Picture of man in a chair
PAPP AMERICA-ABROAD FUND, INC.
A No-Load Fund
ANNUAL REPORT
DECEMBER 31, 1998
Managed by:
L. Roy Papp & Associates
6225 North 24th Street
Suite 150
Phoenix, AZ 85016
(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
CHART HERE:
AVERAGE ANNUAL TOTAL RETURN
1 Year 5 Year Since Inception
Papp America-Abroad Fund 23.8% 24.9% 19.8%
Morgan Stanley World Index 24.3% 15.8% 14.4%
<TABLE>
<CAPTION>
<S> <C> <C>
Year Papp America-Abroad Fund Morgan Stanley World Index
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
1998 35,799 25,882
</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 51% of the earnings of the companies
in the Fund's portfolio are derived from foreign sources and 49% 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 Shareholders:
Our Fund was up 23.8% in 1998. This compares with an increase of 24.3% for the
Morgan Stanley World Index, against which we compare ourselves, and an increase
of 28.7% for the Standard & Poor's 500 Stock Index. This marks the fourth
straight year of double-digit increases for our Fund. In 1995 we were up 37.1%,
in 1996 we were up 27.7% and in 1997 we were up 29.9%.
As the chart on the opposite page indicates, we have handily beaten the World
Index which, like our Fund, represents about 50% foreign and 50% U.S. earnings.
Since inception in late 1991 to the end of 1998 we were up 258.2% while the
World Index was up 156.5%. These numbers appear to validate the basic concepts
behind the creation of this Fund, the first in the nation to invest in mainly
United States companies because they have a large foreign earnings component.
In 1991 investing abroad was quite the vogue and a number of our clients
questioned our failure to do so. But two of us had lived overseas and worked in
the financial area. We were acutely aware that the stock markets outside the
United States were far different than our own. Many of their stocks involve
small and undercapitalized companies, in some cases their markets are rigged,
their accounting is not up to American standards, they are subject to political
tinkering and the lack of SEC disclosure requirements.
We therefore looked at American companies, mainly the multinationals, which
received a large portion of their earnings from overseas activities, and found
that of the 100 largest companies in the world based on sales, only 24 are
American companies. However, these 24 receive 52% of the earnings of the top 100
so they are three times as profitable as the foreign stocks. Our goal has been
to purchase the best of these large companies, stocks which have shown a
consistent pattern of growth over a long period of time. We also buy small
multinationals providing they have a unique product in demand and provided they
have the same growth patterns as our larger companies.
Our concerns about owning foreign stocks, particularly in emerging nations, have
proven correct. Brazil and Mexico had their problems some years ago and the
former is back in the soup today. Most recently, the problems have surfaced in
Asia, especially in its smaller nations. In turn, these concerns have impacted
investors' views about the companies we own even though the earnings of most
continue their historic growth.
We believe this negative outlook will cease before long. The Asian economies
appear to be slowly recovering and the dollar is somewhat weaker against other
currencies which will work to our advantage this year. Most importantly, our
stocks continue to show excellent earnings growth and this will eventually
translate into higher prices. For these reasons we are enthusiastic about 1999.
Warmest regards,
L. Roy Papp, Chairman
February 1, 1999
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) as of December 31, 1998 and 1997,
including the schedule of portfolio investments as of December 31, 1998, and the
related statements of operations and statements of changes in net assets for the
two years then ended, and the financial highlights for the five years then
ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights 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 audits to obtain
reasonable assurance about whether the financial statements and 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 and financial highlights. Our procedures included confirmation of
securities owned as of December 31, 1998, 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 and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Papp America-Abroad Fund, Inc. as of December 31, 1998 and 1997, and the results
of its operations and changes in its net assets for the two years then ended and
its financial highlights for the five years then ended, in conformity with
generally accepted accounting principles.
Phoenix, Arizona
January 21, 1999
4
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
Number Market
Common Stocks of Shares Value
<S> <C> <C>
Electrical Equipment (15.1%)
American Power Conversion *
(Leading producer of uninterruptible power supply products) 627,900 $ 30,413,906
Emerson Electric Company
(Manufacturer of electrical and electronic products and systems) 120,000 7,260,000
Molex, Inc.
