<PAGE> 1
DEAR SHAREHOLDER:
We are pleased to provide you with the following semiannual report for the
Growth Fund of Spain, Inc.
PERFORMANCE HIGHLIGHTS
- The fund returned 7.68% on a net asset value basis for the six-month period
ended May 31, 1995, outperforming its peers in the Spanish closed-end fund
area.
- The fund's 7.68% return based on net asset value compares favorably with the
5.19% return for the Madrid General Index+ in dollar terms.
- The fund posted a 5.98% total return, based on market price, during the six
months ended May 31, 1995. The fund's closing price on May 31, 1995 was
$10.125. With a net asset value of $12.86 on this date, the fund was trading
at a 21.27% discount.
ECONOMIC AND POLITICAL OVERVIEW
Spain's gross domestic product (GDP) increased by 2% in 1994 and is expected to
continue to expand this year, albeit at a lesser rate than in 1994. Official
forecasts call for increased consumer spending and a continued recovery in
exports. Meanwhile however, inflation is expected to move higher because of an
increase in Value Added Tax (VAT) rates. As the domestic economy recovers,
imported inflation will continue to be a problem.
The budget deficit has improved somewhat from 1994 levels, although this appears
to be a cyclical rather than structural reduction. Government plans to reduce
public spending were enthusiastically received by both bond and stock market
investors, although it remains to be seen whether these plans will actually
contribute to a meaningful reduction of the deficit.
The Socialist government continues to be plagued by corruption scandals, most
recently by allegations that the government funded an anti-terrorist group in
the early 1980s. These scandals have been an embarrass-
ment for the Socialist party and weakened the public's loyalty to the Gonzalez
administration. Municipal elections held in May showed growing support for
Partido Popular, the opposition party, which may push for a general election as
early as 1996.
MARKET ENVIRONMENT
Spanish stocks were weak in early 1995, primarily due to renewed attacks on the
peseta that negatively affected the bond market. On March 5, the currency was
devalued so that its permitted fluctuation bands within the European Monetary
System widened by 7%. Prior to the devaluation, the newly independent Bank of
Spain raised official interest rates to 8% because of strengthening evidence
that inflation was starting to accelerate.
The market's weak performance led to more compelling valuations and created
buying opportunities in some larger blue chip stocks. We expect the markets to
trend upward for the balance of the year, as most negative news and concerns
have already been priced into the market.
THE PORTFOLIO
During the six-month reporting period we adopted a more defensive position,
reducing exposure to the communications, chemicals and foods sectors, and taking
profits in selected bank and cyclical holdings. As a result, the fund's equity
exposure was reduced to approximately 83% as of May 31.
Within the banking sector, lower quality banks such as Argentaria and Banco
Central Hispano have suffered declines. However, Banco Popular, one of the
fund's top holdings, strongly outperformed its peer group. The fund's exposure
to banks increased during the six-month period with additional purchases of
Banco Popular and Banco Bilbao Vizcaya.
A position in Acerinox, a steel manufacturer that performed well in 1994, was
reduced due to forecasts for lower consumer demand on a global basis, its
sensitivity to the value of the U.S. dollar and the decline in U.S. steel
prices. The Fund has a lower position in the construction sector than the Madrid
General Index, since the managers expect
1
<PAGE> 2
these stocks will be hurt by cut-backs in spending by the public-sector. If the
sector becomes oversold, however, we could increase this position.
The Fund's exposure to electric utilities and motorways has been reduced because
of their high debt levels and, particularly, high debt exposure to strengthening
foreign currencies.
In the telecommunications sector, the fund's position in Telefonica de Espana
has been reduced. Although this stock has recently experienced strong investor
demand, we believe the company's fundamentals do not justify continued strength
and have reduced the fund's weighting in this stock.
A comparison of the sector weightings of the fund's approximate 83% equity
component and the official sector weightings of the Madrid General Index as of
May 31, 1995 was as follows:
<TABLE>
<CAPTION>
FUND
PERCENTAGE OF MADRID GENERAL
SECTOR EQUITIES INDEX PERCENTAGE
-------------------- ------------- ----------------
<S> <C> <C>
Banks 28.6% 31.6%
Construction 6.7 7.5
Electric Utilities 21.5 21.5
Food 3.0 3.1
Investment Co. 1.3 2.9
Metals/Machinery 9.1 3.7
Oil/Chemicals 8.6 10.2
Telecommunications 9.9 12.1
Other 11.3 7.4
----- -----
TOTAL 100% 100%
</TABLE>
OUTLOOK
The decline of the market in the first quarter of 1995 was based on a weakening
of macroeconomic fundamentals that will not be easily repaired. A stabilization
of currency markets would be favorable for the Spanish stock market since this
could lead to a recovery of European bond markets and improved sentiment toward
peseta-denominated investments. For the near-term, our primary concern continues
to be inflation.
