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THE ITT HARTFORD
MUTUAL FUNDS
[LOGO] 1997 SEMI-ANNUAL REPORT
[ARTWORK]
[LOGO]
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Table Of Contents
- Letter From The Chairman 1
- Fund Manager Discussions 2
- Portfolios At A Glance 9
- Financial Statements 13
<PAGE>
Chairman
Lowndes A. Smith
ITT Hartford Mutual Funds
A Message From The Chairman
Dear Fellow Mutual Fund Investor:
Never underestimate the power of a great idea.
Over 187 years ago, The Hartford Financial Services Group was founded with
one all-important idea in mind: to provide the best in financial security for
its clients.
Today, that idea is alive in a whole new way. We've just completed our first
year as a provider of public mutual funds. And the success of our new venture
has been simply phenomenal. The ITT Hartford Family of Mutual Funds has been
received with open arms by financial advisors, market analysts and, most
importantly, by you: our investors.
That's not surprising. Although offering mutual funds publicly is new for us,
we've built a long and impressive track record offering substantially similar
investment options through our phenomenally popular variable annuity and
variable life products. Now, with the addition of our public mutual funds,
investors can turn to Hartford products for all three phases of their
financial life: mutual funds for short- to mid-term objectives; annuities for
longer-term goals like retirement; and variable life insurance for estate
planning.
But our well-known expertise in delivering all the right financial products
for all the right reasons isn't the only source of our funds' popularity. At
the core of The ITT Hartford Family of Mutual Funds' success are our
portfolio managers at Wellington Management Company, LLP and The Hartford
Investment Management Company (HIMCO). They are the source of great ideas,
combined with rigorous research and disciplined, long-term analysis, that
drive our funds' performance. Over the last six months, their efforts have
produced a string of outstanding successes - not the least of which was the
ITT Hartford Capital Appreciation Fund's distinction of being named the
nation's number one performing mutual fund out of 2,769 Domestic Equity funds
for the year ended 7/22/97 by Lipper Analytical Services.
Proof positive that great ideas produce great results.
But while you review this report, our focus has already shifted from past
results to the future. We truly appreciate your business and know that, to
keep it, we need to continue producing performance, service and value that
exceeds the norm. With our resources, we feel extremely well-positioned to do
just that. And as we move forward, we re-commit ourselves to yet another
great idea: making sure that the ITT Hartford Family of Mutual Funds provides
you and your family with ample opportunity to benefit from the financial
markets ahead.
Sincerely,
Lowndes A. Smith
Director and Chairman
The Hartford Mutual Funds
1
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ITT Hartford Small Company Fund
Portfolio Manager
Mark Waterhouse
Vice President
Wellington Management Company, LLP
How Did The Fund Perform?
The ITT Hartford Small Company Fund returned 10.0% for the six month period
ended 6/30/97, outperforming the Lipper Small Company Mutual Fund Average,
which returned 9.0%.
Why Did The Fund Perform This Way?
Small cap stocks lagged large caps for the period, as the Russell 2000 index
returned 10.2% versus the S&P 500's return of 20.6%. Within the Russell 2000
index, technology was the strongest performing sector. The Fund benefited
from a considerable overweight in this sector, 23% versus 13% for the Russell
2000 index as of 6/30/97. The health care sector also exhibited strength
during the period, and we used the strength in both the health care and
technology sectors to trim some positions. We continue, however to see upside
in these areas and will maintain overweight positions, as health care and
technology tend to be "hallowed hunting grounds" for small company stocks
with substantial earnings growth potential. One other area of note was the
finance sector, which was a strong positive force for the Fund both in terms
of our overweight position and stock selection in the sector.
What Is Your Outlook For 1997?
Given current valuation levels of the broad market, we anticipate a
relatively challenging investment environment during the remainder of 1997.
However, the combination of a favorable economic backdrop, strong corporate
fundamentals, and sustained cash inflows should significantly limit any
short-term declines. We saw a hint of a revival of the small cap market
(relative to the large cap market) during the second half of the period and
are cautiously optimistic that our sector of the market will begin its long
awaited "catch-up" during the second half of the year.
2
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ITT Hartford Capital Appreciation Fund
Portfolio Manager
Saul J. Pannell, CFA
Senior Vice President
and Partner
Wellington Management Company, LLP
How Did The Fund Perform?
For the six month period ended 6/30/97, the ITT Hartford Capital Appreciation
Fund eclipsed both the Lipper peer group and the S&P 500. The Fund posted a
return of 35.5% versus 10.2% and 20.6% for the Lipper Capital Appreciation
Mutual Fund average and the S&P 500, respectively. Since inception (7/22/96)
and for the most recent quarter ended 6/30/97, the Hartford Capital
Appreciation Mutual Fund ranks as the top fund in the Lipper Capital
Appreciation Mutual Fund universe.
Why Did The Fund Perform This Way?
At the end of the period, the Fund's asset weighted market cap was $2.3
Billion, the median market cap was $700 Million and the Fund's holdings were
invested in 73 companies. Looking at some of the Funds' most recent
successes, many of the better performers were concentrated in the Information
Technology sector. These included: Creative Technology Labs, a specialty
computer components supplier, Philips Electronics NV, the large Dutch
conglomerate, Credence Systems, a manufacturer of semiconductor test
equipment, and Oak Industries, a manufacturer of broadband infrastructure
components. We continue to increase foreign exposure on the margin, with new
positions in Unibanco (Brazilian bank holding company) and Corporation Geo
(Mexican homebuilder). Overall foreign investment levels were approximately
15% in the fund.
What Is Your Outlook For 1997?
The overall markets continue to enjoy favorable tailwinds in the form of
moderate economic activity, declining long term interest rates, and favorable
supply/demand dynamics. The resumption of cash flows into equity funds
coupled with reported increased flows from offshore investors has revived the
uptrend in equity prices that was broken by the Federal Reserve's notching up
of short term rates several months ago. Our overall strategy for the Fund
remains dual faceted. We maintain an emphasis on smaller companies with
dynamic earnings growth prospects, and couple that with an opportunistic
trading approach to larger cap stocks where we typically see a catalyst for
outperformance. We have tended to roam off the beaten path, since
historically that's where the most upside potential has been. This approach,
if executed well, should continue to provide positive absolute and relative
results over a reasonable time frame.
3
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ITT Hartford International Opportunities
Portfolio Manager
Trond Skramstad
Senior Vice President
and Partner
Wellington Management
Company, LLP
How Did The Fund Perform?
The ITT Hartford International Opportunities Fund provided a total return of
9.2% for the six month period ended 6/30/97, underperforming the Lipper
International Mutual Fund average which returned 12.5% during the period.
Why Did The Fund Perform This Way?
The Fund maintained a sizable commitment to Europe during the period,
approximately 50% as of 6/30/97. While this represents a significant position
in any one region, this level of exposure represents an underweight relative
to the Morgan Stanley Capital International GDP Weighted Index ("the Index").
Also during the period, the Japanese market experienced a sharp rebound from
the first half of the year due to appreciation of the yen and the belief that
recent fiscal tightening will not impede economic recovery. In the last few
months as the market has appreciated, the Fund has moved to an underweight
position in Japan relative to the Index. On-going economic problems continued
to plague the Pacific Basin markets, but on a country-by-country basis,
significant divergence took place. The market in Hong Kong rebounded from a
weak first quarter as the market anticipated the Chinese takeover. The
regional laggards were Thailand and Malaysia. Thailand's equity market
continued its precipitous decline on concerns of a potential Baht devaluation
and a worsening crisis in the financial system, while the Malaysian market
declined as a result of credit curbs announced by the central bank.
What Is Your Outlook For 1997?
With respect to the European markets, the Socialist victory in the French
election could remove some rigidity in the EMU process and actually benefit
individual market performance. We believe this leaves continental Europe
well-positioned for a period of moderate growth, low inflation and low
interest rates, typically an environment that benefits equity markets. In
Japan, the region is no longer significantly undervalued and going forward,
we may look for opportunities to further reduce the Fund's position by
selling into strength. Finally, in Hong Kong, given the recent appreciation
in the market, we are growing cautious and are likely to trim the Fund's
holdings in Hong Kong on any significant strength.
4
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ITT Hartford Stock Fund
Portfolio Manager
Rand L. Alexander, CFA
Senior Vice President
and Partner
Wellington Management Company, LLP
How Did The Fund Perform?
The ITT Hartford Stock Fund outperformed both the S&P 500 and its Lipper peer
group for the six month period ended 6/30/97, providing a return of 21.5%,
versus 20.6% for the S&P 500 and 14.3% for the Lipper Growth Mutual Fund
average.
Why Did The Fund Perform This Way?
Our above average performance during the period was driven by our overweight
in some of the strongest performing sectors: pharmaceuticals, securities
brokers, and telecommunications equipment, and our underweight in utilities
which underperformed the market. The two largest individual holdings in the
fund, General Electric and Wal-Mart Stores were among the best performing
companies during the period, providing price appreciation of 34% and 49%,
respectively during the 6 month period ending 6/30/97. Also, during the
period we increased our exposure to mid cap companies, a segment that has
lagged the market over the past 12 months. We found good value in several
high quality mid cap companies which have strong market positions and
promising outlooks. Some of the companies we added include: Clear Channel
Communications, a diversified media company; EMC, a provider of high end
computer disc drives; Hertz, a leading car rental company; and Perkin Elmer,
a manufacturer of instrumentation for biotech research. We also used a brief
period of weakness in the financial services sector, due to concerns about
another potential Fed rate hike, to increase our exposure to financials. We
added to our holdings in Allstate, American Express and Marsch & McLennan
while initiating a position in Fannie Mae. We continue to believe that the
backdrop for financial assets is positive.
What Is Your Outlook For 1997?
Large capitalization stocks continue to outperform small caps as earnings
growth for large companies remains stronger and investors are willing to pay
up for reliability and global diversification. Inflation is low, economic
growth is not too strong, corporate profits are growing, and labor costs are
not out of control. Liquidity in corporate America remains quite high. Stock
buybacks and mergers and acquisitions continue at record levels. Prospects
for international growth for many large U.S. companies looks excellent, which
should benefit many of our holdings.
5
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ITT Hartford Dividend and Growth Fund
Portfolio Manager
Laurie A. Gabriel, CFA
Senior Vice President
and Partner
Wellington Management Company, LLP
How Did The Fund Perform?
For the six month period ended 6/30/97, the ITT Hartford Dividend and Growth
Fund outperformed its Lipper peer group, providing a return of 18.5% versus
14.8% for the Lipper Equity Income Mutual Fund average. The fund continues to
post strong results versus the equity income competitors, placing the fund in
the first quartile for the 1 month, 3 month and year-to-date (6 month)
periods.
Why Did The Fund Perform This Way?
A major contributor to performance during the period was Health Care, due in
part to strong stock selection in the pharmaceutical industry. Warner-Lambert
was a top contributor because of two new drugs that received approval this
year. These new products combat cholesterol and diabetes, and revenues have
exceeded all expectations. Bristol-Myers Squibb also performed well with the
issuance of a patent for a cancer-fighting drug. Our overweighting in
electric utilities remains a source of disappointment resulting from a
combination of negative regulatory and competitive pressures. Toward the end
of June, however, we have seen an improvement in this industry, in
conjunction with the recent bond market strength. Duke Energy Corp and Edison
International are two of our largest electric utility holdings. Stock
selection in combination with a concentration in automobile and department
store names was a strong contributor in the Consumer Discretionary sector.
Mercantile Stores, performed well due to speculation of a potential takeover
by a large national department store chain and Ford Motor Company experienced
the highest profitability in North America in ten years, due largely to
massive cost cutting measures.
What Is Your Outlook For 1997?
Broad diversification across economic sectors is an ongoing part of the
Funds' investment strategy. The Fund owned 91 positions at the end of the
period. Given the generally positive back drop of moderate economic growth
and a low inflation environment, we do not anticipate the current momentum
for US equities to reverse. Nonetheless, some risk to equities at these
valuation levels remains. With respect to this situation, we have begun to
add some more conservative holdings into the portfolio. In keeping with our
charter, the Fund continues to maintain an above-average yield (3.0% gross
yield currently versus 1.7% for the S&P 500 Index) and below average P/E and
beta. Relative to the market, the Fund should exhibit these value-oriented
characteristics over time.
6
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ITT Hartford Advisers Fund
Portfolio Manager
Rand L. Alexander, CFA
Senior Vice President
and Partner
Wellington Management
Company, LLP
Portfolio Manager
Paul D. Kaplan
Senior Vice President
and Partner
Wellington Management Company, LLP
How Did The Fund Perform?
The ITT Hartford Advisers Fund outperformed its Lipper peer group average
for the six month period ended 6/30/97, providing a total return of 14.1%
versus 10.3% for the Lipper Flexible Mutual Fund average. Primary
responsibility for strong relative performance was a high equity exposure and
superior stock selection within the equity portion of the fund.
Why Did The Fund Perform This Way?
The total return provided by the equity market during the period was simply
stunning. In the second quarter alone, the S&P 500 stock index was up 17.5%,
bringing the 6 month total return to approximately 20%. Our above average
performance during the period was driven by our overweight in some of the
strongest performing sectors: pharmaceuticals, securities brokers, and
telecommunications equipment, and our underweight in utilities which
underperformed the market. On the heals of an essentially flat first 3 months
of the year, the bond market has begun to show signs of life with the Lehman
Government/Corporate index generating a total return of 3.6% in the last 3
months of the period. It would appear that the bond market is finally
experiencing some abatement in the growth/inflation fears which had gripped
investors since the beginning of 1996.
What Is Your Outlook For 1997?
The asset allocation at the end of the period was 67% stocks, 30% bonds and
3% in cash. For the bulk of the period, the Fund's equity weighting has been
at the high end of its historical range and reflects our continued belief
that equities are more attractive than bonds. Bonds remain attractive
relative to cash and we will therefore carry only a very modest cash
commitment. Interest rates have fallen in response to the slowing economy and
low inflation, but we believe that the rate decline has farther to go. It
remains our view that inflation is currently not a threat and that the CPI is
likely to stay below 3.0%. If we are correct in our inflation assumptions,
then long-term Treasury bond yields of 6.8% are still too high, and we
believe that they will fall. Therefore, in the fixed income portion of the
portfolio we are maintaining a relatively long portfolio duration. We
continue to search for those conditions which would lead us to reduce our
exposure to one or the other of the financial markets, but to date we find no
evidence to convince us that we should reduce our holdings of either stocks
or bonds.
7
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The Hartford Bond Income Strategy Fund
Portfolio Manager
Alison D. Granger, CFA
Senior Vice President
The Hartford Investment
Management Company (HIMCO)
How Did the Fund Perform?
The ITT Hartford Bond Income Strategy Fund outperformed its Lipper peer
group average for the six month period ended June 30, 1997, providing a total
return of 3.6% versus 3.1% for the Lipper Corporate Debt "BBB" Rated Mutual
Fund average.
Why Did The Fund Perform This Way?
- - Moderate portfolio duration management. The fund began and ended the first
half of 1997 carrying a portfolio duration which was approximately 10% longer
than the benchmark index. In February, however, we shortened the duration to
neutral, as we became concerned about a possible Fed tightening. The bond
market sold off between late February and mid-April, at which time we
lengthened our duration once again. The portfolio thereby benefited from the
rally which began then.
- - An allocation to BB-rated high yield corporate debt. Top performing
holdings within this asset class included K-Mart 7.95% of '23, Brady Bonds
issued by Argentina and Mexico, and Long Island Lighting Co (LILCO)
debentures, to name a few.
- - An allocation to discount mortgages. These securities provided greater
total return than other equal-duration choices available in other high
quality asset classes.
- - Higher portfolio yield. The portfolio carried a yield which was higher than
that of its index. This greater income accumulated and helped contribute to a
higher total return during the period.
What Is Your Outlook for 1997?
We are currently assessing the wisdom of maintaining the funds long duration
posture given the success we have had in holding this position throughout the
bond market rally since mid-April and recent fundamental indications that the
economic slowdown of the past few months may be over.
We remain overweighted in the corporate and mortgage sectors, in order to
provide shareholders with a maximization of yield commensurate with the
fund's stated risk profile. Given our current fundamental outlook for the
economy and particular credits, we view pricing as generally fair. However,
should yields tighten relative to Treasuries, we will look to reduce our
allocation to these sectors, particularly to BB-rated corporate high yield.
We will look for potential investments in some of the Asian credits we have
so far avoided which have underperformed of late. And finally, we expect to
continue to add to positions in AAA-rated supranational issues when we find
them at attractive levels. We believe that the risk/reward profile of this
sector is currently very attractive.
8
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Portfolio at a Glance -
ITT Hartford Small Company Fund
Top Holdings as of:
June 30, 1997
% of Fund's
Investments
1. Mckesson 2.7%
2. Vencor Inc. 1.9%
3. Firstplus Financial Group 1.8%
4. Calpine Corp. 1.7%
5. Frontier Insurance Group 1.7%
6. Air Express International 1.7%
7. M.S. Carriers 1.7%
8. Saks Holdings Inc. 1.7%
9. Heska Corp. 1.6%
10. U.S. Office Prod. Co. 1.6%
Top 5 Sectors as of:
June 30, 1997
% of Fund's
Investments
Finance 24%
Information Technology 20%
Industrial & Commercial 16%
Health Care 15%
Information & Entertainment 10%
Portfolio Composition
Stock 100%
ITT Hartford Capital Appreciation Fund
Top Holdings as of:
June 30, 1997
% of Fund's
Investments
1. CP Clare Corporation 3.8%
2. Firstplus Financial Group 3.6%
3. Philips Nv Adr 3.1%
4. NAC Re Corp. 2.9%
5. Corporation Geo Sa B 2.4%
6. Avant Corp. 2.4%
7. EMC Corp 2.4%
8. Cable Design Technologies 2.3%
9. Genzyme Corp. 2.2%
10. U.S. Office Prod. Co. 2.0%
Top 5 Sectors as of:
June 30, 1997
% of Fund's
Investments
Information Technology 34%
Consumer Discretionary 13%
Finance 13%
Health Care 11%
Information & Entertainment 9%
Portfolio Composition
Stock 100%
IN REGARDS TO THE MANAGER DISCUSSIONS AND THE TOP 10 HOLDINGS, SECURITIES
REFERRED TO MAY OR MAY NOT CURRENTLY BE HELD IN THE PORTFOLIO.
PORTFOLIO COMPOSITION IS NET OF PAYABLES/RECEIVABLES FOR SECURITY
TRANSACTIONS.
9
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ITT Hartford International Opportunities Fund
Top Holdings as of:
June 30, 1997
% of Fund's
Investments
1. Unidanmark A Redg (Denmark) 1.7%
2. Smurfit Jefferson Group (Ireland) 1.3%
3. Fiat Spa (Italy) 1.3%
4. Nordbanken Ab (Sweden) 1.3%
5. Mabuchi Motor (Japan) 1.3%
6. Guinness Plc (UK) 1.2%
7. Pharmacia&Upjohn Dep (Sweden) 1.2%
8. Associated Brit Food (UK) 1.1%
9. Societe Generale (France) 1.1%
10. Namco Ltd (Japan) 1.1%
Top 5 Countries as of:
June 30, 1997
% of Fund's
Investments
Japan 22%
United Kingdom 15%
France 8%
Germany 6%
Australia 4%
Portfolio Composition
Stock 94%
Cash 6%
ITT Hartford Stock Fund
Top Holdings as of:
June 30, 1997
% of Fund's
Investments
1. General Electric 4.4%
2. Wal-Mart 2.3%
3. Citicorp 2.2%
4. Boeing Company 2.1%
5. SBC Communications Inc. 2.1%
6. Royal Dutch Petroleum 2.0%
7. Gannett Co., Inc. 2.0%
8. Allstate Corp. 2.0%
9. McDonalds Corp. 1.9%
10. IMB Corp. 1.8%
Top 5 Sectors as of:
June 30, 1997
% of Fund's
Investments
Finance 18%
Healthcare 15%
Information Technology 15%
Industrial & Commercial 12%
Consumer Discretionary 10%
Portfolio Composition
Stock 94%
Cash 6%
IN REGARDS TO THE MANAGER DISCUSSIONS AND THE TOP 10 HOLDINGS, SECURITIES
REFERRED TO MAY OR MAY NOT CURRENTLY BE HELD IN THE PORTFOLIO.
