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Previous: HISTORIC PRESERVATION PROPERTIES 1990 LP TAX CREDIT FUND, 10-Q/A, 1996-06-05 |
Next: TUBOSCOPE VETCO INTERNATIONAL CORP, S-8, 1996-06-05 |
SMALLCAP World Fund
Semi-Annual Report
For the six months ended March 31, 1996
[The American Funds Group(R)]
SMALLCAP WORLD FUND(R) SEEKS LONG-TERM GROWTH OF CAPITAL THROUGH INVESTMENTS IN
SMALLER COMPANIES IN THE U.S. AND AROUND THE WORLD.
Investment Highlights
Total returns for periods ended March 31,1996 with dividends reinvested
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FT/S&P-Actuaries
SMALLCAP Medium-Small Cap
World Fund S&P 500 World Index
6 months +9.1% +11.7% +8.4%
12 months +31.1 +32.1 +16.6
5 years +104.5 +97.9 +64.5
Since fund's
inception on
April 30, 1990 +129.8 +132.6 +74.6
Average annual
compound return
since inception +15.1 +15.3 +9.9
</TABLE>
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/S&P - Actuaries Medium-Small Cap World
Index, calculated by Goldman Sachs, tracks the smallest stocks (the bottom 25%)
in 26 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, 1996,
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.)
<TABLE>
<CAPTION>
<S> <C> <C>
Since inception on 4/30/90: +116.56% +13.94% a year
5 years: +92.75% +14.03% a year
12 months: +23.55% -
</TABLE>
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS. SHARE PRICE AND RETURN WILL
VARY, SO YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE SHORTER THE TIME
PERIOD OF YOUR INVESTMENT, THE GREATER THE POSSIBILITY OF LOSS. 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.
FELLOW SHAREHOLDERS:
Two noteworthy developments propelled SMALLCAP World Fund to a meaningful gain
during the six months ended March 31, 1996. First, the stocks of smaller
companies awoke from their lethargy midway through the period and began
outpacing the stocks of larger companies for the first time in nearly two
years. Equally important for the fund's results, the stocks of smaller
companies outside the U.S. also saw a resurgence.
Taken together, these events helped SMALLCAP generate a six-month gain of 9.1%,
assuming you reinvested the 18-cent dividend and $2.45 a share capital gain
distribution paid in December, as 98% of our shareholders did. By comparison,
Standard & Poor's 500 Composite Index, which measures the stocks of large U.S.
companies, rose 11.7%. The Morgan Stanley Capital International EAFE(R)
(Europe, Australasia, Far East) Index, which tracks major non-U.S. markets,
gained 7.2%. Meanwhile, the fund's investment universe, best captured by the
Financial Times/S&P - Actuaries Medium-Small Cap World Index, increased 8.4%.
No individual markets were particularly stronger than others, and only a few -
Finland, India, Italy and Pakistan - saw declines of any magnitude.
TWO HALVES MAKE THE WHOLE
While we would not generally counsel looking at results over briefer periods -
even six months is not terribly meaningful - in this case it may be
instructive. The stocks of larger companies both inside and outside the United
States went up at about the same rate in each half of the period, although
different types of stocks led the charge. The stocks of smaller companies,
however, typically were up only modestly in the first three months of the
period and saw the bulk of their gains in the final three months.
We have mentioned in the past that there is a distinct
large-company/small-company cycle, and we may have just witnessed another turn.
Large-company stocks led the market's sharp advance over the previous 12
months. Now small companies have come to the fore as investors look elsewhere
to extend their gains.
In looking back at similar cycles in the past, it appears that SMALLCAP's
introduction in April 1990 could not have been better timed. Small-company
stocks were near the end of a seven-year period of severe underperformance.
Since that time, we have not seen decisive leadership from either side; rather,
we have had short alternating cycles of three to 15 months.
While that may continue to be the case, small companies appear to offer
superior potential. Recent stock market gains among large-company stocks have
had as much to do with restructurings and merger activity as with earnings
growth. Most jobs, however, continue to be created by small companies. The
recent swing back toward small-company stocks may reflect investors returning
their focus to what is really driving the economy.
SIMPLE TRUTHS
When researching companies - or looking at mutual funds - focusing on the
simplest facts can often help you draw useful conclusions. We think that the
list on page 4 of the fund's 10 largest holdings is instructive in this regard.
It says more about the fund's approach than any words we could hope to muster.
The fund's largest individual holding, as you will see, is a railroad - not
exactly what one might expect from a fund focusing on smaller companies. The
rest of the list is about as eclectic as you can get: a local television
broadcaster, two oil service companies, two Swedish exporters, a closeout
retailer, a printer, an Australian operator of multiplex cinemas and a Hong
Kong-based cellular phone company. Perhaps most striking is that there is not a
high-tech or biotech company among them.
We have always felt that SMALLCAP World Fund takes a somewhat unusual - and
perhaps unique - approach to small-company investing. This list shows that we
are not accepting the easy answers but are looking for value in unusual places
and are building the portfolio one stock at a time. Every company in the fund's
portfolio has its own story. No economic or geographic themes have been
followed to create this melange.
Following such a strategy, of course, has its own demands. Intensive research
is the predominant one. SMALLCAP has the ability to call on research conducted
by nearly 100 investment professionals around the world. We continue to be
impressed by the depth and breadth of the ideas generated by our analysts. It's
comforting at a time of generally high U.S. stock prices that they are finding
so many dynamic small companies around the world with reasonable stock prices.
SPREADING THE WEALTH
At the start of our reporting period, the fund held slightly more than 20% of
its assets in money market instruments. That number is now closer to 13%,
reflecting active stock buying late in calendar 1995. Many of these purchases
were made outside the United States. With large-cap U.S. stock prices at
historically high levels, it may not be surprising that we are finding better
values in other countries.
The fund's non-U.S. holdings have done significantly better than the unmanaged
indexes over the past two years, but until recently have not kept pace with
U.S. stocks. That may now be changing. We are seeing improving market and
economic conditions in many regions, notably in the developing countries.
Speculative excesses and significant financial events (such as the devaluation
of the peso in Mexico) led to steep declines in many of the smaller markets in
Latin America and Asia in 1994 and 1995. As typically happens, this has created
numerous opportunities. We have started to nibble again at companies in
selected countries, including Mexico and Malaysia.
Other areas of interest would include the stocks of natural resources
companies. Strong demand and rising commodity prices have signaled a
substantial improvement in these companies' fortunes. We've found intriguing
values in Canadian resource companies, U.S. oil service companies, and mining
companies located in Australia and Indonesia. All told, over the past six
months we added more than 100 stocks to the portfolio from 18 countries.
We also continued to cull "graduates" - companies whose success has caused
their stocks to escalate out of the fund's normal buying range. As a stock's
capitalization passes $1.2 billion or so, we start looking for an appropriate
exit point. We believe that keeping to this discipline will help the fund
maintain its unique small-company character.
REALISTIC EXPECTATIONS
Lest all this optimism lull you into complacency, let us reiterate, as we do
every six months, that the stock market rarely follows the desired script. More
than five years have passed since the last 10% market decline, and over the
past 60 years declines of twice that magnitude have occurred with greater
frequency than that. Small companies will not be immune from the eventual
decline. Our job is not, and cannot be, to guess when a decline may occur; no
one we know can do that with any regularity. Rather, we try to select solid
companies that will survive the tough times and prosper when good times return.
That, we believe, is the key to long-term investment success.
One final item: Bill Grimsley, who has served as President of the fund since
its inception and continues to serve as one of its portfolio counselors, has
become the fund's first Vice Chairman. Gordon Crawford, who has been a
portfolio counselor for SMALLCAP since its introduction, has taken up the reins
as President.
