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Previous: PRICE T ROWE ASSOCIATES INC /MD/, SC 13G/A, 1997-03-10 |
Next: PUBLIC SERVICE CO OF COLORADO, U-3A-2/A, 1997-03-10 |
<PAGE>
FINANCIAL STATEMENTS OF
PRUDENTIAL'S GIBRALTAR
FUND
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
<S>
<C>
ASSETS
Investments, at value (cost:
$258,445,755)............................ $
303,562,622
Receivable for investments sold............ 4,733,056
Interest and dividends receivable.......... 306,071
--
-----------Total
Assets............................. 308,601,749
--
-----------LIABILITIES
Payable for investments purchased.......... 4,643,337
Bank overdraft............................. 2,528,378
Due to investment adviser.................. 94,424
Accrued expenses........................... 38,989
--
-----------Total
Liabilities........................ 7,305,128
--
-----------NET
ASSETS................................... $
301,296,621
--
--
--
--
--
--
--
--
--
--
--
--
--
-
Net assets were comprised of:
Common stock, at $1 par value.............. $
26,366,193 Paid-in capital, in excess of
par.......... 217,244,277
----
--
--
--
--
-
2
4
3
,
6
1
0
,
4
7
0
Undistributed net investment income.......... 602,554
Accumulated net realized gain on
investments................................ 11,966,730
Net unrealized appreciation on investments... 45,116,867
--
-----------Net assets, December 31,
1996.............. $ 301,296,621
--
--
--
--
--
--
--
--
--
--
--
--
--
-
Net asset value and redemption price per
share (26,366,193 shares of common stock
outstanding; 75,000,000 shares
authorized).............................. $ 11.43
---
---
---
---
---
---
---
---
---
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Year Ended December 31, 1996
<S> <C> <C>
INVESTMENT INCOME
Dividends (net of $6,523 foreign
withholding taxes)....................... $ 2,959,611
Interest................................... 1,344,964
-------
--
--
--
-
4
,
3
0
4
,
5
7
5
---
-----------EXPENSES
Investment advisory fee.................... 349,118
State franchise tax expense................ 73,666
Excise tax expense......................... 71,422
Directors' fees............................ 8,500
Custodian expense..........................
5,00
0 --
----
----
----
-
Total expenses...........................
507,706 Less: expense reimbursement for excise
tax.
....
....
....
....
....
....
....
....
....
.
(71,
422)
----
----
----
---
Net expenses.............................
436,
284
----
----
----
---
NET INVESTMENT INCOME........................
3,868,291
----
----------NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net realized gain on investments...........
35,522,025 Net change in unrealized appreciation
on
inve
stme
nts.
....
....
....
....
....
....
....
.
28,1
88,3
80 -
----
----
----
--
NET GAIN ON INVESTMENTS......................
63,710,405
----
----------NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................... $
67,578,696
----
----
----
----
----
----
----
-
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED
DECEMBER 31 ---------------
-----------------------
1996
1995
------------------ -------
- -----------<S> <C>
<C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income.................................................................. $ 3,868,291 $
4,381,133
Net realized gain on investments....................................................... 35,522,025
31,242,770
Net change in unrealized appreciation on investments................................... 28,188,380
9,457,438
------------------ -------
-----------NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.....................................
67,578,696 45,081,341
------------------ -------
-----------DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income................................................... (3,659,501)
(4,026,639)
Distributions from net realized capital gains.......................................... (31,301,947)
(21,543,401) --------------
---- -------------------
TOTAL DIVIDENDS AND DISTRIBUTIONS........................................................ (34,961,448)
(25,570,040)
------------------ -------
-----------CAPITAL TRANSACTIONS:
Reinvestment of dividends and distributions [2,971,950 and 2,396,099 shares,
respectively]......................................................................... 33,969,659
24,867,217
Capital stock repurchased [(2,374,885) and (2,430,032) shares, respectively]........... (26,513,694)
(25,659,420) --------------
---- -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS................ 7,455,965
(792,203)
------------------ -------
-----------TOTAL INCREASE IN NET ASSETS.............................................................
40,073,213 18,719,098
NET ASSETS:
Beginning of year...................................................................... 261,223,408
242,504,310
------------------ -------
-----------End of year............................................................................ $
301,296,621 $ 261,223,408
------------------ -------
---------------------------
-- -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A4 AND A5.