PORTFOLIO COMPOSITION IS NET OF PAYABLES/RECEIVABLES FOR SECURITY
TRANSACTIONS.
10
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ITT Hartford Dividend & Growth Fund
Top Holdings as of:
June 30, 1997
% of Fund's
Investments
1. Citicorp 4.3%
2. General Electric 3.9%
3. First Bank System Inc. 3.6%
4. Philip Morris 3.0%
5. Warner-Lambert Company 2.7%
6. Chevron Corp. 2.6%
7. Xerox 2.3%
8. Pharmacia & Upjohn 2.2%
9. Merck & Co., Inc. 2.1%
10. American Home Prod. Corp. 1.9%
Top 5 Sectors as of:
June 30, 1997
% of Fund's
Investments
Fiance 16%
Utilities 15%
Health Care 13%
Energy 13%
Consumer Staples 13%
Portfolio Composition
Stock 100%
ITT Hartford Advisers Fund
Top Holdings as of:
June 30, 1997
% of Fund's
Investments
1. General Electric 3.0%
2. Citicorp 1.5%
3. Wal-Mart 1.4%
4. Boeing Company 1.4%
5. SBC Communications Inc. 1.4%
6. Royal Dutch Petroleum 1.4%
7. Gannett Co., Inc. 1.4%
8. McDonalds Corp. 1.3%
9. Merrill Lynch & Co. Inc. 1.3%
10. Travelers Group Inc. 1.3%
Top 5 Sectors as of:
June 30, 1997
% of Fund's
Investments
Finance 18%
Healthcare 15%
Information Technology 15%
Industrial & Commercial 12%
Consumer Discretionary 10%
Portfolio Composition
Stock 67%
Bonds 30%
Cash 3%
IN REGARDS TO THE MANAGER DISCUSSIONS AND THE TOP 10 HOLDINGS, SECURITIES
REFERRED TO MAY OR MAY NOT CURRENTLY BE HELD IN THE PORTFOLIO.
PORTFOLIO COMPOSITION IS NET OF PAYABLES/RECEIVABLES FOR SECURITY
TRANSACTIONS.
11
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ITT Hartford Bond Income Strategy Fund
Top Holdings as of:
June 30, 1997
% of Fund's
Investments
1. Landeskreditbank Baden-Wurttemberg 2.8%
2. Continental Air 2.7%
3. Tele-Communications Inc. 1.8%
4. Citicorp 1.8%
5. Mass Mutual Life Ins 144a 1.8%
6. Abbey National PLC 1.7%
7. Phoenix Home Life 1.7%
8. Bayerische Landesbank Ny 1.7%
9. Interamer Dev Bk 1.7%
10. United Air Lines 1.7%
Credit Quality Distribution:
June 30, 1997
% of Fund's
Investments
AAA 52%
AA 4%
A 13%
BAA 6%
BA 19%
B 2%
Not Rated 4%
Portfolio Composition
Corporates 51%
US Treasury/Agency 29%
Mortgage Related 13%
Emerging Markets 3%
Supra-National 2%
Assets Backed 1%
Short-Term 1%
IN REGARDS TO THE MANAGER DISCUSSIONS AND THE TOP 10 HOLDINGS, SECURITIES
REFERRED TO MAY OR MAY NOT CURRENTLY BE HELD IN THE PORTFOLIO.
PORTFOLIO COMPOSITION IS NET OF PAYABLES/RECEIVABLES FOR SECURITY
TRANSACTIONS.
<TABLE>
<CAPTION>
Performance Review: SINCE INCEPTION 7-22-96 THROUGH 6/30/97
Cumulative Return
Cumulative Return Since Inception
Fund Since Inception(1) (sales charge adjusted)(2)
<S> <C> <C>
Small Company Fund (Class A) 25.55% 18.65%
Small Company Fund (Class B) 24.83% 19.83%
Capital Appreciation Fund (Class A) 86.60% 76.34%
Capital Appreciation Fund (Class B) 85.59% 80.59%
International Opportunities Fund (Class A) 18.11% 11.62%
International Opportunities Fund (Class B) 17.32% 12.32%
Stock Fund (Class A) 40.38% 32.66%
Stock Fund (Class B) 39.48% 34.48%
Dividend & Growth Fund (Class A) 36.58% 29.06%
Dividend & Growth Fund (Class B) 35.58% 30.58%
Advisers Fund (Class A) 27.31% 20.31%
Advisers Fund (Class B) 26.46% 21.46%
Bond Income Strategy Fund (Class A) 9.57% 4.64%
Bond Income Strategy Fund (Class B) 8.78% 3.78%
</TABLE>
(1) PERFORMANCE RESULTS ARE HISTORICAL AND INCLUDE REINVESTMENT OF ALL
DISTRIBUTIONS AND CHANGES IN NET ASSET VALUE. PERFORMANCE RESULTS DO
NOT REFLECT SALES CHARGES.
(2) PERFORMANCE RESULTS ARE HISTORICAL AND INCLUDE REINVESTMENT OF ALL
DISTRIBUTIONS AND CHANGES IN NET ASSET VALUE. PERFORMANCE RESULTS REFLECT
THE EFFECT OF MAXIMUM SALES CHARGES. THE MAXIMUM SALES CHARGE FOR CLASS A
SHARES IS 5.5% (4.5%, BOND INCOME STRATEGY). CLASS B SHARES REFLECT THE
DEDUCTION OF THE CONTINGENT DEFERRED SALES CHARGE (CDSC) IN YEARS ONE
THROUGH SIX OF 5%, 4%, 3%, 3%, 2%, 1% RESPECTIVELY.
THE INVESTMENT RETURN AND PRINCIPAL VALUE OF THE FUND WILL FLUCTUATE SO
THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL
COST.
12
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- --------------------------------------------------------------------------------
ITT HARTFORD MONEY MARKET FUND, INC.
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- --------------
<C> <S> <C>
SHORT-TERM SECURITIES -- 89.5%
CERTIFICATE OF DEPOSIT -- 1.2%
Bank of Tokyo Mitsubishi
$ 300,000 5.66% due 08/29/97............... $ 300,000
--------------
COMMERCIAL PAPER -- 86.1%
Abbey National North America
300,000 5.42% due 07/11/97............... 299,548
Air Products & Chemicals
300,000 5.65% due 07/18/97............... 299,200
Allergan Inc.
500,000 5.60% due 08/05/97............... 497,278
American Home Products Corp.
700,000 5.63% due 07/16/97............... 698,358
American Honda Finance
300,000 5.65% due 08/04/97............... 298,399
ANZ (Delaware) Inc.
300,000 5.60% due 07/02/97............... 299,953
Aristar, Inc.
750,000 5.67% due 09/08/97............... 741,849
Avon Capital Corp.
500,000 5.60% due 09/09/97............... 494,556
Avon Capital Corp.
300,000 5.65% due 07/31/97............... 298,588
Credit Suisse First Boston
300,000 5.65% due 07/28/97............... 298,729
Daimler Benz N.A. Corp.
300,000 5.61% due 08/04/97............... 298,411
Daimler Benz N.A. Corp.
300,000 5.39% due 08/05/97............... 298,428
Eksportfinans A/S
300,000 5.65% due 07/02/97............... 299,953
Eksportfinans A/S
500,000 5.62% due 08/11/97............... 496,800
Finova Capital Corp.
300,000 5.68% due 07/23/97............... 298,959
Finova Capital Corp.
300,000 5.42% due 07/11/97............... 299,548
Ford Motor Credit Corp.
500,000 5.57% due 07/28/97............... 497,911
General Electric Capital Corp.
500,000 5.56% due 08/28/97............... 495,521
General Electric Capital Corp.
360,000 5.55% due 07/08/97............... 359,612
Gillette Co.
376,000 5.60% due 07/10/97............... 375,474
Goldman Sachs Group LP
750,000 5.60% due 09/03/97............... 742,533
GTE Corp.
750,000 5.58% due 09/12/97............... 741,514
Heinz, H.J. Company
667,000 5.53% due 07/23/97............... 664,746
MCI Communications
300,000 5.44% due 07/14/97............... 299,411
Merrill Lynch & Co.
300,000 5.65% due 07/23/97............... 298,964
Merrill Lynch & Co.
300,000 5.63% due 07/23/97............... 298,968
Monsanto Co.
400,000 5.60% due 07/29/97............... 398,258
National Rural Utilities
300,000 5.56% due 07/07/97............... 299,722
Nationsbank N.A.
600,000 5.65% due 07/09/97............... 599,247
Nationwide Building Society
300,000 5.38% due 07/11/97............... 299,552
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- --------------
<C> <S> <C>
COMMERCIAL PAPER -- (CONTINUED)
Nordbanken North America
$ 500,000 5.60% due 08/20/97............... $ 496,111
Nordbanken North America
300,000 5.62% due 07/01/97............... 300,000
Pacific Dunlop Ltd.
750,000 5.63% due 09/04/97............... 742,376
Pearson Inc.
600,000 5.60% due 07/01/97............... 600,000
Penney (J.C.) Funding Co.
750,000 5.50% due 09/08/97............... 742,022
Province of Quebec
700,000 5.59% due 08/21/97............... 694,457
Rtz America Inc.
750,000 5.60% due 09/04/97............... 742,417
Sanwa Business Credit
750,000 5.70% due 09/03/97............... 742,400
Sharp Electronic Corp.
500,000 5.57% due 07/18/97............... 498,685
Sherwin Williams
925,000 5.58% due 08/19/97............... 917,975
Stanley Works
600,000 5.62% due 08/14/97............... 595,879
Sumitomo Bank
600,000 5.78% due 08/12/97............... 595,954
Svenska Handelsbanken, Inc.
300,000 5.62% due 08/01/97............... 298,548
Volkswagon of America
300,000 5.64% due 07/21/97............... 299,060
Zeneca Inc.
500,000 5.60% due 08/22/97............... 495,956
Zeneca Inc.
300,000 5.63% due 07/22/97............... 299,015
--------------
21,650,845
--------------
REPURCHASE AGREEMENT -- 2.2%
543,000 Interest in repurchase agreement
(U.S. Treasury obligations), in a
joint trading account dated
06/30/97 due 07/01/97 with a
yield of 5.9% and maturity amount
of $543,089...................... $ 543,000
--------------
Total short term securities........ $ 22,493,845
--------------
--------------
CORPORATE NOTES -- 10.5%
General Motor Corp.
780,000 5.852% due 04/17/98.............. $ 780,173
IBM Credit Corp.
750,000 5.688% due 06/05/98.............. 749,560
Morgan Stanley Group
500,000 5.763% due 05/18/98.............. 500,000
Sears Roebuck Acceptance Corp.
300,000 5.616% due 10/02/97.............. 299,963
Wells Fargo
300,000 5.632% due 09/05/97.............. 300,042
--------------
Total corporate notes.............. $ 2,629,738
--------------
--------------
DIVERSIFICATION OF ASSETS:
Total short-term securities (cost
$22,493,845)............................... 89.5% $ 22,493,845
Total corporate notes (cost $2,629,738)...... 10.5 2,629,738
------ ------------
Total investments (cost $25,123,583)......... 100.0% $ 25,123,583
------ ------------
------ ------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
1
<PAGE>
- --------------------------------------------------------------------------------
ITT HARTFORD BOND INCOME STRATEGY FUND, INC.
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- -------------
<C> <S> <C>
U.S. TREASURIES & FEDERAL AGENCIES -- 37.6%
FEDERAL NATIONAL MORTGAGE
ASSOCIATION -- 11.8%
Pass-Throughs
$ 3,900,000 6.00% due 05/01/12.......... $ 3,757,408
-------------
U.S. TREASURY BONDS -- 3.7%
280,000 6.50% due 11/15/26......... 268,363
91,000 6.75% due 08/15/26......... 90,033
30,000 7.875% due 08/15/21......... 33,431
150,000 8.125% due 08/15/19......... 171,047
500,000 8.875% due 05/15/17......... 608,750
-------------
1,171,624
-------------
U.S. TREASURY NOTES -- 20.6%
750,000 5.00% due 01/31/98......... 746,954
570,000 5.625% due 11/30/98......... 567,328
375,000 5.75% due 08/15/03......... 362,109
100,000 5.875% due 11/15/05......... 95,688
500,000 6.00% due 05/31/98......... 500,782
600,000 6.25% due 06/30/98......... 602,625
600,000 6.25% due 07/31/98......... 602,625
400,000 6.50% due 05/31/01......... 402,250
320,000 6.625% due 07/31/01......... 323,200
500,000 6.875% due 08/31/99......... 507,500
600,000 7.125% due 02/29/00......... 613,125
300,000 7.25% due 05/15/04......... 312,656
550,000 7.50% due 10/31/99......... 565,641
350,000 7.875% due 11/15/04......... 377,563
-------------
6,580,046
-------------
U.S. TREASURY STRIPS -- 1.5%
300,000 0.00% due 08/15/15......... 46,356
150,000 0.00% due 08/15/15......... 43,029
400,000 5.875% due 10/31/98........ 399,500
-------------
488,885
-------------
Total U.S. treasuries &
Federal agencies............ $ 11,997,963
-------------
-------------
CORPORATE NOTES -- 43.8%
CABLE -- 4.0%
Jones Intercable, Inc.
300,000 8.875% due 04/01/07......... $ 303,000
Lenfest Communications, Inc.
250,000 8.375% due 11/01/05......... 245,938
Rogers Cablesystems, Inc.
200,000 9.625% due 08/01/02......... 210,500
Tele-Communications, Inc. MTN
500,000 6.580% due 02/15/05......... 510,734
-------------
1,270,172
-------------
CHEMICALS -- 0.8%
Terra Industries, Inc.
250,000 10.50% due 06/15/05......... 270,625
-------------
COLLEGES -- 0.9%
Massachusetts Institute of
Technology
300,000 7.25% due 11/2/2096......... 294,277
-------------
ENERGY & SERVICES -- 0.3%
Gulf Canada Resources Ltd.
100,000 8.35% due 08/01/06.......... 105,750
-------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- -------------
<C> <S> <C>
CORPORATE NOTES -- (CONTINUED)
FINANCIAL SERVICES -- 13.4%
Abbey National PLC
$ 500,000 6.69% due 10/17/05.......... $ 489,075
Bayerische Landesbank (NY)
500,000 6.375% due 10/15/05......... 483,275
Citicorp
500,000 7.125% due 05/15/06......... 500,305
Ford Motor Credit Co.
500,000 6.125% due 01/09/06......... 468,102
K Mart Corp.
100,000 7.84% due 01/02/02.......... 98,737
Landeskreditbank
Baden-Wuerttemnerg
750,000 7.625% due 02/01/23......... 780,661
Lehman Brothers Holdings, Inc.
150,000 8.875% due 03/01/02......... 160,572
Massachusetts Mutual Life
Insurance Co.*
500,000 7.625% due 11/15/23......... 497,390
Phoenix Home Life Mutual
Insurance Co.*
500,000 6.95% due 12/01/06.......... 486,360
Societe Generale (NY)
250,000 9.875% due 07/15/03......... 283,885
-------------
4,248,362
-------------
FOOD, BEVERAGE & TOBACCO --
0.9%
Ralcorp Holdings Inc.
250,000 8.75% due 09/15/04.......... 275,672
-------------
FUNERAL/CEMETERY SERVICES --
0.3%
Loewen Group International,
Inc.
100,000 8.25% due 10/15/03.......... 103,383
-------------
GAMING -- 0.3%
Trump Atlantic City, Inc.
100,000 11.25% due 05/01/06......... 97,500
-------------
HEALTH CARE -- 1.3%
Tenet Healthcare Corp.
100,000 8.00% due 01/15/05.......... 100,250
Tenet Healthcare Corp.
300,000 7.875% due 01/15/03......... 299,250
-------------
399,500
-------------
HOME BUILDING -- 0.5%
U.S. Home Corp.
150,000 7.95% due 03/01/01.......... 149,413
-------------
MEDIA & SERVICES -- 0.3%
Turner Broadcasting System
Inc.
100,000 7.40% due 02/01/04.......... 100,172
-------------
PACKAGING & CONTAINERS -- 1.7%
Domtar, Inc.
425,000 9.50% due 08/01/16.......... 439,875
Owens-Illinois, Inc.
100,000 8.10% due 05/15/07.......... 102,122
-------------
541,997
-------------
PAPER & FOREST PRODUCTS --
1.6%
Buckeye Cellulose Corp.
300,000 8.50% due 12/15/05.......... 300,000
Quno Corp.
200,000 9.125% due 05/15/05......... 215,000
-------------
515,000
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
2
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- -------------
<C> <S> <C>
CORPORATE NOTES -- (CONTINUED)
REAL ESTATE -- 1.6%
Duke Realty LP
$ 250,000 7.25% due 09/22/02.......... $ 251,946
HMH Properties
250,000 9.50% due 05/15/05.......... 260,000
-------------
511,946
-------------
RETAIL -- 3.2%
K Mart Corp.
100,000 7.55% due 07/27/04.......... 95,706
K Mart Corp.
275,000 7.95% due 02/01/23.......... 247,500
Proffitt's Inc.
200,000 8.125% due 05/15/04......... 200,500
Specialty Retailers, Inc.
250,000 8.50% due 07/15/05.......... 251,875
Stop and Shop Companies, Inc.
200,000 9.75% due 02/01/02.......... 220,884
-------------
1,016,465
-------------
SHIPBUILDING -- 0.3%
Newport News Shipbuilding Co.
100,000 8.625% due 12/01/06......... 103,500
-------------
TELECOMMUNICATIONS -- 1.9%
Comcast Cellular*
300,000 9.50% due 05/01/07.......... 300,750
Rogers Cantel, Inc.
200,000 9.375% due 06/01/08......... 210,750
US West-1 A-2 1997*
50,000 0.00% due 02/02/17.......... 10,825
Viacom, Inc.
100,000 6.75% due 01/15/03.......... 96,303
-------------
618,628
-------------
TRANSPORTATION -- 5.5%
Continental Airlines, Inc.
100,000 9.50% due 12/15/01.......... 104,500
Continental Airlines, Inc.
1997-1*
750,000 7.461% due 10/01/16......... 758,722
CSX Corp.*
200,000 7.25% due 05/01/04.......... 202,243
Norfolk Southern Corp.
200,000 7.80% due 05/15/27.......... 205,701
United Air Lines, Inc.
400,000 9.75% due 08/15/21.......... 478,391
-------------
1,749,557
-------------
UTILITIES -- 5.0%
Cleveland Electric
Illuminating Co.
250,000 7.13% due 07/01/07.......... 253,750
CMS Energy Corp.
100,000 8.125% due 05/15/02......... 100,640
Long Island Lighting Co.
100,000 8.90% due 07/15/19.......... 106,530
Pacific Gas and Electric Co.
300,000 7.05% due 03/01/24.......... 289,033
Pacific Gas and Electric Co.
