<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
A No-Load Fund
SEMI-ANNUAL REPORT
JUNE 30, 1997
Managed by:
L. Roy Papp & Associates
4400 North 32/nd/ Street
Suite 280
Phoenix, AZ 85018
(602)956-1115 Local
(800)421-4004
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PAPP
AMERICA-ABROAD FUND, INC. AND THE MORGAN STANLEY WORLD
INDEX
<TABLE>
<CAPTION>
-------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
-------------------------------------------------------
<S> <C> <C> <C>
Since
1 Year 5 Year Inception
-------------------------------------------------------
Papp America-
Abroad Fund 26.2% 21.6% 20.4%
-------------------------------------------------------
Morgan Stanley
World Index 15.4% 15.7% 14.0%
-------------------------------------------------------
</TABLE>
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Year Papp America-Abroad Fund Morgan Stanley World Index
<S> <C> <C>
12/6/91 10 10
1991 10.994 10.72
1992 11.811 10.158
1993 11.803 12.45
1994 12.725 13.079
1995 17.44 15.848
1996 22.262 17.985
6/30/97 28.084 20.751
</TABLE>
Papp America-Abroad Fund $28,084
Morgan Stanley World Index $20,751
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE
- --------------------------------------------------------------------------------
* This Fund's performance is measured against that of the Morgan Stanley World
Index. Approximately 53% of the earnings of the companies in the Fund's
portfolio are derived from foreign sources and 47% are derived from United
States sources. The Morgan Stanley World Index includes 59% foreign companies
and 41% United States companies.
<PAGE>
Papp America-Abroad Fund, Inc.
Dear Fellow Shareholder:
Our Fund did well during the first six months of this year. Per share net asset
value increased from $20.11 at the beginning of the year to $25.38 on June 30,
or 26.2%. For the same period the Morgan Stanley World Index increased 19.0%
and the Standard & Poor's 500 Stock Index increased 20.7%. As the chart on the
opposite page indicates, since inception on December 6, 1991, we were up 181.0%.
These results far outpace those of the World Index, against which we measure
ourselves, which was up 114.7%. For the same period, the S&P 500 was up 170.3%.
We did not pay a dividend from investment income on June 30, nor did we
distribute any realized capital gains because we had none to speak of. Many of
our companies have not increased their dividends, or have done so only modestly.
They believe that because of high income tax rates, it is in their stockholders'
best interests to repurchase their own shares and modernize their facilities to
produce long-term capital gains which are taxed at a lower rate. These factors,
together with the higher prices of our portfolio securities, have resulted in a
near offset between the Fund's expenses and its income from investments. On our
part, we attempt to keep portfolio turnover low. Our companies have been
meeting, and in many instances exceeding, our sales and earnings expectations
and we see no reason to sell them only to create distributions upon which you
must pay taxes.
Today, the media writes about the fine shape in which the economy finds itself.
We believe globalization is the engine driving this economy and that, coupled
with rapid advances in informational and medical technology, this will continue
to be the case for at least the next 20 years. Our Fund is specifically
designed to benefit from these conclusions. We purchase growth companies that
have a lot of their activities outside the U.S. While the origin of a
multinational company is far less important than the quality of that company and
the ability of its management, it just so happens that a big majority of the
best companies in the world are United States domiciled. This is best
illustrated by the fact that of the 100 largest companies in the world, based on
sales, only 24 are American; however, those 24 produced 50% of the earnings. Of
the ten most profitable companies in the world, seven are American. While we do
own a few quality foreign companies, the vast majority of our holdings will
continue to be United States based.
Finally, I want to welcome the many new shareholders who purchased our Fund
since the first of the year. I hope you share our belief that the purchase and
retention of high quality growth stocks, coupled with low portfolio turnover,
will in the long run produce excellent investment results.
Best Regards,
/s/ L. Roy Papp
_____________________
L. Roy Papp, Chairman
July 22, 1997
P.S. At this writing, the Fund's per share net asset value is $26.81, an
increase of 33.3% for the year.