(Supplier of electrical, electronic, and fiber optic interconnection
products and systems) 450,000 14,175,000
-------------
51,848,906
-------------
Industrial Services (15.0%)
Air Express International
(Air freight forwarding) 480,000 10,440,000
Interpublic Group of Companies, Inc.
(Worldwide advertising agencies) 360,000 28,710,000
Manpower, Inc.
(Provider of non-government employment services) 365,000 9,193,437
Omnicom Group, Inc.
(Worldwide advertising agencies) 50,000 2,900,000
-------------
51,243,437
-------------
Computer Equipment (13.6%)
EMC Corp. *
(Manufacturer of enterprise computer storage systems) 27,000 2,295,000
Hewlett-Packard Company
(Manufacturer of printers, computers, and medical
electronic equipment) 150,000 10,246,875
Intel Corporation
(Manufacturer of microprocessors, microcontrollers, and
memory chips) 244,000 28,929,250
International Business Machines
(Global provider of information technology, hardware, software
and services) 27,000 4,988,250
-------------
46,459,375
-------------
Financial Services (11.8%)
American International Group
(Major international insurance holding company) 56,000 5,411,000
General Electric Co.
(Diversified financial and industrial company) 140,000 14,288,750
State Street Corporation
(Provider of U.S. and global securities custodial services) 300,000 20,868,750
-------------
40,568,500
-------------
Specialty Retailing (9.0%)
Office Depot *
(Large office supply retailer and direct marketer of office products) 835,000 30,842,812
----------
Pharmaceutical (8.0%)
Astra AB
(International pharmaceutical company) 427,000 8,833,563
Merck & Company
(Ethical drugs) 126,000 18,608,625
-------------
27,442,188
-------------
*Non-income producing security.
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1998
Number Market
Common Stocks (continued) of Shares Value
Consumer Services (7.4%)
Service Corporation International
(Funeral service, cemetery owner/operator) 350,000 $ 13,321,875
Steiner Leisure Ltd. *
(Provider of spa services, beauty salons, and health clubs on
cruise ships) 375,000 12,000,000
-------------
25,321,875
-------------
Restaurants (4.6%)
McDonald's Corporation
(Fast food restaurants and franchising) 208,000 15,938,000
-------------
Medical Products (4.5%)
Johnson & Johnson
(Healthcare products) 183,000 15,349,125
-------------
Software (3.6%)
Microsoft Corporation*
(Personal computer software) 90,000 12,481,875
-------------
Consumer Products (2.8%)
Gillette Company
(Personal care products and batteries) 27,000 1,304,438
Mattel, Inc.
(Toy manufacturer) 370,000 8,440,625
-------------
9,745,063
-------------
Telecommunications (2.1%)
L.M. Ericsson Telephone AB
(Manufacturer of telecom systems and cellular handsets) 100,000 2,393,750
Hong Kong Telecommunications, Ltd.
(International telecommunications services) 270,000 4,741,875
-------------
7,135,625
-------------
Distributors (1.4%)
Sigma-Aldrich Corp.
(Develops, manufactures, and distributes specialty chemicals) 155,000 4,553,125
-------------
Total Common Stocks - 98.9% 338,929,906
Cash and Other Assets, Less Liabilities - 1.1% 3,884,730
-------------
Net Assets - 100% $ 342,814,636
=============
Net Asset Value Per Share
(Based on 10,670,513 shares outstanding at December 31, 1998) $ 32.13
=============
*Non-income producing security.
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
PAPP AMERICA-ABROAD FUND, INC.