We look forward to reporting to you again in six months.
Cordially,
Robert B. Egelston
Chairman of the Board
Gordon Crawford
President
May 17, 1996
Where are SMALLCAP's portfolio companies located?
Geographical distribution based on total net assets
for the period ending March 31, 1996
<TABLE>
<CAPTION>
<S> <C>
The Americas 58.3%
United States 51.3%
Canada 6.3
Mexico .6
Other Latin America .1
Europe 16.9%
United Kingdom 4.5%
Sweden 4.1
France 1.5
Norway 1.4
Austria 1.2
Germany 1.1
Spain .6
Luxembourg .5
Ireland .5
Belgium .5
Other Europe 1.0
Asia/Pacific 10.6%
Australia 4.2%
Hong Kong 2.9
Philippines .8
Japan .8
Malaysia .7
Indonesia .5
Other Asia .7
Other Countries 1.2%
Cash & Equivalents 13.0%
TOTAL 100.0%
</TABLE>
SMALLCAP World Fund
INVESTMENT PORTFOLIO March 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Unaudited
Industry Diversification
Broadcasting & Publishing 8.90%
Business & Public Services 6.30%
Health & Personal Care 5.79%
Leisure & Tourism 4.87%
Merchandising 4.79%
Other Industries 56.36%
Cash & Equivalents 12.99%
Percent
of
Net
Assets
Largest Individual Holdings
Wisconsin Central Transportation .95%
Village Roadshow .94
Reading & Bates .84
Hoganas Eldfast .81
Consolidated Stores .81
Camco International .77
First Pacific .70
Banta .69
Industriforvaltnings AB Kinnevik .68
Renaissance Communications .67
Percent
Shares or Market of
EQUITY-TYPE SECURITIES Principal Value Net
(common and preferred stocks and convertible debentures) Amount (000) Assets
BROADCASTING & PUBLISHING - 8.90%
Renaissance Communications Corp. (USA)/1/ 1,487,850 $37,010 .67 %
Gaylord Entertainment Co., Class A (USA) 1,344,000 36,288 .66
Westwood One, Inc. (USA)/1/ 1,875,000 34,453 .63
Cablevision Systems Corp., Class A (USA)/1/ 560,000 32,200 .59
International Family Entertainment, Inc., Class B (USA)/1/ 1,768,750 29,848 .54
CanWest Global Communications Corp. (Canada) 918,300 23,665 .43
FLEXTECH PLC (United Kingdom)/1/ 3,079,600 23,403 .43
Data Broadcasting Corp. (USA) /1/ /2/ 1,900,000 20,187 .37
BET Holdings, Inc., Class A (USA)/1/ 662,100 18,456 .34
New Straits Times Press (Malaysia) Bhd. (Malaysia) 3,550,000 18,245 .33
WIC Western International Communications Ltd., Class B (Canada) 1,025,000 16,074 .29
Scandinavian Broadcasting System SA (Denmark - Incorporated in
Luxembourg)/1/ 655,000 14,738 .27
United International Holdings, Inc., Class A (USA)/1/ 910,000 14,560 .26
Central European Media Enterprises Ltd., Class A (USA - Incorporated in
Bermuda) /1/ 655,000 14,082 .26
United Television, Inc. (USA) 150,000 13,313 .24
Chrysalis Group PLC (United Kingdom)/1/ /2/ 1,600,000 10,865 .20
ValueVision International, Inc., Class A (USA) /1/ 1,270,000 10,716 .19
Silver King Communications, Inc. (USA) /1/ 345,000 10,695 .19
Young Broadcasting Inc., Class A (USA)/1/ 310,000 9,223 .17
Scottish Television PLC (United Kingdom) 900,000 9,064 .16
Jones Intercable, Inc., Class A (USA)/1/ 610,000 8,845 .16
Australian Provincial Newspapers Holdings Ltd. (Australia) 4,589,545 8,785 .16
Sinclair Broadcast Group, Inc., Class A (USA) /1/ /2/ 325,000 8,613 .16
TCA Cable TV, Inc. (USA) 272,700 7,942 .14
Ascent Entertainment Group, Inc.(USA) /1/ 500,000 7,500 .14
Omni Media Corp. Ltd. (South Africa) 390,000 7,256 .13
Metropole Television SA (France) 68,900 7,052 .13
Century Communications Corp., Class A (USA)/1/ 724,064 7,014 .13
Austereo Ltd. (Australia) 3,407,232 5,138 .09
DMX Inc. (USA) /1/ /2/ 2,570,000 4,979 .09
NRJ SA (France) 39,284 4,910 .09
Adelphia Communications Corp., Class A (USA)/1/ 525,000 3,675 .07
Westcott Communications, Inc. (USA) /1/ 189,000 3,355 .06
Grammy Entertainment Public Co. Ltd.(Thailand) 240,000 2,700 .05
M-Net (South Africa) 1,571,800 1,857 .03
Pacific Media PLC (United Kingdom)/1/ 52,249,124 1,395 .03
AUDIOFINA (Luxembourg) 20,850 950 .02
BUSINESS & PUBLIC SERVICES - 6.30%
Banta Corp. (USA) 1,425,000 38,119 .69
Franklin Quest Co. (USA) /1/ 970,700 26,209 .48
Flughafen Wien AG (Austria) 350,600 24,028 .44
Bell & Howell Holdings Co. (USA) /1/ 700,000 22,925 .42
NETCOM On-Line Communication Services, Inc. (USA) /1/ /2/ 720,000 17,280 .31
Vivra Inc. (USA)/1/ 600,000 17,250 .31
DII Group, Inc.(formerly DOVatron International, Inc.) (USA) /1/ /2/ 520,000 15,795 .29
BDM International Inc. (USA) /1/ 400,000 15,300 .28
Robert Half International Inc. (USA) /1/ 300,000 14,588 .26
Vanstar Corp. (USA) /1/ 1,380,000 13,973 .25
Blenheim Group PLC (United Kingdom) 2,261,460 9,835
Blenheim Group PLC, 6.40% convertible preferred 409,090 456 .19
APCOA Parking AG (Germany) /2/ 101,000 9,580 .17
Katz Media Group, Inc. (USA) /1/ 560,500 9,248 .17
Continental Waste Industries, Inc. (USA)/1/ /2/ 833,333 9,062 .16
On Assignment, Inc. (USA) /1/ 235,000 8,930 .16
US Order, Inc. (USA) /1/ 420,000 8,610 .16
Triple P NV (Netherlands) /1/ 765,000 8,606 .16
Western Waste Industries (USA)/1/ 200,000 7,625 .14
Filofax Group PLC (United Kingdom) /2/ 1,956,000 6,925 .13
Open Text Corp. (Canada) /1/ 430,000 6,074 .11
Primark Corp. (USA) /1/ 150,000 5,550 .10
Thomas Group, Inc. (USA)/1/ /2/ 388,500 5,536 .10
United Waste Systems, Inc. (USA)/1/ 100,000 5,000 .09
Quebecor Printing Inc. (Canada) 270,000 4,853 .09
KCI Konecranes (Finland) 270,000 4,754 .09
International Container Terminal Services, Inc., 5.00% convertible
debentures 2001 (Philippines) $5,500,000 4,702 .08
CBT Group PLC (American Depositary Receipts)(Ireland) /1/ 60,000 4,410 .08
