Babson Stewart Ivory International Fund
Quarterly Report
March 31, 1995
MESSAGE
To Our Shareholders
At March 31, 1995 the net asset value of shares of Babson-Stewart Ivory
International Fund was $15.54 per share, which represented a total return
(price change and reinvested distributions) of 0.6% for the quarter, and 1.8%
for the previous twelve months. Comparisons against the unmanaged Morgan
Stanley Capital International (MSCI) EAFE and other indices are as follows:
Investment Results - Total Return
Periods Ended 3/31/95
First Quarter Previous
1995 12 Months
BSIIF 0.6% 1.8%
MSCI EAFE* Index 1.9% 6.4%
MSCI World Index 4.8% 9.9%
S&P 500 Index 9.7% 15.5%
Lipper International Funds
(avg. 237 funds) -1.8% -1.7%
*Europe, Australia, Far East
Unfavorable asset mix (over-exposure in Southeast Asia and Latin America)
and underperformance in the UK and Japan, along with the weaker dollar, were
factors affecting performance in the quarter ended March 31. Currency moves
were mainly against the U.S. dollar, with the Australian dollar the only other
major currency to reflect relative weakness.
The Fund's average annual compounded total returns for five years and the
life of the Fund (inception December 7, 1987) as of March 31 were 8.0% and
8.6%, 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.
Economic growth in the United States has slowed from the 4.6% annual rate in
the fourth quarter of 1994, rekindling hope for a "soft" landing in 1995
without the need for further interest rate increases. The lower rate of
growth is particularly noticeable in the consumer sector, including
automobiles. The latest round of currency weakness, which came as a surprise
to many observers, is partly attributed to the after-effects of the Mexican
devaluation and makes U.S. industry more competitive on an international
basis. For this reason, policymakers may view the situation as primarily a
problem for Japan and Europe, rather than for the U.S.
While Japan is no stranger to currency strength, the 15.5% yen appreciation
against the U.S. dollar in the first quarter came at a particularly sensitive
time, when a fragile economic recovery was already suffering the dislocations
of the Kobe earthquake in January. This event, while creating short-term
disruptions, will have a stimulative effect on the Japanese economy. We
believe therefore that Japan's economic recovery from the 1993-94 slowdown
has been delayed, but is still on course.
The growth rate in the United Kingdom is slowing to a level more in line with
the productive capacity of the economy. German growth is at a comfortable
level, with strong exports and construction offset by weaker consumer demand.
Unemployment remains Continental Europe's most intractable problem and is
attributed by critics to the Continent's inflexible labor practices and high
social costs.
International growth remains highest in the small Far East countries,
although stock markets have remained under pressure for most of the quarter.
The Mexican currency debacle highlighted the risks of emerging market
investment and has been a blow to investors in Latin America. The austerity
measures now introduced in Mexico have swung the economy into a recession,
and higher interest rates, with a more cautious attitude on the part of
international investors, now implies slower growth across Latin America as a
whole.
Portfolio activity during the quarter included net equity purchases of about
$5.1 million, mainly reflecting new cash inflows. The portfolio's cash
position was reduced from 2.7% to 2.3%. As a result of portfolio changes, we
have reduced investment in Asia and Latin America, eliminating Mexico but
retaining a small exposure in Brazil and Chile, and increasing investments
in Europe. Within Asia our exposure in Japan remains below the index
weighting, while other Asian exposure is over-weighted.
Thank you for your continuing interest in Babson-Stewart Ivory International
Fund.
Sincerely,
LARRY D. ARMEL
Larry D. Armel
President
<PAGE>
STATEMENT OF NET ASSETS
March 31, 1995
SHARES COMPANY MARKET VALUE
COMMON STOCKS - 97.36%
AFRICA - 0.58%
12,500 South African Breweries
(brewing, glass, retail & hotels) $ 352,654
AUSTRALIA - 4.20%
75,469 Brambles
(Transport, plant services) 699,207
165,000 CSR
(Building materials/base metals) 520,047
59,457 Lend Lease
(Real estate) 724,309
123,750 Western Mining
(Diversified base metals) 623,149
2,566,712
BELGIUM - 1.38%
3,550 Colruyt
(Food retailer) 842,052
BRAZIL - 0.48%
24,000 Usiminas
(Steel producer) 294,000
CHILE - 0.56%
11,250 Genesis Chile Fund
(Investment in Chile) 343,125
DENMARK - 1.44%
10,000 Sophus Berendsen
(Environmental, industrial services) 884,728
FRANCE - 8.09%
1,800 Carrefour
(Food retailer) 906,925
5,000 Castorama Dubois
(DIY retailer) 818,257
3,750 Cetelem
(Consumer finance) 813,319
2,585 Comptoirs Modernes
(Food retailer) 800,925
8,000 Guilbert
(Office supplies, paper) 758,578
8,000 SEB
(Electrical appliances) 851,736
4,949,740
GERMANY - 4.27%
1,400 Linde
1,400rts. (Engineering) 758,939
1,250 Plettac
(Scaffolding) 712,859
950 Rheinelektra
(Electric utility, machinery) 700,509
728 Weru
(Building materials) 438,440
2,610,747
HONG KONG - 4.03%
1,701,625 CDL Hotels
(Regional hotel group) 715,246
250,000 Johnson Electric
(Micro-motors) 588,464
350,000 Shaw Bros.
