SHADOW
STOCK
FUND
Annual Report
December 31, 1997
JONES & BABSON
MUTUAL FUNDS
MESSAGE
TO OUR SHAREHOLDERS
Shadow Stock Fund's total returns (price change and reinvested
distributions) for the most recent quarter, semiannual period and year
ended December 31, 1997, are summarized in the table below:
Investment Results - Total Return
Periods Ended 12/31/97
3 Mos. 6 Mos. 12 Mos.
SHADOW STOCK FUND -1.2% 15.5% 27.6%
Russell 2000* -3.3% 11.5% 22.4%
Lipper Microcap Fund* -6.6% 10.2% 19.5%
*Unmanaged stock index
The Fund's average annual compounded total returns for three, five, and ten
year periods as of December 31, 1997, were 24.2%, 16.1% and 14.3%,
respectively. Performance data contained in this report is for past periods
only. Past performance is not predictive of future performance. Investment
return and share value will fluctuate, and redemption value may be more or
less than original cost.
Small capitalization stocks continued to enjoy a return to favor, a
shift that began last year, with most of the glory going to modestly
valued stocks. This is illustrated by the unmanaged Russell 2000 Value
index, which gained 31.8%, versus the unmanaged Russell 2000 Growth
index which gained only 12.9% for the 12 months ended December 31, 1997.
The top performing sectors within the Russell universe were financials
and utilities, and the worst performing was the technology sector. The
portfolio, which was 15% invested in utilities and 19% in financial
stocks, participated in this positive performance, while 12% of the
portfolio was invested in the technology sector. Technology was most
hurt during the October correction, some of it due to very high
valuations and some, in the case of many of our holdings, simply for
being technology stocks.
The Fund continues to have attractive valuation characteristics. The average
price/earnings ratio based on the trailing twelve-months for the companies
in the Fund is only 18.4, well below the Russell 2000 multiple of 25.4 times
earnings. The average price-to-book value is 2.0, compared to 6.1 for the
unmanaged Standard & Poor's 500 index and 3.9 for the Russell 2000. The
reasonable valuations of the Fund's investments should help to reduce risk if
the market experiences a setback.
A number of holdings were sold during the quarter because they had risen
to more than double the upper limit of market capitalization to qualify
for purchase, or their price/book value ratios had risen too high. Among
these sales were Aztec Manufacturing (electrical equipment), Fairfield
Communities (engineering and construction), Virco Manufacturing (household
furniture), Michael Foods (food producer), Morgan Keegan (investment banking),
State Auto Financial (insurance), and Mobile America (insurance).
Some of the new names of interest are Quad Systems (circuit boards), Key
Production (oil and gas), Hoenig Group (investment research), Emergent
Group (mortgages and car loans), Winnebago Industries
(recreational vehicles), Graham Field Health (medical supplier),
Childtime Learning Center (childcare), and Aquarion (water). Mergers and
acquisitions continue to redefine the portfolio's landscape. Some of the
new names in the portfolio are due to share exchanges, while others were
purchased outright by another firm and are no longer in the portfolio.
These transactions are typically done at price premiums over the levels
existing before the announcements, benefiting portfolio results.
The Fund continues to base its investment policies on three primary
characteristics that academic studies have identified as leading to
above average performance in the past. They are small size, neglected by
Wall Street, and low price-to-book value. Although these policies are
not always what the stock market favors, its returns on a risk-adjusted
basis are above average.
One of the chief benefits of the high degree of
portfolio diversification is risk reduction. Although
individual companies of the size used in the Shadow Stock Fund are
generally riskier than larger companies, the combination of a large
number of companies, well diversified across industries and economic
sectors, reduces the individual company risk and results in low
portfolio risk. It would be impractical for most individual investors to
own such a large number of individual stocks in order to reduce risk, so
the Fund provides a convenient vehicle to participate in ownership of
micro-capitalization companies with relatively low risk.
We appreciate your continued use of our Fund in your investment program.
