[THE AMERICAN FUNDS GROUP(R)]
SMALLCAP WORLD FUND
1999
SEMI-ANNUAL REPORT
for the six months ended March 31
[cover: Global illustrations of North America, Europe, Australia/South Pacific
areas]
SMALLCAP WORLD FUND(R) seeks long-term growth of capital through investments in
smaller companies in the United States and around the world.
SMALLCAP is one of the 29 mutual funds in The American Funds Group,(r) the
nation's third-largest mutual fund family. For more than six decades, Capital
Research and Management Company, the American Funds adviser, has invested with
a long-term focus based on thorough research and attention to risk.
INVESTMENT HIGHLIGHTS (Total returns for periods ended March 31, 1999, with all
distributions reinvested)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Salomon Smith Average Global
SMALLCAP Barney World Small Company
World Fund Smallcap Index Mutual Fund
Six months +17.2% +12.7% +13.8%
One year - 10.1 - 12.2 - 12.8
Five years +64.6 +30.8 +47.4
Since fund's +182.9 +93.8 +118.0
inception on April
30, 1990
Since fund's +12.4 +7.7 +9.1
inception
(annualized)
</TABLE>
ALL MARKET INDEXES CITED IN THIS REPORT ARE UNMANAGED AND INCLUDE REINVESTMENT
OF ALL DISTRIBUTIONS. THE SALOMON SMITH BARNEY WORLD SMALLCAP INDEX TRACKS
5,000 PUBLICLY TRADED STOCKS IN 22 COUNTRIES WITH MARKET CAPITALIZATIONS
BETWEEN $100 MILLION AND $1.2 BILLION. THE GLOBAL SMALL-CAPITALIZATION MUTUAL
FUND AVERAGE IS COMPUTED BY LIPPER, INC.
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, 1999,
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>
Average Annual
Total Return Compound Return
Since inception on +166.66% +11.63%
April 30, 1990
Five years +55.12% +9.18%
One year - 15.30% -
</TABLE>
FIGURES SHOWN ARE PAST RESULTS AND ARE NOT PREDICTIVE OF FUTURE RESULTS. SHARE
PRICE AND RETURN WILL VARY, SO YOU MAY LOSE MONEY. INVESTING FOR SHORT PERIODS
MAKE LOSSES MORE LIKELY. INVESTMENTS ARE NOT FDIC-INSURED, NOR ARE THEY
DEPOSITS OF OR GUARANTEED BY A BANK OR ANY OTHER ENTITY. INVESTING OUTSIDE THE
UNITED STATES IS SUBJECT TO ADDITIONAL RISKS, SUCH AS CURRENCY FLUCTUATIONS AND
POLITICAL INSTABILITY, WHICH ARE DETAILED IN THE FUND'S PROSPECTUS.
FELLOW SHAREHOLDERS:
We are pleased to report that SMALLCAP World Fund experienced a sizable bounce
off the stock market's autumn lows. For the six months ended March 31, 1999,
your fund gained 17.2% if you reinvested the dividend of 9 cents a share and
capital gain distribution of $1.29 a share paid in December, as 98% of our
shareholders did.
Once again, the fund handily outpaced the primary benchmarks we use to gauge
its results. The Salomon Smith Barney World Smallcap Index, which tracks the
fund's investment universe, gained 12.7%. The average return for global
small-company mutual funds was a bit higher - 13.8% as reported by Lipper.
Once again as well, large-company stocks fared substantially better. Standard &
Poor's 500 Composite Index, a leading gauge of mostly U.S. large-company
stocks, gained 27.3% while the Morgan Stanley Capital International EAFE(r)
(Europe, Australasia, Far East) Index, which measures large-company stocks in
major markets outside North America, rose 22.5%.
Looking at longer periods, the fund's results compare very well with its
universe, as the table at left shows. SMALLCAP ranks first of six global
small-company funds over its lifetime, according to Lipper, third of 14 over
five years and 14 of 40 over the past year. It has also outpaced the MSCI EAFE
Index over its lifetime, though the fund has fallen well short of the S&P 500.
LARGE COMPANIES REMAIN DOMINANT
We suspect that continuing to watch large-company stocks march skyward while
small-company stocks languish is beginning to try the patience of many
shareholders. It might be helpful to quantify how unusual this situation is,
and then attempt to explain why it has been happening.
First, it's important to understand that the very largest stocks are skewing
the stock market's reported gains. Over the past six months, for example, the
20 largest stocks in the S&P 500 accounted for roughly 40% of the index's
return; over the past 12 months, they accounted for half of the gain. During
calendar year 1998, while the S&P rose 27% without dividends, the median price
change among the 500 stocks was only 4.6% and 209 stocks actually declined in
value.
[Begin Sidebar]
WHERE ARE SMALLCAP'S PORTFOLIO COMPANIES LOCATED?
Geographical distribution of net assets on March 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
THE AMERICAS 58.9%
United States 52.8%
Canada 4.4
Mexico .8
Brazil .6
Other Americas .3
EUROPE 19.5%
United Kingdom 5.8%
Germany 2.4
Sweden 2.0
France 1.8
Denmark 1.5
Spain .9
Ireland .9
Finland .7
Turkey .5
Switzerland .5
Other Europe 2.5
ASIA/PACIFIC 9.9%
Australia 2.7%
Japan 1.7
Singapore 1.5
Hong Kong 1.4
Taiwan .7
New Zealand .7
Indonesia .5
Other Asia/Pacific .7
OTHER COUNTRIES 2.8%
CASH & EQUIVALENTS 8.9%
TOTAL 100.0%
</TABLE>
[End Sidebar]
AN EXPLANATION OF THE TREND
Typically, earnings are what drive stock prices. This time around, however,
investors are being driven by momentum, indexing and liquidity. Many investors
are buying stocks simply because they are going up; the stocks that go up the
most are the ones they buy the most of. This style of investing, dubbed
"momentum investing" by the popular press, does not strike us as a particularly
thoughtful method. In a rising market it clearly has advantages, but over time
it can result in above-average volatility yet only average returns.
Indexing is another relatively new phenomenon, at least in terms of its
popularity. Because unmanaged indexes are often weighted by capitalization, the
larger stocks have a disproportionate effect on the index. Much like momentum
investing, investors who index essentially buy more and more of the largest
stocks. Foreign investors are similarly attracted to the largest stocks, but
for a different reason: They value the liquidity these stocks provide. In other
words, they can buy and sell them easily.
WHERE DO WE GO FROM HERE?
These factors explain why the situation exists; they don't tell us much about
when or why it will end. To understand why we believe it will end, it is
helpful to look at some basic facts: The Leuthold Group, an investment research
firm, reports that today's price-to-earnings ratios, which are widely used to
gauge stock market value, directly reflect a company's size. The larger the
company, the higher the value the market is placing on it, with the very
largest companies selling at a significant premium to all others.
Leuthold also reports that anticipated earnings growth is now fairly similar
for all companies regardless of size, with a slight edge to small and midsize
firms. The question we would ask is: How long can investors place a higher
value on companies that aren't growing any faster, and may grow more slowly,
than others?
This situation reminds us uncomfortably of the Nifty Fifty craze of the early
1970s. Then as now, a select group of very large stocks soared well above what
reason, and earnings, could support. At the time it felt like their dominance
would never end, but end it did, painfully, during the 1974 market decline.
We are by no means predicting a market decline today; indeed, the U.S. economy
has rarely been stronger. But fewer and fewer big stocks pass the ultimate
value test: Would you buy the entire company at this price if you had the
chance? More and more small stocks still do. Sooner or later, investors will
recognize their value. In the meantime, we'll continue to do what we do best:
go out and find the most dynamic small companies on your behalf.
WHERE THE VALUES ARE
Recently, we've been finding good values as far afield as technology firms in
Israel and cellular phone companies in Brazil. Germany, Japan and Singapore
have provided particularly fertile ground for new investments, but even the
U.S. market offers an abundance of choice among small-company stocks.
Among industries, technology offers lots of attractive values, while contract
manufacturing and outsourcing continue to be sources of good ideas as well. We
have even invested in the occasional Internet stock - although prices have
typically risen so fast after each initial public offering that our holding
periods have been unusually short.
WHAT HELPED, WHAT HURT
Many of the fund's best stocks during the period were technology and media
companies, as the best and worst holdings listed on page 5 indicate. Investors
worldwide seem to have insatiable appetites for companies, large or small, that
create or deliver information. Takeover activity has been intense, especially
in media and technology - where good ideas seem easier to buy than originate.
Shipping stocks were among our worst performers during the six months. The
Asian financial crisis crimped imports to the region, causing shipping levels
and rates to decline precipitously.
It is also true that any stock reporting a disappointment, no matter how
insignificant, has been accorded no mercy. Investors, all too aware that
small-company stocks can be difficult to sell, have quickly sent perfectly good
stocks down 50% or more for even short-term earnings shortfalls. While it is
painful when you hold one of these stocks - and we held a few - such dramatic
declines also provide unusual opportunities to invest in quality growth
companies at very reasonable prices.
Of the 473 stocks we held throughout the period, 278 rose in price and 26 more
than doubled - showing that even in a difficult market, stock selection can
play an important role. We also added 114 new names while eliminating 132, some
as a result of mergers, some because they had significantly outgrown our
definition of small and some due to disappointing business developments.
STAYING THE COURSE
Our research and our experience clearly show there is nothing fundamentally
wrong with small companies or with the concept of small-company investing.
Beauty, however, is in the eye of the beholder, and small companies are today's
ugly ducklings. But while we may now be in the midst of a one-decision market -
"just buy the biggest stocks" - nothing in life (or the stock market) is ever
that easy. If the market has taught us anything over the years, it is that if
something seems too good to be true, it probably is.
We've been both pleased and frustrated with SMALLCAP's results in recent years
- - pleased, because we've done well against the most relevant benchmarks;
frustrated, because small-company stocks keep getting cheaper and cheaper
relative to their larger counterparts. Sooner or later, that will undoubtedly
change and, due to the illiquid nature of small-company stocks, will change
quickly. In the meantime, we appreciate your patience and look forward to
reporting to you again in six months.
