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Previous: INSURED MUNICIPAL SECURITIES TR 49TH DIS SE SER 23 NEW YORK, 497, 1995-06-09 |
Next: AMERICAN SKANDIA LIFE ASSURANCE CORP/CT, 10-Q/A, 1995-06-09 |
SMALLCAP WORLD FUND
1995
SEMI-ANNUAL
REPORT
For the six months ended March 31
[The American Funds Group(R)]
INVESTMENT HIGHLIGHTS
<TABLE>
<CAPTION>
for periods ended March 31, 1995 with dividends SMALLCAP S&P 500 FT-Actuaries
reinvested World Fund World Small
Cap
Index
<S> <C> <C> <C>
Total return over six months -1.3% +9.7% +0.3%
Total return since fund's inception on April 30, 1990 +75.3 +76.1 +49.7
Average annual compound return since inception +12.1 +12.2 +8.6
</TABLE>
SMALLCAP
WORLD FUND(R)
SEEKS LONG-TERM GROWTH OF
CAPITAL THROUGH INVESTMENTS IN
SMALLER COMPANIES IN THE U.S. AND
AROUND THE WORLD.
All market indexes cited in this report are unmanaged and include reinvestment
of all distributions. Standard & Poor's 500 Composite Index tracks the 500
largest U.S. stocks; the Financial Times-Actuaries World Small Cap Index,
calculated by Goldman Sachs, tracks the smallest stocks (the bottom 25%) in 24
world markets.
Fund results in this report were computed without a sales charge unless
otherwise indicated. Here are the total returns and average annual compound
returns with all distributions reinvested for periods ended March 31, 1995,
assuming payment of the 5.75% maximum sales charge at the beginning of the
stated periods. Sales charges are lower for accounts of $50,000 or more.
Since inception on 4/30/90: +65.19%, or +10.75% a year; 12 months: -3.91%
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS. SHARE PRICE AND RETURN WILL
VARY, SO YOU MAY HAVE A GAIN OR LOSS OF PRINCIPAL WHEN YOU SELL YOUR SHARES.
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED OR GUARANTEED BY,
THE U.S. GOVERNMENT, ANY FINANCIAL INSTITUTION, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, OR ANY OTHER AGENCY, ENTITY OR PERSON. In addition to the normal
risks of capital loss due to fluctuating security prices inherent in any
investment in equity securities, the fund is subject to risks associated with
investing in smaller capitalization stocks such as possible illiquidity or
greater price fluctuations. Investments outside the U.S. (especially those in
developing countries) are subject to additional risks, including currency
fluctuations, political and social instability, differing securities
regulations and accounting standards, limited public information, possible
changes in taxation and periods of illiquidity. Accordingly, investors should
maintain a long-term perspective.
FELLOW
SHAREHOLDERS:
The six-month period ended March 31 - the first half of SMALLCAP World Fund's
1995 fiscal year - was a difficult time for investors in smaller companies the
world over. With interest rates rising, the U.S. dollar plummeting and most
emerging markets in a free-fall, investors worldwide undertook a "flight to
quality," showing great preference for the stocks of large, established
companies in major markets.
In this volatile environment, SMALLCAP posted a modest loss of 1.3%. This
assumes you reinvested the dividend of 11 cents a share and the capital gain
distribution of $1.35 a share paid in December, as 97% of our shareholders did.
By comparison, the Financial Times-Actuaries World Small Cap Index, the closest
approximation of the universe in which SMALLCAP can invest, eked out a gain of
0.3%.
In the U.S., the stocks of larger companies did appreciably better than the
stocks of smaller firms. They gained 9.7% for the six months as measured
by Standard & Poor's 500 Composite Index versus 2.7% for the Russell 2000 index
of smaller companies. This trend - of larger companies outpacing smaller ones -
was evident in most of the markets in which SMALLCAP invests. While
disappointing, this shouldn't be surprising: The stocks of large and small
companies often move in different rhythms. For most of the previous three
years, small companies held the advantage.
The U.S. market was the world's strongest during the six-month period, at
least when measured in local currencies. When translated into U.S. dollars,
four European markets (Belgium, France, the Netherlands and Switzerland) posted
somewhat higher gains than the U.S. based on the exceptional strength of the
German mark, to which these European Union currencies are linked.
U.S. stock prices have been caught in a tug of war between rising corporate
profits and rising interest rates. Economic growth has remained robust - too
strong, in fact, for the Federal Reserve, which is concerned that unrestrained
growth could lead to higher inflation. The Fed has certainly done its best to
restrain growth, raising short-term interest rates seven times since February
1994, from 3% to 6% currently. We are now beginning to see signs that higher
rates are having the desired tempering effect, with housing starts and
manufacturing growth both slowing noticeably. As yet, inflation has not
rekindled.
While so far the stock market has focused primarily on positive earnings
reports, the impact of rising interest rates should not be underestimated. In
1994, rising rates sent long-term bond prices to their worst annual decline
since the 1920s (though they have since regained some of that ground) and
contributed to volatility in the stock market. Higher rates also increase the
cost of borrowing for all types of activities, including industrial expansion,
consumer spending and government financing, so they may have more pronounced
longer term consequences.
The most profound effect of rising rates, however, has not been felt here in
the U.S. but in the so-called emerging markets, many of which have depended on
a steady stream of foreign capital to finance their economic expansions. In
1993 and early 1994, the flow of money into these markets was so high that it
obscured many economic problems. Higher interest rates have since dried up the
flow of foreign investment, causing severe dislocations in some economies. By
far the most notable example is Mexico, which devalued the peso in December and
suffered a dizzying drop in its financial markets.
SMALLCAP has owned of number of Mexican stocks over the past few years,
reaching more than 4% of equity assets at one point. Fortunately, we sold most
of our Mexican holdings during a market rally last September, not because of
any prescience on our part but because we felt better values were available
elsewhere. We did retain two holdings: Tolmex, a cement company benefiting from
exports to California, and Grupo Durango, a paper company that also has strong
export markets. Not surprisingly, given the peso's plunge, these were our two
worst holdings for the period.
Mexico may have been one of the most vulnerable countries since it was so
dependent on foreign capital to fuel its expansion, but it was far from being
the only smaller market to see a sharp stock market decline. From Argentina to
India, investors were reintroduced to the risks of investing in these
lesser-developed countries.
[PULLQUOTE]
Rather than attempting to identify regions or industries that seem to offer
potential, we look for individual companies whose stocks appear to offer good
long-term value.
[END PULLQUOTE]
We have always felt that the stocks of companies based in developing
countries, if chosen carefully, can make an appropriate addition to investors'
portfolios - when used in moderation. We have kept your fund's holdings in
these markets at relatively low levels in recent years because we believed they
had become too popular. Now, with valuations more reasonable, we have begun to
invest selectively again because we believe these markets offer exceptional
potential over the long haul.
Actually, we are starting to see good values in many countries. The strong
yen, for example, while reducing our interest in Japanese stocks even further
(because it will increase the price of Japanese products), has greatly enhanced
the competitiveness of many firms around the globe. Swedish companies such as
Hoganas, a producer of iron powder for manufacturing, Svedala, a mining supply
firm, and Avesta Sheffield, a maker of stainless steel products, for example,
are all gaining market share. In the Asia/Pacific region, solid earnings growth
has continued for many companies, but stock prices have come down. That has
made us take a hard look at smaller firms in Hong Kong, Australia and other
Pacific Basin markets.
Our interests, as always, have been diverse - from railroads to the
information superhighway. Wisconsin Central, a well-managed regional railroad,
and America Online, a provider of on-line computer services and a popular
access point to the Internet, are two of our three largest holdings. They help
illustrate the tremendous variety that can be found in SMALLCAP's portfolio -
from the mundane to the dynamic.
[PULLQUOTE]
No matter what the market does in the months ahead, we will continue to do
what we have always done best: use our extensive research capabilities to
uncover the most promising smaller companies anywhere in the world.
[END PULLQUOTE]
We have been fortunate to have had both a sizable buying reserve - a bit over
19% of net assets at the beginning of the period - and a continuing flow of
investments from new and existing shareholders, totaling approximately $135
million over the past six months. This has enabled us to take advantage of the
many opportunities we see unfolding. We added 67 stocks to the portfolio during
the period while eliminating 46, and we still have a buying reserve of 18% to
use whenever values appear.
