<PAGE>
[ARTWORK]
PAPP AMERICA-ABROAD FUND, INC.
A No-Load Fund
ANNUAL REPORT
DECEMBER 31, 1997
Managed by:
L. Roy Papp & Associates
4400 N. 32nd Street
Suite 280
Phoenix, AZ 85018
(602)956-1115 Local
(800)421-4004
E-mail: [email protected]
Web: http://www.roypapp.com
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PAPP
AMERICA-ABROAD FUND, INC. AND THE MORGAN STANLEY WORLD INDEX
[INSERT GRAPH HERE]
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
1 Year 5 Year Since Inception
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Papp America-
Abroad Fund 29.9% 19.6% 19.1%
- --------------------------------------------------------------------------------
Morgan Stanley
World Index 15.8% 15.4% 12.8%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Papp America-Abroad Fund Morgan Stanley World Index
<S> <C> <C>
12/6/91 $10,000 $10,000
1991 10,994 10,720
1992 11,811 10,158
1993 11,803 12,450
1994 12,725 13,079
1995 17,440 15,848
1996 22,262 17,985
1997 28,910 20,817
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE
================================================================================
The investment return and principal value of an investment in the Fund will
fluctuate so that Fund shares, when redeemed may be worth more or less than
their original cost. This Fund's performance is measured against that of the
Morgan Stanley World Index. Approximately 59% of the earnings of the companies
in the Fund's portfolio are derived from foreign sources and 41% are derived
from United States sources. The Morgan Stanley World Index is an unmanaged
[market-weighted] index that includes 50% foreign companies and 50% United
States companies; the values shown include reinvested dividends.
2
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
Dear Fellow Shareholder:
Once again our Fund had a fine year with per share net asset value increasing
29.9% in 1997. These results were substantially better than those of the Morgan
Stanley World Index, against which we compare ourselves, which was up 15.8%. The
Standard & Poor's 500 Stock Index was up 33.4% in 1997. Since December 6, 1991,
when we commenced operations, the Fund was up 189.2%, and the World Index was up
108.2%.
Results for the last three years have also been satisfying. In 1995 we were up
37.1%, in 1996 we were up 27.7%, and in 1997 we were up 29.9%. This means that a
$10,000 investment made on January 1, 1995 would have increased to $22,742 by
December 31, 1997. These numbers emphasize the importance of having been in
stocks throughout the entire period, despite the warnings of some of the pundits
that three consecutive 20% plus years could not happen.
We do not pretend to know what will happen in 1998, but we do not believe the
market will experience a major correction. The cold war is over and much of the
world is at peace. Resources that were dedicated to armaments can now be used
for more productive purposes. Our American economy is very strong and shows no
signs of abating, while the European economy appears to be improving. There are
some clouds over Asia, but our trade with the Southeast Asia nations remains a
relatively small part of the big picture. Also, it appears likely that the
dollar's strength will not adversely impact earnings to the extent it did in
1997.
Our America-Abroad Fund was the first in the nation to implement the concept of
global investing through the ownership of multinational American companies. A
number of our investment counsel clients had expressed a desire to participate
in the world's stock markets because of their anticipated growth. We were
sympathetic to this view, but were concerned that for a variety of reasons
worldwide investing might be substantially more difficult than it appeared to be
on the surface. Our concerns included currency risks, the large expenses of
foreign custodians, different accounting, auditing, and reporting standards, and
lack of SEC oversight.
Moreover, our research indicated that many United States companies were already
doing a large portion of their business overseas, that such business was growing
rapidly, and most importantly, that these American companies were realizing
substantial and growing profits from their foreign activities in contrast to
many foreign companies which were burdened by the high costs and inefficiencies
imposed by their socialistic governments. For these reasons, we concluded that
our shareholders' best interests would be served through investing in mostly
American companies which receive a substantial percentage of their earnings from
foreign activities. Further, it remains our belief that the greatest growth
worldwide will be in the fields of electronic and medical technology and we have
emphasized these areas in our securities portfolio.
Naturally, for the most part our investments have been in the very large
multinational companies which are industry leaders. Examples include Hewlett-
Packard, Intel, Microsoft, and Motorola in electronics and Merck and Johnson &
Johnson in health. However, we also own a number of smaller companies whose
operations are worldwide, such as Viking Office Products, American Power
Conversion, and Steiner Leisure, Ltd.
We believe that the best way to participate in the globalization of the world's
economies is through investments in these companies and that our shareholders
will over time achieve a superior return on their investment.
