<PAGE>
Annual
Report to Stockholders
December 31, 1999
<PAGE>
Dear Fellow Stockholders,
In 1999 the broad market was driven higher by technology stocks and more
specifically by semiconductor and Internet-related technology stocks. For
the full year 1999, Blue Chip Value Fund's net asset value provided a to-
tal return of 6.17% versus 21.04% for the S&P 500 and 12.72% for the S&P
Barra Large-Cap Value Index. The discount to net asset value on December
31, 1999 was 4.43%. The Fund's net asset value increased 9.67% in the
fourth quarter, outperforming the S&P Barra Large-Cap Value Index return
of 8.97% for the same period. However, the narrowness of the market caused
Blue Chip Value Fund to underperform the 14.88% returned by the S&P 500
for the quarter.
The market in 1999 was very narrow, with the 100 largest names in the S&P
500 generating about 90% of the total return for the Index. Within those
top 100 companies, large cap growth and more specifically technology
stocks such as Microsoft, Cisco and Oracle dominated in 1999. We have pre-
viously discussed how the S&P 500 Index is constructed so that growth
stocks have more of an impact on the performance of the Index than value
stocks. This was never more true than in 1999. The make-up of the S&P 500
Index is changing with the inclusion of firms such as America Online, Ya-
hoo and Microsoft. The addition of these "new economy" type of firms to
the S&P 500 both increases the P/E multiple and lowers the dividend yield
of the Index. In this way, the S&P 500 is becoming even more of a growth
index. As more Internet-related firms reach profitability and qualify for
inclusion in the S&P 500, this trend will accelerate.
Although the market was driven higher primarily by large-cap growth
names, we were able to find a number of attractively priced technology and
telecommunications stocks that produced excellent returns for the Fund in
1999. Adobe, a provider of graphic design, publishing and imaging soft-
ware, has benefited from increased demand for its products for Web content
creation and delivery, helping propel the stock up 63.7% in the third and
fourth quarters and 187.7% for the year. Apple was up 151.1% in 1999 on
the strength of new product launches with 122.0% occurring in the second
half of the year. Novell, a position which we added to during the fourth
quarter when the stock dropped below $20, finished the year at a high over
$39 and returned 50.7% in the latter half of the year and 120.2% for the
full year. Motorola increased 55.4% in the past six months and 141.1% in
1999, driven by the strength of its semiconductor and cellular handset di-
visions.
During the quarter we increased our weighting in financial services
stocks such as Citigroup, American Express and Chase Manhattan Bank be-
cause of the strength of global capital markets and in anticipation of the
passage of HR10 financial reform in Congress which allows for one-stop
shopping at financial institutions. Going forward, we continue to like en-
ergy stocks such as Kerr-McGee and Phillips Petroleum because higher oil
and gas prices have not been fully reflected in the stock prices. We also
continue to like Motorola because of the current proliferation of cellular
phones and the pending growth of wireless broadband services.
<PAGE>
We believe that large-cap stocks can continue to lead the market during
2000, with large-cap value providing superior relative returns. An analy-
sis of the portfolio characteristics demonstrates that we have a portfolio
of undervalued companies that are likely to experience earnings accelera-
tion. The price-to-earnings ratio for the Fund is 22.2x versus 33.0x for
the S&P 500 and the price-to-book value stands at 5.2x versus 12.0x for
the Index. Stocks in the Fund produce a dividend yield that is virtually
the same as the S&P 500 at 1.2%.
We enter 2000 optimistic that a large-cap value approach will produce at-
tractive returns for investors as the market broadens and money rotates
out of technology stocks and into other sectors. We remind our investors
that Blue Chip Value Fund will maintain its disciplined value approach to
finding quality large-cap investment opportunities at attractive valua-
tions.