A general election in local governments in the spring of 1996 would be favorable
since it could boost investor confidence that Spain's main structural problems
(high budget deficit, high unemployment) will be addressed. In the meantime The
Growth Fund of Spain, Inc. will keep its defensive strategy. We expect to
concentrate on sectors and stocks that are not too sensitive to higher inflation
and interest rates but can profit from ongoing recovery of GDP growth in Spain.
Due to the continued weakness of the US dollar--even against devaluing
currencies like the peseta--the fund remains unhedged.
We appreciate your continued support of The Growth Fund of Spain and look
forward to serving your investment needs in the future.
Sincerely,
[SIG]
Dennis H. Ferro
Vice President and Portfolio Co-Manager
[SIG]
Eduardo Suarez
Portfolio Co-Manager
July 6, 1995
Mr. Ferro became Portfolio Co-Manager of the Fund in March, 1994 when he joined
Kemper Financial Services, Inc. (KFS). Prior to Kemper, he was president,
managing director and chief investment officer for Cigna International. Mr.
Ferro is now an Executive Vice-President of KFS and Director of International
Equities.
Mr. Suarez has been a Portfolio Manager of the Fund since its inception in
February, 1990. He is the chief executive officer of BSN Gestion de Patrimonios,
S.A., S.G.C. (BSN Gestion).
Statistical Note: Total return measures aggregate change in net asset
value/market value assuming reinvestment of dividends. Returns are historical
and do not represent future performance. Market price, net asset value and
returns fluctuate. Additional information concerning performance is contained in
the Financial Highlights appearing at the end of this report.
* Source for performance data: Lipper Analytical Services, Inc.
+ The Madrid General Index is calculated by the Madrid Stock Exchange and
includes 76 stocks in the nine industry sectors listed on the Madrid Stock
Exchange. The General Index is unmanaged and is weighted according to market
capitalization of the industry sector.
2
<PAGE> 3
ANNUAL SHAREHOLDERS MEETING
We are pleased to report that Mr. Frederick T. Kelsey and Mr. David B. Mathis
were elected to the Board of Directors of The Growth Fund of Spain, Inc. at the
annual meeting held on May 16, 1995. The other Directors whose term of office
continued after the shareholder meeting are: Arthur R. Gottschalk, Stephen B.
Timbers, John B. Tingleff and John G. Weithers.
Along with the election of the Directors, shareholders were asked to ratify the
selection of Ernst & Young LLP as the independent auditors for the fund. The
results of the shareholders' vote at the May 16, 1995 meeting were as follows:
- Election of Trustees
<TABLE>
<CAPTION>
For Withheld
<S> <C> <C>
Frederick T. Kelsey 12,484,589 437,479
David B. Mathis 12,497,093 424,975
</TABLE>
- Ratification of the selection of Ernst & Young LLP as independent auditors for
the fund
For 12,500,533
Against 240,792
3
<PAGE> 4
PORTFOLIO OF INVESTMENTS May 31, 1995
(Dollars in thousands)
<TABLE>
<CAPTION>
Number
of Shares Value
------------ --------
<S> <C> <C>
COMMON STOCKS
BANKING-23.6%
-----------------------------------------------------------
Argentaria 160,000 $ 5,615
-----------------------------------------------------------
Banco Bilbao-Vizcaya 522,500 15,099
-----------------------------------------------------------
Banco Central Hispano 85,200 1,945
-----------------------------------------------------------
Banco de Andalucia 35,130 4,525
-----------------------------------------------------------
Banco Popular Espanol, S.A. 89,761 13,427
-----------------------------------------------------------
Bankinter 127,000 11,388
-----------------------------------------------------------
51,999
CHEMICALS AND ENERGY-5.9%
-----------------------------------------------------------
Repsol, S.A. 405,000 13,073
-----------------------------------------------------------
CONSTRUCTION AND PROPERTY
DEVELOPMENT-10.2%
-----------------------------------------------------------
Cubiertas, S.A. 23,996 1,692
-----------------------------------------------------------
Dragados y Construcciones, S.A. 140,000 2,145
-----------------------------------------------------------
Fomento de Construcciones y
Contratas (FCC) 53,647 5,357
-----------------------------------------------------------
Inmobiliaria Metropolitana Vasco
