Jundt
"with innovation
Growth
comes growth,
Fund
creating new
and dynamic
Annual Report
investment
December 31, 1995
opportunities"
This report is not authorized for use in connection with an offer of
sale or a solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance shown in this report should not be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
General information regarding the Fund's portfolio, updated monthly,
is available by calling Princeton Administrators, L.P., at 1-800-543-
6217 or 1-609-282-4600.
<PAGE>
Printed on Recycled Paper
LETTER TO SHAREHOLDERS
Jundt
Growth Fund
DEAR SHAREHOLDER,
Reorganization
We will remember this past year not only as a year of robust growth
in the United States stock markets, but also as a year of
reorganization for The Jundt Growth Fund and its shareholders.
The Fund was organized in 1991 as a closed-end fund.
Recognizing that shares of closed-end equity funds typically trade
in the market at a discount to net asset value (NAV), the Fund's
Board of Directors has always been committed to offering
shareholders that need or desire to sell their shares with a
periodic means of realizing the full value of their shares. To
provide this means, the Fund conducted annual tender offers,
allowing Fund shareholders to periodically redeem their shares at
NAV. However, these tender offers proved to be unsuccessful in
addressing the market discount problem and resulted in a substantial
reduction of the Fund's asset base.
In keeping with its commitment to Fund shareholders, in 1995
the Board of Directors recommended the conversion of the Fund to an
open-end (mutual) fund, to allow redemptions of Fund shares each
business day at NAV. In August, Fund shareholders approved the
Fund's conversion, and the conversion was effective on December 29,
1995. As a mutual fund, shares of the Fund no longer trade on the
New York Stock Exchange. The NAV of the Fund's Class A shares is now
quoted daily in the mutual fund section of most major newspapers.
(Shares of the closed-end fund were converted into Class A shares.)
For brokers and financial advisers, the new quote symbol for the
Fund's Class A shares is JGFAX.
The Fund's growth-oriented investment objective remains
unchanged. The Fund's focus remains on 30 to 50 of what we believe
are the fastest growing companies in America, with an emphasis on
companies with annual revenues in excess of $750 million.
<PAGE>
Review of 1995 and Outlook for 1996
While growth stocks are often perceived by investors as a
homogeneous group, 1995 was a year in which there was significant
disparity in the performance of various growth rate categories. This
is shown graphically in the chart on the next page.
LETTER TO SHAREHOLDERS (CONCLUDED)
RUSSELL 1000 GROWTH INDEX
1995 PERFORMANCE-EARNINGS
GROWTH CATAGORIES
* In 1995, a strategy which emphasized the fastest growing companies
underperformed slower growing companies significantly.
* The highest earnings growth sector (column 5) underperformed the
overall index (column 1) by 9.7% in 1995. This represents
underperformance due to style.
A bar chart illustrating the following percentages:
Overall Index 37.2%
8--12% Earnings Growth 39.2%
12--16% Earnings Growth 40.7%
16--20% Earnings Growth 36.6%
20%+ Earnings Growth 27.5%
Source: Diversified Investment Advisors, Inc. Compiled data supplied
by Vestek Systems, Inc.
<PAGE>
For the past four years, equity investors focused on cyclical
companies whose operations benefited from an economic recovery,
declining interest rates and a weak dollar. In the current economic
environment of slow growth, modest inflation, low interest rates and
slowing corporate profits, we believe the outlook for growth stocks
remains very bright. We further believe the Fund's focus on
companies with the fastest rates of revenue growth best positions
the Fund to perform very strongly relative to its peer group.
Thank you for your ongoing loyalty and confidence. Your Board
of Directors and I look forward to continuing to serve you.
Sincerely,
(James R. Jundt)
James R. Jundt
Chairman
PERFORMANCE DATA
JUNDT GROWTH FUND, INC. DECEMBER 31, 1995
TOTAL RETURN BASED ON A $10,000 INVESTMENT
A line graph depicting the growth of an investment in the
Fund's Class A Shares compared to growth of an investment in
the Russell 1000 Growth Index.
Beginning and ending values are:
09/03/91* 12/31/95
Jundt Growth Fund, Inc.--
Class A Shares++ $ 9,475 $13,039
Russell 1000 Growth Index++++ $10,000 $17,035
<PAGE>
[FN]
*Commencement of operations as a closed-end fund.