A1
<PAGE>
SCHEDULE OF
INVESTMENTS
PRUDENTIAL'S
GIBRALTAR FUND
DECEMBER 31, 1996
<TABLE>
<CAPTION>
LONG-TERM INVESTMENTS -- 87.9%
VALUE COMMON STOCKS
- -- 84.4% SHARES (NOTE 1)
------------- --
- -----------<S> <C>
<C>
AEROSPACE -- 1.1%
Coltec Industries, Inc. (a)..................... 175,000 $ 3,303,125
--
- -----------ALUMINUM -- 1.6%
Aluminum Co. of America......................... 75,000 4,781,250
--
- -----------AUTOS - CARS & TRUCKS -- 1.4%
LucasVarity PLC, ADR (United Kingdom) (a)....... 72,200 2,743,600
Miller Industries, Inc. (a)..................... 74,550 1,491,000
------
--
--
--
-
4
,
2
3
4
,
6
0
0
--
- -----------CHEMICALS -- 1.7%
Agrium, Inc..................................... 257,000 3,533,750
Polymer Group, Inc. (a)......................... 108,300 1,502,662
------
--
--
--
-
5
,
0
3
6
,
4
1
2
--
- -----------COMMUNICATIONS EQUIPMENT -- 4.7%
Cisco Systems, Inc. (a)......................... 124,000 7,889,500
Comverse Technology, Inc. (a)................... 50,000 1,881,250
VeriFone, Inc. (a).............................. 45,100 1,330,450
Westell Technologies, Inc. (a).................. 133,000 3,009,125
-----
--
--
--
--
1
4
,
1
1
0
,
3
2
5
--
- -----------COMPUTER HARDWARE -- 1.0%
Larscom, Inc. (Class 'A' Stock) (a)............. 125,100 1,423,012
Western Digital Corp. (a)....................... 29,700 1,689,187
------
--
--
--
-
3
,
1
1
2
,
1
9
9
--
- -----------COMPUTER SOFTWARE SERVICES -- 6.5%
C/NET, Inc. (a)................................. 32,800 943,000
Computer Associates International, Inc.......... 60,000 2,985,000
Edify Corp. (a)................................. 52,200 835,200
Macromedia Inc. (a)............................. 130,200 2,343,600
Microsoft Corp. (a)............................. 86,000 7,105,750
Oracle Corp. (a)................................ 66,000 2,747,250
Softkey Intl., (a).............................. 171,000 2,458,125
-----
--
--
--
--
1
9
,
4
1
7
,
9
2
5
--
- -----------DIVERSIFIED GAS -- 1.4%
Weatherford Enterra, Inc. (a)................... 135,000 4,050,000
--
- -----------DRUGS AND MEDICAL SUPPLIES -- 4.3%
Pfizer, Inc..................................... 55,000 4,558,125
St. Jude Medical, Inc. (a)...................... 65,100 2,774,887
United States Surgical Corp..................... 144,400 5,685,750
-----
--
--
--
--
1
3
,
0
1
8
,
7
6
2
--
- ------------
ELECTRICAL EQUIPMENT -- 2.0%
UCAR International, Inc. (a).................... 162,500 6,114,062
--
- -----------ELECTRONICS -- 8.6%
Burr-Brown Corp. (a)............................ 106,000 2,703,000
Checkpoint Systems, Inc. (a).................... 117,400 2,905,650
Intel Corp...................................... 56,000 7,329,000
SGS Thomson Microelectronics, N.V............... 50,500 3,535,000
Uniphase Corp. (a).............................. 179,700 9,434,250
-----
--
--
--
--
2
5
,
9
0
6
,
9
0
0
--
- -----------FINANCIAL SERVICES -- 10.6%
Advanta Corp. (Class 'B' Stock)................. 109,600 4,466,200
E*TRADE Group, Inc. (a)......................... 49,700 559,125
Federal National Mortgage Association........... 300,000 11,175,000
Imperial Credit Industries, Inc. (a)............ 193,800 4,045,575
</TABLE>
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE COMMON STOCKS
(CONTINUED) SHARES (NOTE 1)
------------- --
- -----------<S> <C>
<C>
Student Loan Marketing Association.............. 51,100 $ 4,758,688
The Money Store, Inc............................ 249,800 6,900,725
-----
--
--
--
--
3
1
,
9
0
5
,
3
1
3
--
- -----------FOREST PRODUCTS -- 2.4%
Stone Container Corp............................ 255,000 3,793,125
Willamette Industries, Inc...................... 50,000 3,481,250
------
--
--
--
-
7
,
2
7
4
,
3
7
5
--
- -----------HOSPITAL MANAGEMENT -- 1.0%
Physican Corp. of America (a)................... 211,800 2,118,000
Sierra Health Services, Inc. (a)................ 34,600 852,025
------
--
--