Cordially,
/s/William R. Grimsley /s/Gordon Crawford
William R. Grimsley Gordon Crawford
Chairman of the Board President
May 14, 1999
<TABLE>
Smallcap World Fund, Inc.
Investment Portfolio March 31, 1999
Unaudited
<S> <C>
Industry Diversification
Business & Public Services 13.83%
Broadcasting & Publishing 12.45
Electronic Components 6.91
Merchandising 6.66
Leisure & Tourism 5.09
Other Industries 46.15
Cash & Equivalents 8.91
</TABLE>
<TABLE>
Percent Percentage Price
of Change for the Six
Net Months Ended
Largest Equity Holdings Assets 3/31/99
<S> <C> <C>
PMC-Sierra 1.87% +123.3%
TV Guide 1.36 +149.0
Century Communications 1.23 +94.5
ISS-International Service Sy 1.15 +23.2
United International Holding .93 +349.0
Jones Intercable .88 +58.5
Andrx .87 +148.0
USWeb/CKS .86 +215.8
SkyTel Communications .85 -8.3
Micrel .82 +88.9
</TABLE>
<TABLE>
OUR 10 MOST SUCCESSFUL HOLDINGS
Holdings owned throughout the six months ended 3/31/99
<S> <C>
United International Holdings
(U.S. cable television) +349.0%
KeraVision (U.S. eye-care products) +258.8
USWeb/CKS (U.S. Internet services) +215.8
UMW Holdings
(Malaysian industrial equipment) +203.8
Flextronics International
(U.S. contract manufacturing) +187.8
Macromedia
(U.S. multimedia computer tools) +178.9
EM.TV & Merchandising
(German TV producer) +158.2
Fujitsu Support and Service
(Japanese computer support) +157.1
TV Guide (U.S. publisher) +149.0
Andrx
(U.S. generic pharmaceuticals) +148.0
</TABLE>
<TABLE>
OUR 10 LEAST SUCCESSFUL HOLDINGS
Holdings owned throughout the six months ended 3/31/99
<S> <C>
ROMAC International
(U.S. employment services) -52.8%
Renaissance Worldwide
(U.S. technology services) -52.9
Franklin Covey
(U.S. time-management products) -54.0
Hornbach Holding (German home
improvement stores) -54.0
Mobel Walther
(German home furnishings) -55.8
Frontline
(Bermuda-based shipping firm) -56.3
Corporate Services Group
(U.K. employment services) -57.7
InaCom
(U.S. communications products) -58.9
Aminex (Irish oil producer) -62.0
Waterfront Shipping
(Norwegian tankers) -79.0
</TABLE>
<TABLE>
Smallcap World Fund, Inc.
Investment Portfolio March 31, 1999
Unaudited
Shares Market Percent
Equity Securities or Principal Value Of Net
(common and preferred stocks and convertible debentures) Amount (000) Assets
<S> <C> <C> <C>
Business & Public Services - 13.83%
ISS-International Service System A/S, Class B (Denmark) 1,350,000 $87,766 1.15%
USWeb/CKS (USA) (1) 1,590,000 65,587 .86
Sapient Corp. (USA) (1) 718,000 51,247 .67
Flextronics International Ltd. (USA -- Incorporated in 900,000 45,900 .60
Singapore) (1)
NCO Group, Inc. (USA) (1,2) 982,400 36,349 .48
ABR Information Services, Inc. (USA) (1,2) 1,865,000 32,404 .43
Medicis Pharmaceutical Corp., Class A (USA) (1) 1,050,000 31,500 .41
MSC Industrial Direct Co., Inc., Class A (USA) (1) 1,771,000 30,107 .40
Midas, Inc. (USA) 852,000 28,435 .37
Black Box Corp. (USA) (1) 878,000 27,218 .36
Falck A/S (Denmark) 295,000 24,132 .32
Bally Total Fitness Holding Corp. (USA) (1) 1,010,500 24,126 .32
CBT Group PLC (ADR) (Ireland) (1) 2,050,000 23,447 .31
Protection One, Inc. (USA) (1) 3,748,800 23,430 .31
ChoicePoint Inc. (USA) (1) 460,000 22,942 .30
Concord EFS, Inc. (USA) (1) 794,100 21,887 .29
Kroll-O'Gara Co. (USA) (1) 782,500 21,225 .28
Regis Corp. (USA) 775,500 20,648 .27
Rental Service Corp. (USA) (1) 1,100,000 19,250 .25
Rhon-Klinikum AG, preferred (Germany) 187,100 18,174 .24
Trigon Healthcare, Inc. (USA) (1) 525,700 18,005 .24
Corporate Services Group PLC (United Kingdom) (3) 7,528,427 8,745
Corporate Services Group PLC 7.50% $6,000,000 5,808 .22
convertible debentures 2005
Corporate Services Group PLC 2,000,000 2,323
ProBusiness Services, Inc. (USA) (1) 400,000 16,800 .22
Casella Waste Systems, Inc., Class A (USA) (1) 675,500 15,241 .20
Photobition Group PLC (United Kingdom) 3,678,070 14,063 .19
Enator AB (Sweden) 446,350 12,821 .17
Brunel International NV (Netherlands) 592,892 12,543 .17
Bright Horizons Family Solutions, Inc. (USA) (1) 555,000 12,141 .16
Insignia/ESG Holdings, Inc. (USA) (1) 785,700 11,049 .15
Automatic Data Processing, Inc. (USA) 252,587 10,451 .14
Intershop Communications AG (Germany) (1) 53,100 10,144 .13
PubliGroupe Ltd. (Switzerland) 23,000 9,975 .13
Budget Group, Inc., Class A (USA) (1) 800,000 9,800 .13
Pittston Brink's Group (USA) 400,000 9,400 .12
ITT Educational Services, Inc. (USA) (1) 250,000 9,391 .12
Lason, Inc. (USA) (1) 162,400 9,135 .12
Iron Mountain Inc. (USA) (1) 291,000 9,094 .12
OneMain.com, Inc. (USA) (1) 246,100 8,921 .12
APCOA Parking AG (Germany) (2) 120,800 8,879 .12
MDC Communications Corp., Class A (Canada) (1,2) 970,933 8,695 .11
InaCom Corp. (USA) (1) 1,104,000 8,556 .11
ROMAC International, Inc. (USA) (1) 996,300 8,469 .11
Sapiens International Corp. NV (Israel) (1) 800,000 8,350 .11
Kanamoto Co., Ltd. (Japan) 1,086,000 7,161 .09
Peapod, Inc. (USA) (1) 600,000 6,562 .09
PSD Group PLC (United Kingdom) 978,000 6,390 .08
Renaissance Worldwide Inc. (USA) (1) 1,000,000 6,188 .08
Sylvan Learning Systems, Inc. (USA) (1) 219,850 6,018 .08
BPP Holdings PLC (United Kingdom) 650,000 5,395 .07
Bellsystem24 Inc. (Japan) 15,000 5,129 .07
AHL Services, Inc. (USA) (1) 250,000 5,125 .07
Superior Consultant Holdings Corp. (USA) (1) 150,000 5,119 .07
International Container Terminal Services, Inc., 1.75% $5,905,000 5,019 .07
convertible debentures 2004 (Philippines)
E-Pub (Holdings) Ltd. (Austria) (1) 9,466 4,904 .06
Mosaic Group Inc. (Canada) (1) 1,773,300 4,705 .06
REMARQ Communities, Series B, 548,000 4,658 .06
convertible preferred (USA) (1,3,4)
Mac-Gray Corp. (USA) (1) 482,000 4,428 .06
GTS Duratek, Inc. (USA) (1) 811,100 4,157 .05
American Healthcorp, Inc. (USA) (1,2) 522,000 3,980 .05
Formula Systems (1985) Ltd. (ADR) (Israel) (1) 154,400 3,966 .05
AmSurg Corp., Class B (USA) (1) 309,972 2,170
AmSurg Corp., Class A (1) 250,000 1,750 .05
Market Facts, Inc. (USA) (1) 175,600 3,863 .05
MEDION AG (Germany) (1) 22,300 3,863 .05
Snyder Communications, Inc. (USA) (1) 130,000 3,624 .05
Fujitsu Support and Service Inc. (Japan) 36,000 3,526 .05
American Dental Partners, Inc. (USA) (1,2) 443,000 3,489 .05
Franklin Covey Co. (USA) (1) 375,000 3,375 .04
Taylor Nelson Sofres PLC (United Kingdom) 1,454,500 3,238 .04
Lernout & Hauspie Speech Products NV 100,000 3,000 .04
(Belgium) (1)
UroCor, Inc. (USA) (1,2) 600,000 2,925 .04
PRT Group Inc. (USA) (1,3) 761,960 2,524 .03
First Consulting Group, Inc. (USA) (1) 225,000 2,503 .03
Lorien PLC (United Kingdom) 819,663 2,380 .03
Primark Corp. (USA) (1) 89,102 1,893 .03
Autoweb.com, Inc. (USA) (1) 43,700 1,557 .02
Transportes Azkar, SA (Estonia) (1) 100,000 1,241 .02
Coinmach Laundry Corp., Class A (USA) (1) 80,000 820 .01
TeleTech Holdings, Inc. (USA) (1) 122,600 805 .01
Four Media Co. (USA) (1) 43,300 260 .00
Metropolis Transactive Holdings Ltd. 313,226 188 .00
(South Africa) (1)
Broadcasting & Publishing - 12.45%
TV Guide, Inc., Class A (formerly United 2,800,000 103,250 1.36
Video Satellite Group, Inc.) (USA) (1)
Century Communications Corp., Class A (USA) (1) 2,020,000 93,804 1.23
United International Holdings, Inc., Class A (USA) (1) 1,625,000 70,687 .93
Jones Intercable, Inc., Class A (USA) (1) 1,705,000 67,241 .88
Adelphia Communications Corp., Class A (USA) (1) 945,000 59,535 .78
Flextech PLC (United Kingdom) (1) 4,442,100 56,651 .74
Westwood One, Inc. (USA) (1) 1,943,100 55,378 .73
Scottish Media Group PLC (United Kingdom) 3,280,000 45,799 .60
Antena 3 de Television, SA (GDR) (Spain) (1,2,3,4) 1,500 39,207 .52
United Television, Inc. (USA) 350,000 36,400 .48
Shaw Communications Inc., Class B (Canada) 1,050,000 33,781 .44