++The Jundt Growth Fund, Inc. invests in a diversified portfolio of
equity securities. The total return for Class A shares is based upon
a hypothetical investment in Class A shares at the Fund's inception
on September 3, 1991, restated (except as noted) to reflect the
maximum initial sales load charged on Class A shares (5.25%). Total
return on Class A shares prior to December 29, 1995 reflects
performance of the Fund as a closed-end fund. As an open-end fund,
the Fund incurs certain additional expenses as a result of the
continuous offering and redemption of its shares. Total return
assumes reinvestment of all dividends and distributions.
++++This unmanaged broad-based Index is comprised of a
representative sampling of the common stocks of 1,000 of the largest
publicly traded companies domiciled in the United States.
Past performance is not predictive of future performance.
AVERAGE ANNUAL TOTAL RETURN**
RETURN WITHOUT RETURN WITH
CLASS A SHARES SALES CHARGE SALES CHARGE
Year Ended 12/31/95 17.81% 11.63%
Fund's inception (9/03/91)
through 12/31/95 7.65% 6.32%
[FN]
**Performance results for per share net asset value of Class A
shares prior to December 29, 1995 are for the period when the Fund
was closed-end. See footnotes to the preceding graph for a
discussion of the presentation of total return.
JUNDT ASSOCIATES' APPROACH TO GROWTH STOCK INVESTING
Jundt
Growth Fund
<PAGE>
JUNDT ASSOCIATES IS GROWTH-ORIENTED; OUR FOCUS IS ON COMPANIES
generating significant revenue increases. We believe the U.S.
economy's heterogeneous nature and multi-trillion dollar size
generally afford investors significant growth opportunities. We
emphasize the fundamental prospects of individual companies rather
than macroeconomic trends. Concentration is placed on larger-
capitalization companies, with at least half the equity securities
consisting of companies with annual revenues over $750 million.
Within these parameters, the Fund's mission is to establish equity
positions in 30 to 50 of what we believe are the fastest growing
corporations in America. Particular emphasis is placed on companies
which we believe will achieve annual rates of revenue growth of 15%
or greater. Historically, the portfolios which we have managed have
been invested in companies having a composite annual revenue growth
rate of 20% to 30%.
BIOGRAPHIES
PHOTO APPEARS HERE
JAMES R. JUNDT, C.F.A.
BA--GONZAGA UNIVERSITY
NEW YORK UNIVERSITY
GRADUATE SCHOOL OF
BUSINESS
32 years of professional experience. Founded Jundt Associates in
1982. Previously with St. Paul Advisers, Inc. (now known as Fortis
Advisers, Inc.), St. Paul, Minnesota, Investors Diver-sified
Services, Inc. (now known as American Express Financial Advisers,
Inc.), Minneapolis, Minnesota, and Merrill Lynch, Pierce, Fenner &
Smith Inc., New York, New York.
Work experience includes security analysis, supervisory
research activity, and portfolio management.
<PAGE>
PHOTO APPEARS HERE
DONALD M. LONGLET, C.F.A.
BA--UNIVERSITY OF
MINNESOTA
28 years of professional experience. Joined Jundt Associates in
1989. Previously with AMEV Advisers, Inc. (now known as Fortis
Advisers, Inc.), St. Paul, Minnesota, and Northwestern National Bank
of Minneapolis (now known as Norwest Bank Minnesota, National
Association), Minneapolis, Minnesota.
Work experience includes security analysis and portfolio
management of pension plans and mutual funds.
PHOTO APPEARS HERE
THOMAS L. PRESS
BS--UNIVERSITY OF
MINNESOTA
MBA--ST. THOMAS
UNIVERSITY
11 years of professional experience. Joined Jundt Associates in
1993. Previously with Investment Advisers, Inc., Minneapolis,
Minnesota (where he served as co-manager of IAI Emerging Growth
Fund, a small capitalization equity mutual fund), Morgan Stanley &
Co., Inc., Chicago, Illinois, and Salomon Brothers, Inc., Chicago,
Illinois.
Work experience includes security analysis, sales, and
portfolio management of pension plans and mutual funds.
PHOTO APPEARS HERE
MARCUS E. JUNDT
BA--GONZAGA
UNIVERSITY
9 years of professional experience. Joined Jundt Associates in 1992.
Previously with Victoria Investors, Los Angeles, California, and
Cargill Investor Services (on the floor of the Chicago Mercantile
Exchange).