--
-
2
,
9
7
0
,
0
2
5
--
- -----------INSURANCE -- 5.0%
Aetna Inc....................................... 76,000 6,080,000
Equitable of Iowa Companies..................... 23,600 1,082,650
Travelers Group, Inc............................ 173,333 7,864,985
-----
--
--
--
--
1
5
,
0
2
7
,
6
3
5
--
- -----------LEISURE -- 2.3%
Carnival Corp. (Class 'A' Stock)................ 120,000 3,960,000
La Quinta Inns, Inc............................. 135,600 2,593,350
Prime Hospitality Corp. (a)..................... 34,500 556,313
------
--
--
--
-
7
,
1
0
9
,
6
6
3
--
- -----------OIL SERVICES -- 6.6%
B.J. Services Co. (a)........................... 83,000 4,233,000
Bouyges Offshore SA, ADR (France) (a)........... 68,100 876,788
Input/Output, Inc. (a).......................... 146,000 2,701,000
J. Ray McDermott SA............................. 82,000 1,804,000
Smith International, Inc. (a)................... 125,000 5,609,375
YPF SA, ADR (Argentina)......................... 189,000 4,772,250
--
- ------------
19,996,413 ---------
-----
PETROLEUM -- 3.3%
Alberta Energy Company Ltd...................... 102,900 2,469,600
Exxon Corp...................................... 75,000 7,350,000
------
--
--
--
-
9
,
8
1
9
,
6
0
0
--
- -----------REAL ESTATE DEVELOPMENT -- 3.9%
Crescent Real Estate Equities Trust............. 51,500 2,716,625
Equity Residential Properties Trust............. 80,000 3,300,000
Manufactured Home Communities, Inc.............. 74,000 1,720,500
Meditrust Corp.................................. 9,300 372,000
Patriot American Hospitality, Inc............... 85,000 3,665,625
-----
--
--
--
--
1
1
,
7
7
4
,
7
5
0
--
- -----------REGIONAL BANKS -- 2.7%
Citicorp........................................ 80,000 8,240,000
--
- -----------RESTAURANTS -- 1.8%
Lone Star Steakhouse & Saloon, Inc. (a)......... 93,100 2,490,425
McDonald's Corp................................. 67,000 3,031,750
------
--
--
--
-
5
,
5
2
2
,
1
7
5
--
- -----------RETAIL -- 2.5%
Galoob Toys, Inc. (a)........................... 135,000 1,890,000
The Gap, Inc.................................... 190,000 5,723,750
------
--
--
--
-
7
,
6
1
3
,
7
5
0
--
- -----------</TABLE>
B1
<PAGE>
PRUDENTIAL'S GIBRALTAR FUND (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE COMMON STOCKS
(CONTINUED) SHARES (NOTE 1)
------------- --
- -----------<S> <C> <C>
STEEL -- 1.7%
AK Steel Holding Corp........................... 131,200 $ 5,198,800
--
- -----------TELECOMMUNICATIONS -- 3.1%
ADC Telecommunications, Inc. (a)................ 222,700 6,903,700
Nextel Communications, Inc. (Class 'A'
Stock) (a).................................... 180,000 2,340,000
------
--
--
--
-
9
,
2
4
3
,
7
0
0
--
- -----------TOBACCO -- 2.6%
RJR Nabisco Holdings Corp....................... 230,000 7,820,000
--
- -----------UTILITY - ELECTRIC -- 0.6%
Long Island Lighting Co......................... 75,900 1,679,288
--
- -----------TOTAL COMMON STOCKS
(cost $208,840,593)............................................
254,281,047
--
- -----------PREFERRED STOCKS -- 2.2%
FINANCIAL SERVICES -- 0.5%
Advanta Corp. (Class 'B' Stock)................. 40,000 1,600,000
---
- ----------RETAIL -- 1.7%
Kmart Corp. (Cum. Conv.)........................ 105,000 5,118,750
---
- ----------TOTAL PREFERRED STOCKS
(cost $6,829,050).............................................. 6,718,750
---
- -----------
PRINCIPAL
AMOUNT
CONVERTIBLE BONDS -- 1.3% (000)
-------------
COMPUTER SOFTWARE SERVICES -- 0.3%
Softkey Intl.,
5.50%, 11/01/00............................... $1,230 1,017,825
---
- ----------RETAIL -- 1.0%
Sunglass Hut Intl.,
5.25%, 06/15/03............................... 4,000 2,870,000
---
- ----------TOTAL CONVERTIBLE BONDS
(cost $4,101,112).............................................. 3,887,825
---
- ----------TOTAL LONG-TERM INVESTMENTS
(cost $219,810,025)............................................
