[Flag Investors logo]
Flag Investors
Mutual Funds [Flag Investors logo]
Growth
Flag Investors Emerging Growth Fund Flag
Flag Investors Equity Partners Fund Investors
Flag Investors International Fund Emerging
Equity Income Growth
Flag Investors Real Estate Securities Fund Fund
Flag Investors Telephone Income Fund
Balanced
Flag Investors Value Builder Fund
Income
Flag Investors Intermediate-Term Income Fund
Flag Investors Total Return U.S. Treasury Fund Shares
Tax-Free Income
Flag Investors Managed Municipal Fund Shares
Flag Investors Maryland Intermediate
Tax-Free Income Fund
Current Income
Flag Investors Cash Reserve Prime Shares
P.O. Box 515
Baltimore, Maryland 21203 Semi-Annual Report
800-767-FLAG April 30, 1996
Distributed by:
ALEX. BROWN & SONS
INCORPORATED
<PAGE>
[Flag Investors logo]
FLAG INVESTORS
EMERGING GROWTH FUND
Directors and Officers
Truman T. Semans Frederick L. Meserve, Jr.
Chairman President
James J. Cunnane Sandra J. Doeller
Director Vice President
Richard T. Hale Gary V. Fearnow
Director Vice President
John F. Kroeger Charles A. Reid
Director Vice President
Louis E. Levy Edward J. Veilleux
Director Vice President
Eugene J. McDonald Brian C. Nelson
Director Vice President and Secretary
W. James Price Joseph A. Finelli
Director Treasurer
Harry Woolf Laurie D. DePrine
Director Assistant Secretary
Investment Objective
An open-end mutual fund seeking long-term growth of capital through investment
in a diversified portfolio of small and mid-sized emerging growth companies.
Investment Advisor
Investment Company Capital Corp.
P.O. Box 515
Baltimore, MD 21203
(800) 553-8080
Custodian
PNC Bank, N.A.
Transfer Agent
Investment Company Capital Corp.
Legal Counsel
Morgan, Lewis & Bockius LLP
Independent Auditors
Coopers & Lybrand L.L.P.
Five Largest Holdings
(As of April 30, 1996)
- --------------------------------------------------------------------------------
Percent of
Company Net Assets
- --------------------------------------------------------------------------------
(bullet) Integrated Systems Inc. 5.0%
Designs, markets and supports computer
software products that automate and
accelerate the development of real-time
software. The company's products are
used in the aerospace, automotive and
computer industries.
(bullet) Synopsys Inc. 4.4%
Develops, markets and supports high
level design automation software for
designers of integrated circuits and
electronics systems. The company has
license agreements with over 400
customers, including major inter-
national semiconductor, computer,
communications, military and
aerospace companies.
(bullet) QuickResponse Services, Inc. 4.3%
Provides a product information database
and related network services that automate
and improve merchandise management.
(bullet) Apple South, Inc. 4.2%
Owns and operates "Applebee's"
and "Don Pablos" restaurants.
(bullet) HomeTown Buffet, Inc. 4.1%
Operates and franchises scatter bar buffet restaurants featuring traditional
American "home cooking" buffet style food. The company operates 60 U.S.
restaurants.
- --------------------------------------------------------------------------------
1
<PAGE>
[Flag Investors logo]
FLAG INVESTORS
EMERGING GROWTH FUND
Dear Shareholders:
Six months of the 1996 fiscal year have passed and we are pleased to report
that your Fund continues to outperform comparative indices. Specifically,
during the most recent quarter ended April 30, 1996, the Fund appreciated 21.7%
vs. 14.6% for the Lipper Small Company Growth Index, 10.8% for the Russell
2000 Index and 3.4% for the Standard &Poor's 500 Index. For the last twelve
months, the Fund produced a total return of 52.1%, placing it in the top 21st
percentile of Morningstar's Small Company Fund category.*
- --------------------------------------------------------------------------------
Performance Comparisons**
(For the periods ended 4/30/96)
3 Months 6 Months 12 Months
Flag Investors Emerging
Growth Fund 21.7% 21.5% 52.1%
NASDAQ OTC Composite 12.3% 14.9% 41.1%
Russell 2000 Index 10.8% 18.4% 33.0%
Lipper Small Company
Growth Index 14.6% 19.3% 40.2%
S&P 500 Index 3.4% 13.7% 30.2%
The Fund's performance also placed in the top 5% of 6,800 funds ranked by
Investor's Business Daily for the 3-year period ended May 2, 1996, earning an
A+ rating in that newspaper.(1)
- --------------------------------------------------------------------------------
* Funds are grouped according to investment objective and are ranked by
total return performance relative to other funds in their respective
categories. This ranking indicates that the Fund's performance ranked #74
out of 349 funds in the Small Company Fund category. In addition, the Fund
ranked #91 out of 108 funds for the 5-year period ended April 30, 1996.