Work experience includes security analysis.
<PAGE>
DIRECTORS
John E. Clute
Dean and Professor
Gonzaga University
School of Law
Floyd Hall
Chairman, President and
Chief Executive Officer
K Mart Corporation
James R. Jundt
Director and
Chairman of the Board
Jundt Associates, Inc.
Demetre M. Nicoloff
Surgeon
Cardiac Surgical
Associates, P.A.
Darrell R. Wells
Managing Director
Security Management
Company
OFFICERS
James R. Jundt
Chairman, President and
Chief Executive Officer
Donald M. Longlet
Vice President and
Treasurer
James E. Nicholson
Secretary
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS
JUNDT GROWTH FUND, INC. DECEMBER 31, 1995
<CAPTION>
COMMON STOCKS
INDUSTRY NUMBER MARKET
DESCRIPTION AND ISSUE OF SHARES COST VALUE (a)
<S> <C> <C> <C>
CLIENT SERVER SOFTWARE (4.7%)
HBO & Co. 48,000 $ 3,699,951 $ 3,678,000
Peoplesoft Inc. (b) 68,900 3,002,590 2,962,700
------------------------------
6,702,541 6,640,700
------------------------------
COMPUTER SERVICES/SOFTWARE (26.4%)
3Com Corp. (b) 144,200 6,470,925 6,723,325
Cascade Communications Corp. (b) 34,600 2,982,975 2,949,650
cisco Systems, Inc. (b) 91,300 7,229,337 6,813,262
Informix Corp. (b) 220,800 5,861,883 6,624,000
Microsoft Corp. (b) 73,500 6,767,302 6,449,625
Oracle Systems Corp. (b) 119,750 5,599,177 5,074,406
Sybase, Inc. (b) 67,900 2,643,236 2,444,400
------------------------------
37,554,835 37,078,668
------------------------------
ELECTRONICS (6.5%)
Hewlett Packard Co. 63,100 5,856,788 5,284,625
Intel Corp. 67,200 4,268,700 3,813,600
------------------------------
10,125,488 9,098,225
------------------------------
INTERACTIVE MEDIA (3.5%)
CUC International, Inc. (b) 144,600 5,174,511 4,934,475
INTERNET TECHNOLOGY (10.9%)
H & R Block, Inc. 134,400 5,482,128 5,443,200
Intuit, Inc. (b) 60,100 4,872,745 4,687,800
Netcom On-Line Communication Services Inc. (b) 45,800 3,186,990 1,648,800
Netscape Communications Corp. (b) 25,600 3,240,845 3,558,400
------------------------------
16,782,708 15,338,200
------------------------------
See accompanying notes to schedule of investments.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNDT GROWTH FUND, INC. DECEMBER 31, 1995
<CAPTION>
COMMON STOCKS (CONTINUED)
INDUSTRY NUMBER MARKET
DESCRIPTION AND ISSUE OF SHARES COST VALUE (a)
<S> <C> <C> <C>
MANAGED CARE (14.8%)
HealthSource, Inc. (b) 208,600 $ 6,575,838 $ 7,509,600
Oxford Health Plans, Inc. (b) 104,000 6,968,442 7,683,000
United Healthcare Corp. 86,600 5,528,231 5,672,300
------------------------------
19,072,511 20,864,900
------------------------------
MEDICAL DEVICES/DRUGS (16.3%)
Biogen, Inc. (b) 80,000 5,056,250 4,920,000
Boston Scientific Corp. (b) 158,700 6,765,078 7,776,300
Genzyme Corp. (b) 95,200 5,433,378 5,938,100
Medtronic, Inc. 75,700 4,332,008 4,229,737
------------------------------