Sincerely,
/s/ Kenneth V. Penland
Kenneth V. Penland, CFA
Chairman of the Board
<PAGE>
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
The Fund's Dividend Reinvestment and Cash Purchase Plan offers stockholders
the opportunity to reinvest dividends and capital gain distributions in addi-
tional shares of the Fund. A stockholder may also make additional cash invest-
ments under the Plan. There is no service charge for participation.
Participating stockholders will receive additional shares issued at a price
equal to the net asset value per share as of the close of the New York Stock
Exchange on the record date ("Net Asset Value"), unless at such time the Net
Asset Value is higher than the market price of the Fund's common stock, plus
brokerage commission. In this case, the Fund will attempt, generally over the
next 10 business days (the "Trading Period"), to acquire shares of the Fund's
common stock in the open market at a price plus brokerage commission which is
less than the Net Asset Value. In the event that prior to the time such acqui-
sition is completed, the market price of such common stock plus commission
equals or exceeds the Net Asset Value, or in the event that such market pur-
chases are unable to be completed by the end of the Trading Period, then the
balance of the distribution shall be completed by issuing additional shares at
Net Asset Value.
Participating stockholders may also make additional cash investments (minimum
$50 and maximum $10,000 per month) by check or money order (or by wire for a
$10 fee) to acquire additional shares of the Fund. Please note, however, that
these additional shares will be purchased at market value plus brokerage com-
mission (without regard to net asset value) per share.
A stockholder owning a minimum of 50 shares may join the Plan by sending an
Enrollment Form to the Plan Agent at ChaseMellon Shareholder Services, LLC,
Overpeck Centre, 85 Challenger Road, Ridgefield Park, NJ, 07660.
The automatic reinvestment of dividends and distributions will not relieve
participants of any income taxes that may be payable (or required to be with-
held) on dividends or distributions, even though the stockholder does not re-
ceive the cash. Participants must own at least 50 shares at all times.
A stockholder may elect to withdraw from the Plan at any time on 15-days'
prior written notice, and receive future dividends and distributions in cash.
There is no penalty for withdrawal from the Plan and stockholders who have
withdrawn from the Plan may rejoin it in the future.
The Fund may amend the Plan at any time upon 30-days prior notice to partici-
pants.
Additional information about the Plan may be obtained from Blue Chip Value
Fund, Inc. 1225 17th Street, 26th Floor, Denver, CO 80202; telephone (800)
624-4190 or by visiting us at www.blu.com.
If your shares are registered with a broker, you can most likely still par-
ticipate in the Dividend Reinvestment Plan. Please talk to your broker about
how to participate and if there are any fees which may be charged by the bro-
ker to your account.
<PAGE>
NEW PORTFOLIO MANAGER TEAM
Effective January 18, 2000, Timothy Quinlisk, CFA, Vice President and Direc-
tor of Value Strategies and Charlotte Petersen, CFA, Vice President, both with
Denver Investment Advisors LLC, investment adviser to Blue Chip Value Fund,
Inc. became responsible for the day-to-day co-management of Blue Chip Value
Fund, Inc.
Mr. Quinlisk has 15 years of research and portfolio management experience,
focusing on value strategies, and most recently worked at John Hancock Advi-
sors, Inc. where he co-managed the Hancock Large Cap Value and Hancock Small
Cap Value Funds since 1998. Mr. Quinlisk received his B.S. degree in Business
Administration from Bryant College and also participated in the graduate pro-
gram for Finance at Bentley College.
Ms. Petersen has 14 years of research and portfolio management experience,
working with both value and growth styles, and has been primarily responsible
for managing portfolios of large institutional clients for Denver Investment
Advisors since 1993. Ms. Petersen received her B.A. degree from Princeton Uni-
versity.
STOCKHOLDER DISTRIBUTION INFORMATION
Certain tax information regarding Blue Chip Value Fund, Inc. is required to
be provided to stockholders based upon the Fund's income and distributions
taxable to the stockholders for the calendar year ended December 31, 1999.
