TWENTIETH CENTURY
World Investors
Annual Report
November 30,
1995
[company logo]
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TABLE OF CONTENTS
Our Message to You ................................................. 1
Investment Philosophy .............................................. 2
Period Overview .................................................... 2
Investment Review
International Equity ........................................... 4
International Emerging Growth .................................. 9
Schedules of Investments
International Equity ........................................... 14
International Emerging Growth .................................. 17
Statements of Assets and Liabilities ............................... 23
Statements of Operations ........................................... 24
Statements of Changes in Net Assets ................................ 25
Notes to Financial Statements ...................................... 26
Financial Highlights ............................................... 29
Independent Accountants' Report .................................... 30
INDICES USED FOR PERFORMANCE COMPARISON
The S&P 500 Index is an index created by Standard & Poor's Corporation that
is considered to represent the performance of the U.S. stock market generally.
It is not an investment product available for purchase.
Lipper Analytical Services, Inc., is an independent mutual fund ranking
service.
The Morgan Stanley Europe, Australia, Far East Index (EAFE(R)) is a widely
followed group of stocks from 20 different countries. It is not an investment
product available for purchase.
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November 30, 1995
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OUR MESSAGE TO YOU
[photo of James E. Stowers and James E. Stowers III in the left margin]
The performance of most international stock markets was modest during 1995.
A combination of sluggish growth in many developed markets and both real and
perceived instability in emerging markets led to returns that were limited at
best. This is in contrast to the double-digit gains afforded by the U.S.
market.
For the 12 months ended November 30, Twentieth Century's International
Equity and International Emerging Growth funds both posted gains slightly under
their benchmark EAFE(R) index's 7.57% return. Both Twentieth Century
international funds rebounded sharply in the second half of the period,
achieving all of their gains between May and November, a period when the EAFE(R)
climbed only 2.36%.
As a result of this strong second-half performance, International Equity
outpaced more than half of the funds in its Lipper category with a 5.93% return
and International Emerging Growth's 5.75% gain outperformed more than two-thirds
of all international small-company funds, according to Lipper Analytical
Services, Inc.
This year international markets have been overshadowed by the remarkable
performance of the U.S. stock market. Yet we continue to believe that many of
the best growth opportunities in the world exist outside the United States.
Although the U.S. economy has been growing at a healthy 3.3% clip per year (as
of September 30, 1995), that rate of growth pales in comparison to that
experienced in many other parts of the world. Asia's emerging market economies,
for example, are expanding up to three times faster. And, unlike the U.S.
equities market, many foreign stock markets today are trading at lower overall
valuations than they were two years ago.
Regardless of these near-term conditions, we continue to believe in the
value of diversifying across international borders over the long term. It is
rarely clear in advance where the companies with the rapidly accelerating
earnings we seek will be found. What is clear is that markets seldom move in
unison. By diversifying around the globe, investors with the patience and
discipline to stay the course will be well-positioned when international markets
regain their luster.
Looking ahead, we see new pockets of opportunity to invest in fast-growing
companies around the globe. We believe that our time-tested growth investment
approach, which targets companies with rapidly accelerating earnings in any of
some 49 countries, will lead us to many of tomorrow's premier businesses.
Sincerely,
/s/James E. Stowers /s/James E. Stowers III
Chairman of the Board and Founder President
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INVESTMENT PHILOSOPHY
Twentieth Century International Equity and Twentieth Century International
Emerging Growth emphasize earnings and revenue acceleration in selecting
individual stocks throughout the world. The portfolio management team selects
companies for investment based on fundamental analysis, relying on a proprietary
computer database containing information on 11,000 international firms. The
funds seek to remain fully invested at all times. Both funds hedge currencies
when, in the view of the managers, the risk of foreign currency exchange losses
appears to be unusually high. These efforts are intended to protect the funds
from negative performance, not to speculate on individual currencies.
In addition to these similarities, each fund has its specific
characteristics:
TWENTIETH CENTURY INTERNATIONAL EQUITY is a broadly diversified fund. It
has no limits on the countries in which it can invest, but typically emphasizes
larger-sized companies in developed foreign markets. While International Equity
may show more price fluctuation than many domestic-stock funds, its focus on
more established firms in major European and Asian markets, as well as Canada,
may make it less volatile than less-diversified foreign-stock funds that focus
on single countries or regions.
TWENTIETH CENTURY INTERNATIONAL EMERGING GROWTH invests in both the world's
developed and emerging markets. However, its holdings in developed markets are
primarily in smaller companies, and its investments in emerging markets are
restricted to no more than 50% of assets. Its goal is to provide a portfolio of
rapidly growing companies from around the world. Because the risks associated
with this investment approach are high, the fund is most appropriate for the
aggressive portion of a well-diversified, long-term investment portfolio.
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PERIOD OVERVIEW
During the year ended November 30, 1995, successful investment
opportunities were often overshadowed by difficult market trends. Relatively
high interest rates in Europe, frequent economic setbacks in Japan, and
continued weakness in most emerging markets contributed to erratic performance
by many international indices. Some markets, among them Britain, Hong Kong,
South Africa, and Japan, posted market rallies of more than 10% at specific
points during the year, but those gains were exceptions to the norm. Overall,
the EAFE(R) index produced only a 7.57% gain in a year when the U.S.-based S&P
500 index returned 36.96%. As a result, individual stock selection had a greater
effect on the funds' total returns than country exposure.
Most European markets have been hampered by relatively weak economic
conditions. Fearing the effects of a weak currency, France, Spain, and various
other European governments have created artificially high interest rates to help
prop up the value of their currencies. Concerned about high unemployment rates,
European consumers have also been stingy with their spending. Consequently,
corporate earnings growth in Europe has been inconsistent. Britain's central
bank's decision to cut interest rates in the spring provided a brief flurry of
U.K. economic growth and led to Europe's broadest stock-price rally. Between the
end of March and mid-October, the British market gained about 18%.
In this uneven environment, many investors were attracted to large,
established companies demonstrating sustainable, internally generated growth.
For example, a more favorable cost and regulatory environment in the large U.S.
healthcare market has helped many global healthcare companies improve their
earnings. European healthcare firms with a multinational sales reach and
promising new products have performed well. Europe's larger
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November 30, 1995
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telecommunications, cellular, and media companies have also had noteworthy
performance.
In our opinion, among all international markets, Japan's offers one of the
brightest prospects for a strong economic recovery--and with it, the possibility
for new consumer demand and capital spending that could lead to accelerating
earnings growth. During the past year, news headlines focused attention on two
severe Japanese economic woes. An unusually expensive yen increased prices on
Japan's export products, leading to earnings declines for the country's many
export-oriented firms. In addition, a banking crisis on par with the U.S.
savings and loan crisis of 1989 and 1990 eroded the capital of several large
Japanese banks and brokerage firms.
Although these conditions hindered Japanese economic growth, they
encouraged some beneficial changes in Japanese business standards. Outside the
banking industry, Japan's larger, stronger companies have curtailed costs and
streamlined operations in ways that haven't been culturally acceptable in the
past. For example, some Japanese manufacturers are shifting a (still small)
percentage of their production to cheaper overseas facilities and are even
laying off workers in the process. Resulting earnings growth is occurring most
rapidly in the technology, media, and capital goods sectors. By focusing on
growing companies in these sectors and avoiding banks and brokers, the funds'
Japanese holdings, on average, outperformed Japan's Nikkei stock market index in
the second half of the year.
Emerging markets have not yet recovered from their losses in 1994. Memories
of the Mexican peso's collapse at 1994's end and the country's subsequent
economic decline have given many investors pause about investing in the world's
emerging markets. Continued rapid economic growth in many of these nations, and
some remarkable individual company performances, have not yet been enough to
spark a broad-based rally. Only a few emerging markets, including South Africa,
showed relative market strength. Hong Kong (which, by our measures, is no longer
an emerging market) has also recovered from its lows. In the near future, we
expect Israel to join this list of above-average emerging markets performers.
Twentieth Century's largest emerging markets investments are in Southeast Asia,
which is home to some of the world's most rapidly growing companies.
Looking at the year ahead, we believe that a successful resolution of
Japan's banking crisis will allow that nation's economic recovery to reach full
flower. We are hopeful that needed interest rate cuts in Europe, if made, will
help spur a long-overdue rally in European issues. By historical measures,
Europe's growth stocks are unusually inexpensive. In our view, sentiment toward
the emerging markets should improve on a selective basis in those countries
where stable politics and growing consumer demand lead to strong earnings
growth.
