss) on Investments
Realized net gain on bullion ...................... 6,568
Realized net gain on securities .................. 1,981,072
Realized net loss from foreign
currency transactions ........................... (7,399)
----------
Realized net gain on investments ................ 1,980,241
----------
Unrealized depreciation in value of bullion
during the period ............................... (55,279)
Unrealized depreciation in value of securities
during the period ............................... (6,761,580)
----------
Unrealized depreciation in value of investments
during the period ............................. (6,816,859)
----------
Net loss on investments ....................... (4,836,618)
----------
Net decrease in net assets resulting from
operations ................................. ($4,679,313)
==========
See notes to financial statements.
<PAGE>
UNITED GOLD & GOVERNMENT FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the For the
six months fiscal year
ended ended
June 30, December 31,
1994 1993
----------- -----------
Increase (Decrease) in Net Assets
Operations:
Net investment income ............... $ 157,305 $ 178,585
Realized net gain on investments .... 1,980,241 2,095,169
Unrealized appreciation
(depreciation) .................... (6,816,859) 17,844,721
----------- -----------
Net increase (decrease) in net
assets resulting from
operations ....................... (4,679,313) 20,118,475
----------- -----------
Dividends to shareholders from
net investment income* .............. (95,401) (188,719)
----------- -----------
Capital share transactions:
Proceeds from sale of shares
(828,143 and 1,720,096 shares,
respectively) ...................... 7,960,811 13,848,251
Proceeds from reinvestment of
dividends (9,896 and 23,934
shares, respectively) ............. 94,058 185,584
Payments for shares redeemed
(794,581 and 1,796,401 shares,
respectively) ...................... (7,515,244) (14,191,833)
----------- -----------
Net increase (decrease) in net
assets resulting from capital
share transactions ............... 539,625 (157,998)
----------- -----------
Total increase (decrease) ........ (4,235,089) 19,771,758
Net Assets
Beginning of period .................. 46,907,913 27,136,155
----------- -----------
End of period ........................ $42,672,824 $46,907,913
=========== ===========
Undistributed net investment
income ............................ $69,950 $8,046
======= ======
*See "Financial Highlights" on page .
See notes to financial statements.
<PAGE>
UNITED GOLD & GOVERNMENT FUND, INC.
FINANCIAL HIGHLIGHTS
For a Share of Capital Stock Outstanding
Throughout Each Period:
For the
six months For the fiscal year ended December 31,
ended --------------------------------------
6/30/94 1993 1992 1991 1990 1989
---------- ------ ------ ------ ------ ------
Net asset value,
beginning of
period ........... $9.97 $5.70 $6.63 $6.68 $8.66 $7.47
----- ----- ----- ----- ----- -----
Income from investment
operations:
Net investment
income........... .03 .04 .06 .15 .11 .16
Net realized and
unrealized gain
(loss) on
investments ..... (0.99) 4.27 (0.93) (0.05) (1.97) 1.20
----- ----- ----- ----- ----- -----
Total from investment
operations ....... (0.96) 4.31 (0.87) .10 (1.86) 1.36
----- ----- ----- ----- ----- -----
Less dividends from
net investment
income ........... (0.02) (0.04) (0.06) (0.15) (0.12) (0.17)
----- ----- ----- ----- ----- -----
Net asset value,
end of period ..... $8.99 $9.97 $5.70 $6.63 $6.68 $8.66
===== ===== ===== ===== ===== =====
Total return* ...... -9.64% 75.82%-13.18% 1.47%-21.59% 18.42%
Net assets, end
of period (000
omitted) .........$42,673 $46,908$27,136 $40,587$54,371 $83,154
Ratio of expenses
to average net
assets ........... 1.60%** 1.69% 1.88% 1.57% 1.56% 1.42%
Ratio of net invest-
ment income to average
net assets ....... 0.70%** 0.48% .90% 2.11% 1.43% 1.91%
Portfolio turnover
rate*** .......... 34.88%**84.00% 61.50% 112.80% 82.42% 89.92%
*Total return calculated without taking into account the sales load deducted
on an initial purchase.
