TWENTIETH CENTURY
World Investors
Semiannual Report
May 31,
1996
[company logo]
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<PAGE>
May 31, 1996 (Unaudited)
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TABLE OF CONTENTS
Our Message to You........................................................ 2
Period Overview........................................................... 3
Investment Review
International Equity................................................... 4
International Emerging Growth.......................................... 9
Schedules of Investments
International Equity...................................................14
International Emerging Growth..........................................18
Statements of Assets and Liabilities......................................25
Statements of Operations..................................................26
Statements of Changes in Net Assets.......................................27
Notes to Financial Statements.............................................28
Financial Highlights......................................................31
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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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1
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OUR MESSAGE TO YOU
In May 1996, Twentieth Century's International Equity fund celebrated its
fifth birthday. The fund was launched in the belief that the growth-oriented
investment discipline underlying Twentieth Century's domestic stock funds could
also be used to identify successful, fast-growing companies around the globe.
Five years later, the investment results have been highly competitive, and we
are committing the resources necessary to help strengthen and enhance our
international capabilities over the long run.
The teams managing the funds include portfolio managers and analysts based
in our Greenwich, Connecticut offices, as well as financial analysts and
international equity trading specialists in our Kansas City headquarters. In
seeking promising investments, our teams rely on Twentieth Century's proprietary
database, which tracks financial data for some 10,000 foreign companies. This
data is analyzed and augmented with first-hand knowledge gleaned during visits
to hundreds of companies outside the United States each year.
[picture of James E. Stowers and James E. Stowers III in left margin]
While International Equity marks its fifth anniversary, its younger
sibling, the International Emerging Growth fund, is on the brink of a name
change. Effective September 3, the fund's name will be changed to the
International Discovery Fund. The fund's policy regarding company capitalization
will evolve to more precisely reflect what our industry defines as the type of
securities in which the fund seeks to invest--smaller, fast-growing companies
throughout the world. This will not, however, affect the fund's investment
objective or change its investment strategies. At Twentieth Century, we're
committed to providing an array of choices to meet your investment goals. This
includes offering an expanded line of international funds. We believe that
changing this fund's name to more accurately describe its focus may help you
differentiate it from other international funds.
The remainder of 1996 promises to bring other positive changes for the
Twentieth Century family of funds and our shareholders. After a year and a half
of behind-the-scenes planning and effort, we'll complete integration with The
Benham Group this fall. When our organizations are fully combined, Twentieth
Century shareholders will have access to over 60 funds with a single phone call,
including three additional funds for those seeking international opportunities.
We believe that despite the special risks involved in international
investing, international markets continue to provide investors with
opportunities for attractive returns. As technology and the spirit of free
enterprise bring the people of the world closer together and open more borders
to international commerce, we look forward to a continued expansion of
opportunities for international investing.
Sincerely,
/s/James E. Stowers /s/James E. Stowers III
James E. Stowers James E. Stowers III
Chairman of the Board and Founder President
2
May 31, 1996 (Unaudited)
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PERIOD OVERVIEW
International markets saw a broad-based upswing during the six months
ending May 31, 1996, in the wake of two years of underperformance in comparison
to U.S. stocks. Sharp gains among many smaller markets were complemented with
solid advances in developed markets. This upward trend was not as pronounced in
Japan, the largest stock market outside of the United States, where share price
advances were dampened by the dollar's strength against the yen. The Japan-heavy
EAFE(R) Index was up 8.12% for the period, while the U.S.-based S&P 500 Index
returned 11.76%, and the average diversified international fund as tracked by
Lipper returned 10.45%.
The economic situation in Japan was of particular interest and importance.
Japan has been in a recession for almost five years, by far the deepest and
longest in the post-war period. By the end of 1995, many Japanese companies
began to release positive sales and earnings reports. These reports conformed
with most of the country's economic indicators, which showed a recovery
underway.
The apparent revival of the Japanese economy helped support a fundamental
shift in investor sentiment. We believe many investors felt that the strong
performance of U.S. equity markets in 1995 was unlikely to continue through 1996
and began to reallocate assets internationally. This was reflected in net cash
inflows to U.S.-based international mutual funds, which grew from $322 million
in the first quarter of 1995 to $11.8 billion in the first quarter of 1996.
The gains were particularly strong in the smaller, emerging markets. Last
fall, stock prices had yet to recover from the shock of the Mexican peso
devaluation in December 1994. Despite this lack of investment favor, emerging
economies such as China, Malaysia, South Korea, Thailand, and Chile showed
annual economic growth in the 8% to 10% range, compared to rates of 1% to 3% in
more developed economies. Many investors began to once again pay attention to
the relatively low valuations and high growth in these markets. Since smaller
markets are particularly sensitive to inflows of new money, many indices in
Asia, Eastern Europe and Latin America rose more than 25%, and a few such as
Hungary, China, and Indonesia surged more than 60% for the period.
Many European markets showed renewed life, as a steady drop in interest
rates raised hopes of a general economic recovery and helped improve the
financial position of selected companies. In addition, the performance of
smaller companies began to improve, led by the strong progress of nimble,
export-oriented companies capitalizing on international sales. Investment
interest was particularly keen in Eastern Europe, where improved economic growth
and strong corporate earnings gave many investors newfound confidence in these
emerging free-market economies.
Looking forward, we think economic progress in Asia appears to be steady,
with many countries outside of Japan showing steady growth and Japan itself
poised for a recovery. Interest rate cuts in Europe bolster the likelihood of
future economic uplift. From our viewpoint, these factors bode well for
diversified international investors.
PORTFOLIO MANAGEMENT TEAM
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Theodore Tyson, Portfolio Manager
Henrik Strabo, Portfolio Manager
3
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INTERNATIONAL EQUITY
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MANAGEMENT Q & A
A discussion with Ted Tyson, lead manager of the International Equity
investment team.
Q. HOW HAS TWENTIETH CENTURY INTERNATIONAL EQUITY PERFORMED FOR THE SIX-MONTH
PERIOD ENDED MAY 31, 1996?
A. International Equity gained 9.96%, while its benchmark, the EAFE(R) Index,
returned 8.12%. The period was characterized by a significant upswing in
European markets in a trend that favored smaller stocks over the larger
companies that are the primary holdings in the fund. The positive performance of
International Equity vs. the index was in part a result of our stock selection
discipline and the fact that the fund held a relatively lighter percentage of
Japanese securities than the EAFE(R) Index.
Q. HOW DID THE FUND DO IN COMPARISON TO ITS PEER GROUP?
A. Based on total returns for the one-year period ended May 31, the fund is 84
out of 294 funds in (continued on next page)
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AVERAGE ANNUAL TOTAL RETURNS (as of May 31, 1996)
International Equity MSCI EAFE(R)Index**+ S&P 500 Index
-------------------- ----------------- -------------
6 Months* 9.96% 8.12% 11.76%
1 Year 17.13% 10.67% 28.45%
5 Year 12.79% 8.21% 14.57%
Inception (5/9/91) 13.06% 8.29%+ 14.77%
*Actual (not annualized)
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$10,000 OVER LIFE OF FUND (as of May 31, 1996)
[mountain graph]
Value on 5/31/96: $18,614 International Equity
$14,989 MSCI EAFE(R) Index**+
$20,083 S&P 500 Index
[graph data]
$10,000 investment made 5/9/91
DATE INTERNATIONAL S&P 500 MSCI EAFE (R)
EQUITY INDEX INDEX**+
5/9/91 (INCEP) $10,000 $10,000 $10,000
Jun 30, 91 9,784 9,769 9,362
Sep 30, 91 10,431 10,291 10,165
Dec 31, 91 11,014 11,147 10,335
Mar 31, 92 11,642 10,867 9,109
Jun 30, 92 12,349 11,074 9,301
Sep 30, 92 11,839 11,423 9,441
Dec 31, 92 11,547 11,995 9,077
Mar 31, 93 12,542 12,518 10,165
Jun 30, 93 13,069 12,577 11,188
Sep 30, 93 13,922 12,901 11,930
Dec 31, 93 16,472 13,199 12,033
Mar 31, 94 15,873 12,703 12,453
Jun 30, 94 16,087 12,757 13,090
Sep 30, 94 16,665 13,380 13,102
Dec 31, 94 15,689 13,378 12,969
Mar 31, 95 15,170 14,677 13,210
Jun 30, 95 16,049 16,073 13,306
Sep 30, 95 16,906 17,347 13,861
Dec 31, 95 17,554 18,388 14,422
Mar 31, 96 17,960 19,374 14,839
May 31, 96 18,614 20,083 14,989
Past performance does not guarantee future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost.