PORTFOLIO MANAGERS
Theodore Tyson, Portfolio Manager
Henrik Strabo, Portfolio Manager
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INTERNATIONAL EQUITY
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MANAGEMENT Q & A
A discussion with Ted Tyson, a portfolio manager on the World Investors
management team.
Q: HOW HAS TWENTIETH CENTURY INTERNATIONAL EQUITY PERFORMED FOR THE PERIOD ENDED
NOVEMBER 30, 1995?
A: For the year ended November 30, International Equity gained 5.93%, while its
benchmark, the EAFE(R) index, returned 7.57%. The first half of the year was
marred by dramatic declines in emerging markets and weak performance by the
fund's Japanese holdings. The fund's best results came in the last half of the
reporting period when it gained 6.52%, in contrast to the EAFE(R)'s 2.36%. This
positive turnaround can be attributed to our ownership of selected growth stocks
in both Europe and Japan that outperformed their local markets.
Q: WHAT STOCKS WORKED FOR YOU IN JAPAN, WHERE THE FUND HAS ITS LARGEST
COUNTRY WEIGHTING?
A: Our positions in Japan got off to a rocky start this past year, but
ultimately became very rewarding. For about a year Japan's economy has been
[continued on page 5]
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AVERAGE ANNUAL TOTAL RETURNS (AS OF NOVEMBER 30, 1995)
International Equity MSCI EAFE(R) Index** S&P 500 Index
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6 Months* 6.52% 2.36% 14.93%
1 Year 5.93% 7.57% 36.96%
Inception (5/9/91) 12.23% 7.39%+ 13.71%
*Actual (not annualized)
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[line graph]
$10,000 Over Life of Fund (as of November 30, 1995)
$10,000 INVESTMENT MADE 5/9/91
IE S&P MCSI(R) Value on 11/30/95:
6/30/91 $9,784 $9,769 $9,362 -----------------
9/30/91 $10,431 $10,291 $10,164 $16,928
12/31/91 $11,014 $11,147 $10,335 International Equity
3/31/92 $11,642 $10,867 $9,108
6/30/92 $12,349 $11,074 $9,300 $13,863
9/30/92 $11,839 $11,423 $9,441 MSCI EAFE(R) Index**+
12/31/92 $11,547 $11,995 $9,077
3/31/93 $12,542 $12,518 $10,165 $17,969
6/30/93 $13,069 $12,577 $11,187 S&P 500 Index
9/30/93 $13,922 $12,901 $11,929
12/31/93 $16,472 $13,199 $12,032
3/31/94 $15,873 $12,703 $12,453
6/30/94 $16,087 $12,757 $13,089
9/30/94 $16,665 $13,380 $13,102
12/31/94 $15,689 $13,378 $12,969
3/31/95 $15,170 $14,677 $13,201
6/30/95 $16,049 $16,073 $13,306
9/30/95 $16,906 $17,347 $13,861
11/30/95 $16,928 $17,969 $13,863
Past performance is no guarantee of future results.
**Source: Lipper Analytical Services, Inc.
+The EAFE(R) Index for 4/30/91, the date closest to the inception date (5/9/91)
of the fund, for which the Index is available, has been used for the starting
point for EAFE(R) in the graph and average annual total return.
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QUICK FUND FACTS
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International Equity
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Strategy:
Capital growth through
investments in international
stocks, emphasizing companies
in developed markets.
Inception Date:
May 9, 1991
Size:
$1.21 billion
(as of November 30, 1995)
Investment Approach:
Aggressive Growth
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November 30, 1995
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INTERNATIONAL EQUITY
[Management Q & A continued from page 4]
showing signs of recovery from an almost five-year recession. Unfortunately, our
move into Japan came a little bit early. A stronger yen (which makes Japanese
products more expensive overseas) reduced the earnings for many of our stock
selections early in the year, and a persistent banking crisis has hampered the
economy's growth.
Yet by mid year as the yen declined in relation to the dollar, our Japanese
holdings made strong gains. Our search for companies with accelerating earnings
and revenues had led us to the best performing sectors of the Japanese
market--media, technology, and capital goods stocks. Stocks like video game
maker Nintendo and semiconductor firm Advantest took advantage of the global
demand for new entertainment and technology products, while a capital goods firm
like machine-tool maker Fanuc responded to the economic recovery taking place
within Japan.
Q: WHY HAVE MANY OF THE FUND'S EUROPEAN INVESTMENTS PERFORMED BETTER THAN THE
EUROPEAN MARKETS AS A WHOLE?
A: In the last half of the period we were able to stay ahead of the indices in
Europe by adhering to our investment discipline and seeking sustained earnings
growth. In general, the European economies have been mixed this year. Even the
United Kingdom's economy, which saw the beginnings of a strong economic recovery
mid year, has already begun to slow. In this environment, European investors
favored solid growth companies--a trend that strongly benefited the fund. These
companies are mainly in industries that enjoy worldwide demand--especially the
media and pharmaceutical sectors. Swedish pharmaceutical company Astra, for
example, is marketing (in conjunction with U.S. pharmaceutical firm Merck) an
innovative product called Losec that has become the leading ulcer medication in
the United States.
Q: WHY IS SWITZERLAND AMONG THE FUND'S TOP COUNTRY WEIGHTINGS?
A: We have held a fairly large position in this country this past year, which
benefited the fund since the market performed relatively well. However, our
position there is really a function of our interest in individual stocks, rather
than country selection. Our holdings in Switzerland include large positions in
Schweizerischer Bankverein (Swiss Bank) and Sandoz, a large pharmaceutical
company. We are more interested in the global reach and sustained earnings
growth these companies offer than the country in which they are located.
Q: WHAT IS YOUR OUTLOOK FOR EUROPE IN THE COMING YEAR?
A: Because so many of its economies are slowing, the outlook for earnings growth
in Europe is not ideal. We have therefore trimmed our holdings in many European
countries, including France and Germany. Our position in the United Kingdom,
which was at 13% six months ago, has also been [continued on page 6]
TOP TEN HOLDINGS* (AS OF NOVEMBER 30, 1995)
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*The composition of the portfolio may change over time.
% of fund's
investments in
% of fund these stocks
investments 12 months ago
Mannesmann 4.09% 2.16%
Sandoz 3.15% --
Verenigd Bezit VNU 2.76% 1.00%
Nintendo 2.75% --
Aoyama Trading 2.39% --
Advantest 2.37% --
Schweizerischer
Bankverein 2.35% --
Hutchison Whampoa 2.31% --
Roussel Uclaf 2.20% 1.07%
British Aerospace 2.11% --
5
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INTERNATIONAL EQUITY
[Management Q & A continued from page 5]
cut back. That situation could change if these countries decide to stimulate
growth by reducing interest rates. In our opinion, dramatic interest-rate
declines aren't likely, but with so many European economies showing faltering
industrial production and weak consumption, the motivation to cut rates should
be high.
Q: HOW MUCH OF THE FUND IS INVESTED IN EMERGING MARKETS?
A: The fund has about 15% of assets in emerging markets. Our largest emerging
markets positions have been in South Africa. In South Africa, from the time that
global economic sanctions against the country were removed until November of
1995, we made noteworthy gains. The market sold off temporarily amid monetary
adjustments and other political and economic challenges, but it bounced back in
the summer.
While no longer considered an emerging market, the relatively small market
in Hong Kong has also been quite a good performer for the fund. We had one very
disappointing stock there, Consolidated Electric Power, which is involved in
infrastructure projects in China that have had significant delays. That stock
has fallen badly. But Hutchison Whampoa, HSBC and First Pacific--our main
holdings in Hong Kong--are up more than 30% this year.
International Equity schedule of investments begins on page 14.
[company logo]
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NOVEMBER 30, 1995
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INTERNATIONAL EQUITY
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INVESTMENTS BY COUNTRY
At November 30, 1995, and November 30, 1994, International Equity had
investments in the following countries. Size of investments is indicated as a
percentage of total fund investments.
[bar chart]
*Reflects countries with investments each less than 2% of total fund assets.
COUNTRY 11/30/95 11/30/94
Japan 31% 16%
United Kingdom 6% 4%
Switzerland 6% 2%
Hong Kong 6% -%
Netherlands 6% 6%
Germany 5% 8%
France 5% 10%
Canada 5% 2%
South Africa 4% 8%
Sweden 3% 6%
Italy 3% 4%
Denmark 2% 1%
Thailand 2% 3%
South Korea 2% 2%
Temp Cash Investments 3% 4%
Other* 11% 6%
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INTERNATIONAL EQUITY
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INVESTMENTS BY INDUSTRY
[bar chart]
At November 30, 1995, and November 30, 1994, International Equity had
investments in these industry sectors. Size of investments is indicated as a
percentage of total fund investments.