250,000 7.25% due 03/01/26.......... 238,522
Public Service Electric & Gas,
MBIA-Insured
125,000 7.00% due 09/01/24.......... 117,620
Public Service Electric & Gas,
MBIA-Insured
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- -------------
<C> <S> <C>
UTILITIES -- (CONTINUED)
$ 250,000 6.75% due 01/01/16.......... $ 235,235
Southern Investments UK PLC
250,000 6.80% due 12/01/06.......... 244,225
-------------
1,585,555
-------------
Total corporate notes......... $ 13,957,474
-------------
-------------
FOREIGN/YANKEE BONDS & NOTES -- 4.6%
FOREIGN GOVERNMENTS
Banco Nacional de Comercio
Exterior SNC
100,000 7.25% due 02/02/04.......... 93,188
KFW International Finance,
Inc.
250,000 7.00% due 03/01/13.......... 246,006
Province of Quebec
300,000 7.125% due 02/09/24......... 282,336
Republica de Argentina Par
Bonds
450,000 5.50% due 03/31/23.......... 312,180
The Russian Federation*
300,000 10.00% due 06/26/07......... 298,950
United Mexican States Discount
Bond
250,000 6.84% due 12/31/19.......... 232,500
-------------
Total foreign/yankee bonds &
notes....................... $ 1,465,160
-------------
-------------
COMMERICAL MORTGAGE BACKED SECURITIES -- 0.3%
Nationsbank Corp. Series
97-CTL1, Class A1
91,827 7.421% due 06/22/24......... $ 93,663
-------------
-------------
SUPRANATIONALS -- 1.5%
Inter-American Development
Bank
450,000 8.50% due 05/01/01.......... $ 479,493
-------------
-------------
ENHANCED EQUIPMENT TRUST CERTIFICATES -- 0.4%
Norwest Airlines Trust Series
2
93,846 11.30% due 06/21/14......... $ 115,115
-------------
-------------
SHORT-TERM SECURITIES -- 11.8%
REPURCHASE AGREEMENT
3,765,000 Interest in repurchase
agreement (U.S. Treasury
obligations), in a joint
trading account dated
06/30/97 due 07/01/97 with a
yield of 5.9% and maturity
amount of $3,765,617........ $ 3,765,000
-------------
-------------
DIVERSIFICATION OF ASSETS:
Total U.S. treasuries & Federal agencies
(cost $11,956,509)......................... 37.6% $ 11,997,963
Total corporate notes (cost $13,895,116)..... 43.8 13,957,474
Total foreign/yankee bonds & notes (cost
$1,426,164)................................ 4.6 1,465,160
Total commercial mortgage backed securities
(cost $93,653)............................. 0.3 93,663
Total supranationals (cost $475,683)......... 1.5 479,493
Total enhanced equipment trust certificates
(cost $115,429)............................ 0.4 115,115
Total short-term securities (cost
$3,765,000)................................ 11.8 3,765,000
------ ------------
Total investment (cost $31,727,553).......... 100.0% $ 31,873,868
------ ------------
------ ------------
</TABLE>
* Security exempt from registration under rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
3
<PAGE>
- --------------------------------------------------------------------------------
ITT HARTFORD ADVISERS FUND, INC.
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
-------- ------------
<C> <S> <C>
COMMON STOCKS -- 66.6%
AEROSPACE & DEFENSE -- 2.3%
21,000 Boeing Co..................... $ 1,114,313
8,500 United Technologies Corp...... 705,500
------------
1,819,813
------------
BUSINESS SERVICES -- 0.7%
10,200 Fluor Corp.................... 562,913
------------
COMMUNICATIONS EQUIPMENT --
2.7%
*10,000 Cisco Systems, Inc............ 671,250
12,000 Ericsson (L.M.) Telephone
ADR......................... 472,500
8,000 General Motors Class H........ 462,000
7,000 Lucent Technologies, Inc...... 504,438
------------
2,110,188
------------
COMPUTERS & OFFICE EQUIPMENT
-- 3.4%
*11,000 Adaptec, Inc.................. 382,250
*12,000 EMC Corp...................... 468,000
11,000 International Business
Machines Corp............... 992,063
10,500 Xerox Corp.................... 828,188
------------
2,670,501
------------
CONSUMER DURABLES -- .8%
*17,000 Hertz Corp. Class A........... 612,000
CONSUMER NON-DURABLES -- 4.3%
6,000 Colgate Palmolive Co.......... 391,500
8,500 Estee Lauder Co. Class A...... 427,125
6,500 Gillette Co................... 615,875
14,000 Kimberly-Clark Corp........... 696,500
8,500 NIKE, Inc. Class B............ 496,188
5,400 Proctor & Gamble Co........... 762,750
------------
3,389,938
------------
CONSUMER SERVICES -- 1.9%
21,500 McDonalds Corp................ 1,038,719
*19,500 Mirage Resorts, Inc........... 492,375
------------
1,531,094
------------
ELECTRONICS -- 4.6%
*15,000 Analog Devices................ 398,438
36,000 General Electric Co........... 2,353,500
6,600 Intel Corp.................... 935,963
------------
3,687,901
------------
ENERGY & SERVICES -- 5.6%
6,000 Amoco Corp.................... 521,625
8,500 Chevron Corp.................. 628,469
10,000 Exxon Corp.................... 615,000
20,000 Royal Dutch Petroleum Co...... 1,087,500
6,300 Schlumberger Ltd.............. 787,500
14,716 Union Pacific Resources Group,
Inc......................... 366,061
11,000 Unocal Corp................... 426,938
------------
4,433,093
------------
FINANCIAL SERVICES -- 11.6%
5,000 Ace Ltd....................... 369,375
12,000 Allstate Corp................. 876,000
13,000 American Express Co........... 968,500
4,000 American International Group,
Inc......................... 597,500
10,000 Associates First Capital
Corp........................ 555,000
10,000 Citicorp...................... 1,205,625
10,000 Federal National Mortgage
Association................. 436,250
7,500 First Bank System, Inc........ 640,313
<CAPTION>
MARKET
SHARES VALUE
-------- ------------
<C> <S> <C>
FINANCIAL SERVICES --
(CONTINUED)
9,000 Marsh & McLennan.............. $ 642,375
17,2000 Merrill Lynch & Co., Inc...... 1,025,550
12,000 Schwab (Charles) Corp......... 488,250
10,000 State Street Corp............. 462,500
16,000 Travelers Group, Inc.......... 1,009,000
------------
9,276,238
------------
FOOD, BEVERAGE & TOBACCO --
1.6%
13,000 Sara Lee Corp................. 541,125
3,200 Unilever N.V.................. 697,600
------------
1,238,725
------------
HEALTH CARE -- 10.1%
11,500 Abbott Laboratories........... 767,625
10,500 American Home Products
Corp........................ 803,250
7,000 Bristol-Myers Squibb Co....... 567,000
15,500 Columbia/HCA Healthcare
Corp........................ 609,344
11,000 Johnson & Johnson............. 708,125
8,500 Merck & Co., Inc.............. 879,750
6,500 Pfizer, Inc................... 776,750
15,500 Pharmacia & Upjohn, Inc....... 538,625
6,000 SmithKline Beecham PLC ADR.... 549,750
*10,000 Tenet Healthcare, Corp........ 295,625
9,800 United HealthCare Corp........ 509,600
*8,000 Vencor, Inc................... 338,000
6,000 Warner-Lambert Co............. 745,500
------------
8,088,944
------------
INDUSTRIAL MATERIALS -- 3.2%
9,000 Crown Cork and Seal, Inc...... 480,938
10,000 du Pont (E.I.) de Nemours &
Co.......................... 628,750
8,600 Phelps Dodge Corp............. 732,613
*20,000 Santa Fe International
Corp........................ 680,000
------------
2,522,301
------------
MANUFACTURING -- 1.3%
4,000 Caterpillar, Inc.............. 429,500
6,000 Minnesota Mining &
Manufacturing Co............ 612,000
------------
1,041,500
------------
MEDIA & SERVICES -- 2.3%
*8,000 Clear Channel
Communications.............. 492,000
11,000 Gannett Co., Inc.............. 1,086,250
11,300 Gaylord Entertainment Class
A........................... 260,606
------------
1,838,856
------------
RETAIL -- 4.9%
14,000 CVS Corp...................... 717,500
9,000 Home Depot, Inc............... 620,438
*14,500 Saks Holding, Inc............. 362,500
10,000 Sears Roebuck & Co............ 537,500
*14,000 Toys "R" Us, Inc.............. 490,000
34,000 Wal-Mart Stores, Inc.......... 1,149,625
------------
3,877,563
------------
SOFTWARE & SERVICES -- 2.5%
*6,500 Computer Sciences Corp........ 468,813
13,500 First Data Corp............... 593,156
*7,000 Microsoft Corp................ 884,625
------------
1,946,594
------------
TRANSPORTATION -- 1.4%
19,800 Southwest Airlines............ 512,325
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
4
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
-------- ------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
TRANSPORTATION -- (CONTINUED)
9,000 Union Pacific Corp............ $ 634,500
------------
1,146,825
------------
UTILITIES -- 1.4%
18,000 SBC Communications, Inc....... 1,113,750
------------
Total common stocks........... $ 52,908,737
------------
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------
<C> <S> <C>
U.S. TREASURIES & FEDERAL AGENCIES -- 30.9%
FEDERAL HOME LOAN MORTGAGE
ASSOCIATION -- 0.3%
$232,224 6.50% due 5/01/26........... $ 222,573
------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION -- 2.2%
223,058 6.50% due 04/15/26.......... 213,230
1,559,583 7.00% due 07/15/23 -
04/15/26.................... 1,537,033
------------
1,750,263
------------
U.S. TREASURY BONDS -- 3.8%
1,900,000 6.25% due 08/15/23.......... 1,758,095
1,200,000 7.25% due 05/15/16.......... 1,251,376
------------
3,009,471
------------
U.S. TREASURY NOTES -- 24.6%
300,000 5.125% due 04/30/98......... 298,500
4,200,000 5.75% due 08/15/03......... 4,055,625
2,250,000 5.875% due 10/31/98......... 2,247,188
2,000,000 6.25% due 05/31/00......... 2,001,241
2,550,000 6.375% due 08/15/02......... 2,548,406
2,900,000 6.50% due 10/15/06......... 2,887,313
5,200,000 7.50% due 02/15/05......... 5,502,250
------------
19,540,532
------------
Total U.S. Treasuries &
Federal agencies............ $ 24,522,830
------------
------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
-------- ------------
<C> <S> <C>
SHORT-TERM SECURITIES -- 2.5%
REPURCHASE AGREEMENT
$2,019,000 Interest in repurchase
agreement (U.S. Treasury
obligations), in a joint
trading account dated
6/30/97 due 7/01/97 with a
yield of 5.9427% and
maturity amount of
$2,019,333.................. $ 2,019,000
------------
------------
</TABLE>
<TABLE>
<S> <C> <C>
DIVERSIFICATION OF ASSETS:
Total common stocks (cost $44,206,766)....... 66.6% $52,908,737
Total U.S. Treasuries & Federal agencies
(cost $24,466,919)......................... 30.9 24,522,830
Total short-term securities (cost
$2,019,000)................................ 2.5 2,019,000
------ -----------
Total investment in securities
(Identified cost $70,692,685).............. 100.0% $79,450,567
------ -----------
------ -----------
* Non-income producing during the period
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
5
<PAGE>
- --------------------------------------------------------------------------------
ITT HARTFORD DIVIDEND AND GROWTH FUND, INC.
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
----------- -------------
<C> <S> <C>
COMMON STOCKS -- 93.5%
AEROSPACE & DEFENSE -- 2.0%
3,100 Northrop Grumman Corp......... $ 272,219
4,600 United Technologies Corp...... 381,800
-------------
654,019
-------------
BUSINESS SERVICES -- 0.5%
5,500 Browning Ferris Industries,
Inc......................... 182,875
-------------
COMPUTERS & OFFICE
EQUIPMENT -- 2.3%
9,600 Xerox Corp.................... 757,200
-------------
CONSUMER DURABLES -- 2.4%
4,100 Ford Motor Co................. 154,775
4,000 Genuine Parts Co.............. 135,500
5,500 Goodyear Tire & Rubber Co..... 348,219
5,800 ITT Industries, Inc........... 149,350
-------------
787,844
-------------
CONSUMER NON-DURABLES -- 4.3%
5,700 Avon Products................. 402,206
9,100 Colgate Palmolive Co.......... 593,775
8,700 Kimberly-Clark Corp........... 432,825
-------------
1,428,806
-------------
CONSUMER SERVICES -- 1.1%
4,800 Eastman Kodak................. 368,400
-------------
ELECTRONICS -- 5.0%
9,800 Amp, Inc. 409,150
19,400 General Electric Co........... 1,268,275
-------------
1,677,425
-------------
ENERGY & SERVICES -- 10.7%
7,700 Ashland, Inc.................. 357,088
11,500 Chevron Corp.................. 850,281
5,800 Exxon Corp.................... 356,700
7,700 Pennzoil Co................... 590,975
8,400 Phillips Petroleum............ 367,500
10,400 Royal Dutch Petroleum......... 565,500
16,700 USX-Marathon Group............ 482,213
-------------
3,570,257
-------------
FINANCIAL SERVICES -- 15.8%
7,800 Allstate Corp................. 569,400
7,300 American Express Co........... 543,850
11,500 Citicorp...................... 1,386,469
8,700 Compass Bancshares, Inc....... 292,538
13,600 First Bank System, Inc........ 1,161,100
4,200 First Union Corp.............. 388,500
6,000 Marsh & McLennan Cos., Inc.... 428,250
7,800 Pacific Century Financial
Corp........................ 360,750
3,200 Peoples Heritage Financial
Group....................... 121,200
2,600 Pinnacle West Capital Corp.... 78,163
-------------
5,330,220
-------------
FOOD, BEVERAGE & TOBACCO --
8.3%
29,250 Flowers Industries, Inc....... 491,766
7,500 General Mills Co.............. 488,438
8,500 Interstate Bakeries........... 504,156
12,000 McCormick & Co................ 303,000
22,100 Philip Morris Companies,
Inc......................... 980,688
-------------
2,768,048
-------------
<CAPTION>
SHARES MARKET
----------- VALUE
-------------
<C> <S> <C>
HEALTH CARE -- 12.4%
6,200 Abbott Laboratories........... $ 413,850
8,300 American Home Products
Corp........................ 634,950
7,500 Bard C.R., Inc................ 272,344
7,100 Bristol-Myers Squibb Co....... 575,100
6,500 Merck & Co., Inc.............. 672,750
20,700 Pharmacia & Upjohn, Inc....... 719,325
7,000 Warner-Lambert Co............. 869,750
-------------
4,158,069
-------------
INDUSTRIAL MATERIALS -- 5.1%
4,100 Calgon Carbon Corp............ 56,888
2,100 Crompton & Knowles Corp....... 46,725
200 Dow Chemical Co............... 17,425
5,600 du Pont E.I. de Nemours &
Co.......................... 352,100
2,400 Eastman Chemical Co........... 152,400
6,900 Geon Co....................... 139,725
2,100 Imperial Chemical ADR......... 119,438
8,900 International Paper Co........ 432,206
2,500 Nalco Chemical Co............. 96,563
5,800 Weyerhaeuser Co............... 301,600
-------------
1,715,070
-------------
MANUFACTURING -- 2.0%
4,800 Cooper Industries............. 238,800
3,100 Dane Corp..................... 117,800
3,000 Minnesota Mining &
Manufacturing Co............ 306,000
-------------
662,600
-------------
MEDIA & SERVICES -- 1.8%
1,400 Cognizant Corp................ 56,700
5,400 Gannett Co., Inc.............. 533,250
-------------
589,950
-------------
REAL ESTATE -- 0.9%
6,900 Liberty Property Trust........ 171,638
5,200 Nationwide Health Properties,
Inc......................... 114,400
-------------
286,038
-------------
RETAIL -- 3.0%
8,800 Mercantile Stores, Inc........ 553,850
8,100 Sears, Roebuck & Co........... 435,375
-------------
989,225
-------------
SOFTWARE & SERVICES -- 0.2%
800 Microsoft Corp. Class A....... 69,600
-------------
TRANSPORTATION -- 1.0%
4,600 Union Pacific Corp............ 324,300
-------------
UTILITIES -- 14.7%
4,700 Ameritech Corp................ 319,306
4,900 AT&T Corp..................... 171,806
12,100 BellSouth Corp................ 561,138
3,700 Cinergy Corp.................. 128,806
6,100 DGE, Inc...................... 172,325
4,900 DPL, Inc...................... 120,663
7,200 Duke Energy Corp.............. 345,150
5,000 Edison International.......... 124,375
6,200 GPU, Inc...................... 222,425
2,900 Illinova Corp................. 63,800
2,200 MCN Energy Group, Inc......... 67,375
4,100 NE Electric System............ 151,700
6,100 NIPSCO Industries, Inc........ 252,006
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
6
<PAGE>
<TABLE>
<CAPTION>
SHARES MARKET
----------- VALUE
-------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
UTILITIES -- (CONTINUED)
4,500 NYNEX Corp.................... $ 259,313
4,700 Pacific Enterprises........... 158,038
1,500 Powergen PLC ADR.............. 72,750
4,900 Public Service Co. of
Colorado.................... 203,350
8,100 SBC Communications, Inc....... 501,188
3,200 Scana Corp.................... 79,400
5,500 Sprint Corp................... 289,438
5,600 Texas Utilities Co............ 192,850
11,300 The Southern Co............... 247,180
6,900 U.S. West Communications
Group....................... 260,044
-------------
4,964,434
-------------
Total common stocks........... $ 31,284,372
-------------
-------------
CONVERTIBLE PREFERRED STOCKS -- 2.7%
ENERGY & SERVICES -- 0.9%
10,000 Sun Company Pfd............... 303,750
-------------
INDUSTRIAL MATERIALS -- 0.9%
5,300 Unocal Capital Trust.......... 303,425
-------------
MEDIA & SERVICES -- 0.9%
5,400 American Radio................ 302,400
-------------
Total convertible preferred
stocks...................... $ 909,575
-------------
-------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- -------------
<C> <S> <C>
PREFERRED STOCKS -- 1.1%
AEROSPACE & DEFENSE -- 1.1%
$ 7,600 Loral Space & Communications
Ltd......................... $ 378,100
-------------
-------------
SHORT-TERM SECURITIES -- 2.7%
REPURCHASE AGREEMENT
907,000 Interest in repurchase
agreement (U.S. Treasury
obligations), in a joint
trading account dated
06/30/97 due 07/01/97 with a
yield of 5.9427% and
maturity amount of
$907,150.................... $ 907,000
-------------
-------------
</TABLE>
<TABLE>
<S> <C> <C>
DIVERSIFICATION OF ASSETS:
Total common stocks (cost $27,833,714)....... 93.5% $31,284,372
Total convertible preferred stocks (cost
$859,516).................................. 2.7 909,575
Total preferred stocks (cost $401,825)....... 1.1 378,100
Total short-term securities (cost
$907,000).................................. 2.7 907,000
-------- -----------
Total investments (cost $30,002,055)......... 100.0% $33,479,047
-------- -----------
-------- -----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
7
<PAGE>
- --------------------------------------------------------------------------------
ITT HARTFORD STOCK FUND, INC.
