Dear Pax World Shareholder:
The Annual Meeting of Pax World Fund, Inc. was held on June 12,
1997 at State Street Bank & Trust Company in Boston. This was the first
meeting of shareholders since the change in ownership of Pax World
Management Corp. to members of the Shadek family. Reports were made by
Luther E. Tyson, Anthony S. Brown, Laurence A. Shadek and Thomas W.
Grant, President of Pax World Management Corp. Mr. Shadek announced the
creation of a new fund, Pax World Growth Fund, Inc. and indicated other
funds are in the planning stage. Mr. Robert P. Colin, portfolio manager
of the new Pax World Growth Fund, Inc. was introduced.
The summer issue of Connection accompanies this report. In it you
will find a fuller report of the Annual meeting. Of the shareholders
voting, 95% voted for the re-election of the slate of Directors named
in the proxy material. The shareholders also approved Pannell Kerr
Forster, P.C. as the outside independent auditor.
The Directors are pleased to report that as of June 30, 1997 the
total return on a share of Pax World Fund, Inc., a balanced fund, since
June 30, 1996 was 19.31%. The total return of a share of the Fund for
the last six months ending June 30, 1997 was 12.68%. The Fund's
portfolio during this period was exposed to about 60% of the risk in
the market.
The Fund's six month total return compares with the following indices:
The Lipper Balanced Fund Index.........................11.15%
The N.Y. Stock Exchange Composite Index................17.88%
Dow Jones Industrial Index.............................18.99%
Standard & Poor's 500 Index............................19.49%
At the mid-year meeting of the Board of Directors, a dividend of
$0.22 per share was declared payable to shareholders of record as of
the close of business on July 1, 1997 and payable on July 7, 1997. The
Directors also elected Laurence A. Shadek as Chairman of the Board of
Directors, Luther E. Tyson as President of the Fund until September 30,
1997, Thomas W. Grant as President of the Fund on and after September
30, 1997, Anthony S. Brown as Vice President, Treasurer, and Assistant
Secretary, and William M. Prifti as Secretary and General Counsel.
In his report, President Tyson replied to two questions brought to
his attention recently. Several shareholders have inquired concerning
any changes in the Fund's social criteria. "My response is that the
social criteria as delineated in the Fund's Prospectus can be changed
only by vote of the shareholders. For a shareholder to purchase shares
with the criterion of not investing in the tobacco industry, only to
discover a tobacco company in the portfolio, would result in a charge
of malpractice if not worse." A second question centered on the
difference between a balanced fund and a growth fund. "A balanced fund
must allocate at least 25% of its assets in bonds. In an up market,
bonds do not perform as well as equities. However, they furnish
protection in terms of income and stability when the market turns down.
A balanced fund does not have as much exposure to the market as a
growth fund that can be 100% in equities."
1
Anthony S. Brown reported on the investment strategy of management
for the past year. "We have not wavered from what we conider sound and
conservative investment principles. In order to achieve greater
diversification, we have spread assets over more equity issues in the
portfolio. We are favoring consumer basic stocks over cyclical stocks.
These equities tend to hold up better and are less volatile during a
slowdown in the business cycle than are cyclical stocks. Some of the
new companies we have added to the portfolio since last June include
Medtronic, Inc. (medical devices for treating heart fibrillation),
Oakwood Homes, Champion Enterprises (manufactured houses), AirTouch
Communications (worldwide wireless), Starbucks Corp., and Southern New
England Telecom. The bond side of the portfolio represents about 40% of
net assets with an average maturity rate of only two years."
Upon reading Connections that accompanies this report, you will
note the strong commitment of your management to creating a family of
Pax World funds. Pax World Growth Fund is a reality. Socially
responsible investing is alive, with new ideas and opportunities for
investors. The Directors, all of whom are investors in Pax World Fund,
Inc., thank you for the opportunity of serving your investment needs.