SBS Broadcasting SA (formerly Scandinavian
Broadcasting System SA)
(Denmark--Incorporated in Luxembourg) (1,2) 970,650 31,182 .41
CanWest Global Communications Corp. (Canada) 1,554,946 20,629 .27
Class Editori SpA, Class A (Italy) (1) 2,082,000 18,507 .24
Chrysalis Group PLC (United Kingdom) 1,474,000 18,192 .24
Ascent Entertainment Group, Inc. (USA) (1,2) 1,573,800 17,213 .23
Central European Media Enterprises Ltd., Class A 1,170,000 15,064 .20
(USA -- Incorporated in Bermuda) (1)
Rural Press Ltd. (Australia) 3,726,466 12,316 .16
Antenna TV SA (ADR) (Greece) (1) 900,000 11,700 .15
Australian Provincial Newspapers Holdings 5,518,911 10,559 .14
Ltd. (Australia)
HIT Entertainment PLC (United Kingdom) (2) 1,053,420 10,367 .14
Ten Network Holdings Ltd. (Australia) 6,500,000 10,328 .14
NRJ SA (France) 47,284 9,492 .12
ENDEMOL Entertainment Holding NV 245,520 8,347 .11
(Netherlands) (1)
Sky Network Television Ltd. (ADR) (New Zealand) (1) 376,000 6,862 .09
Agora SA (Poland) (1) 625,000 6,750 .09
Media General, Inc., Class A (USA) 139,500 6,487 .09
Primedia Ltd., units (South Africa) 3,318,508 6,463 .08
GWR Group PLC (United Kingdom) 1,093,000 6,436 .08
Teletypos SA (Greece) 418,000 6,214 .08
Modern Times Group MTG AB, Class B (ADR) 69,200 6,159 .08
(Sweden) (1)
@ Entertainment Inc. (USA) (1) 635,000 6,033 .08
CD Radio Inc. (USA) (1) 175,900 4,573 .06
Sondagsavisen A/S (Denmark) 80,000 4,475 .06
CHUM Ltd., nonvoting, Class B (Canada) 158,200 4,198 .06
Investec--Consultoria Internacional, SA (Portugal) 99,000 3,783 .05
Matav-Cable Systems Media Ltd. (ADR) (Israel) 135,000 3,712 .05
Southern Star Group Ltd. (Australia) 3,870,000 3,690 .05
Alma Media Oyj (Finland) 126,400 3,547 .05
TVA Group Inc., Class B (Canada) (1) 243,600 3,232 .04
P4 Radio Hele Norge ASA (Norway) 960,000 3,230 .04
United Broadcasting Corp. (formerly International 5,800,000 2,318 .03
Broadcasting Corp. Ltd.) (Thailand) (1)
Grupo Radio Centro, SA de CV (ADR) (Mexico) 420,000 2,310 .03
StoryFirst Communications Inc., convertible preferred, 4,022 1,207 .02
Class B (Russia) (1,3,4)
Electronic Components - 6.91%
PMC-Sierra, Inc. (USA) (1,2) 1,995,000 142,019 1.87
Micrel, Inc. (USA) (1,2) 1,246,000 62,378 .82
Sanmina Corp. (USA) (1) 917,000 58,459 .77
NatSteel Electronics Ltd (Singapore) 17,700,000 48,403 .64
Venture Manufacturing (Singapore) Ltd (Singapore) 5,887,000 26,604
Venture Manufacturing (Singapore) Ltd (3) 2,710,000 12,247 .51
Cymer, Inc. (USA) (1) 1,182,700 23,506 .31
Acer Display Technology (Taiwan) (1,3,4) 36,000,000 19,565 .26
DuPont Photomasks, Inc. (USA) (1) 450,000 17,831 .23
Level One Communications, Inc. (USA) (1) 340,000 16,532 .22
Photronics, Inc. (USA) (1) 850,000 15,831 .21
Littelfuse, Inc. (USA) (1) 800,000 14,700 .19
Applied Micro Circuits Corp. (USA) (1) 225,000 9,619 .13
Wus Printed Circuit Co., Ltd. (Taiwan) (1) 5,827,000 9,501 .12
Kinpo Electronics, Inc. (Taiwan) (1) 7,500,000 8,831 .12
Rogers Corp. (USA) (1) 355,400 8,796 .12
Unicap Electronics Industrial Corp. (Taiwan) (1) 7,836,543 8,755 .11
Varitronix International Ltd. (Hong Kong -- 4,562,000 7,124 .09
Incorporated in Bermuda) (1)
Malaysian Pacific Industries Bhd. (Malaysia) (4) 4,420,000 6,688 .09
Option International NV (Belgium) (1) 280,000 6,384 .08
MegaChips Corp. (Japan) 30,000 1,748 .02
Merchandising - 6.66%
EM. TV & Merchandising AG (Germany) 54,000 46,334 .61
Michaels Stores, Inc. (USA) (1) 1,400,000 34,563 .45
Sunglass Hut International, Inc. (USA) (1,2) 3,200,000 33,600 .44
Zale Corp. (USA) (1) 798,700 27,306 .36
PETsMART, Inc. (USA) (1) 3,150,000 25,298 .33
Cost Plus, Inc. (USA) (1,2) 855,000 25,116 .33
DFS Furniture Co. PLC (United Kingdom) 4,952,700 20,295 .27
Komori Corp. (Japan) 1,001,400 19,698 .26
Lands' End, Inc. (USA) (1) 560,000 19,390 .25
GrandVision SA (France) 681,704 18,063 .24
Homac Corp. (Japan) 968,100 17,981 .24
Migros Turk TAS (Turkey) 13,634,675 17,933 .23
Rent-Way, Inc. (USA) (1) 600,000 14,400 .19
Haverty Furniture Companies, Inc. (USA) 545,000 13,829 .18
Claire's Stores, Inc. (USA) 450,000 13,556 .18
Jo-Ann Stores, Inc., Class A (USA) (1,2) 525,000 7,219
Jo-Ann Stores, Inc., Class B (1,2) 525,000 5,644 .17
Gymboree Corp. (USA) (1,2) 1,435,600 12,831 .17
Controladora Comercial Mexicana, SA de CV, 10,737,000 10,562 .14
units (Mexico)
Williams-Sonoma, Inc. (USA) (1) 234,099 6,613
Williams-Sonoma, Inc. (1,3) 134,099 3,788 .14
Intelligent Systems Corp., Class C, preferred 1,434,700 10,000 .13
(USA) (1,3,4)
iMALL, Inc. (USA) (1) 540,000 8,708 .11
Sixt AG (Germany) 101,136 6,222
Sixt AG, nonvoting preferred 36,768 1,905 .11
Sports Authority, Inc. (USA) (1) 1,100,000 8,044 .10
Whitehall Jewellers, Inc. (formerly Marks Bros. 510,000 7,841 .10
Jewelers, Inc.) (USA) (1,2)
Jean Coutu Group (PJC) Inc., Class A (Canada) 333,400 7,077 .09
School Specialty, Inc. (USA) (1) 352,000 6,886 .09
AnnTaylor, Inc. (USA) (1) 150,000 6,628 .09
Hanover Direct, Inc. (USA) (1) 2,209,400 6,214 .08
Mobel Walther AG, nonvoting preferred (Germany) 260,000 4,462
Mobel Walther AG 88,000 1,520 .08
Hornbach Holding AG, preferred (Germany) 142,650 5,419 .07
Chapters Inc. (Canada) (1) 324,200 5,054 .07
PlanetRx Inc., preferred, Series B (USA) (1,3,4) 1,000,000 5,000 .07
Piercing Pagoda, Inc. (USA) (1,2) 502,500 4,491 .06
EUROBIKE AG (Germany) (2) 364,000 4,439 .06
Liquidation World Inc. (Canada) (1,2) 450,000 4,179 .05
Dickson Concepts (International) Ltd. (Hong Kong 4,575,699 3,720 .05
- -- Incorporated in Bermuda)
Athlon Groep NV (Netherlands) 125,000 3,285 .04
Homeplace Holdings Inc., 7.00% convertible 30,200 2,001 .03
preferred, Series C (USA) (1,4)
Leisure & Tourism - 5.09%
Cheesecake Factory Inc. (USA) (1,2) 1,295,500 30,768 .40
Imax Corp. (Canada) (1,2) 1,558,000 30,381 .40
J D Wetherspoon PLC (United Kingdom) 6,204,935 28,029 .37
Consolidated Products, Inc. (USA) (1,2) 1,562,500 27,441 .36
Village Roadshow Ltd. (Australia) 8,201,596 14,977
Village Roadshow Ltd., Class A, 5.50% preferred 6,459,896 10,675 .34
Extended Stay America, Inc. (USA) (1) 2,500,000 25,469 .33
Vail Resorts, Inc. (USA) (1) 1,494,600 23,727 .31
Four Seasons Hotels Inc. (Canada) 529,707 22,260 .29
Alliance Atlantis Communications Corp., 917,500 14,455
nonvoting, Class B (Canada) (1,2)
Alliance Atlantis Communications Corp., 322,700 4,945 .26
Class A (1,2)
CINAR Films Inc., Class B (Canada) (1) 830,600 19,104 .25
Florida Panthers Holdings, Inc., Class A (USA) (1) 1,175,000 9,106
Florida Panthers Holdings, Inc., Class A, 500,000 3,875
1997 Series (1,3)
Florida Panthers Holdings, Inc., Class A, 231,730 1,720 .19
1999 Series (1,3,4)
Ruby Tuesday, Inc. (USA) 841,800 14,626 .19
Station Casinos, Inc. (USA) (1) 1,133,200 14,448 .19
Hoyts Cinemas Ltd., units (Australia) 10,410,414 13,842 .18
CinemaxX AG (Germany) (1) 299,409 8,887 .12
Spelling Entertainment Group Inc. (USA) (1) 1,000,000 8,750 .12
Kinowelt Medien AG (Germany) (1) 50,000 8,635 .11
CineMedia Film AG (Germany) (1) 95,237 7,658 .10
Morton's Restaurant Group, Inc. (USA) (1,2) 415,000 6,432 .09
Gaumont SA (France) 94,835 6,039 .08
Lions Gate Entertainment Corp. (Canada) (1,2) 1,383,334 5,047 .07
Capital Corp. PLC (United Kingdom) 3,500,000 4,630 .06
Silverleaf Resorts, Inc. (USA) (1) 550,000 4,400 .06
Mandarin Oriental International Ltd. (Singapore) 6,540,217 4,251 .06
I T International Theatres Ltd. (Israel) (1) 300,000 4,005 .05
Filmes Lusomundo, SA, preferred (Portugal) 292,500 3,157 .04
Norsk Lotteridrift ASA (Norway) (1,2) 965,000 3,122 .04
Johnnies Industrial Corp. Ltd. (South Africa) 367,454 2,338 .03
Health & Personal Care - 5.00%
Andrx Corp. (USA) (1,3) 730,000 66,521 .87
Gilead Sciences, Inc. (USA) (1) 600,000 27,300 .36
