<PAGE>
Dear Shareholder:
A few days ago the Hong Kong stock market came down with pneumonia, then most of
the world caught the Asian flu. We, on the other hand, appear to have contracted
only the 24 hour variety.
U.S. money is a world commodity because the U.S. dollar, aided by computers, can
give us the value of every country's currency in seconds. Switzerland has
finally joined the rest of the world and will not use gold as a currency
reserve. Thus, the U.S. dollar has become the world's currency. In mere seconds,
a currency can be converted from one country's stocks and bonds into cash and
then moved to another nation's stocks, bonds, real estate, or cash equivalents.
All of this can be done in a moment with modern electronics and computers and
has resulted in our living in a truly international world.
Because of the problems facing Malaysia, Thailand, and other Southeast Asia
nations, most economists have reduced their estimates for next year's growth in
those countries, but they would still be growing faster than the United States
or Europe. More important is the fact that all Southeast Asia is only two or
three percent of our gross domestic product. Our economy will not be damaged.
Our economy is in very good shape (even Mr. Greenspan said so) and I see no
recession for at least the next two years. Globalization and technology will
drive us for a long time. I believe the stock market had another correction,
which could continue for a while before we start up again. Stocks continue to be
the best long-term investment.
The events of the past several days again spotlight the folly inherent in market
timing and other short-term judgments. We have always said that a successful
investor is a patient, long-term investor and our Funds are designed with that
philosophy in mind.
Warmest regards,
L. Roy Papp, Chairman
October 29, 1997
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Number Market
Common Stocks of Shares Value
- --------------------------------------------------------------------- --------- -----------
<S> <C> <C>
Industrial Services (14.3%)
Air Express International
(Air freight forwarding) 333,000 $12,154,500
Interpublic Group of Companies, Inc.
(Worldwide advertising agencies) 280,000 14,367,500
Manpower, Inc.
(Provider of non-government employment services) 330,000 13,035,000
-----------
39,557,000
-----------
Computers and Software (14.2%)
American Power Conversion *
(Leading producer of uninterruptible power supply products designed
for use with PCs, workstations, and other electronic devices) 240,000 6,750,000
Hewlett-Packard Company
(Manufacturer of printers, computers, and medical
electronic equipment) 183,000 12,729,938
Intel Corporation
(Manufacturer of microprocessors, microcontrollers, and
memory chips) 160,000 14,770,000
Microsoft Corporation*
(Personal computer software) 40,000 5,292,500
-----------
39,542,438
-----------
Health Care (9.8%)
Abbott Laboratories
(Healthcare products) 90,000 5,754,375
Johnson & Johnson
(Healthcare products) 160,000 9,220,000
Merck & Company
(Ethical drugs and specialty chemicals) 122,000 12,192,375
-----------
27,166,750
-----------
Direct Marketing (8.0%)
Amway Asia Pacific, Inc.
(Direct marketing of household and personal items in Asia) 230,000 6,741,875
Viking Office Products *
(Direct international marketer of office products to small and
medium sized businesses) 715,000 15,551,250
-----------
22,293,125
-----------
Distributors (7.4%)
Arrow Electronics, Inc.*
(Distributor of electronic components and computer products) 201,600 11,692,800
Sigma-Aldrich Corp.
(Develops, manufactures, and distributes specialty chemicals) 265,000 8,728,437
-----------
20,421,237
-----------
Telecommunications (7.1%)
Hong Kong Telecommunications, Ltd.
(International telecommunications services) 370,000 8,278,750
Motorola, Inc.
(Manufacturer of electronic equipment) 160,000 11,500,000
-----------
19,778,750
-----------
</TABLE>
*Non-income producing security.
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Number Market
Common Stocks (continued) of Shares Value
- -------------------------------------------------------------------- --------- ------------
<S> <C> <C>
Electrical Equipment (7.1%)
General Electric Co.
(Diversified industrial company) 155,000 $ 10,549,688
Emerson Electric Company
(Manufacturer of electrical and electronic products and systems) 160,000 9,220,000
------------
19,769,688
------------
Financial Services (6.2%)
State Street Corporation
(Provider of U.S. and global securities custodial services) 280,000 17,062,500
------------
Industrial Components (5.4%)
Illinois Tool Works, Inc.
(Manufacturer of tools, fasteners, and packaging systems) 150,000 7,500,000
Millipore Corporation
(Leading supplier of purification products) 152,500 7,491,562
------------
14,991,562
------------
Consumer Services (4.5%)
Service Corporation International
(Funeral service, cemetery owner/operator) 385,000 12,392,188
------------
Restaurants (4.3%)
McDonald's Corporation
(Fast food restaurants and franchising) 250,000 11,906,250
------------
Consumer Products (3.6%)
Gillette Company
(Personal care products and batteries) 16,000 1,381,000
Unilever Group
(Producer and marketer of branded and packaged consumer goods) 40,000 8,505,000
------------
9,886,000
------------
Miscellaneous (6.3%)
Coca Cola Company
(Dominant international soft drink company) 18,600 1,133,437
Exxon Corp.
(Worldwide integrated oil company) 40,000 2,562,500
Mattel, Inc.
(Toy manufacturer) 350,000 11,593,750
Steiner Leisure LTD *
(The leading provider of spa services, beauty salons, and health
clubs on cruise ships) 58,000 2,131,500
------------
17,421,187
------------
Total Common Stocks - 98.2% 272,188,675
Cash and Other Assets, Less Liabilities - 1.8% 4,980,636
------------
Net Assets $277,169,311
============
Net Asset Value Per Share
(Based on 10,400,880 shares outstanding at September 30, 1997) $ 26.65
============
</TABLE>
*Non-income producing security.
<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.