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
ASSETS
<S> <C> <C>
1998 1997
---------------- ----------------
Investment in securities at market value (original
cost $248,043,277 and $260,250,479 at December 31,
1998 and 1997, respectively) (Note 1) $ 338,929,906 $ 285,776,806
Cash 6,522,782 3,507,780
Dividends and interest receivable 361,875 461,788
---------------- ---------------
Total assets $ 345,814,563 $ 289,746,374
================ ===============
LIABILITIES
Redemptions payable $ 240,533 $ 209,767
Payable for investment securities purchased 2,759,394 1,287,313
---------------- ---------------
Total liabilities $ 2,999,927 $ 1,497,080
================ ===============
NET ASSETS
Paid-in capital $ 252,595,092 $ 262,716,207
Accumulated undistributed net realized gain
on sale of investments 371 -
Accumulated undistributed net investment income/(loss) (667,456) 6,760
Net unrealized gain on investments 90,886,629 25,526,327
---------------- ---------------
Net assets applicable to Fund shares outstanding $ 342,814,636 $ 288,249,294
================ ===============
Fund shares outstanding 10,670,513 11,091,202
================ ===============
Net Asset Value Per Share (net assets/shares
outstanding) $ 32.13 $ 25.98
================ ===============
</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, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
---------------- --------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 2,686,890 $ 1,777,770
Interest 224,020 214,337
Foreign taxes withheld (20,469) (14,828)
---------------- --------------
Total investment income 2,890,441 1,977,279
---------------- --------------
EXPENSES:
Management fee (Note 3) 3,292,225 1,599,574
Filing fees 116,312 79,501
Printing and postage 46,725 16,210
Transfer agent fees 40,994 24,038
Custodial 28,994 27,819
Accounting 14,500 18,815
Directors' attendance fees 6,300 5,100
Legal 4,534 3,354
Other fees 14,073 2,214
---------------- --------------
Total expenses 3,564,657 1,776,625
---------------- --------------
Net investment (loss)/income (674,216) 200,654
---------------- --------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Proceeds from sales of securities 92,997,025 7,380,204
Cost of securities sold (92,579,267) (5,990,861)
----------------- ---------------
Net realized gain on investments sold 417,758 1,389,343
Net change in unrealized gain on investments 65,360,302 16,166,447
---------------- --------------
Net realized and unrealized gain on investments 65,778,060 17,555,790
---------------- --------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 65,103,844 $ 17,756,444
================ ==============
</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, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
---------------- ---------------
<S> <C> <C>
FROM OPERATIONS:
Net investment (loss)/income $ (674,216) $ 200,654
Net realized gain on investments sold 417,758 1,389,343
Net change in unrealized gain on investments 65,360,302 16,166,447
---------------- ---------------
Increase in net assets resulting from
operations 65,103,844 17,756,444
---------------- ---------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income - (200,654)
Net realized gain on investments sold (417,387) (1,389,343)
---------------- ---------------
Decrease in net assets resulting from
distributions to shareholders (417,387) (1,589,997)
---------------- ---------------
FROM SHAREHOLDER TRANSACTIONS:
Proceeds from sale of shares 168,123,001 315,859,241
Net asset value of shares issued to shareholders
in reinvestment of net investment income and
net realized gain on investments sold 374,828 1,485,676
Payments for redemption of shares (178,618,944) (74,885,567)
---------------- ---------------
(Decrease)/increase in net assets resulting
from shareholder transactions (10,121,115) 242,459,350
----------------- ---------------
Total increase in net assets 54,565,342 258,625,797
Net assets at beginning of the period 288,249,294 29,623,497
---------------- ---------------
Net assets at end of period $ 342,814,636 $ 288,249,294
================ ===============
</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, 1998
(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.
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>
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.
Dividends and distributions payable to its shareholders are recorded by the Fund
on the ex-dividend date.
On December 28, 1998, a distribution was declared from net realized long-term
capital gains of approximately $.0396 a share aggregating $417,387. The
distribution was paid on December 31, 1998, to shareholders of record on
December 29, 1998.
On December 19, 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.
(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 $40,994 and $24,038 in 1998 and 1997, respectively, from the
manager for providing shareholder and transfer agent services.
The Fund's independent directors receive $1,000 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.