3
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Number Market
Common Stocks of Shares Value
- -------------------------------------------------------------------- --------- -----------
<S> <C> <C>
Industrial Services (12.5%)
Air Express International
(Air freight forwarding) 145,000 $ 5,763,750
Interpublic Group of Companies, Inc.
(Worldwide advertising agencies) 122,000 7,480,125
Manpower, Inc.
(Provider of non-government employment services) 145,000 6,452,500
-----------
19,696,375
-----------
Computers and Software (11.5%)
Hewlett-Packard Company
(Manufacturer of printers, computers, and medical
electronic equipment) 127,700 7,151,200
Intel Corporation
(Manufacturer of microprocessors, microcontrollers, and
memory chips) 49,000 6,948,813
Microsoft Corporation*
(Personal computer software) 32,000 4,044,000
-----------
18,144,013
-----------
Health Care (11.0%)
Abbott Laboratories
(Healthcare products) 70,000 4,672,500
Johnson & Johnson
(Healthcare products) 100,000 6,437,500
Merck & Company
(Ethical drugs and specialty chemicals) 60,000 6,210,000
-----------
17,320,000
-----------
Electrical Equipment (8.1%)
General Electric Co.
(Diversified industrial company) 110,000 7,191,250
Emerson Electric Company
(Manufacturer of electrical and electronic products and systems) 100,000 5,506,250
-----------
12,697,500
-----------
Telecommunications (7.0%)
Hong Kong Telecommunications, Ltd.
(International telecommunications services) 180,000 4,207,500
Motorola, Inc.
(Manufacturer of electronic equipment) 90,000 6,840,000
-----------
11,047,500
-----------
Distributors (6.9%)
Arrow Electronics, Inc.*
(Distributor of electronic components and computer products) 100,000 5,312,500
Sigma-Aldrich Corp.
(Develops, manufactures, and distributes specialty chemicals) 158,000 5,539,875
-----------
10,852,375
-----------
</TABLE>
*Non-income producing security.
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Number Market
Common Stocks (continued) of Shares Value
- -------------------------------------------------- ----------- ---------
<S> <C> <C>
Industrial Components (6.5%)
Illinois Tool Works, Inc.
(Manufacturer of tools, fasteners, and packaging systems) 100,000 4,993,750
Millipore Corporation
(Leading supplier of purification products) 120,000 5,280,000
------------
10,273,750
------------
Consumer Products (5.2%)
Gillette Company
(Personal care products and batteries) 16,000 1,516,000
Procter & Gamble Company
(Household, personal care, and food products) 10,400 1,469,000
Unilever Group
(Producer and marketer of branded and packaged consumer goods) 24,000 5,232,000
------------
8,217,000
---------
Restaurants (3.9%)
McDonald's Corporation
(Fast food restaurants and franchising) 130,000 6,280,625
------------
Consumer Services (3.9%)
Service Corporation International
(Funeral service, cemetery owner/operator) 185,000 6,081,875
------------
Financial Services (3.8%)
State Street Corporation
(Provider of U.S. and global securities custodial services) 128,000 5,920,000
------------
Food and Beverage (3.1%)
CPC International
(International food processor) 40,000 3,692,500
Coca Cola Company
(Dominant international soft drink company) 18,600 1,255,500
------------
4,948,000
------------
Miscellaneous (12.3%)
Exxon Corp.
(Worldwide integrated oil company) 31,000 1,906,500
Mattel, Inc.
(Toy manufacturer) 200,000 6,775,000
Amway Asia Pacific, Inc.