Central, S.A. (Metrovacesa) 135,441 4,096
-----------------------------------------------------------
Uralita 250,000 2,996
-----------------------------------------------------------
Vallehermoso, S.A. 353,049 6,159
-----------------------------------------------------------
22,445
CONSUMER GOODS-5.9%
-----------------------------------------------------------
Centros Commercialet Pryca 345,000 6,356
-----------------------------------------------------------
Continente 70,000 1,706
-----------------------------------------------------------
Cortefiel, S.A. 77,000 2,313
-----------------------------------------------------------
Empressa Nacional de Celuosas, S.A. 100,000 2,617
-----------------------------------------------------------
12,992
ELECTRIC AND OTHER UTILITIES-17.7%
-----------------------------------------------------------
Cantabrico 263,074 7,859
-----------------------------------------------------------
Empresa Nacional de Electricidad,
S.A. (ENDESA) 225,000 10,748
-----------------------------------------------------------
Fuerzas Electricas de Cataluna,
S.A. (FECSA) 546,133 3,112
-----------------------------------------------------------
Gas Natural 60,134 6,613
-----------------------------------------------------------
Gas y Electricidad, S.A. (GESA) 67,723 3,251
-----------------------------------------------------------
Iberdrola I, S.A., ordinary shares 1,073,631 7,509
-----------------------------------------------------------
39,092
FOOD AND TOBACCO-2.5%
-----------------------------------------------------------
Tabacalera Espanola, S.A. 95,000 3,233
-----------------------------------------------------------
<CAPTION>
Number
of Shares
or Principal
Amount Value
------------ --------
<S> <C> <C>
Viscofan Industria Navarra de
Envolturas Cellulosicas, S.A. 152,220 $ 2,314
-----------------------------------------------------------
5,547
INVESTMENT AND DIVERSIFIED
COMPANIES-1.1%
-----------------------------------------------------------
Corp Fin Reunida Cofir 744,139 2,420
-----------------------------------------------------------
METALS AND ENGINEERING-7.5%
-----------------------------------------------------------
Aceronix, S.A.
ordinary shares 18,266 2,205
new shares 10,625 1,283
-----------------------------------------------------------
Azcoyen, S.A. 62,559 4,416
-----------------------------------------------------------
Zardoya Otis, S.A. 75,754 8,583
-----------------------------------------------------------
16,487
TELECOMMUNICATIONS AND
MOTORWAYS-8.1%
-----------------------------------------------------------
Aumar 309,163 3,730
-----------------------------------------------------------
Autopistas Concesionarios, S.A.
(ACESA) 401,293 3,762
-----------------------------------------------------------
Compania Telefonica Nacional de
Espana, S.A. 799,490 10,493
-----------------------------------------------------------
17,985
TOTAL COMMON STOCKS-82.5%
(Cost: $155,212) 182,040
-----------------------------------------------------------
MONEY MARKET INSTRUMENTS
Yield-8.60% to 8.94%
Due-June 1995
-----------------------------------------------------------
Banco Exterior Internacional SP1,185,603 9,665
-----------------------------------------------------------
Banco Sabadell SP 500,000 4,076
-----------------------------------------------------------
Caixa D Estalvis de Catalunya SP1,182,953 9,643
-----------------------------------------------------------
Credit Lyonnais S.A. SP1,119,223 9,123
-----------------------------------------------------------
TOTAL MONEY MARKET
INSTRUMENTS-14.7%
(Cost: $32,867) 32,507
-----------------------------------------------------------
TOTAL INVESTMENTS-97.2%
(Cost: $188,079) $214,547
-----------------------------------------------------------
CASH AND OTHER ASSETS,
LESS LIABILITIES-2.8% 6,073
-----------------------------------------------------------
NET ASSETS-100% $220,620
-----------------------------------------------------------
</TABLE>
4
<PAGE> 5
NOTE TO PORTFOLIO OF INVESTMENTS
Based on the cost of investments of $188,079,000 for federal income tax purposes
at May 31, 1995, the aggregate gross unrealized appreciation was $29,031,000,
the aggregate gross unrealized depreciation was $2,563,000 and the net
unrealized appreciation of investments was $26,468,000.
See accompanying Notes to Financial Statements.