**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.
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:
$1.31 billion
(as of May 31, 1996)
Investment Approach:
Aggressive Growth
Ticker:
TWIEX
4
May 31, 1996 (Unaudited)
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INTERNATIONAL EQUITY
the Lipper International Fund category--among the top third. Over the longer
term, International Equity has five-year returns (as of May 31) placing it 10 of
65 funds--among the top 15% of its peer group.
Q. WHAT WERE THE MAIN FACTORS AFFECTING THE FUND'S RECENT PERFORMANCE?
A. A key factor was how our style of investing, which seeks companies showing
accelerating growth in revenues and earnings, led us to a higher weighting in
Japan than we've had in recent years, although still lower than the EAFE(R)
Index. Economic recovery in Japan helped produce significant earnings growth in
the companies that we owned. Although our holdings, and the Japanese market
overall, were up in yen terms, a stronger dollar worked against us, resulting in
only a small gain for the portfolio.
Q. WHAT KINDS OF COMPANIES DOES THE FUND HOLD IN JAPAN?
A. Last year we were invested in technology companies in Japan, particularly
semiconductor makers, which have recently begun to suffer from worldwide pricing
pressures. As earnings in these firms began to slip, we shifted our holdings
toward companies in cyclical industries, such as ship building and steel, that
are benefiting from the overall economic recovery. In Japan, many of these
economically sensitive companies have particularly thin profit margins. As a
result, growth in sales tends to have a dramatic impact on the bottom line,
causing the earnings acceleration that makes these companies prime candidates
for our portfolio.
Q. WHERE HAVE YOU HAD THE MOST INVESTMENT SUCCESS?
A. Approximately 10% of the fund in emerging markets provided a boost for
overall performance. We also had a number of positive investments in Europe. One
example is a Swiss company, Adia, which has been showing significant earnings
growth, largely from the company's temporary employment business. Europe lags
the United States in the use of temporary employees, but this trend is
reversing. Adia recently purchased the largest French company in the temporary
employment business and is now the dominant player in Europe. In just the first
quarter of 1996 the stock was up 32.10%.
Q. WHERE HAVE THE DISAPPOINTMENTS BEEN?
A. The biggest frustration for us has been to watch so many emerging markets
rally, even though the companies were not showing the sort of fundamental
earnings growth that matches our investment discipline. On top of that, two of
the emerging market countries with the highest exposure in the portfolio, South
Africa and Israel, have not been a part of the overall upward trend. In South
Africa there was a currency crisis stemming from rumors that Prime Minister
Mandela's health was failing. In Israel, politics and terrorism have really set
the market back. In the developed markets, the most disappointing investment has
(continued on next page)
TOP TEN HOLDINGS (as of May 31, 1996)
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% of fund's
investments in
% of fund's these stocks
investments 6 months ago
Sandoz 3.54% 3.15%
Nintendo 2.37% 2.75%
Kaufhof Holding 2.31% --
Lagardere Groupe 2.13% --
Adia 2.05% --
Telebras ADR 1.87% 1.13%
ING 1.87% 1.34%
Sankyo 1.84% 0.72%
NKK 1.83% --
Toyota Motor 1.72% --
5
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INTERNATIONAL EQUITY
been our experience with Italy's Olivetti. While the company's cellular and
computer printing divisions did well, sales of personal computers didn't match
projections. With this damper on earnings, we could no longer justify holding
the company and sold it at a loss.
Q. LATIN AMERICAN HOLDINGS ARE DOWN TO AROUND 2% OF THE FUND'S ASSETS. WHAT'S
KEEPING THE FUND AWAY FROM THIS PART OF THE WORLD?
A. Once again the key factor has been earnings. Take Mexico, for example. The
market there is up well over 20% for this reporting period, but without any
significant earnings growth to back it. Many people are betting that the economy
is turning. They want to get in early and in doing so are driving the market up.
Our discipline relies on real earnings, rather than economic predictions. As a
result, we're keeping an eye on Latin American markets, but do not see the
fundamentals necessary to invest there yet.
Q. TRAVEL AND COMPANY VISITS ARE AN IMPORTANT PART OF YOUR INVESTMENT RESEARCH.
WHERE HAVE YOU BEEN DURING THIS PERIOD, AND HAVE YOU UNCOVERED ANY NEW
INVESTMENT OPPORTUNITIES?
A. We recently traveled from Italy through Turkey and into Israel, visiting
five to seven companies a day. In Italy we saw a number of firms in Venice and
to the north that are in the luxury goods manufacturing business--which has been
extraordinarily strong this past year. Because order trends continued strong and
we liked what we heard from company management, we increased positions in a
number of these firms. In Turkey, inflation and political concerns seem to be
restricting corporate earnings. We saw just the opposite in Israel, where many
companies are flourishing, despite political events that have depressed the
overall stock market. The country is exceedingly well-endowed with science and
technological skills, partly due to Russian immigration. This is confirmed by
Intel's establishment of a major manufacturing base in the area between Tel Aviv
and Jerusalem--Israel's Silicon Valley. We were impressed by a number of these
rapidly growing businesses.
Q. WERE THERE ANY MAJOR ECONOMIC OR POLITICAL EVENTS THAT MADE A REAL
DIFFERENCE FOR OUR INVESTMENTS?
A. There were no major events like the Mexican currency collapse that we dealt
with 18 months ago. Even in light of the problems we've mentioned in South
Africa and Israel, this has really been one of the calmest periods in terms of
world events that I can remember since the fund commenced operations in 1991.
Q. DO YOU SEE ANY DEVELOPING TRENDS, AND WHAT IS YOUR OUTLOOK FOR THE UPCOMING
PERIOD?
A. While we didn't reap many rewards from our investments in Japan, we are
optimistic going forward. One lesson that we've learned is that international
markets often are inefficient in matching overall market performance to
accelerating earnings. As a result, our investment style will not always place
us in the hottest markets over the short term. However, over the longer term,
we're confident that our time-tested discipline leads us to many of the world's
fastest-growing companies.
International Equity schedule of investments begins on page 14.
6
May 31, 1996 (Unaudited)
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INTERNATIONAL EQUITY
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INVESTMENTS BY COUNTRY
At May 31, 1996, and November 30, 1995, International Equity had investments in
the following countries. Size of investments is indicated as a percentage of
total fund investments.
*Reflects countries with investments each less than 2% of total fund
investments.
[bar graph]
5/31/96 11/30/95
Japan 30% 31%
Canada 10% 5%
Switzerland 9% 6%
France 8% 5%
Germany 6% 5%
United Kingdom 5% 6%
Netherlands 4% 6%
Italy 4% 3%
Brazil 2% 1%
Israel 2% 1%
Temporary Cash Investments 6% 3%
Other* 14% 11%
7
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INTERNATIONAL EQUITY
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INVESTMENTS BY INDUSTRY
At May 31, 1996, and November 30, 1995, International Equity had investments in
these industry sectors. Size of investments is indicated as a percentage of
total fund investments.
[bar graph]
5/31/96 11/30/95
Telecommunications 10% 7%
Pharmaceuticals & Medical Equipment 10% 12%
Manufacturing 9% 14%
Aerospace & Technology 9% 9%
Media & Publishing 7% 7%
Automotive/Engineering 6% 1%
Financial 6% 9%
Food & Beverage/Consumer Goods 6% 9%
Retail 5% 5%
Transportation 5% 3%
Oil/Gas Exploration/Distribution/Services 4% 5%
Construction & Property Development 4% 5%
Utilities 1% 2%
Temporary Cash Investments 6% 4%
Other 12% 8%
8
May 31, 1996 (Unaudited)
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INTERNATIONAL EMERGING GROWTH
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MANAGEMENT Q & A
A discussion with Henrik Strabo, lead manager of the International Emerging
Growth investment team.
Q. HOW DID TWENTIETH CENTURY INTERNATIONAL EMERGING GROWTH PERFORM FOR THE
SIX-MONTH PERIOD ENDED MAY 31, 1996?