(Direct marketing of household and personal items in Asia) 125,000 5,453,125
Viking Office Products
(Direct international marketer of office products to small and
medium sized businesses) 280,000 5,320,000
------------
19,454,625
------------
Total Common Stocks - 95.7% 150,933,638
Cash and Other Assets, Less Liabilities - 4.3% 6,821,347
------------
Net Assets $157,754,985
============
Net Asset Value Per Share
(Based on 6,216,580 shares outstanding at June 30, 1997) $ 25.38
============
</TABLE>
5
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
<S> <C>
Investment in securities at market value (identified
cost $126,700,288 at June 30, 1997) (Note 1) $150,933,638
Cash 11,758,617
Dividends and interest receivable 201,760
------------
Total assets $162,894,015
============
</TABLE>
LIABILITIES
<TABLE>
<S> <C>
Redemptions Payable $ 622,371
Payable for investment securities purchased 4,393,438
Accrued Expenses 123,221
----------
Total Liabilities $5,139,030
==========
</TABLE>
NET ASSETS
<TABLE>
<CAPTION>
<S> <C>
Paid-in capital applicable to 6,216,580 outstanding
shares at June 30, 1997 $133,521,635
Net unrealized gain on investments 24,233,350
------------
Net assets $157,754,985
============
Net Asset Value Per Share (net assets/shares
outstanding) $ 25.38
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(Unaudited)
<TABLE>
INVESTMENT INCOME:
<S> <C>
Dividends $ 415,669
Interest 59,795
Foreign taxes withheld (5,527)
-----------
Total investment income 469,937
-----------
EXPENSES:
Management fee (Note 3) 310,328
Filing fees 29,107
Custodial 10,771
Accounting 6,830
Transfer agent fees 3,507
Directors' attendance fees 2,500
Postage and Printing 2,042
Legal 748
Other fees 22,078
-----------
Total expenses 387,911
-----------
Net investment income 82,026
-----------
REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS:
Proceeds from sales of securities 2,028,988
Cost of securities sold 2,047,195
-----------
Net realized loss on investments sold (18,207)
Net change in unrealized gain on investments 14,873,469
-----------
Net realized and unrealized gain/(loss) on investments 14,855,262
-----------
Net increase in net assets resulting from operations $14,937,288
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND THE YEAR ENDED DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Six months ended Year ended
June 30, 1997 December 31, 1996
---------------- -----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 82,026 $ 10,514
Net realized gain/(loss) on investments sold (18,207) 1,034,321
Net change in unrealized gain on investments 14,873,469 4,034,187
------------ -----------
Increase in net assets resulting from
operations 14,937,288 5,079,022
------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income - (10,514)
Net realized gain on investments sold - (1,034,321)
------------ -----------
Total distributions to shareholders - (1,044,835)
------------ -----------
FROM SHAREHOLDER TRANSACTIONS:
Proceeds from sale of shares 120,373,335 9,114,588
Net asset value of shares issued to shareholders
in reinvestment of net investment income and
net realized gain on investments sold - 996,559
Payments for redemption of shares (7,179,135) (510,144)
------------ -----------
Increase in net assets resulting
from share transactions 113,194,200 9,601,043
------------ -----------
Total increase in net assets 128,131,488 13,635,230
Net assets at beginning of the period 29,623,497 15,988,267
------------ -----------
Net assets at end of period $157,754,985 $29,623,497
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997
(Unaudited)
(1) SIGNIFICANT ACCOUNTING POLICIES:
Papp America-Abroad Fund, Inc. (the Fund) was incorporated on August 15, 1991,
and is registered under the Investment Company Act of 1940 as an open-end
diversified management investment company. Operations of the Fund commenced on
December 6, 1991. The Fund invests with the objective of long-term capital
growth in the common stocks of United States companies that have substantial
international activities and, to a much lesser extent, in the common stocks of
foreign enterprises that are traded publicly in United States securities
markets.
The policies described below are followed by the Fund in the preparation of its
financial statements in conformity with generally accepted accounting
principles.
(a) Investment in Securities
For purposes of computing the net asset value of a share of the Fund, securities
traded on securities exchanges, or in the over-the-counter market in which
transaction prices are reported, are valued at the last sales prices at the time
of valuation or, lacking any reported sales on that day, at the most recent bid
quotations. Other securities traded over-the-counter are valued at the most
recent bid quotations. Securities for which quotations are not available and
any other assets are valued at a fair value as determined in good faith by the
Board of Directors. The price per share for a purchase order or redemption
request is the net asset value next determined after receipt of the order.