Sincerely,
Larry D. Armel
/s/Larry D. Armel
President
STATEMENT OF NET ASSETS
December 31, 1997 (unaudited)
SHARES COMPANY MARKET VALUE
COMMON STOCKS - 96.63%
BASIC MATERIALS - 2.63%
9,401 Aceto Corp. $ 192,721
13,000 American Pacific Corp. 82,875
6,000 Badger Paper Mills, Inc. 46,500
4,480 Baltek Corp. 41,440
17,700 Hauser Chemical Research, Inc. 106,200
14,417 Insteel Industries, Inc. 99,117
6,600 Pitt-Des Moines, Inc. 242,550
12,325 Roanoke Electric Steel Corp. 328,153
3,800 Stephan Co. 50,588
6,500 Tuscarora, Inc. 117,000
1,307,144
CAPITAL GOODS - 13.39%
7,000 American Technical Ceramics Corp. 105,875
7,044 Athey Products Corp. 29,497
9,450 Autocam Corp. 129,938
2,300 Badger Meter, Inc. 93,725
15,000 Baker (Michael) Corp. 146,250
5,727 Binks Manufacturing Co. 241,966
19,900 BMC West Corp. 208,950
16,300 Cameron Ashley Building Products, Inc. 273,025
21,000 Cascade Corp. 357,000
12,200 Cherry Corp. Cl. A 213,500
9,000 Cherry Corp. Cl. B 158,625
8,000 Deflecta-Shield Corp. 126,000
8,382 Del Global Technology 83,820
7,000 Devcon International Corp. 34,125
7,015 Ecology and Environment, Inc. Cl. A 82,426
12,000 Engle Homes, Inc. 220,500
14,800 Failure (The) Group, Inc. 155,400
10,000 Farr Co. 150,000
11,000 Fibermark, Inc. 236,500
11,500 Gehl Co. 241,500
3,150 Graham Corp. 48,038
4,000 Heist (C.H.) Corp. 28,000
5,400 Industrial Acoustics Company, Inc. 56,362
7,600 Liberty Homes, Inc. Cl. A 73,625
6,000 M/I Schottenstein Homes, Inc. 112,500
16,800 Mestek, Inc. 315,000
13,112 Met-Pro Corp. 216,348
10,200 Monaco Coach Corp. 260,100
5,700 Noland Co. 128,250
11,000 Northwest Pipe Co. 264,000
25,500 O'Sullivan Corp. 270,938
4,000 Oilgear Co. 93,000
3,600 Oriole Homes Corp. Cl. A 14,850
3,200 Penn Engineering & Manufacturing Corp. (voting) 79,800
9,600 Penn Engineering & Manufacturing Corp. (non-voting) 230,400
6,200 Plasti-Line, Inc. 85,250
10,200 Puerto Rican Cement Co., Inc. 511,913
9,000 Selas Corp. of America 86,625
4,900 SL Industries, Inc. 57,881
7,182 Southwest Water Co. 125,685
75 Terex Corp. 1,763
19,600 URS Corp. New 305,025
6,653,975
CONSUMER CYCLICAL - 17.68%
21,600 Amplicon, Inc. 356,400
4,400 Analysis & Technology, Inc. 123,750
15,000 Ben & Jerry's Homemade, Inc. Cl. A 232,500
20,000 Bon-Ton Stores, Inc. 300,000
19,200 Carmike Cinemas, Inc. Cl. A 550,800
9,000 Childtime Learning Centers, Inc. 123,750
12,000 Conso Products Co. 91,500
8,800 Crown Books Corp. 56,100
15,000 Deckers Outdoor Corp. 112,500
20,000 Dixie Group, Inc. Cl. A 227,500
9,000 Duckwall-Alto Stores, Inc. 133,875
31,000 Egghead, Inc. 201,500
9,300 ELXSI Corp. 106,950
8,500 Equinox Systems, Inc. 144,500
2,700 Federal Screw Works 155,250
8,600 Fuqua Enterprises, Inc. 296,700
8,000 Globe Business Resources, Inc. 169,000
17,500 Gottschalks, Inc. 146,562
11,000 Government Technology Services, Inc. 63,250
8,703 Hampton Industries, Inc. 76,151
8,524 Hein-Werner Corp. 62,332
11,000 InaCom Corp. 308,688
10,916 Knape & Vogt Manufacturing Co. 237,423
9,498 M/A/R/C (The) Group 170,964
13,000 Maxwell Shoe, Inc. Cl. A 139,750
8,500 McRae Industries, Inc. Cl. A 68,000
12,000 Motorcar Parts & Accessories, Inc. 201,000
11,000 Nobel Education Dynamics, Inc. 55,688
15,700 Optical Coating Laboratory, Inc. 215,875