A. International Emerging Growth posted a 25.07% total return. Over the same
period, the fund's benchmark, the EAFE(R) Index, produced an 8.12% gain. The
fund's return placed it first among the 12 funds with comparable objectives
tracked by Lipper over one year (as of May 31) and since its inception in April
1994. This strong performance can be attributed to favorable results among the
fund's holdings of small and mid-sized companies in developed countries, and
major upswings affecting the fund's holdings in many of the smaller, emerging
nations.
Q. WHAT INVESTMENTS CONTRIBUTED TO THIS GAIN?
A. Although some individual positions did extremely well, the results have been
truly broad based. We had excellent performance from the fund's holdings in
Northern Europe, including (continued on next page)
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AVERAGE ANNUAL TOTAL RETURNS (as of May 31, 1996)
International Lipper International
Emerging Growth MSCI EAFE(R) Index**+ Small Co Average**
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6 Months* 25.07% 8.12% 16.52%
1 Year 33.00% 10.67% 20.30%
Inception (4/1/94) 17.88% 8.93%+ 5.52%
*Actual (not annualized)
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$10,000 OVER LIFE OF FUND (as of May 31, 1996)
[mountain graph]
Value on 5/31/96: $14,258 International Emerging Growth
$12,036 MSCI EAFE(R)Index**+
$11,263 Lipper International Small Co Average**
[graph data]
$10,000 investment made 4/1/94
INTERNATIONAL LIPPER INTERNATIONAL MSCI EAFE(R)
DATE EMERGING GROWTH SMALL CO AVERAGE** INDEX**+
4/1/94 (INCEP) $10,000 $10,000 $10,000
Jun 30, 94 10,760 9,818 10,511
Sep 30, 94 11,420 9,974 10,521
Dec 31, 94 10,760 9,351 10,414
Mar 31, 95 10,100 8,938 10,608
Jun 30, 95 11,020 9,389 10,685
Sep 30, 95 11,800 10,005 11,130
Dec 31, 95 11,825 9,968 11,581
Mar 31, 96 12,931 10,679 11,916
May 31, 96 14,258 11,263 12,036
Past performance does not guarantee future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost.
**Source: Lipper Analytical Services, Inc.
+The EAFE(R) Index for 3/31/94, the date closest to the inception date (4/1/94)
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.
QUICK
FUND
FACTS
--------------------------
INTERNATIONAL EMERGING GROWTH
--------------------------
Strategy:
Capital growth through
investments in companies
in emerging markets and
smaller companies in
developed markets.
Inception Date:
April 1, 1994
Size:
$241.52 million
(as of May 31, 1996)
Investment Approach:
Aggressive Growth
Ticker:
TWEGX
9
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INTERNATIONAL EMERGING GROWTH
Sweden, Finland, Germany and the Netherlands. Our holdings in Israel were also
quite positive. While we have invested less than 2% of the fund in Poland, we
received a disproportionate reward for our holdings there, as the market value
of the companies we owned doubled, leading a rebounding Polish market, which
advanced 37% during the period.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. While our 13% stake in Japan is much lower than the 40% in the EAFE(R)
Index, it is our largest single country weighting. Although the Japanese market
was up in yen terms, a stronger dollar worked against American investors,
resulting in an overall market that had only modest gains in dollar terms. While
the results from Japan have been positive, they've not been in line with the
gains of the overall fund. South Africa has been a true disappointment, due to
major political and economic problems, but we still like the individual
companies we own there. As the business environment improves and the earnings
outlook clears, we will consider adding to the fund's South African holdings.
Q. HOW IS THE FUND ALLOCATED BETWEEN DEVELOPED AND EMERGING MARKETS?
A. About 80% of the fund is in smaller companies in developed markets such as
Japan and Great Britain, and 20% is invested in the emerging markets such as
Eastern Europe, Israel, Chile, and Malaysia. In Europe, where we have 45% of the
fund's assets, we're seeing something special and very compelling among smaller
companies. It's really a transformation. Europe is becoming much more
entrepreneurial--in many ways much more like the United States. One of the key
forces is the shift in the way companies are financing their growth.
Traditionally, financing was arranged through what is known as "house banks."
These banks focused on the balance sheet--making sure that short-term profits
were sufficient to cover financing. Today smaller European companies are turning
instead to the stock market for capital, and the focus has shifted away from the
balance sheet and towards growth. On the other side of the world, we've found
Asian companies outside of Japan that are prospering from the continued economic
growth in the Far East and smaller companies in Japan that are beginning to
benefit from the general economic recovery.
Q. WHAT DO YOU LOOK FOR IN A COMPANY?
A. We look for quality companies that will show sustainable, accelerating
growth over time. How do we define high quality? We look for a company that has
a very strong product, a large share of its respective market, and the ability
to protect its market share. We like management to concentrate on its area of
expertise and focus on improving core competencies. A good example is Sweden's
Hoganas, which manufactures metal powders that are used to make lighter,
stronger components, (continued on next page)
TOP TEN HOLDINGS (as of May 31, 1996)
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% of fund's
investments in
% of fund's these stocks
investments 6 months ago
Gentinge Industrier B 2.84% 0.48%
Technomatrix Technologies ADR 2.68% 2.78%
Koninklijke Van Ommeren 2.47% --
Marschollek, Lautenschlager
und Partner 2.39% 2.62%
Havas Advertising 2.35% --
Esselte B 1.97% --
Newcourt Credit 1.93% --
Hoganas B 1.90% 1.90%
WM-Data Nordic B 1.68% 1.30%
Sociedad Quimica Y
Minera de Chile ADR 1.60% --
10
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
INTERNATIONAL EMERGING GROWTH
primarily for the auto industry. The amount of their product used in autos is
growing at a very fast rate, so even if auto production shows no growth, the
company can prosper. They have good management, a very focused product line, 75%
of the market in Europe, and close to 30% of the market in Japan. We first
purchased shares of Hoganas when the company went public in September 1994, and
its stock is up close to 150% since then. While results of this magnitude are
unusual, Hoganas exemplifies the qualities we seek.
Q. ON A RECENT SWING THROUGH EUROPE YOU VISITED SOME 40 COMPANIES OVER TWO
WEEKS. HOW DO YOU DECIDE WHICH COMPANIES TO VISIT?
A. A certain number of these visits are typically with companies that are
already in the portfolio. In addition, we visit companies we've identified as
potential holdings because they have fundamentals that were flagged by our
database. We are always on the lookout for quality companies. We actually get
many ideas from our conversations with management. Savvy, successful managers
tend to know the business community, so we always ask if they're aware of other
companies that are doing good work. Chances are it's a good lead when it comes
from someone who actually knows how to build a successful business.
Q. HOW ARE INVESTORS FROM THE UNITED STATES RECEIVED OVERSEAS?
A. The entrepreneurial, smaller companies that we focus on are very receptive
to foreign investment--and American dollars are playing a more and more
important role in their financial plans. For the most part they understand
U.S.-based mutual funds, and they tell us that we tend to come to them with
deeper research and understanding than many of their domestic investors. Being
conversant in a number of languages is a definite plus--we have members of our
international investment team who read and speak most of the major international
languages: Japanese, Chinese (Mandarin and Cantonese), French and Spanish, plus
a number of others including Malay, Danish, and Swedish. It's great to be able
to break the ice in the native language. In addition to face-to-face meetings,
language skills are important when researching company documents and regional
reports and publications.
Q. WHAT IS YOUR OUTLOOK FOR THE PERIOD AHEAD?
A. For one thing, we're looking for better performance from our Japanese
holdings. Like smaller companies anywhere, our holdings in Japan are more
leveraged toward strong economic growth than larger companies. As the economy
improves, we're starting to see signs of this economic lift in earnings
acceleration in select Japanese companies, and we expect these holdings to be a
greater positive influence on the portfolio in the months ahead. On a more
general note, we're very optimistic about the growth of the international
economy--particularly in emerging markets. Our investment discipline tends to
focus our portfolio in companies that are benefiting from this growth, whether
they are based in the developed world or in the emerging economies. We're
confident that a diverse portfolio of fast-growing companies will reward
long-term investors.
International Emerging Growth schedule of investments begins on page 18.
11
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INTERNATIONAL EMERGING GROWTH
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INVESTMENTS BY COUNTRY
At May 31, 1996, and November 30, 1995, International Emerging Growth had
investments in the following countries. Size of investments is indicated as a
percentage of total fund investments.