On behalf of the Directors,
Luther E. Tyson
President
July 14, 1997
- --------------------------------------------------------------------------------
OFFICERS AND DIRECTORS
Laurence A. Shadek, Chairman of the Board of Directors & Director
Luther E. Tyson, Ph.D., President
Thomas W. Grant, Vice Chairman of the Board of Directors & Director
Anthony S. Brown, Vice President, Treasurer, and Assistant Secretary
C. Lloyd Bailey, Director
Ralph M. Hayward, Director
Joy L. Liechty, Director
Raymond L. Mannix, Director
Sanford C. Sherman, Director
Esther J. Walls, Director
William M. Prifti, Esq., Secretary and General Counsel
- --------------------------------------------------------------------------------
2
PORTFOLIO HIGHLIGHTS
Six Months Ended 6/30/97
KEY STATISTICS
Change in N.A.V. ($16.56 to $18.66)...............................$2.10
12 Month Total Return
(6/30/96 - 6/30/97)..............................................19.31%
6 Month Total Return
(12/31/96 - 6/30/97).............................................12.68%
Net Increase
in Net Assets Resulting from Operations.....................$64,831,168
Total Net Assets.........................................$572.7 million
TEN LARGEST STOCK HOLDINGS
Percent of
Company Net Assets
Toys R Us Inc......................................................3.7%
Merck & Co. Inc....................................................3.6%
Peoples Energy Corp................................................3.6%
Enron Corp.........................................................3.6%
Gap Inc............................................................3.4%
AirTouch Communications, Inc.......................................3.3%
Wal-Mart Stores Inc................................................3.0%
Brooklyn Union Gas Co. ............................................2.9%
Bay State Gas Co...................................................2.6%
Pitney Bowes Inc...................................................2.0%
Total.............................................................31.7%
[GRAPHICS OMITTED]
ASSET ALLOCATION
June 30, 1997
Cash & Equivalents..................................................12%
Common Stocks.......................................................53%
U.S. Government Agency Bonds........................................35%
[GRAPHICS OMITTED]
SECURITY DIVERSIFICATION
June 30, 1997
U.S. Government Agency Bonds........................................35%
Pharmaceuticals.....................................................7%
Natural Gas.........................................................13%
Food................................................................4%
Retail..............................................................12%
Other...............................................................21%
Telecommunications..................................................8%
3
PAX WORLD FUND, INCORPORATED
SCHEDULE OF INVESTMENTS (UNAUDITED)
June 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
NUMBER OF PERCENT OF
NAME OF ISSUER AND TITLE OF ISSUE SHARES VALUE NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
COMMON STOCKS
CONSUMER PRODUCTS
Liz Claiborne, Inc........................................ 100,000 $ 4,662,500 .8%
------------
FOOD
CPC International, Inc.................................... 100,000 9,231,250
General Mills, Inc........................................ 100,000 6,512,500
H.J. Heinz Co............................................. 100,000 4,612,500
------------
20,356,250 3.6
------------
HOME IMPROVEMENT PRODUCTS
Masco Corp................................................ 100,000 4,175,000 .7
------------
LOANS - STUDENT
Student Loan Marketing Association........................ 42,600 5,410,200 .9
------------
MAILING EQUIPMENT
Pitney Bowes, Inc......................................... 166,700 11,585,650 2.0
-----------
MANUFACTURED HOMES
Champion Enterprises, Inc................................. 550,000 8,250,000
Oakwood Homes Corp........................................ 288,700 6,928,800
------------
15,178,800 2.6
-----------
MEDICAL EQUIPMENT
Medtronic, Inc............................................ 100,000 8,100,000 1.4
------------
NATURAL GAS
Bay State Gas Co.......................................... 553,800 14,744,925
Brooklyn Union Gas Co..................................... 587,600 16,820,050
Enron Corp................................................ 500,000 20,406,250
Peoples Energy Corp....................................... 551,900 20,661,756
-----------