INDUSTRY 11/30/95 11/30/94
Manufacturing 14% 9%
Pharm & Med Equip 12% 3%
Food & Bev, Cons Goods 9% 6%
Financial 9% 5%
Aerospace & Tech 9% 2%
Media & Pub 7% 7%
Telecommunications 7% 7%
Retail 5% 8%
Const&Prop Develop 5% 5%
Oil/Gas Explor/Dist/Serv 5% 3%
Transportation 3% 4%
Utilities 2% 8%
Automotive/Engineering 1% 6%
Temp Cash Investments 4% 4%
Other Industries 8% 13%
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November 30, 1995
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INTERNATIONAL EMERGING GROWTH
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MANAGEMENT Q & A
A discussion with Henrik Strabo, a portfolio manager on the World Investors
management team.
Q: HOW DID TWENTIETH CENTURY INTERNATIONAL EMERGING GROWTH PERFORM FOR THE YEAR
ENDED NOVEMBER 30, 1995?
A: For the one-year period, International Emerging Growth posted a 5.75% total
return. Over the same period, the fund's benchmark index, the EAFE(R), produced
a 7.57% gain. The bulk of its performance can be attributed to the fund's 6.34%
gain during the past six months. This strong second-half rebound helped the fund
outshine many peers for the year as a whole. For the one-year period ended
November 30, 1995, the fund placed third out of 11 international small company
funds, based on total returns, as tracked by Lipper Analytical Services, Inc.
(although past performance is no guarantee of future results). [continued on
page 10]
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AVERAGE ANNUAL TOTAL RETURNS (AS OF NOVEMBER 30, 1995)
International Lipper Int'l Small
Emerging Growth MSCI EAFE(R) Index** Company Avg.**
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6 Months* 6.34% 2.36% 3.20%
1 Year 5.75% 7.57% 2.34%
Inception (4/1/94) 8.23% 6.65% -1.82%
*Actual (not annualized)
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[bar graph]
$10,000 Over Life of Fund (as of November 30, 1995)
$10,000 INVESTMENT MADE 4/1/94
Value on 11/30/95:
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EG Lipper EAFE(R) $11,400
6/30/94 $10,760 $9,767 $10,511 International
9/30/94 $11,420 $9,983 $10,521 Emerging Growth
12/31/94 $10,760 $9,351 $10,414
3/31/95 $10,100 $8,938 $10,608 $11,123
6/30/95 $11,020 $9,389 $10,685 MSCI EAFE(R) Index**
9/30/95 $11,800 $10,005 $11,130
11/30/95 $11,400 $9,712 $11,132 $9,712
Lipper Int'l Small
Company Avg.**
Past performance is no guarantee of future results.
**Source: Lipper Analytical Services, Inc.
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QUICK FUND FACTS
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International
Emerging Growth
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Strategy:
Capital growth through
investments in companies
in emerging markets and
smaller companies in
developed markets.
Inception Date:
April 1, 1994
Size:
$114.58 million
(as of November 30, 1995)
Investment Approach:
Aggressive Growth
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INTERNATIONAL EMERGING GROWTH
[Management Q & A continued from page 9]
Q: WHAT LED TO THE FUND'S STRONG REBOUND IN THE LAST SIX MONTHS OF THE YEAR?
A: For most of the past year, conditions have not been ideal for smaller-sized
foreign companies. In Europe, for example, investors are favoring larger
companies with steadier earnings over smaller, more speculative firms. Japan's
small companies have also lagged their larger counterparts. In this environment,
many foreign small-cap stocks did poorly. These challenges, in addition to
weakness in the emerging markets, help explain why the fund struggled in the
year's first half. In the last six months, however, we were fortunate that our
search for earnings acceleration identified a few important exceptions to the
trend. Sage Group, one of the fund's larger holdings, is a British company that,
like Intuit in the United States, makes software for small businesses. Its
products have proven extremely popular and its earnings growth has been so
attractive to investors that its stock has doubled over the past year.
Q: ONE OF INTERNATIONAL EMERGING GROWTH'S LARGEST SINGLE COUNTRY WEIGHTINGS, AT
10% OF ASSETS, IS IN JAPAN. YET INTERNATIONAL EQUITY HAS ALMOST TRIPLE THAT
AMOUNT OF ASSETS IN JAPAN. WHY IS THIS FUND SO MUCH LIGHTER IN JAPAN?
A:In general, the early signs of a strong economic recovery we see in Japan make
us enthusiastic about the country's prospects. At this time, though, we are more
favorable toward larger companies than smaller ones in Japan. Because Japan's
larger firms are attempting to lower costs, they're putting pressure on many of
their smaller suppliers to lower their profit margins. As a result, the Japanese
small-cap stock indices have really lagged the market as a whole this year.
Consequently we haven't seen the earnings acceleration we'd like among the small
or mid sized companies that are well-suited for International Emerging Growth.
Q: ARE THERE ANY COUNTRIES THAT YOU FIND PARTICULARLY ATTRACTIVE?
A: Because our selection process revolves around choosing the individual stocks
that we believe show the best earnings and revenue acceleration, we don't focus
on macroeconomic country considerations in our investment process. It is true
that sometimes the best investment opportunities will cluster in particular
countries where the conditions for growth are especially favorable. Few foreign
countries have exhibited conditions highly favorable for growth investing,
particularly for smaller-sized companies, over the past year. Our response has
been to look for individual stocks in many markets, giving particular emphasis
to companies that meet especially stringent growth acceleration standards. The
relatively large 10% stake the fund has in Germany, for example, owes mostly to
a single position in medical equipment maker Fresenius. Fresenius has become the
fund's largest holding, and as long as the firm maintains its outstanding
earnings growth, it is likely to remain a top holding. [continued on page 11]
TOP TEN HOLDINGS* (AS OF NOVEMBER 30, 1995)
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*The composition of the portfolio may change over time.
% of fund's
investments in
% of fund these stocks
investments 12 months ago
Fresenius 3.72% 1.04%
Nera 3.20% --
De Rigo Holdings ADR 2.79% --
Technomatix Technologies ADR 2.78% 0.65%
Marschollek, Lautenschlager
und Partner 2.62% 0.79%
Sage Group 2.55% 0.29%
SITA 2.39% --
Misumi 2.05% --
Bank in Liechtenstein 1.98% 0.79%
Hoganas B 1.90% 0.58%
10
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November 30, 1995
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INTERNATIONAL EMERGING GROWTH
[Management Q & A continued from page 10]
Q: HOW MUCH DOES THE FUND HAVE IN EMERGING MARKETS CURRENTLY?
A: About 25% of assets are devoted to emerging markets. Our best results over
the past year have come from positions in South Africa. Many solidly growing
companies in that country have enjoyed a resurgence in earnings and stock price
since the abolishment of apartheid and the lifting of global economic sanctions.
Generally, we are maintaining larger positions in Southeast Asia than we are in
Latin America because the Southeast Asian countries are showing much greater
earnings acceleration.
Q: DID YOU EXPERIENCE ANY SURPRISES IN THE EMERGING MARKETS?
A: Probably the biggest surprise has been that, other than the Hong Kong market,
which we do not consider an emerging market, the markets in Southeast Asia did
not perform as well as we expected. Because most Southeast Asian currencies are
linked to the dollar, these markets tend to perform well when U.S. interest
rates decline, as rates did this past year. Moreover, companies in that region
continue to grow as fast as any in the world. But despite these positive
factors, our positions in Southeast Asian firms were a disappointment. We did
not suffer dramatic losses, but the internal dynamics of the Southeast Asian
economies and the attempts by their governments to rein in inflation have caused
those markets to underperform.
Q: WHICH EMERGING MARKETS OFFER THE MOST ATTRACTIVE EARNINGS GROWTH
OPPORTUNITIES FOR THE COMING YEAR?
A: Among the emerging markets, we are increasing our position in Israel most
aggressively. Israel's stock market performance has been erratic in the past few
years, as the nation has struggled through an on-again, off-again peace process
and political uncertainties. But Israel provides an excellent environment for
global business. It has a significant pool of skilled labor. It has averaged
about 5% gross domestic product (GDP) growth each of the past two years, and
next year GDP growth may climb to 7%. And the Israeli government has created a
very open environment for business competition as a means to bring inflation
down. That competition has led to stronger, faster-growing Israeli companies.