*Reflects countries with investments each less than 2% of total fund
investments.
[bar graph]
5/31/96 11/30/95
Japan 13% 10%
Sweden 9% 7%
United Kingdom 8% 5%
Netherlands 7% 3%
France 6% 7%
Germany 5% 10%
Malaysia 4% 1%
Hong Kong 4% 5%
Israel 4% 5%
Finland 4% 1%
Canada 4% 1%
Norway 3% 7%
Italy 3% 5%
Chile 2% 2%
South Africa 2% 4%
Philippines 2% 0%
Switzerland 2% 2%
India 2% 2%
Temporary Cash Investments 4% 3%
Other* 12% 9%
12
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
INTERNATIONAL EMERGING GROWTH
- --------------------------------------------------------------------------------
INVESTMENTS BY INDUSTRY
At May 31, 1996, and November 30, 1995, International Emerging Growth had
investments in these industry sectors. Size of investments is indicated as a
percentage of total fund investments.
[bar graph]
5/31/96 11/30/95
Manufacturing 13% 6%
Aerospace & Technology 13% 17%
Financial 12% 7%
Retail 8% 12%
Pharmaceuticals & Medical Equipment 7% 6%
Media & Publishing 6% 7%
Food & Beverage/Consumer Goods 5% 8%
Construction & Property Development 5% 4%
Metals & Mining/Aggregates 4% 3%
Telecommunications 4% 8%
Automotive/Engineering 2% 2%
Forest Products & Packaging 1% 3%
Transportation 1% 2%
Temporary Cash Investments 4% 3%
Other 15% 10%
13
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS May 31, 1996 (Unaudited)
INTERNATIONAL EQUITY
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS & RIGHTS
Argentina -- 1.00%
600,000 YPF Sociedad Anonima ADR $ 13,200,000
(oil and gas) ----------
Australia -- 1.09%
4,198,807 Southcorp Holdings 10,791,115
(packaging, wines,
and appliances)
3,026,300 TNT 1 3,647,316
(delivery and airline services) ----------
14,438,431
----------
Bahamas -- 0.68%
180,000 Sun International Hotels ADR1 9,090,000
(resort operations) ----------
Belgium -- 0.77%
201,000 Delhaize Le Lion 10,208,097
(retail supermarkets) ----------
Canada -- 9.97%
798,300 CAE 6,903,744
(aerospace, electronics,
industrials technologies)
548,000 Canadian National Railway
(Installment Receipts) 10,138,000
(railroad)
700,000 Canadian Pacific 14,329,502
(diversified holding company)
501,700 Hollinger 3,990,899
(international newspaper)
300,000 Northern Telecom 16,275,000
(telecommunications
equipment)
727,800 Poco Petroleums1 5,975,369
(oil and gas exploration)
1,026,000 QLT Phototherapeutics1 21,976,355
(pharmaceuticals and
photodynamic therapies)
790,300 Renaissance Energy1 20,907,407
(oil and gas exploration)
1,806,900 Rogers Communications B1 17,999,770
(communications and media)
1,000,000 Tellus 13,282,248
(telecommunications) ----------
131,778,294
-----------
France -- 7.61%
106,400 BIS1 13,838,300
(temporary employment agency)
465,000 Cap Gemini Sogeti1 16,383,092
(computer consulting services)
301,075 Casino Guichard-Perrachon
et Cie 12,682,379
(grocery chain)
1,032,739 Lagardere Groupe 28,126,426
(high technologies, automobiles
and communications)
205,190 Total 14,884,888
(oil and gas exploration,
rubber and chemicals)
270,000 Valeo 14,701,543
(auto parts) ----------
100,616,628
-----------
Germany -- 4.12%
12,000 Altana 7,578,117
(pharmaceuticals, dietetics
and chemicals)
267,200 Deutsche Pfandbrief und
Hypothekenbank 10,728,385
(mortgage banking)
86,600 Kaufhof Holding 30,588,139
(general retailers)
30,000 Schmalbach-Lubeca
Aktiengesellschaft 5,559,389
(packaging and ----------
container manufacturer)
54,454,030
----------
Hong Kong -- 1.40%
4,000,000 CDL Hotels International 2,274,989
(hotels)
2,932,000 First Pacific 4,036,271
(trading company)
See Notes to Financial Statements
14
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
600,000 New World Development $ 2,846,322
(diversified property
developments)
6,024,000 Peregrine Investments
Holdings 9,344,002
(securities brokerage) ----------
18,501,584
----------
India -- 1.28%
165,000 Gujarat Ambuja Cements GDR 2,021,250
(cement manufacturer)
242,000 Indian Tobacco GDR1 2,026,750
(tobacco)
435,000 Larsen and Toubro GDR+ 8,700,000
(engineering equipment
and construction)
275,000 Reliance Industries GDR1 4,193,750
(man-made textiles ----------
and petrochemicals)
16,941,750
----------
Ireland -- 0.75%
1,222,396 Independent Newspapers 9,898,382
(newspaper publisher) ----------
Israel -- 1.88%
4,508 Africa Israel Investments1 4,221,672
(tourism, property
development)
4,007,118 Bezek The Israeli
Telecommunications 9,956,822
(telecommunications)
400,000 ECI Telecom ADR 10,675,000
(digital telecommunications ----------
equipment)
24,853,494
----------
Italy -- 3.65%
1,069,000 Arnoldo Mondadori Editore 8,305,974
(publishing and printing)
120,000 Mediolanum1 933,549
(life insurance and
mutual funds)
14,000,000 Parmalat Finanziaria Spa 17,607,780
(dairy production)
10,038,000 Telecom Italia Mobile 21,475,138
(mobile telephone services) ----------
48,322,441
----------
Japan -- 29.98%
627,000 Bridgestone 10,922,029
(tire and rubber manufacturer)
530,000 Chiyoda Fire &
Marine Insurance 3,304,980
(insurance)
770,000 Daifuku 11,629,372
(machine, equipment developer)
1,100,000 Dainippon Screen 10,294,186
(precision machinery)
1,370,000 Daiwa Securities 18,406,301
(securities broker)
1,800,000 Fuji Heavy Industries 8,255,733
(transportation equipment)
450,000 Hankyu Department Stores 6,087,561
(retail department store)
1,208,000 Hitachi Cable 10,286,328
(wire and cable manufacturer)
500,000 Hitachi Koki 4,957,146
(electric tool manufacturer)
226,000 Hokuetsu Paper Mills 1,957,934
(paper manufacturer)
800 Hoya 25,722
(glass manufacturer,
electronic components)
600,000 Japan Aviation
Electronics Industry1 4,503,127
(electrical equipment
manufacturer)
1,000,000 Japan Synthetic Rubber 7,004,864
(synthetic rubber
producer and chemicals)
400,000 JEOL1 3,005,791
(electron microscope
manufacturer)
145,000 Keyence 19,078,063
(measure and control equipment)
See Notes to Financial Statements
15
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS (CONTINUED) May 31, 1996 (Unaudited)
INTERNATIONAL EQUITY (CONTINUED)
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
530,000 Kokuyo $ 14,192,263
(paper products, office
equipment and furniture)
203,000 Kurita Water 4,702,340
(water treatment equipment)
838,000 Mitsubishi Estate 11,724,624
(property investment)
235,000 National House Industries 3,679,870
(housing materials)
300,000 Nichicon 4,391,939
(electrical machinery
manufacturer)
82,000 Nichiei 5,607,227
(finance company)
425,200 Nintendo 31,360,593
(video games)
533,000 Nippon Express 5,333,704
(general transport)
1,375,000 Nippon Kayaku 9,937,457
(pharmaceuticals and
chemical products)
20,800 Nippon Television Network 5,897,429
(television broadcasting)
460,000 Nissan Fire & Marine Insurance 3,341,580
(insurance)
8,250,000 NKK1 24,155,664
(iron, steel producer
and heavy industrials)
300,000 Nomura Securities 5,670,605
(securities broker)
133,000 NSG Nippon Sheet Glass 637,118
(sheet glass manufacturer
and fiber optics)
1,170,000 Sanden 8,358,304
(automobile air-conditioners)
1,023,000 Sankyo 24,265,740
(pharmaceutical manufacturer)
240,000 Secom 15,566,366
(security service)
700,000 Sharp 11,415,335
(consumer electronics)
4,700,000 Sumitomo Metal Industries 14,501,737
(steel producer,
engineering services )
500,000 Terumo 6,022,701
(medical supplies
manufacturer)
2,083,000 Tokyu 15,614,056
(railway and properties)
995,000 Toyota Motor 22,771,832
(auto manufacturer)
375,000 Uni-Charm 9,902,710
(household products)
1,000,000 Ushio 11,489,460
(optical equipment
and specialty lamps)
333,000 Venture Link 6,109,243
(information service firm) ----------
396,369,034
-----------
Malaysia -- 0.50%
4,000,000 Renong 6,666,133
(diversified holding company) ----------
Netherlands -- 4.10%
110,000 Hagemeyer 7,586,875
(trading)
300,000 ING 24,759,333
(financial services group)
127,000 Nutricia 13,605,013
(food processing)
500,000 Verenigd Bezit VNU 8,217,892
(publishing) ----------
54,169,113
----------
New Zealand -- 0.50%
1,633,900 Telecom Corporation
of New Zealand 6,633,832
(telecommunications services) ----------
Portugal -- 0.37%
200,000 Portugal Telecom ADR 4,850,000
(telecommunications services) ----------
See Notes to Financial Statements
16
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