72,632,981 12.7
-----------
4
PAX WORLD FUND, INCORPORATED
SCHEDULE OF INVESTMENTS (UNAUDITED), continued
NUMBER OF PERCENT OF
NAME OF ISSUER AND TITLE OF ISSUE SHARES VALUE NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
COMMON STOCKS, continued
PACKAGING
Bemis Co., Inc............................................ 50,000 $ 2,162,500 .4
------------
PHARMACEUTICALS
Bristol-Myers Squibb Co................................... 100,000 8,100,000
Johnson & Johnson......................................... 100,000 6,437,500
Merck & Co., Inc.......................................... 200,000 20,700,000
Pfizer, Inc............................................... 50,000 5,975,000
------------
41,212,500 7.2
RETAIL
Gap, Inc.................................................. 500,000 19,437,500
Home Depot, Inc........................................... 50,000 3,446,875
Starbucks Corp............................................ 200,000 7,787,500
Toys R Us, Inc............................................ 600,000 21,000,000
Wal-Mart Stores, Inc...................................... 500,000 16,906,250
------------
68,578,125 12.0%
------------
TELECOMMUNICATIONS
AirTouch Communications, Inc.............................. 700,000 19,162,500
BellSouth Corp............................................ 100,000 4,637,500
Nynex Corp................................................ 200,000 11,525,000
Southern NE Telecomm. Corp................................ 100,000 3,887,500
U.S. West, Inc. - Communications Group.................... 200,000 7,537,500
-------------
46,750,000 8.2
------------- ------
TOTAL COMMON STOCKS............................................ $300,804,506 52.5%
------------- ------
5
PAX WORLD FUND, INCORPORATED
SCHEDULE OF INVESTMENTS (UNAUDITED), continued
PRINCIPAL PERCENT OF
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT VALUE NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------
GOVERNMENT AGENCY BONDS
Federal Farm Credit Banks Consolidated
7.750%, due December 9, 1997.............................. $10,000,000 $ 10,088,530
Federal Home Loan Bank System
5.660%, due November 9, 1998.............................. 7,000,000 6,963,880
5.025%, due February 23, 1999............................. 9,000,000 8,845,290
5.825%, due March 12, 1999................................ 10,000,000 9,939,100
5.880%, due March 19, 1999................................ 13,000,000 12,943,060
5.660%, due January 12, 2000.............................. 5,000,000 4,922,650
Federal National Mortgage Association
6.050%, due November 10, 1997............................. 14,000,000 14,016,618
7.510%, due November 14, 1997............................. 10,000,000 10,068,960
5.620%, due February 10, 1999............................. 10,000,000 9,928,740
5.230%, due February 24, 1999............................. 8,000,000 7,873,840
6.110%, due September 20, 2000............................ 12,000,000 11,895,000
6.080%, due September 25, 2000............................ 5,000,000 4,952,350
5.820%, due December 5, 2000.............................. 15,000,000 14,714,100
6.340%, due December 20, 2000............................. 8,000,000 7,921,280
5.370%, due February 7, 2001.............................. 20,000,000 19,300,000
5.410%, due February 13, 2001............................. 10,000,000 9,660,900
5.360%, due February 16, 2001............................. 10,000,000 9,643,700
6.710%, due July 24, 2001................................. 7,000,000 7,052,500
7.040%, due September 24, 2001............................ 10,000,000 10,023,400
International Bank for Reconstruction
& Development
5.875%, due July 16, 1997................................. 10,000,000 10,001,600
-------------
TOTAL GOVERNMENT AGENCY BONDS............................. 200,755,498 35.1%
------------- ------
CERTIFICATES OF DEPOSIT
State Street Bank
5.000%, due July 21, 1997................................. 35,000,000 35,000,000
5.000%, due July 24, 1997................................. 15,000,000 15,000,000
5.000%, due July 28, 1997................................. 10,000,000 10,000,000
-------------
TOTAL CERTIFICATES OF DEPOSIT............................. 60,000,000 10.5
------------- ------
TOTAL INVESTMENTS............................ 561,560,004 98.1
Cash and receivables, less liabilities................ 11,122,851 1.9
------------- ------
NET ASSETS................................................. $572,682,855 100.0%
------------- ------
</TABLE>
See notes to financial statements.