11,000 OroAmerica Inc. 55,688
20,000 Piccadilly Cafeterias, Inc. 262,500
7,000 Pulaski Furniture Corp. 124,250
16,400 R & B, Inc. 157,850
8,500 Reading Entertainment, Inc. 108,375
14,000 Rex Stores Corp. 143,500
12,000 Rock Bottom Restaurants, Inc. 75,750
6,000 Rocky Shoes & Boots, Inc. 91,500
30,000 RPC Energy Services, Inc. 354,375
8,400 S & K Famous Brands, Inc. 110,775
7,600 Scheib (Earl), Inc. 60,800
23,100 Sportmart, Inc. 53,419
5,250 Supreme Industries, Inc. Cl. A 47,250
11,000 Supreme International Corp. 137,500
29,000 Syms Corp. 344,375
12,000 Tarrant Apparel Group 187,500
36,200 TCBY Enterprises, Inc. 273,763
11,000 Thomaston Mills, Inc. Cl. A 101,750
1,000 Thomaston Mills, Inc. Cl. B 9,375
7,000 Trimark Holdings, Inc. 35,875
13,800 Uni-Marts, Inc. 48,300
7,875 Valley Forge Corp. 113,203
9,000 Weyco Group, Inc. 203,625
42,000 Winnebago Industries, Inc. 372,750
13,828 Wolohan Lumber Co. 186,678
8,788,984
CONSUMER STAPLES - 8.77%
18,000 Blessings Corp. 265,500
16,100 Buttrey Food & Drug Stores Co. 177,100
9,300 Cagle's, Inc. Cl. A 104,625
6,000 Christiana Companies, Inc. 237,750
6,000 Continental Can Company, Inc. 151,125
4,000 Foodarama Supermarkets, Inc. 91,000
30,000 Frozen Food Express Industries, Inc. 270,000
3,200 Genesee Corp. Cl. B 129,600
11,900 Grist Mill Co. 119,000
35,000 Ingles Markets, Inc. Cl. A 498,750
7,225 Marsh Supermarkets, Inc. Cl. A 109,278
9,125 Marsh Supermarkets, Inc. Cl. B 136,304
18,000 Orange-Co. Inc. 145,125
15,200 Quaker Fabric Corp. 298,300
8,200 Safety Components International, Inc. 98,400
19,550 Sanderson Farms, Inc. 283,475
6,200 Seaway Food Town, Inc. 117,800
6,900 Seneca Foods Corp. Cl. A 117,731
5,900 Seneca Foods Corp. Cl. B 99,562
5,000 Span-America Medical Systems, Inc. 35,000
14,000 Swiss Army Brands, Inc. 141,750
13,000 Toastmaster Inc. 54,437
7,850 Tranzonic Cos. Cl. A 224,706
6,000 Triple S Plastics, Inc. 37,125
12,900 Vallen Corp. 267,675
10,800 Western Beef, Inc. 81,000
7,400 Zaring Homes, Inc. 66,600
4,358,718
ENERGY - 1.58%
10,500 Adams Resources & Energy, Inc. 150,938
2,203 HS Resources, Inc. 30,428
20,000 Key Production, Inc. 210,000
9,100 Maynard Oil Co. 93,275
10,200 Prima Energy Corp. 197,625
5,000 Roanoke Gas Co. 103,750
786,016
FINANCIAL - 18.96%
4,300 Amwest Insurance Group, Inc. 62,350
10,000 Capitol Transamerica Corp. 213,125
14,208 Chartwell Re Corp. 479,520
7,968 Cotton States Life and Health Insurance Co. 182,268
20,000 EMC Insurance Group, Inc. 265,000
20,000 First Financial Caribbean Corp. 507,500
17,000 Emergent Group, Inc. 235,875
7,000 First Cash, Inc. 54,250
9,000 First Investment Financial Services Group, Inc. 63,000
16,000 Guarantee Life Companies, Inc. 456,000
11,500 Interstate/Johnson Lane, Inc. 304,750
11,800 Lawyers Title Corp. 370,962
10,000 Litchfield Financial Corp. 193,750
10,000 McDonald & Co. Investments, Inc. 283,750
5,000 Merchants Group, Inc. 106,250
12,300 Meridian Insurance Group, Inc. 211,406
5,800 Midland Co. 365,400
5,600 Minuteman International, Inc. 60,900
22,800 National Discount Brokers Group, Inc. 287,850
7,000 National Insurance Group 61,250
4,850 National Security Group, Inc. 85,481
5,300 National Western Life Insurance Co. 537,950