The key in this kind of environment is selectivity. Markets are no longer
going up and down as a group, and success will depend on the progress made by
the underlying businesses. This fits our approach well. Rather than attempting
to identify regions or industries that seem to offer potential, we look for
individual companies whose stocks appear to offer good long-term value. The
result of all these individual decisions is the portfolio listed on pages 5
through 15 - an exceptionally diverse group of more than 350 individual
companies in 35 industries located in 30 countries.
Since its introduction on April 30, 1990, SMALLCAP has generated a total
return of 75.3%, or 12.1% compounded annually. This is roughly equivalent to
the return of the S&P 500, which measures the stocks of larger U.S. companies,
but far superior to the return posted by the FT-Actuaries World Small Cap Index
(as shown in the table on the inside front cover).
SMALLCAP has also fared better than most mutual funds in its universe. It
ranked second of seven global small-company mutual funds during this nearly
five-year period, according to Lipper Analytical Services. This showing is
consistent with SMALLCAP's more recent rankings. For example, its 12-month
return through March 31 of 1.9%, while modest, ranked third among 15 such
funds. (Lipper rankings do not include the effect of sales charges.)
No matter what the market does in the months ahead - whether large or small
companies, or U.S. or non-U.S. stocks move to the fore - we will continue to do
what we have always done best: use our extensive research capabilities to
uncover the most promising smaller companies anywhere in the world.
While the world is clearly experiencing strong economic crosscurrents, we see
nothing that in any way alters our view that, over the long run, small
companies should continue to do better than larger ones.
We look forward to reporting to you again in six months.
Cordially,
Robert B. Egelston
Chairman of the Board
William R. Grimsley
President
May 18, 1995
WHERE ARE SMALLCAP'S PORTFOLIO COMPANIES LOCATED?
==================================================
Geographical distribution of equity assets on March 31, excluding cash
equivalents
THE AMERICAS 68.2%
- ----------------------------------
United States 62.6
Canada 5.2
Mexico .2
Argentina .2
EUROPE 20.8%
- ----------------------------------
United Kingdom 6.1
Sweden 5.3
France 1.7
Austria 1.5
Belgium 1.3
Luxembourg 1.2
Germany .8
Norway .7
Italy .6
Finland .6
Spain .4
Netherlands .3
Ireland .3
PACIFIC BASIN 10.4%
- ----------------------------------
Australia 4.3
Hong Kong 3.6
Japan 1.1
Philippines .7
Indonesia .2
Taiwan .2
China .1
Malaysia .1
Thailand .1
OTHER .6%
- ----------------------------------
Pakistan .3
South Africa .1
India .1
Gabon .1
SMALLCAP World Fund
INVESTMENT PORTFOLIO March 31, 1995
UNAUDITED
Industry Diversification
Broadcasting & Publishing 9.62%
Electronic Components 5.19%
Banking 5.14%
Merchandising 4.87%
Business & Public Services 4.82%
Other Industries 52.43%
Cash & Equivalents 17.93%
*******
<TABLE>
<CAPTION>
Percent
of
Net
Largest Individual Holdings Assets
<S> <C>
First Pacific 1.12%
America Online 1.08
Wisconsin Central Transportation .98
Gaylord Entertainment .93
Village Roadshow .90
H & M Hennes & Mauritz .86
ANTEC .86
BayBanks .84
Consolidated Stores .83
Cablevision Systems .80
</TABLE>
********
<TABLE>
<CAPTION>
Percent
Shares or Market of
EQUITY-TYPE SECURITIES Principal Value Net
(common and preferred stocks and convertible debentures) Amount (000) Assets
<S> <C> <C> <C>
BROADCASTING & PUBLISHING - 8.69%
Gaylord Entertainment Co., Class A (USA) 1,280,000 $33,600 .93%
Cablevision Systems Corp., Class A (USA) /1/ 550,000 29,219 .80
Westwood One, Inc. (USA) /1/ /2/ 1,875,000 22,266 .61
International Family Entertainment, Inc., Class B (USA) 1,375,000 21,141 .58
/1/
Bell Cablemedia PLC (American Depositary Receipts)
(United
Kingdom) /1/ 895,000 17,117 .47
Le Groupe Videotron Ltee (Canada) 1,806,000 15,181 .42
Scandinavian Broadcasting System SA (Denmark -
Incorporated
in Luxembourg) /1/ 655,000 15,065 .41
FLEXTECH PLC (United Kingdom) /1/ 2,329,600 14,822 .41
TCA Cable TV, Inc. (USA) 540,000 13,905 .38
United International Holdings, Inc., Class A (USA) /1/ 810,000 12,758 .35
Comcast UK Cable Partners Ltd., Class A (United Kingdom) 700,000 11,375 .31
/1/
BET Holdings, Inc., Class A (USA) /1/ /2/ 630,000 10,946 .30
CanWest Global Communications Corp. (Canada) /2/ 780,000 10,323 .28
Jones Intercable, Inc., Class A (USA) /1/ 610,000 9,684 .27
Renaissance Communications Corp. (USA) /1/ 261,300 8,362 .23
Century Communications Corp., Class A (USA) /1/ 724,064 7,150 .20
McClatchy Newspapers, Inc., Class A (USA) 293,000 6,886 .19
Australis Media Group Ltd., convertible preferred 5,787,000 3,651
(Australia) /1/
Australis Media Group Ltd.1 /3/ 5,098,960 3,216 .19
Young Broadcasting Inc., Class A (USA) /1/ /2/ 310,000 6,820 .19
International Cablecasting Technologies Inc. (USA) /1/ 2,180,000 6,813 .19
Scottish Television PLC (United Kingdom) 900,000 6,364 .18
TV4 AB, Class A (Sweden) 307,000 5,680 .16
Adelphia Communications Corp., Class A (USA) /1/ 525,000 5,250 .14
WIC Western International Communications Ltd., Class B 415,000 4,750 .13
(Canada)
Chrysalis Group PLC (United Kingdom) 1,130,000 4,629 .13
Metropole Television (France) 68,900 4,530 .12
M-NET (SOUTH AFRICA) 1,330,000 4,274 .12
Shaw Brothers (Hong Kong) Ltd. (Hong Kong) 2,500,000 3,913 .11
Infinity Broadcasting Corp., Class A (USA) /1/ 92,375 3,810 .10
Playboy Enterprises, Inc., Class B (USA) /1/ 406,700 3,203 .09
SelecTV PLC (United Kingdom) /1/ 7,150,000 3,125 .09
AMERICAN PUBLISHING CO., CLASS A (USA) 300,000 3,113 .09