Performance figures used in these rankings exclude the impact of any sales
charge.
** These figures assume the reinvestment of dividends and capital gains
distributions and exclude the impact of any sales charge. The unmanaged
indices listed above are widely recognized as indicators of performance in
their respective market sectors. The Russell 2000 Index is a widely
recognized indicator of general small company growth performance. The
Lipper Small Company Growth Index is an indicator of the performance
of the 30 largest funds in the Lipper Small Company Growth Fund Average
Category.
(1) Funds are ranked based on total return excluding the impact of sales charge.
The universe of 6,800 funds includes all NASDAQ funds that have at least $25
million in assets and a 3-year performance record.
Since investment return and principal value will fluctuate, an investor's
shares may be worth more or less than their original cost when redeemed. Past
performance is not an indicator of future results. Please review the Additional
Performance Information on page 3.
Our investment philosophy is based on our historical observation that
superior investment performance comes from holding rapidly growing companies for
a long period of time. Our strategy is to identify such companies early in their
life cycles. Hence, the market capitalization of the companies is generally
below $500 million when we originally buy them.
If we successfully identify companies as having very large market
opportunities with proprietary products or business models and excellent
management, they will grow to be large. We keep them in the portfolio as long as
the original investment thesis remains valid and their growth rate remains above
our 20% threshold requirement. As these companies succeed and get larger, we
trim weightings to make way for new investments in smaller companies. This
investment process results in a portfolio that is diversified between larger,
well-known and somewhat more established companies and smaller, start-up
companies that are not as well-known by investors.
As this investment process took place over the last year, turnover in the
portfolio remained low at 35%. The Long-Term Holdings table on p. 3 lists five
of the larger companies that have been in the portfolio for a long period of
time, along with their gains since the date of purchase (two holdings are up
more than ten-fold). We have also shown the current percent weighting of each
holding, the current market capitalization and how many months we have held the
position.
2
<PAGE>
[Flag Investors logo]
FLAG INVESTORS
EMERGING GROWTH FUND
Long-Term Holdings
(As of 4/30/96)
Market Number of
Percent of Capitalization Months
Gain* Net Assets (in billions) Held
- --------------------------------------------------------------------------------
Maxim Integrated
Products Inc. 9.5x 1.3% $2.2 61
- -------------------------------------------------------------------------------
Parametric
Technology Corp. 11.5x 1.9% $5.4 58
- -------------------------------------------------------------------------------
Clear Channel Com-
munications Inc. 15.5x 1.6% $2.3 49
Vivra Inc. 2.8x 2.9% $1.1 42
Fritz Companies Inc. 3.5x 3.2% $1.3 41
*The multiple of the original investment.
As newer companies replace older companies in the portfolio, aggregate
earnings for the portfolio continue to grow rapidly. Over the past year, the
weighted average earnings growth for portfolio companies was greater than 35%.
We believe that it is this rapid aggregate earnings growth that is enabling the
Fund to post superior performance. Our current analysis suggests that earnings
for our companies should continue to grow in excess of 35% for the remainder of
this year and through 1997. At the current price-to-earnings multiple of less
than 27 times estimated 1997 year-end earnings, the Fund appears reasonably
priced for those investors with a long-term outlook.
Very truly yours,
/s/ Frederick L. Meserve, Jr.
Frederick L. Meserve, Jr.
President
May 23, 1996
Additional Performance Information
The shareholder letter included in this report contains statistics
designed to help you evaluate the performance of your Fund's management. The
Securities and Exchange Commission (SEC) requires that when we report such
figures, we also include the Fund's total return, according to a
standardized formula, for various time periods through the end of the most
recent calendar quarter. The SEC total return figures differ from those we
reported because the time periods may be different and because the SEC
calculation includes the impact of the Fund's currently effective 4.50%
maximum sales charge.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
% Return With
Periods ended 3/31/96: Sales Charge
- --------------------------------------------------------------------------------
One Year 27.02%
- --------------------------------------------------------------------------------
Five Years 9.96%
- --------------------------------------------------------------------------------
Since Inception (6/15/88) 10.02%
- --------------------------------------------------------------------------------
These total returns correspond to those experienced by individual
shareholders only if their shares were purchased on the first day of each time
period and the maximum sales charge was paid.