International Emerging Growth schedule of investments begins on page 17.
[company logo]
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INTERNATIONAL EMERGING GROWTH
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INVESTMENTS BY COUNTRY
At November 30, 1995, and November 30, 1994, International Emerging Growth had
investments in the following countries. Size of investments is indicated as a
percentage of total fund investments.
[bar chart]
*Reflects countries with investments each less than 2% of total fund assets.
COUNTRY 11/30/95 11/30/94
Japan 10% 9%
Germany 10% 7%
Sweden 7% 5%
Norway 7% 2%
France 7% 1%
United Kingdom 5% 2%
Hong Kong 5% 3%
Italy 5% 1%
Israel 5% 1%
South Africa 4% 5%
Denmark 3% --
Netherlands 3% --
Ireland 3% 5%
Thailand 3% 5%
Chile 2% 2%
Switzerland 2% 3%
India 2% 1%
Singapore 2% 2%
Spain 2% 0%
Peru 2% 2%
Temp Cash Investments 3% 3%
Other 8% 9%
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November 30, 1995
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INTERNATIONAL EMERGING GROWTH
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INVESTMENTS BY INDUSTRY
At November 30, 1995, and November 30, 1994, International Emerging Growth had
investments in these industry sectors. Size of investments is indicated as a
percentage of total fund investments.
[bar chart]
INDUSTRY 11/30/95 11/30/94
Aerospace & Tech 17% 4%
Retail 12% 8%
Food & Bev, Cons Goods 8% 8%
Telecommunications 8% 2%
Media & Pub 7% 8%
Financial 7% 6%
Manufacturing 6% 12%
Pharm & Med Equip 6% 4%
Const&Prop Develop 4% 8%
Metals & Mining Aggregates 3% 11%
Forest Products & Packaging 3% 1%
Automotive/Engineering 2% 10%
Transportation 2% 2%
Utilities 2% 2%
Oil/Gas Explor/Dist/Serv 1% 1%
Temp Cash Investments 3% 3%
Other Industries 9% 10%
13
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS November 30, 1995
INTERNATIONAL EQUITY
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS
Austria--1.32%
140,000 Voest-Alpine Technologie $16,146,176
(engineering, plant -----------
construction)
Canada--4.72%
375,000 Canadian National Railway
(Installment Receipts)1 5,625,000
(railroad)
300,000 Canadian Pacific 5,516,937
(diversified holding company)
450,300 Northern Telecom 18,180,863
(telecommunications
equipment)
687,300 Renaissance Energy1 15,799,128
(oil and gas exploration)
1,187,400 Rogers Communications B1 12,446,541
(communications and media) ----------
57,568,469
----------
Denmark--2.11%
205,000 Novo Nordisk B 25,794,217
(pharmaceuticals) ----------
France--4.84%
177,400 Roussel Uclaf 26,848,305
(pharmaceuticals)
300,000 SGS Thomson
Microelectronics1 11,175,000
(semiconductors)
300,000 Societe Nationale Elf 21,051,576
(oil and gas) ----------
59,074,881
----------
Germany--5.45%
311,500 Adidas1 16,595,253
(sportswear and equipment)
155,000 Mannesmann 49,878,040
(diversified manufacturing) ----------
66,473,293
----------
Hong Kong--6.12%
6,800,000 Consolidated Electric Power 11,121,095
(power plants)
12,721,856 First Pacific 13,815,858
(trading company)
1,460,305 HSBC Holdings 21,522,689
(bank)
5,000,000 Hutchison Whampoa 28,248,770
(container parts, ----------
property development)
74,708,412
----------
India--0.28%
220,000 Larsen and Toubro GDR+ 3,355,000
(engineering and plant ---------
construction)
Ireland--0.96%
1,965,396 Independent Newspapers 11,685,508
(newspaper publisher) ----------
Israel--0.86%
3,900 Africa Israel Investments1 4,774,397
(tourism, property
development)
2,007,600 Bezek The Israeli
Telecommunications 5,725,121
(telecommunications) ----------
10,499,518
----------
Italy--2.52%
14,600,000 Olivetti1 9,696,811
(office, computer equipment)
13,000,000 Telecom Italia Mobile 21,089,430
(mobile telephone services) ----------
30,786,241
----------
Japan--31.17%
511,000 Advantest 28,946,734
(semi-conductor test
equipment)
1,016,000 Aoyama Trading 29,175,087
(specialty retail)
1,327,000 Bridgestone 19,508,012
(tire and rubber maker)
306,000 Daibiru 3,358,847
(real estate company)
See Notes to Financial Statements
14
<PAGE>
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
1,000,000 Dainippon Screen1 $8,683,295
(precision machinery maker)
408,000 Fanuc 17,314,059
(machine tools)
1,230,000 Fujitsu 14,465,625
(computer manufacturer)
154,000 Futaba 6,957,809
(electronic component
manufacturer)
350,000 Hankyu Department Stores 4,630,764
(retail department store)
816,000 Hoya 24,231,685
(glass manufacturer,
electronic components)
145,000 Keyence 17,763,513
(measure and control
equipment)
612,000 Kirin Beverage 8,037,242
(beverages)
500,000 Kurita Water 13,867,790
(water treatment equipment)
86,000 Kyocera 6,784,927
(ceramic packaging
manufacturer)
838,000 Mitsubishi Estate 9,444,798
(property investment)
177,000 Mitsui High-Tech 4,822,463
(electronic devices)
165,000 Nichiei 10,527,270
(finance company)
425,200 Nintendo 33,504,268
(video games)
1,133,000 Nippon Express 9,804,861
(general transport)
68,800 Nippon Television Network 18,003,234
(television broadcasting)
393,000 Sankyo 8,743,176
(pharmaceutical
manufacturer)
408,000 Santen Pharmaceutical 8,996,913
(pharmaceuticals)
340,000 Secom 22,892,145
(security service)
78,500 Square 2,985,054
(software producer)
2,083,000 Tokyu 14,433,096
(railway and properties)
660,000 Ushio 7,503,308
(optical equipment maker
and specialty lamps)
413,000 Venture Link 11,900,034
(information service firm)
194,000 Xebio 6,730,632
(retail sporting goods)
173,500 York-Benimaru 6,410,497
(supermarkets) ----------
380,427,138
----------
Malaysia--1.23%
850,000 Commerce Asset 4,119,872
(financial services)
93,000 Hong Leong Industries 425,109
(motorcycle manufacturing)
978,000 Kian Joo Can Factory 3,892,422
(food and general packaging)
2,650,000 Renong1 3,863,735
(diversified holding company)
441,000 United Engineers 2,745,715
(engineering, construction) ----------
15,046,853
----------
Mexico--0.74%
250,000 Grupo Casa Autrey ADR 3,562,500
(wholesale distributor)
61,000 Grupo Industrial Maseca B
ADR 571,875
(food processing)
150,000 Panamerican Beverages A
ADR 4,837,500
(soft drink bottler) ----------
8,971,875
----------
Netherlands--5.75%
306,000 Hagemeyer 15,453,973
(trading)
250,000 ING 16,361,055
(financial services group)
60,200 Nutricia 4,571,587
(food processing)
239,100 Verenigd Bezit VNU 33,731,154
(publishing) ----------
70,117,769
----------
See Notes to Financial Statements
15
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS (continued) November 30, 1995
INTERNATIONAL EQUITY (CONTINUED)
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
Portugal--0.26%
151,100 Sonae Investimentos-
Sociedade Gestora $3,188,184
(retail) ----------
Singapore--0.83%