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
----------- ---------------
<C> <S> <C>
COMMON STOCKS -- 94.4%
AEROSPACE & DEFENSE -- 3.4%
12,000 Boeing Co..................... $ 636,750
4,500 United Technologies Corp...... 373,500
---------------
1,010,250
---------------
BUSINESS SERVICES -- 0.9%
5,200 Fluor Corp.................... 275,938
---------------
COMMUNICATIONS EQUIPMENT --
3.2%
*4,700 Cisco Systems, Inc............ 315,488
6,000 Ericsson (L.M.) Telephone
ADR......................... 236,250
4,000 General Motors Class H........ 231,000
2,500 Lucent Technologies........... 180,156
---------------
962,894
---------------
COMPUTERS & OFFICE EQUIPMENT
-- 4.7%
*5,000 Adaptec, Inc.................. 173,750
*6,000 EMC Corp...................... 234,000
6,000 International Business
Machines Corp............... 541,125
5,800 Xerox Corp.................... 457,475
---------------
1,406,350
---------------
CONSUMER DURABLES -- 1.2%
*10,000 Hertz Corp. Class A........... 360,000
---------------
CONSUMER NON-DURABLES -- 5.4%
2,800 Colgate Palmolive Co.......... 182,700
3,600 Estee Lauder Co. Class A...... 180,900
3,000 Gillette Co................... 284,250
8,000 Kimberly-Clark Corp........... 398,000
5,000 NIKE, Inc. Class B............ 291,875
2,000 Proctor & Gamble Co........... 282,500
---------------
1,620,225
---------------
CONSUMER SERVICES -- 0.9%
*11,000 Mirage Resorts, Inc........... 277,750
---------------
ELECTRONICS -- 6.7%
*7,000 Analog Devices................ 185,938
20,000 General Electric Co........... 1,307,500
3,500 Intel Corp.................... 496,344
---------------
1,989,782
---------------
ENERGY & SERVICES -- 7.9%
3,200 Amoco Corp.................... 278,200
4,300 Chevron Corp.................. 317,931
4,800 Exxon Corp.................... 295,200
11,200 Royal Dutch Petroleum Co...... 609,000
3,500 Schlumberger Ltd.............. 437,500
7,000 Union Pacific Resources Group,
Inc......................... 174,125
6,000 Unocal Corp................... 232,875
---------------
2,344,831
---------------
FINANCIAL SERVICES -- 16.6%
2,000 Ace Ltd....................... 147,750
8,000 Allstate Corp................. 584,000
7,000 American Express Co........... 521,500
2,000 American International Group,
Inc......................... 298,750
5,000 Associates First Capital
Corp........................ 277,500
5,500 Citicorp...................... 663,094
5,000 Federal National Mortgage
Association................. 218,125
4,000 First Bank System, Inc........ 341,500
5,000 Marsh & McLennan Cos., Inc.... 356,875
8,000 Merrill Lynch & Co., Inc...... 477,000
<CAPTION>
SHARES MARKET
----------- VALUE
---------------
<C> <S> <C>
FINANCIAL SERVICES --
(CONTINUED)
6,000 Schwab (Charles) Corp......... $ 244,125
6,000 State Street Corp............. 277,500
8,566 Travelers Group, Inc.......... 540,193
---------------
4,947,912
---------------
FOOD, BEVERAGE & TOBACCO --
2.4%
7,000 Sara Lee Corp................. 291,375
2,000 Unilever N.V. New York
Shares...................... 436,000
---------------
727,375
---------------
HEALTH CARE -- 14.5%
7,000 Abbott Laboratories........... 467,250
6,000 American Home Products
Corp........................ 459,000
3,500 Bristol-Myers Squibb Co....... 283,500
9,000 Columbia/HCA Healthcare
Corp........................ 353,813
6,000 Johnson & Johnson............. 386,250
5,000 Merck & Co., Inc.............. 517,500
4,000 Pfizer, Inc................... 478,000
9,000 Pharmacia & Upjohn, Inc....... 312,750
3,000 SmithKline Beecham PLC ADR.... 274,875
*6,000 Tenet Healthcare, Corp........ 177,375
5,000 United HealthCare Corp........ 260,000
*2,000 Vencor, Inc................... 84,500
2,100 Warner-Lambert Co............. 260,925
---------------
4,315,738
---------------
INDUSTRIAL MATERIALS -- 4.6%
4,500 Crown Cork & Seal, Inc........ 240,469
6,000 du Pont (E.I.) de Nemours &
Co.......................... 377,250
4,000 Phelps Dodge Corp............. 340,750
*12,000 Santa Fe International
Corp........................ 408,000
---------------
1,366,469
---------------
MANUFACTURING -- 1.6%
1,500 Caterpillar, Inc.............. 161,063
3,000 Minnesota Mining &
Manufacturing Co............ 306,000
---------------
467,063
---------------
MEDIA & SERVICES -- 3.1%
*4,000 Clear Channel
Communications.............. 246,000
6,000 Gannett Co., Inc.............. 592,500
3,000 Gaylord Entertainment Class
A........................... 69,188
---------------
907,688
---------------
RETAIL -- 9.5%
7,500 CVS Corp...................... 384,375
5,000 Home Depot, Inc............... 344,688
12,000 McDonalds Corp................ 579,750
*9,000 Saks Holding, Inc............. 225,000
6,000 Sears Roebuck & Co............ 322,500
*8,000 Toys "R" Us, Inc.............. 280,000
20,000 Wal-Mart Stores, Inc.......... 676,250
---------------
2,812,563
---------------
SOFTWARE & SERVICES -- 3.5%
*3,000 Computer Sciences Corp........ 216,375
7,000 First Data Corp............... 307,563
*4,000 Microsoft Corp................ 505,500
---------------
1,029,438
---------------
TRANSPORTATION -- 2.2%
11,000 Southwest Airlines Co......... 284,621
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
8
<PAGE>
<TABLE>
<CAPTION>
SHARES MARKET
----------- VALUE
---------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
TRANSPORTATION -- (CONTINUED)
5,200 Union Pacific Corp............ $ 366,600
---------------
651,251
---------------
UTILITIES -- 2.1%
10,000 SBC Communications, Inc....... 618,750
---------------
Total common stocks........... $ 28,092,237
---------------
---------------
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<C> <S> <C>
SHORT-TERM SECURITIES -- 5.6%
REPURCHASE AGREEMENT
$ 1,660,000 Interest in repurchase
agreement (U.S. Treasury
obligations), in a joint
trading account dated
06/30/97 due 07/01/97 with a
yield of 5.9427% and
maturity amount of
$1,660,274.................. $ 1,660,000
---------------
---------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
VALUE
-----------
<S> <C> <C>
DIVERSIFICATION OF ASSETS:
Total common stocks (cost $24,188,882)....... 94.4% $28,092,241
Total short-term securities (cost
$1,660,000)................................ 5.6 1,660,000
------ -----------
Total investment in securities
(Identified cost $25,848,882).............. 100.0% $29,752,237
------ -----------
------ -----------
</TABLE>
* Non-income producing for the period.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
9
<PAGE>
- --------------------------------------------------------------------------------
ITT HARTFORD CAPITAL APPRECIATION FUND, INC.
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
---------- ------------
<C> <S> <C>
COMMON STOCKS -- 97.8%
BUSINESS SERVICES -- 2.9%
*5,000 Cort Business Service Corp............... $ 147,500
*50,000 Euronet Service Inc...................... 553,125
*50,500 U.S. Office Products Co.................. 1,543,406
------------
2,244,031
------------
COMMUNICATIONS EQUIPMENT -- 7.9%
*65,000 Elsag Bailey Process Automation N.V...... 1,194,375
*20,000 Gilat Satellite Network.................. 665,000
*95,000 Mosaix Inc............................... 1,294,375
*41,200 Oak Industries, Inc...................... 1,184,500
*13,000 RF Micron Devices Inc.................... 248,625
60,000 Scitex Corp. ORD......................... 528,750
*20,800 3 Com Corp............................... 936,000
------------
6,051,625
------------
COMPUTERS & OFFICE EQUIPMENT -- 4.6%
28,400 Cerner Corp.............................. 596,400
*66,000 Creative Technologies.................... 1,122,000
*46,000 EMC Corp................................. 1,794,000
------------
3,512,400
------------
CONSUMER DURABLES -- 2.4%
*76,700 Ugly Duckling Corp....................... 1,188,850
*34,000 United Auto Group Inc.................... 673,625
------------
1,862,475
------------
CONSUMER NON-DURABLES -- 1.5%
*110,000 Carson Inc............................... 1,182,500
------------
CONSUMER SERVICES -- 4.9%
*40,000 Cheesecake Factory....................... 840,000
57,000 International Game Technology............ 1,011,750
*20,000 Mirage Resorts, Inc...................... 505,000
*56,700 WMS Industries Inc....................... 1,421,044
------------
3,777,794
------------
ELECTRONICS -- 13.6%
*60,000 Cable Design Technologies................ 1,766,250
*182,000 Clare Corp............................... 2,866,500
*40,800 DSP Communication Inc.................... 448,800
*65,000 Genrad Inc............................... 1,470,625
32,000 Philips N.V. ADR......................... 2,300,000
*20,000 Rambus Inc............................... 930,000
*21,000 Vishay Intertechnology................... 607,688
------------
10,389,863
------------
ENERGY & SERVICES -- 4.1%
*250,000 Arakis Energy Corp....................... 945,313
*240,000 Hurricane Hydrocarbons................... 869,844
18,000 Transocean Offshore...................... 1,307,250
------------
3,122,407
------------
FINANCIAL SERVICES -- 13.4%
1 Aegon N.V................................ 36
*80,600 Firstplus Financial Group................ 2,740,400
12,000 Legg Mason Inc........................... 645,750
32,000 MMI Companies, Inc....................... 836,000
45,000 NAC Re Corp.............................. 2,176,875
*40,000 Providian Financial Corp................. 1,285,000
24,000 The Money Store.......................... 688,500
<CAPTION>
SHARES MARKET
---------- VALUE
------------
<C> <S> <C>
FINANCIAL SERVICES -- (CONTINUED)
*35,000 Unibanco GDR............................. $ 1,299,375
23,500 United Cos. Financial Corp............... 663,875
------------
10,335,811
------------
FOOD, BEVERAGE & TOBACCO -- 0.1%
2,700 Dreyers Grand Ice Cream Inc.............. 106,650
------------
FOREIGN SECURITIES -- 2.4%
320,000 Corporation Geo S.A. B................... 1,831,799
------------
HEALTH CARE -- 7.2%
*60,000 Genzyme Corp............................. 1,665,000
*16,300 Idexx Laboratories....................... 202,731
*900 IDX Systems Corp......................... 31,050
*50,000 Multicare Cos............................ 1,368,750
*60,000 Perrigo.................................. 750,000
*250,000 PerSeptive Biosystems Inc................ 1,531,250
------------
5,548,781
------------
INDUSTRIAL MATERIALS -- 4.0%
3,500 Giant Industries Inc..................... 553,438
15,000 Phelps Dodge Corp........................ 1,277,813
*40,000 Titanium Metals Corp..................... 1,265,000
------------
3,096,251
------------
MANUFACTURING -- 4.3%
*47,300 Ballantyne of Omaha...................... 851,400
*60,000 Covance Inc.............................. 1,158,750
50,000 Stewart & Stevenson...................... 1,300,000
------------
3,310,150
------------
MEDIA & SERVICES -- 2.7%
*50,000 Alternative Resources Corp............... 1,018,750
*28,000 Outdoor Systems Inc...................... 1,071,000
------------
2,089,750
------------
RETAIL -- 7.5%
45,000 CUC International........................ 1,161,563
*70,000 Gadzooks Inc............................. 1,365,000
*70,000 OfficeMax Inc............................ 1,010,625
*50,000 Saks Holding, Inc........................ 1,250,000
*50,000 Viking Office Products Inc............... 950,000
------------
5,737,188
------------
SOFTWARE & SERVICES -- 10.2%
*55,700 Avant Corp............................... 1,799,806
*32,050 Cadence Design Systems Inc............... 1,073,675
*45,000 Metacreations Corp....................... 495,000
*25,200 Parametric Tech Corp..................... 1,072,575
*45,000 Platinum Technology Inc.................. 596,250
*45,000 Rational Software Corp................... 756,560
*100,000 Simulation Services Inc.................. 1,525,000
*30,000 Smallworldwide PLC ADR................... 510,000
------------
7,828,866
------------
TRANSPORTATION -- 1.9%
*65,000 Hvide Marine Inc. Class A................ 1,438,125
------------
UTILITIES -- 2.2%
*10,000 ACC Corp................................. 308,750
*70,000 Calpine Corp............................. 1,330,000
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
10
<PAGE>
<TABLE>
<CAPTION>
SHARES MARKET
---------- VALUE
------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
UTILITIES -- (CONTINUED)
*2,000 Worldcom Inc............................. $ 64,000
------------
1,702,750
------------
Total common stocks...................... $ 75,169,216
------------
------------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
SHORT-TERM SECURITIES -- 2.2%
REPURCHASE AGREEMENT
$1,720,000 Interest in repurchase agreement (U.S.
Treasury obligations), in a joint
trading account dated 06/30/97 due
07/01/97 with a yield of 5.9427% and
maturity amount of $1,720,284.......... 1,720,000
------------
------------
<CAPTION>
MARKET
VALUE
------------
<C> <S> <C>
DIVERSIFICATION OF ASSETS:
Total common stocks (cost $64,393,327)..... 97.8 % $75,169,216
Total short-term securities (cost
$1,720,000).............................. 2.2 1,720,000
------ -----------
Total investment in securities
(Identified cost $66,113,327)............ 100.0 % $76,889,216
------ -----------
------ -----------
* Non-income producing during the period
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
11
<PAGE>
- --------------------------------------------------------------------------------
ITT HARTFORD SMALL COMPANY FUND, INC.
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
---------- ------------
<C> <S> <C>
COMMON STOCKS -- 78.4%
AEROSPACE & DEFENSE -- 2.0%
*4,800 Gulfstream Aerospace Corp.......... $ 141,600
2,300 Precision Castparts Corp........... 137,138
------------
278,738
------------
BUSINESS SERVICES -- 4.0%
*2,400 American Residential Services...... 55,800
*4,400 Borg-Warner Security Corp.......... 78,650
*2,800 Ingram Micro Inc. Class A.......... 67,550
*3,200 Services Experts Inc............... 78,400
*3,460 Tetra Technologies, Inc............ 85,635
*6,900 U.S. Office Products Co............ 210,881
------------
576,916
------------
COMMUNICATIONS EQUIPMENT -- 4.6%
*5,670 Gilat Satellite Networks Ltd....... 188,528
*4,400 Natural Microsystems Corp.......... 158,400
*3,800 Oak Industries, Inc................ 109,250
*15,990 Transwitch Corp.................... 135,915
*4,860 Videoserver, Inc................... 64,395
------------
656,488
------------
CONSUMER SERVICES -- 2.9%
3,100 Callaway Golf Co................... 110,050
*7,190 Golden Bear Golf, Inc.............. 85,381
*7,600 Prime Hospitality Corp............. 150,100
*3,000 WMS Industries Inc................. 75,188
------------
420,719
------------
ENERGY & SERVICES -- 1.9%
*3,000 Falcon Drilling Co., Inc........... 172,875
*5,200 Input Output Inc................... 94,250
------------
267,125
------------
FINANCIAL SERVICES -- 19.5%
3,730 Compass Bancshares Inc............. 125,421
3,160 Cullen/Frost Bankers Inc........... 133,905
2,700 Finova Group, Inc.................. 206,550
*7,100 Firstplus Financial Group.......... 241,400
3,500 Frontier Insurance Group........... 226,625
*4,000 Hamilton Bancorp Inc............... 107,000
*6,390 Investment Technology Group........ 171,731
*8,000 ITLA Capital Corp.................. 130,000
1,200 Jefferies Group Inc................ 68,400
3,600 Legg Mason, Inc.................... 193,725
2,640 MMI Companies, Inc................. 68,970
2,400 Morgan Keegan...................... 47,700
5,330 Peoples Heritage Financial Group... 201,874
3,700 Piper Jaffray Cos.................. 75,850
*2,800 Prepaid Legal Services, Inc........ 59,150
4,100 Raymond James Financial Inc........ 112,238
3,070 Reinsurance Group of America....... 176,525
8,490 Resource Bancshares Mortgage
Group............................ 167,678
*5,000 Unibanco GDR....................... 185,625
2,520 Wilmington Trust Corp.............. 115,290
------------
2,815,657
------------
FOOD, BEVERAGE & TOBACCO -- 2.3%
*3,100 Consolidated Cigar Holdings Inc.... 86,025
*4,200 General Cigar Holdings Inc......... 123,638
*2,670 Robert Mondavi Corp. Class B....... 126,158
------------
335,821
------------
<CAPTION>
SHARES MARKET
---------- VALUE
------------
<C> <S> <C>
HEALTH CARE -- 9.5%
*2,600 Genesis Health Ventures, Inc....... $ 87,750
*3,490 IDX Systems Corp................... 120,405
*5,930 Magainin Pharmaceuticals, Inc...... 42,993
*6,100 Magellan Health Services, Inc...... 179,950
4,600 McKesson Corp...................... 356,500
*4,700 Medpartners, Inc................... 101,638
*5,500 Multicare Cos...................... 150,563
*6,560 NABI, Inc.......................... 43,460
*2,300 PerSeptive Biosystems Inc.......... 14,088
*6,050 Vencor, Inc........................ 255,613
------------
1,352,960
------------
INDUSTRIAL MATERIALS -- 2.4%
*6,000 Noble Drilling Corp................ 135,375
3,100 Pittston Burlington Group.......... 87,188
*2,500 UCAR International Inc............. 114,375
------------
336,938
------------
MANUFACTURING -- 2.4%
*8,200 Ballantyne of Omaha................ 147,600
*2,000 Doncasters PLC ADR................. 46,250
5,390 Memtec Ltd. ADR.................... 145,530
------------
339,380
------------
MEDIA & SERVICES -- 2.9%
3,500 McClatchy Newspapers Class A....... 102,813
*6,590 Pegasus Communications Corp........ 73,314
*10,000 Playboy Enterprises Class B........ 115,625
*7,680 Western Wireless Corp. Class A..... 121,920
------------
413,672
------------
RETAIL -- 4.2%
*7,000 Gadzooks Inc....................... 136,500
*7,500 Golden Books Family
Entertainment.................... 93,750
*2,380 Hot Topic Inc...................... 53,550
*8,700 Saks Holding Inc................... 217,500
*7,280 Urban Outfitters Inc............... 101,920
------------
603,220
------------
SOFTWARE & SERVICES -- 10.7%
*3,520 Bisys Group, Inc................... 146,960
*5,430 Boole & Babbage, Inc............... 115,388
*3,400 Cadence Design Systems Inc......... 113,900
*12,700 Cayenne Software Inc............... 42,069
*3,250 Ceridian Corp...................... 137,313
*4,700 DST Systems Inc.................... 156,569
*4,430 IKOS Systems Inc................... 94,691
*5,790 Mercury Interactive Corp........... 86,126
*9,570 Optika Imaging Systems............. 47,850
*4,650 Plantinum Technology Inc........... 61,613
*2,800 Policy Management Systems Co....... 131,600
*6,720 Premenos Technology Corp........... 57,120
*7,230 Rational Software Corp............. 121,554
*4,500 Simulation Services Inc............ 68,625
*4,810 Sterling Software, Inc............. 150,313
------------
1,531,691
------------
TRANSPORTATION -- 5.7%
5,680 Air Express International Corp..... 225,780
*4,600 Budget Group Inc................... 158,700
*8,700 M.S. Carriers...................... 218,588
*3,660 Swift Transportation............... 107,970
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
12
<PAGE>
<TABLE>
<CAPTION>
SHARES MARKET
---------- VALUE
------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
TRANSPORTATION -- (CONTINUED)
5,000 Werner Enteprises Inc.............. $ 96,875
------------
807,913
------------
UTILITIES -- 3.4%
*12,000 Calpine Corp....................... 228,000
*4,590 McLeod, Inc. Class A............... 154,913
*29,500 Peoples Telephone Co., Inc......... 101,406
------------
484,319
------------
Total common stocks................ $ 11,221,557
------------
------------
CONVERTIBLE BONDS -- 1.2%
HEATH CARE
Sunrise Assited Living
150,000 5.50% due 06/15/02............... $ 166,875
------------
------------
PREFERRED STOCK -- 0.8%
CONSUMER SERVICES
3,400 AMC Entertainment, Inc............. $ 107,950
------------
------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<C> <S> <C>
SHORT-TERM SECURITIES -- 19.6%
REPURCHASE AGREEMENT -- 19.4%
$2,766,000 Interest in repurchase agreement
(U.S. Treasury obligations), in a
joint trading account dated
06/30/97 due 07/01/97 with a
yield of 5.9427% and maturity
amount of $2,766,457............. $ 2,766,000
------------
U.S. TREASURY BILL -- 0.2%
U.S. Treasury Bill
30,000 5.836% due 05/28/98.............. 28,470
------------
Total short-term securities........ $ 2,794,470
------------
------------
</TABLE>
<TABLE>
<S> <C> <C>
DIVERSIFICATION OF ASSETS:
Total common stocks (cost $9,731,881)........ 78.4% $ 11,221,557
Total convertible bonds (cost $150,008)...... 1.2 166,875
Total preferred stock (cost $113,991)........ 0.8 107,950
Total short-term securities (cost
$2,794,470)................................ 19.6 2,794,470
------ ------------
Total investment (cost $12,790,350).......... 100.0% $ 14,290,852
------ ------------
------ ------------
* Non-income producing during the period.
