|
|
|
|
|
|
|
|
|
|
Previous: TAX EXEMPT SECURITIES TRUST SERIES 359, 485BPOS, 1994-08-31 |
Next: FIRST TRUST SPEC SIT TR SER 40 SUNBLT GRO & TRE SEC TR SER 1, 485BPOS, 1994-08-31 |
<PAGE> 1
CHAIRMAN'S LETTER
FELLOW SHAREHOLDER:
Common stock prices experienced two significant downdrafts--one in late
March, the other in late June--during the six months ended June 30, the first
half of the 1994 fiscal year for Vanguard Balanced Index Fund. Nonetheless,
reasonable strength during the remainder of the six-month period held the net
decline in the value of all U.S. common stocks to -4.5%. With the sharp and
steady rise in interest rates over the past six months, the prices of long-term
bonds experienced an even steeper drop. As would be expected, the price
declines of shorter-maturity bonds were more moderate.
In this challenging environment, the Fund provided a negative return
of -4.4%, even as our "tracking" of our target index was excellent. The
following table compares the total return (capital change plus income) of
Vanguard Balanced Index Fund for the fiscal half year with that of our
Composite Balanced Index, which is made up of two unmanaged benchmarks: the
Wilshire 5000 Index and the Lehman Aggregate Bond Index. To provide a broad
perspective of the financial markets, we also show the discrete results of
these two performance standards.
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------
Total Return
----------------
Six Months Ended
June 30, 1994
- - ---------------------------------------------------------------------------
<S> <C>
VANGUARD BALANCED INDEX FUND -4.4%
- - ---------------------------------------------------------------------------
COMPOSITE BALANCED INDEX* -4.2%
- - ---------------------------------------------------------------------------
WILSHIRE 5000 INDEX -4.5%
LEHMAN AGGREGATE BOND INDEX -3.9
- - ---------------------------------------------------------------------------
</TABLE>
* Weighted 60% in the Wilshire 5000 Index and 40% in the Lehman Aggregate Bond
Index.
The Fund's return is based on net asset values of $10.91 per share on December
31, 1993, and $10.27 on June 30, 1994, with the latter figure adjusted to take
into account the reinvestment of our two quarterly dividends totaling $.16 per
share from net investment income. On June 30, the Fund's dividend yield was
4.2%.
* THE PERIOD IN REVIEW
Following two years of relative tranquility, substantial volatility returned to
the stock market during the past six months, and stocks in the aggregate showed
a net decline. While the decline in stock prices from the February high to the
June low (-8%) was fairly significant, it was a far cry from the market's sharp
dips in 1990 (-20%), 1987 (-34%), 1981 (-18%), and 1973-74 (-48%). (Price
change from high to low, excluding income.)
Although the recent stock price decline could be described as
"moderate" in an historical sense, it seemed to reflect investor concerns
beyond the actual dimensions of the problems confronting the market, most
notably possible future inflation. Surely, investor concerns were increased by
the sharp six-month decline (-12%) in the prices of long-term investment-grade
bonds, as rates on AA utilities leaped upward--from 7.3% at the start of our
fiscal period to 8.4% at its close. However painful this price decline may have
been for investors in long-term bonds, it is worth noting that interest rates
had been dropping steadily for some seven years, and the retracement during the
past six months has merely returned rates to the level prevailing during the
final quarter of 1992.
While real evidence of inflation has yet to be reflected in the
Consumer Price Index, the Federal Reserve has acted to "tighten" the money
supply and slow economic growth and potential future inflation, raising the
Federal funds rate (at which banks borrow from one another) four times--in
February, March, April, and again in May--from 3.00% to 4.25%. Theory suggests
that increases in short-term rates should be regarded by market participants as
a restraint on potential inflation, and thus cause long- term rates to fall.
However, this theory seldom holds true in practice, and 1994 has proved to be
no exception.
As noted at the outset of this letter, the Fund's tracking of its
performance benchmark, the Composite Balanced Index, has been exemplary
1
<PAGE> 2
thus far in 1994, coming within 0.2%, net of all operating expenses and
transaction costs. This is a nice improvement over the relative return we
earned in 1993 (Fund, +10.0%; Composite Index, +10.7%). Some of the improvement
can be attributed to "growing pains" in our first full year of operations, when
the Fund's assets nearly quadrupled--from $109 million to $367 million. Some
has to do simply with luck--i.e., the statistical sampling method that we
employ may add or detract from our relative return in any given year. Last
year, this factor had a negative impact on our tracking; this year the impact
has been pretty much neutral. In all, we fully expect to maintain a high degree
of tracking precision over the long-term.
* IN SUMMARY
When I wrote to you six months ago in our Annual Report for 1993, I cautioned
you to remember that "the financial markets giveth and the financial markets
taketh away." Alas, the "taketh away" has indeed transpired over the past six
months. Nonetheless, Vanguard Balanced Index Fund--with its low-cost, passively
managed strategy--should serve the long-term investor well, and we would urge
you, once again, to stay the course.
Sincerely,
/s/ JOHN C. BOGLE
- - -----------------
John C. Bogle
Chairman of the Board
July 20, 1994
Note: Mutual fund data from Lipper Analytical Services, Inc.