Inhale Therapeutic Systems, Inc. (USA) (1,2,3) 1,000,000 27,125 .36
Nobel Biocare AB (Sweden) (2) 1,391,900 19,143 .25
Vertex Pharmaceuticals Inc. (USA) (1) 730,000 18,432 .24
Anesta Corp. (USA) (1,2) 740,000 16,696 .22
Mentor Corp. (USA) 1,080,000 15,863 .21
Zonagen, Inc. (USA) (1,2) 640,000 13,760 .18
Scios Inc. (USA) (1) 1,485,000 13,458 .18
Pharmacyclics, Inc. (USA) (1,2,3) 580,000 9,570
Pharmacyclics, Inc. (1,2) 215,000 3,548 .17
Aviron (USA) (1) 605,000 12,251 .16
KeraVision, Inc. (USA) (1,2) 795,000 12,124 .16
ImClone Systems Inc. (USA) (1) 650,000 10,969 .14
Thermedics Inc. (USA) (1) 1,390,000 9,817 .13
Ocular Sciences, Inc. (USA) (1) 341,100 9,785 .13
COR Therapeutics, Inc. (USA) (1) 947,300 9,414 .12
Hollis-Eden Pharmaceuticals, Inc. (USA) (1,2,3,4) 555,556 8,559 .11
Protein Design Labs, Inc. (USA) (1) 500,000 7,531 .10
Vical Inc. (USA) (1) 700,000 7,175 .09
Digene Corp. (USA) (1,2) 800,000 6,300 .08
Scotia Holdings PLC (United Kingdom) (1) 3,476,900 5,890 .08
Neose Technologies, Inc. (USA) (1) 400,000 5,475 .07
OrthoLogic Corp. (USA) (1,2) 1,620,000 4,860 .06
GelTex Pharmaceuticals, Inc. (USA) (1) 329,900 4,639 .06
Cyberonics, Inc. (USA) (1,3) 479,000 4,550 .06
Computer Motion, Inc. (USA) (1,2) 434,900 4,349 .06
Dura Pharmaceuticals, Inc. (USA) (1) 300,000 4,237 .06
Genelabs Technologies, Inc. (USA) (1) 2,072,500 4,210 .06
NeoPath, Inc. (USA) (1) 621,400 2,486
NeoPath, Inc. (1,3,4) 500,000 1,700 .06
Intercardia, Inc. (USA) (1) 360,000 2,880 .04
Grupo Casa Autrey, SA de CV (ADR) (Mexico) 500,000 2,563 .03
AVANT Immunotherapeutics, Inc. (USA) (1,3) 1,000,000 1,563
AVANT Immunotherapeutics, Inc. (1) 500,000 781 .03
CIMA LABS INC. (USA) (1,2) 617,200 1,890 .03
Gensia Sicor Inc. (USA) (1) 585,000 1,645 .02
Vision-Sciences, Inc. (USA) (1) 730,400 1,004 .01
Nature's Sunshine Products, Inc. (USA) 67,000 737 .01
Data Processing & Reproduction - 4.22%
Macromedia, Inc. (USA) (1) 1,215,300 55,068 .72
HNC Software Inc. (USA) (1,2) 1,675,198 54,863 .72
Electronics for Imaging, Inc. (USA) (1) 850,000 33,150 .44
Saville Systems Ireland PLC (ADR) (Ireland) (1,2) 2,200,000 26,950 .35
Datacraft Asia Ltd (Singapore) 8,991,058 21,040 .28
Nice Systems Ltd. (ADR) (Israel) (1,2) 625,000 18,437 .24
Remedy Corp. (USA) (1) 1,260,000 17,640 .23
Aspect Development, Inc. (USA) (1) 602,100 13,999 .18
Platinum Software Corp. (USA) (1) 1,820,000 13,422 .18
Primax Electronics Ltd. (Taiwan) (1) 7,991,428 10,713 .14
Scient Corp., convertible preferred, Series B 1,417,323 9,000 .12
(USA) (1,3,4)
PictureTel Corp. (USA) (1) 1,193,300 8,353 .11
i2 Technologies, Inc. (USA) (1) 300,000 7,978 .11
Gretag Imaging Holding AG (Switzerland) (1) 85,000 7,404 .10
NEON Systems, Inc. (USA) (1) 125,000 6,875 .09
National Computer Systems, Inc. (USA) 193,000 4,729 .06
Edify Corp. (USA) (1) 720,700 3,919 .05
Great Plains Software, Inc. (USA) (1) 100,000 3,869 .05
Momentum Business Applications, Inc. (USA) (1,2) 302,000 2,699 .04
Acer Computer International Ltd. (Singapore) 2,300,000 897 .01
Electronic Instruments - 3.24%
Plantronics, Inc. (USA) (1) 650,000 40,666 .53
Etec Systems, Inc. (USA) (1,2) 1,210,000 35,619 .47
Disco Corp. (Japan) 709,000 27,534 .36
TranSwitch Corp. (USA) (1) 600,000 27,150 .36
L-3 Communications Corp. (USA) (1) 550,000 25,437 .33
Orbotech Ltd. (Israel) (1) 450,000 22,106 .29
Trimble Navigation Ltd. (USA) (1,2) 1,450,000 14,138 .19
ANTEC Corp. (USA) (1) 570,000 12,255 .16
LoJack Corp. (USA) (1,2) 1,211,400 9,313 .12
Mercury Computer Systems, Inc. (USA) (1) 490,000 8,820 .12
ASM Pacific Technology Ltd. (Hong Kong) 16,487,000 8,723 .11
ThermoQuest Corp. (USA) (1) 510,000 6,184 .08
Lumonics Inc. (Canada) (1) 710,000 3,414 .05
Milltronics Ltd. - Milltronics Ltee (Canada) (1) 392,200 2,667 .04
Micronic Laser Systems AB (Sweden) (1,3,4) 466,666 2,158 .03
Banking - 2.76%
Citizens Banking Corp. (USA) 700,000 25,200 .33
UST Corp. (USA) 850,000 18,567 .24
Imperial Bancorp (USA) (1) 1,058,400 18,125 .24
FirstMerit Corp. (USA) 680,000 17,510 .23
Laurentian Bank of Canada (Canada) (2) 1,021,800 15,827 .21
Fulton Financial Corp. (USA) 684,425 15,699 .21
Provident Bankshares Corp. (USA) 595,350 15,553 .20
Yapi ve Kredi Bankasi AS (Turkey) 800,000,000 14,817 .20
Commerce Bancorp, Inc. (USA) 320,971 13,240 .17
Keystone Financial, Inc. (USA) 404,000 13,029 .17
Bank Handlowy w Warszawie SA (GDR) (Poland) 950,000 11,543 .15
Banco de Galicia y Buenos Aires SA, Class B 711,750 11,432 .15
(ADR) (Argentina)
AMCORE Financial, Inc. (USA) 477,900 9,887 .13
Pacific Bank, NA (USA) 237,800 4,994 .07
Grupo Financiero BBV Probursa, SA de CV, 16,785,500 2,382 .03
Class B (Mexico) (1)
Banco Rio de la Plata SA, Class B (ADR) (Argentina) 221,000 2,127 .03
Energy Sources - 2.64%
Newfield Exploration Co. (USA) (1) 1,800,000 40,725 .54
Ranger Oil Ltd. (Canada) (1,2) 7,018,915 28,076 .37
Fletcher Challenge Energy (New Zealand) 13,909,226 26,670 .35
Oil Search Ltd. (Australia) 13,740,000 16,593
Oil Search Ltd. 9.50% convertible preferred 50,000 3,426
Oil Search Ltd. (3) 2,300,000 2,778 .30
Encal Energy Ltd. (Canada) (1) 4,335,000 18,692 .25
QCT Resources Ltd. (Australia) 27,787,331 14,129 .19
Cairn Energy PLC (United Kingdom) (1) 6,000,000 10,890 .14
Premier Oil PLC (United Kingdom) 42,825,000 9,845 .13
Cabre Exploration Ltd. (Canada) (1,2) 1,099,000 9,477 .12
Ramco Energy PLC (United Kingdom) (1,2) 1,597,000 5,926 .08
Novus Petroleum Ltd. (Australia) 4,895,605 4,549 .06
Paladin Resources NL (Australia) (1,2) 11,270,998 3,273 .04
Det Sondenfjelds-Norske Dampskibsselskab 400,000 2,717
ASA (Norway) (1)
Det Sondenfjelds-Norske Dampskibsselskab 400,000 104 .04
ASA, rights, expire 1999 (1)
Arcon International Resources PLC (Ireland) (1) 11,798,000 1,903 .02
Aminex PLC (Ireland) (1,3) 3,250,000 629
Aminex PLC (1) 1,000,000 194 .01
Anzoil NL (Australia) (1) 2,730,000 347 .00
Chemicals - 2.43%
Valspar Corp. (USA) 1,224,900 38,661 .51
OM Group, Inc. (USA) 1,050,000 34,650 .45
Cambrex Corp. (USA) (2) 1,400,000 30,975 .41
Ionics, Inc. (USA) (1) 750,000 22,594 .30
Airgas, Inc. (USA) (1) 2,074,500 17,374 .23
Bush Boake Allen Inc. (USA) (1) 533,600 14,674 .19
Kalon Group PLC (United Kingdom) 5,932,800 11,773 .15
Gurit-Heberlein AG (Switzerland) 3,000 7,510 .10
Georgia Gulf Corp. (USA) 495,000 5,538 .07
McWhorter Technologies, Inc. (USA) (1) 109,400 1,490 .02
Real Estate - 1.98%
Unibail (France) 263,749 33,021 .43
Castellum AB (Sweden) 2,359,200 21,965 .29
Newhall Land and Farming Co. (USA) 850,000 20,294 .27
Cadiz Land Co., Inc. (USA) (1,2) 2,175,900 17,407 .23
CCA Prison Realty Trust (USA) 915,700 15,968 .21
TBI PLC (United Kingdom) 9,718,400 13,562 .18
Wiggins Group PLC (United Kingdom) (1) 37,815,866 8,541 .11
Sponda Oyj (Finland) 1,330,000 7,249 .09
Diligentia AB (Sweden) 800,000 6,329 .08
Mandamus AB (Sweden) (1) 727,575 4,383 .06
Pillar Property PLC (United Kingdom) 400,000 2,017 .03
Insurance - 1.86%
Independent Insurance Group PLC (United Kingdom) (2) 13,940,000 61,059 .80
Mutual Risk Management Ltd. (USA -- 900,000 34,425 .45
Incorporated in Bermuda)
HCC Insurance Holdings, Inc. (USA) 1,390,000 26,757 .35
Harleysville Group Inc. (USA) 370,000 7,169 .10
Clark/Bardes Holdings, Inc. (USA) (1) 386,000 6,562 .09
Lindsey Morden Group Inc. (Canada) 230,000 5,340 .07
Telecommunications - 1.80%
SkyTel Communications, Inc. (USA) (1,2) 3,895,000 64,754 .85
Intermedia Communications Inc. (USA) (1) 1,150,000 30,619 .40
Global TeleSystems Group, Inc. (USA) (1) 175,000 9,789 .13
Telinfo NV (Belgium) 57,000 7,708 .10
EXPAND SA (France) (1) 160,000 6,044 .08
Highpoint Telecommunications Inc. (Canada) (1,2) 1,000,000 5,406 .07
CESKE RADIOKOMUNIKACE AS (GDR) 113,300 3,886 .05
(Czech Republic) (1)