</TABLE>
FUTURES CONTRACTS -- NOTE 2
The Fund had 6 Russell 2000 Stock Index futures contracts open at June 30, 1997.
The contracts had a market value of $1,196,700 at June 30, 1997.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
13
<PAGE>
- --------------------------------------------------------------------------------
ITT HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC.
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
---------- ------------
<C> <S> <C>
COMMON STOCKS -- 83.8%
ARGENTINA -- 0.4%
8,000 Banco de Galicia y Buenos
Aires SA de C.V............. $ 53,206
------------
AUSTRALIA -- 3.5%
7,500 Amcor Ltd..................... 49,444
23,666 Boral Ltd..................... 73,931
8,772 Broken Hill Proprietary Co.
Ltd......................... 128,033
*62,000 Crown Ltd..................... 98,932
52,501 Goodman Fielder Ltd........... 76,695
16,000 Pioneer International Ltd..... 61,370
------------
488,405
------------
AUSTRIA -- 0.6%
610 OMV AG........................ 78,154
------------
BELGIUM -- 0.9%
*1,125 Credit Communal Holding....... 120,949
------------
BRAZIL -- 1.2%
1,000 Aracruz Celulose SPA.......... 20,375
700 Centrais Electricas
Brasileiras SA.............. 19,572
400 Companhia Energeitca de Minas
Gerias SA................... 20,138
179,000 Petroleo Brasileiro........... 49,050
458,000 Telecomunic Brasileiras....... 61,986
------------
171,121
------------
CANADA -- 2.0%
1,300 Alcan Aluminium Ltd........... 44,855
1,900 Canadian Imperial Bank of
Commerce.................... 47,860
5,400 Canadian Pacific Ltd.......... 153,563
2,500 Canwest Global Communication
Corp........................ 37,031
------------
283,309
------------
CHILE -- 0.7%
600 Embotelladora Andina ADR Class
A........................... 12,863
1,200 Embotelladora Andina ADR Class
B........................... 25,050
1,650 Enersis SA ADR................ 58,678
------------
96,591
------------
DENMARK -- 2.1%
2,350 TeleDanmark B ADR............. 61,394
4,200 Unidanmark A Registered....... 236,264
------------
297,658
------------
FINLAND -- 1.2%
4,600 Kesko......................... 64,825
7,000 Metsa-Serla Oy B.............. 57,005
1,900 Rauma Oy...................... 43,529
------------
165,359
------------
FRANCE -- 7.7%
3,290 Assurances Generales de
France...................... 105,241
3,700 Banque Nationale de Paris..... 152,640
2,800 Credit Commercial de France... 118,754
1,825 Havas SA...................... 131,646
730 Peugeot SA.................... 70,626
3,450 Remy Cointreau................ 82,916
3,251 Rhone-Poulenc................. 132,899
1,412 Societe Generale.............. 157,772
500 Societe Nationale Elf
Acquitaine.................. 53,995
680 Total SA...................... 68,800
------------
1,075,289
------------
<CAPTION>
SHARES MARKET
---------- VALUE
------------
<C> <S> <C>
GERMANY -- 4.2%
2,700 Bayer AG...................... $ 104,124
750 Degussa AG.................... 39,684
3,700 Deutsche Lufthansa AG......... 71,238
1,120 Hornbach Holding Pref
(Non-voting)................ 93,519
390 Karstadt AG................... 141,002
100 Mannesmann AG................. 44,705
*4,350 Metallgesellschaft AG......... 89,994
------------
584,266
------------
HONG KONG -- 2.3%
8,000 Hutchison Whampoa Ltd......... 69,186
24,000 Hysan Development Co. Ltd..... 70,786
3,000 New World Development Co.
Ltd......................... 17,890
2,000 Sun Hung Kai Properties....... 24,073
12,000 Swire Pacific Ltd............. 108,038
138,000 Tingyi Holding Corp........... 34,379
------------
324,352
------------
INDIA -- 0.1%
800 State Bank of India GDR....... 20,900
------------
INDONESIA -- 1.1%
*38,000 Bank Negara Indonesa BNI...... 24,224
2,500 Indosat ADR................... 74,844
43,000 Kalbe Farma - Foreign
Registered.................. 57,475
------------
156,543
------------
IRELAND -- 1.3%
62,600 Jefferson Smurfit Group....... 182,324
------------
ITALY -- 3.3%
10,500 Arnoldo Mondadori Editore
S.p.A....................... 60,599
50,000 Fiat S.p.A.................... 179,841
11,800 Istituto Banco San Paolo di
Torino...................... 85,925
18,600 Stet S.p.A.................... 108,222
7,000 Telecom Italia S.p.A.......... 20,940
------------
455,527
------------
JAPAN -- 20.9%
10,000 Aisin Seiki Co. Ltd........... 152,932
4,000 Asahi Organic Chemicals
Industry Co. Ltd............ 20,729
2,000 Dai Nippon Printing Co........ 45,268
3,000 Daibiru Corp.................. 36,179
6,000 Eisai Co. Ltd................. 113,781
3,000 Exedy Corp.................... 38,277
4,000 Fuji Machine Manufacturing
Co.......................... 145,067
2,000 Fukuda Denshi................. 41,073
5,000 Hitachi Ltd................... 55,929
1,000 Japan Associated Finance...... 78,651
15,000 JGC Corp...................... 103,557
2,000 Kyudenko Corp................. 16,884
3,000 Mabuchi Motor Co.............. 174,342
5,000 Maruichi Steel Tube........... 83,020
2,300 Matsumotokiyoshi.............. 97,684
6,000 Matsushita Electric Industrial
Co.......................... 121,122
*35,000 Mazda Motor Corp.............. 122,346
1,000 Meiwa Estate Co. Ltd.......... 21,847
6,000 Mitsubishi Heavy Industries... 46,089
3,000 Murata Manufacturing Co....... 119,549
4,000 NAMCO Ltd..................... 154,505
11,000 NGK Spark Plug................ 120,161
9,000 Nikko Securities Co. Ltd...... 55,449
11,000 Nippon Express Co............. 87,958
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
14
<PAGE>
<TABLE>
<CAPTION>
SHARES MARKET
---------- VALUE
------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
JAPAN -- (CONTINUED)
120 Nippon Television Network
Corp........................ $ 48,239
4,000 Okumura....................... 21,218
2,000 Royal Ltd..................... 42,122
17,000 Sakura Bank Ltd............... 130,438
5,000 Sanwa Bank Ltd................ 74,281
400 Sawako Corp................... 7,271
2,000 Shimachu...................... 60,124
3,000 Sony Musci Entertainment
(Japan) Inc................. 140,785
2,000 Square Co. Ltd................ 98,750
14,000 Sumitomo Rubber Industries.... 94,328
1,500 Tokyo Steel Manufacturing..... 16,779
13,000 Toyo Ink Manfacturing Co.
Ltd......................... 52,032
9,000 Yamato Kogyo Co. Ltd.......... 88,875
------------
2,927,641
------------
LUXEMBOURG -- 0.5%
4,650 Quilmes Industrial ADR........ 54,056
500 Ranbaxy Laboratories Ltd.
GDR......................... 11,750
------------
65,806
------------
MALAYSIA -- 1.3%
*176 Bumi Amada Berhad............. 258
29,000 Land & General Holdings
Berhad...................... 33,320
11,000 Renong Berhad................. 14,382
11,000 Resort World Berhad........... 33,122
25,000 Sime Darby Berhad............. 83,201
8,000 Sungei Way Holdings Berhad.... 15,087
------------
179,370
------------
MEXICO -- 3.0%
9,900 Cemex SA - CPO................ 42,441
2,600 Cemex SA De C.V............... 11,130
*8,000 Corporation Geo SA De C.V.
Series B.................... 45,795
7,500 FEMSA SA Series B............. 44,730
71,000 Grupo Financiero Bancomer
Series B.................... 34,377
4,400 Grupo Televisa SA Series
CPO......................... 66,796
24,000 Kimberly-Clark De Mexico SA De
C.V......................... 95,322
2,400 Panamerican Beverages Inc..... 78,900
------------
419,491
------------
NETHERLANDS -- 2.8%
720 Akzo Nobel NV................. 98,851
3,300 Ing Groep NV.................. 153,811
2,500 Polygram NV................... 131,423
------------
384,085
------------
NEW ZEALAND -- 0.8%
7,964 Air New Zealand Ltd. B........ 24,288
28,000 Brierley Investments Ltd...... 27,326
21,000 Carter Holt Harvey Ltd........ 54,225
------------
105,839
------------
NORWAY -- 1.4%
8,200 Nycomed ASA Series A.......... 120,970
3,750 Saga Petroleum ASA Series A... 71,201
------------
192,171
------------
PERU -- 0.4%
3,100 Compania de Minas Buenaventura
SA Series B................. 61,031
------------
PHILIPPINES -- 0.4%
550 Philippine Long Distance
ADR......................... 35,338
<CAPTION>
SHARES MARKET
---------- VALUE
------------
<C> <S> <C>
PHILIPPINES -- (CONTINUED)
37,000 Pilipino Telephone............ $ 18,587
------------
53,925
------------
SINGAPORE -- 1.9%
7,000 Development Bank of
Singapore................... 88,121
11,500 Keppel Corp................... 51,072
8,000 Keppel Fels Ltd............... 27,080
20,000 Keppel Land Ltd............... 53,152
4,000 United Overseas Bank Ltd...... 41,123
------------
260,548
------------
SPAIN -- 0.3%
300 Empresa Nacional de
Electricidad SA............. 25,233
500 Telefonica De Espana SA....... 14,483
------------
39,716
------------
SWEDEN -- 2.6%
5,254 Norobanken AB................. 176,665
4,860 Pharmacia & Upjohn, Inc.
SDR......................... 164,045
1,240 Sparbanken Sverige AB,
Swedbank.................... 27,583
------------
368,293
------------
SWITZERLAND -- 1.3%
*10 Ciba Specialty Chemicals AG... 926
47 Nestle SA..................... 62,093
*35 Sairgroup..................... 39,277
100 Sulzer AG - Registered........ 85,743
------------
188,039
------------
THAILAND -- 0.4%
11,000 Land & House Co., Ltd......... 22,930
3,300 Siam City Cement Public Co.,
Ltd......................... 10,318
5,500 Siam Commercial............... 22,505
------------
55,753
------------
UNITED KINGDOM -- 13.2%
3,580 Allied Irish Banks PLC........ 27,378
800 Amersham International PLC.... 21,236
18,350 Associated British Foods...... 158,349
3,200 Bank of Ireland............... 35,230
7,000 Bank of Scotland.............. 44,736
6,900 Bass PLC...................... 84,175
6,625 Boc Group PLC................. 115,222
9,000 Boots Company PLC............. 105,375
10,000 British Gas PLC............... 124,323
5,000 British Telecom Co. PLC....... 37,114
24,000 BTR........................... 82,083
6,300 Burmah Castrol PLC............ 106,686
11,600 Carlton Communications PLC.... 97,977
*75,000 Centrica PLC.................. 91,433
28,765 Cookson Group PLC............. 101,253
8,075 De la Rue PLC................. 49,591
17,000 Guinness PLC.................. 166,363
10,720 National Grid Group PLC....... 39,162
6,051 Powergen PLC.................. 72,005
16,730 Rank Group PLC................ 105,945
4,722 Reckitt & Colman PLC.......... 70,376
4,538 Royal & Sun Alliance
Insurance................... 33,458
14,120 Sainsbury (J) PLC............. 85,657
------------
1,855,127
------------
Total common stocks........... $ 11,710,788
------------
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
15
<PAGE>
- --------------------------------------------------------------------------------
ITT HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES MARKET
---------- VALUE
------------
<C> <S> <C>
PREFERRED STOCKS -- 1.2%
BRAZIL -- 0.6%
27,000 Banco Itau SA Pfd............. $ 15,424
3,692,400 Companhia Paranaese de Energia
Series B.................... 66,196
------------
81,620
------------
FINLAND -- 0.6%
1,100 Nokia Corp. ADR............... 81,127
------------
Total preferred stocks........ $ 162,747
------------
------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<C> <S> <C>
SHORT-TERM SECURITIES -- 15.0%
REPURCHASE AGREEMENT -- 14.6%
$2,029,000 Interest in repurchase
agreement (U.S. Treasury
obligations), in a joint
trading account dated
06/30/97 due 07/01/97 with a
yield of 5.9427% and
maturity amount of
$2,029,335.................. $ 2,029,000
------------
U.S. TREASURY BILL -- 0.4%
U.S. Treasury Bill
60,000 5.12% due 07/03/97.......... 59,983
------------
Total short-term securities... $ 2,088,983
------------
------------
DIVERSIFICATION OF ASSETS:
Total common stocks (cost $10,804,016)....... 83.8 % $ 11,710,788
Total preferred stocks (cost $121,876)....... 1.2 162,747
Total short-term securities (cost
$2,088,983)................................ 15.0 2,088,983
------ ------------
Total investments (cost $13,014,875)......... 100.0 % $ 13,962,518
------ ------------
------ ------------
* Non-income producing during the period
</TABLE>
FUTURES CONTRACTS -- NOTE 2
The Fund had 1 September TSE 35 Index futures contract, 1 September ALL ORDS
Index futures contract, 1 July Hang Seng Index futures contract, 3 July OMX
Stock Index futures contracts, 1 September FTSE 100 Index futures contract, and
1 September DTD DAX Index futures contract open at June 30, 1997. The contracts
had a market value of $824,852.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
16
<PAGE>
ITT HARTFORD MUTUAL FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES,
STATEMENT OF OPERATIONS,
STATEMENT OF CHANGES IN NET ASSETS,
NOTES TO FINANCIAL STATEMENTS AND
FINANCIAL HIGHLIGHTS
<PAGE>
- --------------------------------------------------------------------------------
ITT HARTFORD MUTUAL FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES
AS OF JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ITT HARTFORD ITT HARTFORD
MONEY BOND INCOME
MARKET FUND STRATEGY FUND
------------ -------------
<S> <C> <C>
ASSETS
Investments in
securities, at
value................. $ 25,123,583 $ 31,873,868
Cash................... 171 590
Receivables:
Investment securities
sold................ -- 529,274
Fund shares sold..... 539,833 91,217
Dividends and
interest............ 22,842 414,786
Deferred organization
expenses............ 31,721 30,631
Other assets........... -- 7,774
------------ -------------
TOTAL ASSETS............. 25,718,150 32,948,140
------------ -------------
LIABILITIES
Payables:
Investment securities
purchased........... -- 4,189,852
Fund shares
redeemed............ 160,482 14,487
Dividend Payable..... 244 1,684
Accrued Expenses..... 54,403 63,368
Other liabilities...... -- 278
------------ -------------
TOTAL LIABILITIES........ 215,129 4,269,669
------------ -------------
NET ASSETS, AT VALUE..... $ 25,503,021 $ 28,678,471
------------ -------------
------------ -------------
NET ASSETS CONSIST OF:
Capital Stock (Par Value
$0.001)................ $ 25,503 $ 28,377
Capital Surplus.......... 25,477,518 28,348,934
Accumulated
undistributed net
investment income
(loss)................ -- 21,140
Accumulated
undistributed net
realized gains
(losses).............. -- 133,705
Unrealized appreciation
(depreciation) of
investments........... -- 146,315
Unrealized appreciation
(depreciation) on
futures contracts
(Note 2).............. -- --
Unrealized appreciation
(depreciation) on
forward currency
contracts (Note 2).... -- --
Unrealized appreciation
(depreciation) on
translation of foreign
currency.............. -- --
------------ -------------
NET ASSETS, AT VALUE..... $ 25,503,021 $ 28,678,471
------------ -------------
------------ -------------
Net assets -- Class A.... $ 23,758,188 $ 26,870,209
Shares outstanding --
Class A................ 23,758,188 2,605,948
Net asset value per share
-- Class A............. $1.00 $10.31
Maximum offering price
per share -- Class A
(1).................... $10.80
Net assets -- Class B.... $ 772,863
Shares outstanding --
Class B................ 75,107
Net asset value per share
-- Class B............. $10.29
Net assets -- Class Y.... $ 1,744,833 $ 1,035,399
Shares Outstanding --
Class Y................ 1,744,833 100,235
Net asset value per share
-- Class Y............. $1.00 $10.33
</TABLE>
(1) Maximum offering price for Bond Income Strategy Fund is computed as 100/95.5
of net asset value. Maximum for all other funds except Money Market fund is
computed as 100/94.5 of net asset value. On investments of $50,000 or more
the offering price is reduced.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
18
<PAGE>
<TABLE>
<CAPTION>
ITT HARTFORD
ITT HARTFORD CAPITAL ITT HARTFORD ITT HARTFORD
ITT HARTFORD DIVIDEND AND ITT HARTFORD APPRECIATION SMALL INTERNATIONAL
ADVISERS FUND GROWTH FUND STOCK FUND FUND COMPANY FUND OPPORTUNITIES FUND
------------- ------------ ------------ --------------- ------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in
securities, at
value................. $79,450,567 $ 33,479,047 $ 29,752,237 $76,889,216 $14,290,852 $13,962,518
Cash................... 905 411 620 612 795 833
Receivables:
Investment securities
sold................ -- -- -- 1,522,759 925,745 --
Fund shares sold..... 1,081,686 1,434,562 1,143,995 4,318,898 369,952 405,496
Dividends and
interest............ 472,950 42,915 16,051 14,011 4,587 1,022
Deferred organization
expenses............ 30,631 30,631 30,631 30,631 30,631 30,631
Other assets........... -- -- -- -- 5,700 166,053
------------- ------------ ------------ --------------- ------------ ------------------
TOTAL ASSETS............. 81,036,739 34,987,566 30,943,534 82,776,127 15,628,262 14,566,553
------------- ------------ ------------ --------------- ------------ ------------------
LIABILITIES
Payables:
Investment securities
purchased........... -- 1,360,758 -- 4,164,730 2,243,014 676,477
Fund shares
redeemed............ 10,077 1,031 4,439 14,476 4,688 306
Dividend Payable..... 5,576 3,601 172 15,833 -- 308
Accrued Expenses..... 118,324 69,377 60,503 98,757 46,124 41,154
Other liabilities...... -- -- -- -- -- 5,562
------------- ------------ ------------ --------------- ------------ ------------------
TOTAL LIABILITIES........ 133,977 1,434,767 65,114 4,293,796 2,293,826 723,807
------------- ------------ ------------ --------------- ------------ ------------------
NET ASSETS, AT VALUE..... $80,902,762 $ 33,552,799 $ 30,878,420 $78,482,331 $13,334,436 $13,842,746
------------- ------------ ------------ --------------- ------------ ------------------
------------- ------------ ------------ --------------- ------------ ------------------
NET ASSETS CONSIST OF:
Capital Stock (Par Value
$0.001)................ $ 72,156 $ 29,996 $ 27,016 $ 64,839 $ 12,030 $ 12,608
Capital Surplus.......... 72,083,578 29,966,118 26,989,463 64,773,975 12,018,388 12,595,619
Accumulated
undistributed net
investment income
(loss)................ 12,278 5,515 (3,492) (161,395) (16,585) 77,743
Accumulated
undistributed net
realized gains
(losses).............. (23,132) 74,178 (37,922) 3,029,023 (209,799) 197,096
Unrealized appreciation
(depreciation) of
investments........... 8,757,882 3,476,992 3,903,355 10,775,889 1,500,502 947,643
Unrealized appreciation
(depreciation) on
futures contracts
(Note 2).............. -- -- -- -- 29,900 11,621
Unrealized appreciation
(depreciation) on
forward currency
contracts (Note 2).... -- -- -- -- -- (17)
Unrealized appreciation
(depreciation) on
translation of foreign
currency.............. -- -- -- -- -- 433
------------- ------------ ------------ --------------- ------------ ------------------
NET ASSETS, AT VALUE..... $80,902,762 $ 33,552,799 $ 30,878,420 $78,482,331 $13,334,436 $13,842,746
------------- ------------ ------------ --------------- ------------ ------------------
------------- ------------ ------------ --------------- ------------ ------------------
Net assets -- Class A.... $36,007,661 $ 18,055,931 $ 19,504,835 $48,404,380 $ 7,873,602 $ 8,566,283
Shares outstanding --
Class A................ 2,869,245 1,337,883 1,392,411 2,689,974 669,930 732,880
Net asset value per share
-- Class A............. $12.55 $13.50 $14.01 $17.99 $11.75 $11.69