MDC Corp., Class A (Canada)/1/ 2,600,000 3,815 .07
Air & Water Technologies Corp., Class A (USA)/1/ 658,500 3,704 .07
Saskatchewan Wheat Pool, nonvoting shares, Class B (Canada) 350,000 3,081 .06
Kanamoto Co., Ltd. (Japan) 221,000 2,808 .05
UNC Inc. (USA)/1/ 350,000 2,625 .05
Energy BioSystems Corp. (USA)/1/ 240,000 1,680 .03
Goldsborough Healthcare PLC (United Kingdom) 980,000 1,645 .03
GNI Group, Inc. (USA)/1/ 290,000 1,450 .03
HEALTH & PERSONAL CARE - 5.79%
VISX, Inc. (USA) /1/ /2/ 785,000 28,653 .52
Scotia Holdings PLC (United Kingdom) 2,675,000 25,390 .46
Genetics Institute, Inc. (USA)/1/ 333,000 21,728 .39
Genelabs Technologies, Inc. (USA) /1/ /2/ /3/ 2,085,000 14,074 .26
Mentor Corp. (USA) 600,000 14,025 .25
Paragon Trade Brands, Inc. (USA)/1/ /2/ 650,000 13,487 .24
Physio - Control International Corp. (USA) /1/ 650,000 13,000 .24
IDEC Pharmaceuticals Corp. (USA) /1/ 515,900 11,479 .21
Thermedics Inc. (USA) /1/ 400,000 11,300 .21
Hologic, Inc. (USA) /1/ 480,000 10,920 .20
SEQUUS Pharmaceuticals, Inc. (USA) /1/ 585,000 8,080
SEQUUS Pharmaceuticals, Inc., convertible preferred /1/ /3/ 48,000 2,244
SEQUUS Pharmaceuticals, Inc., warrants, expire 1998 /1/ 80,832 485 .20
Vical Inc. (USA) /1/ 700,000 10,150 .18
ImmuLogic Pharmaceutical Corp. (USA) /1/ 750,000 9,937 .18
KeraVision Inc. (USA) /1/ /2/ 795,000 9,838 .18
Omnicare, Inc. (USA) 180,000 9,698 .18
COR Therapeutics, Inc. (USA) /1/ 829,200 9,639 .17
ImClone Systems Inc. (USA) /1/ /2/ 1,000,000 8,750 .16
Neurogen Corp. (USA) /1/ 250,000 8,625 .16
Martek Biosciences Corp. (USA) /1/ 200,000 7,200 .13
Alpha-Beta Technology, Inc. (USA)/1/ 545,000 6,812 .12
Anesta Corp. (USA)/1/ /2/ 460,000 6,555 .12
AutoImmune Inc. (USA)/1/ /3/ 794,000 6,451 .12
NeoPath, Inc. (USA) /1/ 275,000 6,394 .12
Ethical Holdings PLC (American Depositary Receipts)(United Kingdom)/1/ /2/ 675,000 6,328 .11
Ranbaxy Laboratories Ltd. (Global Depositary Receipts)(India) 262,500 5,880 .11
Biomatrix, Inc. (USA)/1/ 410,000 5,330 .10
PerSeptive Biosystems, Inc. (USA)/1/ 600,000 4,575 .08
HemaSure Inc. (USA) /1/ 240,000 4,260 .08
Isis Pharmaceuticals, Inc. (USA)/1/ 272,600 3,169 .06
InSite Vision Inc. (USA)/1/ /2/ /3/ 550,000 3,025
InSite Vision Inc., warrants, expire 2001 /1/ /3/ 50,000 113 .06
Body Shop International PLC (United Kingdom) 1,360,000 3,009 .05
Gensia Pharmaceuticals, Inc. (USA)/1/ 480,000 2,220 .04
T Cell Sciences, Inc. (USA) /1/ /3/ 800,000 2,200 .04
Cyberonics, Inc. (USA)/1/ 370,800 1,669 .03
Vision-Sciences, Inc. (USA)/1/ 484,500 1,514 .03
LEISURE & TOURISM - 4.87%
Village Roadshow Ltd. (Australia) 8,201,596 33,962
Village Roadshow Ltd., preferred shares 5,336,602 17,512 .94
Rio Hotel & Casino, Inc. (USA)/1/ /2/ 1,382,700 21,086 .38
Bally Entertainment Corp. (USA) /1/ 1,200,000 20,700 .38
AAPC Ltd. (Australia) /2/ /3/ 30,396,422 17,574 .32
Aztar Corp. (USA) /1/ 1,740,000 14,790 .27
Spelling Entertainment Group Inc. (USA)/1/ 1,245,100 12,451 .23
Trump Hotels & Casino Resorts, Inc. (USA) /1/ 410,000 11,993 .22
ACTIVISION, Inc. (USA)/1/ /3/ 900,000 11,812 .21
Four Seasons Hotels Inc. (Canada) 757,049 11,664 .21
Savoy Pictures Entertainment, Inc. (USA) /1/ /2/ 1,950,000 11,456 .21
J D Wetherspoon PLC (United Kingdom) 837,500 11,247 .20
Showboat, Inc. (USA) 445,700 10,920 .20
UGC Droits Audiovisuels SA (France) 168,869 9,866 .18
Station Casinos, Inc. (USA) /1/ 842,500 9,794 .18
Alliance Communications Corp., Class A (Canada)/1/ /2/ 316,000 3,362
Alliance Communications Corp., Class B /1/ 316,000 3,246 .12
Imax Corp. (Canada) /1/ 190,000 6,009 .11
CINAR Films Inc., Class B (Canada) /1/ 375,000 5,812 .11
Gaumont SA (France) 69,159 5,291 .10
Quantum Restaurant Group, Inc. (USA)/1/ 315,000 5,198 .09
Mandarin Oriental International Ltd. (Singapore) 3,916,319 4,935 .09
Filmes Lusomundo, SA, preferred shares (Portugal) 292,500 2,628 .05
Ameristar Casinos, Inc. (USA)/1/ 390,000 2,389 .04
MovieFone, Inc., Class A (USA)/1/ 360,000 1,665 .03
MERCHANDISING - 4.79%
Consolidated Stores Corp. (USA)/1/ 1,330,000 44,555 .81
Zale Corp. (USA) /1/ 1,500,000 25,781 .47
Williams-Sonoma, Inc. (USA)/1/ 1,048,750 23,859 .43
AnnTaylor, Inc. (USA) /1/ /2/ 1,200,000 21,600 .39
Sports Authority, Inc. (USA) /1/ 772,200 21,139 .38
Fabri-Centers of America, Inc., Class B (USA)/1/ /2/ 525,000 6,103
Fabri-Centers of America, Inc., Class A /1/ 525,000 6,037 .22
Duty Free International, Inc. (USA) 856,500 11,349 .21
Viking Office Products, Inc. (USA)/1/ 200,000 11,125 .20
Giordano Holdings Ltd. (Hong Kong) 10,678,000 11,045 .20
DFS Furniture Co. PLC (United Kingdom) 1,442,000 10,540 .19
Dickson Concepts (Hong Kong) 9,299,000 10,220 .19
PT Modern Photo Film (Indonesia) 1,875,000 10,189 .19
Homac Corp. (Japan) 497,200 9,848 .18
Michaels Stores, Inc. (USA) /1/ 610,000 8,540 .16
Homeplace Holdings, 7.00% convertible preferred (USA) /1/ 30,200 8,003 .15
MSC Industrial Direct Co., Inc. Class A (USA) /1/ 200,000 5,775 .10
Hanover Direct, Inc. (USA)/1/ 3,944,000 4,684 .09
DAIKI Co. Ltd., 1.50% convertible debentures 2004 (Japan) Y450,000,000 4,230 .08
Colruyt NV (Belgium) 12,000 3,933 .07
Arbor Drugs, Inc. (USA) 137,500 2,888 .05
Tandy Brands Accessories, Inc. (USA)/1/ 221,625 1,607 .03
ENERGY EQUIPMENT - 4.30%
Reading & Bates Corp. (USA)/1/ 2,350,000 46,413 .84
Camco International, Inc. (USA) /2/ 1,350,000 42,525 .77
Transocean Drilling AS (Norway) 1,553,600 33,938 .62