**Annualized.
***This rate is, in general, calculated by dividing the average value of the
Fund's portfolio securities during the period into the lesser of its
purchases or sales of securities in the period, excluding short-term
securities and bullion.
See notes to financial statements.
<PAGE>
UNITED GOLD & GOVERNMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1994
NOTE 1 -- Significant Accounting Policies
United Gold & Government 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. Gold and silver bullion are valued at the last
spot settlement price for current delivery as calculated by the Commodity
Exchange, Inc. as of the close of that Exchange. Platinum bullion is
valued at the last spot settlement price as calculated by the New York
Mercantile Exchange as of the close of that Exchange. Securities for which
quotations are not readily available are valued as determined in good faith
in accordance with procedures established by and under the general
supervision of the Fund's Board of Directors. 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. Original issue discount (as defined in the Internal
Revenue Code), premiums on the purchase of bonds and post-1984 market
discount are amortized for both financial and tax reporting purposes over
the remaining lives of the bonds. Dividend income is recorded on the ex-
dividend date except that certain dividends from foreign securities are
recorded as soon as the Fund is informed of the ex-dividend date. Interest
income is recorded on the accrual basis. See Note 3 -- Investment
Securities Transactions.
C. Foreign currency translations -- All assets and liabilities denominated in
foreign currencies are translated into U.S. dollars daily. Purchases and
sales of investment securities and accruals of income and expenses are
translated at the rate of exchange prevailing on the date of the
transaction. For assets and liabilities other than investments in
securities, net realized and unrealized gains and losses from foreign
currency translations arise from changes in currency exchange rates. The
Fund combines fluctuations from currency exchange rates and fluctuations in
market value when computing net realized and unrealized gain or loss from
investments.
D. 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.
E. 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 may be due to differing
treatments for such things as deferral of wash sales and post-October
losses, foreign currency transactions, net operating losses and expiring
capital loss carryforwards.
F. Repurchase agreements -- Repurchase agreements are collateralized by the
value of the resold securities which, during the entire period of the
agreement, remains at least equal to the value of the loan, including
accrued interest thereon. The collateral for the repurchase agreement is
held by the Fund's custodian bank.
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 .30% 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 $10.5 billion of
combined net assets at June 30, 1994) at annual rates of .51% of the first $750
million of combined net assets, .49% on that amount between $750 million and
$1.5 billion, .47% between $1.5 billion and $2.25 billion, .45% between $2.25
billion and $3 billion, .43% between $3 billion and $3.75 billion, .40% between
$3.75 billion and $7.5 billion, .38% between $7.5 billion and $12 billion, and
.36% of that amount over $12 billion. The Fund accrues and pays this fee daily.
Pursuant to assignment of the Investment Management Agreement between the
Fund and Waddell & Reed, Inc. ("W&R"), Waddell & Reed Investment Management
Company ("WRIMCO"), a wholly-owned subsidiary of W&R, serves as the Fund's
investment manager.
The Fund has an Accounting Services Agreement with Waddell & Reed Services
Company ("WARSCO"), a wholly-owned subsidiary of W&R. Under the agreement,
WARSCO acts as the agent in providing accounting services and assistance to the
Fund and pricing daily the value of shares of the Fund. For these services, the
Fund pays WARSCO a monthly fee of one-twelfth of the annual fee shown in the
following table.
Accounting Services Fee
Average
Net Asset Level Annual Fee
(all dollars in millions) Rate for Each Level
------------------------- -------------------
From $ 0 to $ 10 $ 0
From $ 10 to $ 25 $ 10,000
From $ 25 to $ 50 $ 20,000
From $ 50 to $ 100 $ 30,000
From $ 100 to $ 200 $ 40,000
From $ 200 to $ 350 $ 50,000
From $ 350 to $ 550 $ 60,000
From $ 550 to $ 750 $ 70,000
From $ 750 to $1,000 $ 85,000
$1,000 and Over $100,000
At present, the Fund operates under state expense requirements which limit
the amount of aggregate annual expenses, adjusted for certain excess expenses,
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 June 30, 1994.