The Board of Directors of Blue Chip Value Fund, Inc. voted to pay to stock-
holders of record on the record date, the following distributions derived from
capital gains realized from sales of portfolio securities and dividends de-
rived from net investment income:
<TABLE>
<CAPTION>
Record Date Pay Date Dividends Capital Gains
----------- ---------- --------- -------------
<S> <C> <C> <C>
4/16/1999 4/30/1999 $0.0000 $0.2500
7/16/1999 7/30/1999 $0.0164 $0.2536
10/15/1999 10/29/1999 $0.0099 $0.2301
12/31/1999 1/14/2000 $0.0072 $0.9128
$0.0335 $1.6465
</TABLE>
The Fund notified stockholders at the end of January 2000 of amounts for use
in preparing 1999 income tax returns.
Attention Corporate Stockholders:
To determine the amount that qualifies for the dividends-received deduction
for corporations, multiply the amount that appears in column 1 of Form 1099-
Div by 100%.
<PAGE>
MORE MONEY WORKING FOR YOU
The graph below charts the ratio of expenses (excluding interest expense) to
average net assets for each fiscal year since the Fund's inception in 1987. The
mutual fund industry has been criticized by some who claim that asset growth in
mutual funds has been enormous however expenses have not declined over this
same time period. Blue Chip Value Fund is pleased with the asset growth we have
experienced through both market appreciation and rights offerings since 1987.
We are equally pleased this asset growth paired with our focus on lowering ex-
penses has resulted in this steady decline. As our operating expenses decline,
this allows more of your money to continue to work for you through investment.
<PAGE>
Report of Independent Auditors
Stockholders and Board of Directors Blue Chip Value Fund, Inc.
We have audited the accompanying statement of assets and liabilities of Blue
Chip Value Fund, Inc. (the "Fund"), including the schedule of investments, as
of December 31, 1999, and the related statement of operations for the year
then ended, the statements of changes in net assets for each of the two years
in the period then ended, and the financial highlights for each of the five
years in the period then ended. These financial statements and financial high-
lights are the responsibility of the Fund's management. Our responsibility is
to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with auditing standards generally ac-
cepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial state-
ments are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of De-
cember 31, 1999, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant esti-
mates made by management, as well as evaluating the overall financial state-
ment presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Blue
Chip Value Fund, Inc. as of December 31, 1999, the results of its operations
for the year then ended, the changes in its net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended, in conformity with accounting principles
generally acccepted in the United States.
[LOGO OF ERNST & YOUNG]
January 14, 2000
Denver, CO
<PAGE>
BLUE CHIP VALUE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
<TABLE>
<S> <C>
ASSETS
Investment in common stock at market value (identified cost
$127,158,384)................................................ $163,257,519
Short-term investments.......................................... 8,361,497
------------
TOTAL INVESTMENTS............................................. 171,619,016
Receivable for securities sold.................................. 4,030,371
Dividends receivable............................................ 137,362
Interest receivable............................................. 26,672
Other assets.................................................... 23,143
------------
TOTAL ASSETS.................................................. 175,836,564
------------
LIABILITIES
Payable for securities purchased................................ 7,180,295
Distributions payable........................................... 15,486,282
Advisory fee payable............................................ 80,439
Administration fee payable...................................... 16,784
Accrued expenses and other liabilities.......................... 70,686
------------
TOTAL LIABILITIES............................................. 22,834,486
------------
NET ASSETS...................................................... $153,002,078
============
COMPOSITION OF NET ASSETS
Capital stock, at par........................................... $ 168,329
Paid-in capital................................................. 116,544,778
Undistributed net capital gains................................. 210,519
Overdistributed net investment income........................... (20,683)
Net unrealized appreciation on investments...................... 36,099,135
------------
$153,002,078
============
SHARES OF COMMON STOCK OUTSTANDING (100,000,000 shares
authorized at $0.01 par value)............................... 16,832,907
============
Net asset value per share....................................... $ 9.09
============
</TABLE>
See accompanying notes.