Asia Satellite Telecommunications Holdings 1,882,000 2,987 .04
Ltd. (China)
M-Cell Ltd. (South Africa) 1,484,000 2,312 .03
Esat Telecom Group PLC (ADR) (Ireland) (1) 40,900 1,713 .02
TelDaFax AG (Germany) (1) 22,500 969 .02
Societe Europeenne de Communication SA, 62,280 815
Class B (ADR) (Luxembourg) (1)
Societe Europeenne de Communication SA, 6,920 91 .01
Class A (ADR) (1)
Beverages & Tobacco - 1.74%
Beringer Wine Estates Holdings, Inc., Class B (USA) (1) 708,000 25,753 .34
Robert Mondavi Corp., Class A (USA) (1) 500,000 17,875 .24
Sanyo Coca-Cola Bottling Co., Ltd. (Japan) (1) 600,000 13,170 .17
Oy Hartwall AB, Class A (Finland) 949,900 11,893 .16
Corporate Investments Ltd. (New Zealand) (2) 27,900,000 11,506 .15
Brau und Brunnen AG (Germany) (1) 146,000 10,700 .14
Simeon Wines Ltd. (Australia) (2) 3,900,000 10,163 .13
Vitasoy International Holdings Ltd. (Hong Kong) 27,250,000 7,912 .10
Quilmes Industrial SA, nonvoting preferred 700,000 6,606 .09
(ADR) (Argentina)
Ege Biracilik ve Malt Sanayii AS (Turkey) 61,103,600 6,397 .08
Guinness Anchor Bhd. (Malaysia) (4) 4,271,000 4,114 .06
AL-Ahram Beverages Co. (GDR) (Egypt) (1) 120,000 3,822 .05
Petaluma Ltd. (Australia) 689,950 2,215 .03
Financial Services - 1.49%
OM Gruppen AB (Sweden) 3,040,300 38,113 .50
Metris Companies Inc. (USA) 445,000 17,967 .24
Fidelity National Financial, Inc. (USA) 1,150,000 17,250 .23
CB Richard Ellis Services, Inc. (USA) (1) 1,042,800 17,206 .23
HealthCare Financial Partners, Inc. (USA) (1) 367,000 9,588 .12
American Capital Strategies, Ltd. (USA) 314,000 5,377 .07
Medallion Financial Corp. (USA) 275,000 4,142 .05
JCG Holdings Ltd. (Hong Kong -- Incorporated in Bermuda) 13,000,000 3,691 .05
Food & Household Products - 1.45%
PT Indofood Sukses Makmur Tbk (Indonesia) (1) 51,000,000 32,023 .42
Geest PLC (United Kingdom) 2,250,000 16,026 .21
Grupo Industrial Maseca, SA de CV, Class B 1,220,000 15,021 .20
(ADR) (Mexico)
Metro-Richelieu Inc., Class A (Canada) 978,500 12,333 .16
Celestial Seasonings, Inc. (USA) (1,2) 530,000 11,461 .15
Royal Canin SA (France) 147,300 8,156 .11
Fyffes PLC (Ireland) 3,350,000 7,882 .10
L.D.C. SA (France) 32,913 3,588 .05
Devro PLC (United Kingdom) 1,500,000 3,521 .05
Industrial Components - 1.17%
Senior Engineering Group PLC (United Kingdom) 9,100,000 22,242 .29
Kiekert AG (Germany) 500,000 15,704 .21
Tower Automotive, Inc. (USA) (1) 805,400 15,001 .20
Superior TeleCom Inc. (USA) 562,500 10,617 .14
Koito Manufacturing Co., Ltd. (Japan) 1,670,000 7,980 .10
Hayes Lemmerz International, Inc. (USA) (1) 300,000 7,050 .09
Pfeiffer Vacuum Technology AG (ADR) (Germany) (1) 128,571 5,303 .07
Roper Industries, Inc. (USA) 150,000 3,581 .05
BTI Capital Trust 6.50% convertible preferred (USA) 107,000 990 .01
Material Sciences Corp. (USA) (1) 87,200 556 .01
Transportation: Shipping - 1.16%
MIF Ltd. (Greece) (1,2) 682,903 13,255 .18
Stolt-Nielsen SA, Class B (ADR) (Multinational) 1,040,000 12,675 .17
ICB Shipping AB, Class B (Sweden) 1,969,000 9,586 .13
Ugland International Holdings PLC (United Kingdom) (2) 7,342,000 9,357 .12
Great Eastern Shipping Co. Ltd. (India) (2) 14,402,500 7,654
Great Eastern Shipping Co. Ltd. (GDR) (2) 325,500 863 .11
Odfjell ASA, Class B (Norway) 445,000 4,434
Odfjell ASA, Class A 214,320 2,191 .09
Bona Shipholding Ltd. (Norway) (1) 913,333 6,205 .08
N & T Argonaut AB, Class B (Sweden) (1) 7,703,790 4,876 .07
Teekay Shipping Corp. (Bahamas) 200,000 3,300 .04
Benor Tankers Ltd. (Norway) (2) 1,240,000 3,209 .04
Knightsbridge Tankers Ltd. (Bermuda) 150,000 2,587 .03
Shipping Corp. of India Ltd. (India) (1) 5,391,600 2,521 .03
Frontline Ltd. (Bermuda) (1) 483,300 1,793 .02
Wah Kwong Shipping Holdings Ltd. (Hong Kong) 5,713,000 1,253 .02
Mosvold Shipping Ltd (Norway) (1) 2,580,000 1,018 .01
IMC Holdings Ltd. (Hong Kong) 11,000,000 852 .01
Waterfront Shipping ASA, rights, expire 1999 (Norway) (1) 3,411,000 477
Waterfront Shipping ASA (1) 3,411,000 97 .01
Recreation & Other Consumer Products - 0.97%
Infogrames Entertainment (France) (1) 343,000 22,619
Infogrames Entertainment, 2.00% $9,272 3,050 .34
convertible debentures 2002
Infogrames Entertainment, warrants, expire 2001 (1) 25,500 178
VTech Holdings Ltd. (Hong Kong) 6,925,000 19,973 .26
Movado Group, Inc. (USA) 440,000 11,000 .15
ACTIVISION, Inc. (USA) (1,3) 570,000 7,054 .09
edel music AG (Germany) (1) 14,000 5,077 .07
Metromedia International Group, Inc. (USA) (1) 1,000,000 4,875 .06
Machinery & Engineering - 0.90%
KCI Konecranes International Corp. (Finland) 701,700 24,235 .32
Crompton & Knowles Corp. (USA) 671,200 10,571 .14
JOT Automation Group Oyj (Finland) (1) 200,000 9,474 .12
Thermo Fibertek Inc. (USA) (1) 1,200,000 8,625 .11
Miura Co., Ltd. (Japan) 500,000 7,472 .10
Powerscreen International PLC (United Kingdom) 1,778,000 4,272 .06
UMW Holdings Bhd. (Malaysia) (4) 2,505,500 2,664 .03
Chen Hsong Holdings Ltd. (Hong Kong -- 12,000,000 1,254 .02
Incorporated in Bermuda)
Textiles & Apparel - 0.83%
Esprit Asia Holdings Ltd. (Hong Kong) 39,314,000 19,786 .26
JJB Sports PLC (United Kingdom) 2,400,000 15,623 .21
Wolford Group (Austria) (2) 324,000 15,009 .20
Hartmarx Corp. (USA) (1,2) 1,787,900 8,716 .11
Culp, Inc. (USA) 635,000 3,691 .05
Miscellaneous Materials & Commodities - 0.76%
Intertape Polymer Group Inc. (Canada) (2) 1,500,000 39,563 .52
Buckeye Technologies Inc. (USA) (1) 500,000 7,000 .10
Arisawa Mfg. Co., Ltd. (Japan) 380,000 4,668 .06
Carbide/Graphite Group, Inc. (USA) (1) 285,100 3,100 .04
Ashton Mining Ltd. (Australia -- Incorporated in Bermuda) 6,536,243 2,285 .03
PT PP London Sumatra Indonesia (Indonesia) 6,486,400 773 .01
Sinocan Holdings Ltd. (Hong Kong -- 36,608,000 189 .00
Incorporated in Bermuda)
Wholesale & International Trade - 0.63%
Li & Fung Ltd. (Hong Kong) 7,800,000 16,508 .22
Brightpoint, Inc. (USA) (1,2) 2,732,500 16,139 .21
United Natural Foods, Inc. (USA) (1) 356,300 8,328 .11
Daewoo Corp., 0.50% convertible debentures $5,000,000 3,750 .05
2007 (South Korea)
Lazare Kaplan International Inc. (USA) (1,2) 463,700 3,188 .04
Electrical & Electronics - 0.61%
Gilat Satellite Networks Ltd. (Israel) (1) 250,000 15,000 .20
Johnson Electric Holdings Ltd. (Hong Kong -- 5,088,000 14,347 .19
Incorporated in Bermuda)
ERG Ltd. (Australia) 8,014,840 9,220 .12
InterCept Group, Inc. (USA) (1,2) 525,000 4,462 .06
Tandberg Television AS (Norway) (1) 381,500 2,666 .03
Advanced Systems Automation Ltd. (Singapore) 2,250,000 1,128 .01
Appliances & Household Durables - 0.51%
Pittway Corp., Class A (USA) 1,116,000 29,574 .39
Kudelski SA (Switzerland) (1) 2,358 9,413 .12
Utilities: Electric & Gas - 0.50%
Australian Gas Light Co. (Australia) 3,895,920 27,858 .37
Centrais Eletricas de Santa Catarina SA - CELESC 135,000 5,738 .07
(ADR) (Brazil) (1)
Cia. de Electricidade do Estado do Rio de Janeiro - 16,329,200,000 3,713 .05
CERJ, ordinary nominative (Brazil) (1)
Espirito Santo Centrais Eletricas SA - ESCELSA, 17,335 576 .01
ordinary nominative (Brazil)
Building Materials & Components - 0.48%
Puerto Rican Cement Co., Inc. (USA) (2) 333,300 10,686 .14
Futuris Corp. Ltd. (Australia) 7,586,803 9,741 .13
Apasco, SA de CV (Mexico) 1,322,620 8,048 .10
Radex-Heraklith Industriebeteiligungs AG (Austria) 225,000 6,120 .08
Cia. Cimento Portland Itau, preferred (Brazil) 23,200,000 2,142 .03
Construction & Housing - 0.44%
Palm Harbor Homes, Inc. (USA) (1) 1,118,906 24,336 .32
Societe Generale d'Entreprises (France) 200,000 9,412 .12
Multi-Industry - 0.41%
Corporacion Financiera Alba, SA (Spain) 178,449 25,519 .34
Aboitiz Equity Ventures (Philippines) (1) 86,063,940 3,434 .04
Cahya Mata Sarawak Bhd. (Malaysia) (4) 5,556,000 2,486 .03
