BENHAM EQUITY FUNDS, N-30D, 1996-08-23

BENHAM EQUITY FUNDS
N-30D, 1996-08-23

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BENHAM SPECIAL
EQUITY FUNDS

-------------

Semiannual Report
June 30, 1996

[picture of book with compass,
bag with gold nuggets, and a mining
company deed]

Global Gold Fund
Global Natural Resources Index Fund

[company logo] The Benham Group
Part of the Twentieth Century Family of Mutual Funds

<PAGE>

CONTENTS

GLOBAL ECONOMIC REVIEW............................... 1

GLOBAL GOLD FUND
Performance Information.............................. 2
Portfolio Composition................................ 3
Market Summary....................................... 4
Management Discussion and
Lipper Performance Comparison.................... 6
Financial Highlights..................................16
Financial Statements and Notes........................18
Schedule of Investments...............................26

GLOBAL NATURAL RESOURCES INDEX FUND
Performance Information.............................. 8
Portfolio Composition................................ 9
Market Summary........................................10
Management Discussion and
Lipper Performance Comparison.....................12
Financial Highlights..................................17
Financial Statements and Notes........................18
Schedule of Investments...............................28

INVESTMENT FUNDAMENTALS:
BENCHMARK INDEXES.....................................14

<PAGE>

GLOBAL ECONOMIC REVIEW
JAMES M. BENHAM [photo of James
Chairman, Benham Funds M. Benham]

During the first half of 1996, the global economy began to shake itself out of
the lethargy that developed in 1995. In the U.S., a series of short-term
interest rate cuts by the Federal Reserve sparked renewed economic growth, led
by the strongest employment increase in more than eight years. After a prolonged
recession that featured deflation and a major banking crisis, the Japanese
economy surged in the first quarter of 1996 (see the graph below). Although this
level of economic growth is probably unsustainable, we see signs of a widespread
recovery in Japan--consumer spending has rebounded, demand for imported goods
has strengthened, and a broad assortment of industries have experienced improved
business conditions.

[mountain graph on left side of page. graph data described below]

Europe remained among the weakest regions for economic growth. Germany
experienced two consecutive quarters of negative economic growth, which would
meet the conditions for a recession in the U.S. The rest of the continent
produced slightly positive growth, but Europe as a whole continues to be plagued
by high levels of unemployment and sizable government deficits. The exception is
the United Kingdom, which is in the late stages of an extended economic
recovery.

Global inflation continued to be a non-issue. Despite rebounding economic
growth, Japan is still in a deflationary environment (falling prices). The
inflation rate has increased slightly in the U.S., but it continues to be
relatively benign. However, as economic growth in each of these countries
expands, both the Federal Reserve and the Bank of Japan will be monitoring
inflation closely.

Global economic growth should continue to rebound during the remainder of 1996.
Interest rate cuts and a weaker currency are expected to enable Germany to begin
recovery later this year and into 1997. The rest of Europe is likely to follow
Germany's lead, although the development of European monetary union will be a
drag on economic growth for the next couple of years. Japan should continue to
see economic improvement, while the U.S. has returned to a moderate level of
economic growth. Even Mexico, whose economy was battered by a currency
devaluation in late 1994 and rampant inflation in 1995, may achieve positive
economic growth this year.

[graph data]
Economic Growth (GDP)
Year-Over-Year % Change

Japan Germany U.S.

3/31/93 -0.4 % -2.1 % 2.46%
6/30/93 -0.02 -1.46 2.24
9/30/93 0.66 -0.61 2.07
12/31/93 0.17 -0.63 2.16
3/31/94 0.2 2.38 2.81
6/30/94 0.58 2.95 3.59
9/30/94 1.01 2.84 3.9
12/31/94 0.39 3.71 3.52
3/31/95 0.12 2.79 3.03
6/30/95 0.31 2.6 1.94
9/30/95 0.25 2.05 1.94
12/31/95 2.25 1.01 1.27
3/31/96 5.7 0.42 1.7
6/30/96 2.41 -0.12 2.36
9/30/96 2.54 0.25 2.06
12/31/96 2.43 1.1 2.28
3/31/97 3.16 1.76 1.99
6/30/97 3.46 2.24 1.55
9/30/97 3.7 2.57 1.47
12/31/97 3.78 2.56 1.61

Source: DRI/McGraww-Hill

GLOBAL GOLD FUND
NAV AND AVERAGE ANNUAL TOTAL RETURNS
For Periods Ended June 30, 1996

AVERAGE ANNUAL TOTAL RETURNS
NET ASSET VALUE RANGE -------------------------------------------------
(1/1/96-6/30/96) 1 YEAR 3 YEARS 5 YEARS LIFE OF FUND
--------------------------------------------------
$12.92-$15.77 3.93% 1.75% 7.98% 3.66%

NET ASSET VALUE (NAV) RANGE indicates the Fund's share price movements over the
stated period and can be used to gauge the stability of the Fund's share price.

TOTAL RETURN figures show the overall dollar or percentage change in the value
of a hypothetical investment in the Fund and assume that all of the Fund's
distributions are reinvested. AVERAGE ANNUAL TOTAL RETURNS illustrate the
annually compounded returns that would have produced the Fund's cumulative total
returns if the Fund's performance had been constant over the entire period.
Average annual total returns smooth out variations in a fund's return; they are
not the same as year-by-year results. For year-by-year total returns, please
refer to the Fund's "Financial Highlights" on page 16.

The Fund commenced operations on August 17, 1988.

Total returns are based on historical Fund performance and do not guarantee
future results. The Fund's share price and total returns will vary, so that
shares, when redeemed, may be worth more or less than their original cost.

SEC PERFORMANCE COMPARISON
[mountain graph]

Comparative Performance of $10,000 Invested on 8/31/88 in the Fund, in the
Fund's Benchmark* and in the Toronto Stock Exchange 300 Index

[graph data]
TSE 300 Benchmark* Fund

8/31/88 $10,000 $10,000 $10,000
9/30/88 10,031 9,348 9,406
10/31/88 10,390 9,436 9,417
11/30/88 10,114 9,657 9,608
12/30/88 10,452 9,187 9,136
1/31/89 11,169 9,305 9,207
2/28/89 11,056 10,102 9,984
3/31/89 11,128 9,680 9,540
4/28/89 11,298 9,086 8,955
5/31/89 11,595 8,661 8,541
6/30/89 11,812 9,344 9,167
7/31/89 12,494 9,497 9,278
8/31/89 12,651 9,974 9,722
9/29/89 12,489 10,393 10,085
10/31/89 12,437 10,774 10,439
11/30/89 12,548 12,430 11,963
12/29/89 12,686 12,323 11,871
1/31/90 11,858 13,113 12,580
2/28/90 11,827 12,401 11,891
3/30/90 11,726 11,610 11,131
4/30/90 10,781 10,196 9,762
5/31/90 11,598 11,189 10,715
6/29/90 11,528 10,530 10,066
7/31/90 11,606 11,513 10,999
8/31/90 10,942 11,249 10,755
9/28/90 10,373 11,319 10,816
10/31/90 10,139 9,287 8,860
11/30/90 10,404 8,910 8,515
12/31/90 10,809 10,001 9,564
1/31/91 10,881 8,259 7,897
2/28/91 11,546 8,998 8,592
3/29/91 11,707 8,840 8,429
4/30/91 11,644 8,529 8,122
5/31/91 11,956 8,867 8,429
6/28/91 11,743 9,585 9,093
7/31/91 12,012 9,392 8,909
8/30/91 11,970 8,402 7,978
9/30/91 11,574 8,503 8,030
10/31/91 12,026 9,031 8,541
11/29/91 11,828 9,192 8,684
12/31/91 12,108 8,987 8,490
1/31/92 12,417 9,146 8,654
2/28/92 12,398 8,825 8,315
3/31/92 11,859 8,016 7,567
4/30/92 11,679 7,673 7,239
5/29/92 11,822 8,299 7,813
6/30/92 11,873 8,855 8,315
7/31/92 12,084 9,409 8,807
8/31/92 11,972 9,236 8,592
9/30/92 11,651 9,344 8,510
10/30/92 11,800 8,864 8,151
11/30/92 11,648 7,752 7,321
12/31/92 11,934 8,254 7,755
1/29/93 11,786 8,013 7,519
2/26/93 12,329 8,873 8,330
3/31/93 12,922 10,002 9,439
4/30/93 13,607 11,510 10,703
5/28/93 13,993 12,803 11,915
6/30/93 14,335 13,641 12,675
7/30/93 14,363 14,909 13,651
8/31/93 15,006 13,703 12,593
9/30/93 14,518 11,945 11,011
10/29/93 15,496 13,971 12,891
11/30/93 15,253 13,754 12,901
12/31/93 15,819 15,017 14,054
1/31/94 16,685 15,002 14,084
2/28/94 16,234 14,264 13,375
3/31/94 15,939 14,753 13,642
4/29/94 15,723 12,941 12,059
5/31/94 15,975 13,729 12,799
6/30/94 14,910 13,049 12,100
7/29/94 15,493 12,886 11,977
8/31/94 16,153 13,666 12,697
9/30/94 16,216 15,259 14,198
10/31/94 15,997 13,677 12,810
11/30/94 15,289 11,943 11,124
12/30/94 15,791 12,494 11,700
1/31/95 15,068 10,965 10,306
2/28/95 15,497 11,647 10,967
3/31/95 16,263 13,535 12,629
4/28/95 16,147 13,271 12,454
5/31/95 16,822 13,729 12,836
6/30/95 17,172 13,744 12,846
7/31/95 17,519 13,836 12,929
8/31/95 17,178 13,911 13,063
9/29/95 17,276 14,043 13,197
10/31/95 17,022 12,139 11,411
11/30/95 17,830 13,628 12,681
12/29/95 18,085 13,641 12,783
1/31/96 19,077 16,091 15,035
2/29/96 18,977 16,345 15,314
3/29/96 19,173 16,301 16,304
4/30/96 19,867 16,250 16,254
5/31/96 20,289 16,601 16,626
6/28/96 19,565 14,085 14,119

Past performance does not guarantee future results.

This graph compares the Fund`s performance with a broad-based market index, the
Toronto Stock Exchange 300 Index (TSE 300), over the life of the Fund. Among
broad-based stock indexes, the TSE 300 has a high percentage of precious metals
stocks. As a secondary index, we have also included the Fund's benchmark.*

* Between August 1988 and February 1996, the Fund's benchmark was the Benham
North American Gold Equities Index, which reflected the Fund's focus on North
American gold stocks. However, on February 12, 1996, Fund shareholders approved
changes to the Fund's investment objective, name and benchmark index. Reflecting
the globalization of gold production, the Fund's focus changed from North
American gold stocks to worldwide gold stocks. As a result, from March 1996 to
the present, the Fund's benchmark has been the FT-SE(R) Gold Mines Index.

GLOBAL GOLD FUND
TOP TEN STOCKS

As of 6/30/96

COMPANY COUNTRY WEIGHT

Barrick Gold Corporation Canada 14.4%
Newmont Mining Corp. United States 9.5%
Placer Dome, Inc. Canada 8.4%
Driefontein Consolidated Ltd. South Africa 4.5%
Homestake Mining Co. United States 4.0%
Santa Fe Gold Corporation United States 3.8%
TVX Gold, Inc. Canada 3.2%
Vaal Reefs Exploration & Mining South Africa 3.0%
Western Areas Gold Mining Co. South Africa 2.9%
Getchell Gold Corporation United States 2.9%
TOTAL WEIGHTING OF TOP TEN 56.6%

As of 12/31/95

COMPANY COUNTRY WEIGHT

Barrick Gold Corporation Canada 24.0%
Placer Dome, Inc. Canada 14.2%
Newmont Mining Corp. United States 10.6%
Santa Fe Gold Corporation United States 4.6%
TVX Gold, Inc. Canada 4.6%
Homestake Mining Co. United States 4.3%
Teck Corporation, B Shares Canada 3.3%
Euro-Nevada Mining Co. Ltd. Canada 3.3%
Hemlo Gold Mines, Inc. Canada 3.0%
Franco-Nevada Mining, Ltd. Canada 2.8%
TOTAL WEIGHTING OF TOP TEN 74.7%

For the top ten holdings of the Fund's benchmark index, see page 14.

GEOGRAPHIC COMPOSITION
[pie charts]

As of 6/30/96 As of 12/31/95
Canada: 43.2% Canada: 67.0%
U.S.: 26.6% U.S.: 30.9%
South Africa: 19.9% Ghana: 1.4%
Australia: 8.4% Australia: 0.7%
Ghana: 1.9%

For the composition of the Fund's benchmark index, see page 14.

GLOBAL GOLD FUND
MARKET SUMMARY
by Bill Martin, Portfolio Manager

GOLD BULLION

The price of gold bullion began 1996 by surging to a six-year high of $417 an
ounce, but it ultimately returned to the narrow trading range ($380-$395 an
ounce) that has existed for more than two years. Nonetheless, we think that
gold's trading range has widened.

The surge in the price of gold bullion at the beginning of the year was
primarily due to changing dynamics in the gold financing arena. In early 1996, a
short-term supply shortage caused gold dealers to raise their gold lease rates.
This mainly affected gold producers, who frequently borrow gold as part of a
hedging technique called "forward selling." With the sudden rise in lease rates,
cost-conscious producers not only curtailed their forward selling; they also
bought gold in the open market. The resulting shift in supply and demand
dynamics sent the price of gold soaring in January and early February (see the
accompanying graph), and it appeared that gold had broken out of its previous
trading range.

[mountain graph. graph data described below]
Spot Price of Gold Bullion
(dollars/oz)
1/96-6/96
Spot Price of Gold ($/oz.)
12/31/95 $387.1
1/5/96 396.3
1/12/96 396.3
1/19/96 399.8
1/26/96 406.2
2/2/96 415.5
2/9/96 405.8
2/16/96 404.8
2/23/96 398.5
3/1/96 398.9
3/8/96 397.1
3/15/96 396.2
3/22/96 398.35
3/29/96 395.45
4/5/96 393.55
4/12/96 394.55
4/19/96 390.73
4/26/96 390.4
5/3/96 392.45
5/10/96 390.65
5/17/96 392.55
5/24/96 391
5/31/96 391
6/7/96 385.3
6/14/96 384.9
6/21/96 385.05
6/28/96 380.45

Source: Bloomberg Financial Markets

However, the price of gold retreated as quickly as it had advanced. Lease rates
fell back to more normal levels as the higher price attracted more lenders and
sellers of gold. In addition, gold sales from central banks helped take up some
of the slack in supply. This combination of factors pushed the price of gold
back below $400 an ounce by March.

Concerns about excess supply put further downward pressure on the price of gold
between April and June. The International Monetary Fund (IMF), a global monetary
organization with 180 member nations, announced its intention to sell $2 billion
of gold from its reserves. Although the IMF has not yet approved the planned
sale, the threat of additional supply caused the price of gold to fall as low as
$380 an ounce by the end of June.

Though the price of gold bullion seems to be back in its familiar trading range,
the dramatic rise early in the year proved that the $400-an-ounce level is no
longer a psychological barrier. We believe that gold's trading range has now
extended out to $380-$410 an ounce.

GLOBAL GOLD FUND
MARKET SUMMARY
(Continued from the previous page)

GOLD STOCKS

The performance of global gold stocks varied from traditional patterns during
the first half of 1996. Usually, the divergence among gold stock returns is
regional in nature--North American stocks outperform South African stocks, or
vice versa--but, as the table below indicates, gold stock returns were fairly
similar from region to region. The main disparity so far in 1996 has been
between the performance of large-capitalization gold stocks and
small-capitalization gold stocks.

The share prices of large gold companies, with their more predictable cash flows
and production levels, tend to track the price movements of gold bullion.
Accordingly, most large-cap gold stocks soared in the first quarter of 1996 and
then retraced their gains in the second quarter, finishing with fairly flat
returns overall. For example, the share price of Barrick Gold Corporation, the
largest gold company in the world, rose by 20% in the first quarter, fell back
in the second quarter and returned just 2.8% overall in the first half of the
year.

Small-cap gold stocks, on the other hand, tend to be less correlated to the
metal's price movements. Instead, investor sentiment and liquidity drives this
portion of the market. In the first half of 1996, small-cap gold stocks
benefited from strong investor demand worldwide for small, fast-growing
companies. Money managers and gold investors alike were attracted to small
production and exploration companies that seek out mining opportunities in
remote, unexplored areas. As a result, many small-cap gold stocks surged by 50%
or more during the first five months of 1996. For example, Bre-X, a Canadian
company with a huge untapped mine in Indonesia, saw its share price quadruple in
the first half of this year, even though the company will not produce an ounce
of gold until the year 2000. This dependence on investor sentiment cut both
ways, however--the gains of small-cap gold stocks were tempered somewhat (and in
some cases completely erased) by a wave of profit-taking in June.

GOLD RETURNS AT A GLANCE
Total Returns for the Six Months Ended June 30, 1996

GOLD STOCKS GOLD BULLION
FT-SE Gold Mines Index......... 5.4% Spot Price of Gold..... -1.7%
African Region........... 7.0%
North American Region.... 5.3% U.S. INFLATION
Australian Region........ 2.1% Consumer
Average Gold-Oriented Fund*.... 14.8% Price Index (CPI)**.... 2.8%

* according to Lipper Analytical Services
**over the past 12 months

Sources: Financial Times, Dow Jones

GLOBAL GOLD FUND
MANAGEMENT DISCUSSION
A question and answer session with Bill Martin, Portfolio Manager

Q: How did the Fund perform during the first half of 1996?

A: The Fund outperformed its benchmark, but it underperformed relative to
other gold funds. For the six-month period ended June 30, 1996, the
Fund's total return was 4.45%, compared to the 3.50% return of its
combined benchmark. Because of the recent change in the Fund's
investment objective, the Fund's benchmark consisted partly of the
Benham North American Gold Equities Index (January-February) and partly
of the FT-SE(R) Gold Mines Index (March-June). The Fund's peer group,
Lipper's "Gold-Oriented Funds" category, produced an average total
return of 14.82% during the period. (See the table at the bottom of
this page for comparisons of the Fund's one-year, three-year, five-year
and life-of-fund returns to the average returns of its peer group.)

Q: Why did the Fund underperform the average gold fund?

A: The Fund's holdings are primarily focused on large, mature gold
companies in order to give the Fund's share price a high correlation
with the price movements of gold bullion. Many other gold funds hold
more small-cap gold stocks, which substantially outperformed large-cap
gold stocks during the first half of this year (as described on page
5). It's important to note that the Fund's underperformance relative to
its peer group is entirely a result of the size component and has
nothing to do with the Fund's new global investment focus.

Q: This new global investment objective was approved by shareholders in
mid-February. How has that affected the Fund's portfolio?

A: Over the course of several weeks in March, we added a 20% position in
South African gold stocks and an 8% position in Australian gold stocks
to the Fund's portfolio. This regional breakdown, which is based on the
FT-SE Index, more accurately reflects the output of the (continued on
next page)

LIPPER PERFORMANCE COMPARISON

Lipper Analytical Services (Lipper) is an independent mutual fund ranking
service located in Summit, NJ. Rankings are based on average annual total
returns for the periods ended 6/30/96 for the funds in Lipper's "Gold-Oriented
Funds" category.
1 YEAR 3 YEARS 5 YEARS LIFE OF FUND+

The Fund: 3.93% 1.75% 7.98% 3.63%
Category Average : 16.60% 4.79% 8.09% 4.08%
The Fund's Ranking: 37 out of 42 21 out of 29 14 out of 28 14 out of 22

+ from August 18, 1988, through June 30, 1996

Total returns are based on historical performance and do not guarantee
future results.

GLOBAL GOLD FUND
MANAGEMENT DISCUSSION
(Continued from the previous page)

world's gold-producing nations. The Fund's new composition has enhanced
its returns--African stocks outperformed North American stocks during
the period.

Q: Is the Fund managed to exactly match the composition of the FT-SE
Index?

A: As a guideline, about 80% of the Fund's portfolio is structured to
track the performance of the Index. Within this 80%, we have some
flexibility to slightly overweight or underweight specific stocks or
regions. For example, we are currently overweighted in U.S. gold stocks
and underweighted in South African stocks compared to the Index. With
regard to the other 20% of the portfolio, we have the opportunity to
add value and provide additional diversification by investing in gold
companies not included in the Index. We expect to concentrate this
portion of the Fund in North American gold companies because that is
where we have developed our expertise over the past eight years.

Q: Looking ahead, what's your outlook for gold bullion and global gold
stocks for the remainder of 1996?

A: Gold bullion seems to be locked into a $380-$410 trading range, and,
barring an economic or political crisis, we don't expect that to change
over the next six months. The price of gold continues to be restrained
by central bank sales and forward selling from gold producers. In
addition, the Federal Reserve's vigilant attention to the U.S.
inflation rate has kept real (inflation-adjusted) interest rates
steady. Relative to the current price of gold bullion, gold shares
appear to be attractively valued. This is especially true of large-cap
gold stocks, which experienced corrections in the second quarter of
this year and lagged behind their small-cap counterparts. We think that
the second half of this year will be more favorable for the larger gold
company stocks that make up the bulk of the Fund's portfolio.

Q: With this outlook in mind, what are your plans for the Fund over the
next six months?

A: We plan to continue overweighting gold stocks in North America, which
we believe to be the most stable region in the world. Although we
intend to maintain minimal weightings in the more volatile exploration
companies, we will look to increase the Fund's holdings of mid- and
small-cap gold producers in this region. We expect to underweight
Australian gold stocks--the end of diesel fuel tax subsidies will
likely lead to higher production costs for Australian companies. We
also intend to continue the Fund's underweighting in South Africa.
Although South African stocks have the highest earnings leverage and
the most attractive valuations in the world, we are wary of political
uncertainties and protracted labor negotiations in this region.

GLOBAL NATURAL RESOURCES FUND
NAV AND AVERAGE ANNUAL TOTAL RETURNS
For Periods Ended June 30, 1996

NET ASSET VALUE (NAV) RANGE indicates the Fund's share price movements over the
stated period and can be used to gauge the stability of the Fund's share price.

The Fund commenced operations on September 15, 1994.

SEC PERFORMANCE COMPARISON
[mountain graph]

Comparative Performance of $10,000 Invested on 9/30/94 in the Fund, in the
Fund's Benchmark and in the Dow Jones World Stock Index

[graph data]
DJWSI EBMS Fund

9/30/94 $10,000 $10,000 $10,000
10/31/94 10,267 10,398 10,355
11/30/94 9,762 9,743 9,736
12/30/94 9,815 9,711 9,789
1/31/95 9,597 9,524 9,616
2/28/95 9,699 9,700 9,789
3/31/95 10,139 10,157 10,227
4/28/95 10,480 10,535 10,645
5/31/95 10,557 10,584 10,675
6/30/95 10,526 10,409 10,471
7/31/95 11,009 10,892 10,975
8/31/95 10,803 10,575 10,625
9/29/95 11,022 10,673 10,728
10/31/95 10,857 10,441 10,533
11/30/95 11,185 10,834 10,913
12/29/95 11,496 11,173 11,199
1/31/96 11,709 11,402 11,336
2/29/96 11,733 11,378 11,430
3/29/96 11,888 11,818 11,871
4/30/96 12,177 12,217 12,229
5/31/96 12,160 12,183 12,145
6/28/96 12,172 12,086 11,997

Past performance does not guarantee future results.