<PAGE>
BLUE CHIP VALUE FUND, INC.
STATEMENT OF OPERATIONS
Year ended December 31, 1999
<TABLE>
<S> <C> <C>
NET INVESTMENT INCOME
INCOME
Dividends............................................ $1,632,163
Interest............................................. 322,802
----------
TOTAL INCOME........................................ $ 1,954,965
------------
EXPENSES
Investment advisory fee
(Note 3).......................................... 987,011
Administrative services fee (Note 3)................. 110,793
Transfer agent fees.................................. 74,290
Stockholder reporting................................ 70,460
Legal fees........................................... 45,761
Directors' fees...................................... 44,795
Insurance and fidelity bond.......................... 31,320
Audit fees........................................... 28,501
Custodian fees....................................... 9,523
Other................................................ 23,941
----------
TOTAL EXPENSES...................................... 1,426,395
------------
NET INVESTMENT INCOME............................... 528,570
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments..................... 21,458,940
Change in unrealized appreciation of investments..... (13,230,638)
------------
NET GAIN ON INVESTMENTS............................. 8,228,302
------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS....................................... $ 8,756,872
============
</TABLE>
See accompanying notes.
<PAGE>
BLUE CHIP VALUE FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Year
Ended December 31,
--------------------------
1999 1998
------------ ------------
<S> <C> <C>
Increase in net assets from operations:
Net investment income............................. $528,570 $854,134
Net realized gain from securities transactions.... 21,458,940 22,664,465
Net change in unrealized appreciation of
investments..................................... (13,230,638) 5,341,824
------------ ------------
NET INCREASE IN NET ASSETS FROM OPERATIONS......... 8,756,872 28,860,423
------------ ------------
Distributions to stockholders from:
Net investment income............................. (562,166) (841,221)
Net realized gain on investments.................. (27,646,148) (16,892,471)
------------ ------------
(28,208,314) (17,733,692)
Increase in net assets from common stock
transactions:
Proceeds from the sale of 0 and 2,035,723 shares
respectively, net of offering expenses.......... 0 16,774,380
Net asset value of common stock issued to
stockholders from reinvestment of dividends
(105,080 shares issued for the year ended
December 31, 1999, 460,246 shares issued for the
year ended December 31, 1998)................... 941,668 4,705,335
------------ ------------
941,668 21,479,715
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS.............. (18,509,774) 32,606,446
NET ASSETS
Beginning of period............................... 171,511,852 138,905,406
------------ ------------
End of period ($20,683) and $12,913
(over)/undistributed net investment income at
December 31, 1999 and December 31, 1998,
respectively)................................... $153,002,078 $171,511,852
============ ============
</TABLE>
See accompanying notes.
<PAGE>
BLUE CHIP VALUE FUND, INC.
<TABLE>
<S> <C>
Per Share Data (for a share outstanding throughout each period)
Net asset value-beginning of period.........................................
Investment operations
Net investment income.......................................................
Net gain (loss) on investments..............................................
Total from investment operations............................................
Distributions
From net investment income..................................................
From net realized gains on investments......................................
Tax return of capital.......................................................
Total distributions.........................................................
Capital Share Transactions
Dilutive effects of rights offering.........................................
Offering costs charged to paid in capital...................................
Total capital share transactions............................................
Net asset value, end of period.............................................
Per share market value, end of period......................................
Total investment return based on: (a)
Market Value...............................................................
Net Asset Value............................................................
Ratios/Supplemental data:
Ratio of expenses to average net assets.....................................
Ratio of net investment income to average net assets........................
Ratio of distributions to average net assets................................
Portfolio turnover rate (b).................................................
Net assets-end of period (in thousands).....................................
</TABLE>
See accompanying notes.