5
<PAGE> 6
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1995
(in thousands)
<TABLE>
<CAPTION>
ASSETS
<S> <C>
----------------------------------------------------------
Investments, at value
(Cost: $188,079) $214,547
----------------------------------------------------------
Cash (including foreign currency of
$13,990 with a cost of $13,754) 14,061
----------------------------------------------------------
Receivable for:
Investments sold 2,325
----------------------------------------------------------
Dividends and interest 677
----------------------------------------------------------
Total assets 231,610
----------------------------------------------------------
LIABILITIES AND NET ASSETS
----------------------------------------------------------
Payable for:
Investments purchased 10,684
----------------------------------------------------------
Management fee 181
----------------------------------------------------------
Custodian and transfer agent
fees and related expenses 42
----------------------------------------------------------
Other 83
----------------------------------------------------------
Total liabilities 10,990
----------------------------------------------------------
Net assets applicable to 17,159 shares
outstanding, $.01 par value,
equivalent to $12.86 per share $220,620
----------------------------------------------------------
ANALYSIS OF NET ASSETS
----------------------------------------------------------
Excess of amounts received from
issuance of shares less amounts paid
on repurchases of shares on account
of capital $191,027
----------------------------------------------------------
Accumulated net realized gain
on investments and
foreign currency transactions 353
----------------------------------------------------------
Unrealized appreciation of investments
and foreign currency transactions 26,770
----------------------------------------------------------
Undistributed net investment income 2,470
----------------------------------------------------------
Net assets applicable to shares outstanding $220,620
----------------------------------------------------------
Net asset value per share
($220,620 / 17,159 shares outstanding) $12.86
----------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
STATEMENT OF OPERATIONS
Six months ended May 31, 1995
(in thousands)
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
----------------------------------------------------------
Dividends $ 3,378
----------------------------------------------------------
Interest 1,178
----------------------------------------------------------
4,556
----------------------------------------------------------
Less foreign taxes withheld 546
----------------------------------------------------------
Total investment income 4,010
----------------------------------------------------------
EXPENSES
----------------------------------------------------------
Management fee 1,006
----------------------------------------------------------
Custodian and transfer agent fees and
related expenses 118
----------------------------------------------------------
Professional fees 33
----------------------------------------------------------
Reports to shareholders 8
----------------------------------------------------------
Directors' fees and other 41
----------------------------------------------------------
Total expenses 1,206
----------------------------------------------------------
Net investment income 2,804
----------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
----------------------------------------------------------
Net realized gain on investments and foreign
currency transactions 2,655
----------------------------------------------------------
Net change in balance of unrealized
appreciation of investments and foreign
currency transactions 9,806
----------------------------------------------------------
Net gain on investments 12,461
----------------------------------------------------------
Net increase in net assets resulting
from operations 15,265
----------------------------------------------------------
</TABLE>
6
<PAGE> 7
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
<TABLE>
<CAPTION>
Six months
ended Year ended
May 31, November 30,
1995 1994
---------- ------------
<S> <C> <C>
OPERATIONS
---------------------------------------------------------
Net investment income $ 2,804 5,487
---------------------------------------------------------
Net realized gain on
investments and foreign
currency transactions 2,655 18,312
---------------------------------------------------------
Net change in unrealized
appreciation of investments
and foreign currency
transactions 9,806 6,006
---------------------------------------------------------
Net increase in net assets
resulting from operations 15,265 29,805
---------------------------------------------------------
Dividends to shareholders from
net investment income (7,767) --
---------------------------------------------------------
Payment for shares repurchased
(100 shares in 1995 and 71
shares in 1994) (850) (717)
---------------------------------------------------------
Total increase in net assets 6,648 29,088
---------------------------------------------------------
NET ASSETS
---------------------------------------------------------
Beginning of period 213,972 184,884
---------------------------------------------------------
End of period (including
undistributed net investment
income of $2,470 in 1995 and
$7,433 in 1994) $220,620 213,972
---------------------------------------------------------
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES.
DESCRIPTION OF FUND
The Fund is registered under the Investment Company Act of 1940 as a
diversified, closed-end management investment company.
