(LOGO)
THE YACKTMAN FUNDS
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3RD QUARTER REPORT
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September 30, 1998
This report is submitted for the general information of shareholders of The
Yacktman Funds. It is not authorized for distribution to prospective investors
unless accompanied or preceded by an effective Prospectus for the Funds, which
contains more information concerning the Funds' investment policies, as well as
fees and expenses and other pertinent information. Please read the Prospectus
carefully.
THE YACKTMAN FUNDS, INC.
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INVESTMENT PERFORMANCE UPDATE
September 30, 1998
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THE YACKTMAN THE YACKTMAN S&P
FUND FOCUSED FUND 500
ANNUAL ANNUAL ANNUAL
TIME PERIOD RETURNS RETURNS RETURNS
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3rd Quarter, 1998
(7/1/98-9/30/98) (16.4)% (16.3)% (9.9)%
Year-to-date
(1/1/98-9/30/98) (13.3)% (9.4)% 6.0%
One Year
(10/1/97-9/30/98) (15.7)% (12.2)% 9.0%
Three Years
(10/1/95-9/30/98) 10.8% N/A 22.6%
Five Years
(10/1/93-9/30/98) 14.7% N/A 19.9%
Since Inception
(7/6/92-9/30/98) 9.8% N/A 18.3%
Since Inception
(5/1/97-9/30/98) N/A 3.2% 20.3%
N/A means not applicable. The above past performance is not predictive of future
results. The investment return and principal value of the Funds will fluctuate
so that an investor's shares when redeemed, may be worth more or less than their
original cost.
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THE YACKTMAN FUND
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TOP TWELVE EQUITY HOLDINGS
September 30, 1998
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PERCENTAGE OF
NET ASSETS
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Philip Morris Cos., Inc. 13.5%
First Data Corp. 12.2%
Franklin Covey Co. 8.0%
Dentsply International, Inc. 7.7%
Department 56, Inc. 7.4%
First Health Group Corp. 4.7%
Bandag, Inc., Class A 4.4%
Intimate Brands, Inc. 4.3%
United Asset Management Corp. 4.2%
Reebok International Ltd. 3.8%
Jostens, Inc. 3.7%
Rollins, Inc. 3.3%
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TOTAL 77.2%
THE YACKTMAN FUND
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PURCHASES & SALES
For the Quarter Ended September 30, 1998
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NET SHARES CURRENT
NEW PURCHASES PURCHASED SHARES HELD
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LUXOTTICA GROUP ADR
An Italian company engaged
in the design, manufacture,
and worldwide distribution
(LensCrafters) of about 1,700
different eyeglass frames
and sunglasses. 309,000 309,000
NIELSEN MEDIA RESEARCH
A provider of television audience
measurement services (provides
audience estimates for all
national programming sources
and local ratings services). 57,900 57,900
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NET SHARES CURRENT
NEW PURCHASES (Cont'd.) PURCHASED SHARES HELD
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REUTERS HOLDINGS ADS
Is the leading supplier of real-time
information systems and automated
trading services to the financial
community worldwide. Reuters
is also the world's largest
electronic publisher. 100,000 100,000
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NET SHARES CURRENT
PURCHASES PURCHASED SHARES HELD
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Tupperware Corp. 300,000 780,000
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NET SHARES CURRENT
SALES SOLD SHARES HELD
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A.C. Nielsen Corp. 392,000 _
Bandag, Inc., Class A 6,900 727,800
Block H&R, Inc. 83,400 400,000
Clorox Co. 125,000 200,000
First Health Group Corp. 500,000 1,000,000
First Data Corp. 420,000 2,650,000
Franklin Covey Co. 26,400 2,100,000
Fruit of the Loom, Inc. 150,000 900,000
Jostens, Inc. 110,000 900,000
King World Productions, Inc. 150,000 250,000
Philip Morris Cos., Inc. 1,500,000 1,500,000
Reebok International Ltd. 65,000 1,450,000
Rollins, Inc. 335,300 940,700
United Asset Management Corp. 557,100 992,900
Whitman Corp. 1,200,000 _
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THE YACKTMAN FUND
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PORTFOLIO OF INVESTMENTS
September 30, 1998 (Unaudited)
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NUMBER
OF SHARES VALUE
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COMMON STOCKS - 98.1%
APPAREL/SHOES - 6.5%
Fruit of the Loom, Inc.<F1> 900,000 $ 13,556,250
Reebok International Ltd.<F1> 1,450,000 19,665,625
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33,221,875
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CONSUMER GOODS - 11.8%
Department 56, Inc.<F1> 1,410,000 38,070,000
Jostens, Inc. 900,000 18,675,000
Luxottica Group ADR 309,000 3,456,938
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60,201,938
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FINANCIAL SERVICES - 16.3%
First Data Corp. 2,650,000 62,275,000
United Asset Management Corp. 992,900 21,347,350
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83,622,350
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FOOD/TOBACCO - 13.5%
Philip Morris Cos., Inc. 1,500,000 69,093,750
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HOUSEHOLD PRODUCTS - 5.1%
Clorox Co. 200,000 16,500,000
Tupperware Corp. 780,000 9,165,000
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25,665,000
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INSURANCE - 2.1%
Selective Insurance Group 570,000 10,901,250
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MEDIA - 3.7%
American Media, Inc., Class A<F1> 1,200,000 6,675,000
King World Productions, Inc.<F1> 250,000 6,531,250
Nielsen Media Research 57,900 593,475
Reuters Holdings ADS 100,000 4,975,000
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18,774,725
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MEDICAL SERVICES - 4.7%
First Health Group Corp.<F1> 1,000,000 24,250,000
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NUMBER
OF SHARES VALUE
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MEDICAL SUPPLIES - 7.7%
Dentsply International, Inc. 1,751,700 $39,194,288
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RETAILING - 4.3%
Intimate Brands, Inc. 1,157,000 21,910,687
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SERVICES - 18.0%
Block H&R, Inc. 400,000 16,550,000
Franklin Covey Co.<F1> 2,100,000 41,081,250
Jenny Craig, Inc.<F1> 843,800 4,535,425
Rollins, Inc. 940,700 16,697,425
Valassis Communications, Inc.<F1> 335,400 13,416,000
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92,280,100
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TIRES AND RUBBER - 4.4%
Bandag, Inc., Class A 727,800 22,561,800
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Total Common Stocks
(cost $501,686,352) 501,677,763
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THE YACKTMAN FUND
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PORTFOLIO OF INVESTMENTS (Cont'd.)