Singapore -- 1.41%
3,000,000 Singapore
Technologies Industrial $ 8,312,611
(diversified holding company)
3,200,000 Straits Steamship Land 10,321,847
(property investment) ----------
18,634,458
----------
South Africa -- 1.37%
550,000 Pepkor 2,484,483
(department stores)
2,837,000 Safmarine and
Rennies Holdings 8,152,299
(shipping, tourism)
244,600 South African Breweries 7,464,517
(brewery) ----------
18,101,299
----------
South Korea -- 0.97%
497,000 Korea Electric Power ADR 12,859,875
(electric power supplier) ----------
Sweden -- 0.70%
145,200 Securitas B 9,189,600
(security and ----------
electronic trading systems)
Switzerland -- 8.64%
116,500 Adia 27,082,164
(employment company)
10,300 Compagnie Financiere
Richemont 15,315,832
(tobacco and luxury goods)
33,793 Edipresse1 8,262,016
(publishing)
45,000 Sandoz 46,821,643
(pharmaceuticals)
24,400 Societe Suisse de
Microelectronique et
d'Horlogerie (SMH) 16,732,826
(watch manufacturer) ----------
114,214,481
-----------
Thailand -- 1.11%
9,100 Bank of Ayudhya Rights 26,583
(bank)
615,000 Shinawatra Computer 14,509,836
(cellular telecommunications ----------
equipment)
14,536,419
----------
United Kingdom -- 5.27%
675,000 Glaxo Wellcome 8,801,801
(pharmaceuticals)
7,400,000 Ladbroke Group 21,742,662
(hotels and gaming)
1,094,400 Misys 14,270,653
(computer software)
2,828,700 Orange1 10,767,383
(computer and
ancillary systems)
2,609,000 Railtrack Group1 8,818,655
(rail network)
1,500,000 Rolls-Royce 5,232,938
(aerospace/defense ----------
manufacturer)
69,634,092
----------
United States -- 0.72%
500,000 Tele-Communications
International A1 9,468,750
(telecommunications ----------
and cable television)
Total Common Stocks
& Rights-- 89.84% 1,187,630,217
(Cost $1,088,738,161) -------------
PREFERRED STOCKS
Brazil -- 2.17%
6,544,400 Companhia Cervejaria Brahma 3,900,744
(brewery)
385,000 Telebras ADR 24,784,375
(telecommunications) ----------
28,685,119
----------
See Notes to Financial Statements
17
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS (CONTINUED) May 31, 1996 (Unaudited)
INTERNATIONAL EQUITY (CONTINUED)
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
Germany -- 2.06%
31,300 Henkel KGAA $ 13,194,644
(chemical products,
household cleaners)
26,030 Wella 14,077,667
(body care products) ----------
27,272,311
----------
Total Preferred Stocks-- 4.23% 55,957,430
(Cost $46,179,997) ----------
TEMPORARY CASH INVESTMENTS
Repurchase Agreement
(J.P. Morgan Securities, Inc.),
5.32%, due 6-3-96; collateralized
by $45,735,000 par value
U.S. Treasury Bonds,
7.875%, due 8-15-01
(Delivery value $48,221,369) 48,200,000
$15,250,000 par value FHLB
Discount Note, 5.23%, 6-7-96 15,236,809
$15,000,000 par value FHLMC
Discount Note, 5.20%, 6-3-96 14,995,658
----------
Total Temporary Cash
Investments-- 5.93% 78,432,467
(Cost $78,432,467) ----------
Total Investment Securities-- 100.00% $ 1,322,020,114
(Cost $1,213,350,625) =============
FORWARD FOREIGN CURRENCY CONTRACTS
Contracts Settlement Value of Unrealized
to Sell Dates Payable (Loss)
- -----------------------------------------------------------------------
50,419,418 CHF 6/28/96 40,491,020 (799,442)
39,627,494 DEM 6/28/96 26,076,896 (372,881)
150,751,383 FRF 6/28/96 29,294,525 (425,458)
7,260,292 GBP 6/28/96 11,252,436 (228,264)
13,135,243,124 JPY 6/28/96 122,122,192 (925,422)
40,722,975 NLG 6/28/96 23,947,648 (348,061)
17,903,160 SEK 6/28/96 2,664,335 (39,930)
----------- -----------
$255,849,052 $(3,139,458)
=========== ===========
(Value of Receivable $252,709,594)
INTERNATIONAL EMERGING GROWTH
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS,
RIGHTS & WARRANTS
Canada -- 3.54%
265,000 Architel Systems1 $ 2,137,019
(computer software)
200,000 Newcourt Credit+ 4,670,681
(financial services)
160,000 The Upper Canada
Brewing Company1 753,147
(brewery)
175,000 Wescam1 996,169
(camera manufacturer) ----------
8,557,016
----------
Chile -- 2.48%
80,000 Santa Isabel ADR 2,120,000
(supermarket chain)
75,000 Sociedad Quimica
Y Minera de Chile ADR 3,881,250
(fertilizers) ----------
6,001,250
----------
Czech Republic -- 0.24%
4,000 Ceske Radiokomunikace1 566,215
(telecommunications) ----------
Denmark -- 0.63%
14,000 Christian Hansen Holding B 1,526,363
(food additives producer) ----------
Finland -- 3.60%
115,000 KCI Konecranes+1 2,817,096
(capital goods)
20,000 Raision Tehtaat 1,218,434
(agricultural products)
20,000 Raision Tehtaat Rights 175,523
(agricultural products)
360,000 Tamro+ 1,986,133
(pharmaceuticals distribution)
55,000 Tietotehas 2,507,163
(information technology) ----------
8,704,349
----------
See Notes to Financial Statements
18
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
France -- 5.55%
12,000 Altran Technologies $ 3,494,128
(engineering consulting)
50,000 Havas Advertising 5,677,958
(advertising)
4,869 Infogrames Entertainment1 1,022,665
(interactive television,
computer games)
4,000 Norbert Dentressangle1 590,119
(transportation services)
12,000 SITA 2,629,914
(environmental services) ----------
13,414,784
----------
Germany -- 1.37%
2,000 Axel Springer Verlag 1,214,391
(newspaper, television)
5,400 Herlitz International Trading 2,096,599
(forest products and paper) ----------
3,310,990
----------
Hong Kong -- 4.39%
3,600,000 Cafe De Coral Holdings 1,105,179
(food service operations)
3,000,000 Chaifa Holdings 843,426
(garment designer
and manufacturer)
2,000,000 China Hong Kong
Photo Products 1,156,884
(photo processing products)
2,500,000 Founder1 1,122,953
(software developer)
2,200,000 International Bank of Asia 1,350,775
(corporate and retail banking)
1,148,900 Li & Fung 1,158,360
(trading)
2,000,000 Moulin International Holdings 736,786
(optical products manufacturer)
3,700,000 Regal Hotels
International Holdings 956,530
(hotel operator)
895,000 Shanghai Industrial Holdings+1 1,087,471
(holding company)
4,500,000 Yue Yuen Industrial 1,099,363
(shoe manufacturing) ----------
10,617,727
----------
Hungary -- 0.52%
25,000 Egis Gyogszergyar 1,252,606
(pharmaceuticals) ----------
India -- 1.50%
22,000 Indian Hotels 478,295
(hotels)
59,000 Larsen and Toubro 466,168
(engineering equipment)
236,000 Oriental Bank of Commerce1 608,596
(bank)
145,000 Steel Authority of India GDR 2,066,250
(steel manufacturer) ----------
3,619,309
----------
Indonesia -- 0.67%
600,000 Bank Indonesia Raya (Bira) 591,640
(bank)
467,500 Matahari Putra Prima 1,027,197
(department stores) ----------
1,618,837
----------
Ireland -- 1.17%
1,240,000 Anglo Irish Bank 1,164,059
(financial services)
121,875 Arnott 803,054
(department stores)
520,000 Heiton Holdings 858,655
(building materials ----------
merchandising)
2,825,768
----------
Israel -- 4.27%
99,763 Blue Square Chain Stores
Properties and Investments1 651,769
(food retailer)
14,262 Elbit 770,838
(electronic defense products)
See Notes to Financial Statements
19
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS (CONTINUED) May 31, 1996 (Unaudited)
INTERNATIONAL EMERGING GROWTH (CONTINUED)
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
60,000 Nice Systems ADR1 $ 1,260,000
(digital recording products)
250,000 Oshap Technologies ADR1 1,164,063
(computer software)
280,000 Technomatix
Technologies ADR1 6,492,500
(CAD/CAM ----------
computer software)
10,339,170
----------
Italy -- 3.18%
160,000 Bulgari ADR+1 2,545,867
(jewelry stores)
70,000 De Rigo Holdings ADR1 1,995,000
(eyeglasses frame distributor)
130,000 Safilo 3,160,454
(corrective eyewear ----------
manufacturer)
7,701,321
----------
Japan -- 13.39%
30,000 Aim Services 722,724
(restaurants and
cafeterias, food caterer)
35,000 Art Life 525,365
(restaurants,
hospitality businesses)
400 Asia Securities Printing 10,155
(financial printing services)
140,000 Canon Copyer Sales 1,790,132
(sales of office equipment)
30,000 Create Medic 416,956
(disposable medical supplies)
26,000 Fuji Soft 807,042
(computer software)
50,000 Fukuda Denshi 1,371,323
(medical electronics equipment)
20,000 HIS 1,126,708
(travel agency)
35,000 Hogy Medical 1,735,001
(medical supplies)
53,000 Kansai Kosaido 780,820
(publishing, printing)
105,000 Kanto Biomedical Laboratory 1,683,113
(clinical testing)