Pulitzer Publishing Co. (USA) 68,750 2,647 .07
Central European Media Enterprises Ltd., Class A (USA -
Incorporated in Bermuda) /1/ /2/ 287,000 2,583 .07
Shaw Communications Inc., Class B (Canada) 390,000 2,406 .07
AUDIOFINA (Luxembourg) 4,918 2,352 .06
GRAMMY ENTERTAINMENT (THAILAND) 240,000 2,009 .06
NRJ SA (France) 19,284 1,560 .04
Pacific Media PLC (United Kingdom) /1/ 52,249,124 1,480 .04
Multimedia, Inc. (USA) /1/ 37,700 1,423 .04
ELECTRONIC COMPONENTS - 5.19%
ANTEC Corp. (USA) /1/ /2/ 1,305,000 31,320 .86
Western Digital Corp. (USA) /1/ 2,075,000 28,531 .79
Cirrus Logic, Inc. (USA) /1/ 650,000 22,100 .61
Cypress Semiconductor Corp. (USA) /1/ 570,000 15,889 .44
Linear Technology Corp. (USA) 260,000 14,430 .40
Microchip Technology Inc. (USA) /1/ 398,750 11,165 .31
SCI Systems, Inc. (USA) /1/ 525,236 9,783 .27
Quantum Corp. (USA) /1/ 618,100 9,194 .25
VLSI Technology, Inc. (USA) /1/ 500,000 8,937 .25
ACTEL CORP. (USA) /1/ 650,000 8,125 .22
OPTi Inc. (USA) /1/ 430,000 6,934 .19
Maxtor Corp. (USA) /1/ 1,300,000 5,687 .16
Park Electrochemical Corp. (USA) 120,000 4,620 .13
Micro Linear Corp. (USA) /1/ 330,000 3,836 .10
Rogers Corp. (USA) /1/ 70,000 3,763 .10
First Pacific Networks, Inc. (USA) /1/ 850,000 3,506 .10
Nihon Dempa Kogyo Co., Ltd. (Japan) 19,000 532 .01
BANKING - 5.14%
BayBanks, Inc. (USA) 475,200 30,413 .84
Washington Mutual Savings Bank (USA) 918,750 18,375 .51
First Financial Corp. (USA) 900,000 13,725 .38
Mercantile Bancorporation Inc. (USA) 375,000 13,688 .38
City National Corp. (USA) 1,025,000 10,891 .30
DAH SING FINANCIAL HOLDINGS LTD. (HONG KONG) 6,200,000 10,746 .30
Central Fidelity Banks, Inc. (USA) 367,500 9,555 .26
West One Bancorp (USA) 350,000 9,537 .26
Provident Bancorp, Inc. (USA) 305,000 9,379 .26
Safra Republic Holdings SA (Luxembourg) 112,000 8,904 .25
Keystone Financial, Inc. (USA) 300,000 8,025 .22
Bay View Capital Corp. (USA) 338,000 7,605 .21
FOURTH FINANCIAL CORP. (USA) 230,000 7,475 .21
Washington Federal Savings and Loan Assn. (USA) 353,925 7,078 .19
FirstMerit Corp. (formerly First Bancorporation of Ohio) 233,900 5,497 .15
(USA)
Hibernia Corp., Class A (USA) 700,000 5,425 .15
Standard Federal Bank (USA) 150,000 4,031 .11
COLLECTIVE BANCORP, INC. (USA) 150,000 2,681 .07
TriCo Bancshares (USA) 149,880 2,323 .06
Philippine National Bank (Philippines) 150,920 1,266 .03
MERCHANDISING - 4.87%
H & M Hennes & Mauritz AB, Class B (Sweden) 520,000 31,322 .86
Consolidated Stores Corp. (USA) /1/ 1,505,000 30,288 .83
Viking Office Products, Inc. (USA) /1/ 900,000 27,450 .76
Lands' End, Inc. (USA) /1/ 760,000 13,300 .37
Williams-Sonoma, Inc. (USA) /1/ 498,750 12,469 .34
Hanover Direct, Inc. (USA) /1/ 4,150,000 11,153 .31
Fabri-Centers of America, Inc. (USA) /1/ /2/ 500,000 9,063 .25
Colruyt NV (Belgium) 31,775 7,447 .20
Duty Free International, Inc. (USA) 856,500 6,317 .17
Goody's Family Clothing, Inc. (USA) /1/ 565,300 4,664 .13
DAIKI, 1.50% CONVERTIBLE DEBENTURES 2004 (JAPAN) Y450,000,000 4,275 .12
ShopKo Stores, Inc. (USA) 376,800 3,862 .11
Super Food Services, Inc. (USA) 345,000 3,709 .10
Kwik-Fit Holdings PLC (United Kingdom) 1,070,000 2,477 .07
Crown Books Corp. (USA) /1/ 160,000 2,400 .07
TJX Companies, Inc. (USA) 150,000 1,969 .05
Groupe Andre (France) 18,494 1,772 .05
Tandy Brands Accessories, Inc. (USA) /1/ 221,625 1,662 .04
Ishiguro Homa Corp. (Japan) 64,900 1,375 .04
BUSINESS & PUBLIC SERVICES - 4.82%
America Online, Inc.(USA) /1/ 530,000 39,353 1.08
Banta Corp. (USA) 441,500 14,570 .40
Coram Healthcare Corp. (USA) /1/ 550,000 13,956 .38
Flughafen Wien AG (Austria) 290,000 13,265 .37
United Waste Systems, Inc. (USA) /1/ 420,000 11,760 .32
Oxford Health Plans, Inc. (USA) /1/ 200,000 11,150 .31
Vivra Inc. (USA) /1/ 290,000 9,352 .26
Quebecor Printing Inc. (Canada) 705,000 8,511 .23
Blenheim Group PLC (United Kingdom) 2,261,460 7,451
Blenheim Group PLC, 6.40% convertible preferred 409,090 378 .22
Goldsborough Healthcare PLC (United Kingdom) 2,195,000 4,940 .14
M.A.I.D. PLC (United Kingdom) /1/ 3,843,500 4,854 .13
MDC Corp., Class A (Canada) /1/ 2,600,000 4,743 .13
International Container Terminal Services, Inc., 5.00%
convertible debentures 2001 (Philippines) $5,500,000 3,960 .11
Thomas Group, Inc. (USA) /1/ /2/ 388,500 3,788 .10
Air & Water Technologies Corp., Class A (USA) /1/ 658,500 3,539 .10
CORDIANT PLC (FORMERLY SAATCHI & SAATCHI CO. PLC)
(UNITED
KINGDOM) /1/ 2,199,995 3,277 .09
Continental Waste Industries, Inc. (USA) /1/ /2/ 300,000 3,187 .09
Kanamoto Co. Ltd. (Japan) /1/ 156,000 3,143 .09
UNC Inc. (USA) /1/ 350,000 1,925 .05
GNI Group, Inc. (USA) /1/ 290,000 1,704 .05
Matrix Service Co. (USA) /1/ 460,000 1,581 .04
Harding Associates, Inc. (USA) /1/ /2/ 235,000 1,351 .04
Energy BioSystems Corp. (USA) /1/ 240,000 1,320 .04
Western Waste Industries (USA) /1/ 75,000 1,209 .03
EnSys Environmental Products, Inc. (USA) /1/ 265,000 861 .02
DATA PROCESSING & REPRODUCTION - 4.78%
Mentor Graphics Corp. (USA) /1/ 1,750,000 27,125 .75
Corel Corp. (Canada) /1/ 2,082,500 27,073 .75
Acclaim Entertainment, Inc. (USA) /1/ 1,550,000 26,931 .74
Electronic Arts (USA) /1/ 925,000 20,812 .57
PictureTel Corp. (USA) /1/ 450,000 17,100 .47
CONVEX Computer Corp. (USA) /1/ 1,315,000 8,547 .24
Scribona AB, Class B (Sweden) 982,000 6,897 .19
SYMANTEC CORP. (USA) /1/ 300,000 6,863 .19
Aspen Technology, Inc. (USA) /1/ 330,000 6,517 .18
Hummingbird Communications Ltd. (Canada) /1/ 300,000 6,150 .17
RADIUS INC. (USA) /1/ 400,000 5,200 .14
Structural Dynamics Research Corp. (USA) /1/ 530,000 4,505 .12
AVID TECHNOLOGY, INC. (USA) /1/ 150,000 4,463 .13
Walker Interactive Systems, Inc. (USA) /1/ 620,000 4,107 .11
Information International, Inc. (USA) /1/ /2/ 150,000 1,125 .03