15,400 Navigators Group, Inc. 289,230
10,000 Omni Insurance Group, Inc. 313,750
14,000 Penn Treaty American Corp. 444,500
12,250 Penn-America Group, Inc. 251,125
6,600 Professionals Insurance Company Management Group 283,800
16,000 PXRE Corp. 531,000
9,900 RLI Corp. 493,143
20,000 RTW, Inc. 120,000
5,550 Scott & Stringfellow Financial, Inc. 141,525
19,000 South Jersey Industries, Inc. 575,937
13,400 Stewart Information Services Corp. 388,600
9,672 Walshire Assurance Co. 106,392
4,600 Ziegler (The) Companies, Inc. 96,887
9,424,476
HEALTH CARE - 0.30%
9,000 Advocat, Inc. 76,500
12,000 Merit Medical Systems, Inc. 75,000
151,500
MISCELLANEOUS - 3.40%
14,000 Andersons, Inc. 124,250
3,000 Astronics Corp. 28,500
10,900 Celebrity, Inc. 14,987
10,400 Edelbrock Corp. 176,800
4,966 Enstar Group, Inc. 38,486
1,500 FRM Nexus, Inc. 1,500
14,500 Hardinge, Inc. 540,125
15,500 Hoenig Group, Inc. 102,687
8,000 MTL, Inc. 204,500
10,600 Primesource Corp. 106,000
4,500 Programming and Systems, Inc. 4,500
12,400 Rottlund Inc. 40,300
2,600 Scope Industries 158,600
18,000 Todd AO Corp. Cl. A 150,750
1,691,985
TECHNOLOGY - 12.49%
2,100 Allen Organ Co. Cl. B 87,150
7,400 Autologic Information International, Inc. 49,950
11,400 BEI Electronics, Inc. 135,375
11,400 BEI Technologies, Inc. 139,650
16,020 Bell Industries Inc. 220,275
13,700 Bell Microproducts Inc. 107,888
55,000 BT Office Products International, Inc. 426,250
12,000 CPAC Inc. 123,000
10,000 Data Research Associates, Inc. 142,500
13,000 Data Systems & Software Inc. 55,250
4,600 Dataram Corp. 41,975
4,000 Datron Systems, Inc. 34,500
10,000 DRS Technologies, Inc. 147,500
5,200 Eastern (The) Co. 102,700
9,000 Environmental Technologies Corp. 59,625
6,000 Equitrac Corp. 108,000
4,000 Espey Mfg. & Electronics Corp. 67,500
14,000 Franklin Electronic Publishers, Inc. 175,000
28,000 Genus Inc. 93,624
7,000 Giga-tronics, Inc. 68,250
16,000 GTI Corp. 78,000
13,900 IEC Electronics Corp. 189,388
15,000 IFR Systems, Inc. 232,500
13,000 Integrated Measurement System, Inc. 222,625
51,000 Intelligent Electronics, Inc. 283,688
9,000 Interphase Corp. 51,750
9,000 Isco, Inc. 79,875
8,500 Koss Corp. 97,750
4,300 Moore Products Co. 159,100
16,400 Newport Corp. 230,625
18,000 Nichols Research Corp. 450,000
17,200 Norstan, Inc. 408,500
16,000 Powell Industries, Inc. 244,000
6,500 Programmer's Paradise, Inc. 60,938
12,000 Proxima Corp. 79,500
9,000 Quad Systems Corp. 47,250
4,300 Quipp, Inc. 70,950
8,000 Refac Technology Develp Corp. 85,500
27,000 Thermospectra Corp. 270,000
10,000 TRM Copy Center Corp. 88,750
11,400 Vertex Communications Corp. 275,025
9,000 Wandel & Goltermann Technologies, Inc. 118,125
6,209,801
TRANSPORTATION & SERVICES - 2.73%
12,000 International Shipholding Corp. 207,000
4,000 Kenan Transport Co. 146,500
6,966 KLLM Transport Services, Inc. 85,333
8,000 Marten Transport Ltd. 177,000
12,500 Old Dominion Freight Line, Inc. 190,625
5,000 Petroleum Helicopters, Inc. 111,250
12,000 Transport Corp. of America, Inc. 189,000
17,000 USA Truck, Inc. 199,750
4,200 VSE Corp. 49,088
1,355,546
UTILITIES - 14.70%
13,000 Aquarion Co. 353,313
6,600 Atrion Corp. 91,575
12,100 Bangor Hydro-Electric Co. 74,869
7,000 Berkshire Gas Co. 161,000