This graph compares the Fund`s performance with a broad-based market index, the
Dow Jones World Stock Index (DJWSI), over the life of the Fund. We have also
included the Fund`s benchmark, the Energy and Basic Materials Sectors of the
DJWSI. Although the investment characteristics of the indexes are similar to
those of the Fund, the securities owned by the Fund and those composing the
indexes are likely to be different, and securities that the Fund and the indexes
have in common are likely to have different weightings in the respective
portfolios. Investors cannot invest directly in the indexes.

PLEASE NOTE: The line representing the Fund's total return includes operating
expenses (such as transaction costs and management fees) that reduce returns,
while the total return lines of the indexes do not.

GLOBAL NATURAL RESOURCES FUND
TOP TEN STOCKS

As of 6/30/96

COMPANY COUNTRY WEIGHT

Exxon Corporation United States 7.5%
Royal Dutch Petroleum Netherlands 7.0%
Mobil Corporation United States 4.0%
Chevron Corporation United States 3.7%
British Petroleum United Kingdom 3.0%
Amoco Corporation United States 2.5%
Diamond Fields Resources, Inc. Canada 2.4%
Schlumberger, Inc. United States 2.3%
Texaco, Inc. United States 2.2%
Total France 1.8%
TOTAL WEIGHTING OF TOP TEN 36.4%

As of 12/31/95

COMPANY COUNTRY WEIGHT

Exxon Corporation United States 8.6%
Royal Dutch Petroleum Netherlands 7.0%
Mobil Corporation United States 4.0%
Texaco, Inc. United States 3.5%
Amoco Corporation United States 3.1%
Chevron Corporation United States 3.1%
British Petroleum United Kingdom 2.8%
Diamond Fields Resources, Inc. Canada 2.5%
Nippon Steel Corporation Japan 2.3%
Atlantic Richfield Company United States 2.3%
TOTAL WEIGHTING OF TOP TEN 39.2%

For the top ten holdings of the Fund's benchmark index, see page 15.

PORTFOLIO COMPOSITION BY INDUSTRY SECTOR
[pie charts]

As of 6/30/96 As of 12/31/95
Energy: 57.7% Energy: 60.7%
Basic Materials: 40.0% Basic Materials: 37.5%
Other: 2.3% Other:1 .8%

PORTFOLIO COMPOSITION BY GEOGRAPHIC REGION
[pie charts]

As of 6/30/96 As of 12/31/95
Africa: 2.8% United States: 45.3%
Americas (excluding U.S.): 8.3% Europe: 27.5%
Asia/Pacific: 15.4% Asia/Pacific: 19.6%
Europe: 26.7% Americas (excluding U.S.): 7.6%
United States: 46.8%

For the geographic composition of the Fund's benchmark index, see page 15.

GLOBAL NATURAL RESOURCES FUND
MARKET SUMMARY
by Bill Martin, Portfolio Manager, and Joe Sterling, Associate Portfolio Manager

OVERVIEW

Natural resources stocks posted solid returns during the first six months of
1996. In the first quarter of the year, skyrocketing prices for several
commodities (due to supply shortages) and improved economic conditions in the
U.S. and Japan led to strong returns for natural resources stocks. These stocks
held relatively steady in the second quarter, although falling commodities
prices and weaker corporate earnings caused slight declines toward the end of
the quarter. The 8.17% return of the Fund's benchmark index (defined on page 15)
in the first half of 1996 reflected the overall performance of natural resources
stocks.

The most significant price movements among individual commodities occurred in
the grain and energy sectors. Severe weather was the main factor--a cold winter
in the U.S. led to soaring oil and gasoline prices, while extremes of heat and
storms caused grain prices to surge. The Goldman Sachs Commodities Index (GSCI),
which is dominated by energy and grains, rose by more than 20% over the first
six months of the year. Other commodities prices were relatively stable during
the six-month period.

ENERGY

Overall, energy stocks produced stronger returns than other natural resources
stocks. The energy sector is dominated by oil, which experienced a great deal of
price volatility in the first half of 1996. The price of oil surged by 30% in
the first quarter of the year, reaching its highest level since the Persian Gulf
War. An unusually cold winter and production problems in the Gulf of Mexico and
the North Sea led to supply shortages and 20-year lows in U.S. oil inventories
(see the accompanying graph). In the second quarter, the price of oil fell back
as Iraq and the U.N. reached an agreement to allow Iraq to sell a limited amount
of oil, ending a ban that has existed since the Gulf War.

[mountain graph on right side of page]
U.S. Oil Inventories
(millions of barrels)
6/86-6/96
[graph data]
6/86 323.927
9/86 335.8
12/86 328.294
3/87 329.533
6/87 325.577
9/87 336.733
12/87 359.003
3/88 344.521
6/88 358.226
9/88 324.247
12/88 334.416
3/89 324.578
6/89 334.138
9/89 333.34
12/89 341.804
3/90 362.76
6/90 384.303
9/90 354.644
12/90 328.595
3/91 341.476
6/91 349.128
9/91 339.521
12/91 325.511
3/92 342.646
6/92 330.796
9/92 322.787
12/92 321.501
3/93 338.939
6/93 353.01
9/93 327.458
12/93 341.604
3/94 335.833
6/94 327.363
9/94 332.478
12/94 329.554
3/95 337.302
6/95 320.748
9/95 304.275
12/95 303.346
3/96 297.765
6/96 314.417

Source: American Petroleum Insitute

GLOBAL NATURAL RESOURCES FUND
MARKET SUMMARY
(Continued from the previous page)

Energy stocks were largely unaffected by the short-term supply shocks that
whipsawed the price of oil. Integrated oil companies continued to struggle with
historically low refining and marketing profit margins, but they began to see
signs of improvement in the first half of 1996. In particular, profits from
refinery operations increased as gasoline prices remained high throughout the
six-month period. Strong summer demand helped support higher gasoline prices,
which tend to lag behind changes in the price of oil.

BASIC MATERIALS

Basic materials stocks produced mixed returns during the first six months of the
year. Metals stocks were affected by supply and demand imbalances and volatile
metals prices. The price of copper plummeted by 25% in June (see the
accompanying graph) after one of the world's biggest copper traders revealed
hidden losses estimated at $1.8 billion. In addition, industry analysts reported
that demand for copper was lower than expected, while supply from Eastern
European nations was unexpectedly strong. As the price of copper fell, investors
sold copper company stocks in anticipation of lower profit margins for copper
producers.

[mountain graph on right side of page. graph data described below]

The prices of other industrial metals fell in sympathy with copper, but the
stocks of metal producers took their cues from other sources. Aluminum company
stocks declined as plans to get idle production facilities up and running were
postponed. Nickel producers, on the other hand, benefited from excess demand for
stainless steel, and their stocks posted strong gains.

Among other basic materials stocks, steel companies continued to experience low
profit levels despite operating at 95% of capacity. Price contracts in the steel
industry typically cover a full year of production, and the existing contracts
from mid-1995 locked in relatively low prices for steel. Earnings should improve
when new contracts are negotiated later this year. Paper prices have been
depressed by high inventories among paper companies, and this has led to stock
price declines in this sector. However, the recent upswing in U.S. economic
growth should help reduce excess inventories and lead to firmer pricing
patterns.

[graph data]
Spot Price of Copper
(cents/lb.)
1/96-6/96
132
129
120
124
122
122
123
118
121
119
126
123
121
121
121
120
129
132
130
134
125
124
125
121
104
110
95

Source: American Metals Market

GLOBAL NATURAL RESOURCES FUND
MANAGEMENT DISCUSSION
with Bill Martin, Portfolio Manager, and Joe Sterling,
Associate Portfolio Manager

Q: How did the Fund perform during the first half of 1996?

A: The Fund's return trailed behind that of its benchmark (defined on page
15), and it also underperformed relative to other natural resources
funds. For the six-month period ended June 30, 1996, the Fund's total
return was 7.13%, compared to the 8.17% return of its benchmark and the
17.09% average total return for the funds in Lipper's "Natural
Resources Funds" category. (See the table at the bottom of this page
for comparisons of the Fund's one-year and life-of-fund returns to the
average returns of its peer group.)

Q: Why did the Fund underperform compared to other natural resources
funds?

A: The Fund is managed to track the performance of a market-weighted index
of natural resources stocks, so the Fund's holdings are primarily
focused on large natural resources companies based in countries with
well-developed economies. This structure is intended to provide
investors with a broad representation of the global natural resources
market. Other natural resources funds are not as broad--they typically
hold a higher percentage of small-cap natural resources stocks, which
benefited from strong investor demand in the first half of 1996. In
addition, they tend to be less industry-neutral than the Fund, which
means they can concentrate more of their portfolios in specific
industries or market sectors.

Q: How was the Fund positioned during the first half of the year?

A: The Fund's portfolio didn't stray too far from its benchmark index in
terms of industry and country allocations. Our main overweighted
position compared to the benchmark was in non-ferrous metals (aluminum,
copper, nickel, etc.) stocks. We overweighted this sector to take
advantage of some merger activity. In particular, we overweighted
Diamond Fields Resources, a Canadian metals producer, (continued on
next page)

LIPPER PERFORMANCE COMPARISON

Lipper Analytical Services (Lipper) is an independent mutual fund ranking
service located in Summit, NJ. Rankings are based on average annual total
returns for the periods ended 6/30/96 for the funds in Lipper's "Natural
Resources Funds" category.
1 YEAR LIFE OF FUND+

The Fund: 14.57% 9.86%
Category Average: 25.26% 14.50%
The Fund`s Ranking: 30 out of 37 24 out of 32

+ from September 15, 1994, to June 30, 1996

Total returns are based on historical performance and do not guarantee future
results.

GLOBAL NATURAL RESOURCES FUND
MANAGEMENT DISCUSSION
(Continued from the previous page)

which benefited from an acquisition offer from Inco, a Canadian copper
company.

Q: Looking ahead, what's your outlook for natural resources stocks for the
remainder of 1996?

A: In general, the outlook is favorable for natural resources stocks. The
level of global economic development is a major factor in determining
demand for the products of natural resources companies, and the
economic outlook is mostly positive. Although U.S. economic growth has
been steady, Germany and Japan hold the keys to global economic
recovery. In Germany, we expect a rebound from recent sluggish growth
levels. The weakening of the German currency during the first half of
this year should boost exports, which make up approximately 65% of the
German economy. The Japanese economy should continue to strengthen in
1996, though we have some doubts about the sustainability of its
recovery. Declining capital and public sector expenditures, a
struggling financial sector and a hike in the consumption tax could
restrain Japan's economy over the long term.

Q: With this outlook in mind, what are your plans for the Fund over the
next six months?

A: We're focusing on peripheral natural resources companies that stand to
benefit indirectly from favorable market trends. For example,
integrated oil companies are taking advantage of higher oil prices by
expanding their drilling and production operations. As a result, we're
buying the stocks of energy services companies, which provide the tools
for drilling and production. Another example is fertilizer
companies--extreme weather conditions hurt crop yields and drove grain
prices higher, and many growers are increasing late-season planting to
take advantage of the higher prices. We also favor paper and steel
companies, which have been battered recently and now appear to be
undervalued compared to other sectors. In particular, we like U.S.
steel companies, which are well managed and should benefit from recent
technological upgrades to their facilities.

Q: What about emerging markets?

A: We look for opportunities in these markets on a case-by-case basis.
Most emerging markets are not represented in our benchmark index, so we
want to make sure we're being rewarded for straying from the index.
Going forward, Dow Jones may add some emerging markets to the Fund's
benchmark; they already plan to include Taiwan later this year. This
may provide more opportunities to add emerging market stocks to the
Fund's portfolio.

INVESTMENT FUNDAMENTALS
BENCHMARK INDEXES
GLOBAL GOLD FUND

Until February 12, 1996, the Fund's benchmark index was the Benham North
American Gold Equities Index, a proprietary index consisting of 30 North
American companies whose revenues are derived primarily from gold production. On
February 12, 1996, Fund shareholders approved changes to the Fund's investment
objective, name and benchmark index to reflect the globalization of gold
production. As a result, the Fund's current benchmark index is the FT-SE Gold
Mines Index* (the Index). The Index consists of 31 gold mining companies in five
countries and is considered a broad measure of the worldwide gold equities
market.

FT-SE GOLD MINES INDEX*

TOP TEN HOLDINGS (As of June 30, 1996)

COMPANY COUNTRY WEIGHT

Barrick Gold Corporation Canada 18.7%
Placer Dome, Inc. Canada 11.5%
Newmont Mining Corp. United States 10.9%
Driefontein Consolidated Ltd. South Africa 5.1%
Homestake Mining Co. United States 5.0%
Ashanti Goldfields Ghana 3.4%
Santa Fe Gold Corporation United States 3.3%
Vaal Reefs Exploration & Mining South Africa 3.2%
Echo Bay Mines, Ltd. Canada 2.9%
Kloof Gold Mining Co. Ltd. South Africa 2.7%
TOTAL WEIGHTING OF TOP TEN 66.7%

GEOGRAPHIC COMPOSITION (As of June 30, 1996)
[pie chart]

Canada: 43.5%
South Africa: 23.9%
United States: 18.1%
Australia: 11.1%
Ghana: 3.4%

* The FT-SE Gold Mines Index is calculated by FT-SE International Limited in
conjunction with the Institute of Actuaries and the Faculty of Actuaries. FT-SE
International Limited does not sponsor, endorse or promote the Fund.

INVESTMENT FUNDAMENTALS
BENCHMARK INDEXES
(Continued from the previous page)

GLOBAL NATURAL RESOURCES INDEX FUND

The Fund's benchmark index (the Index) is derived from the Energy and Basic
Materials sectors of the Dow Jones World Stock Index* (DJWSI). The DJWSI was
created by the editors of The Wall Street Journal on January 5, 1993. The DJWSI
consists of 2,800 stocks in 29 countries and is divided into nine broad market
sectors. We created the Index using the companies represented in two of these
sectors--Basic Materials and Energy. In creating the Index, however, we altered
the Basic Materials sector to exclude chemical companies because they do not
stockpile natural resources. As of June 30, 1996, the Index consisted of 315
companies in 26 countries.

BASIC MATERIALS AND ENERGY SECTORS OF THE DJWSI*

TOP TEN HOLDINGS (As of June 30, 1996)

COMPANY COUNTRY WEIGHT

Exxon Corporation United States 9.4%
Royal Dutch Petroleum Netherlands 7.2%
Shell Transportation and Trading United States 4.2%
British Petroleum United Kingdom 4.2%
Mobil Corporation United States 3.8%
Chevron Corporation United States 3.3%
Amoco Corporation United States 3.1%
Nippon Steel Corporation Japan 2.1%
Texaco, Inc. United States 1.9%
Schlumberger, Inc. United States 1.8%
TOTAL WEIGHTING OF TOP TEN 41.0%

GEOGRAPHIC COMPOSITION (As of June 30, 1996)
[pie chart]

United States: 40.8%
Europe: 27.8%
Asia/Pacific: 19.0%
Americas (excluding U.S.): 6.5%
South Africa: 5.9%

* The Dow Jones World Stock Index is the property of Dow Jones & Company, Inc.
and is not affiliated with the Fund.

<TABLE>
<CAPTION>
BENHAM EQUITY FUNDS
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED),
AND THE YEARS ENDED DECEMBER 31 (EXCEPT AS NOTED)

BENHAM GLOBAL GOLD FUND
-------------------------------------------------------------------------------------------
JUNE 30, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1996 1995 1994 1993 1992 1991 1990 1989 1988+
----- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA
- --------------
NET ASSET VALUE AT BEGINNING OF PERIOD...$ 12.37 11.33 13.67 7.55 8.28 9.35 11.71 9.05 10.00
Income From Investment Operations
Net Investment Income................. .0101 .0226 .0299 .0124 .0181 .0247 .0006 .0372 .0895
Net Realized and Unrealized Gains
(Losses) on Investments............ .5399 1.0259 (2.3213) 6.1197 (.7324) (1.0753) (2.2691) 2.7547 (.9688)
------ ------ ------ ------ ------ ------ ------ ----- -----
Total Income (Losses) From
Investment Operations.............. .5500 1.0485 (2.2914) 6.1321 (.7143) (1.0506) (2.2685) 2.7919 (.8793)
------ ------ ------ ------ ------ ------ ------ ----- -----
Less Distributions
Dividends from Net Investment Income.. 0 (.0085) (.0214) (.0114) (.0157) (.0194) (.0006) (.0372) (.0666)
Distributions from Net Realized
Capital Gains..................... 0 0 0 (.0007) 0 0 (.0909) (.0947) (.0041)
Distributions in Excess of Net Realized
Capital Gains...................... 0 0 (.0272) 0 0 0 0 0 0
------ ------ ------ ------ ------ ------ ------ ----- -----
Total Distributions................ 0 (.0085) (.0486) (.0121) (.0157) (.0194) (.0915) (.1319) (.0707)
------ ------ ------ ------ ------ ------ ------ ----- -----
NET ASSET VALUE AT END OF PERIOD.........$ 12.92 12.37 11.33 13.67 7.55 8.28 9.35 11.71 9.05
====== ====== ====== ====== ====== ====== ====== ===== =====
TOTAL RETURN*............................ 4.45% 9.25% (16.75)% 81.22% (8.65)% (11.23)% (19.43)% 29.93% (9.19)%
- ------------
SUPPLEMENTAL DATA AND RATIOS
- ----------------------------
Net Assets at End of Period
(in thousands of dollars)............$513,288 537,693 568,030 616,347 163,777 124,436 104,163 61,786 7,683
Ratio of Expenses to Average
Daily Net Assets++.................... .64%** .61% .61% .72% .75% .75% .96% 1.00% 0%
Ratio of Net Investment Income to Average
Daily Net Assets...................... .14%** .17% .20% .23% .23% .30% .01% .36% 2.04%**
Portfolio Turnover Rate.................. 35.00% 28.40% 41.67% 28.38% 52.57% 56.33% 20.96% 34.39% .92%
Average Commission Paid per Share Traded. $ .026 .035 N/A N/A N/A N/A N/A N/A N/A

- -------------------

+ Commencement of operations for Benham Global Gold Fund was August 17, 1988.

++ The ratios for the periods beginning with the year ended December 31, 1995, include expenses paid through
expense offset arrangements.

* Total return figures assume reinvestment of dividend and capital gain distributions and are not annualized.

** Annualized. (The period ended December 31, 1988, includes .76% from nonrecurring income.)
</TABLE>

See the accompanying notes to financial statements.

<TABLE>
<CAPTION>
BENHAM EQUITY FUNDS
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED),
AND THE YEARS ENDED DECEMBER 31 (EXCEPT AS NOTED)
Benham Global
Natural Resources Index Fund
-----------------------------
June 30, Dec. 31, Dec. 31,
1996 1995 1994+
----- ----- -----
<S> <C> <C> <C>
PER-SHARE DATA
- --------------
NET ASSET VALUE AT BEGINNING OF PERIOD......................................... $10.66 9.61 10.00
Income from Investment Operations
Net Investment Income....................................................... .11 .16 .07
Net Realized and Unrealized Gains (Losses) on Investments................... .65 1.22 (.42)
------- ------- -------
Total Income (Losses) From Investment Operations......................... .76 1.38 (.35)
------- ------- -------
Less Distributions
Dividends from Net Investment Income........................................ (.09) (.16) (.04)
Distributions from Net Realized Capital Gains............................... 0 (.17) 0
------- ------- -------
Total Distributions...................................................... (.09) (.33) (.04)
------- ------- -------
NET ASSET VALUE AT END OF PERIOD............................................... $ 11.33 10.66 9.61
======= ======= =======
TOTAL RETURN*.................................................................. 7.13% 14.41% (3.48)%
- ------------
SUPPLEMENTAL DATA AND RATIOS
- ----------------------------
Net Assets at End of Period (in thousands of dollars).......................... $51,019 30,157 $18,972
Ratio of Expenses to Average Daily Net Assets++................................ .76%** .76% 0%
Ratio of Net Investment Income to Average Daily Net Assets..................... 2.33%** 2.02% 2.74%**
Portfolio Turnover Rate........................................................ 17% 39% 0%
Average Commission Paid per Share Traded....................................... $.039 .028 N/A

- -------------------
+ Commencement of operations for Benham Global Natural Resources Index Fund was September 15, 1994.

++ The ratios for the periods beginning with the year ended December 31, 1995, include expenses paid through
expense offset arrangements.

* Total return figures assume reinvestment of dividend and capital gain distributions and are not annualized.

** Annualized.

</TABLE>

See the accompanying notes to financial statements.

<TABLE>
<CAPTION>
BENHAM EQUITY FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1996
(UNAUDITED)
BENHAM
Benham Global Natural
Global Resources
Gold Fund Index Fund
--------- ---------
ASSETS
<S> <C> <C>
Investment securities (identified cost $442,215,042 and $46,926,909, respectively) (Note 4).. $512,713,602 50,452,227
Cash denominated in foreign currencies (cost $162,143)....................................... 0 162,425
Cash......................................................................................... 0 37,973
Investment in affiliated money market fund (Note 2).......................................... 1,823,859 0
Interest and dividends receivable............................................................ 269,675 163,514
Receivable for fund shares sold.............................................................. 0 121,270
Prepaid expenses and other assets............................................................ 6,465 31,820
Receivable for securities sold............................................................... 29,310 126,202
----------- ----------
Total assets............................................................................... 514,842,911 51,095,431
----------- ----------
LIABILITIES
Payable for securities purchased............................................................. 0 40,546
Payable for fund shares redeemed............................................................. 131,605 925
Payable to affiliates (Note 2)............................................................... 281,687 19,676
Bank overdraft............................................................................... 1,137,480 0
Accrued expenses and other liabilities....................................................... 3,723 14,956
----------- ----------
Total liabilities.......................................................................... 1,554,495 76,103
----------- ----------
NET ASSETS $513,288,416 51,019,328
=========== ==========
Net assets consist of:
Capital (par value and paid in surplus)...................................................... $428,784,941 47,254,035
Undistributed net investment income.......................................................... 430,416 113,252
Net undistributed realized gain on investments and foreign currency transactions............. 13,573,286 126,328
Net unrealized appreciation on investments and translation of assets and liabilities
in foreign currencies (Note 4)............................................................. 70,499,773 3,525,713
----------- ----------
Net assets...................................................................................... $513,288,416 51,019,328
=========== ==========
Shares of beneficial interest outstanding....................................................... 39,736,895 4,501,283
=========== ==========
Net asset value, offering price and redemption price per share.................................. $12.92 11.33
====== =====
- -------------------

* See the accompanying notes to financial statements.