The net asset value of a share of the Fund is determined as of the close of
trading on the New York Stock Exchange, currently 4:00 p.m. New York City time,
on any day on which that Exchange is open for trading, by dividing the market
value by the number of shares outstanding, and rounding the result to the
nearest full cent.
Investment transactions are accounted for on the trade date (the date the order
to buy or sell is executed). Dividend income is recorded on the ex-dividend
date and interest is recorded on the accrual basis. Realized gains and losses
from investment transactions and unrealized appreciation or depreciation are
calculated on the identified cost basis.
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 increases and decreases in net assets from operations
during the reporting period. Actual results could differ from those estimates.
9
<PAGE>
(b) Federal Income Taxes
The Fund's policy is to comply with the requirements of the Internal Revenue
Code which are applicable to regulated investment companies. The Code requires
that substantially all of the Fund's taxable income, as well as any net realized
gain on sales of investments, is to be distributed to the shareholders. The
Fund has complied with this policy and, accordingly, no provision for federal
income taxes is required.
(2) DIVIDENDS AND DISTRIBUTIONS:
Dividends and capital gain distributions are reinvested in additional shares of
the Fund unless the shareholder has requested in writing to be paid by check.
On December 18, 1996, a dividend of approximately $.0073 a share, aggregating
$10,514 was declared from net investment income earned during 1996. A
distribution was also declared from net realized long-term capital gains of
approximately $.2713 a share, aggregating $388,302. Also a distribution was
declared from net realized short-term capital gains of approximately $.0723 a
share, aggregating $102,964. The dividend and distribution were paid on
December 31, 1996, to shareholders of record on December 17, 1996.
On June 20, 1996, a distribution of approximately $.50 a share, aggregating
$543,055, was declared from net realized capital gains earned during 1996. The
distribution was paid on June 28, 1996, to shareholders of record on June 19,
1996.
Dividends and distributions payable to its shareholders are recorded by the Fund
on the ex-dividend date.
(3) TRANSACTIONS WITH AFFILIATES:
The Fund has an investment advisory and management services agreement with
L. Roy Papp & Associates (Manager). The Manager receives from the Fund, as
compensation for its services, a fee accrued daily and payable monthly at an
annual rate of 1% of the Fund's net assets. The Manager will reimburse the Fund
to the extent the Fund's regular operating expenses during any of its fiscal
years exceed 1.25% of its average daily net asset value in such year. The Fund
incurred fees of $3,507 in 1997 and $3,872 in 1996, from the manager for its
services as shareholder services and transfer agent.
The Fund's independent directors receive $650 for each meeting of the Board of
Directors attended on behalf of the Fund. Certain officers and/or directors of
the Fund are also partners of the Manager and shareholders in the Fund. The
Fund made no payments to its officers or directors, except to independent
directors as stated above.
10
<PAGE>
(4) PURCHASES AND SALES OF SECURITIES:
For the six months ended June 30, 1997 and the year ended December 31, 1996,
investment transactions excluding short-term investments were as follows:
<TABLE>
<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
Purchases at cost $108,930,108 $10,809,437
Sales 2,028,987 2,583,120
</TABLE>
(5) CAPITAL SHARE TRANSACTIONS:
At June 30, 1997, there were 25,000,000 shares of $.01 par value capital stock
authorized. Transactions in capital shares of the Fund were as follows:
<TABLE>
<CAPTION>
Proceeds Shares
------------- ----------
<S> <C> <C>
Six months ended June 30, 1997
Shares issued $120,373,335 5,052,982
Dividends and distributions reinvested - -
Shares redeemed (7,179,135) (309,441)
------------ ---------
Net increase $113,194,200 4,743,541
============ =========
Year ended December 31, 1996
Shares issued $ 9,114,588 478,153
Dividends and distributions reinvested 996,599 52,290
Shares redeemed (510,144) (27,965)
------------ ---------
Net increase $ 9,601,043 502,478
============ =========
</TABLE>
(6) UNREALIZED APPRECIATION:
Unrealized appreciation of portfolio securities for both financial statement and
federal income tax purposes is as follows:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
------------ ------------
<S> <C> <C>
Market value $150,933,638 $29,177,255
Original cost 126,700,288 19,817,375
------------ -----------
Net unrealized appreciation $ 24,233,350 $ 9,359,880
============ ===========
</TABLE>
As of June 30, 1997, gross unrealized gains on investments in which market value
exceeded cost totaled $24,426,196 and gross unrealized losses on investments in
which cost exceeded market value totaled $192,846.