6
PAX WORLD FUND, INCORPORATED
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
June 30, 1997
ASSETS
<TABLE>
<CAPTION>
<S> <C>
Investments, at value - note A
Common stocks (cost - $206,117,815)................................................ $300,804,506
Bonds (amortized cost - $202,105,030).............................................. 200,755,498
Certificates of deposit (cost - $60,000,000) 60,000,000
--------------
561,560,004
Cash ................................................................................... 5,511,663
Receivables
Dividends and interest............................................................. 3,840,722
Investment securities sold......................................................... 2,479,166
---------------
Total assets................................................................... 573,391,555
-------------
LIABILITIES
Payables
Capital stock reacquired........................................................... 182,144
Accrued expenses
Investment advisory fee - note B................................................... 240,651
Transfer agent fee................................................................. 105,000
Other accrued expenses............................................................. 180,905
----------------
Total liabilities.............................................................. 708,700
----------------
Net assets (equivalent to $18.66 per share based on............................
30,691,017 shares of capital stock outstanding) - note E................................ $572,682,855
------------
Net asset value, offering price and redemption price per share
($572,682,855 / 30,691,017 shares outstanding)............................. $18.66
------
</TABLE>
See notes to financial statements.
7
PAX WORLD FUND, INCORPORATED
STATEMENT OF OPERATIONS (UNAUDITED)
Six Months Ended June 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
Investment income
Income - note A
Dividends................................................ $ 3,444,247
Interest - note H........................................ 5,407,057
-------------
Total income......................................... 8,851,304
Expenses
Investment advisory fee - note B......................... $1,369,848
Transfer agent fee ...................................... 429,575
Distribution expenses - note D........................... 370,310
State taxes.............................................. 252,507
Custodian fees - note F.................................. 76,668
Printing and mailing..................................... 75,518
Registration fees........................................ 47,353
Legal fees and related expenses - note B................. 43,147
Other ................................................ 34,388
Directors' fees and expenses - note B.................... 16,409
------------
Total expenses....................................... 2,715,723
Less: Fees paid indirectly - note F.................. 73,004
------------
Net expenses.................................. 2,642,719
------------
Investment income - net.............................. 6,208,585
------------
Realized and unrealized gain on investments - note C..............
Net realized gain on investments - note H.................... 40,898,760
Change in unrealized appreciation of investments
for the period - note H.................................. 17,723,823
-----------
Net gain on investments.............................. 58,622,583
-----------
Net increase in net assets resulting from operations. $64,831,168
-----------
</TABLE>
See notes to financial statements.
8
PAX WORLD FUND, INCORPORATED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Year Ended
Ended December 31,
June 30, 1997 1996
------------- --------------
(Unaudited)
<S> <C> <C>
Increase (decrease) in net assets
Operations
Investment income - net............................. $ 6,208,585 $ 16,150,851
Net realized gain on investments.................... 40,898,760 26,195,518
Change in unrealized appreciation
of investments.................................. 17,723,823 6,708,027
------------ -------------
Net increase in net assets resulting
from operations............................. 64,831,168 49,054,396
Net equalization (debits) .................................. (29,711) (38,061)
Distributions to shareholders from
Investment income - net ($-0- and $.55
per share, respectively) - note A............... -- (16,099,745)
Net realized gain on investments ($-0- and
$.892 per share, respectively) - note A......... -- (26,195,473)
Capital share transactions - note E.......................... (5,551,547) 29,735,468
------------- -------------
Net increase in net assets...................... 59,249,910 36,456,585
Net assets
Beginning of period.......................................... 513,432,945 476,976,360
------------ -------------
End of period (including undistributed investment
income - net of $6,511,006 and $332,132,
respectively)................................................ $572,682,855 $513,432,945
------------ ------------
</TABLE>
See notes to financial statements.
