(logo) Chase Vista funds)
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THE GROWTH FUND OF WASHINGTON
(graphic eastern seaboard, MD and VA highlighted)
Semi-Annual Report
June 30, 1999
(logo)
THE GROWTH FUND OF WASHINGTON
Fund results in this letter were computed without a sales charge. Here
are the
total and average annual compound returns with all distributions
reinvested for
periods ended June 30, 1999, assuming payment of the 5.75% maximum sales
charge
at the beginning of the stated periods - 10 years: +223.92%, or +12.47% a
year;
5 years: +144.35%, or +19.56% a year; and 12 months: +3.60%. Sales
charges are
lower for accounts of $100,000 or more.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS. ALL INVESTMENTS ARE
SUBJECT TO
CERTAIN RISKS. FOR EXAMPLE, THOSE WHICH INCLUDE COMMON STOCKS ARE AFFECTED BY
FLUCTUATING STOCK PRICES, SO YOU MAY GAIN OR LOSE MONEY BY INVESTING IN THE
FUND. ACCORDINGLY, INVESTORS SHOULD MAINTAIN A LONG-TERM INVESTMENT
PERSPECTIVE.
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED, GUARANTEED OR
ENDORSED BY, THE U.S. GOVERNMENT, ANY BANK, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, ENTITY OR PERSON.
Fellow Shareholders
The Growth Fund of Washington's net asset value was $30.82 on June 30, 1999
versus $30.86 on December 31, 1998, which is unchanged on a total return basis
with the 4-cent per share dividend on June 21 taken in shares. For the same
period, the total return on the unmanaged Standard & Poor's 500 Composite
Index
increased by 12.56%. At mid-year, the weighted average price-earnings
multiple
for the Fund's holdings was 19.3 times 2000 estimated earnings, or about 19%
less than the S&P 500's multiple of 24.4 times.
One of the reasons for the Fund's underperformance is the decline year-to-date
in both Freddie Mac and Fannie Mae. These two issues have been significant
contributors to the Fund's performance in past years. The fundamentals of the
companies remain strong, and both expect to generate attractive earnings
growth
this year and in future years. We maintain a long-term focus, and believe
that
stock market performance will follow business performance over the long term.
During this same six-month period, the focus of the financial markets was
on the
pace of domestic growth. At its May meeting the Federal Reserve Open Market
Committee (FOMC) adopted a "tightening bias." On June 30, the FOMC raised the
target on the federal funds rate by 25 basis points, and adopted a "neutral"
policy stance. The move was widely anticipated. The Federal Reserve
stated that
this increase in rates was a necessary "pre-emptive"step to slow down the pace
of growth. Although inflation has remained at low levels, there are fears that
tight labor market conditions may re-ignite price pressures.
On June 30, 1999, The Growth Fund of Washington held securities of 26
companies
in 13 industry groups. The Fund's five largest holdings, representing
44.15% of
net assets, were Freddie Mac (13.34%); Fannie Mae (11.52%); The Washington
Post
Co., Class B (7.06%); Capital One Financial Corp. (6.80%); and SunTrust Banks,
Inc. (5.43%).
Since the first of the year, two companies were added to the Fun d's
portfolio:
America Online, Inc., the Herndon, Virginia-based leader in interactive
services, web brands, internet technologies, and e-commerce, whose two
worldwide
internet services, America Online and CompuServe have approximately 20 million
members; and Coventry Healthcare, Inc., a Bethesda, Maryland-based provider of
health care services through full-risk health care plans, including health
maintenance organization and preferred provider organization products, and an
administrator of self-insured health plans of certain large employers,
providing
services to the employer and their covered employees.
In addition, the acquisition of Fund holding Crestar Financial Corp. by
SunTrust
Banks, Inc. was completed and the Fund received shares of SunTrust Banks.