(a) Total investment return is calculated assuming a purchase of
common stock on the opening of the first day and a sale on the
closing of the last day of each period reported. Dividends and
distributions, if any, are assumed for purposes of this calcu-
lation to be reinvested at prices obtained under the Fund's
dividend reinvestment plan. Rights offerings, if any, are as-
sumed for purposes of this calculation to be fully subscribed
under the terms of the rights offering. Generally, total in-
vestment return based on net asset value will be higher than
total investment return based on market value in periods where
there is an increase in the discount or a decrease in the pre-
mium of the market value to the net asset value from the begin-
ning to the end of such periods. Conversely, total investment
return based on the net asset value will be lower than total
investment return based on market value in periods where there
is a decrease in the discount or an increase in the premium of
the market value to the net asset value from the beginning to
the end of such periods.
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the year ended December 31,
----------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
$ 10.25 $ 9.76 $ 8.94 $ 8.47 $ 6.98
0.03 0.05 0.10 0.13 0.13
0.49 1.62 2.56 1.69 2.45
-------- -------- -------- ------- -------
0.52 1.67 2.66 1.82 2.58
-------- -------- -------- ------- -------
(0.03) (0.05) (0.10) (0.13) (0.13)
(1.65) (1.08) (1.47) (1.22) (0.95)
-- -- -- -- (0.01)
-------- -------- -------- ------- -------
(1.68) (1.13) (1.57) (1.35) (1.09)
-------- -------- -------- ------- -------
-- (0.04) (0.26) -- --
-- (0.01) (0.01) -- --
-------- -------- -------- ------- -------
-- (0.05) (0.27) -- --
-------- -------- -------- ------- -------
$ 9.09 $ 10.25 $ 9.76 $ 8.94 $ 8.47
======== ======== ======== ======= =======
$ 8.6875 $ 9.75 $10.9375 $ 9.25 $ 7.625
======== ======== ======== ======= =======
6.7% 1.3% 40.5% 39.5% 41.6%
6.2% 17.6% 31.2% 21.3% 38.1%
0.85% 0.94% 0.94% 1.05% 1.15%
0.32% 0.56% 1.01% 1.39% 1.55%
16.86% 11.62% 16.48% 14.42% 13.22%
54.24% 76.02% 55.15% 42.31% 50.84%
$153,002 $171,512 $138,905 $98,041 $92,887
</TABLE>
(b) A portfolio turnover rate is the percentage
computed by taking the lesser of purchases or sales
of portfolio securities (excluding short-term
investments) for a year and dividing it by the
monthly average of the market value of the
portfolio securities during the year.
<PAGE>
BLUE CHIP VALUE FUND, INC.
December 31,
<TABLE>
<CAPTION>
Market
COMMON Shares Cost Value
STOCKS: ------- ============ ------------
<S> <C> <C> <C>
COMMON STOCKS -- 106.70%
CAPITAL GOODS -- 26.39%
Aerospace & Defense -- 4.49%
General Dynamics Corp. ....................... 51,300 $ 2,660,714 $ 2,706,075
United Technologies Corp. .................... 64,020 2,354,858 4,161,300
------------ ------------
5,015,572 6,867,375
Communication Equipment -- 4.70%
Motorola Inc.................................. 48,800 3,227,546 7,185,800
Computers (Hardware) -- 3.97%
Apple Computer Inc.*.......................... 59,100 2,421,470 6,076,219
Computer Software & Services -- 11.31%