9
PAX WORLD FUND, INCORPORATED
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
June 30, 1997
NOTE A - ACCOUNTING POLICIES
Pax World Fund, Incorporated (the "Fund") is a diversified,
open-end management investment company registered under the Investment
Company Act of 1940, as amended. Significant accounting policies of the
Fund are as follows:
Valuation of investments: Securities listed on any national,
regional or local exchange are valued at the closing prices on such
exchanges. Securities listed on the NASDAQ national market system are
valued using quotations obtained from the market maker where the
security is traded most extensively.
Amortization of bond premium and discount: Commencing January 1,
1997, the Fund amortizes purchase price premium and discount on bonds
over the remaining life of the bonds using the effective interest
method of amortization; for callable bonds, the amortization period is
to the first call date. Reference is made to note H.
Federal income taxes: The Fund's policy is to comply with the
requirements of the Internal Revenue Code that are applicable to
regulated investment companies and to distribute substantially all its
taxable income to its shareholders.
Therefore, no Federal income tax provision is required.
Equalization: The Fund uses the accounting practice known as
"equalization" by which a portion of the proceeds from sales and costs
of redemptions of capital shares, equivalent on a per share basis to
the amount of undistributed net investment income on the date of the
transactions, is credited or charged to undistributed income. As a
result, undistributed net investment income per share is unaffected by
sales or redemptions of capital shares.
Equalization is a permanent book/tax difference that causes a
difference between investment income and distributions.
Distributions to shareholders: All distributions to shareholders
are recorded by the Fund on the ex-dividend dates.
Accounting estimates: The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Other: The Fund follows industry practice and records security
transactions on the trade date. Dividend income is recognized on the
ex-dividend date, and interest income is recognized on an accrual
basis.
NOTE B - INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund has an investment advisory agreement ("Agreement") with
Pax World Management Corp. ("Adviser") which provides for payment by
the Fund of an annual investment advisory fee of 3/4 of 1% of the
10
PAX WORLD FUND, INCORPORATED
NOTES TO FINANCIAL STATEMENTS (UNAUDITED), continued
first $25,000,000 of its average daily net assets and 1/2 of 1% of its
average daily net assets in excess of that amount. Two officers, who
are also directors of the Fund, are also officers and directors of the
Adviser. Another two officers of the Fund, who are not directors of the
Fund, are also officers of the Adviser. The Agreement provides for an
expense reimbursement from the Adviser if the Fund's total expenses,
exclusive of interest, brokerage commisions or fees, and taxes, but
including the investment advisory fee, exceeds 1-1/2% of the average
daily net asset value of the Fund for any full fiscal year. No expense
reimbursement was required for either 1996 or the six months ended June
30, 1997.
All Directors are paid by the Fund for attendance at directors'
meetings.
During the six months ended June 30, 1997, the Fund incurred legal
fees and related expenses of $43,147 with William M. Prifti, Esq.,
general counsel for the Fund. Mr. Prifti is Secretary of the Fund.
All of the Adviser's capital stock is currently owned by four
siblings whose family has a 26.8% ownership interest in a brokerage
firm which the Fund utilizes to execute security transactions.
Brokerage commissions paid to this firm during the six months ended
June 30, 1997 and the year ended December 31, 1996 totalled $97,120 and
$68,224, respectively (32.7% and 18.6% of total commissions for the six
months ended June 30, 1997 and the year ended December 31, 1996,
respectively). Of the 1996 amount, $22,630 was paid subsequent to the
siblings' purchase of Adviser's capital stock on September 27, 1996
(48.8% of total commissions paid during the period September 27, 1996
to December 31, 1996).
NOTE C - INVESTMENTS
Purchases and proceeds from sales of investments, other than U.S.