</TABLE>
18

<TABLE>
<CAPTION>
BENHAM EQUITY FUNDS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
Benham Benham Global
Global Natural Resources
Gold Fund Index Fund
--------- ---------
INVESTMENT INCOME
<S> <C> <C>
Dividends (net of foreign taxes withheld of $166,394 and $52,770, respectively).............. $ 1,804,829 603,646
Interest..................................................................................... 541,040 65,516
---------- ----------
Total Income............................................................................... 2,345,869 669,162
---------- ----------
EXPENSES (NOTE 2)
Investment advisory fees..................................................................... 920,112 75,919
Administrative fees.......................................................................... 291,126 20,643
Transfer agency fees......................................................................... 342,782 56,562
Printing and postage......................................................................... 178,517 8,845
Custodian fees............................................................................... 62,927 21,894
Auditing and legal fees...................................................................... 18,518 2,547
Registration and filing fees................................................................. 40,399 16,424
Directors' fees and expenses................................................................. 9,761 4,525
Other operating expenses..................................................................... 84,917 16,129
---------- ----------
Total expenses............................................................................. 1,949,059 223,488
Amount waived (Note 2).......................................................................... 0 (55,792)
Custodian earnings credit (Note 5).............................................................. (33,606) (5,481)
---------- ----------
Net expenses................................................................................. 1,915,453 162,215
---------- ----------
Net investment income...................................................................... 430,416 506,947
---------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS (NOTE 4)
Net realized gain (loss) during the period on:
Investments.................................................................................. 52,231,787 94,468
Foreign currency transactions................................................................ (42,346) (7,186)
---------- ----------
52,189,441 87,282
---------- ----------
Change in net unrealized appreciation (depreciation) during the period on:
Investments.................................................................................. (25,818,790) 1,885,059
Foreign currency transactions................................................................ 760 2,314
---------- ----------
(25,818,030) 1,887,373
---------- ----------
Net realized and unrealized gain on investments and foreign currency transactions............... 26,371,411 1,974,655
---------- ----------
Net increase in assets resulting from operations................................................ $26,801,827 2,481,602
========== ==========
- -------------------

See the accompanying notes to financial statements.
</TABLE>

<TABLE>
<CAPTION>
BENHAM EQUITY FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED), AND THE YEAR ENDED DECEMBER 31, 1995

Benham Benham Global Natural
Global Gold Fund Resources Index Fund
------------------ ------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
Net investment income......................................................$ 430,416 990,117 506,947 479,241
Net realized gain (loss) on investments and foreign currency transactions.. 52,189,441 (18,376,439) 87,282 407,901
Net change in unrealized appreciation (depreciation) of investments and
foreign currency transactions............................................ (25,818,030) 62,195,695 1,887,373 2,144,025
----------- ----------- ----------- ----------
Change in net assets derived from investment activities.................. 26,801,827 44,809,373 2,481,602 3,031,167
----------- ----------- ----------- ----------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income...................................................... 0 (374,822) (399,493) (380,010)
Net realized gain on investments........................................... 0 0 0 (375,581)

Total distributions to shareholders...................................... 0 (374,822) (399,493) (755,591)
----------- ----------- ----------- ----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 3):
Proceeds from sales of shares.............................................. 360,568,407 634,985,010 37,782,456 37,771,225
Net asset value of dividends reinvested.................................... 0 339,282 384,126 721,605
Cost of shares redeemed.................................................... (411,774,958) (710,095,220) (19,386,821) (29,582,694)
----------- ----------- ----------- ----------
Change in net assets derived from capital share transactions............. (51,206,551) (74,770,928) 18,779,761 8,910,136

Net increase (decrease) in net assets.................................... (24,404,724) (30,336,377) 20,861,870 11,185,712
----------- ----------- ----------- ----------
NET ASSETS:
Beginning of period........................................................ 537,693,140 568,029,517 30,157,458 18,971,746
----------- ----------- ----------- ----------
End of period..............................................................$ 513,288,416 537,693,140 51,019,328 30,157,458
=========== =========== =========== ==========
- -------------------

See the accompanying notes to financial statements.
</TABLE>

BENHAM EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(UNAUDITED)

(1) SIGNIFICANT ACCOUNTING POLICIES

Benham Equity Funds (BEF) is registered under the Investment Company Act of 1940
as an open-end management investment company. Benham Global Gold Fund (BGGF) and
Benham Global Natural Resources Index Fund (BGNRIF) are two of the five Funds
composing BEF. BGGF seeks to realize a total return consistent with investment
in securities of companies that are engaged in mining, processing, fabricating,
or distributing gold or other precious metals worldwide.

On February 12, 1996, shareholders of BGGF approved proposals to change the
Fund's investment objective, name and benchmark index. Prior to that date, the
Fund (previously named Benham Gold Equities Index Fund), focused on investments
in North American gold-producing companies. Accordingly, it's benchmark index
was changed from the Benham North American Gold Equities Index to the FT-SE Gold
Mines Index, which is composed of gold company stocks from around the world.

BGNRIF seeks to realize a total return consistent with investment in companies
that are engaged in the natural resources industries. BEF is authorized to issue
a total of 20 billion shares of capital stock. Each Fund is authorized to issue
two billion shares. Significant accounting policies followed by BEF are
summarized below.

VALUATION OF INVESTMENT SECURITIES--Investment securities, both foreign and
domestic, are valued at market as provided by an independent pricing service.
The pricing service values equity securities at the closing price on their
primary exchange. Securities traded over-the-counter are valued at the mean
between the latest bid and asked prices. Prices of non-U.S. dollar denominated
securities are converted into U.S. dollars on a daily basis. When valuations are
not readily available, securities are valued at fair value as determined in good
faith by the board of directors. Security transactions are recorded on the date
the order to buy or sell is executed. Realized gains and losses from security
transactions are determined on the basis of identified cost.

INCOME TAXES--Each Fund of BEF intends to qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code. By complying with these
provisions, each Fund will not be subject to federal or state income or
franchise taxes to the extent that it distributes substantially all of its net
investment income and net realized capital gains to shareholders. Accordingly,
no provision for income taxes has been made.

As of December 31, 1995, BGGF had a tax capital loss carryover of $36,626,815.
Loss carryovers not offset by realized gains will expire eight years after the
fiscal year in which they were realized. BGGF's capital loss carryover will
expire December 31, 2003. No capital gain distributions will be made by BGGF
until all of its loss carryover has been offset or expired.

The character of distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for
federal income tax purposes. These differences are primarily due to differing
treatments for foreign currency transactions and wash sales.

SHARE VALUATION--Each Fund's net asset value per share is computed by dividing
the value of its total assets, less its liabilities, by the total number of
shares outstanding at the beginning of each business day. Net asset values
fluctuate daily in response to changes in the market value of investments.

INVESTMENT INCOME AND SHAREHOLDER DISTRIBUTIONS--Dividend income from investment
securities is recorded on the ex-dividend date. Interest income and expenses are
accrued daily. Both BGGF and BGNRIF distribute dividends, if any, semiannually.
Each Fund distributes net short-term and long-term capital gains, if any, once
per year. Distributions may be paid in cash or reinvested as additional shares.

FOREIGN CURRENCY TRANSLATIONS--The functional currency of the Funds is the U.S.
dollar. Foreign-currency-denominated assets and liabilities are translated into
U.S. dollars at current exchange rates each day the Funds are open for business.
Purchases and sales of securities and income and expenses are translated into
U.S. dollars at prevailing exchange rates on the dates these transactions occur.

The Funds do not isolate that portion of the results of operations resulting
from changes in the foreign exchange rates on investments from the fluctuations
arising from changes in the market prices of securities held. Such fluctuations
are included with the net realized and unrealized gain or loss on investments.

Net realized gains on foreign currency transactions represent exchange gains or
losses from sales of portfolio securities, sales of foreign currencies, and the
difference between asset and liability amounts initially stated in foreign
currencies and the U.S. dollar value of the amounts actually received or paid.
Net unrealized currency gains and losses from valuing foreign-currency
denominated assets and liabilities at period-end exchange rates are reflected as
a component of net unrealized appreciation (depreciation) on investments and
translation of assets and liabilities in foreign currencies.

ORGANIZATION COSTS--Costs incurred by BGNRIF in connection with the
organization, initial registration, and public offering of shares are being
amortized on a straight-line basis over a five-year period ending September
1999.

(2) INVESTMENT ADVISORY FEE AND OTHER
TRANSACTIONS WITH AFFILIATES

Benham Management Corporation (BMC) is a wholly owned subsidiary of Twentieth
Century Companies, Inc. (TCC). BMC's former parent company, Benham Management
International, Inc., merged into TCC on June 1, 1995. Each Fund pays BMC a
monthly investment advisory fee based on its pro rata share of the dollar amount
derived from applying BEF's average daily net assets to the following annualized
investment advisory fee schedule.

0.50% of the first $100 million
0.45% of the next $100 million
0.40% of the next $100 million
0.35% of the next $100 million
0.30% of the next $100 million
0.25% of the next $1 billion
0.24% of the next $1 billion
0.23% of the next $1 billion
0.22% of the next $1 billion
0.21% of the next $1 billion
0.20% of the next $1 billion
0.19% of average daily net assets over $6.5 billion

Additionally, BGNRIF pays the following annual investment advisory fee to BMC
based on its average daily net assets.

.05% of the first $500 million
.04% of the next $500 million
.03% of average daily net assets over $1 billion

BMC provides BEF with all investment advice. Twentieth Century Services, Inc.
pays all compensation of BEF officers and directors who are officers or
directors of TCC or any of its subsidiaries. In addition, promotion and
distribution expenses are paid by BMC.

BEF has an Administrative Services and Transfer Agency Agreement with Benham
Financial Services, Inc. (BFS), a wholly owned subsidiary of TCC. Under the
agreement, BFS provides substantially all administrative and transfer agency
services necessary to operate the Funds. Fees for these services are based on
transaction volume, number of accounts, and average net assets of all funds in
The Benham Group.

BEF has an additional agreement with BMC pursuant to which BMC established a
contractual expense guarantee that limits each Fund's expenses (excluding
extraordinary expenses such as brokerage commissions and taxes and the impact of
custodian earnings credits) to .75% of the Fund's average daily net assets. The
agreement provides further that BMC may recover amounts (representing expenses
in excess of the Fund's expense guarantee rate) absorbed during the preceding 11
months, if, and to the extent that, for any given month, the Fund's expenses are
less than the expense guarantee rate in effect at that time. The expense
guarantee rate is renewed annually in June.

The payables to affiliates as of June 30, 1996, based on the above agreements
were as follows:
Benham
Benham GLOBAL NATURAL
GLOBAL RESOURCES
GOLD FUND INDEX FUND
---------- ----------
Investment Advisor.............................. $137,162 4,974
Administrative Services......................... 91,666 4,058
Transfer Agent.................................. 52,859 10,644
--------- ---------
$281,687 19,676
========= =========

As of June 30, 1996, BGGF had invested in shares of Capital Preservation Fund,
Inc. (CPF), a money market fund advised by BMC. The terms of such transactions
were identical to those with nonrelated entities except that, to avoid
duplicative investment advisory fees and administrative fees, BGGF did not pay
BMC investment advisory fees or BFS administrative fees with respect to assets
invested in shares of CPF.

BEF has a distribution agreement with Benham Distributors, Inc. (BDI), which is
responsible for promoting sales of and distributing the Funds' shares. BDI is a
wholly owned subsidiary of TCC.

(3) SHARE TRANSACTIONS

Transactions for the six months ended June 30, 1996, and the year ended December
31, 1995, were as follows:

Benham Benham GLOBAL
GLOBAL NATURAL RESOURCES
GOLD FUND INDEX FUND
----------------- -----------------
1996 1995 1996 1995
-------- -------- -------- --------
Shares sold.................. 24,765,157 52,760,173 3,364,420 3,649,431
Reinvestment of dividends.... 0 27,188 33,964 68,911
---------- ---------- --------- ---------
24,765,157 52,787,361 3,398,384 3,718,342
Less shares redeemed.........(28,512,274)(59,426,047) (1,726,645) (2,862,561)
---------- ---------- --------- ---------
Net increase (decrease)
in shares.................... (3,747,117) (6,638,686) (1,671,739) 855,781
========== ========== ========= =========

(4) INVESTMENT SECURITIES--PURCHASES AND SALES

Purchases and sales of investment securities, excluding short-term securities,
for the six months ended June 30, 1996, were as follows:

Benham
Benham GLOBAL NATURAL
GLOBAL RESOURCES
GOLD FUND INDEX FUND
--------- ---------
Purchases..................................... $212,884,572 25,311,607
============ ==========
Sales Proceeds................................ $266,653,435 7,050,953
============ ==========

As of June 30, 1996, unrealized appreciation (depreciation) was as follows:
Benham
Benham GLOBAL NATURAL
GLOBAL RESOURCES
GOLD FUND INDEX FUND
--------- ---------
Appreciated securities ........................ $81,470,529 4,557,052
Depreciated securities......................... (10,971,968) (1,031,734)
------------ ---------
Net unrealized appreciation.................... $70,498,561 3,525,318
============ =========

As of June 30, 1996, the cost of investment securities for federal income tax
purposes was $448,531,313 (BGGF) and $46,985,415 (BGNRIF). Gross unrealized
appreciation and depreciation of investments, based on this cost, were:

Benham
Benham GLOBAL NATURAL
GLOBAL RESOURCES
GOLD FUND INDEX FUND
--------- ---------
Appreciated securities......................... $76,289,486 4,527,321
Depreciated securities......................... (12,107,196) (1,060,509)
------------ ---------
Net unrealized appreciation ................... $64,182,290 3,466,812
============ =========

(5) EXPENSE OFFSET ARRANGEMENTS

Each Fund's Statement of Operations reflects custodian earnings credits. These
amounts are used to offset the custody fees payable by the Funds to the
custodian bank. The credits are earned when the Fund maintains a balance of
uninvested cash at the custodian bank. Beginning with the year ending December
31, 1995, the ratios of expenses to average daily net assets shown in the
Financial Highlights are calculated as if these credits had not been earned.

BENHAM EQUITY FUNDS
Benham Global Gold Fund
Schedule of Investment Securities
June 30, 1996
(Unaudited)

SHARES VALUE
------- -----------

COMMON STOCKS AND WARRANTS

AUSTRALIA -- 8.4%
1,911,000 Acacia Resources Limited ..................... $ 4,509,291
5,100,000 Gold Mines of Kalgoorlie Ltd. ................ 5,575,853
5,800,000 Golden Shamrock Mining1 ...................... 5,200,669
1,812,000 Newcrest Mining Limited ...................... 7,268,666
100,000 North Flinders Mines Ltd. .................... 663,848
1,700,000 Placer Pacific Limited ....................... 2,473,700
1,350,000 Plutonic Resources Ltd. ...................... 6,901,976
2,550,000 Poseidon Limited ............................. 6,277,849
600,000 Sons of Gwalia NL ............................ 4,247,370
------------
43,119,222
------------
CANADA -- 43.2%
256,420 Agnico Eagle Mines, Ltd. ..................... 4,166,825
145,000 Banro Resource Corporation Warrants2 ......... 846,006
2,714,066 Barrick Gold Corp. ........................... 73,619,040
200,000 Bre-X Minerals Ltd. .......................... 3,343,967
537,400 Cambior, Inc. ................................ 7,113,473
150,000 Dayton Mining Corporation .................... 901,991
1,264,800 Echo Bay Mines, Ltd. ......................... 13,596,600
100,000 Eldorado Gold Corporation Ltd. ............... 549,994
283,200 Euro-Nevada Mining Co., Ltd. ................. 12,149,280
126,800 Glamis Gold, Ltd. ............................ 903,450
200,000 Goldcorp, Inc. ............................... 3,314,634
250,000 Greenstone Resources Ltd. .................... 2,933,304
765,000 Hemlo Gold Mines, Inc. ....................... 8,190,855
350,000 Indochina Goldfields2 ........................ 3,015,803
848,800 Kinross Gold Corp.1 .......................... 6,410,986
466,300 Miramar Mining1 .............................. 2,513,346
1,802,600 Placer Dome, Inc. ............................ 43,037,075
441,100 Prime Resources1 ............................. 3,267,228
1,219,500 Royal Oak Mines1 ............................. 4,496,906
49,300 Scorpion Minerals, Inc. ...................... 171,727
470,000 South Pacific Resources Corporation .......... 2,154,145
2,232,200 TVX Gold, Inc.1 .............................. 16,368,723
69,000 Teck Corp., B ................................ 1,416,777
838,100 Viceroy Resources Corp.1 .................... 4,855,113
750,000 Yamana Resources, Inc. ....................... 1,911,231
------------
221,248,479
------------
GHANA -- 1.9%
486,000 Ashanti Goldfields............................ 9,598,500
------------
SOUTH AFRICA -- 19.9%
855,000 Beatrix Mines Limited ........................ 6,860,928
1,710,000 Driefontein Consolidated Ltd. ................ 22,902,667
760,000 Elandsrand Gold Mining Company Ltd. .......... 4,299,735
475,000 Free State Consolidated Gold Mines
Limited ................................... 4,469,750
950,000 Hartebeestfontein Gold Mining
Company Limited ........................... 3,202,863
1,045,000 Kloof Gold Mining Company Ltd. ............... 9,893,777
475,000 Randfontein Estates Gold Mining
Company Witwatersrand Ltd. .................. 2,906,708
190,000 Southvaal Holdings Limited ................... 6,800,600
190,000 Vaal Reefs Exploration & Mining
Company Ltd. ................................ 15,509,756
950,000 Western Areas Gold Mining Company Ltd. ....... 14,807,759
285,000 Western Deep Levels Limited .................. 10,529,962
-----------
102,184,505
-----------
26

SCHEDULE OF INVESTMENT SECURITIES - BENHAM GLOBAL GOLD FUND (Continued)
================================================================================

SHARES VALUE
------- -----------

UNITED STATES -- 25.9%
56,000 Amax Gold, Inc.1 ............................. $ 308,000
349,000 Battle Mountain Gold Co. ..................... 2,530,250
368,100 Crown Resources, Inc.1 ....................... 1,978,537
477,000 FMC Gold Co. ................................. 2,146,500
205,500 Freeport McMoran Copper & Gold, Inc., A ...... 6,139,313
447,100 Getchell Gold Corporation .................... 14,754,300
293,800 Hecla Mining Co.1 ............................ 2,056,600
1,181,276 Homestake Mining Co. ......................... 20,229,352
986,088 Newmont Mining Corp. ......................... 48,688,095
296,800 Pegasus Gold, Inc.1 .......................... 3,635,800
1,360,900 Santa Fe Gold Corp. 1 ........................ 19,222,712
500,000 Stillwater Mining Co.1,2 ..................... 11,073,437
------------
132,762,896
------------
TOTAL COMMON STOCKS AND WARRANTS-- 99.3% ............... 508,913,602
(cost $438,415,042)

TEMPORARY CASH INVESTMENTS -- 0.7%
Repurchase Agreement (Goldman Sachs Co., Inc.),
5.35%, due 07/01/96; collateralized by $2,870,000
par value U.S. Treasury Bonds, 11.75%,
due 02/15/10 (Delivery value $3,801,694) ............... 3,800,000
(cost $3,800,000) ----------

TOTAL INVESTMENT SECURITIES-- 100.0% ................... $512,713,602
(cost $442,215,042) ==========

- -------------------

1 Non-income producing.

2 The following securities were purchased under Rule 144A of the Securities Act
of 1933 and, unless registered under the Act or exempted from registration,
may only be sold to qualified institutional investors.

AVERAGE JUNE 30, 1996,
ACQUISITION COST PER MARKET PERCENTAGE OF
ISSUER DATE SHARE VALUE NET ASSETS
- ------------------- ----------- -------- -------- ------------

Banro Resource
Corporation
Warrants 06/18/96 $ 6.58 $ 846,006 0.7%

Indochina Goldfields 06/13/96 10.96 3,015,803 0.5

Stillwater Mining Co. 08/18/95 21.50 11,073,437 2.6
---------- ---
TOTAL $14,935,246 3.8%
========== ===

See the accompanying notes to financial statements.

BENHAM EQUITY FUNDS
Benham Global Natural Resources Index Fund
Schedule of Investment Securities
June 30, 1996
(Unaudited)

SHARES VALUE
------- -----------

COMMON STOCKS

ARGENTINA -- 0.83%
ENERGY
18,500 YPF Sociedad Anonima ADR ..................... $416,250
----------
AUSTRALIA -- 0.89%
BASIC MATERIALS
29,030 CRA Ltd....................................... 446,624
----------
AUSTRIA -- 1.00%
ENERGY
5,000 OMV........................................... 506,370
----------
CANADA -- 7.67%
BASIC MATERIALS
22,000 Alcan Aluminum Ltd. .......................... 671,000
17,000 Cominco Ltd. ................................. 365,500
43,000 Diamond Fields Resources, Inc.1 .............. 1,214,021
12,600 Placer Dome, Inc. ............................ 300,825
10,000 Potash Corp. Saskatchewan .................... 662,500
12,800 Rio Algom Ltd. ............................... 246,400
ENERGY
15,600 Norcen Energy Resources, Inc. ................ 273,983
18,600 Ranger Oil Ltd. .............................. 137,175
---------
3,871,404
---------
FINLAND -- 0.75%
BASIC MATERIALS
10,750 Outokumpu Oy ................................. 180,690
9,500 UPM Kymmene Oy ............................... 196,733
---------
377,423
---------
FRANCE -- 3.75%
BASIC MATERIALS
2,200 IMetal........................................ 311,936
ENERGY
9,100 Societe Elf Aquitaine ........................ 669,177
12,250 Total ........................................ 908,430
---------
1,889,543
---------
GERMANY -- 3.03%
BASIC MATERIALS
800 DeGussa AG ................................... 271,278
1,050 Thyssen AG ................................... 191,636
1,414 Viag AG ...................................... 559,158
ENERGY
13,000 RWE AG ....................................... 505,924
---------
1,527,996
---------
JAPAN -- 12.14%
BASIC MATERIALS
35,000 Hokuetsu Paper Mills ......................... 295,392
110,000 Kawasaki Steel Corporation ................... 396,442
17,000 Mitsubishi Paper ............................. 106,250
36,000 Mitsui Mining Company1 ....................... 201,679
60,000 Mitsui Mining & Smelting ..................... 245,256
226,000 NKK Corporation1 ............................. 684,599
49,000 New Oji Paper Company ........................ 422,938
47,000 Nippon Paper Industries ...................... 293,750
223,000 Nippon Steel Corporation ..................... 765,037
34,000 Nisshin Steel Company ........................ 131,843
136,000 Sumitomo Metal Industries .................... 416,935
35,000 Sumitomo Metal Mining ........................ 303,057

SCHEDULE OF INVESTMENT SECURITIES - BENHAM GLOBAL NATURAL RESOURCES INDEX FUND
(Continued)
================================================================================

SHARES VALUE
------- -----------

ENERGY
65,000 Cosmo Oil Company .............................. $ 402,099
15,000 General Sekiyu KK .............................. 132,071
100,000 Japan Energy Corporation ....................... 371,350
32,000 Mitsubishi Oil Company ......................... 272,993
64,000 Nippon Oil Company ............................. 433,868
17,000 Tonen Corporation .............................. 249,726
----------
6,125,285
----------
MALAYSIA -- 0.63%
BASIC MATERIALS
60,000 Land & General................................ 147,955
170,000 Malaysian Mining CP........................... 171,772
----------
319,727
----------
NETHERLANDS -- 7.04%
ENERGY
23,000 Royal Dutch Petroleum......................... 3,550,896
----------
NEW ZEALAND -- 0.93%
BASIC MATERIALS
111,600 Carter, Holt, Harvey ......................... 255,141
18,725 Fletcher Challenge Energy1 ................... 41,395
37,450 Fletcher Challenge Paper1 .................... 72,506
20,000 Steel and Tube Holdings ...................... 97,490
----------
466,532
----------
NORWAY -- 0.76%
ENERGY
26,200 Saga Petroleum, A............................. 384,669
----------
SINGAPORE -- 0.26%
BASIC MATERIALS
67,000 Natsteel...................................... 132,937
----------
SOUTH AFRICA -- 2.84%
BASIC MATERIALS
9,000 Anglo American Corp. of South Africa ......... 570,488
23,000 Driefontein Consolidated ..................... 308,048
40,000 Gencor ....................................... 147,789
8,000 Gold Fields of South Africa .................. 242,004
2,000 Vaal Reefs Exploration ....................... 163,261
----------
1,431,590
----------
SOUTH KOREA -- 0.53%
BASIC MATERIALS
11,000 Pohang Iron & Steel ADR ...................... 268,125
----------
SPAIN -- 1.77%
ENERGY
6,000 Petroleos (CIA Espania)....................... 201,521
20,000 Respol SA..................................... 695,143
----------
896,664
----------
SWEDEN -- 1.46%
BASIC MATERIALS
14,000 Assidoman .................................... 325,692
13,000 Stora Kopparbergs, A ......................... 171,278
19,000 Trelleborg AB ................................ 237,456
----------
734,426
----------
SWITZERLAND -- 0.65%
BASIC MATERIALS
400 Alusuisse Lonza............................... 329,900
----------
THAILAND -- 0.11%
ENERGY
2,000 Banpu Coal Company............................ 57,655
----------