Warmest regards,
/s/ L. Roy Papp
---------------------
L. Roy Papp, Chairman
February 6, 1998
3
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of the
Papp America-Abroad Fund, Inc.:
We have audited the accompanying statements of assets and liabilities of the
Papp America-Abroad Fund, Inc. (the Fund), including the schedule of portfolio
investments as of December 31, 1997, and the related statements of operations
and changes in net assets for each of the two years in the period then ended,
and the financial highlights for each of the five years in the period then
ended. These financial statements are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements based on our audits. The financial highlights of the Papp America-
Abroad Fund, Inc. for the year ended December 31, 1992, and the period from
December 6, 1991 (date of commencement of operations) through December 31, 1991,
were audited by other auditors whose report dated January 29, 1993, expressed an
unqualified opinion on those financial highlights.
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 are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1997, by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Papp America-Abroad Fund,
Inc. as of December 31, 1997, and the results of its operations and changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended, in
conformity with generally accepted accounting principles.
/s/ Arthur Andersen LLP
Phoenix, Arizona,
January 21, 1998.
4
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Number Market
Common Stocks of Shares Value
- -------------------------------------------------------------------- --------- -----------
<S> <C> <C>
Industrial Services (14.5%)
Air Express International
(Air freight forwarding) 390,000 $11,895,000
Interpublic Group of Companies, Inc.
(Worldwide advertising agencies) 325,000 16,189,063
Manpower, Inc.
(Provider of non-government employment services) 385,000 13,571,250
-----------
41,655,313
-----------
Computers and Software (14.1%)
American Power Conversion *
(Leading producer of uninterruptible power supply products) 440,000 10,395,000
Hewlett-Packard Company
(Manufacturer of printers, computers, and medical
electronic equipment) 183,000 11,437,500
Intel Corporation
(Manufacturer of microprocessors, microcontrollers, and
memory chips) 190,000 13,347,500
Microsoft Corporation*
(Personal computer software) 43,000 5,557,750
-----------
40,737,750
-----------
Health Care (10.8%)
Abbott Laboratories
(Healthcare products) 90,000 5,900,625
Johnson & Johnson
(Healthcare products) 185,000 12,186,875
Merck & Company
(Ethical drugs and specialty chemicals) 122,000 12,962,500
-----------
31,050,000
-----------
Consumer Products (9.0%)
Coca Cola Company
(Dominant international soft drink company) 18,600 1,239,225
Gillette Company
(Personal care products and batteries) 16,000 1,607,000
Mattel, Inc.
(Toy manufacturer) 350,000 13,037,500
Unilever Group
(Producer and marketer of branded and packaged consumer goods) 160,000 9,990,000
-----------
25,873,725
-----------
Distributors (8.5%)
Arrow Electronics, Inc.*
(Distributor of electronic components and computer products) 403,200 13,078,800
Sigma-Aldrich Corp.
(Develops, manufactures, and distributes specialty chemicals) 285,000 11,328,750
-----------
24,407,550
-----------
Electrical Equipment (7.5%)
General Electric Co.
(Diversified industrial company) 162,000 11,886,750
Emerson Electric Company
(Manufacturer of electrical and electronic products and systems) 170,000 9,594,375
-----------
21,481,125
-----------
</TABLE>
*Non-income producing security.
5
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Number Market
Common Stocks (continued) of Shares Value
- ------------------------------------------------------------------- --------- ------------
<S> <C> <C>
Direct Marketing (7.2%)
Amway Asia Pacific, Inc.
(Direct marketing of household and personal items in Asia) 230,000 $ 4,485,000
Viking Office Products *
(Direct international marketer of office products to small and
medium sized businesses) 740,000 16,141,250
------------
20,626,250
------------
Telecommunications (5.8%)
Hong Kong Telecommunications, Ltd.
(International telecommunications services) 370,000 7,631,250
Motorola, Inc.
(Manufacturer of communication equipment) 160,000 9,130,000
------------
16,761,250
------------
Financial Services (5.6%)
State Street Corporation
(Provider of U.S. and global securities custodial services) 280,000 16,292,500
------------
Consumer Services (4.9%)
Service Corporation International
(Funeral service, cemetery owner/operator) 385,000 14,220,937
------------
Industrial Components (4.8%)
Illinois Tool Works, Inc.