INVESTMENT VALUATION
Investments are stated at value. All securities that are traded on a Spanish
securities exchange and for which market quotations are readily available are
valued at the closing value on the principal exchange on which the securities
are traded on the day of valuation or, if no such closing price is available, at
the last bid price quoted on such day. If there are no quotations available for
the day of valuation, the last available closing price will be used. Fixed
income securities are valued by using market quotations, or independent pricing
services that use prices provided by market makers or estimates of market values
obtained from yield data relating to instruments or securities with similar
characteristics. Equity options are valued at the last sale price unless the bid
price is higher or the asked price is lower, in which event such bid or asked
price is used. Exchange traded fixed income options are valued at the last sale
price unless there is no sale price, in which event prices provided by market
makers are used. Over-the-counter traded fixed income options are valued based
upon current prices provided by market makers. Financial futures and options
thereon are valued at the settlement price established each day by the board of
trade or exchange on which they are traded. Forward foreign currency contracts
and foreign currencies are valued at the forward and current exchange rates,
respectively, prevailing on the day of valuation. Other securities and assets
are valued at fair value as determined in good faith by the Board of Directors.
7
<PAGE> 8
CURRENCY TRANSLATION
The books and records of the Fund are maintained in U.S. dollars. All assets and
liabilities initially expressed in Spanish pesetas are converted into U.S.
dollar values at the mean between the bid and offered quotations of that
currency against U.S. dollars as last quoted by a recognized dealer. If such
quotations are not readily available, the rate of exchange is determined in good
faith by the Board of Directors. Income and expenses and purchases and sales of
investments are translated into U.S. dollars at the rate of exchange prevailing
on the respective dates of such transactions. The Fund includes that portion of
the results of operations resulting from changes in foreign exchange rates with
net realized and unrealized gain (loss) on investments, as appropriate.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME
Investment transactions are accounted for on the trade date (date the order to
buy or sell is executed). Dividend income is recorded on the ex-dividend date,
except that certain dividends from foreign securities are recorded as soon as
the information is available to the Fund. Interest income is recorded on the
accrual basis and includes amortization of money market instrument premium and
discount. Realized gains and losses from investment transactions are reported on
an identified cost basis. Realized and unrealized gains and losses on financial
futures, options and forward foreign currency contracts are included in net
realized and unrealized gain (loss) on investments, as appropriate.
FEDERAL INCOME TAXES AND DIVIDENDS TO SHAREHOLDERS
The Fund has complied with the special provisions of the Internal Revenue Code
available to investment companies for the six months ended May 31, 1995.
The Fund may make an election under the Internal Revenue Code so that
shareholders may claim a tax credit or deduction for their share of foreign
taxes paid by the Fund.
The accumulated net realized loss on sales of investments for federal income tax
purposes at May 31, 1995, amounting to approximately $1,315,000, is available to
offset future taxable gains. If not applied, the loss carryover expires during
the year 2001.
Net realized capital gains, if any, reduced by capital loss carryovers, will be
distributed at least annually. Dividends payable to its shareholders are
recorded by the Fund on the ex-dividend date.
Distributions are determined in accordance with income tax principles which may
treat certain transactions, such as foreign currency transactions, differently
from generally accepted accounting principles.
2. TRANSACTIONS WITH AFFILIATES
The Fund has a management agreement with Kemper Financial Services, Inc. (KFS).
For management services and facilities furnished, the Fund pays a fee at an
annual rate of 1% of average weekly net assets. The Fund incurred a management
fee of $1,006,000 for the six months ended May 31, 1995.
KFS utilizes the investment management services of BSN Gestion de Patrimonios,
S.A., S.G.C. (the Spanish Adviser) pursuant to a sub-advisory agreement entered
into between KFS and the Spanish Adviser. For services provided under the
sub-advisory agreement, KFS pays a fee at an annual rate of .35% of the Fund's
average weekly net assets to the Spanish Adviser. During the six months ended
May 31, 1995, KFS incurred fees of $352,000 to the Spanish Adviser.
8
<PAGE> 9
The Fund has a custodian agreement for the Fund's securities and cash in the
United States and a transfer agent agreement with Investors Fiduciary Trust
Company (IFTC), which was 50% owned by KFS until January 31, 1995, when KFS
completed the sale of IFTC to a third party. For the six months ended May 31,
1995, the Fund incurred custodian and transfer agent fees of $14,000 (excluding
related expenses). Pursuant to a services agreement with IFTC, Kemper Service
Company (KSvC), an affiliate of KFS, is the shareholder service agent of the
Fund. For the six months ended May 31, 1995, IFTC remitted shareholder service
fees of $12,000 to KSvC.
The Fund has a custodian agreement with Banco Santander, an affiliate of the
Spanish Adviser, for custody of the Fund's Spanish securities. For the six
months ended May 31, 1995, the Fund incurred custody fees of $98,000 to Banco
Santander.