SCHEDULE OF INVESTMENT SECURITIES - BENHAM GLOBAL NATURAL RESOURCES INDEX FUND
(Continued)
================================================================================

SHARES VALUE
------- -----------

UNITED KINGDOM -- 6.80%
BASIC MATERIALS
170,000 British Steel ................................ $433,737
75,000 Bunzl ........................................ 274,527
33,700 RTZ Corporation .............................. 498,121
ENERGY
172,000 British Petroleum............................. 1,505,928
49,000 Shell Transport & Trading..................... 716,670
----------
3,428,983
----------
UNITED STATES -- 44.97%
BASIC MATERIALS
7,000 Alumax, Inc.1 ................................ 212,624
6,300 Bowater, Inc. ................................ 237,037
12,999 Freeport McMoran Copper & Gold, B ............ 414,343
8,000 Freeport McMoran, Inc. ....................... 284,000
10,600 Halliburton Co. .............................. 588,300
10,000 Input / Output Inc.1 ......................... 323,750
12,600 International Paper Company .................. 464,625
6,800 Mead Corporation ............................. 352,750
9,100 Newmont Mining Corporation ................... 449,312
11,000 Nucor Corporation ............................ 556,875
3,000 Phelps Dodge Corporation ..................... 187,125
5,500 Reynolds Metals .............................. 286,687
16,000 Santa Fe Pacific Gold ........................ 226,000
10,500 Schnitzer Steel .............................. 276,938
8,000 Weyerhaeuser Company ......................... 340,000
7,500 Willamette Industries ........................ 445,312
ENERGY
5,400 Amerada Hess Corporation ..................... 289,575
17,600 Amoco Corporation ............................ 1,273,800
5,000 Anadarko Petroleum Corp. ..................... 290,000
6,200 Burlington Resources, Inc. ................... 266,600
32,100 Chevron Corporation .......................... 1,893,900
21,800 Dresser Industries, Inc. ..................... 643,100
10,000 El Paso Natural Gas Co. ...................... 385,000
13,000 Enron Corporation ............................ 531,375
44,000 Exxon Corporation ............................ 3,822,500
7,000 Louisiana Land & Exploration ................. 403,375
18,000 Mobil Corporation ............................ 2,018,250
20,100 Occidental Petroleum Corporation ............. 497,475
15,500 Oryx Energy Company1 ......................... 251,875
15,700 Phillips Petroleum Corporation ............... 657,438
14,000 Schlumberger, Inc. ........................... 1,179,500
7,000 Sonat, Inc. .................................. 315,000
13,500 Texaco, Inc. ................................. 1,132,312
11,100 Unocal Corporation ........................... 374,625
30,800 USX Marathon Group ........................... 619,850
4,000 Williams Companies ........................... 198,000
----------
22,689,228
----------
TOTAL COMMON STOCKS-- 98.81% 49,852,227
(cost $46,326,909) ----------

SHORT-TERM INVESTMENTS -- 1.19%
Repurchase Agreement (State Street Bank and Trust
Company), 5.35%, due 07/01/96; collateralized by
$635,000 par value U.S.Treasury Notes, 5.25%,
due 01/31/01 (Delivery value $600,268) 600,000
(cost $600,000) ----------

TOTAL INVESTMENT SECURITIES-- 100.00% $50,452,227
(cost $46,926,909) ==========

- -------------------

1 Non-income producing.

See the accompanying notes to financial statements.

[THIS PAGE INTENTIONALLY LEFT BLANK]

TRUSTEES

James M. Benham
Albert A. Eisenstat
Ronald J. Gilson
Myron S. Scholes
Kenneth E. Scott
Ezra Solomon
Isaac Stein
James E. Stowers, III
Jeanne D. Wohlers

OFFICERS

James M. Benham
Chairman of the Board

Maryanne Roepke
Treasurer and Chief Financial Officer

Douglas A. Paul
Vice President, Secretary
and General Counsel

Ann N. McCoid
Controller

[company logo] The Benham Group
Part of the Twentieth Century Family of Mutual Funds

1665 Charleston Road
Mountain View, CA 94043

1-800-321-8321

Not authorized for distribution unless preceded or
accompanied by a current fund prospectus.

Benham Distributors, Inc. 8/96 Q071

<PAGE>
BENHAM
EQUITY FUNDS

------------

Semiannual Report
June 30, 1996

[picture of the front
of the New York Stock Exchange]

Equity Growth Fund
Income & Growth Fund
Utilities Income Fund

[company logo] The Benham Group
Part of the Twentieth Century Family of Mutual Funds

<PAGE>
CONTENTS

U.S. ECONOMIC REVIEW................................. 1

U.S. STOCK MARKET SUMMARY............................ 2

EQUITY GROWTH FUND
Performance Information.............................. 4
Portfolio Composition................................ 5
Portfolio Statistics and
Additional Performance Information................ 6
Management Discussion................................ 7
Financial Highlights..................................26
Financial Statements and Notes........................29
Schedule of Investments...............................37

INCOME & GROWTH FUND
Performance Information.............................. 9
Portfolio Composition.................................10
Portfolio Statistics and
Additional Performance Information.................11
Management Discussion.................................12
Financial Highlights..................................27
Financial Statements and Notes........................29
Schedule of Investments...............................42

UTILITIES INCOME FUND
Market Summary........................................14
Special Report: Electric Utilities Deregulation.......15
Performance Information...............................17
Portfolio Composition.................................18
Portfolio Statistics and
Lipper Performance Comparison......................19
Management Discussion.................................20
Financial Highlights..................................28
Financial Statements and Notes........................29
Schedule of Investments...............................48

INVESTMENT FUNDAMENTALS
Definitions...........................................22
Equity Fund Management Approach.......................24
Benchmark Indexes.....................................25

<PAGE>
U.S. ECONOMIC REVIEW
JAMES M. BENHAM [picture of James
Chairman, Benham Funds M. Benham]

After a weak 1995, the U.S. economy reversed its course during the first half of
1996. The U.S. economy grew at an anemic 1.3% rate in 1995--declining
manufacturing activity, slowing corporate spending and weak retail sales
restrained economic output and seemed to suggest a possible recession in 1996.
Federal budget battles, which led to two government shutdowns, furthered the
cause of economic weakness. The Federal Reserve (the Fed), which had lowered
short-term interest rates from 6.00% to 5.50% in 1995, cut rates further (to
5.25%) in January 1996 in an attempt to stimulate economic growth.

[mountain graph on left side of page. graph data described below]

Resurgent economic growth arrived sooner than expected--the U.S. economy perked
up with a 2.2% annual growth rate in the first quarter of 1996. The economic
rebound was led by strong employment growth, including the largest monthly jobs
increase in more than eight years in February (see the accompanying graph). This
healthy employment growth sent the U.S. bond market into a tailspin and led to
changing expectations in the U.S. financial markets, where further Fed interest
rate cuts had been anticipated. The economy picked up additional momentum in the
second quarter as robust employment gains, improving retail sales, surging auto
sales and a resilient housing market produced a 4.2% annual growth rate.

The recent flurry of economic activity sparked concerns about rising inflation,
but there has been little evidence to support this view. U.S. inflation was just
2.5% in 1995, the lowest annual rate since 1986. The inflation rate continues to
be relatively benign in 1996, but there have been signs of increasing wage
pressures--in June, the Labor Department reported the largest average hourly
earnings increase in more than 30 years.

Accelerating U.S. economic growth will likely lead the Fed to raise short-term
interest rates in the second half of the year. However, there are still some
signals that suggest caution--layoffs are at historically high levels, capital
expenditures are slowing, and personal bankruptcies and loan delinquencies are
higher. As a result, we expect moderate U.S. economic growth for the remainder
of 1996, with both growth and inflation around 3%.

[graph data]
U.S. Nonfarm Payroll Employment
(seasonally adjusted, in thousands)

Monthly Change Three-Month Moving Avg.
Jul-95 101 113
Aug-95 298 197
Sep-95 124 174
Oct-95 126 183
Nov-95 150 133
Dec-95 237 171
Jan-96 -66 107
Feb-96 509 227
Mar-96 158 200
Apr-96 191 286
May-96 365 238
Jun-96 239 265

Source: Bloomberg Financial Markets

MARKET SUMMARY
U.S. STOCK MARKET
by Steve Colton, Vice President & Senior Portfolio Manager

NOTE: TERMS MARKED WITH AN ASTERISK (*) ARE DEFINED ON PAGES 22 AND 23.

U.S. stocks continued to climb during the first half of 1996, though they
stumbled slightly after reaching record highs in late May and early June. The
gains in the domestic stock market resulted largely from record cash flows into
stock mutual funds.

Stock mutual funds took in over $138 billion during the first half of 1996, more
than the total for all of 1995 (see the chart below for monthly stock-fund
inflows). A substantial portion of this record amount was earmarked for
aggressive growth funds focusing on small-capitalization stocks,* which comprise
about 25% of the U.S. stock market. With such a large amount of capital directed
at small-cap issues, valuations of these companies ballooned, and stocks traded
at high price/earnings ratios.*

Corporate earnings growth, which helped domestic stock indexes produce returns
of more than 30% in 1995, slowed considerably during the period. Nevertheless,
approximately 70% of companies reporting second-quarter earnings met or beat
expectations.

Stock-Fund Inflows
[bar graph]
[graph data]
J $6.82
F 8.58
M 7.23
A 10.67
M 8.39
J 8.19
J 13.9
A 13.19
S 12.76
O 9.17
N 14.34
D 16.387
J 29.473
F 21.902
M 21.408
A 25.919
M 25.114
J 14.484

Net New Cash Flows for 1995.................................$128,890
Net New Cash Flows Year-to-Date 1996........................$138,299

Figures are in millions of dollars.

Source: Investment Company Institute

MARKET SUMMARY
U.S. STOCK MARKET
(Continued from the previous page)

In addition to slower earnings growth, stocks had to contend with rising
long-term interest rates which jumped from 6% to 7% during the first half of
1996. Rising interest rates hurt stocks by increasing the cost of borrowing to
finance expansion and by making fixed-income investments more attractive.

In 1995, cost-cutting efforts and steady earnings growth enabled
large-capitalization stocks* to outperform small-capitalization stocks.
Small-cap stocks continued to lag in the first quarter of 1996 as money managers
found it easier to deploy incoming cash in large-cap issues. However, small-cap
stocks surged in April and May on the heels of a rebound in technology stocks,
while larger multinational firms suffered lower profits as the U.S. dollar
strengthened against most foreign currencies.

Despite faltering in June, small-cap stocks managed to outperform large-cap
stocks during the six-month period. The Russell 2000 Index, a broad index of
small-cap stocks, posted a total return of 10.49% for the six months ended June
30, 1996, while the S&P 500 Index, a broad index of large-cap stocks, returned
10.10% over the same period (see the accompanying graph).

[mountain graph on right side of page. graph data described below]

Among specific industries, consumer stocks did particularly well because of
strong growth in employment and personal spending. The energy sector also
performed well, thanks to rising prices for oil and natural gas. Though hurt by
a sell-off in June, the technology sector was one of the better performers for
the period, while rising interest rates hampered financial stocks and utilities
shares. The utility sector was the only broad category to post negative returns
for the first half of 1996.

[graph data]
S&P 500 vs. Russell 2000
(Growth of $1.00)

Russell 2000 S&P 500
12/95 $1 $1
1/96 0.99892 1.03404
2/96 1.03006 1.04363
3/96 1.05102 1.05368
4/96 1.10722 1.06921
5/96 1.15085 1.09678
6/96 1.1036 1.10096

Standard & Poor's 500
Stock Index (S&P 500).....................10.10%
Russell 2000 Stock Index..................10.49%

Investors cannot invest directly in either of these indexes.

Source: Ibbotson Associates, Inc.

EQUITY GROWTH FUND
NAV AND AVERAGE ANNUAL TOTAL RETURNS
For Periods Ended June 30, 1996

NET ASSET VALUE (NAV) RANGE indicates the Fund's share price movements over the
stated period and can be used to gauge the stability of the Fund's share price.

The Fund commenced operations on May 9, 1991.

SEC PERFORMANCE COMPARISON
Comparative Performance of $10,000 Invested on 5/31/91
in the Fund and in the S&P 500
[mountain graph]

[graph data]
S&P 500 Equity Growth
5/31/91 $10,000 $10,000
6/28/91 9,542 9,535
7/31/91 9,987 10,069
8/30/91 10,223 10,406
9/30/91 10,053 10,266
10/31/91 10,187 10,584
11/29/91 9,777 10,385
12/31/91 10,895 11,620
1/31/92 10,693 11,409
2/28/92 10,832 11,399
3/31/92 10,621 11,007
4/30/92 10,933 11,007
5/29/92 10,986 11,048
6/30/92 10,823 10,805
7/31/92 11,265 11,281
8/31/92 11,034 11,099
9/30/92 11,164 11,168
10/30/92 11,203 11,351
11/30/92 11,584 11,830
12/31/92 11,726 12,100
1/29/93 11,824 12,131
2/26/93 11,986 12,234
3/31/93 12,238 12,635
4/30/93 11,943 12,312
5/28/93 12,262 12,551
6/30/93 12,298 12,857
7/30/93 12,249 12,847
8/31/93 12,713 13,422
9/30/93 12,616 13,549
10/29/93 12,877 13,559
11/30/93 12,754 13,349
12/31/93 12,908 13,482
1/31/94 13,347 13,804
2/28/94 12,985 13,348
3/31/94 12,419 12,856
4/29/94 12,578 13,001
5/31/94 12,784 13,247
6/30/94 12,471 13,034
7/29/94 12,881 13,337
8/31/94 13,409 13,787
9/30/94 13,081 13,531
10/31/94 13,375 13,723
11/30/94 12,888 13,249
12/30/94 13,079 13,451
1/31/95 13,418 13,824
2/28/95 13,941 14,349
3/31/95 14,352 14,704
4/28/95 14,775 15,289
5/31/95 15,365 15,887
6/30/95 15,722 16,121
7/31/95 16,244 16,663
8/31/95 16,285 16,710
9/29/95 16,972 17,133
10/31/95 16,911 16,932
11/30/95 17,654 17,724
12/29/95 17,994 18,099
1/31/96 18,606 18,709
2/29/96 18,779 19,243
3/29/96 18,959 19,236
4/30/96 19,239 19,632
5/31/96 19,735 20,079
6/28/96 19,810 20,027

Past performance does not guarantee future results.

This graph compares the Fund`s performance with a broad-based market index, the
Standard & Poor`s 500 Stock Index (S&P 500), over the life of the Fund. Although
the investment characteristics of the S&P 500 are similar to those of the Fund,
the securities owned by the Fund and those composing the S&P 500 are likely to
be different, and any securities that the Fund and the S&P 500 have in common
are likely to have different weightings in their respective portfolios.
Investors cannot invest directly in the S&P 500.

EQUITY GROWTH FUND
TOP TEN STOCKS
As of 6/30/96 As of 12/31/95

COMPANY WEIGHT COMPANY WEIGHT

Bristol-Myers Squibb Co. 2.9% Mobil Corporation 2.7%
Exxon Corporation 2.6% Philip Morris Companies, Inc. 2.7%
Philip Morris Companies, Inc. 2.5% General Electric Company 2.5%
BankAmerica Corporation 2.3% Exxon Corporation 2.3%
Mobil Corporation 2.2% Johnson & Johnson 2.2%
Johnson & Johnson 2.1% BankAmerica Corporation 2.1%
General Electric Company 2.0% Ameritech Corporation 1.9%
Dow Chemical Company 1.9% Travelers Group, Inc. 1.9%
IBM Corporation 1.7% Amoco Corporation 1.8%
Amoco Corporation 1.7% Sears, Roebuck & Co. 1.7%
TOTAL WEIGHTING OF TOP TEN 21.9% TOTAL WEIGHTING OF TOP TEN 21.8%

For the top ten holdings of the S&P 500, see page 25.

INDUSTRY WEIGHTINGS
As of June 30, 1996
[bar graph]
[graph data]
Energy 9.6
Banking 9.5
Pharmaceuticals 8.4
Telecommunications 7.4
Insurance 6.3
Industrial Equipment & Machinery 5.9
Financial Services 5.8
Utilities 5.7
Retail 5.7
Electrical &* Electronic Components 5.4
Computer Systems 3.5
Aerospace & Defense 3.5
Chemicals 2.9
Tobacco 2.5
Automobiles & Auto Parts 2.1
Airlines 1.6
Food & Beverage 1.6
Diversified Companies 1.2
Control & Measurements 1
Other 10.4

EQUITY GROWTH FUND
PORTFOLIO STATISTICS
As of 6/30/96 As of 12/31/95
------------------- -------------------
S&P S&P
The Fund 500 The Fund 500
------------------- -------------------

Number of Companies: 161 500 156 500

Dividend Yield: 2.27% 2.19% 2.39% 2.30%

Beta (S&P 500 = 1.00): 1.00 1.00 0.99 1.00

Price/Earnings Ratio:* 14.6 18.8 15.4 19.5

Price/Book Ratio: 3.2 3.8 2.9 4.0

* based on earnings from the previous 12 months

The statistical terms listed above are defined on page 23.

LIPPER PERFORMANCE COMPARISON

1 YEAR 3 YEARS 5 YEARS LIFE OF FUND*

The Fund: 24.23% 15.92% 16.00% 14.70%
Category Average: 22.18% 14.88% 14.57% 13.32%
The Fund's
Ranking: 220 out of 616 140 out of 378 78 out of 246 72 out of 236

* from May 9, 1991, through June 30, 1996

Total returns are based on historical performance and do not guarantee future
results.

SIX-MONTH TOTAL RETURN BREAKDOWN
For the Period Ended June 30, 1996

% FROM REALIZED
% FROM AND UNREALIZED GAINS SIX-MONTH
INCOME + ON INVESTMENTS = TOTAL RETURN

.93% + 9.72% = 10.65%

EQUITY GROWTH FUND
MANAGEMENT DISCUSSION
with Dong Zhang, Portfolio Manager+

Q: How did the Fund perform?

A: The Fund outperformed the S&P 500 stock Index and the average growth
fund. For the six months ended June 30, 1996, the Fund's total return
was 10.65%, compared with a return of 10.10% for the S&P 500 and the
10.08% return for the average growth fund. (See the Lipper Performance
Comparison on page 6 for the Fund's average annual total returns
relative to its peer group.)

Q: Why did the Fund outperform its peer group average?

A: The primary reason was the quantitative model we use to identify
undervalued stocks with good earnings potential, such as CompUSA (up
almost 120%), Ross Stores (up more than 80%) and Hewlett-Packard (up
about 20%). In addition, the model helped us avoid lagging sectors such
as agriculture and food stocks, whose earnings were squeezed by rising
grain prices, and telephone stocks, which were hurt by expectations of
price wars and high capital spending as a result of the
Telecommunications Act of 1996. Another reason the Fund beat its peer
group average was our policy of remaining fully invested in stocks.
Based on data from Morningstar, the average growth and income fund
maintained an estimated cash position of about 7% during the six-month
period. Finally, the Fund benefited from its use of Twentieth Century's
efficient trading systems.

Q: What changes did you make in the Fund's composition during the
six-month period?

A: We significantly increased the Fund's holdings in financial services
stocks, which were relatively cheap because of concern over rising
interest rates. Nevertheless, this sector benefited tremendously from
the past year's stock market rally and will likely produce strong
earnings growth going forward. The Fund's returns were enhanced by a
trend towards consolidation in the financial services industry. We also
increased holdings of industrial equipment companies--the "low-price"
cousin of technology stocks. Unlike the more glamorous technology
sector, however, analysts had much lower expectations for companies in
this industry segment. Despite low expectations, industrial equipment
companies posted strong earnings growth and are very attractively
valued.

+ On June 1, 1996, Dong Zhang assumed the day-to-day management of the Fund from
Steve Colton. Mr. Zhang was previously an associate portfolio manager and
equity strategies research analyst and was instrumental in developing the
quantitative model used to select stocks for the Fund's portfolio. Mr. Zhang
holds a Ph.D. in physics from Stanford University.

EQUITY GROWTH FUND
MANAGEMENT DISCUSSION
(Continued from the previous page)

Q: Looking ahead, what is your outlook for U.S. stocks for the last half
of the year?

A: The performance of U.S. stocks for the remainder of 1996 is highly
dependent upon the level of interest rates and the growth of corporate
earnings. During the stock market's 1995 rally, for example, corporate
earnings growth was strong and interest rates were declining. Earnings
growth has decelerated considerably in 1996, however. While earnings
grew at a rate of 18% during 1995, earnings estimates for 1996 vary
widely, ranging from 0% to 10% with an average of about 4%. In
addition, inflation fears, supported by reports of
stronger-than-expected U.S. economic growth, have driven interest rates
higher. Rising rates are bad for stocks because they increase the cost
of corporate borrowing to finance growth. We believe disappointing
earnings reports from high-profile companies like Motorola Inc. and
rising interest rates were the cause of the stock market correction in
July. As a result of that sell-off, we feel that the S&P 500 went from
being overvalued to being fairly valued. Despite recent volatility, we
expect U.S. equities to produce positive returns comparable to the
growth rate of corporate earnings plus dividend yields.

Q: With this outlook in mind, how will you position the Fund going
forward?

A: We intend to follow our current investment strategy, remaining fully
invested in stocks and focusing on companies that appear to be
undervalued. We believe our emphasis on both value and earnings
momentum helps us to buy strong stocks at attractive prices. The Fund
is overweighted in natural gas utility stocks, which are benefiting
from higher natural gas prices and strong demand. We plan to maintain
our overweighting in financial stocks and shares of industrial
equipment companies because of their attractive value and strong
earnings performance. Another sector we feel to be undervalued is
computer hardware and systems. Though this industry segment faces some
near-term problems because of a decline in personal computer sales, we
believe computer hardware shares offer strong long-term growth
potential and are selling at reasonable prices.

INCOME & GROWTH FUND
NAV AND AVERAGE ANNUAL TOTAL RETURNS
For Periods Ended June 30, 1996

NET ASSET VALUE (NAV) RANGE indicates the Fund's share price movements over the
stated period and can be used to gauge the stability of the Fund's share price.

The Fund commenced operations on December 17, 1990.