Government agency bonds, for the six months ended June 30, 1997,
aggregated $147,168,721 and $142,420,709, respectively. Proceeds from
sales and maturities of U.S. Government agency bonds for the six months
ended June 30, 1997, aggregated $11,002,500.
Net realized gain or loss on sales of investments is determined on
the basis of identified cost (amortized cost for bonds). If determined
on an average cost basis, the net realized gain for the six months
ended June 30, 1997, would have been approximately the same.
Net premium amortization for the six months ended June 30, 1997
was $904,110. Reference is made to note H.
For Federal income tax purposes, the identified amortized cost of
investments owned at June 30, 1997, was $468,222,845.
NOTE D - DISTRIBUTION EXPENSES
The Fund maintains a distribution expense plan pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended. The plan
provides that the Fund may incur distribution expenses to finance
activity which is primarily intended to result in the sale of Fund
shares. These expenses include (but are not limited to) advertising
expenses, the costs of printing and mailing prospectuses to potential
investors, commissions and account servicing fees paid to, or on
account of, broker-dealers or certain financial institutions which have
entered into agreements with the Fund, compensation to and expenses
incurred by officers, directors and/or employees of the Fund for their
distributional services and indirect and overhead costs associated with
the sale of Fund shares (including, but not limited to, travel and
telephone expenses). The Plan provides that (i) up to twenty-five
one-hundredths of one percent (.25%) of the average daily net assets of
the Fund per annum may be used to pay for personal service and/or the
maintenance of shareholder accounts (service fee) and (ii)
11
PAX WORLD FUND, INCORPORATED
NOTES TO FINANCIAL STATEMENTS (UNAUDITED), continued
total distribution fees (including the service fee of .25%) may not
exceed thirty-five one hundredths of one percent (.35%) of the average
daily net assets of the Fund per annum. The Board may terminate the
plan at any time with no penalty to the Fund. If the plan is
terminated, the payment of fees to third parties would be discontinued
at that time.
NOTE E - CAPITAL AND RELATED TRANSACTIONS
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1997 December 31, 1996
------------------------- -------------------------
Shares Dollars Shares Dollars
------ ------- ------ -------
(Unaudited)
<S> <C> <C> <C> <C>
Shares sold.................... 1,370,368 $23,524,816 3,151,719 $ 52,809,366
Shares issued in reinvestment
of dividends.............. -- -- 2,360,551 39,060,319
--------------- ----------------- ---------- ------------
1,370,368 23,524,816 5,512,270 91,869,685
Shares redeemed................ (1,687,757) (29,076,363) (3,704,015) (62,134,217)
---------- ------------ ---------- -------------
Net increase (decrease)........ (317,389) $ (5,551,547) 1,808,255 $29,735,468
---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
The components of net assets at June 30, 1997(unaudited), are as follows:
Paid-in capital (75,000,000 shares of $1 par value authorized)................... $439,855,704
Undistributed investment income.................................................. 6,511,006
Undistributed net capital gains.................................................. 40,897,157
Accumulated prior years' net realized losses on investments...................... (7,918,171)
Net unrealized appreciation of investments....................................... 93,337,159
--------------
Net assets.................................................................... $572,682,855
--------------
</TABLE>
NOTE F - CUSTODIAN BANK AND CUSTODIAN FEES
State Street Bank and Trust Company is the custodian bank for the
Fund's assets. The custodian fees charged by the bank are reduced,
pursuant to an expense offset arrangement, by an earnings credit which
is based upon the average cash balances maintained at the bank. If the
Fund did not have such an offset arrangement, it could have invested
the amount of the offset in an income-producing asset.
NOTE G - DIVIDEND DECLARATION
The Board of Directors has declared a dividend from net investment
income of $.22 per share, payable July 7, 1997, to shareholders of
record on July 1, 1997.