As of December 31, 1996, gross unrealized gains on investments in which market
value exceeded cost totaled $9,467,081 and gross unrealized losses on
investments in which cost exceeded market value totaled $107,201.
11
<PAGE>
(7) SELECTED FINANCIAL HIGHLIGHTS:
The following selected per share data has been calculated using revenues and
expenses for the periods indicated, divided by the weighted average number of
shares outstanding during the periods. The ratios are calculated using the
revenues and expenses for the periods, divided by the weighted average of the
daily net assets of the Fund.
<TABLE>
<CAPTION>
Six Months Year Ended December 31, Period Ended
Ended ---------------------------------------------------------------------- December 31,
1997 1996 1995 1994 1993 1992 1991 (A)
------------ ----------- ----------- ----------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 20.11 $ 16.47 $ 12.24 $ 11.45 $ 11.67 $ 10.98 $ 10.00
Income from operations:
Net investment income --- .01 .04 .10 .10 .11 .02
Net realized and unrealized
gain (loss) on
investments 5.27 4.48 4.52 .79 (.11) .71 .98
------------ ----------- ----------- ----------- ----------- ---------- ----------
Total from operations 5.27 4.49 4.56 .89 (.01) .82 1.00
Less distributions:
Dividend from net
investment
Income --- (.01) (.04) (.10) (.09) (.11) (.02)
Distribution of net
realized
Gain --- (.84) (.29) --- (.12) (.02) ---
------------ ----------- ----------- ----------- ----------- ---------- ----------
Total distributions --- (.85) (.33) (.10) (.21) (.13) (.02)
Net asset value, end of
period $ 25.38 $ 20.11 $ 16.47 $ 12.24 $ 11.45 $ 11.67 $ 10.98
============ =========== =========== =========== =========== ========== ==========
Total return 26.21% 27.65% 37.05% 7.77% (.08)% 7.44% 9.94%
============ =========== =========== =========== =========== ========== ==========
Ratios/Supplemental Data:
Net assets, end of period $157,754,985 $29,623,497 $15,988,267 $11,573,197 $10,934,293 $5,013,407 $1,369,899
Expenses to average
net assets (B) 1.22%* 1.25% 1.22% 1.25% 1.25% 1.25% 1.25%*
Net investment income to
average net assets (C) 1.48%* 1.30% 1.50% 2.07% 2.28% 2.28% 4.51%*
Portfolio turnover rate 6.12%* 12.29% 26.65% 16.00% 8.00% 16.00% 0.00%
Average commission rate
(per share) $ 0.0266 $ 0.0487
</TABLE>
* Annualized
(A) From the date of commencement of operations (December 6, 1991).
(B) If the Fund had paid all of its expenses and there had been no
reimbursement by the investment adviser, this ratio would have been
1.30%, 1.30%, 1.33%, 3.16%, and 2.07% for the years ended December 31,
1996, 1994, 1993, 1992 and the period ended December 31, 1991.
(C) Computed giving effect to investment adviser's expense limitation
undertaking.
12
<PAGE>
FACTS ABOUT THE FUND
Investment Objective
The Fund invests with the objective of long-term capital growth in the common
stocks of United States companies that have substantial international activities
and, to a much lesser extent, in the common stocks of foreign enterprises that
are traded publicly in United States securities markets.