Transportation: Airlines - 0.31%
Atlantic Coast Airlines Holdings, Inc. (USA) (1) 850,000 23,906 .31
Philippine Airlines, Inc. (Philippines) (1,4) 64,494,643 0 .00
PR Holdings, Inc., subscription rights (Philippines) (1,3,4) 1,730,000 0 .00
Equity Common Trusts - 0.28%
Atle AB, Class A (Sweden) 1,590,000 21,480 .28
Automobiles - 0.19%
Mahindra & Mahindra Ltd. (GDR) (India) 1,795,948 9,967
Mahindra & Mahindra Ltd. 804,052 4,330 .19
Transportation: Rail & Road - 0.17%
Tranz Rail Holdings Ltd. (ADR) (New Zealand) 1,051,200 6,438 .09
Werner Enterprises, Inc. (USA) 245,000 3,859 .05
C.H. Robinson Worldwide, Inc. (USA) 100,000 2,544 .03
Forest Products & Paper - 0.15%
Caraustar Industries, Inc. (USA) 385,000 8,855 .12
PT Indah Kiat Pulp & Paper Corp. Tbk (Indonesia) (1) 8,707,000 2,480 .03
Metals: Nonferrous - 0.13%
Kaiser Aluminum Corp. (USA) (1) 1,850,000 10,059 .13
Gold Mines - 0.07%
Ashanti Goldfields Co. Ltd. (Ghana) 400,000 3,190 .04
Avocet Mining PLC (United Kingdom) (1,2) 3,850,000 1,693 .02
Philippine Gold PLC (United Kingdom) (1,2) 4,953,700 719 .01
Energy Equipment - 0.07%
Shaw Industries Ltd., Class A (Canada) 750,000 5,050 .07
Aerospace & Military Technology - 0.05%
Orbital Sciences Corp., 5.00% convertible $2,500,000 3,050 .04
debentures 2002 (USA) (3)
Alvis PLC (United Kingdom) 160,700 415 .01
Metals: Steel - 0.04%
Tubos de Acero de Mexico, SA (ADR) (Mexico) 335,547 3,020 .04
Ispat Industries Ltd., 3.00% convertible debentures $1,000,000 230 .00
2001 (India)
Miscellaneous - 4.71%
Other equity securities in initial period of acquisition 358,564 4.71
--------- ------
TOTAL EQUITY SECURITIES (cost: $6,189,644,000) 6,931,732 91.09
--------- ------
Principal
Amount
SHORT-TERM SECURITIES (000)
Corporate Short-Term Notes - 6.57%
DaimlerChrysler AG 4.80%-4.84% due 4/7-6/1/1999 $ 71,890 71,597 .94
Bayerische Motoren Werke AG 4.77%-4.82% 61,419 61,142 .80
due 4/9-5/14/1999
Halifax PLC 4.81%-4.82% due 4/12-4/27/1999 57,900 57,736 .76
Abbey National North America 4.81%-4.90% 55,000 54,863 .72
due 4/7-5/3/1999
Commonwealth Bank of Australia 4.78%-4.83% 50,000 49,848 .66
due 4/14-4/30/1999
Diageo Capital PLC 4.81%-4.82% due 45,500 45,250 .59
4/23-5/20/1999 (3)
Lloyds Bank PLC 4.83%-4.84% due 4/1-4/6/1999 43,800 43,780 .58
Westpac Banking Corp. 4.82% due 4/13/1999 40,000 39,931 .53
BP America Inc. 4.79%-4.80% due 5/13-5/14/1999 35,300 35,096 .46
Siemens Capital Corp. 4.83% due 5/19/1999 30,000 29,814 .39
Barclays U.S. Funding Corp. 4.76% due 4/9/1999 10,900 10,887 .14
Federal Agency Discount Notes - 1.32%
Fannie Mae 4.74%-4.78% due 4/6-6/10/1999 101,149 100,408 1.32
Non-U.S. Currency - 0.05%
New Taiwanese Dollar NT$119,260 3,601 .05
----------- --------
TOTAL SHORT-TERM SECURITIES (cost: $604,633,000) 603,953 7.94
----------- --------
TOTAL INVESTMENT SECURITIES (cost: $6,794,277,000) 7,535,685 99.03
Excess of cash and receivables over payables 73,502 .97
----------- --------
NET ASSETS $7,609,187 100.00%
======== ======
1 Non-income-producing security.
2 Represents an affiliated company as defined under the
Investment Company Act of 1940.
3 Purchased in a private placement transaction; resale
to the public may require registration or sale only
to qualified institutional buyers.
4 Valued under procedures established by the
Board of Directors.
ADR = American Depositary Receipts
GDR = Global Depositary Receipts
See Notes to Financial Statements
</TABLE>
<TABLE>
SMALLCAP World Fund
FINANCIAL STATEMENTS
Unaudited
- ---------------------------------------- ------------ -----------------
Statement of Assets and Liabilities (dollars in thousands, except
at March 31, 1999 per-share data)
- ---------------------------------------- ------------ -----------------
<S> <C> <C>
Assets:
Investment securities at market:
Unaffiliated issuers (cost: $5,536,189) $6,208,881
Affiliated issuers (cost: $1,258,088) 1,326,804
------------ $7,535,685
Cash 256
Receivables for -
Sales of investments 112,387
Sales of fund's shares 6,190
Dividends and interest 8,895 127,472
------------ -----------------
7,663,413
Liabilities:
Payables for -
Purchases of investments 22,311
Repurchases of fund's shares 23,241
Management services 4,349
Other expenses 4,325 54,226
------------ -----------------
Net Assets at March 31, 1999 -
Equivalent to $24.51 per share on
310,479,265 shares of $0.01 par value
capital stock outstanding (authorized
capital stock - 400,000,000 shares) $7,609,187
=================
Statement of Operations
for the six months ended March 31, 1999 (dollars in thousands)
- ---------------------------------------- ------------ -----------------
Investment Income:
Income:
Dividends (includes $5,655 from affilia $ 26,646
Interest 19,173 $ 45,819
------------
Expenses:
Management services fee 25,709
Distribution expenses 9,706
Transfer agent fee 4,480
Reports to shareholders 457
Registration statement and
prospectus 245
Postage, stationery and supplies 791
Directors' fees 77
Auditing and legal fees 69
Custodian fee 676
Taxes other than federal income tax 189
Other expenses 100 42,499
------------ -----------------
Net investment income 3,320
-----------------
Realized Loss and Unrealized
Appreciation on Investments:
Net realized loss (includes $40,586 net
loss from affiliates) (108,001)
Change from unrealized depreciation to
unrealized appreciation on investments:
Beginning of period (558,923)
End of period 738,982
Net unrealized appreciation on investm ------------ 1,297,905
-----------------
Net realized loss and unrealized appreciation
on investments 1,189,904
-----------------
Net Increase in Net Assets Resulting
from Operations $1,193,224
=================
Statement of Changes in Net
Assets (dollars in thousands)
- ---------------------------------------- ------------- -----------------
Six Months Year Ended
Ended 3/31/99 * 9/30/98
------------ -----------------
Operations:
Net investment income $ 3,320 $ 23,809
Net realized gain (loss) on investments (108,001) 493,492
Net unrealized appreciation (depreciation)
on investments 1,297,905 (2,424,139)
------------ ------------------
Net increase (decrease) in net assets
resulting from operations 1,193,224 (1,906,838)
------------ ------------------
Dividends and Distributions Paid
to Shareholders:
Dividends from net
investment income (28,122) (15,213)
Distributions from net realized
gain on investments (403,092) (760,633)
------------ ------------------
Total dividends and
distributions (431,214) (775,846)
------------ ------------------
Capital Share Transactions:
Proceeds from shares sold:
25,756,587 and 54,562,618
shares, respectively 617,440 1,498,043
Proceeds from shares issued in
reinvestment of net investment
income dividends and
distributions of net realized
gain on investments:
17,698,052 and 29,239,348
shares, respectively 415,013 743,523
Cost of shares repurchased:
53,716,598 and 64,322,473
shares, respectively (1,286,836) (1,713,474)
------------ ------------------
Net increase (decrease) in net assets
resulting from capital share
transactions (254,383) 528,092
------------ ------------------
Total Increase (Decrease) in Net Assets 507,627 (2,154,592)
Net Assets:
Beginning of period 7,101,560 9,256,152
------------ ------------------
End of period (including accumulated excess
net investment income distributions and
undistributed net investment income:
$3,315 and $21,487, respectively) $7,609,187 $7,101,560
============ =================
* Unaudited
See Notes to Financial Statements
</TABLE>
SMALLCAP WORLD FUND
NOTES TO FINANCIAL STATEMENTS
Unaudited
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION - 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.