Any performance figures shown are for the full period indicated. Since
investment return and principal value will fluctuate, an investor's shares may
be worth more or less than their original cost when redeemed. Past performance
is not an indicator of future results.
This report is prepared for the general information of shareholders. It
is authorized for distribution to prospective investors only when preceded
or accompanied by an effective prospectus.
For more complete information regarding any of the Flag Investors Funds,
including charges and expenses, obtain a prospectus from your investment
representative or directly from the Fund at 1-800-767-FLAG. Read it carefully
before you invest.
3
<PAGE>
[Flag Investors logo]
FLAG INVESTORS
EMERGING GROWTH FUND
Statement of Net Assets April 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Percent Percent
No. of Value of Net No. of Value of Net
Shares Security (Note A) Assets Shares Security (Note A) Assets
- ---------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <S> <C> <C>
COMMON STOCKS--87.9%
Business Services--11.8% Media/Communications--2.1%
20,000 Apollo Group* $ 880,000 1.6% 13,032 Clear Channel Communica-
24,450 Corporate Express, Inc.* 913,818 1.7 tions Inc. $ 882,918 1.6%
57,100 Energy Biosystems Corp.* 371,150 0.7 19,800 Lancit Media Productions
111,600 Manugistics Group, Inc.* 1,813,500 3.4 Ltd.* 257,400 0.5
78,800 QuickResponse Services, 1,140,318 2.1
Inc.* 2,304,900 4.3
8,428 Strategic Distribution, Technology--Software/Services--16.7%
Inc.* 61,103 0.1 91,600 Integrated Systems Inc.* 2,679,300 5.0
6,344,471 11.8 93,000 Marcam Corp.* 1,069,500 2.0
26,000 Parametric Technology
Consumer Services--19.2% Corp.* 1,046,500 1.8
87,900 Apple South, Inc. 2,285,400 4.2 81,100 Progress Software Corp.* 1,277,325 2.4
154,550 HomeTown Buffet, Inc.* 2,202,338 4.1 56,700 Synopsys Inc.* 2,338,875 4.4
67,500 O'Charleys, Inc.* 1,037,813 1.9 39,000 XcelleNet Inc.* 575,250 1.1
86,200 Pacific Sunwear of 8,986,750 16.7
California* 1,400,750 2.6
20,050 Papa John's International, Technology--Systems/
Inc.* 988,715 1.8 Semiconductor--18.4%
21,950 PETsMART, Inc.* 974,032 1.8 31,200 Atmel Corporation* 1,248,000 2.3
32,500 Starbucks Corp.* 881,562 1.7 55,400 Cidco Inc.* 1,980,550 3.7
15,400 Sylvan Learning Systems, 16,000 Itron, Inc.* 940,000 1.7
Inc.* 596,750 1.1 67,400 Level One Communications
10,367,360 19.2 Inc. 1,786,100 3.3
20,800 Maxim Integrated Products
Financial Services--1.9% Inc.* 712,400 1.3
40,800 PXRE Corporation 1,040,400 1.9 27,100 QUALCOMM, Inc.* 1,050,126 2.0
15,300 Security Dynamics
Health Care Services--11.1% Technologies, Inc.* 1,292,850 2.4
29,300 Access Health Marketing 2,075 Sipex Corp.* 42,538 0.1
Inc.* 1,622,488 3.0 22,800 Xilinx, Inc.* 840,750 1.6
53,800 Genesis Health Ventures
Inc. 1,593,825 2.9 9,893,314 18.4
25,650 PhyCor, Inc.* 1,263,262 2.3
49,375 Vivra Inc.* 1,561,484 2.9 Transportation--6.2%
6,041,059 11.1 47,000 Fritz Companies Inc.* 1,727,250 3.2
122,500 Great Lakes Aviation Ltd.* 505,312 0.9
Health Equipment and Services--0.5% 69,000 Landair Services Inc.* 1,104,000 2.1
12,700 Perclose, Inc.* 260,350 0.5 3,336,562 6.2
Total Common Stocks
(Cost $27,723,221) 47,410,584 87.9
</TABLE>
4
<PAGE>
[Flag Investors logo]
FLAG INVESTORS
EMERGING GROWTH FUND
Statement of Net Assets (concluded) April 30, 1996
(Unaudited)
Percent
Par Value of Net
(000) Security (Note A) Assets
REPURCHASE AGREEMENT--16.7%
$8,981 Goldman Sachs & Co., 5.20%
Dated 4/30/96, to be
repurchased on 5/1/96,
collateralized by U.S.