Adobe Systems Inc............................. 68,300 1,729,277 4,593,175
Novell Inc.*.................................. 229,200 3,771,227 9,125,025
UniSys Corp.*................................. 112,300 1,959,000 3,586,581
------------ ------------
7,459,504 17,304,781
Machinery -- Diversified -- 1.92%
Ingersoll-Rand Co............................. 53,600 2,246,263 2,951,350
TOTAL CAPITAL GOODS......................... 20,370,355 40,385,525
------------ ------------
CONSUMER CYCLICAL -- 12.47%
Automobiles -- 2.32%
General Motors Corp........................... 48,900 3,491,762 3,554,419
Auto Parts & Equipment -- 0.35%
Delphi Automotive Systems..................... 34,240 685,963 539,280
Entertainment -- 2.32%
Viacom Inc. -- Class B*....................... 58,700 2,721,829 3,547,681
Leisure -- 2.32%
Harley-Davidson Inc. ......................... 55,300 2,139,040 3,542,656
Retail Stores -- General Merchandise
Chains -- 3.99%
Dayton-Hudson Corp. .......................... 50,400 2,079,660 3,701,250
K-Mart Corp.*................................. 238,400 3,451,764 2,398,900
------------ ------------
5,531,424 6,100,150
</TABLE>
<PAGE>
SCHEDULE OF INVESTMENTS
1999
<TABLE>
<CAPTION>
Market
COMMON Shares Cost Value
STOCKS: ------- ============ ------------
<S> <C> <C> <C>
Retail Stores -- Specialty Apparel -- 1.17%
Intimate Brands
Inc. -- Class A............................ 41,490 $ 1,797,162 $ 1,789,256
TOTAL CONSUMER CYCLICAL..................... 16,367,180 19,073,442
------------ ------------
CONSUMER STAPLES -- 9.72%
Distributors (Food & Health) -- 1.68%
SuperValu Inc. ............................... 128,700 2,343,327 2,574,000
Drugs -- 2.80%
Eli Lilly & Co................................ 24,400 1,662,960 1,622,600
Schering-Plough Corp. ........................ 63,060 1,506,464 2,660,344
------------ ------------
3,169,424 4,282,944
Healthcare -- Diversified -- 3.35%
Allergan Inc.................................. 38,600 1,028,534 1,920,350
Bristol-Myers Squibb Co....................... 49,880 1,642,519 3,201,672
------------ ------------
2,671,053 5,122,022
Retail Stores -- Drug Stores -- 1.89%
CVS Corp...................................... 72,600 2,096,615 2,899,462
TOTAL CONSUMER STAPLES...................... 10,280,419 14,878,428
------------ ------------
CREDIT SENSITIVE -- 45.61%
Banks (Money Center) -- 4.15%
Chase Manhattan Corp. ........................ 37,300 3,225,195 2,897,744
J.P. Morgan & Company Inc. ................... 27,300 3,732,436 3,456,862
------------ ------------
6,957,631 6,354,606
Consumer Finance -- 1.20%
Household International Inc................... 49,300 1,968,266 1,836,425
Electric Companies -- 1.24%
Edison International.......................... 72,130 1,732,214 1,888,904
Financial -- Diversified -- 12.26%
American Express Co. ......................... 15,300 2,422,459 2,543,625
AXA Financial Inc............................. 141,600 4,612,072 4,796,700
Citigroup Inc................................. 112,300 6,058,426 6,239,669
Morgan Stanley Dean Witter & Co............... 36,300 3,215,037 5,181,825
------------ ------------
16,307,994 18,761,819
</TABLE>
<PAGE>
BLUE CHIP VALUE FUND, INC.