SIGNIFICANT ACCOUNTING POLICIES - The following is a summary of the
significant accounting policies consistently followed by the fund in the
preparation of its financial statements:
SECURITY VALUATION - Equity securities, including depositary receipts, are
valued at the last reported sale price on the exchange or market on which such
securities are traded, as of the close of business on the day the securities
are being valued or, lacking any sales, at the last available bid price. In
cases where equity securities are traded on more than one exchange, the
securities are valued on the exchange or market determined by the investment
adviser to be the broadest and most representative market, which may be either
a securities exchange or the over-the-counter market. Securities with original
maturities of one year or less having 60 days or less to maturity are amortized
to maturity based on their cost if acquired within 60 days of maturity or, if
already held on the 60/th/ day, based on the value determined on the 61/st/
day. Securities and assets for which representative market quotations are not
readily available are valued at fair value as determined in good faith by a
committee appointed by the Board of Directors.
NON-U.S. CURRENCY TRANSLATION - Assets or liabilities initially expressed in
terms of non-U.S. currencies are translated into U.S. dollars at the prevailing
market rates at the end of the reporting period. Purchases and sales of
securities and income and expenses are translated into U.S. dollars at the
prevailing market rates on the dates of such transactions. The effects of
changes in non-U.S. currency exchange rates on investment securities are
included with the net realized and unrealized gain or loss on investment
securities.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - As is customary in the
mutual fund industry, securities transactions are accounted for on the date the
securities are purchased or sold. In the event the fund purchases securities on
a delayed delivery or "when-issued" basis, it will segregate with its custodian
liquid assets in an amount sufficient to meet its payment obligations in these
transactions. 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 and premiums on securities purchased are
amortized.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions paid
to shareholders are recorded on the ex-dividend date.
FORWARD CURRENCY CONTRACTS - The fund may enter into forward currency
contracts, which represent agreements to exchange currencies of different
countries at specified future dates at specified rates. The fund enters into
these contracts to reduce its exposure to fluctuations in foreign exchange
rates arising from investments denominated in non-U.S. currencies.
2. FEDERAL INCOME TAXATION - 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, 1999, net unrealized appreciation on investments for book and
federal income tax purposes aggregated $741,408,000, of which $1,916,874,000
related to appreciated securities and $1,175,466,000 related to depreciated
securities. During the six months ended March 31, 1999, the fund realized, on a
tax basis, a net capital loss of $107,728,000 on securities transactions. In
addition, the fund has deferred, for tax purposes, to fiscal year ending
September 30, 1999, the recognition of losses related to non-U.S. currency
transactions totaling $1,114,000 which were realized during the period November
1, 1997 through September 30, 1998. The cost of portfolio securities for book
and federal income tax purposes was $6,794,277,000 at March 31, 1999.
3. FEES AND TRANSACTIONS WITH RELATED PARTIES
INVESTMENT ADVISORY FEE - The fee of $25,709,000 for management services was
incurred 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 $8.0 billion but
not exceeding $13.0 billion; and 0.615% of such assets in excess of $13.0
billion.
DISTRIBUTION EXPENSES - 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, 1999, distribution expenses under the Plan were $9,706,000. As
of March 31, 1999, accrued and unpaid distribution expenses were $1,395,000.
American Funds Distributors, Inc. (AFD), the principal underwriter of the
fund's shares, received $1,577,000 (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.
TRANSFER AGENT FEE - American Funds Service Company (AFS), the transfer agent
for the fund, was paid a fee of $4,480,000.
DEFERRED DIRECTORS' FEES - 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, 1999, aggregate deferred compensation and earnings
thereon since the plan's adoption (1993), net of any payments to directors,
were $215,000.
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. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES
The fund made purchases and sales of investment securities, excluding
short-term securities, of $1,498,558,000 and $1,925,601,000, respectively,
during the six months ended March 31, 1999.
As of March 31, 1999, accumulated net realized loss on investments was
$108,550,000 and additional paid-in capital was $6,978,965,000. The fund
reclassified $53,923,000 from undistributed net realized gains to additional
paid-in capital during the six months ended March 31, 1999 for the prior fiscal
year-end.
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 $676,000 includes $26,000 that was paid by these credits
rather than in cash.
Dividend and interest income is recorded net of non-U.S. taxes paid. For the
six months ended March 31, 1999, such non-U.S. taxes were $2,222,000. Net
realized currency losses on dividends, interest, sales of non-U.S. bonds and
notes, and other receivables and payables, on a book basis, were $147,000 for
the six months ended March 31, 1999.
5. TRANSACTIONS WITH AFFILIATES - Affiliated issuers, as defined under the
Investment Company Act of 1940, are those in which the fund's holdings of an
issuer represent 5% or more of the outstanding voting securities of the issuer.
A summary of the fund's transactions in the securities of these issuers during
the six months ended March 31, 1999 is as follows:
<TABLE>
Beginning Ending
Company Shares Purchases Sales Shares
<S> <C> <C> <C> <C>
ABR Information Services 1,865,000 - - 1,865,000
ACTIVISION /1/ 1,215,000 - 645,000 570,000
Alarmguard Holdings 360,000 - 360,000 -
Alliance Atlantis Communications 1,069,675 179,500 8,975 1,240,200
Alvis /1/ 4,831,250 - 4,670,550 160,700
American Dental Partners 443,000 - - 443,000
American Healthcorp 522,000 - - 522,000
Aminex /1/ 3,250,000 1,000,000 - 4,250,000
Anesta 550,000 190,000 - 740,000
Antena 3 de Television 1,500 - - 1,500
APCOA Parking 120,800 - - 120,800
Ascent Entertainment Group 1,930,000 - 356,200 1,573,800
Avocet Mining 3,850,000 - - 3,850,000
Benor Tankers 1,240,000 - - 1,240,000
Brightpoint 2,732,500 - - 2,732,500
Cabre Exploration 1,033,400 65,600 - 1,099,000
Cadiz Land 2,122,000 53,900 - 2,175,900
Cambrex 1,400,000 - - 1,400,000
Carbide/Graphite Group /1/ 511,800 - 226,700 285,100
Castellum /1/ 2,515,000 50,000 205,800 2,359,200
CB Richard Ellis Services /1/ 1,042,800 - - 1,042,800
Celestial Seasonings 520,000 10,000 - 530,000
Cheesecake Factory 1,295,500 - - 1,295,500
Chrysalis Group /1/ 1,824,000 - 350,000 1,474,000
CIMA LABS 617,200 - - 617,200
Computer Motion 434,900 - - 434,900
Consolidated Products 1,250,000 312,500 - 1,562,500
Corporate Investments 27,900,000 - - 27,900,000
Corporate Services Group /1/ 13,092,098 - 3,563,671 9,528,427
Cost Plus 500,000 355,000 - 855,000
Cymer /1/ 1,500,000 182,700 500,000 1,182,700
Cytyc 933,700 - 933,700 -
Data Broadcasting 2,130,000 - 2,130,000 -
Digene 800,000 - - 800,000
Edify /1/ 1,055,000 - 334,300 720,700
Etec Systems 460,000 750,000 - 1,210,000
EUROBIKE 364,000 - - 364,000
Filofax Group 1,956,000 - 1,956,000 -
Four Media /1/ 610,000 30,000 596,700 43,300
Franklin Covey /1/ 1,350,000 - 975,000 375,000
Great Eastern Shipping 14,728,000 - - 14,728,000
Gymboree 1,435,600 - - 1,435,600
Hardy Oil & Gas 9,058,014 - 9,058,014 -
Hartmarx 1,787,900 - - 1,787,900
Highpoint Telecommunications - 1,000,000 - 1,000,000
HIT Entertainment 840,000 213,420 - 1,053,420
HNC Software 1,595,000 80,198 - 1,675,198
Hollis-Eden Pharmaceuticals - 555,556 - 555,556
Imax 1,558,000 - - 1,558,000
Independent Insurance Group 8,150,000 5,790,000 - 13,940,000
Inhale Therapeutic Systems - 1,000,000 - 1,000,000
InterCept Group 500,000 25,000 - 525,000
Intertape Polymer Group 1,500,000 - - 1,500,000
Jo-Ann Stores 1,050,000 - - 1,050,000