19,000 Karakami Kankoh 484,133
(hotel chain operator)
40,000 King Jim 1,241,603
(office supplies)
50,000 Konoshima Chemical 1,047,023
(ceramic building materials)
44,000 Lilycolor 489,229
(interior fixtures)
40,000 Matsumotokiyoshi 1,260,134
(supermarket and
home center operator)
30,000 Ministop 817,234
(convenience stores)
71,500 Misumi 2,384,990
(industrial parts supplier)
115,000 Nichiei Construction 1,331,943
(building construction)
37,000 Nihon Jumbo 1,522,168
(film processing)
42,000 Nippon Kanzai 1,183,044
(building maintenance)
25,500 Nissin 1,145,935
(consumer finance)
100,000 Nissin Corp. 704,193
(refrigerated transport)
80,000 Okabe 778,318
(building materials)
80,000 Royal 1,549,224
(restaurant chain operator)
200,000 Sodick1 2,334,955
(machine tools)
90,000 Tenma 2,251,564
(plastic manufacturer)
60,000 Up 895,066
(educational services) ----------
32,390,095
----------
See Notes to Financial Statements
20
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
Malaysia -- 4.42%
280,000 Arab Malaysia $ 1,026,360
(financial services)
120,000 Autoindustries 817,242
(automotive safety
manufacturer)
500,000 Bolton Properties 821,248
(real estate)
350,000 Chemical Company of Malaysia 1,058,609
(chemical manufacturer)
355,000 Gadek 2,247,015
(rubber manufacturer)
400,000 Gadek Capital1 1,217,851
(finance company)
220,000 KFC Holdings 1,242,689
(fast food retail)
300,000 Leader Universal Holdings 901,370
(cable manufacturer)
450,000 RJ Reynolds 1,370,083
(tobacco manufacturer) ----------
10,702,467
----------
Mexico -- 0.99%
115,000 Grupo Industrial Durango ADR1 977,500
(packaging)
90,000 Grupo Industrial Maseca ADR 1,417,500
(food processing) ----------
2,395,000
----------
Netherlands -- 7.37%
19,292 Aalberts Industries 1,721,287
(dispenser systems,
special components)
46,387 Ahrend Groep 2,069,390
(office furniture manufacturer)
59,000 Boskalis Westminster 980,101
(dredging)
51,000 IHC Caland 2,359,004
(engineering construction)
124,976 Kempen 1,555,231
(investment banking)
160,000 Koninklijke Van Ommeren 5,963,841
(tank storage)
125,000 Toolex Alpha ADR+1 3,187,500
(CD production machinery) ----------
17,836,354
----------
Norway -- 3.46%
220,000 Hitec1 1,183,605
(drilling equipment)
75,000 Merkantildata 899,232
(information technology)
60,000 Nera 2,047,483
(mobile phone industry)
140,000 Tandberg1 2,195,049
(digital decoding)
210,000 Tomra Systems 2,049,788
(beverage recycling machines) ----------
8,375,157
----------
Peru -- 0.41%
25,700 Buenaventura T ADR1 501,150
(mining)
380,000 Enrique Ferreyros 484,537
(capital goods distribution) ----------
985,687
----------
Philippines -- 2.20%
8,000,000 Metro Pacific 2,138,221
(investment holding company)
800,000 Security Bank 2,214,586
(banking services)
7,000,000 Southeast Asia Cement1 962,199
(cement) ----------
5,315,006
----------
Poland -- 1.49%
40,000 Bank Rozwoju Eksportu 970,730
(financial services)
230,000 Elektrim Towarzystwo 1,533,901
(electrical equipment)
See Notes to Financial Statements
21
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS (CONTINUED) May 31, 1996 (Unaudited)
INTERNATIONAL EMERGING GROWTH (CONTINUED)
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
750,000 Inicjatyw Gospodarczych Big1 $ 750,278
(bank)
8,000 Rolimpex 348,277
(wholesale importer/exporter) ----------
3,603,186
----------
Singapore -- 1.27%
500,000 CSA Holdings1 493,783
(computer systems solutions)
800,000 Parkway Holdings 2,330,373
(property management)
300,000 St Computer System1 236,590
(computer services) ----------
3,060,746
----------
South Africa -- 2.04%
120,480 The Bidvest Group 623,172
(industrial holding company)
150,000 Group Five 258,621
(building and construction)
100,000 JD Group 441,379
(furniture and
appliance retailer)
98,500 LTA 407,586
(building/construction)
269,400 Malbak+ 1,269,586
(industrial holding company)
25,000 Perskor Groep Beperk 847,701
(printing, publishing)
369,400 Saambou Holdings 424,598
(financial services)
140,000 Servgro International 659,770
(hotel, leisure services) ----------
4,932,413
----------
Sweden -- 9.02%
250,000 Esselte B 4,765,309
(office supplies, security systems)
375,000 Getinge Industrier B 6,868,746
(medical equipment
manufacturer)
120,000 Hoganas B 4,592,566
(metal powder)
80,000 Svedala Industri 1,536,812
(mining and mineral
processing equipment)
67,200 WM-Data Nordic B 4,062,902
(computer consulting) ----------
21,826,335
----------
Switzerland -- 1.80%
5,000 Fotolabo 2,104,208
(mail order film processing)
120 Lindt Und Sprungli 2,260,521
(chocolate manufacturer) ----------
4,364,729
----------
Thailand -- 1.35%
80,000 Advanced Service 1,345,972
(cellular telephone services)
32,000 KR Precision 189,875
(electronics)
350,000 Siam Makro 1,732,301
(wholesale stores) ----------
3,268,148
----------
United Kingdom -- 7.98%
283,333 Biocompatibles 2,077,926
(biopharmaceuticals)
33,333 Biocompatibles Warrants
(expiration date 2-14-97) 27,392
(biopharmaceuticals)
200,000 Close Brothers Group 1,175,279
(financial services)
350,000 Dorling Kindersley Holdings 3,407,999
(publishing)
2,300,000 Freepages Group1 1,052,014
(classified information service)
See Notes to Financial Statements
22
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
430,000 Harvey Nichols1 $ 2,260,164
(retailer)
169,800 JBA Holdings 1,392,724
(software development)
250,000 Kwik-Fit Holdings 899,290
(automotive repair centers)
240,000 McKechnie 1,801,061
(metal, plastic components)
150,000 Powerscreen International 1,096,591
(capital goods)
150,000 Psion 1,011,701
(computer equipment)
430,000 Sage Group 3,086,890
(computer software) ----------
19,289,031
----------
Total Common Stocks,
Rights & Warrants-- 90.30% 218,400,059
(Cost $186,326,906) -----------
PREFERRED STOCKS & RIGHTS
Brazil -- 1.35%
752,600 Itausa 557,900
(financial holding company)
14,000,000 Lojas Renner 575,006
(apparel retailer)
10,000,000 Telecomunicacoes De Sao Paulo 2,113,699
(telephone services)
428,561 Telecomunicacoes
De Sao Paulo Rights 8,318
(telephone services) ----------
3,254,923
----------
Germany -- 4.06%
12,000 Fresenius 2,101,528
(medical equipment, supplies)
5,700 Marschollek, Lantenschlager
und Partner 5,787,087
(financial services)
50,000 Mobel Walther 1,938,558
(specialty retail) ----------
9,827,173
----------
Total Preferred Stocks
& Rights-- 5.41% 13,082,096
(Cost $9,048,691) ----------
TEMPORARY CASH INVESTMENTS
Repurchase Agreement
(J.P. Morgan Securities, Inc.),
5.25%, due 6-3-96; collateralized by
$330,000 par value U.S. Treasury Bonds,
11.75%, due 2-15-01
(Delivery value $400,175) 400,000
$10,000,000 par value FHLB Discount
Notes, 5.275%, 6-12-96 9,984,142
----------
Total Temporary
Cash Investments-- 4.29% 10,384,142
(Cost $10,384,142) ----------
Total Investment
Securities-- 100.00% $ 241,866,297
(Cost $205,759,739) ===========
FORWARD FOREIGN CURRENCY CONTRACTS
Contracts Settlement Value of Unrealized
to Sell Dates Payable (Loss)
- -----------------------------------------------------------------------
1,909,250 CHF 6/28/96 1,533,288 (30,273)
8,040,800 DEM 6/28/96 5,291,253 (75,661)
19,928,602 FRF 6/28/96 3,872,594 (56,243)
1,043,361,599 JPY 6/28/96 9,700,438 (65,909)
11,365,566 NLG 6/28/96 6,683,661 (97,143)
---------- ----------
$27,081,234 $(325,229)
========== ==========
(Value of Receivable $26,756,005)
See Notes to Financial Statements
23
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS (CONTINUED) May 31, 1996 (Unaudited)
NOTES TO SCHEDULES OF INVESTMENTS
CHF = Swiss franc
DEM = German mark
FRF = French franc
GBP = British pound
JPY = Japanese yen
NLG = Netherlands guilder
SEK = Swedish krona
ADR = American Depositary Receipts
GDR = Global Depositary Receipts
1 Non-income producing
+ 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>
MAY 31, 1996
-------------------------
Fund/ Acquisition Average Market Percentage of
Issuer Date Cost Per Share Value Net Assets
- --------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY
<S> <C> <C> <C> <C>
Larsen and Toubro GDR 3-1 to 4-25-96 $15.73 $ 8,700,000 0.66%
========== =====
INTERNATIONAL EMERGING GROWTH
Bulgari ADR 7-6 to 9-5-95 $ 5.63 $ 2,545,867 1.05%
KCI Konecranes 3-19 to 6-4-96 18.18 2,817,096 1.17%