18,350 Cascade Natural Gas Corp. 344,063
8,300 Chesapeake Utilities Corp. 170,150
15,150 Colonial Gas Co. 436,509
16,450 Connecticut Energy Corp. 495,556
5,000 Connecticut Water Service, Inc. 162,500
17,800 Consumers Water Co. 356,000
19,000 CTG Rseources, Inc. 495,188
4,000 Delta Natural Gas Company, Inc. 76,000
2,200 Dominguez Services Corp. 70,950
13,000 E'town Corp. 522,438
6,000 EnergyNorth, Inc. 172,875
3,400 Essex County Gas Co. 155,550
5,000 Florida Public Utilities Co. 122,500
9,000 Green Mountain Power Corp. 164,812
5,000 Maine Public Service Co. 60,625
7,600 Middlesex Water Co. 171,000
18,419 NUI Corp. 528,395
2,000 Pennsylvania Enterprises, Inc. 50,500
15,000 Philadelphia Suburban Corp. 441,562
10,800 Providence Energy Corp. 235,575
6,100 SJW Corp. 369,050
16,600 Southern California Water Co. 417,075
14,000 St. Joseph Light & Power Co. 249,375
9,176 UNITIL Corp. 223,092
5,100 Upper Peninsula Energy Corp. 137,700
7,309,797
TOTAL COMMON STOCKS - 96.63% 48,037,942
FACE AMOUNT DESCRIPTION MARKET VALUE
REPURCHASE AGREEMENT - 3.33%
$ 1,655,000 UMB Bank, n.a.
5.80%, due January 2, 1998
(Collateralized by U.S.
Treasury Notes, 5.875%,
due February 28, 1999) 1,655,000
TOTAL INVESTMENTS - 99.96% $ 49,692,942
Other assets less liabilities - 0.04% 18,142
TOTAL NET ASSETS - 100.00%
(equivalent to $12.69 per share;
10,000,000 shares of $1.00 par
value capital shares authorized;
3,916,621 shares outstanding) $ 49,711,084
See accompanying Notes to Financial Statements.
STATEMENT OF ASSETS
AND LIABILITIES
December 31, 1997 (unaudited)
ASSETS:
Investment securities, at market value
(identified cost $36,949,015) $ 49,692,942
Dividends receivable 57,993
Total assets 49,750,935
LIABILITIES AND NET ASSETS:
Cash overdraft 39,851
Total liabilities 39,851
NET ASSETS $ 49,711,084
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in capital) $ 36,758,658
Accumulated undistributed income (loss):
Undistributed net investment income (22,930)
Undistributed net realized gain on investment transactions 231,429
Net unrealized appreciation in value of investments 12,743,927
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $ 49,711,084
Capital shares, $1.00 par value
Authorized 10,000,000
Outstanding 3,916,621
NET ASSET VALUE PER SHARE $ 12.69
See accompanying Notes to Financial Statements.
STATEMENT OF OPERATIONS
Six Months Ended December 31, 1997 (unaudited)
INVESTMENT INCOME:
Income:
Dividends $ 346,974
Interest 112,767
459,741
Expenses:
Management fees (Note 3) 267,201
Custodian fees 20,556
Pricing service fees 12,777
Registration fees 8,427
308,961
Net investment income 150,780
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (Note 1):
Realized gain from investment transactions
(excluding repurchase agreements):
Proceeds from sales of investments 16,748,575
Cost of investments sold 11,901,837
Net realized gain from investment transactions 4,846,738
Unrealized appreciation on investments:
Beginning of period 11,042,916
End of period 12,743,927
Increase in net unrealized appreciation on investments 1,701,011
Net gain on investments 6,547,749
Increase in net assets resulting from operations $ 6,698,529
See accompanying Notes to Financial Statements.