LEISURE & TOURISM - 4.36%
Village Roadshow Ltd. (Australia) /1/ 8,147,437 23,307
Village Roadshow Ltd., preferred shares1 4,415,001 9,391 .90
Spelling Entertainment Group Inc. (USA) /1/ 1,613,800 16,542 .46
Sydney Harbour Casino Holdings Ltd., convertible
preferred
(Australia) /1/ /3/ 22,200,000 16,284 .45
Rio Hotel & Casino, Inc. (USA) /1/ 1,155,200 15,884 .44
J D Wetherspoon PLC (United Kingdom) 1,600,000 12,045 .33
AAPC Ltd. (Australia) 21,907,080 9,159 .25
Savoy Pictures Entertainment, Inc. (USA) /1/ 1,150,000 8,769 .24
Showboat, Inc. (USA) 480,000 7,200 .20
Four Seasons Hotels Inc. (Canada) 650,649 7,040 .19
Au Bon Pain Co., Inc. (USA) /1/ 424,000 5,724 .16
UGC Droit Audiovisuels, SA (France) 144,000 4,480 .12
Samuel Goldwyn Co. (USA) /1/ /2/ 500,600 4,443 .12
GAUMONT SA (FRANCE) 68,800 3,853 .11
ACTIVISION, Inc. (USA) /1/ /3/ 570,000 3,420 .10
Quantum Restaurant Group, Inc. (USA) /1/ 315,000 3,347 .09
Mandarin Oriental International Ltd. (Hong Kong -
Incorporated in Bermuda) 2,203,319 2,936 .08
Ameristar Casinos, Inc. (USA) /1/ 460,000 2,875 .08
MovieFone, Inc., Class A (USA) /1/ /2/ 360,000 1,575 .04
TELECOMMUNICATIONS - 4.35%
United States Cellular Corp. (USA) /1/ 924,000 27,951 .77
Octel Communications Corp. (USA) /1/ 1,075,000 22,306 .61
International CableTel Inc. (USA) /1/ 707,100 21,036 .58
Vanguard Cellular Systems, Inc. (USA) /1/ 937,500 20,859 .57
Associated Communications Corp., Class A (USA) /1/ 319,075 5,983
Associated Communications Corp., Class B1 319,075 5,743 .32
LCI International, Inc. (USA) /1/ 450,000 11,194 .31
Telephone and Data Systems, Inc. (USA) 270,000 10,665 .29
Pilipino Telephone Corp. (Philippines) /1/ /3/ 25,200,000 10,395 .29
Nordictel Holdings AB (Sweden) /1/ 703,500 7,601 .21
Centennial Cellular Corp. (USA) /1/ 490,000 7,105 .20
Atlantic Tele-Network, Inc. (USA) /1/ 610,000 3,813 .11
BCE Mobile Communications Inc. (Canada) /1/ 95,000 3,143 .09
CHEMICALS - 3.04%
Kalon Group PLC (United Kingdom) /2/ 7,330,000 16,495 .45
Holliday Chemical Holdings PLC (United Kingdom) 4,912,500 15,668 .43
Tessenderlo Chemie SA (Belgium) 40,429 12,900 .36
Valspar Corp. (USA) 300,300 11,149 .31
FERRO CORP. (USA) 350,000 8,881 .24
McWhorter, Inc. (USA) /1/ 523,500 8,376 .23
Mississippi Chemical Corp. (USA) 400,000 7,200 .20
RPM, Inc. (USA) 330,000 6,559 .18
Sterling Chemicals, Inc. (USA) /1/ 530,000 6,161 .17
Armor All Products Corp. (USA) 222,100 4,609 .13
Airgas, Inc. (USA) /1/ 141,000 3,736 .10
Raychem Corp. (USA) 88,000 3,575 .10
Yip's Hang Cheung (Holdings) Ltd. (Hong Kong) 13,100,000 3,135 .09
Yorkshire Chemical PLC (United Kingdom) 350,000 1,890 .05
MACHINERY & ENGINEERING - 2.44%
Svedala Industri AB (Sweden) 500,000 11,817 .33
Greenfield Industries, Inc. (USA) 389,100 10,895 .30
Valmont Industries, Inc. (USA) 470,000 9,635 .27
Kalmar Industries AB (Sweden) /1/ 638,000 8,099 .22
Thermo Fibertek Inc. (USA) /1/ 400,000 6,900 .19
Crompton & Knowles Corp. (USA) 400,000 6,700 .18
AGCO Corp. (USA) 150,000 4,969 .14
Miura Co., Ltd. (Japan) 250,000 4,462 .12
Jungheinrich AG (Germany) 20,500 4,162 .11
Thermo Power Corp. (USA) /1/ 410,000 4,100 .11
Cincinnati Milacron Inc. (USA) 138,900 3,177 .09
Memtec Ltd. (American Depositary Receipts) (Australia) 234,236 3,074 .08
Varity Corp. (USA) /1/ 71,914 2,733 .07
APV PLC (United Kingdom) 2,260,000 2,470 .07
Hitachi Kiden Kogyo Ltd. (Japan) 127,800 1,435 .04
EMCON (USA) /1/ 365,000 1,414 .04
Siu-Fung Ceramics Holdings Ltd. (Hong Kong -
Incorporated in
Bermuda) 9,000,000 1,374 .04
KSB AG, preferred shares (Germany) 7,800 1,335 .04
TRANSPORTATION: RAIL & ROAD - 2.37%
Wisconsin Central Transportation Corp. (USA) /1/ 758,100 35,631 .98
TNT Freightways Corp. (USA) 970,000 23,038 .63
M.S. Carriers, Inc. (USA) /1/ 400,000 8,900 .25
TNT Ltd. (Australia) /1/ 4,034,236 5,297
TNT Ltd., 8.00% convertible preferred 1,316,100 1,882 .20
WERNER ENTERPRISES, INC. (USA) 350,000 6,913 .19
Nippon Konpo Unyu Soko (Japan) 460,000 4,295 .12
INSURANCE - 2.30%
Fairfax Financial Holdings Ltd. (Canada) /1/ 272,700 14,242 .39
Transatlantic Holdings, Inc. (USA) 225,000 13,781 .38
Pohjola Insurance Co. Ltd., Class B (Finland) /2/ 1,003,000 9,942 .27
Liberty Corp. (USA) 350,000 9,625 .26
Harleysville Group Inc. (USA) 375,000 9,000 .25
Selective Insurance Group, Inc. (USA) 195,000 5,558 .15
NYMAGIC, Inc. (USA) 254,000 4,572 .13
Irish Life PLC (Ireland) 1,251,964 3,851 .11
Nelson Hurst PLC (United Kingdom) 1,165,000 3,122 .09
Taisei Fire and Marine Insurance Co., Ltd. (Japan) 500,000 3,022 .08
NAC Re Corp. (USA) 87,200 2,594 .07
Vital Forsikring AS, Class A Frie (Norway) 224,800 2,402 .07
ACMAT Corp., Class A (USA) /1/ 150,000 1,725 .05
HEALTH & PERSONAL CARE - 2.28%
Genetics Institute, Inc. (USA) /1/ 333,000 12,488 .34
Omnicare, Inc. (USA) 190,000 9,975 .27
Paragon Trade Brands, Inc. (USA) /1/ 420,000 5,985 .16
COR THERAPEUTICS, INC. (USA) /1/ 400,000 5,100 .14
Liposome Technology, Inc. (USA) /1/ 585,000 3,876
LIPOSOME TECHNOLOGY, INC., CONVERTIBLE RESET PREFERRED/1/ 43,623 1,091 .14
//3
Liposome Technology, Inc., warrants, expire 1998/1/ 73,461 0
AutoImmune Inc. (USA) /1/ /2/ /3/ 794,000 4,962 .14
Isis Pharmaceuticals, Inc. (USA) /1/ 763,000 4,864 .13
Ethical Holdings PLC (American Depositary Receipts)
(United
Kingdom) /1/ /2/ 675,000 3,966 .11
Body Shop International PLC (United Kingdom) 1,360,000 3,831 .11
PerSeptive Biosystems, Inc. (USA) /1/ 600,000 3,825 .11
SciClone Pharmaceuticals, Inc. (USA) /1/ 600,000 3,600 .10
Alpha-Beta Technology, Inc. (USA) /1/ 400,000 2,900 .08
Maybelline, Inc. (USA) 136,900 2,875 .08
Athena Neurosciences, Inc. (USA) /1/ 365,400 2,375 .07
Anesta Corp. (USA) /1/ /2/ 460,000 2,185 .06
Vision-Sciences, Inc. (USA) /1/ 450,000 2,025 .06