Malbak 7-25-95 to 1-9-96 5.81 1,269,586 0.53%
Newcourt Credit 12-24-95 to 5-28-96 17.40 4,670,681 1.93%
Shanghai Industrial Holdings 5-23-96 0.94 1,087,471 0.45%
Tamro 5-15 to 5-20-96 5.34 1,986,133 0.82%
Toolex Alpha ADR 5-9-96 21.00 3,187,500 1.32%
---------- -----
$17,564,334 7.27%
========== =====
</TABLE>
See Notes to Financial Statements
24
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
International International
May 31, 1996 (Unaudited) Equity Emerging Growth
- -------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Investment securities, at value (identified
cost of $1,213,350,625 and $205,759,739,
respectively) (Note 3)................................... $ 1,322,020,114 $ 241,866,297
Foreign currency holdings, at value (identified
cost of $263,359 and $201,250 respectively) ............. 263,194 203,700
Cash ....................................................... 5,955,398 1,842,477
Receivable for investments sold............................. 15,493,841 3,402,105
Dividends and interest receivable........................... 6,239,401 443,422
------------- ------------
1,349,971,948 247,758,001
------------- ------------
LIABILITIES
Disbursements in excess of demand deposit cash.............. 2,217,789 100,843
Payable for capital shares redeemed......................... 1,034,940 20,261
Payable for investments purchased........................... 30,654,465 5,345,793
Payable for forward foreign currency exchange
contracts held........................................... 3,139,458 325,229
Accrued management fees (Note 2)............................ 1,943,697 381,517
Other liabilities........................................... 36,535 67,150
------------- ------------
39,026,884 6,240,793
------------- ------------
NET ASSETS APPLICABLE TO OUTSTANDING SHARES..................... $1,310,945,064 $241,517,208
============= ============
CAPITAL SHARES, $0.01 PAR VALUE
Authorized.................................................. 800,000,000 200,000,000
============= ============
Outstanding................................................. 158,990,062 34,079,759
============= ============
NET ASSET VALUE PER SHARE....................................... $ 8.25 $ 7.09
============= ============
NET ASSETS CONSIST OF:
Capital (par value and paid-in surplus) .................... $1,095,034,131 $200,907,868
Undistributed net investment (loss)......................... (1,573,639) (163,791)
Accumulated undistributed net realized gain from
investments and foreign currency transactions............ 112,047,287 5,009,172
Net unrealized appreciation on investments
and translation of assets and liabilities
in foreign currencies (Note 3)........................... 105,437,285 35,763,959
------------- ------------
$1,310,945,064 $241,517,208
============= ============
See Notes to Financial Statements
</TABLE>
25
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
International International
Six Months Ended May 31, 1996 (Unaudited) Equity Emerging Growth
- -------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME (LOSS)
<S> <C> <C>
Income:
Dividends (net of foreign taxes withheld
of $1,124,478 and $203,336, respectively) ................. $ 8,220,717 $ 1,345,255
Interest ....................................................... 1,548,287 230,658
------------- -------------
9,769,004 1,575,913
------------- -------------
Expenses:
Management fees (Note 2) ....................................... 11,320,064 1,626,535
Directors' fees and expenses ................................... 5,601 681
------------- -------------
11,325,665 1,627,216
------------- -------------
NET INVESTMENT LOSS .................................................. (1,556,661) (51,303)
------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY (Note 3)
Net realized gain (loss) during the period on:
Investments..................................................... 125,317,396 11,899,889
Foreign currency transactions .................................. (4,435,030) 566,168
------------- -------------
120,882,366 12,466,057
------------- -------------
Change in net unrealized appreciation (depreciation)
during the period on:
Investments .................................................... 8,509,982 27,458,517
Translation of assets and liabilities
in foreign currencies ..................................... (9,094,347) (2,949,448)
------------- -------------
(584,365) 24,509,069
------------- -------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY ..................................... 120,298,001 36,975,126
------------- -------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ............................................ $ 118,741,340 $ 36,923,823
============= =============
See Notes to Financial Statements
</TABLE>
26
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Ended May 31, 1996 (Unaudited) INTERNATIONAL EQUITY INTERNATIONAL
and the Year Ended November 30, 1995 EMERGING GROWTH
- ----------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS 1996 1995 1996 1995
-------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income (loss) ......................... $ (1,556,661) $ 3,130,463 $ (51,303) $ 304,720
Net realized gain (loss) on investments
and foreign currency transactions .................. 120,882,366 (9,429,329) 12,466,057 (6,179,550)
Change in net unrealized appreciation
(depreciation) on investments and translation
of assets and liabilities in foreign currencies .... (584,365) 75,548,366 24,509,069 12,189,016
--------------- --------------- --------------- ---------------
Net increase in net assets
resulting from operations .......................... 118,741,340 69,249,500 36,923,823 6,314,186
--------------- --------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ........................... (1,160,340) -- (304,720) --
In excess of net investment income ................... -- -- (344,800) --
From net realized gains on security transactions ..... -- (64,609,265) -- --
--------------- --------------- --------------- ---------------
Net (decrease) from distributions ................ (1,160,340) (64,609,265) (649,520) --
--------------- --------------- --------------- ---------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ............................ 235,993,872 392,977,541 102,468,199 42,306,561
Proceeds from reinvestment of distributions .......... 1,139,328 63,657,003 639,754 --
Payments for shares redeemed ......................... (254,210,689) (567,475,203) (12,144,190) (45,243,072)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets from
capital share transactions ....................... (17,077,489) (110,840,659) 90,663,763 (2,936,511)
--------------- --------------- --------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS ................ 100,503,511 (106,200,424) 126,938,066 3,377,675
NET ASSETS
Beginning of period .................................. 1,210,441,553 1,316,641,977 114,579,142 111,201,467
--------------- --------------- --------------- ---------------
End of period ........................................ $ 1,310,945,064 $ 1,210,441,553 $ 241,517,208 $ 114,579,142
=============== =============== =============== ===============
Undistributed net investment income (loss) ........... $ (1,573,639) $ 1,143,362 $ (163,791) $ 537,032
=============== =============== =============== ===============
TRANSACTIONS IN SHARES OF THE FUNDS:
Sold ................................................. 29,827,593 55,937,551 15,880,327 7,866,729
Issued in reinvestment of distributions .............. 149,517 9,198,989 109,359 --
Redeemed.............................................. (32,094,693) (80,255,938) (1,997,492) (8,402,017)
--------------- --------------- --------------- ---------------
Net increase (decrease) .............................. (2,117,583) (15,119,398) 13,992,194 (535,288)
=============== =============== =============== ===============
See Notes to Financial Statements
</TABLE>
27
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS May 31, 1996 (Unaudited)
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. 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.