3,200,000 Straits Steamship Land 10,118,398
(property investment) ----------
South Africa--4.13%
120,000 Anglo American Industrial 5,331,880
(diversified holding company)
500,000 Anglovaal Industries 4,020,717
(diversified holding company)
700,000 First National Bank Holdings 6,201,445
(financial services)
150,000 Liberty Life Association 4,436,418
(life insurance)
404,965 Nedcor 6,623,388
(bank)
650,000 Pepkor 3,809,459
(diversified retailer)
2,837,000 Safmarine and Rennies
Holdings 9,860,093
(shipping, tourism)
200,000 South African Breweries 6,760,256
(brewery)
122,100 Southern Life Association 1,422,864
(life insurance company)
300,000 Sun International
Bophuthatswana 1,962,655
(resort hotels and casinos) ----------
50,429,175
----------
South Korea--1.13%
170,000 Korea Electric Power ADR 4,143,750
(electric power supplier)
150,100 LG Electronics 5,473,055
(electronics manufacturer)
185,300 Shinhan Bank 4,230,053
(bank) ----------
13,846,858
----------
Spain--0.25%
56,230 Cubiertas Y Mzov 3,065,847
(construction) ----------
Sweden--3.22%
520,000 Astra A 19,387,156
(pharmaceuticals)
360,000 Astra B 13,229,744
(pharmaceuticals)
459,500 OM Gruppen 6,621,391
(electronic trading systems) ----------
39,238,291
----------
Switzerland--6.18%
33,793 Edipresse 8,365,600
(publishing)
45,000 Sandoz 38,434,709
(pharmaceuticals)
72,000 Schweizerischer Bankverein 28,665,249
(bank) ----------
75,465,558
----------
Taiwan--0.98%
930,000 Acer GDR+1 11,973,750
(computer manufacturer) ----------
Thailand--1.89%
1,180,000 Bank of Ayudhya 6,319,449
(bank)
724,000 Shinawatra Computer 16,740,754
(cellular telecommunications ----------
and computer services)
23,060,203
----------
United Kingdom--6.26%
5,700,000 ASDA Group 8,822,603
(retail, grocery superstores)
1,420,000 Amstrad 5,755,917
(consumer electronic products)
2,048,529 British Aerospace 25,805,627
(aerospace, defense and
communications)
6,500,000 British Gas 24,255,644
(gas transmission and
production)
See Notes to Financial Statements
16
<PAGE>
- --------------------------------------------------------------------------------
Shares/Principal Amount Value
- --------------------------------------------------------------------------------
2,500,000 Cookson Group $11,742,781
(electronics and industrial ----------
materials)
76,382,572
----------
United States--0.97%
500,000 Tele-Communications
International A1 11,812,500
(telecommunications and ----------
cable television)
TOTAL COMMON STOCKS--94.17% 1,149,236,686
(Cost $1,042,980,029) -------------
PREFERRED STOCKS
Brazil--1.13%
287,000 Telebras ADR 13,776,000
(telecommunications) ----------
South Korea--0.65%
327,000 Korea Electric Power ADR1 7,926,480
(electric power supplier) ----------
TOTAL PREFERRED STOCKS--1.78% 21,702,480
(Cost $19,320,010) ----------
EQUITY LINKED NOTES*
Russia--0.56%
$13,000,000 Credit Suisse Medium
Term Notes, 3.00%, 7-19-96 6,892,800
(Cost $13,000,000) ----------
TEMPORARY CASH INVESTMENTS
Repurchase Agreement (Goldman
Sachs & Company), 5.75%, due
12-1-95; collateralized by $2,900,000
par value U.S. Treasury Bonds,
10.00%-12.75%, due 5-15-10 to 11-15-10
(Delivery value $4,200,671) 4,200,000
$38,494,000 par value FHLMC
Discount Notes, 5.65%, 12-20-95 38,378,197
----------
TOTAL TEMPORARY CASH
INVESTMENTS--3.49% 42,578,197
(Cost $42,578,197) ----------
TOTAL INVESTMENT SECURITIES
- --100.00% $1,220,410,163
(Cost $1,117,878,236) ==============
INTERNATIONAL EMERGING GROWTH
COMMON STOCKS
Canada--1.35%
150,000 Canadian 88 Energy1 $197,506
(oil, gas exploration)
309,800 Pangea Goldfields1 421,590
(gold exploration)
175,000 Wescam1 917,191
(camera manufacturer) ----------
1,536,287
----------
Chile--2.39%
90,000 Santa Isabel ADR 2,148,750
(supermarket chain)
8,000 Telefonos De Chile ADR 577,000
(telecommunications utility) ----------
2,725,750
----------
Denmark--3.29%
70,000 Bang & Olufsen B 2,161,342
(stereo equipment)
12,000 Christian Hansen Holding B 1,139,390
(food additives producer)
20,000 Scandinavian Mobility1 453,328
(rehabilitation aids ----------
and appliances)
3,754,060
----------
Finland--0.99%
30,000 Aspoyhtyma 1,129,694
(electrical components) ---------
France--6.71%
10,000 Altran Technologies 1,403,037
(engineering consultants)
20,000 M6 Metropole Television 1,694,082
(television broadcasting)
4,000 Norbert Dentressangle 460,052
(transportation services)
17,000 Sligos 1,375,136
(computer services)
16,000 SITA 2,729,800
(environmental services) ----------
7,662,107
----------
See Notes to Financial Statements
17
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS (continued) November 30, 1995
INTERNATIONAL EMERGING GROWTH (CONTINUED)
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
Germany--3.33%
3,000 Axel Springer Verlag $1,886,401
(newspaper, television)
5,400 Herlitz International Trading 1,912,313
(forest products and paper) ----------
3,798,714
----------
Hong Kong--5.05%
1,300,000 ASM Pacific Technology 1,109,265
(semiconductor assembly
equipment)
2,400,000 Giordano International 2,156,474
(retail, apparel)
1,600,000 International Bank of Asia 884,309
(corporate and retail banking)
1,148,900 Li & Fung 854,079
(trading)
3,000,000 Yue Yuen Industrial 760,196
(shoe manufacturing) ----------
5,764,323
----------
Hungary--0.68%
95,000 Mol Magyar Olaj-Es GDR+1 778,050
(oil and gas) ----------
India--1.95%
85,000 Mahindra & Mahindra GDR 956,250
(vehicle manufacturer)
112,000 Tata Engineering &
Locomotive GDR+ 1,267,280
(truck manufacturer) ----------
2,223,530
----------
Indonesia--0.47%
310,000 Bakrie and Brothers 543,026
(trading and ----------
telecommunications)
Ireland--3.03%
160,000 Arnott 799,092
(department stores)
240,703 Irish Continental Group 1,793,683
(ferry operator)
250,000 Jurys Hotel Group 868,061
(hotels) ----------
3,460,836
----------
Israel--4.70%
99,763 Blue Square Chain Stores
Properties and Investments 685,043
(food retailer)
75,000 Orbotech ADR1 993,750
(optical inspection systems)
236,500 Technomatix Technologies
ADR1 3,177,969
(CAD/CAM computer
software)
20,000 Tower Semiconductor ADR1 502,500
(semiconductor foundry) ----------
5,359,262
----------
Italy--4.90%
190,000 Bulgari ADR+1 1,526,891
(jewelry stores)
150,000 De Rigo Holdings ADR1 3,187,500
(eyeglasses frame distributor)
400,000 Sasib Risparmo 873,046
(capital goods, packaging) ----------
5,587,437
----------
Japan--10.10%
40,000 Arc Land Sakamoto 572,353
(retail, hardware)
50,000 Art Life 695,840
(restaurants, hospitality
businesses)
20,000 Fuji Soft 656,637
(computer software)
50,000 Fukuda Denshi 1,323,075
(medical electronics
equipment maker)
50,000 Kansai Kosaido 764,444
(publishing, printing,