SunTrust is the nation's 10th largest commercial banking organization,
providing
a wide range of services to meet the financial needs of customers in six
states,
including Maryland and Virginia, plus the District of Columbia. Consolidation
activity in the banking industry has increased in the last few months, as Y2K
concerns are less of an issue; and there is a possible change in accounting
rules that would eliminate pooling-of-interest transactions after next year.
The Growth Fund of Washington eliminated the following holdings during this
period: COMSAT Corp., Harman International Industries, Inc., Richfood
Holdings,
Inc. (acquired by SuperValu, Inc.), SLM Holding Corp., and USEC, Inc.
Prospects for the regional economy appear to be bright, with reasonable growth
and little sign of inflation. The most recent Federal Reserve Beige Book
reported strong housing sales in the mid-Atlantic region and manufacturing
activity grew at a moderate pace.
In telecommunications, the convergence of voice, data, and video is ongoing.
Small and large combinations have been announced during the last six
months. On
July 18, 1999, Qwest Communications and U S West agreed to a strategic
merger of
the two companies. Terms provide that Qwest will issue shares of its common
stock having a value of $69.00 for each share of US West. The merger is
subject
to approval of shareholders of both companies and by Federal and state
regulators. It is expected to be consummated by mid-2000.
With the general markets at historic highs, one can expect increased
volatility
and the possibility of lower prices. The Growth Fund of Washington's lower
than
average price-earnings ratio should provide some downside protection. We
encourage you to maintain a long-term perspective toward your holdings.
We welcome your comments, as always, and look forward to reporting to again in
six months.
Sincerely,
(signatures)
James H. Lemon, Jr. Harry J. Lister
Chairman President
August 23, 1999
<TABLE>
<CAPTION>
Investment Portfolio as of June 30, 1999
Number
Industry
of Market Percent of
Group Securities<F1>
Shares Value Net Assets
<S> <S> <C> <C> <C>
Aerospace Lockheed Martin Corp. 97,126 $ 3,617,944 4.75%
Bethesda-based defense/aerospace company
that designs and services communication
and information systems.
Banking Bank of America Corp. 44,400 3,255,075 4.27
Multi-bank holding company with
operations in many states and Washington,
DC with $595 billion in assets.
Capital One Financial Corp. 93,000 5,178,938 6.80
Northern Virginia-based general purpose
credit card issuer, with $17 billion in
managed loans.
First Union Corporation 72,600 3,412,200 4.48
Leading financial services company with
assets of $235 billion, serving 16 million
corporate and retail customers in invest-
ment and mortgage banking.
Provident Bankshares Corporation54,754 1,273,031 1.67
Baltimore-based bank holding company for
Provident Bank.
SunTrust Banks, Inc. 59,520 4,132,920 5.43
Tenth largest banking company; branches
across six states and Washington, DC
with $91.1 billion in assets.
TOTAL 17,252,164 22.65
Biotechnology
Human Genome Sciences, Inc.<F2>10,000 395,000 .52
Rockville, Maryland-based leader in gene
sequencing, with licensing agreements
with major pharmaceutical companies for
therapeutic and diagnostic product
development.
Computer American Management
Systems, Inc.<F2> 44,000 1,410,750 1.85
Services & Northern Virginia-based leading supplier
Hardware of information technologies.
MICROS Systems, Inc.<F2> 31,000 1,054,000 1.38
Maryland-based manufacturer and marketer
of systems and software for the hospitality
industry.
TOTAL 2,464,750 3.23
Financial Fannie Mae 128,320 $ 8,773,880 11.52%
Services Washington, DC-based, the largest
residential mortgage funding operation
through the secondary market.
Freddie Mac 175,200 10,161,600 13.34
Northern Virginia-based company which
purchases, securitizes and guarantees
mortgages.
TOTAL 8,935,480 24.86
Health Coventry Healthcare, Inc.<F2>31,000 339,063 .45
Services Bethesda-based managed health care
company serving approximately
1.4 million members.
Trigon Healthcare, Inc.<F2> 31,700 1,153,088 1.51
Richmond-based managed health care
company serving approximately
2 million members.