21,586,714 22,864,137
------------------------------
MISCELLANEOUS (1.7%)
First Data Corp. 35,000 2,374,155 2,340,625
RESTAURANTS (9.2%)
Boston Chicken, Inc. (b) 194,100 6,613,377 6,235,463
Starbucks Corp. (b) 322,300 6,952,235 6,768,300
------------------------------
13,565,612 13,003,763
------------------------------
RETAIL (28.4%)
AutoZone, Inc. (b) 181,600 5,295,456 5,243,700
Home Depot, Inc. 178,283 7,668,864 8,535,299
Lowe's Companies, Inc. 176,800 5,646,317 5,922,800
Office Depot, Inc. (b) 193,675 5,357,050 3,825,081
OfficeMax, Inc. (b) 184,850 4,188,701 4,136,019
PetSmart, Inc. (b) 154,950 4,924,776 4,803,450
Staples, Inc. (b) 306,975 8,400,713 7,482,516
------------------------------
41,481,877 39,948,865
------------------------------
<PAGE>
TELECOMMUNICATION INFRASTRUCTURE (5.5%)
LM Ericsson Telephone Co. (ADR)* 214,400 4,837,400 4,180,800
Motorola, Inc. 37,400 2,282,709 2,131,800
Tellabs Inc. (b) 40,000 1,550,640 1,480,000
------------------------------
8,670,749 7,792,600
------------------------------
See accompanying notes to schedule of investments.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (CONCLUDED)
JUNDT GROWTH FUND, INC. DECEMBER 31, 1995
<CAPTION>
COMMON STOCKS (CONCLUDED)
INDUSTRY NUMBER MARKET
DESCRIPTION AND ISSUE OF SHARES COST VALUE (a)
<S> <C> <C> <C>
WIRELESS/TELECOMMUNICATION SERVICES (18.2%)
Airtouch Communications, Inc. (b) 227,400 $ 6,432,009 $ 6,424,050
Mobile Telecommunications Technologies Corp. (b) 115,300 3,015,450 2,464,538
Paging Network, Inc. (b) 131,600 3,322,900 3,207,750
Telephone & Data Systems, Inc. 51,800 2,046,865 2,046,100
Vodafone Group PLC (ADR)* 121,900 4,179,342 4,296,975
WorldCom, Inc. (b) 201,500 5,878,659 7,102,875
------------------------------
24,875,225 25,542,288
------------------------------
TOTAL COMMON STOCKS (146.1%) 207,966,926 205,447,446
<PAGE>
SHORT-TERM SECURITIES
PRINCIPAL MARKET
ISSUE AMOUNT COST VALUE (A)
REPURCHASE AGREEMENT (0.7%) (NOTE 2)
Repurchase agreement with Morgan
Stanley & Co., Incorporated,
5.80% acquired on 12/28/95 and due
1/02/1996 with accrued interest of
$817 (collateralized by $910,000
U.S. Treasury Bond 7.25%, 5/15/2016,
value including accrued interest,
$1,034,306) $ 1,014,000 1,014,000 1,014,000
MONEY MARKET FUNDS (0.0%)
Investment in Prime Value Funds Treasury Fund 6,981 6,981 6,981
------------------------------
TOTAL SHORT-TERM SECURITIES (0.7%) 1,020,981 1,020,981
Total investments in securities (146.8%) $208,987,907(c) 206,468,427
===========
Liabilities in excess of other assets (-46.8%) (65,826,369)
-----------
NET ASSETS (100.0%) $140,642,058
===========
<FN>
Notes to Schedule of Investments:
*American Depositary Receipt (ADR).
(a)Securities are valued by procedures described in note 2 to the
financial statements.
(b)Presently non-income producing.