December 31,
<TABLE>
<CAPTION>
Market
COMMON Shares Cost Value
STOCKS: ------- ============ ------------
<S> <C> <C> <C>
Insurance (Life/Health) -- 3.51%
Conseco Inc. ................................. 140,800 $ 3,283,289 $ 2,516,800
Jefferson Pilot Corp. ........................ 20,400 1,508,070 1,392,300
Torchmark Corp. .............................. 50,100 1,557,093 1,456,031
------------ ------------
6,348,452 5,365,131
Insurance (Property/Casualty) -- 0.97%
Allmerica Financial Corp...................... 26,800 1,519,496 1,490,750
Investment Banking/Brokerage -- 5.61%
Goldman Sachs Group Inc....................... 20,900 1,146,255 1,968,519
Lehman Brothers Holdings Inc.................. 57,800 3,240,015 4,894,938
Merrill Lynch & Company Inc................... 20,600 1,614,561 1,720,100
------------ ------------
6,000,831 8,583,557
Natural Gas -- 3.75%
Coastal Corp.................................. 58,900 2,557,475 2,087,269
Columbia Energy Group......................... 28,900 1,734,130 1,827,925
El Paso Energy Corp. ......................... 46,800 1,714,027 1,816,425
------------ ------------
6,005,632 5,731,619
Savings & Loan -- 2.96%
Golden West Financial Corp. .................. 135,100 3,934,152 4,525,850
Telecommunications -- Long Distance -- 4.17%
AT&T Corp. ................................... 48,800 2,460,040 2,476,600
Sprint Corp. (FON Group)...................... 58,000 1,750,445 3,904,125
------------ ------------
4,210,485 6,380,725
Telephone -- 5.79%
ALLTEL Corp. ................................. 47,400 2,255,423 3,919,387
BellSouth Corp................................ 105,600 3,930,975 4,943,400
------------ ------------
6,186,398 8,862,787
TOTAL CREDIT SENSITIVE...................... 61,171,551 69,782,173
------------ ------------
</TABLE>
<PAGE>
SCHEDULE OF INVESTMENTS
1999
<TABLE>
<CAPTION>
Market
COMMON Shares Cost Value
STOCKS: ------ ============ ------------
<S> <C> <C> <C>
INTERMEDIATE GOODS &
SERVICES -- 12.51%
Chemicals -- 1.92%
Dow Chemical Co............................. 22,000 $ 2,597,036 $ 2,939,750
Containers (Metal & Glass) -- 1.82%
Ball Corp................................... 70,500 3,125,998 2,775,938
Oil (Integrated -- Domestic) -- 2.10%
Phillips Petroleum Co....................... 68,500 3,471,637 3,219,500
Oil (Integrated -- International) -- 3.19%
Royal Dutch Petroleum Co. ADR............... 80,800 5,242,744 4,883,350
Oil & Gas (Exploration & Production) -- 1.17%
Kerr-McGee Corp. ........................... 28,800 1,705,839 1,785,600
Service (Comm'l & Consumer) -- 2.31%
Hertz Corp.--Class A........................ 70,500 2,825,625 3,533,813
------------ ------------
TOTAL INTERMEDIATE GOODS AND SERVICES..... 18,968,879 19,137,951
------------ ------------
TOTAL COMMON STOCKS....................... 127,158,384 163,257,519
------------ ------------
SHORT-TERM INVESTMENTS -- 5.47%
Dreyfus Cash Management Fund................ 7,161,497 7,161,497
Fidelity Institutional Money Market Fund.... 1,200,000 1,200,000
------------ ------------
8,361,497 8,361,497
------------ ------------
TOTAL INVESTMENTS --112.17%...................... $135,519,881 171,619,016
============ ============
Liabilities in excess of Cash and Other
Assets -- (12.17%)....................... (18,616,938)
------------
NET ASSETS --100.00%............................. $153,002,078
============
</TABLE>
* Denotes non-income producing security.
<PAGE>
BLUE CHIP VALUE FUND, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Blue Chip Value Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as a diversified, closed-end management in-
vestment company.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Securities Valuations--Each investment security is valued at the last sale
price at period end reported by the principal exchange on which the issue was
traded or, if no sale is reported, the last bid price is used. Short-term in-
vestments are valued at cost, which approximates market value.
Federal Income Taxes--The Fund intends to comply with the requirements of the
Internal Revenue Code that are applicable to regulated investment companies
and to distribute all of its taxable income to its stockholders. Therefore, no
provision has been made for federal income taxes.