Treasury Notes with a
market value of
$9,161,447.
(Cost $8,981,000) $ 8,981,000 16.7%
Total Investment in
Securities
(Cost $36,704,221)** 56,391,584 104.6
Liabilities in Excess of
Other Assets, Net (2,483,400) (4.6)
Net Assets $53,908,184 100.0%
Value
(Note A)
Net Asset Value and
Redemption Price
Per:
Class A Share
($41,856,986 / 2,128,129
shares outstanding) $19.67
Institutional Share
($12,051,198 / 613,537
shares outstanding) $19.64
Maximum Offering
Price Per:
Class A Share
($19.67 / .955) $20.60
Institutional Share $19.64
- --------------------------------------------------------------------------------
* Non-income producing security.
** Aggregate cost for federal tax purposes was $36,671,784.
See accompanying Notes to Financial Statements.
5
<PAGE>
[Flag Investors logo]
FLAG INVESTORS
EMERGING GROWTH FUND
Statement of Operations For the Six Months Ended April 30, 1996
(Unaudited)
INVESTMENT INCOME (NOTE A):
Interest $ 126,731
Dividends 16,098
Total income 142,829
EXPENSES:
Investment advisory fee (Note B) 178,837
Distribution fee (Note B) 45,568
Accounting fee (Note B) 18,927
Legal 17,452
Audit 10,962
Printing and postage 10,472
Transfer agent fees (Note B) 9,972
Custodian fees 8,976
Miscellaneous 5,360
Registration fees 4,284
Directors' fees 997
Total expenses 311,807
Expenses in excess of income (168,978)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain from security transactions 1,096,319
Change in unrealized appreciation of investments 8,023,603
Net gain on investments 9,119,922
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $8,950,944
- --------------------------------------------------------------------------------
See accompanying Notes to Financial Statements.
6
<PAGE>
[Flag Investors logo]
FLAG INVESTORS
EMERGING GROWTH FUND
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
For the Six
Months Ended For the Year
April 30, 1996 Ended
(Unaudited) October 31, 1995
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE/DECREASE IN NET ASSETS:
Operations:
Expenses in excess of income $ (168,978) $ (190,378)
Net realized gain from security transactions 1,096,319 2,180,561
Change in unrealized appreciation of investments 8,023,603 6,850,511
Net increase in net assets resulting from operations 8,950,944 8,840,694
DIVIDENDS TO SHAREHOLDERS FROM:
Net realized short-term gains (674,016) --
Net realized long-term gains (1,348,032) (73,772)
Total distributions (2,022,048) (73,772)
CAPITAL SHARE TRANSACTIONS (NOTE C):
Proceeds from sale of 922,987 and 735,343 shares,
respectively 15,932,793 10,561,629
Value of 117,523 and 5,714 shares issued in
reinvestment of dividends, respectively 1,913,272 68,962
Cost of 529,876 and 316,169 shares repurchased,
respectively (8,993,413) (4,572,632)
Increase in net assets derived from capital share
transactions 8,852,652 6,057,959
Total increase in net assets 15,781,548 14,824,881
NET ASSETS:
Beginning of period 38,126,636 23,301,755
End of period $53,908,184 $38,126,636
- ----------------------------------------------------------------------------------------------------
See accompanying Notes to Financial Statements.