SEC PERFORMANCE COMPARISON
Comparative Performance of $10,000 Invested on 12/31/90
in the Fund and in the S&P 500
[mountain graph]

[graph data]
S&P 500 Fund
12/31/90 $10,000 $10,000
1/31/91 10,436 10,514
2/28/91 11,182 11,314
3/29/91 11,453 11,670
4/30/91 11,480 11,727
5/31/91 11,976 12,181
6/28/91 11,428 11,634
7/31/91 11,960 12,231
8/30/91 12,244 12,588
9/30/91 12,039 12,531
10/31/91 12,200 12,809
11/29/91 11,709 12,447
12/31/91 13,048 13,908
1/31/92 12,806 13,686
2/28/92 12,972 13,753
3/31/92 12,720 13,428
4/30/92 13,093 13,568
5/29/92 13,157 13,583
6/30/92 12,962 13,432
7/31/92 13,491 14,012
8/31/92 13,215 13,755
9/30/92 13,370 13,824
10/30/92 13,417 14,071
11/30/92 13,873 14,583
12/31/92 14,044 15,002
1/29/93 14,161 15,060
2/26/93 14,354 15,258
3/31/93 14,657 15,733
4/30/93 14,303 15,449
5/28/93 14,685 15,744
6/30/93 14,728 16,094
7/30/93 14,669 16,024
8/31/93 15,226 16,700
9/30/93 15,109 16,770
10/29/93 15,422 16,863
11/30/93 15,275 16,552
12/31/93 15,459 16,699
1/31/94 15,985 17,137
2/28/94 15,551 16,587
3/31/94 14,873 15,948
4/29/94 15,064 16,087
5/31/94 15,311 16,260
6/30/94 14,936 16,030
7/29/94 15,426 16,441
8/31/94 16,059 17,020
9/30/94 15,666 16,642
10/31/94 16,018 16,942
11/30/94 15,435 16,415
12/30/94 15,663 16,608
1/31/95 16,070 17,055
2/28/95 16,696 17,656
3/31/95 17,189 18,060
4/28/95 17,695 18,715
5/31/95 18,402 19,468
6/30/95 18,830 19,764
7/31/95 19,454 20,423
8/31/95 19,503 20,550
9/29/95 20,326 21,406
10/31/95 20,253 21,352
11/30/95 21,142 22,333
12/29/95 21,549 22,732
1/31/96 22,283 23,491
2/29/96 22,490 23,881
3/29/96 22,706 24,003
4/30/96 23,041 24,472
5/31/96 23,635 24,980
6/28/96 23,725 24,974

Past performance does not guarantee future results.

This graph compares the Fund`s performance with a broad-based market index, the
Standard & Poor's 500 Stock Index (S&P 500), over the life of the Fund. Although
the investment characteristics of the S&P 500 are similar to those of the Fund,
the securities owned by the Fund and those composing the S&P 500 are likely to
be different, and any securities that the Fund and the S&P 500 have in common
are likely to have different weightings in their respective portfolios.
Investors cannot invest directly in the S&P 500.

INCOME & GROWTH FUND
TOP TEN STOCKS
As of 6/30/96 As of 12/31/95

COMPANY WEIGHT COMPANY WEIGHT

Bristol-Myers Squibb Co. 3.7% General Electric Company 2.6%
Exxon Corporation 3.0% Exxon Corporation 2.4%
Philip Morris Companies, Inc. 2.7% Philip Morris Companies, Inc. 2.3%
General Electric Company 2.5% Royal Dutch Petroleum Co. 2.2%
Mobil Corporation 2.0% Consolidated Edison Co. 2.1%
Johnson & Johnson 1.8% Bristol-Myers Squibb Co. 2.1%
Amoco Corporation 1.8% Johnson & Johnson 2.0%
BankAmerica Corporation 1.5% Mobil Corporation 1.9%
IBM Corporation 1.4% Dow Chemical Company 1.9%
Chase Manhattan Corporation 1.4% Atlantic Richfield Company 1.8%
TOTAL WEIGHTING OF TOP TEN 21.8% TOTAL WEIGHTING OF TOP TEN 21.3%

For the top ten holdings of the S&P 500, see page 25.

INDUSTRY WEIGHTINGS
As of June 30, 1996
[bar graph]

[graph data]
Energy 11.3
Pharmaceuticals 8.7
Utilities (electric) 8.2
Banking 7.7
Telecommunications 7.2
Electrical & Electronic Components 6.7
Chemicals & Resins 4.9
Retail 4.9
Insurance 4
Financial Services 4
Industrial Equipment & Machinery 3.8
Computer Systems 3.3
Tobacco 2.8
Aerospace & Defense 2.7
Automobiles & Auto Parts 2.6
Computer Software & Services 1.3
Consumer Products 1.2
Food & Beverage 1.1
Utilities (Natural Gas) 1.1
Diversified Companies 1
Other 11.5

INCOME & GROWTH FUND
PORTFOLIO STATISTICS

As of 6/30/96 As of 12/31/95
------------------- -------------------
S&P S&P
The Fund 500 The Fund 500
------------------- -------------------

Number of Companies: 242 500 239 500

Dividend Yield: 2.83% 2.19% 2.95% 2.30%

Beta (S&P 500 = 1.00): 0.95 1.00 0.97 1.00

Price/Earnings Ratio:* 13.7 18.8 15.4 19.5

Price/Book Ratio: 2.1 3.8 3.1 4.0

* based on earnings from the previous 12 months

The statistical terms listed above are defined on page 23.

LIPPER PERFORMANCE COMPARISON

1 YEAR 3 YEARS 5 YEARS LIFE OF FUND*

The Fund: 26.36% 15.77% 16.51% 18.02%
Category Average: 22.15% 14.44% 14.25% 15.56%
The Fund's Ranking: 67 out of 484 83 out of 285 28 out of 207 22 out of 180

* from December 20, 1990, through June 30, 1996

Total returns are based on historical performance and do not guarantee future
results.

SIX-MONTH TOTAL RETURN BREAKDOWN
For the Period Ended June 30, 1996

% FROM REALIZED
% FROM AND UNREALIZED GAINS SIX-MONTH
INCOME + ON INVESTMENTS = TOTAL RETURN

1.23% + 8.63% = 9.86%

INCOME & GROWTH FUND
MANAGEMENT DISCUSSION
with Steve Colton, Vice President & Senior Portfolio Manager

Q: How did the Fund perform?

A: The Fund's total return for the six months ended June 30, 1996, was
9.86%, compared with a return of 10.10% for the S&P 500. Though it
trailed the S&P 500, the Fund outpaced the 9.24% return for the average
growth and income fund over the same period. The Fund's six-month total
return placed it in the top third of all growth and income funds; for
the one-year period ended June 30, the Fund ranked in the top 15% of
its peer group. (See the Lipper Performance Comparison on page 11 for
the Fund's average annual total returns relative to its peer group.)

Q: Why did the Fund outperform its peer group average?

A: The primary reason was the quantitative model we use to identify
undervalued stocks with good earnings potential, such as CompUSA (up
almost 120%), Ross Stores (up more than 80%) and Hewlett-Packard (up
about 20%). In addition, the model helped us avoid lagging sectors such
as agriculture and food stocks, whose earnings were squeezed by rising
grain prices, and telephone stocks, which were hurt by expectations of
price wars and high capital spending as a result of the
Telecommunications Act of 1996. Another reason the Fund beat its peer
group average was our policy of striving to remain fully invested in
stocks. Based on data from Morningstar, the average growth and income
fund maintained an estimated cash position of about 6.5% during the
six-month period. Finally, the Fund benefited from its use of Twentieth
Century's efficient trading systems.

Q: What changes did you make in the Fund's composition during the
six-month period?

A: We significantly increased the Fund's holdings in financial services
stocks, which offered high dividend yields and were relatively
inexpensive because of concern over rising interest rates. Banks,
brokerage firms and insurance companies posted earnings considerably
higher than expectations. Brokerage firms, in particular, benefited
from the past year's stock market rally, enjoying record earnings as a
result of high trading volume and merger and acquisition activity. The
Fund also increased its holdings of industrial equipment companies.
Pessimistic earnings estimates for this sector drove share prices down
to very attractive levels, but industrial equipment companies exceeded
expectations, posting strong earnings growth.

INCOME & GROWTH FUND
MANAGEMENT DISCUSSION
(Continued from the previous page)

Q: Looking ahead, what is your outlook for U.S. stocks for the last half
of the year?

Q: With this outlook in mind, how will you position the Fund going
forward?

A: We intend to follow our currrent investment strategy, remaining fully
invested in stocks and focusing on companies that appear to be
undervalued. We believe our emphasis on both value and earnings
momentum helps us to buy strong stocks at attractive prices. We plan to
maintain our overweighting in financial stocks and shares of industrial
equipment companies because of their attractive value and strong
earnings performance. We also like select utility stocks because of
their relative value and their income components. Another sector we
feel to be undervalued is computer hardware and systems. Though this
industry segment faces near-term problems because of a decline in
personal computer sales, we believe computer hardware shares offer
strong long-term growth potential and are selling at reasonable prices.

UTILITIES INCOME FUND
MARKET SUMMARY
by Steve Colton, Vice President & Senior Portfolio Manager

In contrast to the broader stock market, utilities stocks posted weak returns
for the six-month period ended June 30, 1996. High and consistent dividend
yields have been the hallmark of utilities stocks, making them the most
bond-like of all stocks. When fears of inflation in early 1996 sent the U.S.
bond market into a tailspin, utilities stocks followed suit. Sensitive to the
dramatic rise in long-term interest rates, utilities stocks underperformed the
broader stock market over the period (see the accompanying graph).

[mountain graph on right side of page. graph data described below]

The telecommunications industry faced a significant change during the six-month
period. On February 8, President Bill Clinton signed the Federal
Telecommunications Bill into law, officially deregulating portions of the
industry. As a result, local phone companies are now required to allow new
competition into their areas. This includes cable, long-distance and wireless
firms who will be able to use the local networks to offer service to homes and
businesses. In addition, the legislation should eventually reduce cellular phone
rates to consumers because fees that wireless phone companies pay to complete
calls on the wired phone network will be significantly reduced. The new law also
holds potential benefits for local phone companies. Once state regulators are
convinced that there is adequate competition in their area, local telephone
companies will be able to compete for long distance and cable services within
their regions. Prior to deregulation, telecommunications stocks had risen to
historically high levels based upon the expected benefits of the pending
legislation. The stocks fell back to more reasonable prices shortly thereafter.
Unfortunately, the retreat dampened the total return of telecommunications
stocks, which fell by 2.54% for the period.

Natural gas was the top-performing utility sector during the first half of the
year. Unusually cold weather during the winter months drove already high natural
gas demand and prices to record levels, leading to stronger earnings for the
stocks. The sector managed an impressive return of 14.63% during the six-month
period. While electric utility stocks benefited from merger activity prompted by
sweeping changes in the industry (see pages 15-16 for details), the stocks still
produced weak returns due to the jump in long-term interest rates. The total
return of electric stocks was a mild 0.15% for the first half of this year.

[graph data]
S&P 500 vs. NYSE Utilities Index
(Growth of $1.00)
S&P 500 NYSE Utilities
12/95 1 1
1/96 1.03404 1.02003
2/96 1.04363 0.990347
3/96 1.05368 0.981325
4/96 1.06921 0.995947
5/96 1.09678 1.00143
6/96 1.10096 1.02795

Source: Ibbotson Associates, Inc.

SPECIAL REPORT
ELECTRIC UTILITIES DEREGULATION
A question and answer session with Steve Colton, Vice President &
Senior Portfolio Manager, and Greg Afiesh, Senior Research Analyst

Q: Can you provide some background about the deregulation of electric
utilities?

A: In 1992, the federal government enacted legislation designed to create
broad-based competition among electric utilities companies. This
legislation has prompted many states to issue proposals designed to
introduce retail competition into the industry. Ultimately,
deregulation of portions of the industry may cause sweeping changes as
companies restructure themselves to become more competitive.

Q: Why were electric utilities deregulated?

A: The electric utilities industry currently represents the largest
industry for consumption of goods and services in the country. Over
$200 billion of electricity is consumed by the U.S. annually. Because
our electricity exceeds the cost of power in many developed nations,
lobbying by corporate America for a more competitive environment has
prompted legislators to take a closer look at the industry.

Q: How have the states reacted to this legislation?

A: Many state regulators have introduced initiatives for restructuring how
utilities are run and operated within their state. California and the
Northeastern states have been the most aggressive in formulating
proposals to introduce retail competition. While implementation will
vary from state to state, deregulation is inevitable and could occur in
all states within the next 3-5 years. Some states may introduce a
transition period (as California has done), allowing utilities
companies to gear up for the change over a period of time before fully
phasing in retail competition. Over this period, rates will likely
remain the same as companies make the technological and infrastructure
changes needed to support retail competition. After the transition
period, rates should fall and be more competitive internationally.

Q: How do electric utilities companies currently operate?

A: Currently, electric utilities operate as monopolies in their respective
service areas. The companies are fully integrated entities, providing
generation, transmission and distribution of power to customers.

Q: How will this structure change?

A: Instead of one company generating, transmitting, and distributing
power, legislation could require that these services be unbundled,
creating separate companies. Power generation companies (continued on
next page)

SPECIAL REPORT
ELECTRIC UTILITIES DEREGULATION
(Continued from the previous page)

will become fully deregulated, while transmission and distribution
power companies will remain regulated. This would allow the generating
companies to sell their power directly to consumers.

Q: How will this affect customers?

A: Deregulation of electric utilities should ultimately result in lower
prices for the consumer. For example, in Argentina, where retail
competition is already in place, the price of electricity has fallen
dramatically, to the point where it is less than the cost of
production. Nationwide, the benefits should be more noticeable to large
industrial consumers, who will have initial access to retail
competition. Later, the process will be handed down in steps to the
residential consumer.

Q: How will deregulation affect utilities companies?

A: Companies involved with power generation should have more potential for
growth but will have higher risks due to increased competition. In
fact, companies involved with power generation will likely see
depressed earnings or operating losses during the initial phases of
deregulation. Increased competition may also prompt merger
activity--more resources means a competitive advantage. The industry as
a whole has been restructuring itself in anticipation of a more
competitive environment. Companies are becoming more efficient and
often downsizing to cut costs. However, cost-cutting activity could
limit excess capacity, which would decrease a company's ability to meet
unexpected power demands.

Q: How might these changes affect someone who invests in electric
utilities?

A: While electric utilities stocks have traditionally been considered
conservative investments due to their high dividend yields, this may
change after retail competition is introduced. As profit margins are
squeezed, companies may be forced to stop paying the traditionally high
dividends that are the hallmark of electric utilities stocks. Many
companies may be forced to begin reinvesting their profits to remain
competitive or be forced out of business. The end result could be that
electric utilities stocks become similar to those of other companies
subject to a free-market environment.

UTILITIES INCOME FUND
NAV AND AVERAGE ANNUAL TOTAL RETURNS
For Periods Ended June 30, 1996

NET ASSET VALUE (NAV) RANGE indicates the Fund's share price movements over the
stated period and can be used to gauge the stability of the Fund's share price.

The Fund commenced operations on March 1, 1993.

SEC PERFORMANCE COMPARISON
Comparative Performance of $10,000 Invested on 3/1/93 in the Fund,
in the S&P 500 and in the New York Stock Exchange Utilities Index
[mountain graph]

[graph data]
S&P 500 NYSE Utilities Index Fund
2/26/93 $10,000 $10,000 $10,000
3/31/93 10,211 10,258 10,223
4/30/93 9,964 10,060 10,126
5/28/93 10,231 10,069 10,161
6/30/93 10,261 10,455 10,590
7/30/93 10,219 10,645 10,787
8/31/93 10,607 11,112 11,249
9/30/93 10,526 11,078 11,264
10/29/93 10,744 11,073 11,187
11/30/93 10,641 10,493 10,596
12/31/93 10,770 10,614 10,660
1/31/94 11,136 10,680 10,706
2/28/94 10,834 10,107 10,168
3/31/94 10,361 9,699 9,732
4/29/94 10,494 9,984 9,979
5/31/94 10,667 9,710 9,804
6/30/94 10,405 9,562 9,639
7/29/94 10,747 9,946 9,995
8/31/94 11,187 10,038 10,064
9/30/94 10,914 9,812 9,801
10/31/94 11,159 9,818 9,838
11/30/94 10,753 9,640 9,681
12/30/94 10,912 9,618 9,590
1/31/95 11,195 10,133 10,152
2/28/95 11,631 10,117 10,212
3/31/95 11,975 10,071 10,162
4/28/95 12,327 10,378 10,420
5/31/95 12,820 10,696 10,791
6/30/95 13,118 10,795 10,862
7/31/95 13,553 11,037 11,068
8/31/95 13,587 11,272 11,275
9/29/95 14,160 11,822 11,897
10/31/95 14,110 12,004 12,128
11/30/95 14,729 12,223 12,359
12/29/95 15,013 12,877 13,014
1/31/96 15,524 13,135 13,212
2/29/96 15,668 12,753 12,909
3/29/96 15,819 12,637 12,698
4/30/96 16,052 12,825 12,740
5/31/96 16,466 12,896 12,689
6/28/96 16,528 13,237 13,134

Past performance does not guarantee future results.

This graph compares the Fund`s performance with a broad-based index, the
Standard & Poor's 500 Stock Index (S&P 500), over the life of the Fund. Because
utility company stocks make up less than 15% of the S&P 500, we have also
included the Fund's benchmark index, the New York Stock Exchange Utilities
Index. Although the investment characteristics of the indexes are similar to
those of the Fund, the securities owned by the Fund and those composing the
indexes are likely to be different, and any securities that the Fund and the
indexes have in common are likely to have different weightings in their
respective portfolios. Investors cannot invest directly in the indexes.

UTILITIES INCOME FUND
TOP TEN STOCKS
As of 6/30/96 As of 12/31/95

COMPANY WEIGHT COMPANY WEIGHT

Bell South Corporation 5.0% Bell South Corporation 4.8%
SBC Communications Inc. 4.9% GTE Corporation 4.6%
Bell Atlantic Corporation 4.8% Ameritech Corporation 4.4%
Consolidated Edison Co. 4.5% SBC Communications, Inc. 4.2%
Ameritech Corporation 4.4% Sprint Corporation 4.0%
GTE Corporation 4.4% NYNEX Corporation 3.7%
NYNEX Corporation 3.3% Bell Atlantic Corporation 3.6%
U.S. West Communications, Inc. 3.2% Consolidated Edison Co. 3.6%
Detroit Edison Company 2.9% U.S. West Communications, Inc. 3.3%
NIPSCO Industries, Inc. 2.9% Pacific Telesis Group 3.1%
TOTAL WEIGHTING OF TOP TEN 40.3% TOTAL WEIGHTING OF TOP TEN 39.3%

For the top ten holdings of the New York Stock Exchange Utilities Index, see
page 25.

INDUSTRY WEIGHTINGS
As of June 30, 1996
[bar graph]

[graph data]
Fund NYSE Utilities
Telecommunications 44.4 44.3
Electric 39.6 38
Natural Gas 11.8 13.4
Other 4.2 4.3

SIX-MONTH TOTAL RETURN BREAKDOWN
For the Period Ended June 30, 1996

% FROM REALIZED
% FROM AND UNREALIZED LOSSES SIX-MONTH
INCOME + ON INVESTMENTS = TOTAL RETURN

2.00% + (1.08)% = 0.92%

UTILITIES INCOME FUND
STOCK PORTFOLIO STATISTICS

As of 6/30/96 As of 12/31/95
------------------- -------------------
NYSE NYSE
Utilities Utilities
The Fund Index The Fund Index
------------------- -------------------

Number of Companies: 79 227 90 248
Dividend Yield: 4.81% 4.22% 4.56% 4.28%
Beta (S&P 500 = 1.00): 0.65 0.70 0.66 0.67
Price/Earnings Ratio:* 11.35 10.01 15.50 16.40
Price/Book Ratio: 1.38 1.18 2.30 2.30

* based on earnings from the previous 12 months

The statistical terms listed above are defined on page 23.

BOND PORTFOLIO STATISTICS

As of 6/30/96 As of 12/31/95

Number of Issues: 1* 1**
Average Rating: AAA AAA
Average Coupon: 7.13% 5.75%
Average Maturity: 26.60 years 1.75 years
Average Duration: 12.00 years 1.60 years

* U.S. Treasury bond
** U.S. Treasury note

The Fund may invest up to 25% of its assets in fixed-income securities to
enhance dividend income or increase share price stability.

LIPPER PERFORMANCE COMPARISON

1 YEAR 3 YEARS LIFE OF FUND*

The Fund: 20.91% 7.44% 8.19%
Category Average: 18.40% 7.32% 7.77%
The Fund's Ranking: 21 out of 85 21 out of 39 19 out of 37

* from March 4, 1993, through June 30, 1996

Total returns are based on historical performance and do not guarantee future
results.

UTILITIES INCOME FUND
MANAGEMENT DISCUSSION
with Steve Colton, Vice President & Senior Portfolio Manager

Q: How did the Fund perform compared to other utilities funds during the
first half of 1996?

A: The Fund's total return for the six-month period ended June 30, 1996,
directly reflected the anemic performance of U.S. utilities stocks. The
Fund`s return for the period was 0.92%, compared to the 3.47% average
return for the 87 funds in Lipper's "Utility Funds" category over the
same period. The Fund underperformed the category average during this
period for the same reasons that it managed an impressive ranking
against its peers in 1995--we manage the Fund to provide a pure play on
utilities stocks. The Fund remained almost fully invested in domestic
utilities stocks for the period, holding only a small percentage of its
assets in bonds or cash. According to Morningstar, the average
utilities fund invested just 77% in domestic utility stocks, with 13%
in foreign stocks and 10% in other investments.

Q: The Fund also underperformed its benchmark, the New York Stock Exchange
(NYSE) Utilities Index. Why?

A: The index returned 2.80% over the period, largely because of its
composition. Nearly 7% of the index is composed of technology-oriented
stocks. One example is Lucent Technologies, which separated in a
successful initial public offering in April from its parent company,
AT&T. Lucent Technolgies manufactures telecommunications equipment and
is, in my opinion, more of a technology stock than a telecommunications
stock. The company, like the technology sector overall, performed well
during the first half of this year, while utilities stocks performed
poorly. As a result, the overperformance of the index relative to the
Fund reflects the difference that technology stocks made.

Q: With this problem in mind, have you considered using a different
benchmark?

A: Yes. Unfortunately, most existing indexes are highly concentrated,
holding a disproportionate amount of large-cap utilities companies. To
provide a more accurate gauge for the Fund, we need a broadly
diversified utilities index. Therefore, we are developing our own
benchmark--specifically, one that directly reflects the performance of
the broader utilities sector.

UTILITIES INCOME FUND
MANAGEMENT DISCUSSION
(Continued from the previous page)

Q: Looking ahead, what is your outlook for utilities stocks for the
remainder of 1996?

A: While last year provided an ideal climate for utilities stocks, the
environment this year remains difficult to predict. Uncertainty in the
U.S. financial markets has prompted inflation concerns and driven up
long-term interest rates. If inflation appears on the economic horizon,
the Federal Reserve may launch a preemptive strike by raising
short-term interest rates. Under this scenario, utilities stocks would
likely continue their weak performance.

However, recent economic data have indicated that inflation remains
under control and that the U.S. is on track for moderate economic
growth for the remainder of the year. If this situation continues,
long-term interest rates may reverse course and start a downward trend,
which would be favorable for utilities stocks.

Q: What are your plans for the Fund going forward?