publication business)
65,000 Misumi 2,337,923
(catalog)
10,000 Nippon Kanzai 289,116
(building maintenance)
See Notes to Financial Statements
18
<PAGE>
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
90,000 Royal $1,367,178
(restaurant chain operator)
30,000 Sari 429,264
(discount store chain)
48,000 Seijo 1,364,238
(drugstores)
150,000 Sodick1 1,331,896
(machine tools)
15,000 Union Tool 396,922
(drill maker) ----------
11,528,886
----------
Malaysia--1.09%
200,000 ACP Industries 835,402
(precast concrete)
300,000 Larut 406,668
(property investment ----------
company)
1,242,070
----------
Mexico--0.40%
160,000 Grupo Continental 454,142
(soft drink bottler) ----------
Netherlands--3.02%
53,500 Ahrend Groep 1,800,179
(office furniture
manufacturer)
40,000 IHC Caland 1,205,161
(engineering construction)
60,000 Rood Testhouse1 444,528
(semiconductor testing) ----------
3,449,868
----------
Norway--6.78%
107,400 Gresvig 1,618,841
(retail sporting goods)
113,900 Nera 3,648,234
(telecom equipment)
30,000 Schibsted 419,218
(publishing company)
40,000 Sysdeco Group 898,100
(software developer)
100,000 Tandberg1 1,154,027
(digital decoding systems) ----------
7,738,420
----------
Peru--1.68%
1,000,000 CPT Telefonica Del Peru B 1,922,747
(telecommunications operator) ----------
Philippines--0.21%
2,000,000 Southeast Asia Cement1 236,777
(cement) ----------
Poland--0.87%
30,000 Firma Oponiarska Debica A 493,315
(tire and rubber
manufacturer)
60,000 Raciborska Fabryka Kotlow1 500,499
(capital goods) ----------
993,814
----------
Portugal--0.75%
30,000 Cimentos De Portugal 489,582
(cement)
30,000 Filmes Lusomundo 362,983
(film distribution, exhibition) ----------
852,565
----------
Singapore--1.91%
420,000 Acma 1,322,084
(electrical/electronic
equipment)
211,000 Pentex-Schweizer Circuits 297,689
(circuit board manufacturer)
1,000,000 Uraco Holdings1 560,085
(precision machinery) ----------
2,179,858
----------
South Africa--3.99%
100,000 CNA Gallo 130,844
(book and record retailer)
250,000 Group Five 579,256
(building and construction)
100,000 JD Group 558,811
(furniture and appliance
retailer)
100,000 LTA 661,033
(building and construction)
See Notes to Financial Statements
19
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS (continued) November 30, 1995
INTERNATIONAL EMERGING GROWTH (CONTINUED)
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
300,000 Malbak+ $1,983,099
(industrial holding company)
10,000 Perskor Groep Beperk 258,961
(printing, publishing
company)
369,400 Saambou Holdings 377,607
(financial services) ----------
4,549,611
----------
South Korea--0.41%
10,000 Shin Won 463,946
(textiles) ----------
Spain--1.71%
68,340 Aguas De Barcelona 1,956,889
(water distribution company) ----------
Sweden--6.99%
45,700 Frontec B1 1,219,512
(information technology)
13,300 Getinge Industrier B 547,580
(medical equipment
manufacturer)
75,000 Hoganas B 2,172,935
(sintered metals)
100,000 Kalmar Industries 1,585,861
(container handling
equipment)
35,000 Svedala Industri 968,672
(mining and mineral
processing equipment)
40,000 WM-Data B 1,488,270
(computer consulting ----------
company)
7,982,830
----------
Thailand--2.68%
94,000 KR Precision 626,548
(electronics)
300,000 Krung Thai Bank 1,091,953
(bank)
70,000 Loxley 1,334,923
(telecommunications and ----------
trading)
3,053,424
----------
United Kingdom--5.47%
50,000 Biocompatibles1 348,644
(biopharmaceuticals)
100,000 Learmonth & Burchett ADR+1 981,250
(computer software company)
170,000 Psion 2,000,832
(computer equipment)
690,000 Sage Group 2,907,919
(computer software) ----------
6,238,645
----------
TOTAL COMMON STOCKS--86.90% 99,167,568
(Cost $89,938,885) ----------
PREFERRED STOCKS AND RIGHTS
Brazil--1.50%
80,000 Arapua 736,194
(home appliance retailer)
300,000 Dixie Toga 273,278
(packaging)
35,877 Dixie Toga Rights 1,114
(packaging)
752,600 Itausa 381,734
(financial holding company)
1,800,000 Telecomunicacoes De
Sao Paulo 312,971
(telephone services) ----------
1,705,291
----------
Germany--6.34%
5,300 Fresenius 4,240,879
(medical equipment, supplies)
4,400 Marschollek, Lautenschlager
und Partner 2,994,748
(financial services) ----------
7,235,627
----------
Portugal--0.40%
50,000 Filmes Lusomundo+ 458,262
(film distribution, exhibition)
See Notes to Financial Statements
20
<PAGE>
- --------------------------------------------------------------------------------
Shares/Principal Amount Value
- --------------------------------------------------------------------------------
Switzerland--1.98%
4,000 Bank in Liechtenstein $2,262,867
(bank)
TOTAL PREFERRED STOCKS AND
RIGHTS--10.22% 11,662,047
(Cost $9,732,145) ----------
TEMPORARY CASH INVESTMENTS
Repurchase Agreement (Goldman
Sachs & Company), 5.75%, due
12-1-95; collateralized by $460,000
par value U.S. Treasury Bonds,
9.125%-11.625%, due 11-15-04
to 5-15-18 (Delivery value $600,096) 600,000
$400,000 par value FHLB Discount
Notes, 6.54%, 12-7-95 399,627
$1,300,000 par value FHLMC Discount
Notes, 5.61%, 12-13-95 1,297,571
$1,000,000 par value FNMA Discount
Notes, 6.64%, 12-29-95 995,660
----------
TOTAL TEMPORARY CASH
INVESTMENTS--2.88% 3,292,858
(Cost $3,292,858) ----------
TOTAL INVESTMENT
SECURITIES--100.00% $114,122,473
(Cost $102,963,888) ============
See Notes to Financial Statements
21
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS (continued) NOVEMBER 30, 1995
NOTES TO SCHEDULES OF INVESTMENTS
+The following securities were purchased under Rule 144A of the Securities Act
of 1933 and, unless registered under the Act or exempted from registration, may
be sold only to qualified institutional investors.
<TABLE>
<CAPTION>
November 30, 1995
------------------------
Fund/ Acquisition Average Market Percentage of
Issuer Date Cost Per Share Value Net Assets
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTERNATIONAL EQUITY
Acer GDR 10-20-95 $12.99 $11,973,750 .99%
Larsen and Toubro GDR 9-19 to 9-20-95 21.49 3,355,000 .28%
---------- -----
$15,328,750 1.27%
========== ====
INTERNATIONAL EMERGING GROWTH
Bulgari ADR 7-6 to 9-5-95 $ 5.78 $1,526,891 1.33%
Filmes Lusomundo 4-28-95 9.17 458,262 .40%
Learmonth & Burchett ADR 11-15-95 10.00 981,250 .86%
Malbak 7-25 to 11-30-95 5.90 1,983,099 1.73%
Mol Magyar Olaj-Es GDR 11-22 to 11-30-95 8.21 778,050 .68%
Tata Engineering & Locomotive GDR 5-12 to 9-12-95 12.67 1,267,280 1.10%
---------- -----
$6,994,832 6.10%
========== =====
</TABLE>
*Equity-linked notes pay interest based upon a notional principal amount, but
their redemption upon maturity is solely based upon the value of an underlying
pool of equity securities, which may be more or less than the notional amount.