SMEDVIG AS (Norway) 1,245,000 26,614 .48
Varco International, Inc. (USA) /1/ /2/ 1,850,000 22,431 .41
Babcock International Group PLC (United Kingdom) /2/ 9,822,285 18,736 .34
COFLEXIP SA (American Depositary Receipts)(France) 749,800 16,027 .29
Atwood Oceanics, Inc. (USA) /1/ /2/ 360,000 12,960 .24
Nowsco Well Service Ltd. (Canada) 838,100 11,991 .22
Weatherford Enterra, Inc. (formerly Enterra Corp.) (USA) /1/ 135,200 4,715 .09
MISCELLANEOUS MATERIALS & COMMODITIES -3.29%
Hoganas Eldfast AB, Class B (Sweden) 1,460,400 44,566 .81
Delta and Pine Land Co. (USA) 550,000 30,594 .56
SGL Carbon AG (Germany) 250,000 23,882 .43
Intertape Polymer Group Inc. (Canada) 500,000 19,313 .35
Sealed Air Corp. (USA)/1/ 400,000 13,650 .25
PT Mulia Industrindo (Indonesia) 6,330,000 11,038 .20
Sinocan Holdings Ltd. (Hong Kong - Incorporated in Bermuda) 28,200,000 10,665 .19
Ashton Mining Ltd. (Australia) 6,100,000 10,151 .19
Carbide/Graphite Group, Inc. (USA)/1/ /2/ 511,800 9,212 .17
Forsheda AB, Class B (Sweden) 450,000 7,828 .14
ENERGY SOURCES - 3.11%
Abacan Resource Corp. (Canada)/1/ /2/ 5,221,000 22,462 .41
QCT Resources Ltd. (Australia) 16,251,845 21,205 .39
California Energy Co., Inc. (USA)/1/ 750,000 19,969 .36
Clyde Petroleum PLC (United Kingdom) 19,500,000 19,342 .35
ELAN Energy Inc. (Canada)/1/ 1,635,000 14,545 .27
Cabre Exploration Ltd. (Canada)/1/ /2/ 993,400 12,299 .22
Stampeder Exploration Ltd. (Canada) /2/ 2,780,000 11,473 .21
Ashland Coal, Inc. (USA)/3/ 399,000 9,326 .17
Paramount Resources Ltd. (Canada) /2/ 831,000 9,298 .17
British-Borneo Petroleum Syndicate, PLC (United Kingdom) 949,200 7,155 .13
Novus Petroleum Ltd. (Australia) 4,700,000 6,242 .11
Hardy Oil & Gas PLC (United Kingdom) 1,750,000 6,089 .11
Ampolex Ltd., 8.00% convertible preferred (Australia) 908,000 5,072 .09
Cimarron Petroleum Ltd. (Canada) /1/ 423,400 4,582 .08
Zhenhai Refining & Chemical Co. Ltd., Class H (People's Republic of China) 7,710,500 1,974 .04
ELECTRONIC COMPONENTS - 2.92%
Flextronics International Ltd. (Singapore)/1/ /2/ 714,800 21,801 .40
ANTEC Corp. (USA)/1/ /2/ 1,305,000 20,227 .37
Microchip Technology Inc. (USA) /1/ 625,000 17,187 .31
Littelfuse, Inc. (USA) /1/ 356,200 13,447 .24
Lattice Semiconductor Corp. (USA) /1/ 450,000 12,769 .23
Vitesse Semiconductor Corp. (USA) /1/ 510,000 11,603 .21
ASM Pacific Technology Ltd. (Hong Kong) 9,199,000 8,742 .16
VLSI Technology, Inc. (USA)/1/ 600,000 7,725 .14
SCI Systems, Inc. (USA)/1/ 200,000 7,325 .13
Park Electrochemical Corp. (USA) 240,000 7,140 .13
ROSS Technology, Inc. (USA) /1/ 656,000 7,052 .13
Cypress Semiconductor Corp. (USA) /1/ 600,000 7,050 .13
Quantum Corp. (USA)/1/ 323,100 5,816 .11
Western Digital Corp. (USA)/1/ 200,000 3,850 .07
Micro Linear Corp. (USA)/1/ 400,000 3,650 .07
Rogers Corp. (USA)/1/ 140,000 3,238 .06
First Pacific Networks, Inc. (USA)/1/ 850,000 1,912 .03
TELECOMMUNICATIONS - 2.92%
International CableTel Inc. (USA)/1/ 1,009,466 30,410 .55
Octel Communications Corp. (USA)/1/ 500,000 24,125 .44
Pilipino Telephone Corp. (Philippines)/1/ /3/ 15,825,000 21,491 .39
Atlantic Tele-Network, Inc. (USA)/1/ 610,000 13,725 .25
IntelCom Group Inc. (Canada) /1/ 763,100 13,545 .25
Telephone and Data Systems, Inc. (USA) 270,000 12,488 .23
Brooks Fiber Properties, Inc., convertible preferred (USA) /1/ /2/ /3/ 49,000 12,250 .22
Vanguard Cellular Systems, Inc. (USA)/1/ 457,500 9,150 .17
MIH Holdings (South Africa) 1,405,300 7,420 .14
Centennial Cellular Corp. (USA)/1/ 340,000 5,185 .09
MIDCOM Communications Inc. (USA) /1/ 700,000 5,031 .09
Associated Group, Inc., Class B (USA)/1/ 85,000 1,626
Associated Group, Inc., Class A /1/ 71,500 1,376 .06
M-CELL (South Africa) 2,500,400 2,420 .04
BANKING - 2.88%
Washington Mutual Savings Bank (USA) 918,750 27,333 .50
First Financial Corp. (USA) 950,000 20,306 .37
Mercantile Bancorporation Inc. (USA) 375,000 17,156 .31
Central Fidelity Banks, Inc. (USA) 367,500 12,495 .23
Keystone Financial, Inc. (USA) 375,000 12,281 .22
Safra Republic Holdings SA (Luxembourg) 112,000 12,152 .22
Hibernia Corp., Class A (USA) 1,100,000 11,688 .21
FirstMerit Corp. (USA) 340,000 10,540 .19
Washington Federal Savings and Loan Assn. (USA) 389,317 8,468 .15
International Bank of Asia Ltd. (Hong Kong) 10,103,000 6,989 .13
Dah Sing Financial Holdings Ltd. (Hong Kong) 2,170,000 6,846 .13
Collective Bancorp, Inc. (USA) 221,800 5,600 .10
City National Corp. (USA) 350,000 4,769 .09
Sterling Financial Corp. (USA) /1/ 138,000 1,794 .03
TRANSPORTATION: RAIL & ROAD - 2.88%
Wisconsin Central Transportation Corp. (USA)/1/ 783,100 52,076 .95
TNT Freightways Corp. (USA) /2/ 1,350,000 30,713 .56
Werner Enterprises, Inc. (USA) 850,000 20,400 .37
Swift Transportation Co., Inc. (USA)/1/ 950,000 16,862 .31
M.S. Carriers, Inc. (USA)/1/ /2/ 837,000 15,903 .29
United TransNet, Inc. (USA) /1/ /2/ 492,000 11,624 .21
TNT Ltd. (Australia)/1/ 4,076,379 5,032
TNT Ltd., 8.00% convertible preferred 1,316,100 1,861 .12
Nippon Konpo Unyu Soko Co., Ltd. (Japan) 460,000 3,907 .07
CHEMICALS - 2.72%
Airgas, Inc. (USA)/1/ 892,700 35,485 .65
Valspar Corp. (USA) 437,500 19,852 .36
Kalon Group PLC (United Kingdom) 8,030,000 16,726 .30
McWhorter, Inc. (USA)/1/ /2/ 706,000 12,267 .22
OM Group, Inc. (USA) 300,000 11,137 .20
Ferro Corp. (USA) 350,000 9,931 .18
Cambrex Corp. (USA) 200,000 9,225 .17
Holliday Chemical Holdings PLC (United Kingdom) 4,912,500 9,071 .17