A: Until we can get a clearer picture of the strength and direction of the
economy, we will largely maintain the Fund's current position. Since
natural gas stocks continue to build on earnings momentum, we are
slightly overweighted in this area. However, we are reducing this
position slightly by selling a few issues that have shown significant
price appreciation.

Currently, we are underweighted in regional telecommunications stocks,
but will likely increase this position slightly. An unexpected increase
in installations of second and third telephone lines in American
households has boosted the earnings of some of these companies,
increasing the value of their stocks.

The Fund holds an underweighted stake in the electric utilities sector
due to flat earnings in the industry; however, there are still some
electric utilities stocks that represent good values. We will also look
to add a few foreign utilities stocks that trade on the New York Stock
Exchange. In particular, we are looking to add a few United Kingdom and
Latin American telecommunications stocks that are priced attractively
and offer the chance for earnings growth.

INVESTMENT FUNDAMENTALS
DEFINITIONS

TYPES OF STOCKS

Blue-Chip Stocks--stocks of the most established companies in American industry.
They are generally large, fairly stable companies that have demonstrated
consistent earnings and usually have long-term growth potential. Examples
include General Electric and Merck & Company.

Cyclical Stocks--stocks whose price and earnings fluctuations tend to follow the
ups and downs of the business cycle. Examples include the stocks of automobile
manufacturers, steel producers and textile operators.

Growth Stocks--stocks of companies that have experienced above-average earnings
growth and appear likely to continue such growth. These stocks often sell at
high P/E ratios. Examples currently include the stocks of high-tech, computer
hardware and computer software companies.

Large-Capitalization ("Large-Cap") Stocks--stocks of companies with a market
capitalization (the total value of a company's outstanding stock) of more than
$500 million. These tend to be the stocks that make up the Dow Jones Industrial
Average, the S&P 500 and the Russell 1000 Index.

Small-Capitalization ("Small-Cap") Stocks--stocks of companies with a market
capitalization (the total value of a company's outstanding stock) of less than
$500 million. These tend to be the stocks that make up the Nasdaq Composite
Index and the Russell 2000 Index.

Value Stocks--stocks that are purchased because they are relatively inexpensive.
These stocks are typically characterized by low P/E ratios.

INVESTMENT FUNDAMENTALS
DEFINITIONS
(Continued from the previous page)

STATISTICAL TERMINOLOGY

Beta--a number that compares the price movement of a stock or stock portfolio to
a market index, usually the S&P 500. The market index is assigned a beta of
1.00. The price of a stock with a beta higher than 1.00 is likely to rise or
fall more than the index (in the same direction as the index). The price of a
stock with a beta of less than 1.00 is likely to rise or fall less than the
index and may move in the opposite direction of index movements.

Dividend Yield--a percentage return calculated by dividing a company's annual
cash dividend by the current market value of the company's stock.

Payout Ratio--this dividend safety measurement expresses a company's stock
dividends as a percentage of the company's earnings. Analysts use this ratio to
look for insupportable dividends that are likely to be cut.

Price/Book Ratio--a stock value measurement calculated by dividing a company's
stock price by its book value per share, with the result expressed as a multiple
instead of as a percentage. (Book value per share is calculated by subtracting a
company's liabilities from its assets, then dividing that value by the number of
outstanding shares.)

Price/Earnings (P/E) Ratio--a stock value measurement calculated by dividing a
company's stock price by its earnings per share, with the result expressed as a
multiple instead of as a percentage. (Earnings per share are calculated by
dividing the after-tax earnings of a corporation by its outstanding shares.)

Return on Equity (ROE)--this number shows the percentage return a company
generates from the money invested by its shareholders. THIS IS THE COMPANY'S
RETURN, NOT THE SHAREHOLDERS'. ROE is calculated by dividing a company's net
profits by its shareholder equity.

INVESTMENT FUNDAMENTALS
EQUITY FUND MANAGEMENT APPROACH

Our stock fund management approach is a combination of the two most common
equity investment strategies: discretionary management and quantitative
management.

Discretionary equity managers use their own experience, knowledge, research and
judgement to decide whether to buy, sell or hold stocks. Discretionary
management techniques may include "stock picking" (selecting individual stocks
without regard to the portfolio's industry concentration) and "market timing"
(shifting all or a portion of the portfolio into and out of the stock market
based on the manager's opinion of whether the market will rise or fall).
Discretionary managers are generally described as active because of their active
role in portfolio management decisions.

Quantitative equity managers generally rely on a stock market index or a
computer model to make most decisions. These managers tend to be "indexers" who
try to duplicate the holdings and performance of a stock market index (such as
the S&P 500). Quantitative managers are usually described as passive.

Based on these two management strategies, we have developed an active
quantitative equity management approach that combines active management with
indexing. Starting with a benchmark index (see page 25 for the funds' benchmark
indexes), we construct a stock portfolio that seeks to provide the highest
expected return with the least amount of deviation from the benchmark index.

We create a universe of stocks traded on U.S. exchanges--for the Equity Growth
Fund and the Income & Growth Fund, the universe consists of the 1,500 largest
companies in the U.S.; for the Utilities Income Fund, the universe consists of
the 227 companies represented in the New York Stock Exchange Utilities Index. We
review each stock and give it a "score" based on its expected performance. Our
evaluation assesses past and future earnings growth as well as relative value.

After we've given each stock a score, we employ a process called portfolio
optimization--a computer program identifies a portfolio of stocks (with
appropriate weightings) that will best track the benchmark index and reflect the
total return characteristics of our stock ranking model. Each stock in this
"optimal" portfolio then undergoes a rigorous quality check by our stock fund
management team.

For the Income & Growth Fund, the portfolio optimization process incorporates a
yield constraint that creates a portfolio with a dividend yield that is
approximately 30% higher than the yield of the S&P 500.

INVESTMENT FUNDAMENTALS
BENCHMARK INDEXES

STANDARD & POOR'S 500 STOCK INDEX

The benchmark index of the Equity Growth Fund and the Income & Growth Fund is
the Standard & Poor's 500 Stock Index (S&P 500). The index is composed of the
stocks of the 500 largest companies traded on the New York Stock Exchange.
Although the S&P 500 represents less than 10% of all U.S. stocks, these 500
companies make up approximately 70% of the total market capitalization of the
U.S. stock market. The S&P 500 is considered a broad measure of overall stock
market performance and is commonly used as a benchmark for the performance of
individual stocks and stock mutual funds.

The stocks in the S&P 500 are weighted based on market capitalization (the total
market value of a company's outstanding stock). Accordingly, stocks with larger
market capitalizations (such as the top ten listed below) have a larger impact
on the overall performance of the S&P 500.

NEW YORK STOCK EXCHANGE UTILITIES INDEX

The benchmark index of the Utilities Income Fund is the New York Stock Exchange
(NYSE) Utilities Index. The index is composed of 227 utilities stocks traded on
the NYSE. Like the S&P 500, the stocks in the NYSE Utilities Index are weighted
based on market capitalization (see the top ten stock listing below).

TOP TEN HOLDINGS
As of June 30, 1996

S&P 500 WEIGHT* NYSE UTILITIES INDEX WEIGHT*

General Electric Company 2.9% GTE Corporation 6.2%
Coca-Cola Company 2.4% Bell South Corporation 6.0%
Exxon Corporation 2.1% Ameritech Corporation 4.9%
AT&T Corporation 2.0% SBC Communications, Inc. 4.3%
Philip Morris Companies, Inc. 1.7% Bell Atlantic Corporation 4.0%
Merck & Company, Inc. 1.6% Lucent Technologies 3.2%
Royal Dutch Petroleum Co. 1.6% NYNEX Corporation 3.0%
Microsoft Corporation 1.4% Southern Company 2.3%
Johnson & Johnson 1.3% U.S. West Communications, Inc. 2.2%
Procter & Gamble 1.2% Sprint Corporation 2.1%
TOTAL WEIGHTING OF TOP TEN 18.2% TOTAL WEIGHTING OF TOP TEN 38.2%

* based on market capitalization

PLEASE NOTE: For the industry weightings of the NYSE Utilities Index, see
page 18.

<TABLE>
<CAPTION>
BENHAM EQUITY FUNDS
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED),
AND THE YEARS ENDED DECEMBER 31 (EXCEPT AS NOTED)

BENHAM EQUITY GROWTH FUND
------------------------------------------------------------
JUNE 30, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1996 1995 1994 1993 1992 1991+
------ ------ ----- ----- ----- -----
PER-SHARE DATA
- --------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD......................... $ 14.25 11.53 12.12 11.68 11.57 10.00
Income from Investment Operations
Net Investment Income....................................... .1316 .2564 .2993 .2309 .2573 .3355
Net Realized and Unrealized Gains (Losses) on Investments... 1.3721 3.7016 (.3315) 1.0955 .2345 1.6542
-------- -------- -------- -------- -------- --------
Total Income (Losses) From Investment Operations.......... 1.5037 3.9580 (.0322) 1.3264 .4918 1.9897
-------- -------- -------- -------- -------- --------
Less Distributions
Dividends from Net Investment Income........................ (.1237) (.2243) (.2990) (.2307) (.2309) (.2891)
Distributions from Net Realized Capital Gains............... 0 (1.0137) (.2588) (.6557) (.1509) (.1306)
-------- -------- -------- -------- -------- --------
Total Distributions....................................... (.1237) (1.2380) (.5578) (.8864) (.3818) (.4197)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE AT END OF PERIOD............................... $ 15.63 14.25 11.53 12.12 11.68 11.57
======== ======== ======== ======== ======== ========
TOTAL RETURN*.................................................. 10.65% 34.56% (.23)% 11.42% 4.13% 17.48%
- ------------
SUPPLEMENTAL DATA AND RATIOS
- ----------------------------
Net Assets at End of Period (in thousands of dollars).......... $197,070 159,450 97,437 96,284 73,592 38,951
Ratio of Expenses to Average Daily Net Assets++................ .66%** .71% .75% .75% .75% .35%**
Ratio of Net Investment Income to Average Daily Net Assets..... 1.74%** 1.96% 2.26% 2.04% 2.33% 3.29%**
Portfolio Turnover Rate........................................ 57.00% 125.86% 94.09% 96.52% 114.32% 89.22%
Average Commission Paid per Share Traded....................... $.037 .032 N/A N/A N/A N/A

- -------------------

+ Commencement of operations for Benham Equity Growth Fund was May 9, 1991.

++ The ratios for the periods beginning with the year ended December 31, 1995,
include expenses paid through expense offset arrangements.

* Total return figures assume reinvestment of dividend and capital gain
distributions and are not annualized.

**Annualized.
</TABLE>

See the accompanying notes to financial statements.

<TABLE>
<CAPTION>
BENHAM EQUITY FUNDS
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED),
AND THE YEARS ENDED DECEMBER 31 (EXCEPT AS NOTED)

BENHAM INCOME & GROWTH FUND
-----------------------------------------------------------------------
JUNE 30, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1996 1995 1994 1993 1992 1991 1990+
------ ------ ----- ----- ----- ----- ------
PER-SHARE DATA
- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD................ $ 17.81 13.92 15.08 14.11 13.53 10.12 10.00
Income From Investment Operations
Net Investment Income.............................. .2192 .4215 .4435 .4285 .4155 .4860 .0087
Net Realized and Unrealized Gains (Losses)
on Investments................................... 1.5316 4.6399 (.5302) 1.1502 .6220 3.5602 .1200
--------- ------- -------- -------- -------- -------- --------
Total Income (Losses) From Investment Operations. 1.7508 5.0614 (.0867) 1.5787 1.0375 4.0462 .1287
--------- ------- -------- -------- -------- -------- --------
Less Distributions
Dividends from Net Investment Income............... (.2108) (.4200) (.4350) (.4246) (.4137) (.4726) (.0087)
Distributions from Net Realized Capital Gains...... 0 (.7514) (.6383) (.1841) (.0438) (.1636) 0
--------- ------- -------- -------- -------- -------- --------
Total Distributions.............................. (.2108) (1.1714) (1.0733) (.6087) (.4575) (.6362) (.0087)
--------- ------- -------- -------- -------- -------- --------
NET ASSET VALUE AT END OF PERIOD...................... $ 19.35 17.81 13.92 15.08 14.11 13.53 10.12
========= ======= ======== ======== ======== ======== ========
TOTAL RETURN*......................................... 9.86% 36.88% (.55)% 11.31% 7.86% 39.08% 1.29%
- ------------
SUPPLEMENTAL DATA AND RATIOS
- ----------------------------
Net Assets at End of Period (in thousands of dollars). $538,151 373,701 224,939 230,191 141,221 59,318 991
Ratio of Expenses to Average Daily Net Assets++....... .64%** .67% .73% .75% .75% .50% 0%
Ratio of Net Investment Income to Average Daily
Net Assets......................................... 2.33%** 2.61% 2.96% 2.90% 3.16% 4.03% 2.09%**
Portfolio Turnover Rate............................... 38.00% 69.88% 67.96% 30.75% 63.17% 140.21% 0%
Average Commission Paid per Share Traded.............. $.038 .030 N/A N/A N/A N/A N/A

- -------------------

+ Commencement of operations for Benham Income & Growth Fund was December 17,
1990.

++The ratios for the periods beginning with the year ended December 31, 1995,
include expenses paid through expense offset arrangements.

* Total return figures assume reinvestment of dividend and capital gain
distributions and are not annualized.

**Annualized.
</TABLE>

See the accompanying notes to financial statements.

<TABLE>
<CAPTION>
BENHAM EQUITY FUNDS
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED),
AND THE YEARS ENDED DECEMBER 31 (EXCEPT AS NOTED)

BENHAM UTILITIES INCOME FUND
------------------------------------------
JUNE 30, DEC. 31, DEC. 31, DEC. 31,
1996 1995 1994 1993+
------ ------ ----- -----
PER-SHARE DATA
- --------------
<S> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD........................................... $ 11.44 8.79 10.24 10.00
Income from Investment Operations
Net Investment Income......................................................... .2208 .4226 .4375 .3626
Net Realized and Unrealized Gains (Losses) on Investments..................... (.1190) 2.6446 (1.4515) .2979
-------- -------- -------- --------
Total Income (Losses) From Investment Operations............................ .1018 3.0672 (1.0140) .6605
-------- -------- -------- --------
Less Distributions
Dividends from Net Investment Income.......................................... (.2118) (.4172) (.4360) (.3577)
Distributions from Net Realized Capital Gains................................. 0 0 0 (.0628)
-------- -------- -------- --------
Total Distributions......................................................... (.2118) (.4172) (.4360) (.4205)
-------- -------- -------- --------
NET ASSET VALUE AT END OF PERIOD................................................. $ 11.33 11.44 8.79 10.24
======== ======== ======== ========
TOTAL RETURN*.................................................................... .92% 35.70% (10.03)% 6.60%
- ------------
SUPPLEMENTAL DATA AND RATIOS
- ----------------------------
Net Assets at End of Period (in thousands of dollars)............................ $163,541 218,794 152,570 194,314
Ratio of Expenses to Average Daily Net Assets++.................................. .74%** .75% .75% .50%**
Ratio of Net Investment Income to Average Daily Net Assets....................... 3.92%** 4.31% 4.67% 4.23%**
Portfolio Turnover Rate.......................................................... 36.00% 68.17% 61.42% 38.76%
Average Commission Paid per Share Traded......................................... $.040 .030 N/A N/A

- -------------------

+ Commencement of operations for Benham Utilities Income Fund was March 1, 1993.

++The ratios for the periods beginning with the year ended December 31, 1995,
include expenses paid through expense offset arrangements.

* Total return figures assume reinvestment of dividend and capital gain
distributions and are not annualized.

**Annualized.
</TABLE>

See the accompanying notes to financial statements.

<TABLE>
<CAPTION>
BENHAM EQUITY FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1996
(UNAUDITED)
BENHAM BENHAM BENHAM
EQUITY GROWTH INCOME & GROWTH UTILITIES INCOME
FUND FUND FUND
--------- --------- ---------
<S> <C> <C> <C>
ASSETS
Investment securities (identified cost of $173,807,309,
$460,460,994, and $146,631,965, respectively) (Note 4)................ $198,160,984 530,605,087 162,403,989
Cash.................................................................... 0 0 291,078
Investment in affiliated money market fund (Note 2)..................... 195,126 7,532,748 0
Interest and dividends receivable....................................... 307,653 1,355,020 648,468
Receivable for fund shares sold......................................... 96,035 598,002 423,283
Margin deposits for futures contracts held (Note 1)..................... 250,000 875,000 0
Net unrealized appreciation on futures contacts held (Note 1)........... 51,800 0 0
Prepaid expenses and other assets....................................... 4,931 5,831 15,895
Receivable for securities sold.......................................... 0 2,698,076 0
----------- ----------- ----------
Total assets....................................................... 199,066,529 543,669,764 163,782,713
----------- ----------- ----------
LIABILITIES
Payable for securities purchased........................................ 510,000 4,936,222 0
Payable for fund shares redeemed........................................ 32,787 71,560 35,430
Dividends payable....................................................... 0 93,062 116,313
Payable to affiliates (Note 2).......................................... 107,749 286,421 87,995
Bank overdraft.......................................................... 1,340,880 19,394 0
Net unrealized depreciation on futures contracts held (Note 1).......... 0 90,700 0
Accrued expenses and other liabilities.................................. 4,682 20,987 1,613
----------- ----------- ----------
Total liabilities....................................................... 1,996,098 5,518,346 241,351
----------- ----------- ----------
NET ASSETS................................................................. $197,070,431 538,151,418 163,541,362
=========== =========== ==========
Net assets consist of:
Capital (par value and paid in surplus)................................. 154,610,730 433,479,954 148,606,461
Net undistributed realized gain (loss) on investments................... 17,920,944 34,072,874 (1,247,221)
Undistributed net investment income..................................... 133,282 545,191 410,109
Net unrealized appreciation on investments and translation of assets and
liabilities in foreign currencies (Note 4)............................ 24,405,475 70,053,399 15,772,013
----------- ----------- ----------
Net assets................................................................. $197,070,431 538,151,418 163,541,362
=========== =========== ==========
Shares of beneficial interest outstanding.................................. 12,607,860 27,808,351 14,436,066
=========== =========== ==========
Net asset value, offering price and redemption price per share............. $15.63 19.35 11.33
======= ===== ====
- -------------------

See the accompanying notes to financial statements.

</TABLE>

<TABLE>
<CAPTION>
BENHAM EQUITY FUNDS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
BENHAM BENHAM BENHAM
EQUITY GROWTH INCOME & GROWTH UTILITIES INCOME
FUND FUND FUND
--------- --------- ---------
INVESTMENT INCOME
<S> <C> <C> <C>
Dividends.................................................. $ 1,914,477 6,217,510 4,256,159
Interest................................................... 251,480 630,845 137,799
----------- ---------- ----------
Total Income............................................. 2,165,957 6,848,355 4,393,958
----------- ---------- ----------
EXPENSES (NOTE 2)
Investment advisory fees................................... 269,974 682,806 282,621
Administrative fees........................................ 85,469 216,239 89,335
Transfer agency fees....................................... 146,346 363,553 206,479
Printing and postage....................................... 35,935 90,462 49,548
Custodian fees............................................. 18,860 35,558 17,816
Auditing and legal fees.................................... 6,256 13,563 6,501
Registration and filing fees............................... 23,764 45,737 14,480
Directors' fees and expenses............................... 5,754 8,008 6,089
Other operating expenses................................... 12,027 28,621 15,958
----------- ---------- ----------
Total expenses........................................... 604,385 1,484,547 688,827
Amount recouped (Note 2)...................................... 0 0 15,897
Custodian earnings credits (Note 5)........................... (16,384) (27,448) (8,216)
----------- ---------- ----------
Net expenses............................................... 588,001 1,457,099 696,508
----------- ---------- ----------
Net investment income.................................... 1,577,956 5,391,256 3,697,450
=========== ========== ==========

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 4)
Net realized gain............................................. 13,228,656 24,074,606 10,367,628
Net unrealized appreciation (depreciation) for the period..... 2,771,203 12,247,138 (14,123,315)
----------- ---------- ----------
Net realized and unrealized gain (loss) on investments..... 15,999,859 36,321,744 (3,755,687)
----------- ---------- ----------
Net increase (decrease) in assets resulting from operations... $17,577,815 41,713,000 (58,237)
=========== ========== ==========
- -------------------

See the accompanying notes to financial statements.

</TABLE>

<TABLE>
<CAPTION>
BENHAM EQUITY FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED), AND THE YEAR ENDED DECEMBER 31, 1995

Benham Benham Benham
Equity Growth Fund Income & Growth Fund Utilities Income Fund
--------------------- ---------------------- -----------------------
June 30, Dec. 31, June 30, Dec. 31, June 30, Dec. 31,
1996 1995 1996 1995 1996 1995
-------- -------- -------- -------- -------- --------
FROM INVESTMENT ACTIVITIES:
<S> <C> <C> <C> <C> <C> <C>
Net investment income.......................... $ 1,577,956 2,590,300 5,391,256 7,252,966 3,697,450 7,656,872
Net realized gain (loss) on investments........ 13,228,656 14,524,662 24,074,606 24,745,688 10,367,628 (1,057,980)
Net change in unrealized appreciation
(depreciation)............................... 2,771,203 20,284,838 12,247,138 53,273,200 (14,123,315) 48,067,735
----------- ---------- ----------- ---------- ---------- -----------
Change in net assets derived from investment
activities............................... 17,577,815 37,399,800 41,713,000 85,271,854 (58,237) 54,666,627
----------- ---------- ----------- ---------- ---------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income.......................... (1,508,678) (2,229,577) (5,168,327) (7,155,104) (3,512,277) (7,543,125)
Net realized gain on investments............... 0 (10,288,052) 0 (14,921,356) 0 0
----------- ---------- ----------- ---------- ---------- -----------
Total distributions to shareholders.......... (1,508,678) (12,517,629) (5,168,327) (22,076,460) (3,512,277) (7,543,125)
----------- ---------- ----------- ---------- ---------- -----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 3):
Proceeds from sales of shares.................. 64,359,797 99,236,956 192,420,784 136,860,249 48,722,975 129,707,694
Net asset value of dividends reinvested........ 1,459,722 12,120,317 4,873,377 20,831,551 3,053,297 6,339,489
Cost of shares redeemed........................ (44,268,519) (74,226,375) (69,388,559) (72,124,849)(103,458,857) (116,945,889)
----------- ---------- ----------- ---------- ---------- -----------
Change in net assets derived from capital share
transactions............................. 21,551,000 37,130,898 127,905,602 85,566,951 (51,682,585) 19,101,294
----------- ---------- ----------- ---------- ---------- -----------
Net increase (decrease) in net assets.... 37,620,137 62,013,069 164,450,275 148,762,345 (55,253,099) 66,224,796
NET ASSETS:
Beginning of period............................ 159,450,294 97,437,225 373,701,143 224,938,798 218,794,461 152,569,665
----------- ---------- ----------- ---------- ---------- -----------
End of period.................................. $197,070,431 159,450,294 538,151,418 373,701,143 163,541,362 218,794,461
=========== ========== =========== ========== ========== ===========
- -------------------

See the accompanying notes to financial statements.
</TABLE>

BENHAM EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(UNAUDITED)

(1) SIGNIFICANT ACCOUNTING POLICIES

Benham Equity Funds (BEF) is registered under the Investment Company Act of 1940
as a diversified open-end management investment company. Benham Equity Growth
Fund (BEGF), Benham Income & Growth Fund (BIGF), and Benham Utilities Income
Fund (BUIF) (collectively the Funds) are three of the five funds composing BEF.
BEGF seeks capital appreciation by investing in common stocks. BIGF seeks
dividend growth, current income, and capital appreciation by investing in common
stocks. BUIF seeks current income and long-term growth of capital and income.
BUIF invests primarily in equity securities of companies engaged in the
utilities industry. BEF is authorized to issue a total of 20 billion shares of
capital stock. Each Fund is authorized to issue two billion shares. Significant
accounting policies followed by BEF are summarized below.