264,887,622
---
- ----------</TABLE>
DECEMBER 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM INVESTMENTS -- 12.9% (000)
(NOTE 1)
------------- ---
- ----------<S> <C> <C>
COMMERCIAL PAPER -- 10.0%
Associates Corp. of North America,
6.202%, 01/02/97.............................. $15,000 $ 15,000,000
Smith Barney, Inc.,
6.00%, 01/02/97............................... 15,000 15,000,000
-----
--
--
--
--
3
0
,
0
0
0
,
0
0
0
---
- ----------TIME DEPOSIT -- 2.9%
Toronto Dominion Holdings,
6.50%, 01/02/97............................... 8,675 8,675,000
---
- -----------
TOTAL SHORT-TERM INVESTMENTS
(cost $38,675,000)............................................. 38,675,000
---
- -----------
TOTAL INVESTMENTS -- 100.8%
(cost $258,445,755; Note 3)....................................
303,562,622 Liabilities in excess of other assets --
(0.8%)................ (2,266,001)
---
- ----------TOTAL NET ASSETS --
100.0%....................................... $ 301,296,621
---
---
---
---
---
---
---
---
---
<FN>
The following abbreviations are used in portfolio descriptions:
ADR American
Depository
Receipt
N.V. Naamloze Vennootschap (Dutch
Corporation)
SA Sociedad Anonima (Spanish
Corporation) or Societe
Anonyme (French Corporation)
(a) Non-income
producing
security.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A4
AND A5.
B2
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS OF
PRUDENTIAL'S GIBRALTAR FUND
NOTE 1: ACCOUNTING POLICIES
Prudential's Gibraltar Fund (the "Fund") is a Delaware Corporation
and is registered as an open-end, diversified management investment
company under the Investment Company Act of 1940, as amended. The
Fund was organized by The Prudential to serve as the investment medium
for the variable contracts accounts of The Prudential Financial Security
Program. The Fund does not sell its shares to the public. The
accounts will redeem shares of the Fund to the extent necessary to
provide benefits under the contracts or for such other purposes as may
be consistent with the contracts.
SECURITIES VALUATION: Securities traded on a national securities
exchange are valued at the last sales price (or the last bid price if
there were no sales of the security that day) on the New York Stock
Exchange, or if not traded on such exchange, such last sales or bid
price at the time of close of the New York Stock Exchange on the
principal exchange on which such securities are traded on the last
business day of the year. For any securities not traded on a national
securities exchange but traded in the over-the-counter market, the
value is the last bid price available, except that securities for
which quotations are furnished through a nationwide automated
quotation system approved by the National Association of Securities
Dealers, Inc. (NASDAQ) are valued at the closing best bid price on
the date of valuation provided by a pricing service which utilizes
NASDAQ quotations. Short-term investments are valued at amortized cost
which, with accrued interest, approximates market value. Amortized cost
is computed using the cost on the date of purchase adjusted
for constant amortization of discount or premium to maturity.
Short-term securities which mature in more than 60 days are valued at
current market quotations. Short-term securities which mature in 60
days or less are valued at amortized cost which approximates market
value.
In connection with transactions in repurchase agreements with U.S.
financial institutions, it is the Fund's policy that its
custodian or designated subcustodians, as the case may be under
triparty repurchase agreements, take possession of the underlying
collateral securities, the value of which exceeds the principal amount
of the repurchase transaction, including accrued interest. If the
seller defaults and the value of the collateral declines or if
bankruptcy proceedings are commenced with respect to the seller
of the security, realization of the collateral by the Fund may be
delayed or limited.
SECURITIES TRANSACTIONS AND NET INVESTMENT INCOME: Securities
transactions are recorded on the trade date. Realized gains and
losses on sales of investments are calculated on the identified cost
basis. Dividend income is recorded on the ex-dividend date and
interest income is recorded on the accrual basis. Expenses are recorded
on the accrual basis which may require the use of certain estimates by
management.
DIVIDENDS AND DISTRIBUTIONS: Dividends from net investment income are
declared and paid semi-annually. The Fund will distribute at least
annually net capital gains in excess of loss carryforwards, if any.
Dividends and distributions are recorded on the ex-dividend date.
Dividends from net investment income and net realized capital gains of
the Fund will normally be declared and reinvested in additional full
and fractional shares twice a year.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles.
TAXES: It is the Fund's policy to continue to meet the requirements
of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable net income and net
capital gains, if any, to its shareholders. Therefore, no federal
income tax provision is required.
Withholding taxes on foreign dividends have been provided for in
accordance with the Fund's understanding of the applicable country's tax
rules and rates.