Maximum offering price
per share -- Class A
(1).................... $13.28 $14.29 $14.83 $19.04 $12.43 $12.37
Net assets -- Class B.... $10,763,038 $ 11,096,224 $ 11,142,380 $22,151,545 $ 1,266,843 $ 1,374,272
Shares outstanding --
Class B................ 862,175 828,082 800,743 1,238,328 108,441 118,324
Net asset value per share
-- Class B............. $12.48 $13.40 $13.92 $17.89 $11.68 $11.61
Net assets -- Class Y.... $34,132,063 $ 4,400,644 $ 231,205 $ 7,926,406 $ 4,193,991 $ 3,902,191
Shares Outstanding --
Class Y................ 2,712,864 325,491 16,446 438,380 355,161 332,714
Net asset value per share
-- Class Y............. $12.58 $13.52 $14.06 $18.08 $11.81 $11.73
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
19
<PAGE>
- --------------------------------------------------------------------------------
ITT Hartford Mutual Funds, Inc.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ITT
HARTFORD ITT HARTFORD
MONEY BOND INCOME
MARKET FUND STRATEGY FUND
----------- --------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ -- $--
Interest............... 445,239 481,467
Less: foreign tax
withheld.............. -- --
----------- --------------
Total investment
income.............. 445,239 481,467
----------- --------------
EXPENSES:
Investment advisory
fees.................. 39,472 44,474
Transfer agent fees.... 17,627 17,425
Distribution fees
Class A.............. 22,034 18,882
Class B.............. -- 2,495
Custodian fees and
expenses.............. 2,150 2,700
Accounting services.... 8,001 8,409
Registration fees...... 12,894 21,774
Board of directors
fees.................. 1,171 1,157
Audit fees............. 4,682 4,629
Legal fees............. 5,094 5,036
Amortization of
deferred
organizational
costs................. 3,768 3,768
Other expenses......... 3,240 3,203
----------- --------------
Total expenses
(before waivers and
reimbursements)..... 120,133 133,952
Expense waivers and
reimbursements........ (43,663) (48,023)
----------- --------------
Total expenses, net.... 76,470 85,929
----------- --------------
Net investment income
(loss)................ 368,769 395,538
----------- --------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on
investments........... -- 133,692
Net realized gain
(loss) on forward
foreign currency
contracts............. -- --
Net realized gain
(loss) on futures
contracts............. -- --
Net realized loss
(loss) on foreign
currency
transactions.......... -- --
Net unrealized
appreciation
(depreciation) of
investments........... -- (12,961)
Net unrealized
appreciation
(depreciation) of
foreign forward
currency contracts.... -- --
Net unrealized
appreciation
(depreciation) on
translation of other
assets and liabilities
in foreign
currencies............ -- --
Net unrealized
appreciation
(depreciation) of
futures contracts..... -- --
----------- --------------
Net realized and
unrealized gain (loss)
on investments........ -- 120,731
----------- --------------
Net increase in net
assets resulting from
operations............ $368,769 $516,269
----------- --------------
----------- --------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
20
<PAGE>
<TABLE>
<CAPTION>
ITT HARTFORD
ITT HARTFORD CAPITAL ITT HARTFORD
ITT HARTFORD DIVIDEND AND ITT HARTFORD APPRECIATION ITT HARTFORD SMALL INTERNATIONAL
ADVISERS FUND GROWTH FUND STOCK FUND FUND COMPANY FUND OPPORTUNITIES FUND
------------- ------------ ------------ --------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 230,555 $ 230,858 $ 94,005 $ 48,458 $ 15,519 $ 116,939
Interest............... 715,284 19,794 30,463 42,262 25,077 44,059
Less: foreign tax
withheld.............. (2,770) (785) (1,195) (4,320) -- (15,984)
------------- ------------ ------------ --------------- ------------------ ------------------
Total investment
income.............. 943,069 249,867 123,273 86,400 40,596 145,014
------------- ------------ ------------ --------------- ------------------ ------------------
EXPENSES:
Investment advisory
fees.................. 214,959 62,713 62,804 129,489 34,938 34,783
Transfer agent fees.... 26,527 27,241 24,776 60,688 10,772 10,868
Distribution fees
Class A.............. 34,668 17,219 17,672 32,669 8,302 8,540
Class B.............. 25,700 14,465 18,915 32,113 3,152 3,143
Custodian fees and
expenses.............. 4,700 4,750 5,000 6,000 7,000 36,000
Accounting services.... 30,414 12,364 11,246 27,546 4,889 6,433
Registration fees...... 47,157 30,255 27,338 47,285 20,067 20,568
Board of directors
fees.................. 4,377 1,809 1,645 4,030 716 722
Audit fees............. 17,506 7,236 6,581 16,120 2,861 2,887
Legal fees............. 19,047 7,873 7,160 17,538 3,113 3,141
Amortization of
deferred
organizational
costs................. 3,768 3,768 3,768 3,768 3,768 3,768
Other expenses......... 12,115 5,007 4,554 11,155 1,980 1,998
------------- ------------ ------------ --------------- ------------------ ------------------
Total expenses
(before waivers and
reimbursements)..... 440,938 194,700 191,459 388,401 101,558 132,851
Expense waivers and
reimbursements........ (87,100) (72,800) (64,694) (140,606) (44,377) (67,317)
------------- ------------ ------------ --------------- ------------------ ------------------
Total expenses, net.... 353,838 121,900 126,765 247,795 57,181 65,534
------------- ------------ ------------ --------------- ------------------ ------------------
Net investment income
(loss)................ 589,231 127,967 (3,492) (161,395) (16,585) 79,480
------------- ------------ ------------ --------------- ------------------ ------------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on
investments........... (22,972) 80,349 (37,916) 3,028,969 (226,273) 129,756
Net realized gain
(loss) on forward
foreign currency
contracts............. -- -- -- -- -- (37,609)
Net realized gain
(loss) on futures
contracts............. -- -- -- -- 17,057 105,537
Net realized loss
(loss) on foreign
currency
transactions.......... -- -- -- (164) -- (570)
Net unrealized
appreciation
(depreciation) of
investments........... 7,726,402 3,018,790 3,413,507 9,932,855 1,348,230 726,646
Net unrealized
appreciation
(depreciation) of
foreign forward
currency contracts.... -- -- -- -- -- (555)
Net unrealized
appreciation
(depreciation) on
translation of other
assets and liabilities
in foreign
currencies............ -- -- -- (184) -- 497
Net unrealized
appreciation
(depreciation) of
futures contracts..... -- -- -- -- 29,900 5,548
------------- ------------ ------------ --------------- ------------------ ------------------
Net realized and
unrealized gain (loss)
on investments........ 7,703,430 3,099,139 3,375,591 12,961,476 1,168,914 929,250
------------- ------------ ------------ --------------- ------------------ ------------------
Net increase in net
assets resulting from
operations............ $8,292,661 $3,227,106 $ 3,372,099 $12,800,081 $1,152,329 $1,008,730
------------- ------------ ------------ --------------- ------------------ ------------------
------------- ------------ ------------ --------------- ------------------ ------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
21
<PAGE>
- --------------------------------------------------------------------------------
ITT Hartford Mutual Funds, Inc.
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ITT HARTFORD
ITT HARTFORD BOND INCOME
MONEY STRATEGY
MARKET FUND FUND
------------- ------------
<S> <C> <C>
OPERATIONS:
Net investment
income................ $ 368,769 $ 395,538
Net realized gain
(loss)................ -- 133,692
Net unrealized
appreciation
(depreciation) of
investments........... -- (12,961)
------------- ------------
Net increase (decrease)
in net assets
resulting from
operations............ 368,769 516,269
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Class A.............. (341,884) (355,080)
Class B.............. -- (12,483)
Class Y.............. (26,885) (17,125)
From net realized gain
on investments
Class A.............. -- (91,053)
Class B.............. -- (2,616)
Class Y.............. -- (3,628)
CAPITAL SHARE
TRANSACTIONS:
Class A.............. 13,004,568 15,919,042
Class B.............. -- 641,467
Class Y.............. 1,744,552 1,029,544
------------- ------------
Net increase in net
assets................ 14,749,120 17,624,337
NET ASSETS:
Beginning of period.... 10,753,901 11,054,134
------------- ------------
End of period.......... $ 25,503,021 $28,678,471
------------- ------------
------------- ------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
22
<PAGE>
<TABLE>
<CAPTION>
ITT HARTFORD
ITT HARTFORD CAPITAL ITT HARTFORD ITT HARTFORD
ITT HARTFORD DIVIDEND AND ITT HARTFORD APPRECIATION SMALL INTERNATIONAL
ADVISERS FUND GROWTH FUND STOCK FUND FUND COMPANY FUND OPPORTUNITIES FUND
------------- ------------ ------------ --------------- ------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment
income................ $ 589,231 $ 127,967 $ (3,492) $ (161,395) $ (16,585) $ 79,480
Net realized gain
(loss)................ (22,972) 80,349 (37,916) 3,028,805 (209,216) 197,114
Net unrealized
appreciation
(depreciation) of
investments........... 7,726,402 3,018,790 3,413,507 9,932,671 1,378,130 732,136
------------- ------------ ------------ --------------- ------------ ------------------
Net increase (decrease)
in net assets
resulting from
operations............ 8,292,661 3,227,106 3,372,099 12,800,081 1,152,329 1,008,730
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Class A.............. (247,177) (63,117) -- -- -- --
Class B.............. (59,878) (37,696) -- -- -- --
Class Y.............. (271,674) (20,579) -- -- -- --
From net realized gain
on investments
Class A.............. (15,143) (16,222) (4,831) (268,315) (887) (12,829)
Class B.............. (4,535) (10,270) (2,720) (113,865) (148) (1,998)
Class Y.............. (14,646) (4,182) (59) (43,860) (499) (5,924)
CAPITAL SHARE
TRANSACTIONS:
Class A.............. 18,615,814 9,813,100 10,682,504 31,194,785 2,513,032 3,656,620
Class B.............. 8,551,590 9,805,823 9,097,272 18,435,117 908,019 1,119,529
Class Y.............. 30,176,521 4,010,553 162,811 6,453,804 3,775,565 3,558,454
------------- ------------ ------------ --------------- ------------ ------------------
Net increase in net
assets................ 65,023,533 26,704,516 23,307,076 68,457,747 8,347,411 9,322,582
NET ASSETS:
Beginning of period.... 15,879,229 6,848,283 7,571,344 10,024,584 4,987,025 4,520,164
------------- ------------ ------------ --------------- ------------ ------------------
End of period.......... $80,902,762 $33,552,799 $ 30,878,420 $78,482,331 $13,334,436 $13,842,746
------------- ------------ ------------ --------------- ------------ ------------------
------------- ------------ ------------ --------------- ------------ ------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
23
<PAGE>
- --------------------------------------------------------------------------------
ITT Hartford Mutual Funds, Inc.
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM JULY 1, 1996 (INCEPTION) TO DECEMBER 31, 1996
<TABLE>
<CAPTION>
ITT HARTFORD
ITT HARTFORD BOND INCOME
MONEY STRATEGY
MARKET FUND FUND
------------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 206,204 $ 265,341
Net realized gain...... -- 159,623
Net unrealized
appreciation of
investments........... -- 159,276
------------- ------------
Net increase in net
assets resulting from
operations............ 206,204 584,240
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Class A.............. (206,198) (255,221)
Class B.............. -- (1,518)
Class Y.............. (6) (129)
From net realized gain
on investments
Class A.............. -- (59,781)
Class B.............. -- (686)
Class Y.............. -- (29)
CAPITAL SHARE
TRANSACTIONS:
Class A.............. 10,753,621 10,658,828
Class B.............. -- 123,373
Class Y.............. 280 5,057
------------- ------------
Net increase in net
assets................ 10,753,901 11,054,134
NET ASSETS:
Beginning of period.... -- --
End of period.......... $ 10,753,901 $11,054,134
------------- ------------
------------- ------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
24
<PAGE>
<TABLE>
<CAPTION>
ITT HARTFORD ITT HARTFORD ITT HARTFORD ITT HARTFORD
ITT HARTFORD DIVIDEND AND ITT HARTFORD CAPITAL SMALL INTERNATIONAL
ADVISERS FUND GROWTH FUND STOCK FUND APPRECIATION FUND COMPANY FUND OPPORTUNITIES FUND
------------- ------------ ------------ ----------------- ------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 109,562 $ 35,337 $ 12,598 $ (18,413) $ (10,563) $ 7,547
Net realized gain...... 34,690 34,697 8,296 734,669 323,041 50,234
Net unrealized
appreciation of
investments........... 1,031,480 458,202 489,848 843,218 152,272 227,544
------------- ------------ ------------ ----------------- ------------ ------------------
Net increase in net
assets resulting from
operations............ 1,175,732 528,236 510,742 1,559,474 464,750 285,325
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Class A.............. (98,048) (32,275) (10,931) -- -- (25,685)
Class B.............. (9,994) (3,872) (2,242) -- -- (963)
Class Y.............. (270) (226) (117) -- -- (446)
From net realized gain
on investments
Class A.............. -- (9,096) -- (261,732) (292,131) (11,118)
Class B.............. -- (1,043) -- (25,075) (14,827) (408)
Class Y.............. -- (55) -- (3,191) (4,569) (165)
CAPITAL SHARE
TRANSACTIONS:
Class A.............. 13,268,744 5,603,131 5,779,861 7,789,947 4,503,579 4,049,578
Class B.............. 1,509,188 727,849 1,249,897 858,773 255,112 160,933
Class Y.............. 33,877 35,634 44,134 106,388 75,111 63,113
------------- ------------ ------------ ----------------- ------------ ------------------
Net increase in net
assets................ 15,879,229 6,848,283 7,571,344 10,024,584 4,987,025 4,520,164
NET ASSETS:
Beginning of period.... -- -- -- -- -- --
End of period.......... $15,879,229 $6,848,283 $ 7,571,344 $10,024,584 $ 4,987,025 $4,520,164
------------- ------------ ------------ ----------------- ------------ ------------------
------------- ------------ ------------ ----------------- ------------ ------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
25
<PAGE>
- --------------------------------------------------------------------------------
ITT Hartford Mutual Funds, Inc.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 (UNAUDITED)
1. ORGANIZATION:
ITT Hartford Mutual Funds, Inc. (the Company) is an open end management
investment company comprised of eight diversified portfolios (each a "Fund"
or together the "Funds"). The Funds are ITT Hartford Bond Income Strategy
Fund, ITT Hartford Stock Fund, ITT Hartford Money Market Fund, ITT Hartford
Advisers Fund, ITT Hartford Capital Appreciation Fund, ITT Hartford
International Opportunities Fund, ITT Hartford Dividend and Growth Fund, and
ITT Hartford Small Company Fund. The Company was organized under the laws of
the State of Maryland and is registered with the Securities and Exchange
Commission (SEC) under the Investment Company Act of 1940, as amended, as a
diversified open-ended management investment company.
The Funds and their investment objectives are listed below:
<TABLE>
<S> <C>
ITT Hartford Money Market Fund Seeks maximum current income consistent with liquidity and
(Money Market Fund) preservation of capital.
ITT Hartford Bond Income Strategy Fund Seeks a high level of current income consistent with a
(Bond Fund) competitive total return, as compared to bond funds with
similar investment objectives and policies, by investing
primarily in debt securities.
ITT Hartford Advisers Fund Seeks maximum long-term total rate of return by investing in
(Advisers Fund) common stocks and other equity securities, bonds and other
debt securities and money market instruments.
ITT Hartford Dividend and Growth Fund Seeks a high level of current income consistent with growth
(Dividend and Growth Fund) of capital by investing primarily in equity securities.
ITT Hartford Stock Fund (Stock Fund) Seeks long-term growth of capital with income a secondary
consideration by investing primarily in equity securities.
ITT Hartford Capital Appreciation Fund Seeks growth of capital by investing primarily in equity
(Capital Appreciation Fund) securities selected on the basis of potential for capital
appreciation.
ITT Hartford Small Company Fund Seeks growth of capital by investing primarily in equity
(Small Company Fund) securities selected on the basis of potential for capital
appreciation.
ITT Hartford International Seeks growth of capital by investing primarily in equity
Opportunities Fund (International securities issued by non-U.S. companies.
Opportunities Fund)
</TABLE>
The Company consists of eight series, each of which is divided into Class A,
Class B, and Class Y shares except the Money Market Fund which is divided
into Class A and Class Y shares. Class A shares are sold with a front-end
load charge of up to 5.50%. Class B shares are sold with a contigent
deferred sales charge which declines from 5.00% to zero depending on the
period of time the shares are held. Class Y shares are sold to certain
institutional investors without a sales charge. All classes of shares have
identical voting, dividend, liquidation and other rights and the same terms
and conditions, except that each class may have different expenses which may
affect performance.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the Funds,
which are in accordance with generally accepted accounting principles in the
investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Security gains and
losses are determined on the basis of identified cost.
b) SECURITY VALUATION--Debt securities (other than short-term obligations)
are valued on the basis of valuations furnished by an unaffiliated
pricing service which determines valuations for normal institutional size
trading units of debt securities. Mortgage securities are valued at the
bid price. Short-term securities held in the ITT Money Market Fund, are
valued at amortized cost or original cost plus accrued interest
receivable, both of which approximate market value. In ITT Hartford
Advisers Fund, ITT Hartford Capital Appreciation Fund, ITT Hartford Small
Company Fund, ITT Hartford Stock Fund, ITT Hartford Bond Income Strategy
Fund, ITT Hartford International Opportunities Fund and ITT Hartford
Dividend and Growth Fund, short-term investments with a maturity of 60
days or less when purchased
26
<PAGE>
are valued at amortized cost, which approximates market value. Short-term
investments with a maturity of more than 60 days when purchased are
valued based on market quotations until the remaining days to maturity
become less than 61 days. From such time until maturity, the investments
are valued at amortized cost.
Equity securities are valued at the last sales price reported on the
principal securities markets on which such securities are traded
(domestic or foreign). If no sale took place on a particular day then
such securities are valued at the mean between the bid and asked prices.