VALUATION OF INVESTMENT SECURITIES--Investment securities, both foreign and
domestic, are valued at market as provided by an independent pricing service.
The pricing service values equity securities at the closing price on their
primary exchange. Securities traded over-the-counter are valued at the mean
between the latest bid and asked prices. Prices of non-U.S. dollar denominated
securities are converted to U.S. dollars on a daily basis. When valuations are
not readily available, securities are valued at market value as determined in
good faith by or under the direction of the board of directors. Security
transactions are recorded on the date the order to buy or sell is executed.
Realized gains and losses from security transactions are determined on the basis
of identified cost.

The character of distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for
federal income tax purposes.

As of December 31, 1995, BUIF had a tax capital loss carryover of $11,392,226.
Loss carryovers not offset by realized gains will expire eight years after the
fiscal year in which they are realized. BUIF's capital loss carryover of
$7,035,543 and $4,356,683 will expire by December 31, 2002 and 2003,
respectively. No capital gain distributions will be made by a Fund until all of
its loss carryover has been offset or expired.

INVESTMENT INCOME AND SHAREHOLDER DISTRIBUTIONS--Dividend income from investment
securities is recorded on the ex-dividend date. Interest income and expenses are
accrued daily. BEGF distributes dividends quarterly; BIGF and BUIF accrue
dividends daily and distribute them on the last business day of each month. Each
Fund distributes net short-term and long-term capital gains, if any, once per
year. Distributions may be paid in cash or reinvested as additional shares.

FUTURES CONTRACTS--The Funds may buy and sell stock index futures contracts in
order to manage each Fund's exposure to changes in market conditions. One of the
risks of entering into futures contracts may include the possibility that the
change in value of the contract may not correlate with the changes in value of
the underlying securities. Upon entering into a futures contract, the Fund is
required to deposit either cash or securities in an amount (initial margin)
equal to a certain percentage of the contract value. Subsequent payments
(variation margin) are made or received by the Fund. The variation margin is
equal to the daily change in the contract value and is recorded as unrealized
gains and losses. The Fund recognizes a realized gain or loss when the contract
is closed or expires.

ORGANIZATION COSTS--Costs incurred by each of the Funds in connection with the
organization, initial registration, and public offering of shares are being
amortized on a straight-line basis over five-year periods ending May 1996 (BEGF)
and February 1998 (BUIF).

(2) INVESTMENT ADVISORY FEE AND OTHER
TRANSACTIONS WITH AFFILIATES

BMC provides BEF with all investment advice. Twentieth Century Services, Inc.
pays all compensation of Fund officers and directors who are officers or
directors of TCC or any of its subsidiaries. In addition, promotion and
distribution expenses are paid by BMC.

BEF has an additional agreement with BMC pursuant to which BMC established a
contractual expense guarantee that limits each Fund's expenses (excluding
extraordinary expenses such as brokerage commissions and taxes) to .75% of the
Fund's average daily net assets. The agreement provides further that BMC may
recover amounts (representing expenses in excess of the Fund's expense guarantee
rate) absorbed during the preceding 11 months, if, and to the extent that, for
any given month, the Fund's expenses are less than the expense guarantee rate in
effect at that time. The expense guarantee rate is renewed annually in June.

The payables to affiliates as of June 30, 1996, based on the above agreements
were as follows:

Benham Benham Benham
Equity Income & Utilities
Growth Fund Growth Fund Income Fund
---------- ---------- ----------

Investment Advisor............... $ 48,084 127,968 38,599
Administrative Services.......... 35,625 95,008 26,428
Transfer Agent................... 24,040 63,445 22,968
------ ------ ------
$107,749 286,421 87,995
====== ====== ======

As of June 30, 1996, each Fund had invested in shares of Capital Preservation
Fund, Inc. (CPF), a money market fund advised by BMC. The terms of such
transactions were identical to those with nonrelated entities except that, to
avoid duplicative investment advisory fees and administrative fees, the Funds
did not pay BMC investment advisory fees or BFS administrative fees with respect
to assets invested in shares of CPF.

BEF has a distribution agreement with Benham Distributors, Inc. (BDI), which is
responsible for promoting sales of and distributing the Funds' shares. BDI is a
wholly owned subsidiary of TCC.

(3) SHARE TRANSACTIONS

Transactions for each of the Funds for the six months ended June 30, 1996, and
the year ended December 31, 1995, were as follows:

Benham Equity Benham Income &
Growth Fund Growth Fund
----------------- -----------------
June 30, Dec. 31, June 30, Dec. 31,
1996 1995 1996 1995
-------- -------- -------- --------

Shares sold................... 4,273,521 7,293,964 10,280,493 8,043,488
Reinvestment of dividends..... 95,209 865,208 257,244 1,210,017
--------- --------- --------- ---------
4,368,730 8,159,172 10,537,737 9,253,505
Less shares redeemed..........(2,953,999) (5,415,539) (3,714,102)(4,427,311)
--------- --------- --------- ---------
Net increase in shares........ 1,414,731 2,743,633 6,823,635 4,826,194
========= ========= ========= =========

Benham Utilities
Income Fund
------------------
June 30, Dec. 31,
1996 1995
-------- --------

Shares sold........................................ 4,285,967 13,052,071
Reinvestment of dividends.......................... 271,914 634,034
---------- ----------
4,557,881 13,686,105
Less shares redeemed............................... (9,252,191)(11,911,081)
---------- ----------
Net increase (decrease) in shares.................. (4,694,310) 1,775,024
========== ==========

(4) INVESTMENT SECURITIES--PURCHASES AND SALES

Purchases and sales of investment securities, excluding short-term securities,
for the six months ended June 30, 1996, were as follows:

Benham Benham Benham
Equity Income & Utilities
Growth Fund Growth Fund Income Fund
----------- ---------- ----------

Purchases........................ $123,333,851 281,910,875 67,318,041
=========== ========== ==========
Sales Proceeds................... $103,632,969 176,882,446 107,290,101
=========== ========== ==========

As of June 30, 1996, unrealized appreciation (depreciation) on investment
securities was as follows:
Benham Benham Benham
Equity Income & Utilities
Growth Fund Growth Fund Income Fund
---------- ---------- ----------

Appreciated securities........... $ 27,019,824 76,153,158 20,735,358
Depreciated securities........... (2,666,149) (6,009,065) (4,963,334)
----------- ---------- ----------
Net unrealized appreciation...... $24,353,675 70,144,093 15,772,024
=========== ========== ==========

As of June 30, 1996, the costs of investment securities for federal income tax
purposes were $173,829,108 (BEGF), $460,482,724 (BIGF), and $146,898,296 (BUIF).
Gross unrealized appreciation and depreciation of investments, based on these
costs, were:
Benham Benham Benham
Equity Income & Utilities
Growth Fund Growth Fund Income Fund
---------- ---------- ----------

Appreciated securities............ $26,998,025 76,145,093 20,710,213
Depreciated securities............ (2,666,149) (6,022,730) (5,204,520)
----------- ---------- ----------
Net unrealized appreciation....... $24,331,876 70,122,363 15,505,693
=========== ========== ==========

(5) EXPENSE OFFSET ARRANGEMENTS

Each Fund's Statement of Operations reflects custodian earnings credits. These
amounts are used to offset the custody fees payable by the Funds to the
custodian bank. The credits are earned when the Fund maintains a balance of
uninvested cash at the custodian bank. Beginning with the year ended December
31, 1995, the ratios of expenses to average daily net assets shown in the
Financial Highlights are calculated as if these credits had not been earned.

BENHAM EQUITY FUNDS
Benham Equity Growth Fund
Schedule of Investment Securities
June 30, 1996
(Unaudited)
SHARES VALUE
------- -----------

COMMON STOCKS

AEROSPACE & DEFENSE3.5%
17,100 General Dynamics Corp................. $ 1,060,200
55,000 Litton Industries, Inc.1.............. 2,392,500
9,000 Lockheed Martin Corp.................. 756,000
16,200 McDonnell-Douglas Corp................ 785,700
23,200 Rockwell International Corp........... 1,328,200
4,900 United Technologies Corp.............. 563,500
----------
6,886,100
----------
AIRLINES1.6%
30,000 AMR Corp.1............................ 2,730,000
5,100 Delta Air Lines, Inc.................. 423,300
----------
3,153,300
----------
AUTOMOBILES & AUTO PARTS2.1%
27,500 Chrysler Corp......................... 1,705,000
72,600 Ford Motor Co......................... 2,350,425
2,500 Kysor Industrial Corp................. 60,625
----------
4,116,050
----------
BANKING9.5%
70,910 Banc One Corp......................... 2,410,940
60,900 BankAmerica Corp...................... 4,613,175
38,800 Chase Manhattan Corp.................. 2,740,250
5,900 Citicorp.............................. 487,487
76,300 City National Corp.................... 1,201,725
12,200 First Bank System, Inc................ 707,600
17,700 First Union Corp...................... 1,077,488
16,500 Morgan (J.P.) & Co.................... 1,396,312
33,200 NationsBank Corp...................... 2,743,150
50,000 Washington Mutual, Inc................ 1,500,000
----------
18,878,127
----------
BIOTECHNOLOGY0.4%
7,500 Bio-Rad Laboratories, Inc............. 269,063
9,400 Medtronic, Inc........................ 526,400
----------
795,463
----------
BUILDING & HOME IMPROVEMENTS0.6%
23,500 Centex Corp........................... 731,438
16,400 Republic Group, Inc................... 233,700
8,800 Webb (Del) Corp....................... 176,000
----------
1,141,138
----------
BUSINESS SERVICES & SUPPLIES0.1%
2,700 CDI Corp.1............................ 91,125
6,800 Hunt Manufacturing Co................. 101,150
----------
192,275
----------
CHEMICALS2.9%
49,700 Dow Chemical Co....................... 3,777,200
23,500 Rohm & Haas Co........................ 1,474,625
9,900 Union Carbide Corp.................... 393,525
----------
5,645,350
----------
- -------------------
See the accompanying notes to financial statements.

SCHEDULE OF INVESTMENT SECURITIES - BENHAM EQUITY GROWTH FUND (Continued)
(Unaudited)
================================================================================

SHARES VALUE
- ------- -----------

COMMUNICATIONS SERVICES7.4%
52,600 Ameritech Corp........................ $ 3,123,125
12,600 Bell Atlantic Corp.................... 803,250
35,000 BellSouth Corp........................ 1,483,125
41,500 Compania De Telefonia Espana SA ADR .. 2,287,688
34,000 MCI Communications Corp............... 869,125
10,000 NYNEX Corp............................ 475,000
34,200 SBC Communications Inc................ 1,684,350
68,600 Sprint Corp........................... 2,881,200
30,000 Tele Danmark A/S ADR.................. 761,250
14,200 360 Communications Company............ 340,800
----------
14,708,913
----------
COMPUTER SOFTWARE & SERVICES0.9%
15,000 Computer Associates International, Inc. 1,068,750
30,000 Factset Research Systems, Inc.......... 600,000
----------
1,668,750
----------
COMPUTER SYSTEMS3.5%
41,100 Compaq Computer Corp.1................ 2,024,175
5,600 Digital Equipment Corp.1.............. 252,000
10,000 Gateway 2000, Inc..................... 339,375
34,600 International Business Machines Corp.. 3,425,400
15,600 Sun Microsystems, Inc.1............... 918,450
----------
6,959,400
----------
CONSTRUCTION0.2%
9,000 Foster Wheeler Corp................... 403,875
----------
CONTROL & MEASUREMENT 1.0%
37,900 Varian Associates, Inc................ 1,961,325
----------
DIVERSIFIED COMPANIES1.2%
18,500 Cascade Corp.......................... 242,813
45,300 Global Industries, Ltd................ 724,800
51,800 ITT Industries........................ 1,301,475
----------
2,269,088
----------
ELECTRICAL & ELECTRONIC COMPONENTS5.4%
41,800 Avnet, Inc............................ 1,760,825
11,400 Esterline Technologies, Inc........... 285,000
4,100 Fluke Corporation..................... 165,537
45,300 General Electric Co................... 3,918,450
7,400 Harris Corp........................... 451,400
15,000 Intel Corp............................ 1,101,562
3,800 Kemet Corp............................ 76,475
6,900 Marshall Industries................... 193,200
26,000 Park Electrochemical Corp............. 520,000
19,600 SCI Systems, Inc.1.................... 797,475
10,000 Tektronix, Inc........................ 447,500
29,600 Wyle Electronics...................... 980,500
----------
10,697,924
----------
ENERGY (PRODUCTION & MARKETING)--9.6%
46,800 Amoco Corp............................ 3,387,150
27,400 Columbia Gas System, Inc. (The)....... 1,428,225
10,900 Eastern Enterprises................... 362,425
59,100 Exxon Corp............................ 5,134,313
39,000 Mobil Corp............................ 4,372,875
24,000 Phillips Petroleum Co................. 1,005,000
19,300 Royal Dutch Petroleum Co. ADR......... 2,967,375
18,000 Valero Energy Corp.................... 450,000
----------
19,107,363
----------
- -------------------
See the accompanying notes to financial statements.

SCHEDULE OF INVESTMENT SECURITIES - BENHAM EQUITY GROWTH FUND (Continued)
(Unaudited)
================================================================================

SHARES VALUE
- ------- -----------

FINANCIAL SERVICES5.8%
25,000 American Express Co................... $ 1,115,625
10,000 Associates First Capital Corporation.. 376,250
48,845 Bear Stearns Companies Inc............ 1,153,963
7,600 Countrywide Credit Industries, Inc.... 188,100
23,000 Dean Witter, Discover & Co............ 1,316,750
10,000 Green Tree Financial Corp............. 312,500
53,700 Lehman Brothers Holdings Inc.......... 1,329,075
13,200 Merrill Lynch & Co., Inc.............. 859,650
29,200 Morgan Stanley Group Inc.............. 1,434,450
35,400 Paine Webber Group Inc................ 840,750
60,200 Salomon, Inc.......................... 2,648,800
----------
11,575,913
----------
FOOD & BEVERAGE1.6%
69,400 PepsiCo, Inc.......................... 2,455,025
20,000 Sara Lee Corp......................... 647,500
----------
3,102,525
----------
FURNITURE & FURNISHINGS0.2%
10,000 Leggett & Platt, Inc.................. 277,500
4,800 Miller (Herman), Inc.................. 146,700
2,700 Shelby Williams Industries, Inc....... 29,700
----------
453,900
----------
HEALTHCARE0.9%
10,000 Foundation Health Corp.1.............. 358,750
15,000 Humana, Inc........................... 268,125
20,000 Mallinckrodt Group Inc................ 777,500
10,000 Sierra Health Services, Inc.1......... 315,000
----------
1,719,375
----------
INDUSTRIAL EQUIPMENT & MACHINERY5.9%
27,800 Applied Materials, Inc................ 846,163
20,000 Case Equipment Corp................... 960,000
29,000 Caterpillar Inc....................... 1,964,750
36,200 Deere & Co............................ 1,448,000
58,700 Dover Corp............................ 2,707,537
15,000 Duriron Company, Inc.................. 359,062
22,400 Harsco Corp........................... 1,506,400
20,000 KLA Instruments Corp.................. 463,750
11,100 Kaydon Corp........................... 477,300
11,400 Measurex Corp......................... 333,450
10,000 Novellus Systems, Inc................. 362,500
17,900 Teradyne, Inc......................... 308,775
----------
11,737,687
----------
INSURANCE6.3%
6,700 American Bankers Insurance Group, Inc. 293,125
5,900 American International Group, Inc..... 581,887
6,300 CNA Financial Corp.1.................. 648,900
10,000 Equitable of Iowa Companies........... 355,000
8,400 Fremont General Corp.................. 193,200
15,000 General Re Corp....................... 2,283,750
39,100 NAC Re Corp........................... 1,309,850
8,000 National Re Corp...................... 302,000
24,300 Old Republic Int'l Corp............... 522,450
16,600 ReliaStar Financial Corp.............. 715,875
37,600 SAFECO Corp........................... 1,332,450
11,300 Transatlantic Holdings, Inc........... 792,412
70,950 Travelers Group, Inc.................. 3,237,094
----------
12,567,993
----------
- -------------------
See the accompanying notes to financial statements.

SCHEDULE OF INVESTMENT SECURITIES - BENHAM EQUITY GROWTH FUND (Continued)
(Unaudited)
================================================================================

SHARES VALUE
- ------- -----------

METALS & MINING0.1%
3,500 Cleveland Cliffs Inc.................. $ 136,938
----------
PHARMACEUTICALS8.4%
63,600 Bristol-Myers Squibb Co............... 5,724,000
85,800 Johnson & Johnson..................... 4,247,100
41,800 Merck & Co., Inc...................... 2,701,325
29,000 Pfizer Inc............................ 2,069,875
30,000 Schering-Plough Corp.................. 1,882,500
----------
16,624,800
----------
PRINTING & PUBLISHING0.3%
8,000 American Business Products, Inc....... 175,000
16,200 Bowne & Co., Inc...................... 334,125
----------
509,125
----------
RESTAURANTS0.4%
15,700 Marriott International................ 843,875
----------
RETAIL (APPAREL)0.2%
10,900 Gap, Inc.............................. 350,163
----------
RETAIL (FOOD & DRUG)2.9%
30,000 Eckerd Corp........................... 678,750
31,600 Longs Drug Stores Corp................ 1,410,150
98,000 Safeway Inc........................... 3,234,000
20,000 Thrifty PayLess Holdings, Inc......... 345,000
----------
5,667,900
----------
RETAIL (GENERAL MERCHANDISE)1.4%
5,300 Dayton Hudson Corp.................... 546,562
43,100 Sears, Roebuck & Co................... 2,095,737
4,700 Waban Inc.1........................... 112,213
----------
2,754,512
----------
RETAIL (SPECIALTY)1.2%
30,900 CompUSA Inc.1......................... 1,054,463
16,400 Gibson Greetings, Inc................. 226,525
15,000 Micro Warehouse, Inc.................. 296,250
20,000 Ross Stores, Inc...................... 696,250
----------
2,273,488
----------
STEEL0.1%
4,100 Texas Industries, Inc................. 281,362
----------
TOBACCO2.5%
46,800 Philip Morris Companies, Inc.......... 4,867,200
----------

TRANSPORTATION0.3%
12,900 CSX Corporation....................... 622,425
----------

UTILITIES (ELECTRIC)5.7%
19,200 Boston Edison Co...................... 489,600
28,200 Consolidated Edison Co. of New York, Inc. 824,850
27,600 DQE, Inc.............................. 759,000
7,000 Detroit Edison Company................ 216,125
9,200 Empresa Nacional de Electricidad S.A. ADR 576,150
15,600 General Public Utilities Corp......... 549,900
17,900 Indiana Energy, Inc................... 512,388
22,000 MCN Corp.............................. 536,250
35,700 NICOR, Inc............................ 1,012,987
12,500 NIPSCO Industries, Inc................ 503,125
36,700 Oneok, Inc............................ 917,500
42,000 Pacific Enterprises................... 1,244,250
13,000 Panhandle Eastern Corp................ 427,375
14,100 Portland General Corp................. 435,337
62,000 Unicom Corp........................... 1,728,250
28,200 Washington Gas Light Co............... 620,400
----------
11,353,487
----------
- -------------------
See the accompanying notes to financial statements.

SCHEDULE OF INVESTMENT SECURITIES - BENHAM EQUITY GROWTH FUND (Continued)
(Unaudited)
================================================================================

SHARES VALUE
- ------- -----------

MISCELLANEOUS0.8%
5,000 Cabletron Systems, Inc................ $ 343,125
20,000 Hughes Supply, Inc.................... 695,000
26,000 King World Productions, Inc........... 945,750
----------
1,983,875
----------
TOTAL COMMON STOCKS94.9%......................... 188,010,984
(cost $163,657,309) ----------

TEMPORARY CASH INVESTMENTS5.1%
Repurchase Agreement (Goldman Sachs & Co., Inc.),
5.35%, due 7/1/96; collateralized by $8,190,000
par value U.S. Treasury Bonds, 7.5%- 11.75%, due
2/15/10 through 11/15/16 (Delivery value
$ 10,151,508)................................. 10,150,000 2
(cost $10,150,000) -----------

TOTAL INVESTMENT SECURITIES100.0%................ $ 198,160,984
(cost $173,807,309) ==========

FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE
PURCHASED DATE AMOUNT AT VALUE
- ------------------------------- ----------- ------------------
20 S&P 500 Stock Index Futures Sept. 1996 $6,767,000

- -------------------
1 Non-income producing.

2 A portion of this repurchase agreement ($7,750,000) has been segregated at the
custodian bank for futures contracts.

ADR - American Depository Receipt

See the accompanying notes to financial statements.

BENHAM EQUITY FUNDS
Benham Income & Growth Fund
Schedule of Investment Securities
June 30, 1996
(Unaudited)

SHARES VALUE
- ------- -----------

COMMON STOCKS

AEROSPACE & DEFENSE -- 2.7%
5,300 Boeing Co............................. $ 461,763
12,900 General Dynamics Corp................. 799,800
62,800 Litton Industries, Inc.1.............. 2,731,800
23,200 Lockheed Martin Corp.................. 1,948,800
17,100 McDonnell-Douglas Corp................ 829,350
15,600 Raytheon Co........................... 805,350
55,500 Rockwell International Corp........... 3,177,375
32,000 United Technologies Corp.............. 3,680,000
----------
14,434,238
----------
AIRLINES -- 0.6%
13,300 AMR Corp.1............................ 1,210,300
26,100 Delta Air Lines, Inc.................. 2,166,300
----------
3,376,600
----------
AUTOMOBILES & AUTO PARTS -- 2.6%
85,200 Chrysler Corp......................... 5,282,400
61,700 Dana Corp............................. 1,912,700
20,000 Excel Industries, Inc................. 250,000
190,300 Ford Motor Co......................... 6,160,963
5,000 TRW Inc............................... 449,375
----------
14,055,438
----------
BANKING -- 7.7%
100,820 Banc One Corp......................... 3,427,880
103,900 BankAmerica Corp...................... 7,870,425
2,900 Bank of Boston Corp................... 143,550
24,900 Barnett Banks, Inc.................... 1,518,900
102,888 Chase Manhattan Corp.................. 7,266,465
21,300 Citicorp.............................. 1,759,912
98,600 City National Corp.................... 1,552,950
33,200 Comerica, Inc......................... 1,481,550
67,400 First Bank System, Inc................ 3,909,200
25,500 First Union Corp...................... 1,552,312
8,200 Mellon Bank Corp...................... 467,400
36,800 Morgan (J.P.) & Co. Inc............... 3,114,200
59,300 NationsBank Corp...................... 4,899,663
22,800 National City Corp.................... 800,850
42,600 P N C Bank Corp....................... 1,267,350
----------
41,032,607
----------
BIOTECHNOLOGY -- 0.4%
35,600 Medtronic, Inc........................ 1,993,600
----------
BUILDING & HOME IMPROVEMENTS -- 0.5%
8,200 Ameron, Inc........................... 323,900
15,000 Centex Corp........................... 466,875
20,000 Medusa Corp........................... 620,000
39,900 Republic Group, Inc................... 568,575
30,000 Webb (Del) Corp....................... 600,000
----------
2,579,350
----------
- -------------------
See the accompanying notes to financial statements.