Investment Transactions--Investment transactions are accounted for on the
trade date. Realized gains and losses on investments are determined on the
first-in, first-out basis for both financial statement and federal income tax
purposes. Dividend income is recognized on the ex-dividend date. Interest
income includes interest earned on money market funds, which is accrued and
recorded daily.
Distributions to Stockholders--Distributions to stockholders are recorded on
the ex-dividend date. Distributions are classified to conform to the tax re-
porting requirements of the Internal Revenue Code. Tax returns of capital rep-
resent distributions in excess of current and accumulated earnings and profits
and are nontaxable to the recipient.
The Fund distributes at least 2.5% of its net asset value quarterly to its
stockholders.
Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements
and disclosures made in the accompanying notes to the financial statements.
Actual results could differ from those estimates.
2. PURCHASE AND SALE OF INVESTMENTS
The cost of investment securities purchased and proceeds from sales of securi-
ties (excluding short-term investments) aggregated $87,093,089 and
$107,449,715, respectively, for the period. At December 31, 1999, gross
unrealized appreciation of investments was $40,525,678 and gross unrealized
depreciation of investments was $4,426,543.
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3. INVESTMENT ADVISORY AND ADMINISTRATION SERVICES
The Fund has an Investment Advisory Agreement with Denver Investment Advisors
LLC ("DIA"), whereby a management fee is paid to DIA based on an annual rate
of 0.65% of the Fund's average weekly net assets up to $100,000,000 and 0.50%
of the Fund's average weekly net assets in excess of $100,000,000. The manage-
ment fee is paid monthly based on the average of the net assets of the Fund
computed as of the last business day the New York Stock Exchange is open each
week. Certain officers and directors of the Fund are also officers of DIA.
During the period, the Fund changed service providers for its administration
services. For the period January 1 through August 31, 1999, the Fund had an
Administrative Agreement with American Data Services, Inc. The administrative
services fee was based on an annual rate of 0.10% of the Fund's average weekly
net assets up to $75,000,000, 0.05% of the Fund's average weekly net assets
between $75,000,000 and $125,000,000, and 0.03% of the Fund's average weekly
net assets in excess of $125,000,000, with a $7,463 per month minimum.
Effective September 1, 1999, ALPS Mutual Funds Services, Inc. ("ALPS") and DIA
entered into an Administrative Agreement to serve as the Fund's co-administra-
tors. The administrative services fee is based on an annual rate for ALPS and
DIA, respectively, of 0.08% and 0.01% of the Fund's average daily net assets
up to $75,000,000, 0.04% and 0.005% of the Fund's average daily net assets be-
tween $75,000,000 and $125,000,000, and 0.02% and 0.005% of the Fund's average
daily net assets in excess of $125,000,000.
For both Administrative Agreements, the administrative services fee is paid
monthly.
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BOARD OF DIRECTORS
Kenneth V. Penland, Chairman
Todger Anderson, Director
Robert J. Greenebaum, Director
Robert M. Inman, Director
Richard C. Schulte, Director
Roberta M. Wilson, Director
OFFICERS
Kenneth V. Penland, Chairman
Todger Anderson, President
W. Bruce McConnel, III, Secretary
Jasper R. Frontz, Treasurer
Investment Adviser/Co-Administrator
Denver Investment Advisors LLC
1225 17th Street, 26th Floor
Denver, CO 80202
(303) 312-5100
Stockholder Relations
Margaret R. Jurado
(800) 624-4190 (303) 312-5100
e-mail: [email protected]
Custodian
Bank of New York
One Wall Street
New York, NY 10286
Co-Administrator
ALPS Mutual Funds Services, Inc.
370 17th Street, Suite 3100
Denver, CO 80202
Transfer Agent Dividend Reinvestment Plan Agent (Questions regarding your
Account)
ChaseMellon Shareholder Services, LLC
Overpeck Centre
85 Challenger Road
Ridgefield Park, NJ 07660
(800) 288-9541
www.chasemellon.com
NYSE Symbol--BLU
www.blu.com