Carburos Metalicos SA (Spain) 164,696 7,286 .13
RPM, Inc. (USA) 412,500 6,394 .12
Landec Corp. (USA) /1/ 380,000 6,175 .11
Armor All Products Corp. (USA) 222,100 3,637 .07
Yip's Hang Cheung (Holdings) Ltd. (Hong Kong) 13,100,000 1,728 .03
Epicore Network Inc. (Canada) /3/ 200,000 506 .01
MACHINERY & ENGINEERING - 2.65%
Thermo Fibertek Inc. (USA)/1/ 825,000 18,356 .33
Svedala Industri AB (Sweden) 500,000 16,346 .30
UMW Holdings Bhd. (Malaysia) 4,655,000 15,826 .29
Greenfield Industries, Inc. (USA) 456,200 15,796 .29
AGCO Corp. (USA) 600,000 14,475 .26
Valmont Industries, Inc. (USA) 470,000 14,100 .26
Kalmar Industries AB (American Depositary Receipts)(Sweden) /3/ 638,000 11,924 .22
Crisplant Industries AS (Denmark) 113,300 8,150 .15
Allied Products Corp. (USA) 315,400 7,136 .13
Crompton & Knowles Corp. (USA) 400,000 5,850 .11
Thermo Power Corp. (USA)/1/ 410,000 5,227 .09
Miura Co., Ltd. (Japan) 250,000 4,415 .08
Jungheinrich AG, preferred shares (Germany) 20,500 3,250 .06
Chen Hson Holdings Ltd. (Hong Kong - Incorporated in Bermuda) 4,752,000 2,642 .05
Siu-Fung Ceramics Holdings Ltd. (Hong Kong - Incorporated in Bermuda) 10,655,737 1,860 .03
MULTI-INDUSTRY - 2.49%
First Pacific Co. Ltd.(Hong Kong) 27,030,124 38,445 .70
Industriforvaltnings AB Kinnevik, Class B (Sweden) 884,000 30,489
Industriforvaltnings AB Kinnevik, Class A 203,440 6,956 .68
D'Ieteren Holdings BV (Belgium) 190,000 20,109
D'Ieteren N.V. VVPR 13,883 1,378 .39
Amalgamated Holdings Ltd. (Australia) 789,320 12,334
Amalgamated Holdings Ltd., 5.00% convertible preferred 265,000 5,176 .32
Corporacion Financiera Alba, SA (Spain) 178,449 13,862 .25
Aboitiz Equity Ventures (Philippines) 41,391,800 7,917 .15
ELECTRONIC INSTRUMENTS - 2.42%
CIDCO Inc. (USA)/1/ /2/ 913,000 29,444 .53
Plantronics, Inc. (USA)/1/ /2/ 450,000 16,988 .31
Discreet Logic Inc. (Canada) /1/ 1,023,200 14,069 .26
Trimble Navigation Ltd. (USA) /1/ 600,000 13,725 .25
LoJack Corp. (USA)/1/ 993,800 9,441 .17
C-COR Electronics, Inc. (USA)/1/ /2/ 600,000 9,300 .17
Horiba Ltd.(Japan) 650,000 8,381 .15
Lumonics Inc. (Canada)/1/ 435,000 8,138 .15
TSX Corp.(USA) /1/ 397,900 7,660 .14
ThermoQuest Corp. (USA) /1/ 360,000 6,120 .11
Pinnacle Systems, Inc. (USA) /1/ 300,000 6,000 .11
Fluke Corp. (USA) 100,000 3,812 .07
DATA PROCESSING & REPRODUCTION - 2.41%
Avid Technology, Inc. (USA)/1/ /2/ 1,325,000 27,825 .51
Mentor Graphics Corp. (USA)/1/ 1,750,000 24,937 .45
Acclaim Entertainment, Inc. (USA)/1/ 1,500,000 15,844 .29
Transaction Systems Architects, Inc., Class A (USA) /1/ 350,000 14,263 .26
Global Village Communications Inc. (USA) /1/ /2/ 775,000 11,528 .21
Landmark Graphics Corp. (USA) /1/ 546,700 9,089 .17
Cerner Corp. (USA) /1/ 359,200 8,351 .15
Cylink Corp. (USA) /1/ 378,300 6,715 .12
Wonderware Corp (USA) /1/ 243,200 5,715 .10
Crystal Dynamics, Inc., convertible preferred, Series D (USA) /1/ /3/ 533,334 4,000 .07
Innovus Corp. (USA) /1/ /2/ /3/ 300,625 3,006 .06
Autologic Information International, Inc. (formerly Information International,
Inc.) (USA) /1/ 150,000 1,312 .02
INDUSTRIAL COMPONENTS - 1.94%
Cardo AB (Sweden) 1,390,000 28,349 .52
Kolbenschmidt AG (Germany)/1/ 114,000 13,516 .25
Standard Products Co. (USA) 507,600 12,373 .22
Bearings, Inc. (USA) 409,950 11,632 .21
Lear Seating Corp. (USA)/1/ 352,300 11,494 .21
Material Sciences Corp. (USA) /1/ 747,100 11,113 .20
Autoliv AB (American Depositary Receipts)(Sweden)/3/ 203,300 10,396 .19
Innovative International (Holdings) Ltd. (Hong Kong) 18,156,000 5,458 .10
Federal-Mogul Corp. (USA) 130,000 2,421 .04
INSURANCE - 1.75%
Fairfax Financial Holdings Ltd. (Canada)/1/ /3/ 272,700 33,412 .61
Transatlantic Holdings, Inc. (USA) 225,000 15,356 .28
Harleysville Group Inc. (USA) 375,000 10,031 .18
Irish Life PLC (Ireland) 2,129,302 8,676 .16
Mutual Risk Management Ltd. (USA - Incorporated in Bermuda) 200,000 8,275 .15
Selective Insurance Group, Inc. (USA) 195,000 7,020 .13
Liberty Corp. (USA) 200,000 6,600 .12
Nelson Hurst PLC (United Kingdom) 1,435,000 4,051 .07
NAC Re Corp. (USA) 87,200 2,845 .05
TRANSPORTATION: SHIPPING - 1.70%
Orient Overseas (International) Ltd. (Hong Kong - Incorporated in Bermuda) 18,338,000 14,464 .26
ICB Shipping AB, Class B (Sweden)/2/ 1,350,000 13,564 .25
Stolt-Nielsen SA, Class B (American Depository Receipts) (Multinational) 552,000 9,867 .18
Bona Shipholding Ltd. (Norway) 880,200 9,339 .17
Pacific Basin Bulk Shipping Ltd. (Multinational)/2/ 750,000 8,906 .16
Irish Continental Group PLC (Ireland) 1,025,000 8,865 .16
Nordstrom & Thulin AB, Class B (Sweden) 3,278,300 7,374 .13
Wah Kwong Shipping Holdings Ltd. (Hong Kong) 5,258,500 6,901 .13
IMC Holdings Ltd. (Hong Kong) 8,198,000 4,770 .09
Benor Tankers Ltd. (Norway)/1/ 763,800 3,933 .07
William Lines, Inc. (Philippines) 14,100,000 3,398 .06
Silja Oy AB, Class A (Finland)/1/ 362,000 2,073 .04
METALS: NONFERROUS - 1.53%
Capral Aluminium Ltd. (Australia)/2/ 8,954,587 25,466 .46
ERAMET (France)/3/ 284,119 20,665 .38
QNI Ltd. (Australia) 6,211,900 14,075 .26
Century Aluminum Co. (USA) /1/ 900,000 12,262 .22
Asturiana de Zinc, SA (Spain)/1/ 1,640,000 11,497 .21
BEVERAGES - 0.98%
Matthew Clark PLC (formerly Taunton Cider PLC) (United Kingdom) 2,099,759 23,199 .42
Brau-Union Goss-Reininghaus-Osterreichische Brau AG (Austria) 271,800 15,558 .28
BBAG Oest Brau-Betl (Austria) 176,770 9,401 .17
San Miguel Brewery Hong Kong Ltd. (Hong Kong) 11,600,000 5,962 .11