SCHEDULE OF INVESTMENT SECURITIES - BENHAM INCOME & GROWTH FUND (Continued)
(Unaudited)
================================================================================

SHARES VALUE
- ------- -----------

BUSINESS SERVICES & SUPPLIES -- 0.1%
25,900 Ennis Business Forms, Inc............. $ 294,613
7,000 Hunt Manufacturing Co................. 104,125
----------
398,738
----------
CHEMICALS & RESINS -- 4.9%
25,800 Arco Chemical Company................. 1,341,600
92,500 Dow Chemical Co....................... 7,030,000
30,800 du Pont (E.I.) de Nemours & Co........ 2,437,050
54,800 Goodrich (B.F.) Company............... 2,048,150
381,000 Hanson PLC ADR....................... 5,429,250
16,900 Imperial Chemical Industries PLC ADR.. 830,212
53,100 Morton International, Inc............. 1,977,975
50,000 Rohm & Haas Co........................ 3,137,500
17,500 Terra Industries Inc.................. 216,562
37,700 Union Carbide Corp.................... 1,498,575
----------
25,946,874
----------
COMMUNICATIONS SERVICES -- 7.2%
90,000 AT&T Corp............................. 5,580,000
91,900 Ameritech Corp........................ 5,456,562
91,900 Bell Atlantic Corp.................... 5,858,625
73,000 BellSouth Corp........................ 3,093,375
36,800 Compania De Telefonia Espana SA ADR... 2,028,600
74,500 GTE Corp.............................. 3,333,875
50,000 MCI Communications Corp............... 1,278,125
35,100 NYNEX Corp............................ 1,667,250
27,200 Pacific Telesis Group................. 918,000
63,600 SBC Communications Inc................ 3,132,300
112,800 Sprint Corp........................... 4,737,600
37,100 Tele Danmark A/S ADR.................. 941,412
----------
38,025,724
----------
COMPUTER PERIPHERALS -- 0.2%
3,200 Cabletron Systems, Inc................ 219,600
5,900 Cisco Systems Inc.1................... 334,457
4,300 Seagate Technology, Inc.1............. 193,500
12,300 Telxon Corp........................... 146,831
----------
894,388
----------
COMPUTER SOFTWARE & SERVICES -- 1.3%
52,500 Computer Associates International, Inc. 3,740,625
40,000 Factset Research Systems, Inc......... 800,000
20,000 Microsoft Corp.1...................... 2,401,250
2,900 Wallace Computer Services, Inc........ 173,275
----------
7,115,150
----------
COMPUTER SYSTEMS -- 3.3%
54,100 Compaq Computer Corp.1................ 2,664,425
1,000 Dell Computer Corp.................... 50,812
25,700 Digital Equipment Corp.1.............. 1,156,500
19,300 Gateway 2000, Inc.1................... 654,994
56,400 Hewlett-Packard Co.................... 5,618,850
74,700 International Business Machines Corp.. 7,395,300
3,000 Sun Microsystems, Inc.1............... 176,625
----------
17,717,506
----------
CONSUMER PRODUCTS -- 1.2%
65,000 Hughes Supply, Inc.................... 2,258,750
57,800 Kellwood Co........................... 1,062,075
18,000 Maytag Corp........................... 375,750
32,300 Procter & Gamble Co................... 2,927,188
----------
6,623,763
----------
CONTROL & MEASUREMENT -- 0.4%
41,800 Varian Associates, Inc................. 2,163,150
----------
- -------------------
See the accompanying notes to financial statements.

SCHEDULE OF INVESTMENT SECURITIES - BENHAM INCOME & GROWTH FUND (Continued)
(Unaudited)
================================================================================

SHARES VALUE
- ------- -----------

DIVERSIFIED COMPANIES -- 1.0%
20,000 Cascade Corp.......................... $ 262,500
25,000 Duriron Co, Inc....................... 598,438
82,900 Global Industries, Ltd................ 1,326,400
50,000 Horsham Corp. ADR..................... 693,750
95,200 ITT Industries........................ 2,391,900
----------
5,272,988
----------
ELECTRICAL & ELECTRONIC COMPONENTS -- 6.7%
83,200 Avnet, Inc............................ 3,504,800
38,600 Cypress Semiconductor Corp.1.......... 463,200
35,000 Esterline Technologies Inc............ 875,000
39,700 Fluke Corporation..................... 1,602,887
152,500 General Electric Co................... 13,191,250
32,000 Harris Corp........................... 1,952,000
44,300 Honeywell Inc......................... 2,414,350
40,300 Intel Corp............................ 2,959,531
11,700 Johnson Controls, Inc................. 813,150
15,800 Marshall Industries................... 442,400
11,700 Micron Technology, Inc................ 302,737
15,000 Parker-Hannifin Corp.................. 635,625
48,200 Pentair, Inc.......................... 1,446,000
40,000 SCI Systems, Inc.1.................... 1,627,500
17,800 Tektronix, Inc........................ 796,550
23,200 Texas Instruments Inc................. 1,157,100
35,400 Wyle Electronics...................... 1,172,625
----------
35,356,705
----------
ENERGY (PRODUCTION & MARKETING) -- 11.3%
132,600 Amoco Corp............................ 9,596,925
32,200 Atlantic Richfield Co................. 3,815,700
3,100 Columbia Gas System, Inc. (The)....... 161,587
59,200 Eastern Enterprises................... 1,968,400
184,800 Exxon Corp............................ 16,054,500
93,500 Mobil Corp............................ 10,483,687
15,000 Oneok, Inc............................ 375,000
109,700 Pacific Enterprises................... 3,249,862
110,400 Panhandle Eastern Corp................ 3,629,400
57,600 Phillips Petroleum Co................. 2,412,000
27,000 Royal Dutch Petroleum Co. ADR......... 4,151,250
19,500 Texaco Inc............................ 1,635,563
60,000 USX-Marathon Group.................... 1,207,500
45,400 Washington Gas Light Co............... 998,800
----------
59,740,174
----------
FINANCIAL SERVICES -- 4.0%
63,500 American Express Credit Corp.......... 2,833,687
S30,000 Associates First Capital Corporation.. 1,128,750
110,115 Bear Stearns Companies Inc............ 2,601,467
34,000 Dean Witter, Discover & Co............ 1,946,500
57,800 Edwards (A.G.), Inc................... 1,567,825
7,500 Federal Home Loan Mortgage Corp....... 641,250
57,500 Federal National Mortgage Association. 1,926,250
800 Green Tree Financial Corp............. 25,000
7,300 Household International, Inc.......... 554,800
8,000 Lehman Brothers Holding, Inc.......... 198,000
41,800 Merrill Lynch & Co., Inc.............. 2,722,225
28,200 Morgan Stanley Group Inc.............. 1,385,325
22,700 Paine Webber Group Inc................ 539,125
73,300 Salomon, Inc.......................... 3,225,200
----------
21,295,404
----------
FOOD & BEVERAGE -- 1.1%
117,200 PepsiCo, Inc.......................... 4,145,950
53,400 Sara Lee Corp......................... 1,728,825
----------
5,874,775
----------
FURNITURE -- 0.3%
46,800 Leggett & Platt, Inc.................. 1,298,700
10,800 Shelby Williams Industries, Inc....... 118,800
----------
1,417,500
----------
- -------------------
See the accompanying notes to financial statements.

SCHEDULE OF INVESTMENT SECURITIES - BENHAM INCOME & GROWTH FUND (Continued)
(Unaudited)
================================================================================

SHARES VALUE
- ------- -----------

HEALTHCARE -- 0.5%
14,100 Baxter International, Inc............. $ 666,225
22,500 Foundation Health Corp.1.............. 807,188
4,600 Humana Inc............................ 82,225
10,000 Mallinckrodt Group Inc................ 388,750
20,000 Sierra Health Services, Inc.1......... 630,000
----------
2,574,388
----------
INDUSTRIAL EQUIPMENT & MACHINERY -- 3.8%
35,200 Applied Materials, Inc.1.............. 1,071,400
48,500 Caterpillar Inc....................... 3,285,875
52,200 Deere & Co............................ 2,088,000
97,700 Dover Corp............................ 4,506,413
25,400 Dresser Industries, Inc............... 749,300
23,400 Harsco Corp........................... 1,573,650
81,000 KLA Instruments Corp.................. 1,878,187
19,100 Kaydon Corp........................... 821,300
15,200 Manitowoc Co., Inc.................... 545,300
35,300 Measurex Corp......................... 1,032,525
55,000 Novellus Systems, Inc.1............... 1,993,750
23,500 Teradyne, Inc.1....................... 405,375
1,500 Timken Co............................. 58,125
----------
20,009,200
----------
INSURANCE -- 4.0%
47,000 Allstate Corporation.................. 2,144,375
3,600 American Bankers Insurance Group, Inc. 157,500
5,400 American International Group, Inc..... 532,575
26,600 General Re Corp....................... 4,049,850
6,700 Loews Corp............................ 528,463
5,300 Marsh & McLennan Cos., Inc............ 511,450
10,000 NAC Re Corp........................... 335,000
5,000 Providian Corp........................ 214,375
24,700 ReliaStar Financial Corp.............. 1,065,187
106,900 SAFECO Corp........................... 3,788,269
3,200 Selective Insurance Group, Inc........ 104,800
2,800 St. Paul Companies, Inc. (The)........ 149,800
26,900 Transamerica Corp..................... 2,178,900
13,800 Transatlantic Holdings, Inc........... 967,725
97,800 Travelers Group, Inc.................. 4,462,125
----------
21,190,394
----------
LEISURE -- 0.6%
32,800 Brunswick Corp........................ 656,000
14,900 Eastman Kodak Co...................... 1,158,475
18,000 Marriott International................ 967,500
23,000 Ruby Tuesday, Inc..................... 520,375
----------
3,302,350
----------
MEDICAL EQUIPMENT & SUPPLIES -- 0.6%
23,400 Becton, Dickinson & Co................ 1,877,850
28,900 Hillenbrand Industries, Inc........... 1,076,525
----------
2,954,375
----------
METALS & MINING -- 0.1%
5,100 Cleveland Cliffs Inc.................. 199,537
8,500 Phelps Dodge Corp..................... 530,188
----------
729,725
----------
OFFICE EQUIPMENT -- 0.4%
35,500 Xerox Corp............................ 1,899,250
----------
PAPER & FOREST PRODUCTS -- 0.1%
10,300 Georgia-Pacific Corp.................. 731,300
----------
PHARMACEUTICALS -- 8.7%
35,200 American Home Products Corp........... 2,116,400
2,400 Bergen Brunswig....................... 66,600
219,800 Bristol-Myers Squibb Co............... 19,782,000
3,600 Lilly (Eli) & Co...................... 234,000
196,600 Johnson & Johnson..................... 9,731,700
101,700 Merck & Co., Inc...................... 6,572,363
62,000 Pfizer Inc............................ 4,425,250
54,600 Schering-Plough Corp.................. 3,426,150
----------
46,354,463
----------
- -------------------
See the accompanying notes to financial statements.

SCHEDULE OF INVESTMENT SECURITIES - BENHAM INCOME & GROWTH FUND (Continued)
(Unaudited)
================================================================================

SHARES VALUE
- ------- -----------

RETAIL (APPAREL) -- 0.8%
17,550 Claire's Stores, Inc.................. $ 484,819
41,200 Gap, Inc.............................. 1,323,550
6,000 Liz Claiborne, Inc.................... 207,750
2,400 NIKE, Inc............................. 246,600
24,200 Oshkosh B'Gosh, Inc................... 438,625
45,000 Ross Stores, Inc...................... 1,566,562
----------
4,267,906
----------
RETAIL (FOOD & DRUG) -- 1.4%
37,600 Albertson's Inc....................... 1,555,700
57,600 Eckerd Corp........................... 1,303,200
36,500 Longs Drug Stores, Inc................ 1,628,813
57,600 Safeway Inc.1......................... 1,900,800
23,600 Thrifty PayLess Holdings, Inc......... 407,100
18,600 Vons Cos., Inc.1...................... 695,175
----------
7,490,788
----------
RETAIL (GENERAL MERCHANDISE) -- 2.1%
13,600 Dayton-Hudson Corp.................... 1,402,500
6,700 Dillard Department Stores, Inc. Cl A.. 244,550
34,000 Mercantile Stores Co., Inc............ 1,993,250
148,600 Sears, Roebuck & Co................... 7,225,675
19,100 Waban Inc.1........................... 456,013
----------
11,321,988
----------
RETAIL (SPECIALTY) -- 0.6%
69,300 CompUSA Inc.1......................... 2,364,863
23,000 Gibson Greetings, Inc................. 317,687
20,300 Micro Warehouse, Inc.1................ 400,925
----------
3,083,475
----------
STEEL -- 0.2%
27,500 Carpenter Technology Corp............. 880,000
----------
TOBACCO -- 2.8%
12,800 American Brands, Inc.................. 580,800
136,700 Philip Morris Companies, Inc.......... 14,216,800
----------
14,797,600
----------
TRANSPORTATION -- 0.8%
86,200 CSX Corporation....................... 4,159,150
----------
UTILITIES (ELECTRIC) -- 8.2%
60,400 Boston Edison Co...................... 1,540,200
192,500 Central & South West Corp............. 5,582,500
7,000 Commonwealth Energy System............ 180,250
244,300 Consolidated Edison Co. of New York, Inc. 7,145,775
36,900 DQE, Inc.............................. 1,014,750
82,200 Detroit Edison Company................ 2,537,925
17,500 Enova Corporation..................... 404,688
70,000 Entergy Corp.......................... 1,986,250
171,900 General Public Utilities Corp......... 6,059,475
114,600 MidAmerican Energy Co................. 1,976,850
15,000 NIPSCO Industries, Inc................ 603,750
84,800 Peoples Energy Corp................... 2,840,800
30,900 Portland General Corp................. 954,038
88,900 Rochester Gas & Electric Corp......... 1,911,350
41,500 Sierra Pacific Resources.............. 1,053,062
23,400 Southwestern Public Service Co........ 763,425
39,100 Texas Utilities Electric Co........... 1,671,525
62,600 Unicom Corp........................... 1,744,975
61,800 United Illuminating Co................ 2,309,775
60,000 Washington Water Power Co............. 1,117,500
----------
43,398,863
----------
- -------------------
See the accompanying notes to financial statements.

SCHEDULE OF INVESTMENT SECURITIES - BENHAM INCOME & GROWTH FUND (Continued)
(Unaudited)
================================================================================

SHARES VALUE
- ------- -----------

UTILITIES (NATURAL GAS) -- 1.1%
16,900 AGL Resources, Inc.................... $ 318,988
16,900 Bay State Gas Co...................... 471,087
16,800 Connecticut Natural Gas Corp.......... 375,900
21,200 Indiana Energy Inc.................... 606,850
30,000 MCN Corp.............................. 731,250
74,000 NICOR Inc............................. 2,099,750
31,000 WICOR, Inc............................ 1,170,250
21,500 Westcoast Energy Inc. ADR............. 322,500
----------
6,096,575
----------
MISCELLANEOUS -- 0.7%
15,500 American Business Products, Inc....... 339,062
4,900 Barnes Group Inc...................... 250,512
53,200 King World Productions, Inc........... 1,935,150
5,300 Valmont Industries, Inc............... 178,213
49,500 Varlen Corp........................... 1,045,688
----------
3,748,625
----------

TOTAL COMMON STOCKS-- 95.0%...................... 504,305,087
(cost $ 434,160,994) ----------

TEMPORARY CASH INVESTMENTS -- 5.0%
Repurchase Agreement (Goldman Sachs & Co., Inc.),
5.35%, due 7/1/96; collateralized by 20,005,000
par value U.S. Treasury Bonds, 13.375%,
due 8/15/01 (Delivery value $26,302,557)...... 26,300,000 2
(cost $26,300,000) ----------

TOTAL INVESTMENT SECURITIES-- 100.0%............. $ 530,605,087
(cost $460,460,994) ==========

FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE
PURCHASED DATE AMOUNT AT VALUE
- ------------------------------- ------------ -----------------
70 S&P 500 Stock Index Futures Sept. 1996 $ 23,684,500

- -------------------
1 Non-income producing.

2 A portion of this repurchase agreement ($22,900,000) has been segregated at
the custodian bank for futures contracts.

ADR - American Depository Receipt

See the accompanying notes to financial statements.

BENHAM EQUITY FUNDS
Benham Utilities Income Fund
Schedule of Investment Securities
June 30, 1996
(Unaudited)

SHARES VALUE
- ------- -----------

COMMON STOCKS

COMMUNICATIONS EQUIPMENT -- 1.1%
99,900 US West Mediavision Group1 $ 1,823,175
----------
COMMUNICATIONS SERVICES -- 44.4%
25,000 AT&T Corp. 1,550,000
60,000 AirTouch Communications, Inc. 1,695,000
64,700 ALLTEL Corp. 1,989,525
120,300 Ameritech Corp. 7,142,812
123,500 Bell Atlantic Corp. 7,873,125
190,000 BellSouth Corp. 8,051,250
4,700 British Telecommunications plc ADR 252,625
42,500 Cable & Wireless plc ADR 839,375
94,500 Century Telephone Enterprises, Inc. 3,012,187
160,500 GTE Corp. 7,182,375
114,300 NYNEX Corp. 5,429,250
160,900 SBC Communications Inc. 7,924,325
109,500 Sprint Corp. 4,599,000
142,300 Tele Danmark A/S ADR 3,610,863
12,000 Telecom Corp. of New Zealand Ltd. ADR 801,000
9,000 Telefonica de Espana ADR 496,125
90,000 Telefonos de Mexico, S. A. ADR 3,015,000
163,400 U S WEST Communications, Inc. 5,208,375
57,000 360 Communications Company 1,368,000
----------
72,040,212
----------
ENERGY (EXPLORATION & PRODUCTION) -- 0.1%
5,900 Enron Corp. 241,163
----------
NATURAL GAS -- 11.8%
57,800 AGL Resources, Inc. 1,090,975
9,900 Bay State Gas Co. 275,962
36,800 British Gas plc ADR 1,030,400
4,800 Brooklyn Union Gas Co.(The) 130,800
17,000 Connecticut Natural Gas Corp. 380,375
70,000 Consolidated Natural Gas Co. 3,657,500
39,800 Eastern Enterprises 1,323,350
7,700 Energen Corp. 170,362
14,400 Indiana Energy Inc. 412,200
9,400 MCN Corp. 229,125
5,000 National Fuel Gas Co. 180,000
21,800 NICOR Inc. 618,575
18,000 Oneok, Inc. 450,000
151,900 Pacific Enterprises 4,500,038
37,600 Panhandle Eastern Corp. 1,236,100
5,000 Providence Energy Corp. 86,250
81,800 TransCanada PipeLines Ltd. ADR 1,206,550
30,000 Washington Gas Light Co. 660,000
56,100 Westcoast Energy Inc. ADR 841,500
18,200 WICOR, Inc. 687,050
----------
19,167,112
----------
UTILITIES (ELECTRIC) -- 39.6%
9,400 American Electric Power Co., Inc. 400,675
10,000 Atlantic Energy, Inc. 182,500
8,500 Black Hills Corp. 211,437
113,600 Boston Edison Co. 2,896,800
30,000 CMS Energy Corp. 926,250
33,600 Central & South West Corp. 974,400

- -------------------
See the accompanying notes to financial statements.

SCHEDULE OF INVESTMENT SECURITIES - BENHAM UTILITIES INCOME FUND (Continued)
(Unaudited)
================================================================================

SHARES VALUE
- ------- -----------

31,200 CINergy Corp.......................... $ 998,400
7,686 Citizens Utilities Co................. 88,389
18,200 Commonwealth Energy System............ 468,650
251,600 Consolidated Edison Co. of New York, Inc. 7,359,300
153,900 Detroit Edison Company................ 4,751,662
54,600 Eastern Utilities Associates.......... 1,071,525
57,300 Edison International.................. 1,009,912
114,800 Enova Corporation..................... 2,654,750
22,100 Entergy Corp.......................... 627,087
96,400 FPL Group, Inc........................ 4,434,400
83,800 General Public Utilities Corp......... 2,953,950
12,500 Houston Industries Inc................ 307,813
15,000 IPALCO Enterprises, Inc............... 393,750
85,000 MidAmerican Energy Co................. 1,466,250
118,800 NIPSCO Industries, Inc................ 4,781,700
23,400 New England Electric System........... 851,175
75,000 Niagara Mohawk Power Corp............. 581,250
60,000 Northeast Utilities................... 802,500
70,000 Northern States Power Co.............. 3,456,250
51,000 Ohio Edison Co........................ 1,115,625
80,200 Pacific Gas & Electric Co............. 1,864,650
85,000 PECO Energy Co........................ 2,210,000
16,700 Portland General Corp................. 515,613
91,300 Rochester Gas & Electric Corp......... 1,962,950
126,500 Southern Co........................... 3,115,063
50,000 TECO Energy, Inc...................... 1,262,500
45,400 Texas Utilities Co.................... 1,940,850
111,300 Unicom Corp........................... 3,102,488
47,700 United Illuminating Co................ 1,782,788
40,000 Washington Water Power Co............. 745,000
----------
64,268,302
----------
UTILITIES (WATER) -- 0.2%
7,000 Aquirion Co............................ 173,250
10,600 Consumers Water Co..................... 168,275
----------
341,525
----------
TOTAL COMMON STOCKS-- 97.2%...................... 157,881,489
(cost $ 142,163,590) ----------

FIXED INCOME SECURITIES

U.S. TREASURY SECURITIES -- 1.3%
$2,000,000 U.S. Treasury Bonds,
7.125%, 02/15/23.............................. 2,022,500
(cost $1,969,375) ----------

TEMPORARY CASH INVESTMENTS -- 1.5%
Repurchase Agreement (Goldman Sachs & Co., Inc.),
5.35%, due 7/1/96; collateralized by $1,890,000
par value U.S. Treasury Bonds, 11.75%, due 2/15/10
(Delivery value $ 2,501,115).................. 2,500,000
(cost $2,500,000) ----------

TOTAL INVESTMENT SECURITIES-- 100.0%............. $162,403,989
(cost $ 146,632,965) ==========

- -------------------
1 Non-income producing.

ADR - American Depository Receipt

See the accompanying notes to financial statements.

TRUSTEES

James M. Benham
Albert A. Eisenstat
Ronald J. Gilson
Myron S. Scholes
Kenneth E. Scott
Ezra Solomon
Isaac Stein
James E. Stowers, III
Jeanne D. Wohlers

OFFICERS

James M. Benham
Chairman of the Board

Maryanne Roepke
Treasurer and Chief Financial Officer

Douglas A. Paul
Vice President, Secretary
and General Counsel

Ann N. McCoid
Controller

[company logo] The Benham Group
Part of the Twentieth Century Family of Mutual Funds

1665 Charleston Road
Mountain View, CA 94043

1-800-321-8321

Not authorized for distribution unless preceded or
accompanied by a current fund prospectus.

Benham Distributors, Inc. 8/96 Q070