United Payors & United
Providers, Inc.<F2> 40,000 927,500 1.22
Rockville-based company that is an
intermediary on behalf of indemnity
insurance companies, third-party
administrators and self-insured unions
for discounted medical services.
TOTAL 2,419,651 3.18
InformationAmerica Online, Inc. 12,000 1,301,400 1.71
Services Herndon, Virginia-based leader in
interactive services, web brands, internet
technologies, and e-commerce services.
Manufact
uring The Black & Decker Corp. 10,000 631,250 .83
Maryland-based manufacturer and marketer
of a wide range of products sold to residential
and commercial markets in over 100 countries.
Danaher Corp. 50,000 2,906,250 3.82
Washington, DC-based manufacturer of
hand tools, automotive & transportation
equipment, and process & environmental
controls.
TOTAL 3,537,500 4.65
Publishing
& The Washington Post
Co., Class B 10,000 $ 5,377,500 7.06%
Communica
tions Washington, DC-based company that
publishes "The Washington Post" and
"Newsweek"; owns several TV stations
and over 60 cable TV systems.
Retail Circuit City Stores, Inc.35,000 3,255,000 4.27
Richmond-based retailer of audio, video and
brand name consumer electronic products,
with a presence in the new and used car
market through CarMax.
Telecommuni-American Tower Corp.<F2>63,500 1,524,000 2.00
cations Owns and operates more than 3,000 wireless
communication towers in 44 states and
Washington, DC.
Bell Atlantic Corp. 56,000 3,661,000 4.81
Holding company for the mid-Atlantic
telephone companies, serving a multi-state
area and Washington, DC.
MCI Worldcom, Inc. 20,000 1,725,000 2.26
A global business telecommunications
company operating in more than 50 countries,
providing fully integrated local, long distance,
international, and Internet services.
PRIMUS Telecommuni
cations Group, Inc.<F2>40,000 897,500 1.18
Vienna, Virginia-based provider of domestic
and international long-distance switched
voice, data, private network and value-
added services.
Qwest Communications
International, Inc.<F2>69,966 2,313,251 3.04
Nation's fourth largest long-distance
company and a multimedia communications
company serving over 2 million customers.
TOTAL 10,120,751 13.29
Transpor
tation CSX Corp. 70,000 3,171,875 4.16
Richmond-based holding company for
transportation and natural resources with
railroad, trucking, pipeline, and ocean
shipping units.
Utilities Columbia Energy Group 15,000 $ 940,313 1.23%
Reston, Virginia-based utility holding
company with more than $6 billion in
assets, engaged in all phases of the natural
gas business; serves 7 million customers in
15 states and Washington, DC.
TOTAL INVESTMENT
SECURITIES (cost: $19,477,030) 72,789,328 95.56
Repurchase Agreements:
Prudential Securities Corporation 3,491,000 4.58
4.75%, issued 6/30/99, $3,491,000
including interest,due 7/1/99
(collateralized by $3,720,000
Federal Home Loan Mortgage Corporation
Mortgage Participation Certificates, due 4/15/29)
Payables over cash and receivables (103,000) (.14)
NET ASSETS $76,177,328 100.00%
<FN>
<F1> Securities listed are common stocks unless otherwise indicated.
<F2> Indicates security which has not paid dividends during the preceding
twelve months.