1Non-income producing
ADR = American Depositary Receipts
FHLB = Federal Home Loan Banks
FHLMC = Federal Home Loan Mortgage Corporation
FNMA = Federal National Mortgage Association
GDR = Global Depositary Receipts
22
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
November 30, 1995
International International
Equity Emerging Growth
<S> <C> <C>
ASSETS
Investment securities, at value (identified
cost of $1,117,878,236 and $102,963,888,
respectively) (Note 3)........................... $1,220,410,163 $114,122,473
Foreign currency holdings, at value (identified
cost of $2,141,744 and $47,454, respectively).... 2,141,744 47,454
Cash............................................... 3,274,264 --
Receivable for investments sold.................... 2,281,425 3,692,641
Receivable for forward foreign
currency exchange contracts held (Note 4)........ 3,450,849 100,049
Dividends and interest receivable.................. 3,053,418 177,578
------------- -----------
1,234,611,863 118,140,195
------------- -----------
LIABILITIES
Disbursements in excess of demand deposit cash..... 1,655,046 543,008
Payable for capital shares redeemed................ 809,838 56,950
Payable for investments purchased.................. 19,918,971 2,769,103
Accrued management fees (Note 2)................... 1,783,299 191,853
Other liabilities.................................. 3,156 139
------------- -----------
24,170,310 3,561,053
------------- -----------
NET ASSETS APPLICABLE TO OUTSTANDING SHARES........ $1,210,441,553 $114,579,142
============= ===========
CAPITAL SHARES, $0.01 PAR VALUE
Authorized......................................... 300,000,000 100,000,000
=========== ===========
Outstanding........................................ 161,107,645 20,087,565
=========== ==========
NET ASSET VALUE PER SHARE $ 7.51 $ 5.70
=========== ===========
NET ASSETS CONSIST OF:
Capital (par value and paid-in surplus)............ $1,112,111,620 $110,244,105
Undistributed net investment income................ 1,143,362 537,032
Accumulated undistributed net realized (loss) from
investments and foreign currency transactions.... (8,835,079) (7,456,885)
Net unrealized appreciation on investments
and translation of assets and liabilities
in foreign currencies (Notes 3 and 4)............ 106,021,650 11,254,890
------------- -----------
$1,210,441,553 $114,579,142
============= ===========
See Notes to Financial Statements
</TABLE>
23
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
International International
Equity Emerging Growth
Year Ended November 30, 1995
<S> <C> <C>
INVESTMENT INCOME
Income:
Dividends (net of foreign taxes withheld
of $2,726,580 and $280,648, respectively)...... $21,363,527 $2,143,739
Interest......................................... 3,748,709 423,255
---------- ---------
25,112,236 2,566,994
---------- ---------
Expenses:
Management fees (Note 2)......................... 21,967,586 2,260,979
Directors' fees and expenses..................... 14,187 1,295
---------- ---------
21,981,773 2,262,274
---------- ---------
NET INVESTMENT INCOME.............................. 3,130,463 304,720
---------- ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY (NOTES 3
AND 4)
Net realized gain (loss) during the year on:
Investments...................................... (75,819,056) (11,302,618)
Foreign currency transactions.................... 66,389,727 5,123,068
----------- -----------
(9,429,329) (6,179,550)
----------- -----------
Change in net unrealized appreciation (depreciation)
during the year on:
Investments...................................... 119,030,253 13,692,323
Translation of assets and liabilities
in foreign currencies.......................... (43,481,887) (1,503,307)
----------- -----------
75,548,366 12,189,016
---------- ----------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY................... 66,119,037 6,009,466
---------- ---------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS.......................... $69,249,500 $6,314,186
=========== ==========
</TABLE>
See Notes to Financial Statements
24
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
International Equity International Emerging Growth
-------------------------------- --------------------------------
Years Ended November 30, 1995, and 1994
INCREASE (DECREASE) IN NET ASSETS 1995 1994 1995 1994*
---- ---- ---- -----
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income (loss)....................... $3,130,463 $(6,408,715) $304,720 $(230,815)
Net realized gain (loss) on investments
and foreign currency transactions................ (9,429,329) 70,090,485 (6,179,550) (1,057,889)
Change in net unrealized appreciation
(depreciation) on investments and translation
of assets and liabilities in foreign currencies.. 75,548,366 (26,968,585) 12,189,016 (934,126)
---------- ------------ ---------- ---------
Net increase (decrease) in net assets
resulting from operations........................ 69,249,500 36,713,185 6,314,186 (2,222,830)
---------- ------------ ---------- ---------
DISTRIBUTIONS TO SHAREHOLDERS
FROM NET REALIZED GAINS ON
SECURITY TRANSACTIONS (64,609,265) (43,888,932) -- --
------------ ------------ ---------- ----------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold.......................... 392,977,541 968,476,762 42,306,561 119,974,009
Proceeds from reinvestment of distributions........ 63,657,003 43,046,702 -- --
Payments for shares redeemed....................... (567,475,203) (446,943,330) (45,243,072) (6,549,712)
----------- ------------- ---------- -----------
Net increase (decrease) in net assets from
capital share transactions..................... (110,840,659) 564,580,134 (2,936,511) 113,424,297
----------- ----------- --------- -----------
NET INCREASE (DECREASE) IN NET ASSETS.............. (106,200,424) 557,404,387 3,377,675 111,201,467
NET ASSETS
Beginning of period................................ 1,316,641,977 759,237,590 111,201,467 --
------------- ----------- -----------
End of period......................................$1,210,441,553 $1,316,641,977 $114,579,142 $111,201,467
============= ============== ============ ============
Undistributed net investment income................ $1,143,362 -- $537,032 --
============= ============== ======== ============
TRANSACTIONS IN SHARES OF THE FUNDS:
Sold............................................... 55,937,551 125,244,452 7,866,729 21,812,549
Issued in reinvestment of distributions............ 9,198,989 5,801,442 -- --
Redeemed........................................... (80,255,938) (58,316,348) (8,402,017) (1,189,696)
----------- ------------ ---------- -----------
Net increase (decrease)............................ (15,119,398) 72,729,546 (535,288) 20,622,853
=========== ========== ========== ==========
</TABLE>
*Period April 1, 1994 (inception) through November 30, 1994
See Notes to Financial Statements
25
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS November 30, 1995
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization --
Twentieth Century World Investors, Inc. (the Corporation) is registered
under the Investment Company Act of 1940 as an open-end diversified investment
company. Two series of shares, investing primarily in common stocks, are
currently issued as International Equity and International Emerging Growth (the
Funds). The following significant accounting policies are in accordance with
accounting policies generally accepted in the investment company industry.
Security Valuations --
Portfolio securities traded primarily on a principal securities exchange
(domestic or foreign) are valued at the last reported sales price on that
exchange, or the mean between the latest bid and asked prices where no last
sales price is available. Domestic securities traded over-the-counter are valued
at the mean of the latest bid and asked prices. Foreign securities traded
over-the-counter are valued at either the mean of the latest bid and asked
prices or at the last reported sales price, depending on local convention or
regulation. Short-term securities are valued at amortized cost which
approximates value. When valuations are not readily available, securities are
valued at fair value as determined in good faith by the board of directors.
Security Transactions --
Security transactions are accounted for on the date purchased or sold.
Net realized gains and losses are determined on the identified cost basis, which
also is used for federal income tax purposes.
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 isolate that portion of the results of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held.
Net realized foreign currency 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
currency exchange gains and 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.
Forward Foreign Currency Exchange Contracts --
The Funds may enter into forward foreign currency exchange contracts for
the purpose of settling specific purchases or sales of securities denominated in
a foreign currency or to hedge the Funds' exposure to foreign currency exchange
rate fluctuations. The net U.S. dollar value of foreign currency underlying all
contractual commitments held by the Funds and the resulting unrealized
appreciation or depreciation are determined daily using prevailing exchange
rates.
26
<PAGE>
Investment Income --
Dividend income less foreign taxes withheld is recorded on the ex-dividend
date or upon receipt of ex-dividend notification in the case of certain foreign
securities. Interest income is recognized on the accrual basis.
Repurchase Agreements --
Securities pledged as collateral for repurchase agreements are held by the
Federal Reserve Bank and are designated as being held on the Funds' behalf by
their custodian under a book-entry system. The Funds monitor the adequacy of the
collateral daily and can require the seller to provide additional collateral in
the event the market value of the securities pledged falls below the carrying
value of the repurchase agreement.
Income Tax Status --
It is the policy of the Funds to distribute all taxable income and
capital gains to shareholders and to otherwise qualify as a regulated
investment company under provisions of the Internal Revenue Code. Accordingly,
no provision has been made for federal or state taxes.
Distributions to Shareholders --
Distributions to shareholders are recorded on the ex-dividend date.
Distributions from net investment income and net realized gains in excess of
capital loss carryovers are declared and paid annually. On November 30, 1995,
International Equity and International Emerging Growth had net realized loss
carryovers of $5,545,725 and $7,330,947, respectively, that will be used to
reduce future taxable gains.
The character of distributions made during the year from net investment
income or net realized gains may differ from their ultimate characterization for
federal income tax purposes. These differences are primarily due to differing
treatments for foreign currency transactions and wash sales.
On December 16, 1995, International Equity and International Emerging
Growth declared and paid distributions of $.007 and $.032, respectively, from
net investment income to shareholders of record on that date.
Supplementary Information --
Certain officers and directors of the Corporation also are officers and/or
directors, and, as a group, controlling stockholders of Twentieth Century
Companies, Inc., the parent of the Corporation's investment manager, Investors
Research Corporation (IRC).
2. MANAGEMENT AGREEMENT
The Management Agreement with IRC provides for a monthly management fee
computed by multiplying the applicable fee for each Fund by the average daily
closing value of such Fund's net assets during the previous month. The Agreement
further provides that all expenses of the Funds, except brokerage commissions,
taxes, interest, expenses of those directors who are not considered "interested
persons" as defined in the Investment Company Act of 1940 (including counsel
fees) and extraordinary expenses, will be paid by IRC. The agreement may be
terminated by either party upon 60 days' written notice.
The current annual fee for International Equity is 1.90% of the average net
assets up to $1 billion, 1.25% of average net assets between $1 billion and $2
billion, and 1.00% of average net assets in excess of $2 billion. The current
annual fee is 2.00% for International Emerging Growth.