(Manufacturer of tools, fasteners, and packaging systems) 150,000 9,018,750
Millipore Corporation
(Supplier of purification products) 142,500 4,836,094
------------
13,854,844
------------
Restaurants (4.1%)
McDonald's Corporation
(Fast food restaurants and franchising) 250,000 11,937,500
------------
Miscellaneous (2.4%)
Exxon Corp.
(Worldwide integrated oil company) 40,000 2,447,500
Steiner Leisure LTD *
(Provider of spa services, beauty salons, and health
clubs on cruise ships) 143,500 4,430,562
------------
6,878,062
------------
Total Common Stocks - 99.1% 285,776,806
Cash and Other Assets, Less Liabilities - .9% 2,472,488
------------
Net Assets $288,249,294
============
Net Asset Value Per Share
(Based on 11,094,202 shares outstanding at December 31, 1997) $25.98
============
</TABLE>
*Non-income producing security.
6
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1997 AND 1996
ASSETS
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Investment in securities at market value (original
cost $260,250,479 and $19,817,375 at December 31,
1997 and 1996, respectively) (Note 1) $285,776,806 $29,177,255
Cash 3,507,780 403,963
Dividends and interest receivable 461,788 42,332
------------ -----------
Total assets $289,746,374 $29,623,550
============ ===========
LIABILITES
Redemptions Payable $ 209,767 $ 53
Payable for investment securities purchased 1,287,313 -0-
------------ -----------
Total liabilities $ 1,497,080 $ 53
============ ===========
NET ASSETS
Paid-in capital applicable to 11,094,202 outstanding
shares at December 31,1997 and 1,473,039 outstanding
shares at December 31, 1996 $262,722,967 $20,263,617
Net unrealized gain on investments 25,526,327 9,359,880
------------ -----------
Net assets $288,249,294 $29,623,497
============ ===========
Net Asset Value Per Share (net assets/shares
outstanding) $ 25.98 $ 20.11
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
------------- ------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 1,777,770 $ 265,241
Interest 214,337 10,180
Foreign taxes withheld (14,828) (878)
----------- ----------
Total investment income 1,977,279 274,543
----------- ----------
EXPENSES:
Management fee (Note 3) 1,599,574 211,223
Filing fees 79,501 26,353
Custodial 27,819 8,140
Transfer agent fees 24,038 3,872
Accounting 18,815 10,850
Printing and Postage 16,210 -
Directors' attendance fees 5,100 4,600
Legal 3,354 6,173
Other fees 2,214 3,420
----------- ----------
Total expenses 1,776,625 274,631
----------- ----------
Less fees waived by adviser (Note 3) - (10,602)
----------- ----------
Net expenses 1,776,625 264,029
----------- ----------
Net investment income 200,654 10,514
----------- ----------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Proceeds from sales of securities 7,380,204 2,584,954
Cost of securities sold 5,990,861 1,550,633
----------- ----------
Net realized gain on investments sold 1,389,343 1,034,321
Net change in unrealized gain on investments 16,166,447 4,034,187
----------- ----------
Net realized and unrealized gain on investments 17,555,790 5,068,508
----------- ----------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $17,756,444 $5,079,022
=========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
------------- ------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 200,654 $ 10,514
Net realized gain on investments sold 1,389,343 1,034,321
Net change in unrealized gain on investments 16,166,447 4,034,187
------------ -----------
Increase in net assets resulting from
operations 17,756,444 5,079,022
------------ -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (200,654) (10,514)
Net realized gain on investments sold (1,389,343) (1,034,321)
------------ -----------
Decrease in net assets resulting from
distributions to shareholders (1,589,997) (1,044,835)
------------ -----------
FROM SHAREHOLDER TRANSACTIONS:
Proceeds from sale of shares 315,859,241 9,114,588
Net asset value of shares issued to shareholders
in reinvestment of net investment income and
net realized gain on investments sold 1,485,676 996,599
Payments for redemption of shares (74,885,567) (510,144)
------------ -----------
Increase in net assets resulting
from shareholder transactions 242,459,350 9,601,043
------------ -----------
Total increase in net assets 258,625,797 13,635,230
Net assets at beginning of the period 29,623,497 15,988,267
------------ -----------
Net assets at end of period $288,249,294 $29,623,497
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
(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.
10
<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 17, 1997, a dividend of approximately $.0189 a share, aggregating
$200,654 was declared from net investment income earned during 1997. A
distribution was also declared from net realized long-term capital gains of
approximately $.1093 a share aggregating $1,204,067. Also a distribution was
declared from net realized short-term capital gains of approximately $.0168 a
share aggregating $185,276. The dividend and distribution were paid on December
31, 1997, to shareholders of record on December 19, 1997.