Securities quoted in foreign currencies are translated into U.S. dollars
at the exchange rate at the end of the reporting period. Options are
valued at the last sales price; if no sale took place on such day, then
options are valued at the mean between the bid and asked prices.
Securities for which market quotations are not readily available and all
other assets are valued in good faith at fair value by a person
designated by the Funds' Board of Directors.
c) FOREIGN CURRENCY TRANSACTIONS--The accounting records of the Funds are
maintained in U.S. dollars. All assets and liabilities initially
expressed in foreign currencies are converted into U.S. dollars at
prevailing exchange rates. Purchases and sales of investment securities,
dividend and interest income, and certain expenses are translated at the
rates of exchange prevailing on the respective dates of such
transactions.
The funds do not isolate that portion of the results of operations
resulting from changes in the foreign exchange rates on investments from
the fluctuations arising from changes in the market prices of securities
held. Such fluctuations are included with the net realized and unrealized
gain or loss on investments.
Net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales of foreign currencies, and the difference
between asset and liability amounts initially stated in foreign
currencies and the U.S. dollar value of the amounts actually received or
paid. Net unrealized foreign exchange gains or losses arise from changes
in the value of portfolio securities and other assets and liabilities at
the end of the reporting period, resulting from changes in the exchange
rates.
d) REPURCHASE TRANSACTIONS--A repurchase agreement is an agreement by which
the seller of a security agrees to repurchase the security sold at a
mutually agreed upon time and price. At the time the Funds enter into a
repurchase agreement, and while the repurchase agreement is in effect,
the value of the underlying collateral security(ies), including accrued
interest, will be equal to or exceed the value of the repurchase
agreement. Securities which serve to collateralize the repurchase
agreement are held by each Fund's custodian in book entry or physical
form in the custodial account of the Fund. Repurchase agreements are
valued at cost plus accrued interest receivable.
e) JOINT TRADING ACCOUNT--Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Funds may transfer uninvested
cash balances into a joint trading account managed by The Hartford
Investment Management Company (HIMCO) or Wellington Management Company
LLP. These balances may be invested in one or more repurchase agreements
and/or short-term money market instruments.
f) FUTURES, OPTIONS ON FUTURES AND OPTIONS TRANSACTIONS--The Funds enter
into futures contracts to retain their cash balance and yet be exposed to
the market thereby providing the liquidity necessary to accommodate
redemptions while at the same time providing shareholders the investment
return of a fully invested portfolio. A futures contract is an agreement
between two parties to buy and sell a security for a set price on a
future date. When the Funds enter into such contracts, they are required
to deposit with their custodian an amount of "initial margin" of cash or
U.S. Treasury bills. Subsequent payments, called maintenance margin, to
and from the broker, are made on a daily basis as the price of the
underlying debt security fluctuates, making the long and short positions
in the futures contract more or less valuable (i.e., mark-to-market),
which results in an unrealized gain or loss to the Funds. The market
value of a traded futures contract is the last sale price or, in the
absence of a last sale price, the last offering price or, in the absence
of either of these prices, fair value is determined according to
procedures established by the Funds' Board of Directors.
At any time prior to expiration of the futures contract, the Funds may
close the position by taking an opposite position which would operate to
terminate the position in the futures contract. A final determination of
maintenance margin is then made, additional cash is required to be paid
by or released to the Funds and the Funds realize a gain or loss.
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's Statement of Net Assets as an investment and
subsequently "marked to market" to reflect the current market value of
the option purchased as
27
<PAGE>
- --------------------------------------------------------------------------------
ITT HARTFORD MUTUAL FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 (UNAUDITED)
of the end of the reporting period. If an option which the Fund has
purchased expires on its stipulated expiration date, the Fund realizes a
loss in the amount of the cost of the option. If the Fund enters into a
closing transaction, it realizes a gain or loss, depending on whether the
proceeds from the sale are greater or less than the cost of the option.
If the Fund exercises a put option, it realizes a gain or loss from the
sale of the underlying security and the proceeds from such sale will be
decreased by the premium originally paid. If the Fund exercises a call
option, the cost of the security which the Fund purchases upon exercise
will be increased by the premium originally paid.
g) FEDERAL INCOME TAXES--For Federal income tax purposes, the Funds intend
to continue to qualify as regulated investment companies under Subchapter
M of the Internal Revenue Code by distributing substantially all of their
taxable income to their shareholders or otherwise complying with the
requirements for regulated investment companies. Accordingly, no
provision for Federal income taxes has been made.
h) FUND SHARE VALUATION AND DIVIDEND DISTRIBUTIONS TO SHAREHOLDERS--Orders
for the Fund's shares are executed in accordance with the investment
instructions of the shareholders. Dividend income is accrued as of the
ex-dividend date. Interest income and expenses are accrued on a daily
basis. The net asset value of the Fund's shares is determined as of the
close of each business day of the New York Stock Exchange (the Exchange).
Orders for the purchase of the Funds' shares received prior to the close
of the Exchange on any day on which the fund is open for business are
priced at the per-share net asset value determined as of the close of the
Exchange. Orders received after the close of the Exchange, or on a day on
which the Exchange and/or the Fund is not open for business, are priced
at the per-share net asset value next determined.
Each fund intends to distribute substantially all of its net income and
capital gains to shareholders no less frequently than once a year.
Normally, dividends from net investment income of the ITT Hartford Small
Company Fund, ITT Hartford Capital Appreciation Fund, ITT Hartford
International Opportunities Fund, and ITT Hartford Stock Fund will be
declared and paid annually; dividends from net investment income of the
ITT Hartford Dividend and Growth Fund and ITT Hartford Advisers Fund will
be declared and paid quarterly; dividends from the net investment income
of the ITT Hartford Bond Income Strategy Fund will be declared and paid
monthly and dividends from net investment income of the ITT Hartford
Money Market Fund will be declared daily and paid monthly. Dividends from
the ITT Hartford Money Market Fund are not paid on shares until the day
following the date on which the shares are issued. Unless shareholders
specify otherwise, all dividends and distributions will be automatically
reinvested in additional full or fractional shares of each Fund.
i) FORWARD FOREIGN CURRENCY CONTRACTS--As of June 30, 1997, ITT Hartford
International Opportunities Fund entered into forward foreign currency
exchange contracts that obligate the Fund to repurchase currencies at
specified future dates. The Fund enters into forward foreign currency
contracts to manage currency exchange rate risk.
Forward contracts involve elements of market risk in excess of the amount
reflected in the Statement of Net Assets. The Fund bears the risk of an
unfavorable change in the foreign exchange rate underlying the forward
contract.
j) ORGANIZATIONAL COSTS--Cost incurred by the Funds in connection with
their organization and public offering of shares have been deferred and
are being amortized on a straight-line basis over five years.
k) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the financial statements and the reported
amounts of income and expenses during the period. Actual results may vary
from the amounts derived from management's estimates.
3. EXPENSES:
a) INVESTMENT MANAGEMENT AND ADVISORY AGREEMENTS--Hartford Investment
Financial Services Company (HIFSCO), a majority-owned indirect subsidiary
of The Hartford Financial Services Group, Inc. (The Hartford), serves as
investment manager to each Fund pursuant to an Investment Management
Agreement dated July 22, 1996. As investment manager, HIFSCO has overall
investment supervisory responsibility for each Fund. In addition, HIFSCO
provides administrative personnel, services, equipment and facilities and
office space for proper operation of the Company. HIFSCO has contracted
with Wellington Management Company, LLP for the provision of day to day
investment management services to the Small Company Fund, Capital
Appreciation Fund, International Opportunities Fund,
28
<PAGE>
Stock Fund, Dividend and Growth Fund and Advisers Fund in accordance with
each Fund's investment objective and policies. In addition, HIFSCO has
contracted with The Hartford Investment Management Company (HIMCO) for
the provision of day to day investment management services for the Bond
Income Strategy Fund and Money Market Fund. Each Fund pays a fee to
HIFSCO, a portion of which may be used to compensate Wellington or HIMCO.
The schedule below reflects the rates of compensation paid to HIFSCO for
services rendered:
<TABLE>
<CAPTION>
ITT HARTFORD MONEY MARKET FUND
AVERAGE DAILY NET ASSETS ANNUAL FEE
- ------------------------------------ ------------
<S> <C>
On first $500 million .50%
On next $500 million .45%
Over $1 billion .40%
<CAPTION>
ITT HARTFORD BOND INCOME STRATEGY FUND
AVERAGE DAILY NET ASSETS ANNUAL FEE
- ------------------------------------ ------------
<S> <C>
On first $500 million .65%
On next $500 million .55%
Over $1 billion .50%
<CAPTION>
ITT HARTFORD CAPITAL APPRECIATION FUND
ITT HARTFORD STOCK FUND
ITT HARTFORD ADVISERS FUND
ITT HARTFORD DIVIDEND AND GROWTH FUND
AVERAGE DAILY NET ASSETS ANNUAL FEE
- ------------------------------------ ------------
<S> <C>
On first $500 million .80%
On next $500 million .70%
Over $1 billion .65%
<CAPTION>
ITT HARTFORD SMALL COMPANY FUND AND
ITT HARTFORD INTERNATIONAL OPPORTUNITIES FUND
AVERAGE DAILY NET ASSETS ANNUAL FEE
- ------------------------------------ ------------
<S> <C>
On first $500 million .85%
On next $500 million .75%
Over $1 billion .70%
</TABLE>
b) DISTRIBUTION AND SERVICE PLAN FOR CLASS A AND B SHARES--The Fund has
adopted a Distribution and Service Plan to compensate the Distributor for
the distribution of Class A and Class B shares and servicing the accounts
of Class A and Class B shareholders. The Class A plan provides for
periodic payments to brokers who provide services to accounts that hold
Class A shares and for promotional and other sales related costs. The
Distributor is compensated at an annual rate that may not exceed 0.35% of
the average daily net asset value of Class A shares of the Fund some or
all of which may be remitted to brokers. Up to 0.25% of the fee may be
used for shareholder servicing expenses with the remainder used for
distribution expenses. The Class A Rule 12b-1 fee for each fund has been
voluntarily capped at 0.30% through December 31, 1997. The cap may be
removed at any time after such date. Some or all of the 12b-1 fee for
Class B shares may be reallowed to broker-dealers for distribution and or
shareholder account services. Under the Plan, the Fund pays the
Distributor 1.00% of the average daily net assets of Class B shares that
are outstanding for 8 years or less, 0.25% of which is intended as a fee
for service provided to existing shareholders with the remainder used for
distribution expenses.
c) OPERATING EXPENSES--Allocable expenses incurred by the Funds are
allocated to each Fund in proportion to the net assets of each Fund,
except where allocation of certain expenses are more fairly made directly
to the Fund. The Hartford Financial Services Group, Inc., the ultimate
parent of HIFSCO, has voluntarily agreed to limit the total
29
<PAGE>
- --------------------------------------------------------------------------------
ITT HARTFORD MUTUAL FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 (UNAUDITED)
operating expenses of the Class A and Class Y shares of the Money Market
Fund and Class A, B and Y of all other Funds, exclusive of taxes,
interest, brokerage commissions, certain distribution expenses and
extraordinary expenses, until at least December 31, 1997 as follows:
<TABLE>
<CAPTION>
FUND CLASS A CLASS B CLASS Y
----------------------------------------- ------- ------- -------
<S> <C> <C> <C>
Money Market............................. 1.00% N/A 0.55%
Bond Income Strategy..................... 1.25 1.95% 0.80
Advisers................................. 1.40 2.10 0.95
Dividend and Growth...................... 1.40 2.10 0.95
Stock.................................... 1.45 2.15 1.00
Capital Appreciation..................... 1.45 2.15 1.00
Small Company............................ 1.45 2.15 1.00
International Opportunities.............. 1.65 2.35 1.20
</TABLE>
4. AFFILIATE HOLDINGS:
HIFSCO or its affiliates have ownership of the shares in the Funds as
follows:
<TABLE>
<CAPTION>
FUND CLASS A CLASS B CLASS Y
- ------------------------------------------------------------------------------------------ ------------ --------- -----------
<S> <C> <C> <C>
Money Market.............................................................................. 10,434,855 N/A 131
Bond Income Strategy...................................................................... 2,524,802 502 506
Advisers.................................................................................. 1,014,927 481 483
Dividend and Growth....................................................................... 37,441 268,752 481
Stock..................................................................................... 138,036 164,570 476
Capital Appreciation...................................................................... 311,669 493 493
Small Company............................................................................. 321,070 508 507
International Opportunities............................................................... 303,589 480 480
</TABLE>
5. INVESTMENT TRANSACTIONS:
For the period, January 1, 1997 to June 30, 1997, investment transactions
(excluding short-term investments) were as follows:
<TABLE>
<CAPTION>
PURCHASES AT SALES AT
FUND COST PROCEEDS
- ----------------------------------------------------------------------------------------- ---------------- ----------------
<S> <C> <C>
Bond Income Strategy..................................................................... $ 27,184,930 $ 9,687,438
Advisers................................................................................. 59,010,503 3,950,827
Dividend and Growth...................................................................... 25,525,688 2,666,054
Stock.................................................................................... 19,051,847 1,085,616
Capital Appreciation..................................................................... 96,666,038 44,007,662
Small Company............................................................................ 10,532,131 4,816,014
International Opportunities.............................................................. 9,137,833 1,958,777
</TABLE>
6. TAX COST AND UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS:
As of June 30, 1997, the aggregate gross unrealized appreciation and
depreciation on all investments, based on cost for federal income tax
purposes, was as follows:
<TABLE>
<CAPTION>
NET UNREALIZED
TAX UNREALIZED UNREALIZED APPRECIATION
FUND COST APPRECIATION DEPRECIATION (DEPRECIATION)
- ---------------------------------------------------------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Bond Income Strategy............................................ $ 31,729,268 $ 212,334 $ (67,734) $ 144,600
Advisers........................................................ 70,695,856 9,180,393 (425,681) 8,754,712
Dividend and Growth............................................. 30,017,305 3,699,326 (237,584) 3,461,742
Stock........................................................... 25,848,882 4,099,245 (195,890) 3,903,355
Capital Appreciation............................................ 66,226,237 11,732,781 (1,069,802) 10,662,979
Small Company................................................... 12,790,676 1,713,651 (213,475) 1,500,176
International Opportunities..................................... 13,016,215 1,259,215 (312,916) 946,299
</TABLE>
30
<PAGE>
7. CAPITAL SHARE TRANSACTIONS:
The following information is for the period from January 1, 1997 to June 30,
1997:
<TABLE>
<CAPTION>
MONEY BOND INCOME DIVIDEND AND
MARKET FUND STRATEGY FUND ADVISERS FUND GROWTH FUND
----------------------- ---------------------- ---------------------- --------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ----------- --------- ----------- --------- ----------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold.................. 17,675,413 $17,675,413 1,519,176 $15,689,338 1,583,983 $18,711,758 1,112,138 $13,893,854
Shares issued on reinvestment
of distributions............ 340,402 340,402 43,298 443,180 20,505 257,509 5,718 76,778
Shares redeemed.............. (5,011,248) (5,011,248) (20,956) (213,476) (29,844) (353,453) (311,401) (4,157,532)
---------- ----------- --------- ----------- --------- ----------- ------- -----------
Net increase................. 13,004,567 $13,004,567 1,541,518 $15,919,042 1,574,644 $18,615,814 806,455 $ 9,813,100
---------- ----------- --------- ----------- --------- ----------- ------- -----------
---------- ----------- --------- ----------- --------- ----------- ------- -----------
<CAPTION>
CAPITAL SMALL COMPANY INTERNATIONAL
STOCK FUND APPRECIATION FUND FUND OPPORTUNITIES FUND
----------------------- ---------------------- ---------------------- --------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ----------- --------- ----------- --------- ----------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold.................. 1,045,285 $13,411,903 2,091,294 $32,373,402 248,375 $ 2,687,199 340,729 $ 3,748,171
Shares issued on reinvestment
of distributions............ 338 4,739 14,893 259,729 111 1,238 1,090 12,808
Shares redeemed.............. (197,091) (2,734,138) (92,088) (1,438,346) (16,043) (175,405) (9,413) (104,359)
---------- ----------- --------- ----------- --------- ----------- ------- -----------
Net increase................. 848,532 $10,682,504 2,014,099 $31,194,785 232,443 $ 2,513,032 332,406 $ 3,656,620
---------- ----------- --------- ----------- --------- ----------- ------- -----------
---------- ----------- --------- ----------- --------- ----------- ------- -----------
<CAPTION>
MONEY BOND INCOME DIVIDEND AND
MARKET FUND STRATEGY FUND ADVISERS FUND GROWTH FUND
----------------------- ---------------------- ---------------------- --------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ----------- --------- ----------- --------- ----------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS B
Shares sold.................. 100,715 $ 1,027,224 748,905 $ 8,802,556 771,995 $ 9,890,870
Shares issued on reinvestment
of distributions............ NA NA 1,182 12,049 5,087 63,586 3,505 46,722
Shares redeemed.............. (38,844) (397,806) (27,450) (314,552) (11,409) (131,769)
---------- ----------- --------- ----------- --------- ----------- ------- -----------
Net increase................. 63,053 $ 641,467 726,542 $ 8,551,590 764,091 $ 9,805,823
---------- ----------- --------- ----------- --------- ----------- ------- -----------
---------- ----------- --------- ----------- --------- ----------- ------- -----------
<CAPTION>
CAPITAL INTERNATIONAL
STOCK FUND APPRECIATION FUND SMALL COMPANY FUND OPPORTUNITIES FUND
----------------------- ---------------------- ---------------------- --------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ----------- --------- ----------- --------- ----------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS B
Shares sold.................. 707,115 $ 9,282,623 1,173,128 $18,448,219 95,686 $ 1,012,592 117,472 $ 1,273,449
Shares issued on reinvestment
of distributions............ 189 2,628 6,206 107,647 11 131 162 1,891
Shares redeemed.............. (15,595) (187,979) (7,751) (120,749) (9,915) (104,703) (14,517) (155,811)
---------- ----------- --------- ----------- --------- ----------- ------- -----------
Net increase................. 691,709 $ 9,097,272 1,171,583 $18,435,117 85,782 $ 908,020 103,117 $ 1,119,529
---------- ----------- --------- ----------- --------- ----------- ------- -----------
---------- ----------- --------- ----------- --------- ----------- ------- -----------
</TABLE>
31
<PAGE>
- --------------------------------------------------------------------------------
ITT HARTFORD MUTUAL FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY BOND INCOME DIVIDEND AND
MARKET FUND STRATEGY FUND ADVISERS FUND GROWTH FUND
----------------------- ---------------------- ---------------------- --------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ----------- --------- ----------- --------- ----------- ------- -----------
CLASS Y
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold.................. 3,305,538 $ 3,305,538 120,458 $ 1,240,384 2,858,661 $31,912,844 347,260 $ 4,322,870
Shares issued on reinvestment
of distributions............ 26,883 26,883 2,028 20,751 22,724 286,319 1,841 24,761
Shares redeemed.............. (1,587,868) (1,587,868) (22,756) (231,590) (171,584) (2,022,642) (26,753) (337,078)
---------- ----------- --------- ----------- --------- ----------- ------- -----------
Net increase................. 1,744,553 $ 1,744,553 99,730 $ 1,029,545 2,709,801 $30,176,521 322,348 $ 4,010,553
---------- ----------- --------- ----------- --------- ----------- ------- -----------
---------- ----------- --------- ----------- --------- ----------- ------- -----------
<CAPTION>
CAPITAL INTERNATIONAL
STOCK FUND APPRECIATION FUND SMALL COMPANY FUND OPPORTUNITIES FUND
----------------------- ---------------------- ---------------------- --------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ----------- --------- ----------- --------- ----------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
Shares sold.................. 12,835 $ 165,622 464,858 $ 6,966,155 371,222 $ 4,014,291 337,575 $ 3,676,581
Shares issued on reinvestment
of distributions............ 4 59 2,499 43,860 43 499 502 5,924
Shares redeemed.............. (241) (2,870) (36,993) (556,210) (22,860) (239,225) (11,294) (124,051)
---------- ----------- --------- ----------- --------- ----------- ------- -----------
Net increase................. 12,598 $ 162,811 430,364 $ 6,453,805 348,405 $ 3,775,565 326,783 $ 3,558,454
---------- ----------- --------- ----------- --------- ----------- ------- -----------
---------- ----------- --------- ----------- --------- ----------- ------- -----------
</TABLE>
8. RECLASSIFICATION OF CAPITAL ACCOUNTS:
In accordance with AICPA statement of position 93-2, DETERMINATION,
DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME, CAPITAL GAIN,
AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES, the Funds have
recorded several reclassifications in their capital accounts. These
reclassifications have no impact on the net asset value of the Funds and are
designed generally to present undistributed income and realized gains on a
tax basis which is considered to be more informative to the shareholder. As
of December 31, 1996 the Funds recorded the following reclassifications to
increase (decrease) the accounts listed below.