27
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued) November 30, 1995
3. INVESTMENT TRANSACTIONS
Investment transactions (excluding short-term investments) for the year
ended November 30, 1995, were as follows:
<TABLE>
<CAPTION>
Purchases Proceeds From Sales
------------------------------------------ -----------------------------------------
Common Preferred Other Debt Common Preferred Other Debt
Fund Stocks Stocks Obligations Stocks Stocks Obligations
- ----- ------ --------- ----------- ------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
International Equity $1,980,996,349 $12,064,434 $9,000,000 $2,126,283,886 $16,410,979 $14,035,406
International
Emerging Growth 170,113,908 9,960,270 600,000 166,254,501 12,965,497 1,946,500
On November 30, 1995, the composition of unrealized appreciation and (depreciation) of investment securities based on the
aggregate cost of investments for federal income tax purposes was as follows:
Fund Appreciation (Depreciation) Net Federal Tax Cost
- ----- ------------ ------------ --- ----------------
International Equity $131,563,815 $(29,031,888) $102,531,927 $1,117,878,236
International
Emerging Growth 14,335,556 (3,302,909) 11,032,647 103,089,826
4. COMMITMENTS
As of November 30, 1995, the Funds had entered into forward foreign
currency exchange contracts that obligate the Funds to deliver currencies at
specified future dates. Forward contracts involve elements of market risk in
excess of the amount reflected in the Statements of Assets and Liabilities. The
Funds bear the risk of an unfavorable change in the foreign currency exchange
rate underlying the forward contract. Additionally, losses may arise if the
counterparties do not perform under the contract terms. Outstanding contracts as
of November 30, 1995, are as follows:
U.S. Dollar U.S. Dollar
Currency to Value as of Currency to Value as of Unrealized
Fund Exchange Date be Delivered 11/30/95 be Received 11/30/95 Gain
- ---- ------------- ------------ ----------- ----------- ----------- ----------
International December 29, 1995 150,273,999 $30,150,498 30,627,223 $30,627,223 $476,725
Equity French franc U.S. dollar
December 29, 1995 48,138,900 33,305,590 33,670,395 33,670,395 364,805
German deutschemark U.S. dollar
December 29, 1995 22,986,853,806 226,180,841 228,268,377 228,268,377 2,087,536
Japanese yen U.S. dollar
December 29, 1995 27,548,458 17,035,296 17,196,828 17,196,828 161,532
Netherlands guilder U.S. dollar
December 29, 1995 22,327,130 19,042,328 19,402,579 19,402,579 360,251
Swiss franc ----------- U.S. dollar ----------- ---------
$325,714,553 $329,165,402 $3,450,849
=========== =========== =========
International December 29, 1995 6,693,355 $4,630,894 4,681,617 $4,681,617 $50,723
Emerging German deutschemark U.S. dollar
Growth December 29, 1995 389,357,500 3,831,112 3,866,471 3,866,471 35,359
Japanese yen U.S. dollar
December 29, 1995 865,612 738,262 752,229 752,229 13,967
Swiss franc ----------- U.S. dollar ----------- ---------
$9,200,268 $9,300,317 $100,049
=========== =========== =========
</TABLE>
28
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS DISTRIBUTIONS
------------------------------ -----------------------------------------------------------------
Net Realized Distributions Distributions [table
and from Net in Excess of cont.
Net Asset Unrealized Total Distributions Realized Net Realized Net Asset below]
Value, Net Gains from from Net Gains on Gains on Value,
Beginning Investment (Losses) on Investment Investment Investment Investment Total End of Total
of Period Income Investments Operations Income Transactions Transactions Distributions Period Return1
INTERNATIONAL EQUITY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
March 4, 19913
through Nov. 30,
1991 $5.00 $.02 $ .31 $ .33 -- -- -- -- $5.33 6.60%
Year Ended Nov. 30,
1992 5.33 .06 .41 .47 $(.005) $(.002) -- $(.007) 5.79 8.77%
1993 5.79 (.04) 1.78 1.74 (.036) (.155) -- (.191) 7.34 31.04%
1994 7.34 (.04) .57 .53 -- -- $(.402) (.402) 7.47 7.28%
1995 7.47 .01 .40 .41 -- -- (.372) (.372) 7.51 5.93%
1995 average commission paid per share traded $.002
INTERNATIONAL EMERGING GROWTH
April 1, 1994
(inception)
through
Nov. 30, 1994
$5.00 $(.02) $.41 $.39 -- -- -- -- $5.39 7.80%
Year Ended
Nov. 30, 1995
5.39 .03 .28 .31 -- -- -- -- 5.70 5.75%
1995 average commission paid per share traded $.004
</TABLE>
RATIOS/SUPPLEMENTAL DATA
[table continued] -----------------------------------------------
Ratio of Net Net
Ratio of Investment Assets,
Operating Income End of
Expenses to Portable Period
to Average Average Turnover (in
Net Assets Net Assets Rate1 thousands)
INTERNATIONAL EQUITY
March 4, 19913
through Nov. 30,
1991 1.87%4 .43%4 84% $43,076,411
Year Ended Nov. 30,
1992 1.91% .95 180% 215,346,400
1993 1.90% (.34%) 255% 759,237,590
1994 1.84% (.53%) 242% 1,316,641,977
1995 1.77% .25% 169% 1,210,441,553
1995 average commission paid per share traded $.002
INTERNATIONAL EMERGING GROWTH
April 1, 1994
(inception)
through
Nov. 30, 1994
2.00%4 (.48%)4 56% $111,201,467
Year Ended
Nov. 30, 1995
2.00% .27 168% $114,579,142
1995 average commission paid per share traded $.004
1 Computed using average shares outstanding throughout the period.
2 Actual total return and portfolio turnover rate for periods indicated.
3 Date on which Fund commenced operations. Fund was first offered to the public
on May 9, 1991 (inception date).
4 Annualized.
See Notes to Financial Statements
29
<PAGE>
- --------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS' REPORT
The Shareholders and Board of Directors
Twentieth Century World Investors, Inc.
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, for each of the two funds comprising
TWENTIETH CENTURY WORLD INVESTORS, INC., as of November 30, 1995, and the
related statements of operations, the statements of changes in net assets, and
the financial highlights for each of the periods indicated. These financial
statements and financial highlights are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
November 30, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the two funds comprising Twentieth Century World Investors, Inc., as of
November 30, 1995, and the results of their operations, changes in their net
assets, and the financial highlights for each of the periods indicated in
conformity with generally accepted accounting principles.
Kansas City, Missouri /s/BAIRD, KURTZ & DOBSON
December 29, 1995 BAIRD, KURTZ & DOBSON
30
<PAGE>
November 30, 1995
- --------------------------------------------------------------------------------
IMPORTANT NOTICE FOR ALL IRA AND 403(B) SHAREHOLDERS
As required by law, any distributions you receive from an IRA and certain
403(b) distributions [not eligible for rollover to an IRA or to another 403(b)]
are subject to federal income tax withholding at the rate of 10% of the total
amount withdrawn, unless you elect not to have withholding apply. If you don't
want us to withhold on this amount, you may send us a written notice not to have
the federal income tax withheld. Your written notice is valid for six months
from the date of receipt at Twentieth Century. Even if you plan to roll over the
amount you withdraw to another tax-deferred account, the withholding rate still
applies to the withdrawn amount, unless we have received a written notice not to
withhold federal income tax within six months prior to the withdrawal.
When you plan to withdraw, you may make your election by completing our
Conversions/Redemptions form or an IRS Form W-4P. Call Twentieth Century for
either form. Your written election is valid for only six months from the date of
receipt at Twentieth Century. You may revoke your election at any time by
sending a written notice to us.
Remember, even if you elect not to have income tax withheld, you are liable
for paying income tax on the taxable portion of your withdrawal. If you elect
not to have income tax withheld or you don't have enough income tax withheld,
you may be responsible for payment of estimated tax. You may incur penalties
under the estimated tax rules if your withholding and estimated tax payments are
not sufficient.
31
<PAGE>
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32
<PAGE>
TWENTIETH CENTURY WORLD INVESTORS, INC. TWENTIETH CENTURY
WORLD INVESTORS
Investment Manager
Investors Research Corporation
Kansas City, Missouri Annual Report
November 30, 1995
This report and the financial
statements contained herein
are submitted for the general
information of our shareholders.
This report is not authorized for
distribution to prospective
investors unless preceded
or accompanied by a current
prospectus.
[company logo]
Investments That Work(TM)
- --------------------------------------
P.O. Box 419200
Kansas City, Missouri
64141-6200
- --------------------------------------
Person-to-person assistance:
1-800-345-2021 or 816-531-5575
- --------------------------------------
Automated information line:
1-800-345-8765
- --------------------------------------
Telecommunications Device for the Deaf:
1-800-634-4113 or 816-753-1865
- --------------------------------------
Fax: 816-340-7962
- --------------------------------------
[company logo]
- --------------------------------------------------------------------------------
================================================================================
SH-BKT-3893
9601 Recycled
(C) 1996 Twentieth Century Services, Inc.