ELECTRICAL & ELECTRONICS - 0.91%
Elsag Bailey Process Automation NV (Netherlands) /1/ 522,100 11,943 .22
Tee-Comm Electronics Inc. (Canada) 1,043,200 11,863 .21
Steinbrecher Corp., convertible preferred, Series D (USA)/1/ /2/ /3/ 910,000 7,280 .13
ERG Limited (Australia) 6,342,203 6,689
ERG Limited, rights, expire 4/11/96 /1/ 1,585,550 3 .12
Spectra-Physics AB, Class A (Sweden) 385,020 4,850 .09
Johnson Electric Holdings Ltd. (Hong Kong - Incorporated in Bermuda) 2,120,000 4,304 .08
MagneTek, Inc. (USA)/1/ 400,000 3,150 .06
AEROSPACE & MILITARY TECHNOLOGY - 0.85%
CAE Industries Ltd. (Canada) 3,350,000 28,879 .53
Thiokol Corp. (USA) 400,000 17,550 .32
UTILITIES: ELECTRIC & GAS - 0.84%
Hub Power Co. (Global Depositary Receipts)(Pakistan)/1/ 831,409 16,320 .30
Australian Gas Light Co. (Australia) 3,795,629 16,014 .29
Espoon Sahko Oy (Finland) 453,500 8,328 .15
Capex SA, Class A (Global Depositary Receipts)(Argentina) 384,200 5,619 .10
BUILDING MATERIALS & COMPONENTS - 0.83%
Puerto Rican Cement Co., Inc. (USA) /2/ 371,000 12,336 .22
Futuris Corp. Ltd. (Australia) 7,756,118 8,181 .15
Lafarge Corp. (USA) 402,800 7,603 .14
Cemex, SA de CV (Mexico) 2,040,000 7,291 .13
Apasco, SA de CV (Mexico) 1,322,620 6,691 .12
Falcon Building Products, Inc., Class A (USA)/1/ 390,000 3,656 .07
RECREATION & OTHER CONSUMER PRODUCTS - 0.81%
WMS Industries Inc. (USA)/1/ 750,000 13,031 .24
Galoob Lewis Toys (USA) /1/ /2/ 600,000 12,150 .22
Pacific Concord Holding Ltd., 4.75% convertible debentures 1998 (Hong
Kong) $5,000,000 4,025
Pacific Concord Holding Ltd. 19,862,000 3,981 .14
Koei Co., Ltd. (Japan) 156,700 5,285 .10
Rawlings Sporting Goods Co., Inc. (USA)/1/ 380,000 3,135 .06
World Houseware (Holdings) Ltd. (Hong Kong) 17,295,809 2,684 .05
WHOLESALE & INTERNATIONAL TRADE - 0.70%
Tech Data Corp. (USA)/1/ 900,000 15,075 .27
Brightpoint Inc. (USA) /1/ /2/ 555,000 10,129 .18
Kamei Corp. (Japan) 483,000 5,866 .11
Thompson PBE, Inc. (USA) /1/ 415,000 5,499 .10
Finning Ltd. (Canada) 120,000 1,959 .04
TEXTILES & APPAREL - 0.60%
Wolford Group (Austria) 90,000 18,070 .33
Indorama Synthetic (Indonesia) 2,052,000 7,024 .13
Z Groupe Zannier (France) 247,000 4,663 .09
Phillips-Van Heusen Corp. (USA) 250,000 2,938 .05
FOOD & HOUSEHOLD PRODUCTS - 0.59%
Hazlewood Foods PLC (United Kingdom) 7,500,000 11,731 .21
Smithfield Foods, Inc. (USA) /1/ 400,000 11,600 .21
Rykoff-Sexton, Inc. (USA) 450,000 7,144 .13
Tingyi (Cayman Islands) Holding Corp. (People's Republic of China) 7,992,000 2,093 .04
CONSTRUCTION & HOUSING - 0.54%
Ryland Group, Inc. (USA) 780,000 12,578 .23
plettac AG (Germany) 49,332 10,829 .20
Corporacion Geo, SA de CV, Class B (Mexico) /3/ 1,751,568 6,062 .11
METALS: STEEL - 0.45%
Avesta Sheffield AB (Sweden) 1,218,542 12,334 .22
Tubos de Acero de Mexico, SA (American Depositary Receipts)(Mexico)/1/ 1,245,000 9,804 .18
Nippon Denro Ispat Ltd., 3.00% convertible debentures 2001 (India) $4,700,000 2,703 .05
FINANCIAL SERVICES - 0.41%
OM Grubben AB (Sweden) 1,064,800 22,355 .41
APPLIANCES & HOUSEHOLD DURABLES - 0.39%
Protection One, Inc. (USA) /1/ /2/ 795,000 11,726 .21
Gemstar International Group Ltd. (USA) /1/ 231,000 5,775 .11
SEB SA (France) 25,862 4,071 .07
FOREST PRODUCTS & PAPER - 0.23%
Caraustar Industries, Inc. (USA) 495,000 12,375 .23
REAL ESTATE - 0.14%
Cadiz Land Co., Inc. (USA)/1/ /2/ /3/ 1,240,000 7,750 .14
TRANSPORTATION: AIRLINES - 0.13%
PR Holdings, Inc., subscription rights (Philippines)/1/ /3/ 1,730,000 7,319 .13
GOLD MINES - 0.13%
Golden Shamrock Mines Ltd. (Australia) 9,000,000 7,032 .13
MISCELLANEOUS - 4.92%
Other equity-type securities in initial period of acquisition 270,444 4.92
---------- ------
TOTAL EQUITY -TYPE SECURITIES (cost: $3,831,379,000) 4,781,001 87.01
---------- ------
Principal
Amount
SHORT-TERM SECURITIES (000)
CORPORATE SHORT-TERM NOTES - 9.93%
Ford Credit Europe PLC 5.22%-5.30% due 4/10-5/28/96 $72,200 71,768 1.30 %
Toyota Motor Credit Corp. 5.18%-5.38% due 4/4-5/3/96 66,700 66,574 1.21
Sony Capital Corp. 5.20%-5.45% due 4/22-4/29/96 64,000 63,757 1.16
Bayer AG 5.10%-5.20% due 4/9-5/22/96 58,000 57,731 1.05
Daimler-Benz North America Corp. 5.12%-5.15% due 4/11-5/23/96 57,800 57,587 1.05
National Australia Funding (Delaware) Inc. 5.205%-5.37% due 4/15-5/14/96 54,400 54,258 .99
Nestle Capital Corp. 5.22%-5.40% due 4/9-4/15/96 35,000 34,929 .64
Commerzbank U.S. Finance Inc. 5.17% due 4/1/96 34,600 34,595 .63
Glaxo Holdings PLC 5.12%-5.27% due 4/12-6/26/96 34,000 33,817 .62
ARCO Coal Australia Inc. 5.30%-5.33% due 4/16-5/20/96 28,700 28,616 .52
Halifax Building Society 5.10%-5.36% due 4/4-5/7/96 22,200 22,143 .40
Canadian Imperial Holdings Inc. 5.185% due 4/2/96 19,600 19,594 .36
FEDERAL AGENCY DISCOUNT NOTES - 2.02%
Federal National Mortgage Assn. 5.00%-5.18% due 4/16-6/12/96 60,145 59,865 1.09
Federal Home Loan Mortgage Corp. 5.00%-5.29% due 4/22-5/13/96 51,600 51,360 .93
CERTIFICATES OF DEPOSIT - 1.09%
National Westminster Bank PLC 5.20%-5.33% due 4/23-5/21/96 35,000 35,000 .64
Canadian Imperial Bank 5.28% due 5/13/96 25,000 24,999 .45
-------- -------
TOTAL SHORT-TERM SECURITIES (cost: $716,612,000) 716,593 13.04
-------- -------
TOTAL INVESTMENT SECURITIES (cost: $4,547,991,000) 5,497,594 100.05
Excess of payables over cash and receivables 2,713 .05
-------- -------
NET ASSETS $5,494,881 100.00%
======== =======
</TABLE>
/1/ Non-income-producing securities.