7
<PAGE>
[Flag Investors logo]
FLAG INVESTORS
EMERGING GROWTH FUND
Financial Highlights--Class A Shares
(For a share outstanding throughout each period)*
</TABLE>
<TABLE>
<CAPTION>
For the Six
Months Ended For the Year Ended October 31,
April 30, 1996 ---------------------------------------------------
(Unaudited) 1995 1994 1993 1992 1991
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value at beginning of period $ 17.09 $ 12.90 $ 14.02 $ 13.53 $ 15.23 $ 8.93
Income from Investment Operations:
Net investment loss (0.07) (0.09) (0.08) (0.08) (0.16) (0.10)
Net realized and unrealized gain/(loss)
on investments 3.55 4.32 0.47 1.20 (1.54) 6.40
Total from Investment Operations 3.48 4.23 0.39 1.12 (1.70) 6.30
Less Distributions:
Dividends from net investment income
and short-term gains (0.30) -- -- -- -- --
Distributions from net realized
long-term gains (0.60) (0.04) (1.51) (0.63) -- --
Total distributions (0.90) (0.04) (1.51) (0.63) -- --
Net asset value at end of period $ 19.67 $ 17.09 $ 12.90 $ 14.02 $ 13.53 $ 15.23
Total Return** 21.46% 32.92% 3.75% 8.33% (11.16)% 70.55%
Ratios to Average Daily Net Assets:
Expenses(2) 1.50%(1) 1.50% 1.50% 1.50% 1.46% 1.50%
Expenses in excess of income(3) (0.84)%(1) (0.64)% (0.73)% (0.52)% (0.92)% (0.76)%
Supplemental Data:
Net assets at end of period (000) $41,822 $38,127 $23,302 $28,867 $38,924 $48,656
Portfolio turnover rate 33%(1) 39% 86% 133% 69% 79%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Computed based upon average shares outstanding.
** Total return excludes the effect of sales charge.
(1) Annualized.
(2) Without the waiver of advisory fees (Note B), the ratio of expenses to
average daily net assets would have been 1.50% (annualized), 1.68%, 1.88%,
1.64%, 1.91% and 1.64% for the six months ended April 30, 1996 and the
years ended October 31, 1995, 1994, 1993, 1992 and 1991, respectively.
(3) Without the waiver of advisory fees (Note B), the ratio of expenses in
excess of income to average daily net assets would have been 1.50%
(annualized), (0.81)%, (1.10)%, (0.66)%, (1.17)% and (1.07)% for the six
months ended April 30, 1996 and the years ended October 31, 1995, 1994,
1993, 1992 and 1991, respectively.
See accompanying Notes to Financial Statements.
8
<PAGE>
[Flag Investors logo]
FLAG INVESTORS
EMERGING GROWTH FUND
Financial Highlights--Institutional Class Shares
(For a share outstanding throughout the period)*
For the Period
November 2, 1995**
through
April 30, 1996
(Unaudited)
---------------------------------------------------------------------------
Per Share Operating Performance:
Net asset value at beginning of period $17.12
------
Income from Investment Operations:
Expenses in excess of income (0.03)
Net realized and unrealized gain on investments 3.45
Total from Investment Operations 3.42
Less Distributions:
Distributions from net investment income and short-term gains (0.30)
Distributions from net realized long-term gains (0.60)
-----
Total distributions (0.90)
-----
Net asset value at end of period $19.64
======
Total Return(1) 19.31%
Ratios to Average Daily Net Assets:
Expenses(2) 1.24%
Expenses in excess of income(2) (0.58)%
Supplemental Data:
Net assets at end of period (000) $11,992
Portfolio turnover rate(2) 33%
- -------------------------------------------------------------------------------
* Computed based upon average shares outstanding.
** Commencement of operations.
(1) Total return excludes the effect of sales charge.
(2) Annualized.
See accompanying Notes to Financial Statements.
9
<PAGE>
[Flag Investors logo]
FLAG INVESTORS
EMERGING GROWTH FUND
Notes to Financial Statements
A. Significant Accounting Policies -- Flag Investors Emerging Growth Fund, Inc.
(the "Fund") was organized as a Maryland Corporation on July 2, 1987
and commenced operations on December 30, 1987, consisting of Class A
Shares, which are subject to a maximum front-end sales charge of
4.50% and a 0.25% distribution fee. On November 2, 1995, the Fund began
offering Institutional Shares, which are not subject to a front-end sales
charge or distribution fee. The Fund is registered under the
Investment Company Act of 1940 as a diversified, open-end management
investment company.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Significant accounting policies are as follows:
Security Valuation -- Portfolio securities that are primarily traded
on a recognized U.S. securities exchange are valued on the basis of their
last sale price. In the event that there are no sales or the security is not
listed, it is valued at the average between the last reported bid and
asked prices or at the fair value as determined by the Investment Advisor
under procedures established and monitored by the Board of Directors.
Short-term obligations with maturities of 60 days or less are valued at
amortized cost.
Repurchase Agreements -- The Fund may agree to purchase money market
instruments subject to the seller's agreement to repurchase them at an
agreed upon date and price. The seller, under a repurchase agreement, will
be required on a daily basis to maintain the value of the securities subject
to the agreement at not less than the repurchase price. The agreement is
conditioned upon the collateral being deposited under the Federal Reserve
book-entry system.