See Notes to Financial Statements
</FN>
</TABLE>
Statement of Assets and Liabilities
as of June 30, 1999 (Unaudited)
Assets Investment in securities,
at market (cost: $19,477,030) $72,789,328
Repurchase agreements,
(cost: $3,491,000) 3,491,000
Cash 21,199
Dividends and interest receivable 2,436
Receivable for securities sold 878,221
Receivable for Fund_s shares sold 65,645
Other assets 33,814
$77,281,643
Liabilities Payable for adviser and management services43,938
Payable for distribution plan 60,625
Payable for securities purchased 527,900
Payable for Fund_s shares repurchased 453,975
Accounts payable and accrued expenses 17,877
1,104,315
Net Assets Capital stock
($.01 par value, 2,471,550 shares
outstanding, 25,000,000 authorized) 24,715
Paid-in capital 21,244,106
Undistributed investment income 16,912
Undistributed realized capital gains 1,579,297
Unrealized gains 53,312,298
$76,177,328
Net asset value per share
$30.82
Statement of Operations
for the six months ended June 30, 1999 (Unaudited)
Investment Income
Income:
Dividends $ 509,501
Interest 51,301 $
560,802
Expenses:
Investment advisory fee 141,114
Business management fee 127,728
Distribution fee 94,076
Transfer agency fee and expenses 39,000
Auditing and legal fees 14,500
Custodian fee and expenses 18,509
Directors_ fees 4,800
Postage, stationery and supplies 2,770
Reports to shareholders 7,264
Registration and prospectus expense 4,245
Other 5,252 459,258
Net investment income 101,544
Realized and Unrealized Gain on Investments
Net realized gain on equities, identified
cost basis 1,561,296
Net change in unrealized gain (1,695,445)
Net realized and change in unrealized
gain on investments (134,149)
Net decrease in net assets resulting from
operations $ (32,605)
See Notes to Financial Statements
Statement of Changes in Net Assets
Six Months
Ended
June 30, 1999 Year Ended
(Unaudited) Dec. 31,
1998
Increase in Net Assets
Operations:
Net investment income $ 101,544 $
181,833
Net realized gain on equity investments 1,561,296
2,941,788
Net change in unrealized gain on
investments (1,695,445)
11,385,760
Net increase (decrease) in net assets
resulting from operations (32,605)
14,509,381
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income (99,636)
(169,899)
Distributions from net realized gains _
(2,883,033)
Total (99,636)
(3,052,932)
Capital Stock Transactions:
Net increase (decrease) in net assets
resulting from capital stock transactions (1,558,579)
4,762,643
Total increase (decrease) in net assets (1,690,820)
16,219,092
Net Assets:
Beginning of period 77,868,148
61,649,056
End of period $76,177,328
$77,868,148
See Notes to Financial Statements
<TABLE>
<CAPTION>
Financial Highlights
for a share outstanding throughout the period
Six Months
Ended
June 30, 1999 For the Year
Ended December 31,
(Unaudited) 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $30.86 $26.09 $20.00 $18.19 $13.32 $15.37
Income from investment operations:
Net investment income .04 .08 .09 .07 .14 .18
Net realized and unrealized gain (loss)
on investment (.04) 5.95 7.20 2.60 5.72 (1.61)
Total from investment operations - 6.03 7.29 2.67 5.86 (1.43)
Less Distributions:
Dividends (from net investment
income) (.04) (.07) (.09) (.07) (.14) (.18)
Distributions (from capital gains) - (1.19) (1.11) (.79) (.85) (.44)
Total distributions (.04) (1.26) (1.20) (.86) (.99) (.62)
Net asset value, end of period $30.82 $30.86 $26.09 $20.00 $18.19 $13.32
Total return<F1> 0.00% 23.22% 36.56% 14.65% 44.25% (9.32%)
Ratios/supplemental data:
Net assets, end of period
(in thousands) $76,177 $77,868 $61,649 $48,801 $45,397 $33,715
Ratio of expenses
to average net assets 1.20%<F2> 1.24% 1.25% 1.42% 1.46% 1.50%
Ratio of net income
to average net assets .26%<F2> .26% .35% .35% .87% 1.20%
Portfolio turnover rate 8.42%<F2> 11.17% 13.03% 24.20% 25.65% 13.34%
<FN>
<F1> Excludes maximum sales charge of 5.75% of the Fund's offering price.