/2/ The funds owns the following percentages (over 5%) of the outstanding
voting securities of the following companies and thus is considered an
affiliate as defined in the Investment Company Act of 1940:
<TABLE>
<CAPTION>
<S> <C>
COMPANY PERCENT
Steinbrecher 7.32%
Puerto Rican Cement 6.85
Carbide/Graphite Group 6.84
McWhorter 6.64
Thomas Group 6.61
M.S. Carriers 6.50
Filofax Group 6.49
Netcom On-line Comm 6.49
Rio Hotel & Casino 6.49
Savoy Pictures Entertainment 6.49
Keravision 6.48
CIDCO 6.47
Alliance Communications 6.46
Protection One 6.46
Cadiz Land 6.45
Innovus 6.45
D*I*I* Group 6.42
Genelabs Technologies 6.42
Abacan Resource 6.40
Anesta 6.40
Brooks Fiber Properties 6.37
Avid Technology 6.28
C-COR Electronics 6.26
Data Broadcasting 6.26
TNT Freightways 6.17
Varco International 6.12
Cabre Explanation 6.04
Chrysalis Group 5.98
Continental Waste Industries 5.95
Galoob Lewis Toys 5.92
DMX 5.90
ANTEC 5.85
Babcock International Group 5.80
Stampeder Exploration 5.79
Pacific Basin Bulk Shipping 5.74
Fabri-Centers of America 5.72
Flextronics International 5.65
AAPC 5.64
Camco International 5.57
Paragon Trade Brands 5.57
APCDA Parking 5.43
Atwood Oceanics 5.42
United Transnet 5.42
Plantronics 5.29
Imclone Systems 5.23
Paramount Resources 5.23
AnnTaylor 5.20
Ethical Holdings 5.18
VISX 5.16
InSite Vision 5.03
Brightpoint 5.01
</TABLE>
/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
EQUITY-TYPE SECURITIES APPEARING IN THE
PORTFOLIO SINCE SEPTEMBER 30, 1995
Apasco
Ascent Entertainment Group
ASM Pacific Technology
Atwood Oceanics
Australian Provincial Newspapers
BBAG Oest Brau-Betl
BDM International
Brightpoint
British - Borneo Petroleum Syndicate
Cambrex
Carburos Metalicos
Cemex
Century Aluminum
Cerner
Chen Hson Holdings
Cimarron Petroleum
Clyde Petroleum
COR Therapeutics
Crisplant Industries
Cylink
Cypress Semiconductor
Delta and Pine Land
DFS Furniture
Dickson Concepts
Discreet Logic
Elsag Bailey Process Automation
Epicore Network
ERG Limited
Franklin Quest
Galoob Lewis Toys
Gemstar
Giordano Holdings
Global Village Comunications
Golden Shamrock Mines
Hardy Oil & Gas
Homeplace Holdings
Horiba
IDEC Pharmaceuticals
Imax
ImClone Systems
ImmuLogic Pharmaceutical
Indorama Synthetic
Intelcom Group
International Bank of Asia
KCI Konecranes
KeraVision
Koei
Landec
Lattice Semiconductor
Littelfuse
Martek Biosciences
Material Sciences
Mentor
Michaels Stores
Microchip Technology
MIH Holdings
Modern Photo Film
MSC Industrial Direct
Mulia Industrindo
Mutual Risk Management
NETCOM On-Line Communication Services
New Straits Times Press
Nowsco Well Service
OM Group
OM Grubben
Omni Media
On Assignment
Open Text
Orient Overseas (International)
Pacific Basin Bulk Shipping
Physio - Control International
Pinnacle Systems
Primark
Protection One
QCT Resources
Robert Half International
ROSS Technology
Rykoff-Sexton
Saskatchewan Wheat Pool
Scotia Holdings
Silver King Communications
Sinclair Broadcast Group
Sinocan Holdings
Smithfield Foods
Stampeder Exploration
Sterling Financial
Stolt-Nielsen
T Cell Sciences
Tee-Comm Electronics
ThermoQuest
Thompson PBE
Tingyi
Trimble Navigation
Triple P
TSX
United TransNet
Vanstar
Varco International
VISX
Vitesse Semiconductor
Wolford Group
Wonderware
Zale
EQUITY-TYPE SECURITIES ELIMINATED FROM
THE PORTFOLIO SINCE SEPTEMBER 30, 1995
ACMAT
Actel
Alumax
America Online
American Publishing
ARBED
Arbor Drugs
Aspen Technology
Athena Neurosciences
Au Bon Pain
Benson Eyecare
Blue Range Resource
Bulgari
Canandaigua Wine
Cephalon
Cincinnati Milacron
Coleman
Comcast UK Cable Partners
CONVEX Computer
Corel
Crown Books
Czar Resources
Delta Woodside Industries
Diamond Multimedia Systems
Electronic Arts
Elf Gabon
EMCON
Fossil
Giant Cement Holding
Gold Peak Industries
Groupe Andre
Hummingbird Communications
Infinity Broadcasting
InStent
J.M. Smucker
Lands' End
Linear Technology
London Clubs International
M.A.I.D.