11
<PAGE>
(4) PURCHASES AND SALES OF SECURITIES:
For the years ended December 31, investment transactions excluding short-term
investments were as follows:
<TABLE>
<CAPTION>
1998 1997
--------------- -------------
<S> <C> <C>
Purchases at cost $ 80,372,065 $246,423,965
Sales 92,997,025 7,380,204
(5) CAPITAL SHARE TRANSACTIONS:
At December 31, 1998, there were 25,000,000 shares of $.01 par value capital
stock authorized. Transactions in capital shares of the Fund were as follows:
Proceeds Shares
Year ended December 31, 1998
Shares issued $ 168,123,001 6,037,848
Dividends and distributions reinvested 374,828 11,761
Shares redeemed (178,618,944) (6,473,298)
--------------- -------------
Net decrease $ (10,121,115) (423,689)
================ ==============
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
=============== =============
(6) UNREALIZED APPRECIATION:
Unrealized appreciation of portfolio securities for both financial statement and
federal income tax purposes is as follows at December 31:
1998 1997
-------------- ---------------
Market value $ 338,929,906 $ 285,776,806
Original cost ( 248,043,277) (260,250,479)
--------------- ----------------
Net unrealized appreciation $ 90,886,629 $ 25,526,327
=============== ===============
</TABLE>
As of December 31, 1998, gross unrealized gains on investments in which market
value exceeded cost totaled $104,546,063 and gross unrealized losses on
investments in which cost exceeded market value totaled $13,659,434.
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.
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,
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Net asset value, beginning of $ 25.98 $ 20.11 $ 16.47 $ 12.24 $ 11.45
period
Income from operations:
Net investment income (loss) (.05) .01 .01 .04 .10
Net realized and unrealized
gain (loss) on investments 6.24 6.00 4.48 4.52 .79
---- ---- ---- ---- ---
Total from operations 6.19 6.01 4.49 4.56 .89
Less distributions:
Dividend from net investment
Income - (.01) (.01) (.04) (.10)
Distribution of net realized gain (.04) (.13) (.84) (.29) -
----- ----- ----- ----- ----
Total distributions (.04) (.14) (.85) (.33) (.10)
Net asset value, end of period $ 32.13 $ 25.98 $ 20.11 $ 16.47 $ 12.24
======== ======== ======== ======== ========
Total return 23.83% 29.92% 27.65% 37.05% 7.77%
============ ============ ============ ============= ============
Ratios/Supplemental Data:
Net assets, end of period $ 342,814,636 $ 288,249,294 $ 29,623,497 $ 15,988,267 $ 11,573,197
Expenses to average net 1.08% 1.11% 1.25% 1.22% 1.25%
assets (B)
Net investment income to
Average net assets (C) .82% 1.24% 1.30% 1.50% 2.07%
Portfolio turnover rate 24.97% 4.71% 12.29% 26.65% 16.00%
Average commission per share (D) $ .0245 $ .0297 $ .0487
Period Ended
Year Ended December 31, December 31,
-----------------------------------------------------------------------------
1993 1992 1991 (A)
---- ---- --------
Net asset value, beginning of $ 11.67 $ 10.98 $ 10.00
period
Income from operations:
Net investment income (loss) .10 .11 .02
Net realized and unrealized gain
(loss) on investments (.11) .71 .98
----- --- ---
Total from operations (.01) .82 1.00
Less distributions:
Dividend from net investment
Income (.09) (.11) (.02)
Distribution of net realized gain (.12) (.02) -
----- ----- -----
Total distributions (.21) (.13) (.02)
Net asset value, end of period $ 11.45 $ 11.67 $ 10.98
======== ======== ========
Total return (.08)% 7.44% 9.94%
============== ============ =============
Ratios/Supplemental Data:
Net assets, end of period $ 10,934,293 $ 5,013,407 $ 1,369,899
Expenses to average net 1.25% 1.25% 1.25%*
assets (B)
Net investment income to
Average net assets (C) 2.28% 2.28% 4.51%*
Portfolio turnover rate 8.00% 16.00% 0.00%
Average commission per share (D) - - -
</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, which commenced operations 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 $1.3
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 44 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
21 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
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
Secretary - Robert L. Mueller
Treasurer - Rosellen C. Papp
Assistant Treasurer - Julie A. Hein
Investment Adviser
L. Roy Papp & Associates
6225 North 24th Street, Suite 150
Phoenix, AZ 85016
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
6225 North 24th Street, Suite 150
Phoenix, AZ 85016
Telephone: (602) 956-1115
(800) 421-4004
Independent Public Accountants
Arthur Andersen LLP
501 North 44th Street, Suite 300
Phoenix, Arizona 85008
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.
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