(c)Cost for federal income tax purposes at December 31, 1995 was
$210,152,630. The aggregate gross unrealized depreciation of
investments in securities based on this cost were:
Gross unrealized appreciation $ 6,853,078
Gross unrealized depreciation (10,537,281)
-----------
Net unrealized depreciation $ (3,684,203)
===========
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
JUNDT GROWTH FUND, INC. DECEMBER 31, 1995
STATEMENT OF ASSETS AND LIABILITIES
<S> <S> <C>
ASSETS Investments in securities, at market value (note 2)
including repurchase agreement of $1,014,000
(identified cost: $208,987,907) $206,468,427
Cash 3,000
Receivable for capital shares sold 1,492
Dividends and accrued interest receivable 117,769
Prepaid expenses 29,967
-----------
Total assets 206,620,655
-----------
LIABILITIES Payable for capital shares redeemed 65,556,384
Accrued investment management fee (note 4) 205,729
Accrued administrative fee (note 4) 50,774
Accrued expenses and other liabilities 165,710
-----------
Total liabilities 65,978,597
-----------
Net assets applicable to outstanding capital stock $140,642,058
===========
Represented by:
Capital stock-authorized 1,000,000,000 shares of $.01 par value;
outstanding, 11,766,102 shares $ 117,661
Additional paid-in capital 143,644,447
Accumulated net realized loss on investments (600,570)
Unrealized depreciation of investments (2,519,480)
-----------
Total, representing net assets applicable to outstanding capital stock $140,642,058
===========
NET ASSET VALUE Net asset value per share of outstanding capital stock $11.95
=====
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS (CONTINUED)
JUNDT GROWTH FUND, INC. DECEMBER 31, 1995
STATEMENT OF OPERATIONS
<CAPTION>
Year Ended December 31, 1995
<S> <S> <C>
INCOME Interest $ 1,568,300
Dividends (net of foreign withholding taxes of $34,517) 581,774
-----------
2,150,074
-----------
EXPENSES Investment management fee 2,448,177
(NOTE 4) Administrative fee 611,386
Audit and legal fees 329,632
Custodian and transfer agent fees 184,492
Reports to shareholders 124,841
Directors' fees 82,249
Registration fees 75,500
Listing fees 24,260
Other expenses 45,257
-----------
Total expenses 3,925,794
-----------
Investment loss, net (1,775,720)
-----------
NET REALIZED AND Net realized gain on investments (note 3) 87,197,971
UNREALIZED GAIN Net change in unrealized appreciation or depreciation on investments (46,279,923)
(LOSS) ON -----------
INVESTMENTS Net gain on investments 40,918,048
-----------
Net increase in net assets resulting from operations $ 39,142,328
===========
See accompanying notes to financial statements.
</TABLE>
<TABLE>
FINANCIAL STATEMENTS (CONCLUDED)
<PAGE>
JUNDT GROWTH FUND, INC. DECEMBER 31, 1995
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
PERIOD FROM
YEAR ENDED JULY 1, 1994 TO
DECEMBER 31, DECEMBER 31,
1995 1994
<S> <S> <C> <C>
OPERATIONS Investment loss--net $ (1,775,720) $ (1,079,093)
Net realized gain (loss) on investments 87,197,971 (2,518,189)
Net change in unrealized appreciation or depreciation
on investments (46,279,923) 29,802,048
----------------------------
Net increase in net assets resulting from operations 39,142,328 26,204,766
----------------------------
DISTRIBUTIONS Realized capital gains--net (83,541,012) --
TO SHAREHOLDERS Tax return of capital -- (5,079,628)
----------------------------
Total distributions to shareholders (83,541,012) (5,079,628)
----------------------------
CAPITAL SHARE Net decrease from capital share transactions (note 5) (38,275,968) --
TRANSACTIONS ----------------------------
NET ASSETS Total increase (decrease) in net assets (82,674,652) 21,125,138
Net assets at beginning of period 223,316,710 202,191,572
----------------------------
Net assets at end of period $140,642,058 $223,316,710
============================
See accompanying notes to financial statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
JUNDT GROWTH FUND, INC. DECEMBER 31, 1995
<PAGE>
1.ORGANIZATION
The Jundt Growth Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 (as amended) as a diversified, open-
end management investment company. The Fund was incorporated under
the laws of the State of Minnesota on May 20, 1991 and originally
commenced operations on September 3, 1991 as a closed-end investment
company. The Fund converted to an open-end investment company
immediately following the close of business on the New York Stock
Exchange on December 28, 1995 (the "Open-End Conversion"). Effective
upon the Open-End Conversion, the Fund offers its shares of common
stock in four classes (Class A, Class B, Class C and Class D).
Shares of Class A and Class D are sold with a front-end sales charge
and sales of greater than $1,000,000 may be subject to a contingent
deferred sales charge. Shares of Class B and Class C may be subject
to a contingent deferred sales charge. All classes of shares have
identical voting, dividend, liquidation and other rights and the
same terms and conditions, except that Class B, Class C and Class D
shares bear certain expenses related to the account maintenance of
such shares, and Class B and Class C shares also bear certain
expenses related to the distribution of such shares. Shareholder
servicing costs attributable solely to a particular class will be
allocated to such class. Each class has exclusive voting rights with
respect to matters relating to its account maintenance and
distribution expenditures.
Also, effective upon the Open-End Conversion, each issued and
outstanding Fund share was converted to a Class A share of the open-
end Fund. No public sales of Class B, Class C or Class D shares
were made prior to December 31, 1995. The Fund's investment
objective is to provide long-term capital appreciation by investing
primarily in a diversified portfolio of equity securities of
companies that are believed by Jundt Associates, Inc. (the
"Adviser") to have significant potential for growth in revenue and
earnings.