Federal Income Tax -- No provision is made for federal income taxes as it is
the Fund's intention to continue to qualify as a regulated investment
company and to make requisite distributions to shareholders that will be
sufficient to relieve it from all or substantially all federal income and
excise taxes. The Fund's policy is to annually distribute to shareholders
substantially all of its taxable net investment income and net realized
long-term capital gains, if any.
Distributions are determined in accordance with income tax regulations, which
may differ from generally accepted accounting principles. Accordingly,
periodic reclassifications are made within the Fund's capital accounts to
reflect income and gains available for distribution under income tax
regulations.
Other -- Security transactions are accounted for on the trade date and the
cost of investments sold or redeemed in kind is determined by use of the
specific identification method for both financial reporting and income tax
purposes. Interest income is recorded on an accrual basis. Dividend
income is recorded on the ex-dividend date.
B. Investment Advisory Fee, Transactions with Affiliates and Other Fees --
Investment Company Capital Corp. ("ICC"), a subsidiary of Alex. Brown
Financial Corp., serves as the Fund's investment advisor. The Advisory
Agreement provides for a maximum annual fee equal to .85% of the Fund's
average daily net assets. However, the actual amount of the fee is
contractually limited to an amount that would result in total expenses on
Class A Shares of no more than 1.50%. As compensation for its services
for the six months ended April 30, 1996, the Advisor received $178,837 in
fees.
As compensation for its transfer agent services, ICC receives from the Fund a
per account fee, calculated and paid monthly. ICC received $9,972 for
transfer agent services for the six months ended April 30, 1996. As
compensation for its accounting services, ICC receives from the Fund an
annual fee, calculated daily and paid monthly, from the Fund's average daily
net assets. ICC received $18,927 for
10
<PAGE>
[Flag Investors logo]
FLAG INVESTORS
EMERGING GROWTH FUND
Notes to Financial Statements (concluded)
accounting services for the six months ended April 30, 1996.
As compensation for providing distribution services, Alex. Brown & Sons
Incorporated ("Alex. Brown") receives from the Fund an annual fee,
calculated daily and paid monthly, at an annual rate equal to .25% of the
Class A Shares' average daily net assets. For the six months ended April
30, 1996, distribution fees were $45,568.
The fund complex of which the Fund is a part has adopted a retirement
plan for eligible Directors. The actuarially computed pension expense
allocated to the Fund for the six months ended April 30, 1996 was $318.
C. Capital Share Transactions -- As of April 30, 1996, the Fund was authorized
to issue up to 15 million shares of $.001 par value common stock (8
million Class A, 1 million Class B, 5 million Institutional and 1 million
undesignated). Transactions in shares of the Fund were as follows:
Class A Shares
- --------------------------------------------------------------------------------
For the For the
Six Months Year Ended
Ended October 31,
April 30, 1996 1995
- --------------------------------------------------------------------------------
Shares sold 270,239 735,343
Shares issued to share-
holders on reinvest-
ment of dividends 106,529 5,714
Shares redeemed (479,670) (316,169)
Net increase/(decrease) in
shares outstanding (102,902) 424,888
Proceeds from sale
of shares $ 4,611,364 $10,561,629
Reinvested dividends 1,733,222 68,962
Net asset value of
shares redeemed (8,185,724) (4,572,632)
Net increase/(decrease) from
capital share
transactions $(1,841,138) $ 6,057,959
Institutional Shares
For the Six
Months Ended
April 30, 1996
- --------------------------------------------------------------------------------
Shares sold 652,748
Shares issued to share-
holders on reinvest-
ment of dividends 10,994
Shares redeemed (50,206)
Net increase in shares
outstanding 613,536
Proceeds from sale
of shares $11,321,429
Reinvested dividends 180,050
Net asset value of
shares redeemed (807,689)
Net increase from
capital share
transactions $10,693,790
D. Investment Transactions -- Purchases and sales of investment securities,
other than short-term obligations, aggregated $10,324,804 and
$5,995,206, respectively, for the six months ended April 30, 1996.
At April 30, 1996, net unrealized appreciation for all securities in which
there is an excess of value over tax cost was $19,522,200, of which
$20,393,961 related to appreciated securities and $871,761 related to
depreciated securities.
E. Net Assets -- At April 30, 1996, net assets consisted of:
Paid-in capital $33,441,091
Accumulated net realized
gain from security
transactions 779,730
Unrealized appreciation
of investments 19,687,363
-----------
$53,908,184
===========
11