<F2> Annualized
See Notes to Financial Statements
</FN>
</TABLE>
Notes to Financial Statements
Note 1 - Summary of Significant Accounting Policies
The Growth Fund of Washington, Inc. (the "Fund") was incorporated in
Maryland on May 24, 1985. The Fund is registered under the Investment Company
Act of 1940 (the "Act"), as amended, as an open end, diversified investment
company. The Fund's objective is to provide for long-term growth of
capital by
investing primarily in securities of companies headquartered or having a major
place of business in Washington, D.C., Maryland or Virginia. Washington
Investment Advisers, Inc. ("WIA") is the Fund's investment adviser (the
"Investment Adviser"). Washington Management Corporation ("WMC") is the
Fund's
business manager (the "Business Manager"). The Investment Adviser and the
Business Manager are wholly owned subsidiaries of The Johnston-Lemon Group,
Incorporated. Vista Fund Distributors, Inc. (the "Distributor"), a wholly
owned
subsidiary of The BISYS Group, Inc., is the distributor of the Fund's shares.
Security Valuation: Securities (except for short-term obligations) are
valued at
the last sales price on the exchange or national securities market on
which the
securities primarily are traded. Securities not listed on an exchange or
national securities market, or securities in which there were no reported
transactions, are valued at the latest reliable quoted bid price. Short-term
obligations with maturities of 60 days or less are valued at amortized cost,
which approximates market value. Any securities for which reliable recent
market quotations are not readily available are valued at fair value as
determined in good faith under policies approved by the Board of Directors.
Repurchase Agreements: In connection with transactions in repurchase
agreements, it is the Fund's policy that its custodian take possession of the
underlying collateral securities, the fair value of which exceeds the
principal
amount of the repurchase transaction, including accrued interest, at all
times.
If the seller defaults, and the fair value of the collateral declines,
realization of the collateral by the Fund may be delayed or limited.
Securities Transactions and Investment Income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recorded on the ex-dividend date and interest income, including, where
applicable, amortization of discount on short-term investments, is recorded on
the accrual basis.
Pursuant to the custodian agreement, the Fund received credits against its
custodian fee for imputed interest on certain balances with the custodian
bank.
The custodian fee of $18,509 includes $1,539 that was paid by these credits
rather than in cash.
Federal Income Taxes: It is the Fund's policy to continue to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income, including any net
realized gain on investments, to its shareholders. Therefore, no Federal
income
tax provision is required. Cost of securities for tax purposes is the same as
for financial reporting purposes.
Note 2 - Investment Adviser and Business Management Fees and Other
Transactions
with Affiliates
WIA was paid a fee of $141,114 for investment management services. The
Investment Advisory Agreement provides for monthly fees, accrued daily,
based on
an annual rate of 0.375% on the Fund's net assets up to $100,000,000,
decreasing
to 0.35% on the net assets in excess of $100,000,000. WMC was paid a fee of
$127,728 for business management services. The Business Management Agreement
provides for monthly fees, accrued daily, based on an annual rate of 0.375% on
the Fund's first $40,000,000 of net assets, 0.30% on net assets in excess of
$40,000,000 but not exceeding $100,000,000 and 0.25% on net assets in
excess of
$100,000,000. The Fund pays all expenses not assumed by the Investment
Adviser
or Business Manager.
Pursuant to a Distribution Plan, the Fund pays a fee at a maximum annual
rate of
0.25% of the Fund's net assets. Payments under this plan are primarily
intended
to result in the sale and retention of Fund shares including, but not limited
to, advertising, sales and other expenses of the Distributor relating to
selling
or servicing efforts, expenses of organizing and conducting sales seminars,
printing of prospectuses and reports for other than existing shareholders,
preparation and distribution of advertising material and sales literature and
payments to dealers whose customers purchase Fund shares.
Johnston, Lemon & Co. Incorporated, a wholly owned subsidiary of The
Johnston-Lemon Group, Incorporated, earned $39,138 on its retail sales of
shares
of the Fund and Distribution Plan fee and received no brokerage commissions
resulting from purchases and sales of securities for the investment account of
the Fund. Sales charges are not an expense of the Fund and, hence, are not
reflected in the accompanying Statement of Operations.