RECLASSIFICATION OF CAPITAL ACCOUNTS: The Fund accounts and
reports for distributions to shareholders in accordance with
A.I.C.P.A. Statement of Position 93-2: Determination, Disclosure,
and Financial Statement Presentation of Income, Capital Gain, and
Return of Capital Distributions by Investment Companies. The effect
of applying this statement was to increase undistributed net investment
income by $333,913, decreased net realized gains by $54,498 and
decreased paid-in capital in excess of par by $279,415. Such
reclassification had no effect on net assets, results of operations,
or net asset value per share.
C1
<PAGE>
NOTE 2: INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE: The investment advisory fee, which is
computed daily at an effective annual rate of 0.125% of the net assets
of the Fund, is payable quarterly to The Prudential Insurance Company
of America ("The Prudential") as required under the investment advisory
agreement. Prudential pays all expenses of the Fund except for fees and
expenses of those members of the Fund's Board of Directors who are
not officers or employees of The Prudential and its affiliates;
transfer and any other local, state or federal taxes; and brokers'
commissions and other fees and charges attributable to investment
transactions.
During the year ended December 31, 1996, Prudential Securities
Incorporated, an affiliate of The Prudential, earned approximately
$19,000 in brokerage commissions as a result of executing
transactions in portfolio securities on behalf of the Fund.
NOTE 3: PORTFOLIO SECURITIES
Purchases and sales of investment securities, other than short-term
investments, for the year ended
December 31, 1996 aggregated $247,883,005 and $294,407,725,
respectively.
The federal income tax basis of the Fund's investments at December 31,
1996 was $258,485,025 and, accordingly, net unrealized appreciation
for federal income tax purposes was $45,077,597 (gross unrealized
appreciation--$56,645,190; gross unrealized depreciation--$11,567,593).
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
- -------------------------------------------------
<S> <C> <C> <C> <C> <C>
1996 1995(A) 1994(A)
1993(A) 1992(A)
-------- -------- -------- ------
- -- --------
PER SHARE OPERATING PERFORMANCE:
Net Asset Value, beginning of
year............................. $ 10.14 $ 9.40 $ 11.29 $ 11.13
$ 11.39
-------- -------- -------- --------
- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.............. 0.16 0.18 0.21 0.18 0.18
Net realized and unrealized gains
(losses) on investments.......... 2.56 1.65 (0.40) 2.43 1.77
-------- -------- -------- --------
- --------
Total from investment
operations..................... 2.72 1.83 (0.19) 2.61 1.95
LESS DISTRIBUTIONS
Dividends from net investment
income........................... (0.15) (0.17) (0.22)
(0.19) (0.19)
Distributions from net realized
gains............................ (1.28) (0.92) (1.48)
(2.26) (2.02)
-------- -------- -------- --------
- --------
Total distributions............ (1.43) (1.09) (1.70)
(2.45) (2.21)
-------- -------- -------- --------
- --------
Net Asset Value, end of year....... $ 11.43 $ 10.14 $ 9.40 $ 11.29
$ 11.13
-------- -------- -------- --------
- --------
-------- -------- -------- --------
- --------
TOTAL INVESTMENT RETURN:(B)........ 27.13% 19.13% (1.33%)
23.79% 17.60%
RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of year (in
millions)........................ $301.3 $261.2 $242.5 $264.3
$230.1
Ratios to average net assets:
Expenses......................... 0.16% 0.14% 0.15%
0.16%0.19%
Net investment income............ 1.38% 1.68% 1.98%
1.45%1.58%
Portfolio turnover rate............ 97% 105% 93%
92% 73%
Average commission rate paid per
share............................ $ 0.0576 N/A N/A N/A N/A
</TABLE>
(a) Calculations are based on average month-end shares outstanding.
(b) Total return is calculated assuming a purchase of shares on the first
day
and a sale on the last day of each period reported and includes
reinvestment
of dividends and distributions. Total returns for less than a
full year are not annualized.
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A4 THROUGH A5.
C2
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of Prudential's Gibraltar
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 Prudential's Gibraltar Fund,
Inc. (the "Fund") at December 31, 1996, the result of its
operations, the changes in its net assets, and financial highlights
for the year ended December 31, 1996, 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 audit. We conducted our audit 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 audit, which included
confirmation of securities at December 31, 1996 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. The accompanying Statement of Changes in Net
Assets of the Fund for the year ended December 31, 1995, and
Financial Highlights for each of the four years in the period ended
December 31, 1995 were audited by other independent accountants,
whose opinion dated February 15, 1996 was unqualified.
PRICE WATERHOUSE LLP
1177 Avenue of the America
New York, NY 10036
February 13, 1997
D1
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