STATEMENTS OF CHANGES
IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
DECEMBER 31, 1997 JUNE 30,
(UNAUDITED) 1997
</CAPTION>
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INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 150,780 $ 379,839
Net realized gain from investment transactions 4,846,738 3,517,542
Increase in net unrealized appreciation on investments 1,701,011 4,247,552
Net increase in net assets resulting from operations 6,698,529 8,144,933
Net equalization included in the price of shares issued
and redeemed (Note 1) (8,265) 5,879
DISTRIBUTIONS TO SHAREHOLDERS FROM:*
Net investment income (272,860) (272,927)
Net realized gain from investment transactions (5,741,282) (3,793,901)
Total distributions to shareholders (6,014,142) (4,066,828)
INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from 2,566,333 and 666,941 shares sold 35,973,528 7,776,031
Net asset value of 444,114 and 323,888 shares issued for
reinvestment of distributions 5,524,789 3,812,222
41,498,317 11,588,253
Cost of 2,380,722 and 1,137,409 shares redeemed (33,785,419) (13,173,479)
Net increase (decrease) from capital share transactions 7,712,898 (1,585,226)
Total increase in net assets 8,389,020 2,498,758
NET ASSETS:
Beginning of period 41,322,064 38,823,306
End of period (including undistributed
net investment income of ($22,930) and
$107,415, respectively) $ 49,711,084 $ 41,322,064
*Distributions to shareholders:
Income dividends per share $ .0808 $ 0.0864
Capital gains distribution per share $ 1.6992 $ 1.2086
</TABLE>
See accompanying Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940, as
amended, as a diversified open-end management investment company. The
financial statements have been prepared in conformity with generally accepted
accounting principles which require management to make certain estimates and
assumptions at the date of the financial statements. The following is a
summary of significant accounting policies consistently followed by the Fund
in the preparation of its financial statements.
Investments - Common stocks traded on a national securities exchange
are valued at the last reported sales price on the last business day of
the period or, if no sale was reported on that date, at the average of
the last reported bid and asked prices. Common stocks traded over-the-
counter are valued at the average of the last reported bid and asked
prices. Investment transactions are recorded on the trade date. Dividend
income and distributions to shareholders are recorded on the ex-dividend
dates. Realized gains and losses from investment transactions and
unrealized appreciation and depreciation of investments are reported on
the identified cost basis.
Federal and State Taxes - The Fund's policy is to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. Therefore, no provision for federal or state tax is
required.
Equalization - The Fund uses the accounting practice known as
equalization, by which a portion of the proceeds from sales and costs of
redemption 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.
2. PURCHASES AND SALES OF SECURITIES:
The aggregate amounts of security transactions during the period ended
December 31, 1997 (excluding repurchase agreements), were as follows:
Purchases $ 18,564,180
Proceeds from sales 16,748,575
3. MANAGEMENT FEES:
Management fees, which include all normal expenses of the Fund other
than fees for pricing services, custodian fees, dues, taxes, fees and
other charges of governmental agencies for qualifying the Fund's shares
for sale, special legal fees, interest and brokerage commissions, are
paid to Jones & Babson, Inc., an affiliated company. These fees are
based on average daily net assets of the Fund at the annual rate of one
percent of net assets. Certain officers and/or directors of the Fund are
also officers and/or directors of Jones & Babson, Inc.
This report has been prepared for the information of the Shareholders of
Shadow Stock Fund, Inc., and is not to be construed as an offering of
the shares of the Fund. Shares of this Fund and of the other Babson
Funds are offered only by the Prospectus, a copy of which may be
obtained from Jones & Babson, Inc.
EQUITIES
Growth Fund
Enterprise Fund*
Enterprise Fund II
Value Fund
Shadow Stock Fund
International Fund
FIXED INCOME
Bond Trust
Money Market Fund
Tax-Free Income Fund
* Closed to new investors.
JONES & BABSON
MUTUAL FUNDS
BMA Tower
700 Karnes Blvd.
Kansas City, MO 64108-3306
816-751-5900
1-800-4-BABSON
(1-800-422-2766)
http://www.jbfunds.com
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