28
- --------------------------------------------------------------------------------
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 Fund's behalf by
its 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 (both expiring in 2002) 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.
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 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 annual fee is 2.00%
for International Emerging Growth.
Effective August 1, 1996, IRC has voluntarily reduced its annual management
fee on the funds. The annual fee for International Equity will be 1.50% of the
average net assets up to $1 billion, 1.20% of the average net assets between $1
billion and $2 billion, and 1.10% of the average net assets in excess of $2
billion. The annual fee for International Emerging Growth will be 1.75% of the
average net assets up to $500 million, 1.40% of the average net assets between
$500 million and $1 billion, and 1.20% of average net assets in excess of $1
billion. IRC will submit a new management agreement for shareholder approval in
July 1997 that reflects the reduced fee structure.
29
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED) May 31, 1996 (Unaudited)
3. Investment Transactions
Investment transactions (excluding short-term investments) for the six months
ended May 31, 1996, 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 $981,726,118 $12,528,670 $260,594 $1,025,127,936 -- $6,100,000
International
Emerging Growth 184,888,060 5,288,354 -- 96,119,690 $9,446,074 --
On May 31, 1996, 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 $128,864,876 $(20,208,545) $108,656,331 $1,213,363,783
International
Emerging Growth 38,330,954 (2,282,233) 36,048,721 205,817,576
</TABLE>
30
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
INTERNATIONAL EQUITY
Six Months Years Ended November 30, March 4, 19913
Ended May 31, --------------------------------------------- through
1996 (Unaudited) 1995 1994 1993 1992 November 30, 1991
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSET VALUE,
BEGINNING OF PERIOD............ $7.51 $7.47 $7.34 $5.79 $5.33 $5.00
------ ------ ------ ------ ------ ------
INCOME FROM
INVESTMENT OPERATIONS
Net Investment
Income (Loss)................ (.01) .01 (.04) (.04) .06 .02
Net Realized
and Unrealized
Gains........................ .76 .40 .57 1.78 .41 .31
------ ------ ------ ------ ------ ------
Total from
Investment Operations........ .75 .41 .53 1.74 .47 .33
------ ------ ------ ------ ------ ------
DISTRIBUTIONS
From Net
Investment Income............ (.01) -- -- (.036) (.005) --
In Excess of Net
Investment Income............ -- -- -- (.155) (.002) --
From Net Realized
Gains on Investment
Transactions................. -- (.372) (.402) -- -- --
------ ------ ------ ------ ------ ------
Total Distributions.......... (.01) (.372) (.402) (.191) (.007) --
------ ------ ------ ------ ------ ------
NET ASSET VALUE,
END OF PERIOD.................. $8.25 $7.51 $7.47 $7.34 $5.79 $5.33
====== ====== ====== ====== ====== ======
TOTAL RETURN1................ 9.96% 5.93% 7.28% 31.04% 8.77% 6.60%
RATIOS/SUPPLEMENTAL DATA
Ratio of Expenses to
Average Net Assets........... 1.78%2 1.77% 1.84% 1.90% 1.91% 1.87%2
Ratio of Net Investment
Income (Loss) to
Average Net Assets........... (.24%)2 .25% (.53%) (.34%) .95% .43%2
Portfolio
Turnover Rate................ 80% 169% 242% 255% 180% 84%
Average Commission
Paid per Share Traded........ $.0180 .0020 -- -- -- --
Net Assets, End
of Period (in thousands)..... $1,310,945 $1,210,442 $1,316,642 $759,238 $215,346 $43,076
- --------------------------------------------------------------------------------------------------------------
1 Total returns for periods less than one year are not annualized. Total return assumes reinvestment of dividends
and capital gains distributions, if any.
2 Annualized.
3 Date on which fund commenced operations. Fund was first offered to the public on May 9, 1991 (inception).
</TABLE>
See Notes to Financial Statements
31
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED) (For a Share Outstanding Throughout the Period)
INTERNATIONAL EMERGING GROWTH
Six Months Year Ended April 1, 1994
Ended May 31, November 30, (inception) through
1996 (Unaudited) 1995 November 30, 1994
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.......... $5.70 $5.39 $5.00
------ ------ ------
INCOME FROM
INVESTMENT OPERATIONS
Net Investment
Income (Loss).............. .00 .03 (.02)
Net Realized
and Unrealized
Gains...................... 1.42 .28 .41
------ ------ ------
Total from
Investment Operations...... 1.42 .31 .39
------ ------ ------
DISTRIBUTIONS
From Net
Investment Income.......... (.01) -- --
In Excess of Net
Investment Income.......... (.02) -- --
------ ------ ------
Total Distributions........ (.03) -- --
------ ------ ------
NET ASSET VALUE,
END OF PERIOD................ $7.09 $5.70 $5.39
====== ====== ======
TOTAL RETURN1.............. 25.07% 5.75% 7.80%
RATIOS/SUPPLEMENTAL DATA
Ratio of Expenses to
Average Net Assets......... 2.00%2 2.00% 2.00%2
Ratio of Net Investment
Income (Loss) to
Average Net Assets......... (.06%)2 .27% (.48%)2
Portfolio
Turnover Rate.............. 67% 168% 56%
Average Commission
Paid per Share Traded...... $.0120 $.0040 --
Net Assets, End
of Period (in thousands)... $241,517 $114,579 $111,202
- ---------------------------------------------------------------------------------------------
1 Total returns for periods less than one year are not annualized. Total return assumes
reinvestment of dividends and capital gains distributions, if any.
2 Annualized.
</TABLE>
See Notes to Financial Statements
32
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
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.
33
TWENTIETH CENTURY WORLD INVESTORS, INC.
TWENTIETH CENTURY
Investment Manager World Investors
INVESTORS RESEARCH CORPORATION
Kansas City, Missouri
This report and the financial Semiannual Report
statements contained herein
are submitted for the general May 31, 1996
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 41920
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
- ----------------------------------------------------
Internet address: htp://www.twentieth-century.com
- ----------------------------------------------------
- --------------------------------------------------------------------------------
SH-BKT-4967 (Recycle logo)
9607 Recycled