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Fund are as
follows:
Investment in Securities
Investments in securities traded on U.S. securities exchanges or
included in a national market system are valued at the last quoted
sales price as of the close of business on the date of valuation or,
lacking any sales, at the mean between the most recently quoted bid
and asked prices. Securities traded in the over-the-counter market
are valued at the mean between the most recently quoted bid and
asked prices. Other securities for which market quotations are not
readily available are valued at fair value in good faith by or under
the direction of the Board of Directors. Short-term securities with
maturities of fewer than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued at amortized
cost, which approximates market value.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNDT GROWTH FUND, INC. DECEMBER 31, 1995
Security transactions are accounted for on the date the securities
are purchased or sold. Realized gains and losses are calculated on
the identified cost basis. Dividend income is recognized on the ex-
dividend date. Interest income, including level-yield amortization
of discount, is accrued daily.
Federal Taxes
The Fund intends to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and also
intends to distribute all of its investment company taxable income
to shareholders. Therefore, no income tax provision is required. In
addition, on a calendar year basis, the Fund will make sufficient
distributions of its net investment income and realized gains, if
any, to avoid the payment of any federal excise taxes.
Net investment income (loss) and net realized gains (losses) may
differ for financial statement and tax purposes primarily due to
wash sales and net operating losses. The character of distributions
made during the year from net investment income or net realized
gains, if any, may differ from their ultimate characterization for
federal income tax purposes. Also, due to the timing of dividend
distributions, the fiscal year in which amounts are distributed may
differ from the year the income or realized gains (losses) were
recorded by the Fund. On the statement of assets and liabilities, as
a result of permanent book-to-tax differences, accumulated net
investment loss has been decreased by $1,775,720 and accumulated net
realized gain on investments has been decreased by $1,405,720,
resulting in a reclassification adjustment to decrease paid-in
capital by $370,000. These reclassifications have no effect on net
assets or net asset value per share.
Repurchase Agreements
The Fund invests in U.S. Government securities pursuant to
repurchase agreements with a member bank of the Federal Reserve
System or a primary dealer in U.S. Government securities. Under such
agreements, the bank or primary dealer agrees to repurchase the
security at a mutually agreed upon time and price. The Fund takes
possession of the underlying securities, marks to market such
securities daily and, if necessary, receives additional securities
to ensure that the contract is adequately collateralized.
Distributions to Shareholders
Distributions are recorded as of the close of business on the ex-
dividend date. Such distributions are payable in cash or reinvested
in additional shares of the Fund.
<PAGE>
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
income and expenses during the reporting period. Actual results
could differ from those estimates.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNDT GROWTH FUND, INC. DECEMBER 31, 1995
3.INVESTMENT SECURITY TRANSACTIONS
Purchases of securities and proceeds from sales, other than
temporary investments in short-term securities, for the year ended
December 31, 1995 were $334,490,660 and $390,599,317, respectively.
4.INVESTMENT ADVISORY AND ADMINISTRATION
AGREEMENTS AND TRANSACTIONS WITH AFFILIATES
The Fund has entered into an investment advisory agreement with the
Adviser. The Adviser is responsible for the management of the Fund's
portfolio and provides the necessary personnel, facilities,
equipment and certain other services necessary to the operations of
the Fund. For such services, the Fund pays a monthly investment
management fee calculated at the annualized rate of 1% of the Fund's
average net assets. The most restrictive annual expense limitation
requires that the Adviser reimburse the Fund to the extent the
Fund's expenses (excluding interest, taxes, distribution fees,
brokerage fees and commissions, and extraordinary items) exceed 2.5%
of the Fund's first $30 million of average daily net assets, 2.0% of
the next $70 million of average daily net assets and 1.5% of the
average daily net assets in excess thereof. The Adviser's obligation
to reimburse the Fund is limited to the amount of the investment
management fee.
The Fund has entered into an administration agreement with Princeton
Administrators, L.P. (the "Administrator") which provided the
Administrator, prior to the Open-End Conversion, with a monthly
administrative fee in an amount equal to an annualized rate of 0.25%
of the Fund's average weekly net assets not exceeding $300,000,000
and 0.20% of the average weekly net assets in excess of
$300,000,000, subject to an annual minimum fee of $150,000.