September 30, 1998 (Unaudited)
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PRINCIPAL
AMOUNT VALUE
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COMMERCIAL PAPER - 0.8%
American Express,
5.45%, 10/2/98 $ 100,000 $ 100,000
Prudential Funding,
5.35%, 10/2/98 4,000,000 4,000,000
WPS Resources Corp.,
5.71%, 10/1/98 100,000 100,000
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Total Commercial Paper
(cost $4,200,000) 4,200,000
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Total Investments - 98.9%
(cost $505,886,352) 505,877,763
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Other Assets less Liabilities - 1.1% 5,797,936
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Net Assets - 100% (equivalent
to $12.07 per share based on
42,390,655 shares outstanding) $511,675,699
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<F1> Non-income producing
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THE YACKTMAN FOCUSED FUND
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PURCHASES & SALES
For the Quarter Ended September 30, 1998
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NET SHARES CURRENT
SALES SOLD SHARES HELD
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Dentsply International, Inc. 35,000 110,000
Department 56, Inc. 52,300 350,000
First Health Group Corp. 21,000 105,000
Philip Morris Cos., Inc. 65,000 165,000
Rollins, Inc. 20,000 140,000
United Asset Management Corp. 10,000 110,000
Whitman Corp. 100,000 _
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THE YACKTMAN FOCUSED FUND
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PORTFOLIO OF INVESTMENTS
September 30, 1998 (Unaudited)
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NUMBER
OF SHARES VALUE
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COMMON STOCKS - 81.8%
APPAREL/SHOES - 5.5%
Fruit of the Loom, Inc.<F1> 100,000 $ 1,506,250
Reebok International Ltd.<F1> 100,000 1,356,250
2,862,500
CONSUMER GOODS - 21.9%
Department 56, Inc.* 350,000 9,450,000
Jostens, Inc. 100,000 2,075,000
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11,525,000
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FINANCIAL SERVICES - 13.9%
First Data Corp. 210,000 4,935,000
United Asset Management Corp. 110,000 2,365,000
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7,300,000
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FOOD/TOBACCO - 14.5%
Philip Morris Cos., Inc. 165,000 7,600,313
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MEDICAL SERVICES - 4.8%
First Health Group Corp.<F1> 105,000 2,546,250
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MEDICAL SUPPLIES - 4.7%
Dentsply International, Inc. 110,000 2,461,250
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RETAILING - 3.6%
Intimate Brands, Inc. 100,000 1,893,750
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SERVICES - 12.9%
Franklin Covey Co.<F1> 220,000 4,303,750
Rollins, Inc. 140,000 2,485,000
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6,788,750
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Total Common Stocks
(cost $49,548,154) 42,977,813
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PRINCIPAL
AMOUNT VALUE
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COMMERCIAL PAPER - 14.0%
American Express,
5.45%, 10/2/98 $2,600,000 $2,600,000
Associates First Capital,
5.35%, 10/5/98 2,131,000 2,131,000
WPS Resources Corp.,
5.71%, 10/1/98 2,600,000 2,600,000
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Total Commercial Paper
(cost $7,331,000) 7,331,000
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DEMAND NOTES
(VARIABLE RATE) - 3.4%
Pitney Bowes Credit Corp. 1,773,577 1,773,577
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Total Demand Notes
(cost $1,773,577) 1,773,577
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THE YACKTMAN FOCUSED FUND
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PORTFOLIO OF INVESTMENTS (Cont'd.)
September 30, 1998 (Unaudited)
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NUMBER OF
CONTRACTS VALUE
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PUT OPTIONS PURCHASED - 0.1%
Philip Morris Cos., Inc.
Expiring Jan. 1999 @ $26.625 170 $ 3,187
Expiring Jan. 1999 @ $33.375 1,080 20,250
Expiring Jan. 2000 @ $30.00 200 14,376
Expiring Jan. 2000 @ $35.00 200 35,000
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Total Put Options Purchased
(cost $375,068) 72,813
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Total Investments - 99.3%
(cost $59,027,799) 52,155,203
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Other Assets less Liabilities - 0.7% 378,233
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Net Assets - 100% (equivalent
to $10.12 per share based on
5,191,825 shares outstanding) $52,533,436
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<F1> Non-income producing
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FOR FUND INFORMATION AND
SHAREHOLDER SERVICES, CALL
1-800-525-8258
THE YACKTMAN FUNDS, INC.
Shareholder Services Center
615 East Michigan Street, 3rd Floor
Milwaukee, Wisconsin 53201-5207
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YA-412-1098