Biomatrix, Inc. (USA) /1/ 410,000 1,999 .05
Cephalon, Inc. (USA) /1/ 287,000 1,937 .05
Cyberonics, Inc. (USA) /1/ 370,800 1,298 .04
InSite Vision Inc. (USA) /1/ 350,000 962 .03
Gensia Pharmaceuticals, Inc. (USA) /1/ 180,000 517 .01
MULTI-INDUSTRY - 2.19%
First Pacific Co. Ltd.(Hong Kong) 55,486,048 40,550 1.12
Industriforvaltnings AB Kinnevik, Class B (Sweden) 360,000 10,940
Industriforvaltnings AB Kinnevik, Class A 203,440 6,127 .47
D'Ieteren Holdings BV (Belgium) 203,883 13,313 .37
Amalgamated Holdings Ltd. (Australia) 341,100 2,752
Amalgamated Holdings Ltd., 5.00% convertible preferred 265,000 2,041 .13
Corporacion Financiera Alba, SA (Spain) 80,000 3,650 .10
ENERGY SOURCES - 1.89%
Ashland Coal, Inc. (USA) /3/ 429,000 12,548 .34
ELAN Energy Inc. (Canada) /1/ 1,635,000 11,843 .33
California Energy Co., Inc. (USA) /1/ 675,000 10,800 .30
Cabre Exploration Ltd. (Canada) /1/ /2/ 859,500 8,378 .23
CRSS Inc. (USA) /2/ 720,000 6,570 .18
Ampolex Ltd., 8.00% convertible preferred (Australia) 908,000 2,597
Ampolex Ltd. 1,000,000 2,553 .14
Paramount Resources Ltd. (Canada) 471,000 4,802 .13
Zhenhai Refining & Chemical Co. Ltd., Class H (People's
Republic
of China) 10,798,500 2,612 .07
Czar Resources Ltd. (Canada) /1/ 2,858,000 2,556 .07
NGC CORP. (FORMERLY TRIDENT NGL HOLDING, INC.) (USA) 223,173 2,036 .06
Elf Gabon SA (Gabon) 6,700 1,334 .04
BEVERAGES - 1.80%
Canandaigua Wine Co., Inc., Class A (USA) /1/ 550,000 22,825 .63
Brau-Union Goss-Reininghaus-Osterreichische Brau AG 271,800 16,212 .44
(Austria)
Osterreichische Brau-Beteiligungs AG (Austria) 176,770 9,743 .27
Taunton Cider PLC (United Kingdom) 3,580,000 7,912 .22
Boddington Group PLC (United Kingdom) 1,316,000 5,390 .15
El Aguila, SA (Spain) /1/ 382,000 2,800
El Aguila, SA, 10.00% convertible debentures 1997 PTA65,670,000 508 .09
METALS: NONFERROUS - 1.61%
ERAMET (France) /3/ 280,000 18,585 .51
Alcan Australia Ltd. (Australia) 8,680,000 16,235 .45
Magma Copper Co., convertible preferred, Series E (USA) 90,000 6,041
Magma Copper Co., convertible preferred, Series D 70,000 4,419 .29
QNI Ltd. (Australia) /1/ 6,207,000 8,195 .23
Asturiana de Zinc, SA (Spain) /1/ 575,000 4,894 .13
INDUSTRIAL COMPONENTS - 1.50%
Standard Products Co. (USA) 507,600 9,962 .27
Bearings, Inc. (USA) 273,300 8,301 .23
Autoliv AB (American Depositary Receipts) (Sweden) /1/ 203,300 7,660 .21
Hayes Wheels International, Inc. (USA) 344,000 6,966 .19
Lear Seating Corp. (USA) /1/ 352,300 6,341 .18
Federal-Mogul Corp. (USA) 250,000 4,500 .12
Innovative International (Holdings) Ltd. (Hong Kong) 18,156,000 3,570 .10
Watts Industries, Inc., Class A (USA) 100,000 2,125 .06
Orbital Engine Corp. Ltd. (Australia) /1/ 1,914,701 1,868 .05
Timken Co. (USA) 50,000 1,775 .05
Goulds Pumps, Inc. (USA) 65,000 1,528 .04
Gold Peak Industries (Holdings) Ltd., warrants, expire
1995
(Hong Kong) /1/ 1,140,000 34 .00
ENERGY EQUIPMENT - 1.36%
Camco International, Inc. (USA) 956,100 19,720 .54
Landmark Graphics Corp. (USA) /1/ 800,000 14,600 .40
Babcock International Group PLC (United Kingdom) /1/ 28,011,428 10,657 .29
Enterra Corp. (USA) /1/ 160,000 2,740 .08
Moorco International Inc. (USA) 120,000 1,650 .05
TRANSPORTATION: SHIPPING - 1.31%
Wah Kwong Shipping Holdings Ltd. (Hong Kong) 4,408,500 8,553 .23
Nordstrom & Thulin AB, Class B (Sweden) 3,118,300 8,044 .22
BONA SHIPHOLDING (NORWAY) 740,000 6,949 .19
SMEDVIG AS (American Depositary Receipts) (Norway) /1/ /2/ 463,000 6,945 .19
IMC Holdings Ltd. (Hong Kong) 8,198,000 5,408 .15
Irish Continental Group PLC (Ireland) 650,000 4,215 .12
EffJohn Oy AB, Class A (Finland) /1/ 362,000 4,015 .11
Benor Tankers Ltd. (Norway) /1/ 750,000 3,478 .10
METALS: STEEL - 1.13%
Avesta Sheffield AB (Sweden) /1/ 1,383,542 12,332 .34
ARBED SA (Luxembourg) /1/ 35,500 4,987
ARBED SA, 2.50% convertible Eurobonds 2003 BFR6,000,000 3,715 .24
Tung Ho Steel Enterprise Corp. (Global Depositary
Receipts)
(Taiwan) /1/ 157,000 3,297
Tung Ho Steel Enterprise Corp., 4.00% convertible
debentures
2001 $1,760,000 2,130 .15
Svenskt Stal AB, Class A (Sweden) 120,000 4,911 .13
Worthington Industries, Inc. (USA) 213,750 4,222 .12
Nippon Denro Ispat Ltd., 3.00% convertible debentures $4,700,000 2,608 .07
2001
(India)
Maanshan Iron & Steel Co. Ltd., Class H (People's
Republic of
China) 11,022,000 2,281 .06
Tubos de Acero de Mexico, SA (American Depositary
Receipts)
(Mexico) /1/ 182,000 637 .02
RECREATION & OTHER CONSUMER PRODUCTS - 1.13%
WMS INDUSTRIES INC. (USA) /1/ 750,000 15,563 .43
Coleman Co., Inc. (USA) /1/ 195,400 7,498 .21
Pacific Concord Holding Ltd., 4.75% convertible
debentures
1998 (Hong Kong) $5,000,000 3,488
Pacific Concord Holding Ltd. 19,862,000 3,263 .19
Rawlings Sporting Goods Co., Inc. (USA) /1/ 380,000 4,132 .11
Jostens, Inc. (USA) 200,000 3,975 .11
World Houseware (Holdings) Ltd. (Hong Kong) 13,974,391 2,946 .08
ELECTRONIC INSTRUMENTS - 1.12%
CIDCO Inc. (USA) /1/ /2/ 630,000 18,900 .52
Plantronics, Inc. (USA) /1/ 350,000 9,669 .26
LoJack Corp. (USA) /1/ 750,000 6,187 .17
Fluke Corp. (USA) 160,000 6,100 .17
TEXTILES & APPAREL - 1.07%
Fila Holding SpA (American Depositary Receipts) (Italy) 555,000 11,308 .31
Phillips-Van Heusen Corp. (USA) 450,000 7,087 .20
MARZOTTO ORD (ITALY) 1,100,000 6,883 .19
Z Groupe Zannier (France) 247,000 6,379 .18
Nine West Group Inc. (USA) /1/ 100,000 2,950 .08
Bernard Chaus, Inc. (USA) /1/ 700,000 2,625 .07
Courtaulds Textiles PLC (United Kingdom) 200,000 1,496 .04
BUILDING MATERIALS & COMPONENTS - 0.97%
Puerto Rican Cement Co., Inc. (USA) 371,000 10,527 .29
Lafarge Corp. (USA) 396,600 7,436 .21
Deceuninck Plastics Industries NV (Belgium) 49,500 5,766 .16
Giant Cement Holding, Inc. (USA) /1/ 458,000 5,152 .14
Tolmex, SA de CV, Class B2 (Mexico) 1,500,000 3,407 .09