<PAGE>
Effective upon the Open-End Conversion, the administration agreement
provides the Administrator with a monthly administrative fee in an
amount equal to an annualized rate of 0.20% of the Fund's average
daily net assets not exceeding $600,000,000 and 0.175% of the Fund's
average daily net assets in excess of $600,000,000, subject to an
annual minimum fee of $125,000. For its fee, the Administrator
provides certain administrative, accounting, clerical and record
keeping services for the Fund.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNDT GROWTH FUND, INC. DECEMBER 31, 1995
Effective upon the Open-End Conversion, the Fund has entered into a
distribution agreement with U.S. Growth Investments, Inc. (the
"Distributor"), an affiliate of the Adviser. The Distributor serves
as the principal underwriter of the Fund's shares. Pursuant to the
Distribution Plans adopted by the Fund in accordance with Rule 12b-1
under the Investment Company Act of 1940, the Fund pays the
Distributor ongoing account maintenance and distribution fees. The
fees are accrued daily and paid monthly at annual rates based upon
the average daily net assets of the shares as follows:
ACCOUNT DISTRIBUTION
MAINTENANCE FEE FEE
Class B 0.25% 0.75%
Class C 0.25% 0.75%
Class D 0.25% -
In addition to the investment management fee, the administrative fee
and account maintenance and distribution fees, the Fund is
responsible for paying most other operating expenses, including
directors' fees and expenses, custodian fees, registration fees,
printing and shareholder reports, transfer agent fees and expenses,
legal, auditing and accounting services, insurance and other
miscellaneous expenses.
Legal fees of $297,084 (of which $226,587 are a result of the
conversion) for the period ended December 31, 1995 were paid to a
law firm of which the secretary of the Fund is a partner. Certain
officers and/or directors of the Fund are officers and/or directors
of the Adviser and/or the Distributor.
<PAGE>
5.CAPITAL SHARE TRANSACTIONS
Net decrease in net assets from capital share transactions was
$38,275,968 for the year ended December 31, 1995. Transactions in
capital shares for each class were as follows:
DOLLAR
CLASS A SHARES AMOUNT
Shares sold 376 $ 4,492
Shares issued to
shareholders in
reinvestment of
dividends 2,311,519 27,275,924
---------------------------
Total issued 2,311,895 27,280,416
Shares redeemed (5,485,890) (65,556,384)
---------------------------
Net decrease (3,173,995) $(38,275,968)
===========================
Approximately 84 shares ($1,000) of each of Class B, Class C and
Class D were sold to the principal shareholder of the Adviser in
connection with the Open-End Conversion and are included in sales of
Class A shares above.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
JUNDT GROWTH FUND, INC. DECEMBER 31, 1995
6. FINANCIAL HIGHLIGHTS
Per share data for a share of capital stock outstanding throughout
each period and selected supplemental and ratio information for each
period indicated are as follows:
<PAGE>
<TABLE>
<CAPTION>
PERIOD PERIOD
PER SHARE DATA YEAR ENDED FROM 7/01/94 YEAR ENDED YEAR ENDED FROM 9/3/91*
12/31/95 TO 12/31/94 6/30/94 6/30/93 TO 6/30/92
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $14.95 $13.53 $15.10 $13.78 $14.07
---------------------------------------------------------------------
Operations:
Investment income (loss)--net (0.12) (0.07) (0.11) (0.05) 0.13
Net realized and unrealized gain (loss)
on investments 2.71 1.83 (0.57) 1.38 (0.30)
---------------------------------------------------------------------
Total from operations 2.59 1.76 (0.68) 1.33 (0.17)
Distributions to shareholders:
From investment income--net -- -- -- (0.01) (0.12)
From realized capital gains--net (5.59) -- (0.52) -- --
Tax return of capital -- (0.34) (0.37) -- --
---------------------------------------------------------------------
Net asset value, end of period $11.95 $14.95 $13.53 $15.10 $13.78
=====================================================================
Total investment return(1) 17.81% 13.06% (4.53)% 9.64% (1.30)%
Net assets at end of period (000's omitted) $140,642 $223,317 $202,192 $473,768 $465,055
Ratio of expenses to average net assets 1.60% 1.58%(2) 1.55% 1.40% 1.37%(2)
Ratio of net investment income (loss) to
average net assets (0.72)% (0.98)%(2) (0.63)% (0.36)% 1.05%(2)
Portfolio turnover rate (excluding short-term
securities) 155% 19% 70% 66% 20%
=====================================================================
<FN>
*Commencement of operations.