All Officers and two Directors of the Fund are "affiliated persons" (as
defined
in the Act) of the Investment Adviser or Business Manager and received no
remuneration from the Fund in such capacities.
Note 3 - Investment Transactions
The Fund made purchases of investment securities, other than short-term
securities, of $3,116,563 and sales of $5,693,830 during the six months ended
June 30, 1999. Net unrealized gains at June 30, 1999 included unrealized
gains
of $53,658,418 and unrealized losses of $346,120.
Note 4 - Investment Transactions
Transactions in capital stock were:
For the Six For the Year
Months Ended Ended
June 30, December 31,
1999 1998
In shares:
Shares sold 70,481 238,097
Shares issued in
re-investment of
dividends 2,928 92,251
Total shares issued 73,409 330,348
Shares redeemed (125,526) (169,144)
Net increase
(decrease) (52,117) 161,204
In dollars:
Shares sold $2,143,656 $6,750,474
Shares issued in
re-investment of
dividends 88,594 2,777,562
Total shares issued 2,232,250 9,528,036
Shares redeemed (3,790,829) (4,765,393)
Net increase
(decrease) $(1,558,579) $4,762,643
(logo)
THE GROWTH FUND OF WASHINGTON
(logo) Chase Vista Funds
Board of Directors
James H. Lemon, Jr.
Chairman
Chairman of the Board and
Chief Executive Officer,
The Johnston-Lemon Group, Incorporated
Harry J. Lister
President
President, Washington
Management Corporation
Cyrus A. Ansary
President, Investment
Services International
Co. LLC
T. Eugene Smith
President,
T. Eugene Smith Inc.
Leonard P. Steuart, II
Vice President,
Steuart Investment Co.
Margita E. White
President, Association
for Maximum Service
Television Inc.
Officers
Stephen Hartwell
Executive Vice President
Howard L. Kitzmiller
Senior Vice President,
Secretary and Treasurer
Prabha S. Carpenter
Senior Vice President
Lois A. Erhard
Vice President
Ralph S. Richard
Vice President
Michael W. Stockton
Assistant Vice President,
Assistant Secretary and Assistant Treasurer
J. Lanier Frank
Assistant Vice President
Chase Vista Service Center
P.O. Box 419392
Kansas City, MO 64141-6392
1-800-34-VISTA
Office of the Fund and Business Manager
Washington Management Corporation
1101 Vermont Avenue, NW
Washington, DC 20005
(202) 842-5665
Investment Adviser
Washington Investment Advisers, Inc.
Custodian
The Chase Manhattan Bank
Transfer Agent
DST Systems, Inc
Distributor
Vista Fund Distributors, Inc.
Independent Accountants
Johnson Lambert & Co.
Counsel
Thompson, O'Donnell, Markham, Norton & Hannon
Preparing for the Year 2000 - The Fund's key service providers - Washington
Investment Advisers, Washington Management Corporation, Chase Manhattan Bank,
the custodian, and DST Systems, the transfer agent - have updated their
computer systems to process date-related information properly following
the turn
of the century. Testing with business partners, vendors and other service
providers will continue throughout the remainder of the year and contingency
plans are being developed to deal with potential disruptions. We will
continue
to keep you up-to-date in our regular publications.
This report is for the information of the shareholders of The Growth Fund of
Washington, Inc., but it may be used as sales literature when preceded or
accompanied by the current prospectus, which gives details about charges,
expenses, investment objectives and operating policies of the Fund. If used as
sales material after September 30, 1999, this report must also be
accompanied by
the Fund's most recent calendar quarter statistical update.
Vista Fund Distributors, Inc., is unaffiliated with The Chase Manhattan Bank.
GFW-3-699
The Growth Fund of Washington, Inc.
1101 Vermont Avenue, NW
Washington, DC 20005
Bulk Rate
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