FUTURIS CORP. LTD. (AUSTRALIA) 4,000,000 2,993 .08
MISCELLANEOUS MATERIAL & COMMODITIES -0.91%
Hoganas Eldfast AB, Class B (Sweden) /2/ 1,405,000 21,442 .59
Sealed Air Corp. (USA) /1/ 200,000 8,625 .24
Oil-Dri Corp. of America, Class A (USA) 175,000 2,953 .08
CONSTRUCTION & HOUSING - 0.86%
plettac AG (Germany) 24,666 14,041 .39
Ryland Group, Inc. (USA) 660,000 9,488 .26
Del Webb Corp. (USA) 392,700 7,363 .20
Higashi Nihon House Co. Ltd. (Japan) 13,000 226 .01
UTILITIES: ELECTRIC & GAS - 0.85%
Australian Gas Light Co. (Australia) 3,097,381 9,542 .26
HUB POWER CO. (GLOBAL DEPOSITARY RECEIPTS) (PAKISTAN) /1/ 831,409 8,730 .24
Burgenland Holding AG (Austria) /1/ /2/ 150,000 5,563 .16
Capex SA, Class A (Global Depositary Receipts) 384,200 4,802 .13
(Argentina) /1/
South Wales Electricity PLC (United Kingdom) 220,000 2,244 .06
WHOLESALE & INTERNATIONAL TRADE - 0.83%
Finning Ltd. (Canada) 803,500 11,209 .31
Jardine International Motor Holdings Ltd. (Hong Kong -
Incorporated in Bermuda) 7,880,000 8,715 .24
Kamei Corp. (Japan) 637,000 7,848 .21
Tokyo Sangyo (Japan) 244,200 2,418 .07
ELECTRICAL & ELECTRONICS - 0.68%
Steinbrecher Corp., convertible preferred, Series D 910,000 7,280 .20
(USA) /3/
Johnson Electric Holdings Ltd. (Hong Kong - Incorporated
in
Bermuda) 2,685,000 6,321 .17
MagneTek, Inc. (USA) /1/ 400,000 5,750 .16
Spectra-Physics AB, Class A (Sweden) 425,720 5,232 .15
FOOD & HOUSEHOLD PRODUCTS - 0.54%
Hazelwood Foods PLC (United Kingdom) 7,500,000 11,050 .30
J.M. Smucker Co., Class B (USA) 300,000 6,037 .17
Nestle (Malaysia) Sdn. Bhd. (Malaysia) 393,000 2,594 .07
APPLIANCES & HOUSEHOLD DURABLES - 0.48%
O'Sullivan Industries Holdings, Inc. (USA) /1/ 840,000 8,400 .23
Moulinex SA (France) /1/ 255,000 6,215 .17
SEB SA (France) 25,437 2,702 .08
FOREST PRODUCTS & PAPER - 0.41%
Caraustar Industries, Inc. (USA) 495,000 8,291 .23
PT Indah Kiat Pulp & Paper Corp. (Indonesia) 4,935,000 6,674 .18
TRANSPORTATION: AIRLINES - 0.35%
PR Holdings, Inc., subscription rights (Philippines) /1/ 1,730,000 7,330 .20
//3
Tower Air, Inc. (USA) 695,000 5,560 .15
AEROSPACE & MILITARY TECHNOLOGY - 0.13%
Celsius Industries Corp., Class B (Sweden) 300,000 4,660 .13
MISCELLANEOUS - 3.39%
Other equity-type securities in initial period of 123,111 3.39
acquisition
----------- -----------
TOTAL EQUITY -TYPE SECURITIES (cost: $2,683,385,000) 2,979,701 82.07
----------- -----------
Principal
Amount
SHORT-TERM SECURITIES (000)
CORPORATE SHORT-TERM NOTES - 11.47%
Daimler-Benz North America Corp. 5.96%-6.01% due $64,400 $ 64,280 1.77
4/6-4/20/95
Panasonic Finance Inc. 6.02%-6.10% due 4/11-5/10/95 47,000 46,760 1.29
Commerzbank U.S. Finance Inc. 5.96%-5.99% due 43,600 43,537 1.20
4/3-4/24/95
Canadian Imperial Holdings Inc. 5.97%-6.05% due 43,400 43,050 1.19
4/20-6/2/95
Miles Inc. 5.97% due 4/25-5/11/95 35,900 35,671 .98
National Australia Funding (Delaware) Inc. 5.98% due 30,200 30,164 .83
4/7/95
Kimberly-Clark Corp. 6.00% due 5/3/95 29,000 28,840 .79
ABN-AMRO North America Finance Inc. 5.98% due 5/2/95 25,000 24,867 .68
Ford Credit Europe PLC 6.01%% due 5/12/95 11,700 11,618 .32
Arco Coal Australia Inc. 5.96% due 4/7/95 11,600 11,587 .32
Siemens Corp. 5.92% due 4/3/95 10,000 9,995 .28
Societe Generale NA Inc. 6.05% due 4/4/95 10,000 9,993 .28
Exxon Imperial U.S. Inc. 6.00% due 4/11/95 10,000 9,982 .27
Nestle Capital Corp. 5.94%-5.96% due 4/4-4/27/95 10,000 9,973 .27
Unilever Capital Corp. 5.98% due 4/19/95 10,000 9,968 .27
Caisse Nationale des Telecommunications 5.95% due 4/6/95 8,980 8,971 .25
CANADA BILLS 5.96% DUE 4/27/95 9,000 8,960 .25
SmithKline Beecham Corp. 5.98% due 4/28/95 8,400 8,361 .23
CERTIFICATES OF DEPOSIT - 3.47%
National Westminster Bank PLC 6.07%-6.11% due 70,000 70,001 1.93
4/28-5/5/95
Abbey National Treasury Services PLC Eurocertificate
6.18%
due 5/15/95 25,000 25,003 .69
Banque Nationale de Paris 6.25% due 4/12/95 10,000 10,000 .27
Commerzbank AG 6.11% due 4/13/95 10,000 10,000 .27
Societe Generale 6.05% due 4/3/95 6,000 6,000 .17
ABN-AMRO Bank NV 6.13% due 5/23/95 5,000 5,000 .14
FEDERAL AGENCY DISCOUNT NOTES - 3.08%
Federal Home Loan Mortgage Corp. 5.92%-6.00% due 71,540 71,386 1.97
4/4-5/22/95
Federal National Mortgage Assn. 5.92%-6.05% due 40,400 40,248 1.11
4/3-5/10/95
----------- --------
TOTAL SHORT-TERM SECURITIES (cost: $654,211,000) 654,215 18.02
----------- --------
TOTAL INVESTMENT SECURITIES (cost: $3,337,596,000) 3,633,916 100.09
Excess of payables over cash and receivables 3,366
----------- --------
NET ASSETS $3,630,550 100.00%
=========== ========
</TABLE>
/1/ Non-income-producing securities.
/2/ The fund owns 6.67%, 6.49%, 6.48%, 6.48%, 6.44%, 6.42%,
6.38%, 6.25%, 6.12%, 5.90%, 5.65%, 5.63%, 5.52%, 5.47%, 5.42%,
5.32%, 5.25%, 5.24%, 5.09%, 5.04%, 5.00%, 5.00%, 5.00%, and
5.00% of the outstanding voting securities of Thomas Group,
Anesta, ANTEC, AutoImmune, Central European Media Enterprises,
Young Broadcasting, MovieFone, Information International,
Westwood One, Samuel Goldwyn, Hoganas Eldfast, CRSS, CanWest
Global Communications, Kalon Group, Fabri-Centers of America,
BET Holdings, Ethical Holdings, Cabre Exploration, Continental
Waste Industries, CIDCO, Burgenland Holding, Harding
Associates, Pohjola Insurance, and SMEDVIG, respectively,
which represent investments in an affiliate as defined in the
Investment Company Act of 1940.
/3/ Purchased in a private placement transaction; resale to the
public may require registration or may extend only to qualified
institutional buyers.
See Notes to Financial Statements
******
<TABLE>
<CAPTION>
EQUITY-TYPE SECURITIES APPEARING IN THE ! EQUITY-TYPE SECURITIES ELIMINATED FROM
PORTFOLIO SINCE SEPEMBER 30, 1994 ! THE PORTFOLIO SINCE SEPTEMBER 30, 1994
<S> <C> <C>
!
!
!