KCI Konecranes International /1/ 911,700 - 210,000 701,700
KeraVision 795,000 - - 795,000
Landec 690,000 - 690,000 -
Laurentian Bank of Canada 987,100 34,700 - 1,021,800
Lazare Kaplan International 550,000 - 86,300 463,700
Lions Gate Entertainment 2,766,667 - 1,383,333 1,383,334
Liquidation World 450,000 - - 450,000
LoJack 1,347,000 - 135,600 1,211,400
Material Sciences /1/ 1,000,000 - 912,800 87,200
McWhorter Technologies /1/ 706,000 - 596,600 109,400
MDC Communications 433,333 537,600 - 970,933
MemberWorks 961,700 - 961,700 -
Micrel 1,275,000 121,000 150,000 1,246,000
MIF 682,902 1 - 682,903
Milltronics /1/ 900,000 - 507,800 392,200
Momentum Business Applications - 302,000 - 302,000
Morton's Restaurant Group 415,000 - - 415,000
NCO Group 995,300 - 12,900 982,400
Nice Systems 60,000 565,000 - 625,000
Nobel Biocare 940,000 451,900 - 1,391,900
Nordic American Tanker Shipping 733,500 - 733,500 -
Norsk Lotteridrift 965,000 - - 965,000
OM Gruppen /1/ 4,329,300 - 1,289,000 3,040,300
OrthoLogic 1,620,000 - - 1,620,000
Paladin Resources 11,270,998 - - 11,270,998
Pharmacyclics 795,000 - - 795,000
Philippine Gold 4,953,700 - - 4,953,700
Piercing Pagoda 502,500 - - 502,500
Platinum Software /1/ 1,625,000 195,000 - 1,820,000
PMC-Sierra 1,900,000 95,000 - 1,995,000
Puerto Rican Cement 371,000 - 37,700 333,300
Ramco Energy 1,597,000 - - 1,597,000
Ranger Oil 7,018,915 - - 7,018,915
Rent-Way /1/ 600,000 - - 600,000
Safety 1st 460,000 - 460,000 -
Saville Systems Ireland - 2,200,000 - 2,200,000
SBS Broadcasting 887,900 82,750 - 970,650
Scottish Media Group /1/ 3,280,000 - - 3,280,000
SEQUUS Pharmaceuticals 1,709,584 - 1,709,584 -
Simeon Wines - 3,900,000 - 3,900,000
SkyTel Communications 3,725,000 170,000 - 3,895,000
Strategic Distribution 1,890,000 - 1,890,000 -
Sunglass Hut International 1,200,000 2,000,000 - 3,200,000
Technical Chemicals and Products 600,000 - 600,000 -
Trimble Navigation 1,250,000 200,000 - 1,450,000
Ugland International Holdings 7,342,000 - - 7,342,000
UroCor 600,000 - - 600,000
Vanstar 2,700,000 - 2,700,000 -
Vincam Group 1,017,750 - 1,017,750 -
Warrantech 860,000 - 860,000 -
Whitehall Jewellers 510,000 - - 510,000
Wolford Group 324,000 - - 324,000
Zonagen 640,000 - - 640,000
Total
Market
Dividend Value
Company Income at 3/31/99
(000) (000)
<S> <C> <C>
ABR Information Services - $32,404
ACTIVISION /1/ - -
Alarmguard Holdings - -
Alliance Atlantis Communications - 19,400
Alvis /1/ - -
American Dental Partners - 3,489
American Healthcorp - 3,980
Aminex /1/ - -
Anesta - 16,696
Antena 3 de Television - 39,207
APCOA Parking - 8,879
Ascent Entertainment Group - 17,213
Avocet Mining - 1,693
Benor Tankers - 3,209
Brightpoint - 16,139
Cabre Exploration - 9,477
Cadiz Land - 17,407
Cambrex $84 30,975
Carbide/Graphite Group /1/ - -
Castellum /1/ 851 -
CB Richard Ellis Services /1/ - -
Celestial Seasonings - 11,461
Cheesecake Factory - 30,768
Chrysalis Group /1/ 65 -
CIMA LABS - 1,890
Computer Motion - 4,349
Consolidated Products - 27,441
Corporate Investments 445 11,506
Corporate Services Group /1/ - -
Cost Plus - 25,116
Cymer /1/ - -
Cytyc - -
Data Broadcasting - -
Digene - 6,300
Edify /1/ - -
Etec Systems - 35,619
EUROBIKE 203 4,439
Filofax Group - -
Four Media /1/ - -
Franklin Covey /1/ - -
Great Eastern Shipping - 8,517
Gymboree - 12,831
Hardy Oil & Gas - -
Hartmarx - 8,716
Highpoint Telecommunications - 5,406
HIT Entertainment 8 10,367
HNC Software - 54,863
Hollis-Eden Pharmaceuticals - 8,559
Imax - 30,381
Independent Insurance Group - 61,059
Inhale Therapeutic Systems - 27,125
InterCept Group - 4,462
Intertape Polymer Group 133 39,563
Jo-Ann Stores - 12,863
KCI Konecranes International /1/ 605 -
KeraVision - 12,124
Landec - -
Laurentian Bank of Canada 261 15,827
Lazare Kaplan International - 3,188
Lions Gate Entertainment - 5,047
Liquidation World - 4,179
LoJack - 9,313
Material Sciences /1/ - -
McWhorter Technologies /1/ - -
MDC Communications - 8,695
MemberWorks - -
Micrel - 62,378
MIF - 13,255
Milltronics /1/ - -
Momentum Business Applications - 2,699
Morton's Restaurant Group - 6,432
NCO Group - 36,349
Nice Systems - 18,437
Nobel Biocare - 19,143
Nordic American Tanker Shipping 370 -
Norsk Lotteridrift - 3,122
OM Gruppen /1/ 2,024 -
OrthoLogic - 4,860
Paladin Resources - 3,273
Pharmacyclics - 13,118
Philippine Gold - 719
Piercing Pagoda - 4,491
Platinum Software /1/ - -
PMC-Sierra - 142,019
Puerto Rican Cement 127 10,686
Ramco Energy - 5,926
Ranger Oil - 28,076
Rent-Way /1/ - -
Safety 1st - -
Saville Systems Ireland - 26,950
SBS Broadcasting - 31,182
Scottish Media Group /1/ 472 -
SEQUUS Pharmaceuticals - -
Simeon Wines - 10,163
SkyTel Communications - 64,754
Strategic Distribution - -
Sunglass Hut International - 33,600
Technical Chemicals and Products - -
Trimble Navigation - 14,138
Ugland International Holdings - 9,357
UroCor - 2,925
Vanstar - -
Vincam Group - -
Warrantech - -
Whitehall Jewellers - 7,841
Wolford Group 7 15,009
Zonagen - 13,760
Total $5,655 $1,326,804
/1/ Unaffiliated issuer at 3/31/1999
</TABLE>
<TABLE>
PER-SHARE DATA AND
RATIOS
Six Months Year Ended September 30
Ended -------- -------- -------- -------- --------
3/31/1999 /1/ 1998 1997 1996 1995 1994
- ----------------------- --------- --------- --------------------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $22.14 $30.72 $26.92 $26.11 $23.61 $22.72
--------- --------- --------------------------- ---------
Income (Loss) From Investment
Operations:
Net investment income 0.01 0.0738 0.1012 0.17 0.22 0.09
Net gains (losses) on securities
(both realized and unrealized) 3.74 (6.10) 6.1688 3.32 3.79 1.83
--------- --------- --------------------------- ---------
Total from investment
operations 3.75 (6.03) 6.27 3.49 4.01 1.92
--------- --------- --------------------------- ---------
Less Distributions:
Dividends (from
net investment
income) (0.09) (0.05) (0.12) (0.23) (0.16) (0.06)
Distributions
(from capital
gains) (1.29) (2.50) (2.35) (2.45) (1.35) (0.97)
--------- --------- --------------------------- ---------
Total distributions (1.38) (2.55) (2.47) (2.68) (1.51) (1.03)
--------- --------- --------------------------- ---------
Net Asset Value, End
of Period $24.51 $22.14 $30.72 $26.92 $26.11 $23.61
========= ========= =========================== =========
Total Return 17.22% /3/ (20.70)% 25.41% 15.21% 18.59% 8.60%
Ratios/Supplemental
Data:
Net assets, end
of period (in
millions) $7,609 $7,102 $9,256 $6,607 $4,625 $3,497
Ratio of expenses
to average net
assets .55% /3/ 1.06% 1.07% 1.09% 1.13% 1.12%
Ratio of net income
to average net
assets .04% /3/ .27% .40% .68% .97% .38%
Portfolio turnover
rate 21.62% /3/ 44.31% 42.21% 42.88% 45.63% 29.43%
/1/ Unaudited
/2/ Excludes maximum sales
charge of 5.75%.
/3/ Based on operations for
the period shown and,
accordingly, not
representative of a full
year.
</TABLE>
[THE AMERICAN FUNDS GROUP(R)]
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 92821-5823
TRANSFER AGENT FOR
SHAREHOLDER ACCOUNTS
American Funds Service Company
(Please write to the address nearest you.)
P.O. Box 2205
Brea, California 92822-2205
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
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02105-1713
COUNSEL
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, California 90071-2899
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
PREPARING FOR THE YEAR 2000 The fund's key service providers - Capital Research
and Management Company, the investment adviser, and American Funds Service
Company, the transfer agent - have updated all significant computer systems to
process date-related information properly following the turn of the century.
Testing of these and other systems with business partners, vendors and other
service providers will continue through much of 1999. We will continue to keep
you up to date in our regular publications. If you'd like more detailed
information, call Shareholder Services at 800/421-0180, ext. 21, or visit our
Web site at www.americanfunds.com.
FOR INFORMATION ABOUT YOUR ACCOUNT OR ANY OF THE FUND'S SERVICES, PLEASE
CONTACT YOUR FINANCIAL ADVISER. YOU MAY ALSO CALL AMERICAN FUNDS SERVICE
COMPANY, TOLL FREE, AT 800/421-0180, OR VISIT WWW.AMERICANFUNDS.COM ON THE
WORLD WIDE WEB.
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, 1999, this report must be accompanied by an American Funds Group
Statistical Update for the most recently completed calendar quarter.
Printed on recycled paper
Litho in USA BDA/L/3216
Lit. No. SCWF-013-0599