The Fund pays WARSCO a 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
$105,908, out of which W&R paid sales commissions of $60,038 and all expenses in
connection with the sale of Fund shares, except for registration fees and
related expenses.
Effective October 1, 1993, the Fund adopted a 12b-1 Service Plan with a
maximum fee of .25%
The Fund paid Directors' fees of $815.
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 Securities Transactions
Purchases of investment securities, other than U.S. Government and short-
term securities, aggregated $1,728,200 while proceeds from maturities and sales
aggregated $7,877,667. Purchases of bullion aggregated $133,602 while proceeds
from the sale of bullion aggregated $124,371. Purchases of short-term
securities aggregated $601,540,000 while proceeds from maturities and sales
aggregated $599,294,658. Purchases of U.S. Government securities aggregated
$4,225,508. There were no sales of U.S. Government securities during the
period.
For Federal income tax purposes, cost of investments owned at June 30, 1994
was $33,822,014, resulting in net unrealized appreciation of $8,744,878, of
which $9,289,965 related to appreciated securities and $544,777 related to
depreciated securities.
NOTE 4 -- Federal Income Tax Matters
For Federal income tax purposes, the Fund realized capital gain net income
of $2,095,170 during the year ended December 31, 1993, which was fully offset by
utilization of capital loss carryforwards. Remaining prior year capital loss
carryforwards of the Fund aggregated $34,989,079 at December 31, 1993. This
amount is available to offset future realized capital gain net income for
Federal income tax purposes through December 31, 1996; $11,894,711 of this
amount is available through December 31, 1997: $11,331,322 is available through
December 31, 1998; $6,823,792 is available through December 31, 1999 and
$4,958,441 is available through December 31, 2000.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
United Gold & Government 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 Gold & Government Fund, Inc.
(the "Fund") at June 30, 1994, the results of its operations for the six months
then ended and the changes in its net assets and the financial highlights for
the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of portfolio positions at June 30, 1994 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
PRICE WATERHOUSE LLP
Kansas City, Missouri
July 29, 1994
<PAGE>
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.
DIRECTORS
Ronald K. Richey, Birmingham Alabama, Chairman of the Board
Henry L. Bellmon, Red Rock, Oklahoma
Dodds I. Buchanan, Boulder, Colorado
Jay B. Dillingham, Kansas City, Missouri
John F. Hayes, Hutchinson, Kansas
Glendon E. Johnson, Miami, Florida
William T. Morgan, Los Angeles, California
Doyle Patterson, Kansas City, Missouri
Keith A. Tucker, Overland Park, Kansas
Frederick Vogel, III, Milwaukee, Wisconsin
Paul S. Wise, Carefree, Arizona
Leslie S. Wright, Birmingham, Alabama
OFFICERS
Keith A. Tucker, President
Michael L. Avery, Vice President
Robert L. Hechler, Vice President
Henry J. Herrmann, Vice President
John M. Holliday, Vice President
Theodore W. Howard, Vice President and Treasurer
Rodney O. McWhinney, Vice President
Sharon K. Pappas, Vice President and Secretary
Carl E. Sturgeon, Vice President
<PAGE>
THE UNITED GROUP OF MUTUAL FUNDS
United Cash Management, Inc.
United Government Securities Fund, Inc.
United Bond Fund
United Municipal Bond Fund, Inc.
United Continental Income Fund, Inc.
United Income Fund
United Municipal High Income Fund, Inc.
United High Income Fund, Inc.
United High Income Fund II, Inc.
United Accumulative Fund
United Vanguard Fund, Inc.
United New Concepts Fund, Inc.
United Science and Technology Fund
United International Growth Fund, Inc.
United Gold & Government Fund, Inc.
United Retirement Shares, Inc.
FOR MORE INFORMATION:
Contact your representative, or your
local office as listed on your
Account Statement, or contact:
WADDELL & REED
CUSTOMER SERVICE
6300 Lamar Avenue
P.O. Box 29217
Shawnee Mission, KS 66201-9217
(913) 236-1303
NUR1013SA(6-94)
printed on recycled paper