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. A
management fee expense reimbursement of $10,602 was required in 1996. The Fund
incurred fees of $24,038 and $3,872 in 1997 and 1996, respectively, from the
manager for providing shareholder and transfer agent services.
11
<PAGE>
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.
(4) PURCHASES AND SALES OF SECURITIES:
For the years ended December 31, investment transactions excluding short-term
investments were as follows:
<TABLE>
<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
Purchases at cost $246,423,965 $10,809,437
Sales 7,380,204 2,584,954
</TABLE>
(5) CAPITAL SHARE TRANSACTIONS:
At December 31, 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>
Year ended December 31, 1997
Shares issued $315,859,241 12,468,691
Dividends and distributions reinvested 1,485,676 58,127
Shares redeemed (74,885,567) (2,905,655)
------------ ----------
Net increase $242,459,350 9,621,163
============ ==========
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>
1997 1996
------------ -----------
<S> <C> <C>
Market value $285,776,806 $29,177,255
Original cost 260,250,479 19,817,375
------------ -----------
Net unrealized appreciation $ 25,526,327 $ 9,359,880
============ ===========
</TABLE>
As of December 31, 1997, gross unrealized gains on investments in which market
value exceeded cost totaled $38,186,956 and gross unrealized losses on
investments in which cost exceeded market value totaled $12,660,629.
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.
12
<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>
Year Ended December 31,
------------------------------------------------------------------------
1997 1996 1995 1994 1993
------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 20.11 $ 16.47 $ 12.24 $ 11.45 $ 11.67
Income from operations:
Net investment income .01 .01 .04 .10 .10
Net realized and unrealized
gain (loss) on investments 6.00 4.48 4.52 .79 (.11)
------------ ----------- ----------- ----------- -----------
Total from operations 6.01 4.49 4.56 .89 (.01)
Less distributions:
Dividend from net investment
income (.01) (.01) (.04) (.10) (.09)
Distribution of net realized
gain (.13) (.84) (.29) - (.12)
------------ ----------- ----------- ----------- -----------
Total distributions (.14) (.85) (.33) (.10) (.21)
Net asset value, end of period $ 25.98 $ 20.11 $ 16.47 $ 12.24 $ 11.45
============ =========== =========== =========== ===========
Total return 29.92% 27.65% 37.05% 7.77% (.08)%
============ =========== =========== =========== ===========
Ratios/Supplemental Data:
Net assets, end of period $288,249,294 $29,623,497 $15,988,267 $11,573,197 $10,934,293
Expenses to average
net assets (B) 1.11% 1.25% 1.22% 1.25% 1.25%
Net investment income to
average net assets (C) 1.24% 1.30% 1.50% 2.07% 2.28%
Portfolio turnover rate 4.71% 12.29% 26.65% 16.00% 8.00%
Average commission rate(D) $ 0.0297 $ 0.0487
</TABLE>
<TABLE>
<CAPTION>
Period Ended
---------- December 31,
1992 1991(A)
---------- ------------
<S> <C> <C>
Net asset value, beginning
of period $ 10.98 $ 10.00
Income from operations:
Net investment income .11 .02
Net realized and unrealized
gain (loss) on investments .71 .98
---------- ----------
Total from operations .82 1.00
Less distributions:
Dividend from net investment
income (.11) (.02)
Distribution of net realized
gain (.02) -
---------- ----------
Total distributions (.13) (.02)
Net asset value, end of period $ 11.67 $ 10.98
========== ==========
Total return 7.44% 9.94%
========== ==========
Ratios/Supplemental Data:
Net assets, end of period $5,013,407 $1,369,899
Expenses to average
net assets (B) 1.25% 1.25%*
Net investment income to
average net assets (C) 2.28% 4.51%*
Portfolio turnover rate
Average commission rate(D) 16.00% 0.00%
</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.
(D) This disclosure was not required for years prior to 1996.
13
<PAGE>
FACTS ABOUT THE FUND
Investment Objective - The Fund, launched December 6, 1991, 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 $1
billion 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 43 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
20 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 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.
14
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
DIRECTORS
<TABLE>
<CAPTION>
<S> <C> <C>
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 Julie A. Hein
George D. Clark, Jr. Robert L. Mueller
Jeffrey N. Edwards Rosellen C. Papp
Robert L. Hawley Bruce C. Williams
</TABLE>
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.