(T.V. network, film production
and distribution) 547,724
1,100,000 South China Morning Post
(Publishing) 615,300
2,466,734
INDONESIA - 0.43%
7,500 Indosat
(Telecommunications) 264,375
IRELAND - 0.98%
100,000 Kerry Group
(Food manufacturer) 600,437
ITALY - 2.80%
25,000 Luxottica
(Eyeglass frames) 900,000
22,000 Industrie Natuzzi
(Furniture manufacturer) 811,250
1,711,250
JAPAN - 32.11%
44,000 Amada Metrecs
(Machine tools, robotics) 648,474
21,000 Amway
(Non-store retailer) 664,940
8,600 Autobacs Seven
(Auto repair shops) 920,898
37,000 Canon Sales
(Distribution of Canon products) 864,824
117,000 Daicel Chemical
(Chemicals, plastics) 633,161
53,000 Hitachi Metals
(Specialty metals) 659,067
34,000 Hoya
(Optical/electronic products) 939,551
28,000 Kato Denki
(Electrical appliance retailer) 593,207
9,000 Keyence
(Sensors) 946,114
69,000 Komatsu
(Construction machinery) 496,546
55,000 Kuraray
(Synthetic textiles) 639,609
51,000 Kurimoto
(Cast iron pipes) 513,817
12,000 Kyocera
(Electronic components) 892,573
15,000 Murata
(Electronic components) 582,038
69,000 NGK Spark Plug
(Spark plugs, ceramic packaging) 826,252
105,000 NTN
(Bearings) 664,940
24,000 Nissen
(Mail order retail) 690,846
17,000 Orix
(Equipment leasing) 679,217
26,400 Rinnai
(Gas appliances) 659,620
8,800 Seven Eleven
(Convenience stores) 617,064
15,000 Sony
(Consumer electronics) 751,295
76,000 Sumitomo Marine & Fire
(Fire & casualty insurance) 646,678
90,000 Sumitomo Warehouse
(Warehousing, transport) 570,984
70,000 SxL
(Housebuilder) 738,284
65,000 Topre
(Automotive steel) 561,313
97,000 Toshiba
(Integrated electronics) 657,835
22,000 Tostem
(Aluminum window frames) 780,196
24,800 Xebio
(Apparel, sportswear) 799,539
19,638,882
KOREA - 1.03%
18,000 Korea Electric Power
(Electric utility) 627,121
MALAYSIA - 1.17%
219,000 Perlis Plantations
(Trading, mining, agriculture) 718,175
NETHERLANDS - 5.26%
22,000 KPN
(Postal, telecom services) 777,325
4,200 Otra
(Technology wholesalers) 845,273
15,000 Polygram
(Recorded music) 828,965
10,000 Wolters Kluwer
(Publisher) 768,136
3,219,699
NEW ZEALAND - 1.16%
120,000 Wilson & Horton
(Newspapers) 707,733
SINGAPORE - 3.74%
140,000 Robinson
(Department store) 609,989
156,000 Trans-Island Bus Services
(Bus transport) 355,282
690,000 Utd Industrial
(Real estate) 611,052
400,000 United Overseas Land
(Real estate) 708,466
2,284,789
SPAIN - 0.98%
30,000 Continente Centros Commerciales
(Hypermarket) 597,392
SWEDEN - 2.59%
40,000 Arjo
(Healthcare services) 655,391
35,000 Astra
(Pharmaceuticals) 928,923
1,584,314
SWITZERLAND - 4.06%
2,700 Fust
(Household appliances) 834,437
2,000 Phoenix Meccano
(Customized electric casings) 741,722
1,400 Sandoz
(Pharmaceuticals and chemicals ) 907,373
2,483,532
UNITED KINGDOM - 16.02%
120,000 Argos
(Mail order, retail) 767,984
150,000 Bowthorpe
(Electronics components, instruments) 814,161
130,000 British Sky Broadcast
(Satellite TV broadcasting) 536,050
104,324 Cadbury Schweppes
(Food, soft drinks) 748,982
40,000 De La Rue
(Security printing) 561,892
102,000 Electrocomponets Ents
(Electronics) 879,196
135,000 Godfrey Davis
(Vehicle distribution, laundries) 463,707
72,000 Granada
(Hotels, leisure) 653,856
161,000 Hays
(Business services) 795,609
158,000 MacFarlane
(Printing, packaging) 611,828
103,000 Marks & Spencer
(Retail) 697,570
343,000 Morrison Supermarket
(Supermarkets) 755,800
103,000 Reuters
(News service) 791,941
93,000 SmithKline Beecham
(Pharmaceuticals) 721,760
9,800,336
TOTAL COMMON STOCKS - 97.36% 59,548,527
Short-Term Investments - 3.41% 2,089,514
TOTAL INVESTMENTS - 100.77% $ 61,638,041
Other assets less liabilities - (0.77%) (473,454)
TOTAL NET ASSETS - 100.00%
(equivalent to $15.54 per share;
10,000,000 shares of $1.00 par
value capital shares authorized;
3,937,075 shares outstanding) $ 61,164,587
This report has been prepared for the information of the Shareholders of
Babson-Stewart Ivory International 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.