<TABLE>
<CAPTION>
UNDISTRIBUTED UNDISTRIBUTED
NET INVESTMENT NET REALIZED CAPITAL
INCOME (LOSS) GAINS (LOSS) SURPLUS
-------------- ------------- -------
<S> <C> <C> <C>
Bond Income Strategy................................................................. $ 1,817 $ (1,817) $
Advisers............................................................................. 526 (526)
Dividend and Growth.................................................................. (24) 24
Stock................................................................................ 692 (692)
Capital Appreciation................................................................. 18,413 (18,413)
Small Company........................................................................ 10,563 (10,563)
International Opportunities.......................................................... 17,810 (17,810)
</TABLE>
32
<PAGE>
9. AUTHORIZED SHARES
The Funds' authorized shares are as follows:
<TABLE>
<CAPTION>
AUTHORIZED
FUND SHARES
- ----------------------------------------------------------------------------------------------------------------- -------------
<S> <C>
ITT Hartford Money Market Fund, Inc. Class A..................................................................... 700,000,000
ITT Hartford Money Market Fund, Inc. Class Y..................................................................... 100,000,000
ITT Hartford Bond Income Strategy Fund, Inc. Class A............................................................. 175,000,000
ITT Hartford Bond Income Strategy Fund, Inc. Class B............................................................. 75,000,000
ITT Hartford Bond Income Strategy Fund, Inc. Class Y............................................................. 50,000,000
ITT Hartford Advisers Fund, Inc. Class A......................................................................... 200,000,000
ITT Hartford Advisers Fund, Inc. Class B......................................................................... 100,000,000
ITT Hartford Advisers Fund, Inc. Class Y......................................................................... 100,000,000
ITT Hartford Dividend & Growth Fund, Inc. Class A................................................................ 175,000,000
ITT Hartford Dividend & Growth Fund, Inc. Class B................................................................ 75,000,000
ITT Hartford Dividend & Growth Fund, Inc. Class Y................................................................ 50,000,000
ITT Hartford Stock Fund, Inc. Class A............................................................................ 175,000,000
ITT Hartford Stock Fund, Inc. Class B............................................................................ 75,000,000
ITT Hartford Stock Fund, Inc. Class Y............................................................................ 50,000,000
ITT Hartford Capital Appreciation Fund, Inc. Class A............................................................. 175,000,000
ITT Hartford Capital Appreciation Fund, Inc. Class B............................................................. 75,000,000
ITT Hartford Capital Appreciation Fund, Inc. Class A............................................................. 50,000,000
ITT Hartford Small Company Fund, Inc. Class A.................................................................... 175,000,000
ITT Hartford Small Company Fund, Inc. Class B.................................................................... 75,000,000
ITT Hartford Small Company Fund, Inc. Class Y.................................................................... 50,000,000
ITT Hartford International Opportunities Fund, Inc. Class A...................................................... 175,000,000
ITT Hartford International Opportunities Fund, Inc. Class B...................................................... 75,000,000
ITT Hartford International Opportunities Fund, Inc. Class Y...................................................... 50,000,000
</TABLE>
33
<PAGE>
- --------------------------------------------------------------------------------
ITT HARTFORD MUTUTAL FUNDS, INC.
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
NET
REALIZED
AND DISTRIBUTIONS
NET ASSET UNREALIZED DIVIDENDS FROM
VALUE AT NET GAIN TOTAL FROM FROM NET REALIZED
BEGINNING INVESTMENT (LOSS) ON INVESTMENT INVESTMENT CAPITAL
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS
---------- ----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ITT HARTFORD MONEY MARKET
FUND
For the Six Months
Ended June 30, 1997...
Class A.............. $ 1.00 $ 0.02 $-- $ 0.02 $(0.02) $--
Class Y.............. 1.00 0.02 -- 0.02 (0.02) --
For the Year Ended
December 31, 1996.....
Class A.............. 1.00 0.02 -- 0.02 (0.02) --
Class Y.............. 1.00 0.02 -- 0.02 (0.02) --
ITT HARTFORD BOND INCOME
STRATEGY FUND
For the Six Months
Ended June 30, 1997...
Class A.............. 10.26 0.14 0.23 0.37 (0.28) (0.04)
Class B.............. 10.25 0.17 0.15 0.32 (0.24) (0.04)
Class Y.............. 10.27 0.17 0.22 0.39 (0.29) (0.04)
For the Year Ended
December 31, 1996.....
Class A.............. 10.00 0.26 0.31 0.57 (0.25) (0.06)
Class B.............. 10.00 0.20 0.34 0.54 (0.23) (0.06)
Class Y.............. 10.00 0.28 0.31 0.59 (0.26) (0.06)
ITT HARTFORD ADVISERS
FUND
For the Six Months
Ended June 30, 1997...
Class A.............. 11.08 0.15 1.42 1.57 (0.09) (0.01)
Class B.............. 11.05 0.03 1.48 1.51 (0.07) (0.01)
Class Y.............. 11.10 0.13 1.46 1.59 (0.10) (0.01)
For the Year Ended
December 31, 1996.....
Class A.............. 10.00 0.09 1.07 1.16 (0.08) --
Class B.............. 10.00 0.02 1.11 1.13 (0.08) --
Class Y.............. 10.00 0.03 1.16 1.19 (0.09) --
ITT HARTFORD DIVIDEND AND
GROWTH FUND
For the Six Months
Ended June 30, 1997...
Class A.............. 11.45 0.07 2.04 2.11 (0.05) (0.01)
Class B.............. 11.40 0.01 2.05 2.06 (0.05) (0.01)
Class Y.............. 11.46 0.07 2.06 2.13 (0.06) (0.01)
For the Year Ended
December 31, 1996.....
Class A.............. 10.00 0.07 1.46 1.53 (0.06) (0.02)
Class B.............. 10.00 0.01 1.48 1.49 (0.07) (0.02)
Class Y.............. 10.00 0.02 1.53 1.55 (0.07) (0.02)
ITT HARTFORD STOCK FUND
For the Six Months
Ended June 30, 1997...
Class A.............. 11.53 0.01 2.47 2.48 -- --
Class B.............. 11.50 (0.02) 2.44 2.42 -- --
Class Y.............. 11.55 0.02 2.49 2.51 -- --
For the Year Ended
December 31, 1996.....
Class A.............. 10.00 0.02 1.53 1.55 (0.02) --
Class B.............. 10.00 -- 1.52 1.52 (0.02) --
Class Y.............. 10.00 0.01 1.57 1.58 (0.03) --
ITT HARTFORD CAPITAL
APPRECIATION FUND
For the Six Months
Ended June 30, 1997...
Class A.............. 13.36 (0.04) 4.77 4.73 -- (0.10)
Class B.............. 13.32 (0.04) 4.71 4.67 -- (0.10)
Class Y.............. 13.38 -- 4.80 4.80 -- (0.10)
For the Year Ended
December 31, 1996.....
Class A.............. 10.00 (0.03) 3.80 3.77 -- (0.41)
Class B.............. 10.00 (0.02) 3.75 3.73 -- (0.41)
Class Y.............. 10.00 -- 3.79 3.79 -- (0.41)
ITT HARTFORD SMALL
COMPANY FUND
For the Six Months
Ended June 30, 1997...
Class A.............. 10.68 (0.02) 1.09 1.07 -- (0.001)
Class B.............. 10.65 (0.03) 1.06 1.03 -- (0.001)
Class Y.............. 10.71 -- 1.10 1.10 -- (0.001)
For the Year Ended
December 31, 1996.....
Class A.............. 10.00 (0.02) 1.42 1.40 -- (0.72)
Class B.............. 10.00 (0.02) 1.39 1.37 -- (0.72)
Class Y.............. 10.00 -- 1.43 1.43 -- (0.72)
ITT HARTFORD
INTERNATIONAL
OPPORTUNITIES FUND
For the Six Months
Ended June 30, 1997...
Class A.............. 10.72 0.03 0.96 0.99 -- (0.02)
Class B.............. 10.69 0.01 1.00 1.01 -- (0.02)
Class Y.............. 10.73 0.05 0.97 1.02 -- (0.02)
For the Year Ended
December 31, 1996.....
Class A.............. 10.00 0.02 0.79 0.81 (0.06) (0.03)
Class B.............. 10.00 (0.01) 0.80 0.79 (0.07) (0.03)
Class Y.............. 10.00 -- 0.84 0.84 (0.08) (0.03)
</TABLE>
(1) Annualized.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
34
<PAGE>
<TABLE>
<CAPTION>
NET NET ASSETS
INCREASE NET ASSET AT END OF
(DECREASE) VALUE AT PERIOD
TOTAL IN END TOTAL (IN
DISTRIBUTIONS NET ASSETS OF PERIOD RETURN THOUSANDS)
----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ITT HARTFORD MONEY MARKET
FUND
For the Six Months
Ended June 30, 1997...
Class A.............. $(0.02) $-- $ 1.00 2.30% $23,758
Class Y.............. (0.02) -- 1.00 2.54 1,744
For the Year Ended
December 31, 1996.....
Class A.............. (0.02) -- 1.00 2.01 10,754
Class Y.............. (0.02) -- 1.00 2.34 0.3
ITT HARTFORD BOND INCOME
STRATEGY FUND
For the Six Months
Ended June 30, 1997...
Class A.............. (0.32) 0.05 10.31 3.63 26,870
Class B.............. (0.28) 0.04 10.29 3.23 773
Class Y.............. (0.33) 0.06 10.33 3.87 1,035
For the Year Ended
December 31, 1996.....
Class A.............. (0.31) 0.26 10.26 5.73 10,925
Class B.............. (0.29) 0.25 10.25 5.38 124
Class Y.............. (0.32) 0.27 10.27 5.95 5
ITT HARTFORD ADVISERS
FUND
For the Six Months
Ended June 30, 1997...
Class A.............. (0.10) 1.47 12.55 14.12 36,008
Class B.............. (0.08) 1.43 12.48 13.64 10,763
Class Y.............. (0.11) 1.48 12.58 14.29 34,132
For the Year Ended
December 31, 1996.....
Class A.............. (0.08) 1.08 11.08 11.56 14,347
Class B.............. (0.08) 1.05 11.05 11.28 1,499
Class Y.............. (0.09) 1.10 11.10 11.88 34
ITT HARTFORD DIVIDEND AND
GROWTH FUND
For the Six Months
Ended June 30, 1997...
Class A.............. (0.06) 2.05 13.50 18.46 18,056
Class B.............. (0.06) 2.00 13.40 18.08 11,096
Class Y.............. (0.07) 2.06 13.52 18.65 4,401
For the Year Ended
December 31, 1996.....
Class A.............. (0.08) 1.45 11.45 15.29 6,083
Class B.............. (0.09) 1.40 11.40 14.82 730
Class Y.............. (0.09) 1.46 11.46 15.49 36
ITT HARTFORD STOCK FUND
For the Six Months
Ended June 30, 1997...
Class A.............. -- 2.48 14.01 21.54 19,505
Class B.............. -- 2.42 13.92 21.07 11,142
Class Y.............. -- 2.51 14.06 21.76 231
For the Year Ended
December 31, 1996.....
Class A.............. (0.02) 1.53 11.53 15.50 6,273
Class B.............. (0.02) 1.50 11.50 15.20 1,254
Class Y.............. (0.03) 1.55 11.55 15.80 44
ITT HARTFORD CAPITAL
APPRECIATION FUND
For the Six Months
Ended June 30, 1997...
Class A.............. (0.10) 4.63 17.99 35.46 48,404
Class B.............. (0.10) 4.57 17.89 35.12 22,152
Class Y.............. (0.10) 4.70 18.08 35.93 7,926
For the Year Ended
December 31, 1996.....
Class A.............. (0.41) 3.36 13.36 37.75 9,028
Class B.............. (0.41) 3.32 13.32 37.35 889
Class Y.............. (0.41) 3.38 13.38 37.95 107
ITT HARTFORD SMALL
COMPANY FUND
For the Six Months
Ended June 30, 1997...
Class A.............. (0.001) 1.07 11.75 10.03 7,874
Class B.............. (0.001) 1.03 11.68 9.68 1,267
Class Y.............. (0.001) 1.10 11.81 10.28 4,194
For the Year Ended
December 31, 1996.....
Class A.............. (0.72) 0.68 10.68 14.11 3,845
Class B.............. (0.72) 0.65 10.65 13.81 66
Class Y.............. (0.72) 0.71 10.71 14.41 8
ITT HARTFORD
INTERNATIONAL
OPPORTUNITIES FUND
For the Six Months
Ended June 30, 1997...
Class A.............. (0.02) 0.97 11.69 9.22 8,566
Class B.............. (0.02) 0.99 11.68 8.77 1,374
Class Y.............. (0.02) 1.00 11.73 9.49 3,902
For the Year Ended
December 31, 1996.....
Class A.............. (0.09) 0.72 10.72 8.14 4,294
Class B.............. (0.10) 0.69 10.69 7.86 163
Class Y.............. (0.11) 0.73 10.73 8.36 64
<CAPTION>
RATIO OF
EXPENSES RATIO OF
TO AVERAGE NET
RATIO OF NET ASSETS INVESTMENT
EXPENSES AFTER INCOME
TO AVERAGE WAIVERS AND TO AVERAGE PORTFOLIO AVERAGE
NET ASSETS REIMBURSEMENTS NET ASSETS TURNOVER COMMISSION
(1) (1) (1) RATE RATE PAID
----------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
ITT HARTFORD MONEY MARKET
FUND
For the Six Months
Ended June 30, 1997...
Class A.............. 1.51% 1.00% 4.61% NA NA
Class Y.............. 1.81 0.55 5.09 -- --
For the Year Ended
December 31, 1996.....
Class A.............. 2.70 1.00 4.49 -- NA
Class Y.............. 3496.38 0.55 4.56 -- --
ITT HARTFORD BOND INCOME
STRATEGY FUND
For the Six Months
Ended June 30, 1997...
Class A.............. 1.50 1.25 5.74 69.61% NA
Class B.............. 5.62 1.95 5.07 -- --
Class Y.............. 1.98 0.80 6.19 -- --
For the Year Ended
December 31, 1996.....
Class A.............. 2.72 1.25 5.72 75.52 NA
Class B.............. 22.36 1.95 5.22 -- --
Class Y.............. 185.34 0.80 6.17 -- --
ITT HARTFORD ADVISERS
FUND
For the Six Months
Ended June 30, 1997...
Class A.............. 1.87 1.40 1.86 7.76 $0.0320
Class B.............. 3.04 2.10 1.13 -- --
Class Y.............. 1.26 0.95 2.35 -- --
For the Year Ended
December 31, 1996.....
Class A.............. 2.94 1.40 2.13 19.75 0.0297
Class B.............. 6.71 2.10 1.24 -- --
Class Y.............. 144.82 0.95 2.75 -- --
ITT HARTFORD DIVIDEND AND
GROWTH FUND
For the Six Months
Ended June 30, 1997...
Class A.............. 2.06 1.40 1.61 15.87 0.0357
Class B.............. 3.64 2.10 0.75 -- --
Class Y.............. 1.84 .95 1.99 -- --
For the Year Ended
December 31, 1996.....
Class A.............. 4.12 1.40 1.95 29.80 0.0306
Class B.............. 12.97 2.10 .082 -- --
Class Y.............. 141.53 0.95 2.41 -- --
ITT HARTFORD STOCK FUND
For the Six Months
Ended June 30, 1997...
Class A.............. 2.11 1.45 0.14 7.22 0.0342
Class B.............. 3.33 2.15 (0.01) -- --
Class Y.............. 4.39 1.00 0.01 -- --
For the Year Ended
December 31, 1996.....
Class A.............. 3.96 1.45 0.71 11.87 0.0281
Class B.............. 7.76 2.15 (0.12) -- --
Class Y.............. 133.50 1.00 1.37 -- --
ITT HARTFORD CAPITAL
APPRECIATION FUND
For the Six Months
Ended June 30, 1997...
Class A.............. 2.20 1.45 (0.90) 111.02 0.0427
Class B.............. 3.20 2.15 (1.53) -- --
Class Y.............. 1.98 1.00 (0.47) -- --
For the Year Ended
December 31, 1996.....
Class A.............. 4.10 1.45 (0.70) 149.99 0.0381
Class B.............. 9.05 2.15 (1.53) -- --
Class Y.............. 93.64 1.00 0.04 -- --
ITT HARTFORD SMALL
COMPANY FUND
For the Six Months
Ended June 30, 1997...
Class A.............. 2.24 1.45 (0.51) 63.66 0.0364
Class B.............. 5.49 2.15 (1.13) -- --
Class Y.............. 2.08 1.00 0.08 -- --
For the Year Ended
December 31, 1996.....
Class A.............. 4.24 1.45 (0.60) 69.92 0.0313
Class B.............. 20.03 2.15 (1.30) -- --
Class Y.............. 115.33 1.00 0.03 -- --
ITT HARTFORD
INTERNATIONAL
OPPORTUNITIES FUND
For the Six Months
Ended June 30, 1997...
Class A.............. 2.93 1.65 0.81 28.42 0.0061
Class B.............. 6.60 2.35 0.51 -- --
Class Y.............. 2.93 1.20 1.72 -- --
For the Year Ended
December 31, 1996.....
Class A.............. 5.35 1.65 0.51 21.51 0.0175
Class B.............. 32.61 2.35 (0.86) -- --
Class Y.............. 126.52 1.20 0.57 -- --
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
35
<PAGE>
THE ITT HARTFORD MUTUAL FUND FAMILY
Small Company Fund
Capital Appreciation Fund
International Opportunities Fund
Stock Fund
Dividend and Growth Fund
Advisers Fund
Bond Income Strategy Fund
Money Market Fund
BY REGULAR MAIL:
The Hartford Mutual Funds
P.O. Box 8416
Boston, MA 02266-8416
1-888-843-7824
BY E-MAIL ON THE INTERNET:
[email protected]
UNDERWRITER
Hartford Securities
Distribution Company, Inc.
P.O. Box 2999
Hartford, CT 06104-2999
INVESTMENT MANAGER
The Hartford Investment Management
Company (HIMCO)
P.O. Box 2999
Hartford, CT 06104-2999
INVESTMENT SUB-ADVISER
Wellington Management Company, LLP
75 State Street
Boston, MA 02109
This presentation is authorized only when
preceded or accompanied by a currently
effective prospectus. The prospectus
contains detailed information about
the funds, including charges and fees,
so please real it carefully before you invest
or send money.
[LOGO]
403764REV Printed in U.S.A. -C- 1997 The Hartford, Hartford, CT 06115