Magma Copper
Marzotto
Maybelline
Memtec
Moulinex
Multichoice
Multimedia
Nestle (Malaysia)
NYMAGIC
O'Sullivan Industries
Osterreichische Brau-Beteiligungs
Oxford Health Plans
Provident Bancorp
Radius
Raychem
Samuel Goldwyn
SciClone Pharmaceuticals
Scotts
Scribona
SelecTV
South Wales Electricity
Standard Federal Bank
Structural Dynamics Research
Sydney Harbour Casino Holdings
Symantec
Tessenderlo Chemie
Timken
Tokyo Sangyo
Tolmex
TriCo Bancshares
Tung Ho Steel Enterprise
Varity
Ventritex
VIVUS
Walker Interactive Systems
Watts Industries
West One Bancorp
Western Publishing Group
Yapi ve Kredi Bankasi
SMALLCAP World Fund
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCIAL STATEMENTS Unaudited
- ---------------------------------------- ------------ ------------
Statement of Assets and Liabilities
at March 31, 1996 (dollars in thousands)
- ---------------------------------------- ------------ ------------
Assets:
Investment securities at market
(cost: $4,547,991) $5,497,594
Cash 2,247
Receivables for -
Sales of investments $38,995
Sales of fund's shares 27,483
Dividends and accrued interest 3,742 70,220
------------ ------------
5,570,061
Liabilities:
Payables for -
Purchases of investments 68,082
Repurchases of fund's shares 2,898
Management services 3,121
Accrued expenses 1,079 75,180
------------ ------------
Net Assets at March 31, 1996 -
Equivalent to $25.53 per share on
215,241,508 shares of $0.01 par value
capital stock outstanding (authorized
capital stock - 400,000,000 shares) $5,494,881
=========
Statement of Operations
for the six months ended March 31, 1996 (dollars in thousands)
- ---------------------------------------- ------------ ------------
Investment Income:
Income:
Dividends $ 15,582
Interest 25,296 $ 40,878
------------
Expenses:
Management services fee 16,788
Distribution expenses 5,610
Transfer agent fee 2,582
Reports to shareholders 290
Registration statement and
prospectus 405
Postage, stationery and supplies 494
Directors' fees 55
Auditing and legal fees 62
Custodian fee 624
Taxes other than federal income tax 110
Other expenses 39 27,059
------------ ------------
Net investment income 13,819
------------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 186,294
Net increase in unrealized appreciation
on investments:
Beginning of period 703,887
End of period 949,587
------------
Net unrealized appreciation on investments 245,700
------------
Net realized gain and unrealized appreciation
on investments 431,994
------------
Net Increase in Net Assets Resulting
from Operations $445,813
==========
Statement of Changes in Net
Assets (dollars in thousands)
- ---------------------------------------- ------------- -------------
Six Months Ended Year Ended
3/31/96* 9/30/95
------------ ------------
Operations:
Net investment income $13,819 $36,956
Net realized gain on investments 186,294 429,536
Net unrealized appreciation
on investments 245,700 238,836
------------ ------------
Net increase in net assets
resulting from operations 445,813 705,328
------------ ------------
Dividends and Distributions Paid
to Shareholders:
Dividends from net
investment income (32,452) (24,819)
Distributions from net realized
gain on investments (441,715) (204,948)
------------ ------------
Total dividends and
distributions (474,167) (229,767)
------------ ------------
Capital Share Transactions:
Proceeds from shares sold:
36,215,522 and 43,202,952
shares, respectively 887,627 1,002,339
Proceeds from shares issued in
reinvestment of net investment
income dividends and
distributions of net realized
gain on investments:
19,830,211 and 10,403,045 shares,
respectively 451,683 217,741
Cost of shares repurchased:
17,921,843 and 24,592,934
shares, respectively (441,473) (566,957)
------------ ------------
Net increase in net assets
resulting from capital share
transactions 897,837 653,123
------------ ------------
Total Increase in Net Assets 869,483 1,128,684
Net Assets:
Beginning of period 4,625,398 3,496,714
------------ ------------
End of period (including undistributed
net investment income: $4,616 and
$23,552, respectively) $5,494,881 $4,625,398
============ ==========
</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 fund seeks long-term growth of capital through investments in smaller
companies in the U.S. and around the world. The following paragraphs summarize
the significant accounting policies consistently followed by the fund in the
preparation of its financial statements:
Equity-type securities traded on a national securities exchange (or
reported on the NASDAQ national market) and securities traded in the
over-the-counter market are stated at the last reported sales price on the day
of valuation; other securities, and securities for which no sale was reported
on that date, are stated at the last quoted bid price. Short-term securities
with original or remaining maturities in excess of 60 days 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. Dividends and distributions paid to shareholders are recorded on
the ex-dividend date.
Investment securities and other assets and liabilities 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 $624,000 includes $99,000 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, 1996, net unrealized appreciation on investments for book
and federal income tax purposes aggregated $949,603,000, of which
$1,202,811,000 related to appreciated securities and $253,208,000 related to
depreciated securities. During the six months ended March 31, 1996, the fund
realized, on a tax basis, a net capital gain of $186,154,000 on securities
transactions. Net gains related to non-U.S. currency transactions of $141,000
were treated as an adjustment to ordinary income for federal income tax
purposes. The cost of portfolio securities for book and federal income tax
purposes was $4,547,991,000 at March 31, 1996.
3. The fee of $16,788,000 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,
1996, distribution expenses under the Plan were $5,610,000. As of March 31,
1996, accrued and unpaid distribution expenses were $800,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $2,582,000. American Funds Distributors, Inc. (AFD), the
principal underwriter of the fund's shares, received $2,498,000 (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 of the fund 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, 1996, aggregate amounts deferred and earnings thereon were
$60,000.
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, 1996, accumulated undistributed net realized gain on
investments was $147,312,000 and additional paid-in capital was $4,391,214,000.
The fund reclassified $303,000 from undistributed net investment income to
undistributed net realized gains during the six months ended March 31, 1996.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $1,473,494,000 and $810,312,000, respectively, during
the six months ended March 31, 1996.
Dividend and interest income is recorded net of non-U.S. taxes paid. For
the six months ended March 31, 1996, such non-U.S. taxes were $1,114,000. Net
realized currency gains on dividends, interest, withholding taxes reclaimable,
and sales of non-U.S. bonds and notes were $461,000 for the six months ended
March 31, 1996.
PER-SHARE DATA AND
RATIOS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Six Months Year ended September 30
Ended -------- -------- -------- ------------ ------------
3/31/96 /1/ 1995 1994 1993 1992 1991
- ----------------------- --------- --------- --------- --------- --------- ---------
Net Asset Value,
Beginning of
Period $26.11 $23.61 $22.72 $18.01 $17.60 $13.26
--------- --------- --------- --------- --------- ---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .07 .22 .09 .06 .14 .18
Net realized and
unrealized gain
on investments 1.98 3.79 1.83 5.56 .38 4.56
--------- --------- --------- --------- --------- ---------
Total income from
investment
operations 2.05 4.01 1.92 5.62 .52 4.74
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Dividends from
net investment
income (.18) (.16) (.06) (.08) (.11) (.40)
Distributions
from net
realized gains (2.45) (1.35) (.97) (.83) - -
--------- --------- --------- --------- --------- ---------
Total distributions (2.63) (1.51) (1.03) (.91) (.11) (.40)
--------- --------- --------- --------- --------- ---------
Net Asset Value, End
of Period $25.53 $26.11 $23.61 $22.72 $18.01 $17.60
========= ========= ========= ========= ========= =========
Total Return /2/ 9.07% /3/ 18.59% 8.60% 32.46% 2.95% 36.43%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end
of period (in
millions) $5,495 $4,625 $3,497 $2,247 $1,255 $798
Ratio of expenses
to average net
assets .56% /3/ 1.13% 1.12% 1.15% 1.21% 1.31%
Ratio of net income
to average net
assets .28% /3/ .97% .38% .33% .85% 1.11%
Average commissions
paid /1/,/4/ 1.22 cents 1.00 cents 1.25 cents 1.55 cents 2.36 cents 1.83 cents
Portfolio turnover
rate 20.17% /3/ 45.63% 29.43% 25.00% 23.10% 19.26%
</TABLE>
/1/ Unaudited
/2/ 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.
/4/ Brokerage commissions
paid on portfolio
transactions increase the
cost of securities
purchased or reduce the
proceeds of securities sold,
and are not reflected in the
fund's statement of
operations. Shares traded
on a principal basis, such as most
over-the-counter and fixed-income
transactions, are excluded.
Generally, non-U.S. commissions
are lower than U.S. commissions
when expressed as cents per share
but higher when expressed as a
percentage of transactions
because of the lower per-share
prices of many non-U.S. securities.
SMALLCAP WORLD FUND
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, 1996, this report must be accompanied by an American Funds Group
Statistical Update for the most recently completed calendar quarter.
Litho in USA BDA/AL/2970
Lit. No. SCWF-013-0596
Printed on recycled paper
[The American Funds Group(R)]
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