ACMAT ! Acuson
Actel ! Analog Devices
AGCO ! Autodesk
American Publishing ! Benefon
Ameristar Casinos ! Bobst
Anesta ! Broadcasting Partners
Aspen Technology ! Burr-Brown
Asturiana de Zinc ! Burswood Property Trust
Athena Neurosciences ! Butler Manufacturing
Avid Technology ! C.E. Heath International Holdings
BONA SHIPHOLDING ! Century Telephone Enterprises
Central European Media Enterprises ! Ceridian
Chrysalis Group ! Cortecs International
CIDCO ! Ellis & Everard
Collective Bancorp ! Fulcrum Technologies
Comcast UK Cable Partners ! Gamma Holding
Continental Waste Industries ! Goldlion Holdings
COR Therapeutics ! Harman International Industries
Coram Healthcare ! Industrie Natuzzi
Courtaulds Textiles ! JC Foods
Crompton & Knowles ! Jordan Petroleum
Dah Sing Financial Holdings ! Kolnische Ruckversicherungs-Gesellschaft
DAIKI ! Komeri
Ferro ! Learning Co.
Fourth Financial ! Logitech International
Futuris ! Macromedia
Gaumont ! Maxim Integrated Products
Giant Cement Holding ! Megahertz
GRAMMY ENTERTAINMENT ! Micro Warehouse
Greenfield Industries ! Micrografx
Hibernia ! Nippon Denwa Shisetsu
HUB POWER ! Northstar Energy
Hummingbird Communications ! Pacific Physician Services
International Cablecasting Technologies ! Penn West Petroleum
Irish Continental Group ! PETsMART
Liberty ! Quanex
M-NET ! Roberts Pharmaceutical
MARZOTTO ORD ! Shun Tak Holdings
McWhorter ! Staples
Metropole Television ! Stone & Webster
Micro Linear ! Tellabs
Mississippi Chemical ! Tokyo Denki Komusho
Moulinex ! Tsutsumi Jewelry
MovieFone ! Ultratech Stepper
Nelson Hurst ! Wattachak
Nine West Group ! Yurtec
Nordstrom & Thulin !
Phillips-Van Heusen !
Radius !
Rawlings Sporting Goods !
Shaw Brothers !
Showboat !
Spectra-Physics !
Standard Federal Bank !
Sydney Harbour Casino Holdings !
Symantec !
Taunton Cider !
Valmont Industries !
VIVRA !
VLSI Technology !
Werner Enterprises !
WIC Western International Communications !
WMS Industries !
World Houseware !
Young Broadcasting !
Z Groupe Zannier !
Zhenhai Refining & Chemical !
</TABLE>
******
SMALLCAP World Fund
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
at March 31, 1995 (dollars in thousands) Unaudited
- ---------------------------------------- ------------ ------------
<S> <C> <C>
Assets:
Investment securities at market
(cost: $3,337,596) $3,633,916
Cash 350
Receivables for -
Sales of investments $12,160
Sales of fund's shares 7,617
Dividends and accrued interest 4,749 24,526
------------ ------------
3,658,792
Liabilities:
Payables for -
Purchases of investments 19,354
Repurchases of fund's shares 5,776
Open forward currency contracts 24
Management services 2,167
Accrued expenses 921 28,242
------------ ------------
Net Assets at March 31, 1995 -
Equivalent to $21.77 per share on
166,732,787 shares of $0.01 par value
capital stock outstanding (authorized
capital stock - 400,000,000 shares) $3,630,550
============
Statement of Operations
for the six months ended March 31, 1995
(dollars in thousands) Unaudited
- ---------------------------------------- ------------ ------------
Investment Income:
Income:
Dividends $ 13,990
Interest 18,065 $ 32,055
------------
Expenses:
Management services fee 12,434
Distribution expenses 3,877
Transfer agent fee 1,917
Reports to shareholders 336
Registration statement and
prospectus 481
Postage, stationery and supplies 679
Directors' fees 50
Auditing and legal fees 49
Custodian fee 496
Taxes other than federal income tax 89
Other expenses 129 20,537
------------ ------------
Net investment income 11,518
------------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 112,433
Net unrealized depreciation on investments (168,669)
Net unrealized depreciation on open forward
currency contracts (24)
------------
Net unrealized depreciation on investments (168,693)
------------
Net realized gain and unrealized depreciation
on investments (56,260)
------------
Net Decrease in Net Assets Resulting
from Operations $ (44,742)
============
Statement of Changes in Net
Assets (dollars in thousands)
- ---------------------------------------- ------------- -------------
Six months Year
ended ended
3/31/95* 9/30/94
------------ ------------
Operations:
Net investment income $ 11,518 $ 11,146
Net realized gain on investments 112,433 212,165
Net unrealized depreciation
on investments (168,693) (12,601)
------------ ------------
Net increase (decrease) in net assets
resulting from operations (44,742) 210,710
------------ ------------
Dividends and Distributions Paid
to Shareholders:
Dividends from net
investment income (16,372) (6,434)
Distributions from net realized
gain on investments (204,948) (104,133)
------------ ------------
Total dividends and
distributions (221,320) (110,567)
------------ ------------
Capital Share Transactions:
Proceeds from shares sold:
20,644,646 and 57,399,291
shares, respectively 455,318 1,341,144
Proceeds from shares issued in
reinvestment of net investment
income dividends and
distributions of net realized
gain on investments:
10,053,586 and 4,360,143 shares,
respectively 209,805 99,705
Cost of shares repurchased:
12,070,000 and 12,557,650
shares, respectively (265,225) (290,901)
------------ ------------
Net increase in net assets
resulting from capital share
transactions 399,898 1,149,948
------------ ------------
Total Increase in Net Assets 133,836 1,250,091
Net Assets:
Beginning of period 3,496,714 2,246,623
------------ ------------
End of period (including undistributed
net investment income: $6,593 and
$11,447, respectively) $3,630,550 $3,496,714
============ ============
</TABLE>
* Unaudited
See Notes to Financial Statements
SMALLCAP World Fund
Notes to Financial Statements
1. SMALLCAP World Fund, Inc. (the "fund") is registered under the Investment
Company Act of 1940 as an open-end,diversified management investment company.
The following paragraphs summarize the significant accounting policies
consistently followed by the fund in the preparation of its financial
statements:
Equity-type securities are stated at market value based upon closing sales
prices reported on recognized securities exchanges on the last business day of
the period or, for listed securities having no sales reported and for unlisted
securities, upon last-reported bid prices on that date. Short-term securities
with original or remaining maturities in excess of 60 days, including forward
currency contracts, are valued at the mean of their quoted bid and asked
prices. Short-term securities with 60 days or less to maturity are valued at
amortized cost, which approximates market value. Securities for which market
quotations are not readily available are valued at fair value as determined in
good faith by the Valuation Committee of the Board of Directors.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. Realized gains
and losses from securities transactions are reported on an identified cost
basis. Dividend and interest income is reported on the accrual basis.
Discounts on securities purchased are amortized over the life of the respective
securities. The fund does not amortize premiums on securities purchased.
Dividends and distributions paid to shareholders are recorded on the
ex-dividend date.
Investment securities and other assets and liabilities, including forward
currency contracts, denominated in non-U.S. currencies are recorded in the
financial statements after translation into U.S. dollars utilizing rates of
exchange on the last business day of the period. Purchases and sales of
investment securities, income, and expenses are calculated using the prevailing
exchange rate as accrued. The fund does not identify the portion of each
amount shown in the fund's statement of operations under the caption "Realized
Gain and Unrealized Appreciation on Investments" that arises from changes in
non-U.S. currency exchange rates.
Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
The custodian fee of $496,000 includes $77,000 that was paid by these credits
rather than in cash.
2. It is the fund's policy to continue to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its net taxable income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision
is required.
As of March 31, 1995, net unrealized appreciation on investments, excluding
forward currency contracts, for book and federal income tax purposes aggregated
$296,382,000, of which $595,450,000 related to appreciated securities and
$299,068,000 related to depreciated securities. During the six months ended
March 31, 1995, the fund realized, on a tax basis, a net capital gain of
$112,585,000 on securities transactions. Net losses related to non-U.S.
currency transactions of $152,000 were treated as an adjustment to ordinary
income for federal income tax purposes. The cost of portfolio securities,
excluding forward currency contracts, for book and federal income tax purposes
was $3,337,596,000 at March 31, 1995.