Brokerage commissions paid on securities transactions to BSN Sociedad de Valores
y Bolsa, an affiliate of the Spanish Adviser, amounted to $157,000 for the six
months ended May 31, 1995.
Certain officers or directors of the Fund are also officers or directors of
KFS. During the six months ended May 31, 1995, the Fund made no payments
to its officers and incurred directors' fees of $4,000 to independent
directors.
3. INVESTMENT TRANSACTIONS
For the six months ended May 31, 1995 investment transactions (excluding short
term instruments) are as follows (in thousands):
Purchases $53,125
--------------------------------------------------------------------------------
Proceeds from sales 61,178
--------------------------------------------------------------------------------
4. REPURCHASE OF SHARES
The Board of Directors of the Fund has authorized the open market repurchase and
retirement of up to one million shares of the Fund's outstanding stock. Shares
repurchased are as follows:
<TABLE>
<CAPTION>
Six months
ended Year ended
May 31, November 30,
1995 1994
---------- ------------
<S> <C> <C>
Number of shares 100,000 71,000
---------------------------------------------------------
Weighted average discount to
net asset value 23% 14%
---------------------------------------------------------
</TABLE>
As of May 31, 1995, 850,000 shares have been repurchased and retired.
9
<PAGE> 10
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Six months
ended
May 31, Year ended November 30,
1995 1994 1993 1992 1991
---------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $12.40 10.67 8.99 11.08 10.71
---------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .17 .32 .40 .54 .37
---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments
and foreign currency transactions .74 1.41 1.28 (2.48) .36
---------------------------------------------------------------------------------------------------------------------------
Total from investment operations .91 1.73 1.68 (1.94) .73
---------------------------------------------------------------------------------------------------------------------------
Less distributions from net investment income .45 -- -- .15 .36
---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.86 12.40 10.67 8.99 11.08
---------------------------------------------------------------------------------------------------------------------------
Market value, end of period $10.125 10.00 9.625 7.50 9.875
---------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(%):
Based on net asset value 7.68 16.21 18.69 (17.73) 7.06
---------------------------------------------------------------------------------------------------------------------------
Based on market value 5.98 3.90 28.33 (22.77) 23.06
---------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (%):
Expenses 1.20 1.23 1.22 1.22 1.23
---------------------------------------------------------------------------------------------------------------------------
Net investment income 2.79 2.57 3.97 4.98 3.32
---------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
Net assets at end of period (in thousands) $220,620 213,972 184,884 156,179 192,986
---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 61 85 50 72 104
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: Ratios have been determined on an annualized basis. Total return is not
annualized. Total return based on net asset value reflects changes in the
Fund's net asset value during the period. Total return based on market
value reflects changes in market value. Each figure includes reinvestment
of dividends. These figures will differ depending upon the level of any
discount from or premium to net asset value at which the Fund's shares
trade during the period.
10
<PAGE> 11
THE GROWTH FUND OF SPAIN, INC.
<TABLE>
<S> <C>
Directors Officers
STEPHEN B. TIMBERS JOHN E. PETERS
President and Director Vice President
ARTHUR R. GOTTSCHALK DENNIS H. FERRO
Director Vice President
FREDERICK T. KELSEY PHILIP J. COLLORA
Director Vice President and
Secretary
DAVID B. MATHIS CHARLES F. CUSTER
Director Vice President and
Assistant Secretary
JOHN B. TINGLEFF JEROME L. Duffy
Director Treasurer
JOHN G. WEITHERS
Director
---------------------------------------------------------
Legal Counsel Custodian and Transfer Agent
VEDDER, PRICE, KAUFMAN INVESTORS FIDUCIARY
& KAMMHOLZ TRUST COMPANY
222 North LaSalle Street 127 West 10th Street
Chicago, IL 60601 Kansas City, MO 64105
Shareholder Service Agent Foreign Custodian
KEMPER SERVICE COMPANY BANCO SANTANDER
P.O. Box 419430 Madrid, Spain
Kansas City, MO 64141
Investment Manager
KEMPER FINANCIAL
SERVICES, INC.
120 South LaSalle Street
Chicago, IL 60603
</TABLE>
SEMIANNUAL REPORT TO SHAREHOLDERS
May 31, 1995
--------------------------
THE
--------------------------
GROWTH
--------------------------
FUND OF
--------------------------
SPAIN, INC.
--------------------------
240790
GSP-3 (7/95) [LOGO] PRINTED ON RECYCLED PAPER Printed in U.S.A. [KEMPER Logo]