The Investment Adviser
The Fund's assets are managed by L. Roy Papp & Associates, the largest
investment counseling firm in Arizona, with over $846 million in total assets
managed for individuals, trusts, corporations, and charitable and educational
institutions. Founded in 1978, the Firm is solely in the investment management
business. The Firm is an independent general partnership. Of its ten general
partners, seven are Chartered Financial Analysts (CFAs).
Experienced Management
The securities portfolio of the Fund is managed by L. Roy Papp and Rosellen C.
Papp. Mr. Papp, the founder of L. Roy Papp & Associates, has over 42 years
experience in the field of investment management. Prior to founding L. Roy Papp
& Associates, he was a senior partner of a large investment counseling firm in
Chicago, Illinois and the United States Director and Ambassador to the Asian
Development Bank, Manila, Philippines. He received his M.B.A. degree from the
Wharton School, University of Pennsylvania and his A.B. degree from Brown
University.
Rosellen C. Papp, the director of research at L. Roy Papp & Associates, has over
19 years experience in security and financial analysis. She holds a Master of
Management degree in Finance from the Kellogg Graduate School of Management,
Northwestern University and a B.B.A. degree from the University of Michigan.
She is a Chartered Financial Analyst and member of the International Society of
Financial Analysts.
"Pure" No-Load
The Fund is a "pure" no-load fund in that there are no "loading" charges or
sales commissions paid in connection with the purchase of its shares. In
addition, there are no deferred sales loads, no redemption fees, and no 12b-1
fees. The Fund's investment adviser receives an annual management fee of 1%,
which is based on the Fund's average daily net asset value. Other expenses such
as auditing charges, legal fees, and custodial expenses are limited to 1/4% of
the Fund's average daily net asset value; therefore, the Fund's annual expenses
may not exceed 1 1/4%.
Suitability
The Fund is suitable only for long-term investors seeking capital appreciation
and increased dividend income over time. Included are individuals of most ages,
institutional accounts such as pension and profit sharing plans, retirement
accounts such as IRA's, educational accounts for young children, and many
personal trusts. The Fund is not suitable for those with high current income
needs, aggressive investors who desire maximum short-term results and are
willing to assume the attendant risks, and those with relatively short time
horizons who may require their capital in the near-term.
13
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
Directors
James K. Ballinger L. Roy Papp
Amy S. Clague Rosellen C. Papp
Robert L. Mueller Bruce C. Williams
Harry A. Papp
Officers
Chairman - L. Roy Papp President - Harry A. Papp
Vice Presidents
Victoria S. Cavallero Robert L. Mueller
George D. Clark, Jr. Rosellen C. Papp
Jeffrey N. Edwards Bruce C. Williams
Robert L. Hawley
Secretary - Robert L. Mueller
Assistant Secretary - Barbara D. Perleberg
Treasurer - Rosellen C. Papp
Assistant Treasurer - Julie A. Hein
Investment Adviser
L. Roy Papp & Associates
4400 North 32nd Street, Suite 280
Phoenix, Arizona 85018
Telephone: (602) 956-1115
Web address: http//www.roypapp.com
Email address: [email protected]
Custodian
Founders Bank of Arizona
7335 E. Doubletree Ranch Road
Scottsdale, Arizona 85258
Shareholder Services and Transfer Agent
L. Roy Papp & Associates
4400 North 32nd Street, Suite 280
Phoenix, Arizona 85018
Telephone: (602) 956-1115
(800) 421-4004
Independent Public Accountants
Arthur Andersen LLP
2 North Central Avenue, Suite 1000
Phoenix, Arizona 85004
Legal Counsel
Bell, Boyd & Lloyd
70 West Madison Street
Chicago, Illinois 60602
This report is submitted for the general information of the shareholders of the
Fund. The report is not authorized for distribution to prospective investors in
the Fund unless it is accompanied or preceded by a currently effective
prospectus of the Fund. No sales charge to the shareholder or to the new
investor is made in offering the shares of the Fund.