3. The fee of $12,434,000 for management services was paid pursuant to an
agreement with Capital Research and Management Company (CRMC), with which
certain officers and Directors of the fund are affiliated. The Investment
Advisory and Service Agreement provides for monthly fees, accrued daily, based
on an annual rate of 0.80% of the first $1 billion of average net assets; 0.70%
of such assets in excess of $1 billion but not exceeding $2 billion; 0.67% of
such assets in excess of $2 billion but not exceeding $3 billion; 0.65% of such
assets in excess of $3 billion but not exceeding $5 billion; 0.635% of such
assets in excess of $5 billion but not exceeding $8 billion; and 0.625% of such
assets in excess of $8 billion.
Pursuant to a Plan of Distribution, the fund may expend up to 0.30% of its
average net assets annually for any activities primarily intended to result in
sales of fund shares, provided the categories of expenses for which
reimbursement is made are approved by the fund's Board of Directors. Fund
expenses under the Plan include payments to dealers to compensate them for
their selling and servicing efforts. During the six months ended March 31,
1995, distribution expenses under the Plan were $3,877,000. As of March 31,
1995, accrued and unpaid distribution expenses were $766,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $1,917,000. American Funds Distributors, Inc. (AFD), the
principal underwriter of the fund's shares, received $1,548,000 (after
allowances to dealers) as its portion of the sales charges paid by purchasers
of the fund's shares. Such sales charges are not an expense of the fund and,
hence, are not reflected in the accompanying statement of operations.
Directors who are unaffiliated with CRMC may elect to defer part or all of
the fees earned for services as members of the board. Amounts deferred are not
funded and are general unsecured liabilities of the fund. As of March 31, 1995,
aggregate amounts deferred were $15,000.
CRMC is owned by The Capital Group Companies, Inc. AFS and AFD are both
wholly owned subsidiaries of CRMC. Certain Directors and officers of the fund
are or may be considered to be affiliated with CRMC, AFS, and AFD. No such
persons received any remuneration directly from the fund.
4. As of March 31, 1995, accumulated undistributed net realized gain on
investments was $85,294,000 and additional paid-in capital was $3,240,638,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $653,030,000 and $436,299,000, respectively, during
the six months ended March 31, 1995.
Dividend and interest income is recorded net of non-U.S. taxes paid. For the
six months ended March 31, 1995, such non-U.S. taxes were $1,504,000. Net
realized currency gains on dividends, interest, withholding taxes reclaimable,
and sales of non-U.S. bonds and notes were $152,000 for the six months ended
March 31, 1995.
The fund purchases forward currency contracts in anticipation of, or to
protect itself against, fluctuations in exchange rates. The contracts are
recorded at market value and reflect the extent of the fund's involvement in
these financial instruments. Risks may arise upon entering these contracts
from the potential inability of counterparties to meet the terms of their
contracts and from
the possible movements in non-U.S. exchange rates and securities values
underlying these instruments. At March 31, 1995, the fund had outstanding
forward currency contracts to sell non-U.S. currencies as follows:
******
<TABLE>
<CAPTION>
Contract Amount U.S. Valuation at
3/31/95
UNREALIZED
<S> <C> <C> <C> <C>
Non-U.S. Currency Sale Contracts Non-U.S. U.S. Amount Depreciation
Japanese Yen expiring 6/12/95 Y54,000,000 $603,000 $579,000 $(24,000)
</TABLE>
******
PER-SHARE DATA AND
RATIOS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Six months Year ended September 30
ended -------- -------- ------------ ------------
3/31/95 /1/ 1994 1993 1992 1991
- -----------------------
Net Asset Value,
Beginning of
Period $23.61 $22.72 $18.01 $17.60 $13.26
--------- --------- --------- --------- ---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .07 .09 .06 .14 .18
Net realized and
unrealized gain (loss)
on investments (.45) 1.83 5.56 .38 4.56
--------- --------- --------- --------- ---------
Total income from
investment
operations (.38) 1.92 5.62 .52 4.74
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Dividends from
net investment
income (.11) (.06) (.08) (.11) (.40)
Distributions
from net
realized gains (1.35) (.97) (.83) - -
--------- --------- --------- --------- ---------
Total distributions (1.46) (1.03) (.91) (.11) (.40)
--------- --------- --------- --------- ---------
Net Asset Value, End
of Period $21.77 $23.61 $22.72 $18.01 $17.60
========= ========= ========= ========= =========
Total Return /2/ (1.34)% /3/ 8.60% 32.46% 2.95% 36.43%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end
of period (in
millions) $3,631 $3,497 $2,247 $1,255 $798
Ratio of expenses
to average net
assets .58% /3/ 1.12% 1.15% 1.21% 1.31%
Ratio of net income
to average net
assets .33% /3/ .38% .33% .85% 1.11%
Portfolio turnover
rate 15.02% /3/ 29.43% 25.00% 23.10% 19.26%
</TABLE>
/1/ Unaudited
/2/ This was calculated
without deducting a sales
charge. The maximum
sales charge is 5.75% of
the fund's offering
price.
/3/ Based on operations for
the period shown and,
accordingly, not
representative of a full
year's operations.
RESULTS OF SHAREHOLDER MEETING HELD APRIL 5, 1995
<TABLE>
<CAPTION>
<S> <C>
Shares Outstanding on January 6, 1995 (record date) 163,329,622
Shares Voting on April 5, 1995 105,466,977 (64.6%)
</TABLE>
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
ELECTION OF DIRECTORS Votes Percent of Votes Percent of Abstentions Percent of
For Shares Withheld Shares Shares
Voting Voting Voting
- --------------------- ---------- ---------- ----------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Richard G. Capen, Jr. 102,695,574 97.4% 2,771,403 2.6% none 0.0%
H. Frederick Christie 102,520,618 97.2 2,946,359 2.8 none
Alan W. Clements 102,679,923 97.4 2,787,054 2.6 none
Robert B. Egelston 102,500,346 97.2 2,966,631 2.8 none
Alan Greenway 102,535,703 97.2 2,931,274 2.8 none
William R. Grimsley 102,726,994 97.4 2,739,983 2.6 none
Graham Holloway 102,718,348 97.4 2,748,629 2.6 none
Leonade D. Jones 102,463,771 97.2 3,003,206 2.8 none
William H. Kling 102,665,821 97.3 2,801,156 2.7 none
Norman R. Weldon 102,728,077 97.4 2,738,900 2.6 none
Patricia K. Woolf 102,638,960 97.3 2,828,017 2.7 none
RATIFICATION OF AUDITORS Votes Percent of Votes Percent of Abstentions Percent of
For Shares Against Shares Shares
Voting Voting Voting
Deloitte & Touche LLP 101,067,475 96.0% 817,658 0.0% 3,581,844 4.0%
</TABLE>
OFFICES OF THE FUND AND OF THE
INVESTMENT ADVISER,
CAPITAL RESEARCH AND MANAGEMENT COMPANY
333 South Hope Street
Los Angeles, California 90071-1443
135 South State College Boulevard
Brea, California 92621-5804
TRANSFER AGENT FOR SHAREHOLDER ACCOUNTS
American Funds Service Company
P.O. Box 2205
Brea, California 92622-2205
P.O. Box 659522
San Antonio, Texas 78265-9522
P.O. Box 6007
Indianapolis, Indiana 46206-6007
P.O. Box 2280
Norfolk, Virginia 23501-2280
CUSTODIAN OF ASSETS
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081-0001
COUNSEL
O'Melveny & Myers
400 South Hope Street
Los Angeles, California 90071-2899
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
FOR INFORMATION ABOUT YOUR ACCOUNT OR
ANY OF THE FUND'S SERVICES, PLEASE CONTACT
YOUR SECURITIES DEALER OR FINANCIAL PLANNER,
OR CALL THE FUND'S TRANSFER AGENT, TOLL-FREE,
AT 800/421-0180.
This report is for the information of shareholders of SMALLCAP World Fund, but
it may also be used as sales literature when preceded or accompanied by the
current prospectus, which gives details about charges, expenses, investment
objectives and operating policies of the fund. If used as sales material after
June 30, 1995, this report must be accompanied by an American Funds Group
Statistical Update for the most recently completed calendar quarter.
Litho in USA BDA/GRS/2640
Lit. No. SCWF-013-0595
Printed on recycled paper
[The American Funds Group(R)]
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