(1)Total investment return is based on the change in net asset value
of a share during the period, assumes reinvestment of distributions
and excludes the effects of sales loads. Total investment returns
prior to December 29, 1995 reflect performance of the Fund as a
closed-end fund (assuming dividend reinvestment pursuant to the
Fund's Dividend Reinvestment Plan as then in effect); as an open-end
fund, the Fund incurs certain additional expenses as a result of the
continuous offering and redemption of its shares.
(2)Adjusted to an annual basis.
</TABLE>
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
JUNDT GROWTH FUND, INC. DECEMBER 31, 1995
<PAGE>
THE BOARD OF DIRECTORS AND SHAREHOLDERS:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments in securities, of
The Jundt Growth Fund, Inc. as of December 31, 1995, and the related
statement of operations for the year then ended, the statements of
changes in net assets for the year then ended and the six-month
period ended December 31, 1994 and the financial highlights for the
periods presented in footnote 6 to the financial statements. These
financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and the 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 the 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.
Investment securities held in custody are confirmed to us by the
custodian. 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 the financial
highlights referred to above present fairly, in all material
respects, the financial position of The Jundt Growth Fund, Inc. as
of December 31, 1995, and the results of its operations for the year
then ended, the changes in its net assets for the year then ended
and the six-month period ended December 31, 1994 and the financial
highlights for the periods presented in footnote 6 to the financial
statements, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
February 2, 1996
</AUDIT-REPORT>
<PAGE>
FEDERAL TAX INFORMATION (UNAUDITED)
JUNDT GROWTH FUND, INC. DECEMBER 31, 1995
Information for federal income tax purposes is presented as an aid
to shareholders in reporting the dividend distributions for the year
ended December 31, 1995 shown below. Shareholders should consult a
tax adviser on how to report these distributions for federal and
state income tax purposes.
Per share distributions are as follows:
<TABLE>
<CAPTION>
DOMESTIC INTEREST OTHER
QUALIFYING FROM NON-QUALIFYING TOTAL LONG-TERM
RECORD PAYABLE ORDINARY FEDERAL ORDINARY ORDINARY CAPITAL
DATE DATE INCOME OBLIGATIONS INCOME INCOME GAINS
<S> <S> <C> <C> <C> <C> <C>
December 15, 1995 December 22, 1995 $.024729 $.045613 $.757224 $.827566 $4.764166
</TABLE>
The law varies in each state as to whether and what percentage of
dividend income attributable to Federal obligations is exempt from
state income tax. We recommend that you consult your tax adviser to
determine if any portion of the dividends you received is exempt
from state income tax.
Listed below are the percentages of total assets of the Fund
invested in Federal obligations as of the end of each quarter of the
fiscal year:
PERCENTAGE OF
QUARTER ENDED FEDERAL OBLIGATIONS*
March 31, 1995 0.00%
June 30, 1995 13.65%
September 30, 1995 19.86%
December 31, 1995 0.00%
[FN]
*For purposes of this calculation, Federal obligations include U.S.
Treasury Notes, U.S. Treasury Bills, and U.S. Treasury Bonds. Also
included are obligations issued by the following agencies: Banks for
Cooperatives, Federal Intermediate Credit Banks, Federal Land Banks,
Federal Home Loan Banks, and the Student Loan Marketing Association.
Repurchase agreements are not included in this calculation.
<PAGE>
INVESTMENT ADVISOR
Jundt Associates, Inc.
1550 Utica Avenue South
Minneapolis, MN 55416
ADMINISTRATOR
Princeton Administrators, L.P.
P.O. Box 9011
Princeton, NJ 08543
TRANSFER AGENT
National Financial Data Services
P.O. Box 419168
Kansas City, MO 64141-6168
1-800-370-0612
CUSTODIAN
Norwest Bank Minnesota, N.A.
Sixth & Marquette
Minneapolis, MN 55479
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
4200 Norwest Center
Minneapolis, MN 55402
LEGAL COUNSEL
Faegre & Benson Professional
Limited Liability Partnership
2200 Norwest Center
Minneapolis, MN 55402