12
PAX WORLD FUND, INCORPORATED
NOTES TO FINANCIAL STATEMENTS (UNAUDITED), continued
NOTE H - ACCOUNTING CHANGE
Effective January 1, 1997, the Fund adopted the policy of
amortizing bond purchase price discounts and premiums over the
remaining lives of the respective bonds (or to the first call date for
callable bonds). The effect of the change is to reflect the
amortization as an adjustment to interest income. Previously, discounts
and premiums were recognized as part of the net realized gain or loss
when the bonds matured or were sold. This change has no net effect on
net assets or on the net increase in net assets resulting from
operations.
Upon adopting the new policy, the Fund recognized the cumulative
amortization of discounts and premiums on the bonds held at January 1,
1997. This resulted in a one-time net reduction of approximately
$1,040,000 in interest income for the six months ended June 30, 1997
(approximately $.03 per share). Correspondingly, there was an identical
one-time credit to net gain on investments for the period.
13
PAX WORLD FUND, INCORPORATED - FINANCIAL HIGHLIGHTS
The following per share data, ratios and supplemental data have
been derived from information provided in the financial statements and
the Fund's underlying financial records.
1. PER SHARE COMPONENTS OF THE NET CHANGE DURING THE PERIOD IN NET
ASSET VALUE (BASED UPON AVERAGE NUMBER OF SHARES OUTSTANDING).
<TABLE>
<CAPTION>
Six Months Year Ended December 31
Ended ----------------------
June 30, 1997 1996 1995 1994 1993 1992
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning............... (Unaudited)
of period........................... $16.56 $16.33 $13.39 $13.55 $14.27 $14.99
-------- ------ ------ ------ ------ ------
Income from investment operations
Investment income - net............. 201 (A) .550 .80 .49 .51 .64
Realized and unrealized gain (loss)
on investments - net................ 1.899 (A) 1.122 3.07 (.15) (.66) (.39)
----- ------ ------- -------- -------- --------
Total from investment operations......... 2.100 1.672 3.87 .34 (.15) .25
------ ------ ------- ---------- -------- --------
Less distributions
Dividends from net investment
income.............................. -- .550 .79 .50 .50 .67
Distributions from realized gains... -- .892 .14 -- .07 .13
Tax return of capital............... -- -- -- -- -- .17
-------- --------- --------- -------- -------- ---------
Total distributions................. -- 1.442 .93 .50 .57 .97
-------- ------- --------- --------- --------- ---------
Net asset value, end of period........... $18.66 $16.56 $16.33 $13.39 $13.55 $14.27
------ ------ ------ ------ ------ ------
____________________________________________________________________________________________________________________________________
2. TOTAL RETURN.......................... 12.68% 10.36% 29.19% 2.65% (1.05)% .6%
____________________________________________________________________________________________________________________________________
3. RATIOS AND SUPPLEMENTAL DATA..........
Ratio of expenses to average net
assets (B).......................... 1.01% (D) .89% .97% .98% .94% 1.0%
Ratio of investment income - net
to average net assets............... 2.32% (D) 3.24% 3.44% 3.66% 3.63% 3.7%
Portfolio turnover rate............. 10.57% 34.55% 28.44% 25.45% 22.15% 17.4%
Average commission rate paid (C).... $.0667 $.0599 $.0714
Net assets, end of period (,000s)... $572,683 $513,433 $476,976 $388,249 $462,762 $469,275
Number of capital shares
outstanding, end of period (,000s).. 30,691 31,008 29,200 29,000 34,142 32,878
------------ ----------- ----------- --------- -------- ----------
</TABLE>
(A) Reference is made to note H.
(B) In order to conform to current disclosure requirements, the ratios for
the periods subsequent to 1994 are based upon total expenses, including
the gross amount of custodian fees (before being reduced pursuant to an
expense offset arrangement). The ratios for prior years were based upon
net expenses and are not required to be restated.
(C) The average commission rates for the periods subsequent to 1994 are
presented to conform to current disclosure requirements. This
disclosure was not required in prior years and has not been computed
for the prior years.
(D) Unaudited ratios for the six months ended June 30, 1997 have been
annualized.
14