2
<PAGE> 3
AVERAGE ANNUAL TOTAL RETURNS
THE YIELD QUOTED IN THE CHAIRMAN'S LETTER IS CALCULATED IN ACCORDANCE WITH SEC
GUIDELINES. THE AVERAGE ANNUAL TOTAL RETURNS* FOR THE FUND (PERIODS ENDED JUNE
30, 1994) ARE AS FOLLOWS:
1 YEAR: -0.30% SINCE INCEPTION (11/9/92): +5.33%
THE FUND'S AVERAGE ANNUAL TOTAL RETURN SINCE INCEPTION INCLUDES AN INCOME
RETURN OF +3.64% AND A CAPITAL RETURN OF +1.69%. ALL OF THE DATA REPRESENT PAST
PERFORMANCE. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE SO THAT INVESTORS' SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS
THAN THEIR ORIGINAL COST.
*PERFORMANCE FIGURES ARE ADJUSTED FOR THE $10 ANNUAL ACCOUNT MAINTENANCE FEE.
3
<PAGE> 4
STATEMENT OF NET ASSETS FINANCIAL STATEMENTS (unaudited)
June 30, 1994
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (59.2%)
- - ------------------------------------------------------------------------------------------------------------
AAR Corp. 5,200 $ 70
* AER Energy Resources Inc. 2,800 15
* AES Corp. 3,607 69
AFLAC, Inc. 5,025 170
* AMR Corp. 3,600 214
ARCO Chemical Co. 4,500 204
AT&T Corp. 67,900 3,692
Abbott Laboratories, Inc. 41,000 1,189
* Acclaim Entertainment Inc. 3,000 49
* Active Voice Corp. 2,500 48
ADAC Laboratories 2,900 24
* Adesa Corp 7,500 92
Adobe Systems, Inc. 3,700 102
* Advanced Polymer Systems 8,200 40
* Advanced Technologies Laboratories, Inc. 3,700 48
ADVO, Inc. 4,700 72
* Advanced Micro Devices, Inc. 4,600 114
* Advanta Corp. Class A 2,850 101
Aetna Life & Casualty Co. 5,500 307
Agricultural Mineral 4,200 117
H.F. Ahmanson & Co. 5,400 102
* Air and Water Technologies Corp. Class A 6,100 56
* Air Express International Corp. 1,800 40
* Air Products & Chemicals, Inc. 5,400 229
Airborne Freight Corp. 2,700 94
* Airtouch Communications 24,800 586
Albemarle Corp. 3,150 52
Alberto-Culver Co. Class A 1,400 28
Albertson's, Inc. 12,500 344
Alco Standard Corp. 2,400 137
Alexander & Alexander Services, Inc. 4,800 78
Alexander & Baldwin, Inc. 3,200 82
Alfa Corp. 5,200 57
* All American Semiconductor, Inc. 1,000 3
* Alleghany Corp. 714 106
Allegheny Ludlum Corp. 3,100 57
* Allegheny Power System, Inc. 5,600 118
* The Allen Group, Inc. 3,600 63
Allergan, Inc. 3,200 69
Allied Capital Commercial Corp. 3,800 64
* Allied Holdings, Inc. 5,400 80
Allied-Signal, Inc. 14,000 485
* Allmerica Property & Casualty Cos. 4,800 80
Allstate Corp. 4,600 109
ALLTEL Corp. 9,300 234
* Altera Corp. 3,500 99
* Alumax, Inc. 5,250 135
Aluminum Co. of America 4,400 322
* ALZA Corp. 3,300 78
* Amax Gold, Inc. 10,006 79
AMBAC, Inc. 1,800 71
Amerada Hess Corp. 4,500 222
* Amdahl Corp. 19,000 105
American Bancorporation 400 7
American Bankers Insurance Group 3,900 88
American Brands, Inc. 10,000 316
* American Business 5,100 68
American Cyanamid Co. 4,300 241
American Electric Power Co., Inc. 9,100 257
American Express Co. 24,299 626
* American Freightways 4,700 99
American General Corp. 10,800 298
American Greetings Corp. Class A 3,700 111
American Heritage Life Investment Corp. 2,400 42
American Home Products Corp. 15,800 897
American International Group, Inc. 16,100 1,395
* American Medical Holdings, Inc. 4,100 103
American National Insurance Co. 1,400 66
* American Oil and Gas Corp. 8,100 82
* American Power Conversion Corp. 4,000 65
American Premier Underwriters Inc. 1,900 48
* American President Cos., Ltd. 2,800 63
* American Re Corp. 2,200 68
American Stores Co. 7,200 176
American Water Works Co., Inc. 3,100 84
Ameron, Inc. 2,200 78
Ames Department Stores, Inc. 7,000 22
Ameritech Corp. 27,600 1,056
Amfed Financial Inc. 3,900 78
* Amgen, Inc. 6,800 291
Amoco Corp. 24,900 1,419
AMP, Inc. 5,300 367
* Ampal-American Israel Corp. 5,600 38
Amsouth Bancorp 2,400 75
Anadarko Petroleum Corp. 3,000 153
* Analog Devices, Inc. 4,600 132
* Analogic Corp. 3,900 63
* Anchor Bancorp Inc. 7,700 120
* Andrea Radio Corp. 1,200 18
Anheuser-Busch Co., Inc. 13,400 680
* Ann Taylor Stores Corp. 3,000 115
* Anthem Electronics, Inc. 2,200 46
* Anthony Industries, Inc. 4,347 66
Aon Corp. 4,800 163
Apache Corp. 2,500 69
Apple Computer, Inc. 5,600 148
* Applied Materials, Inc. 4,000 171
Applied Power, Inc. 2,600 53
Arbor Drugs, Inc. 4,800 90
Archer-Daniels-Midland Co. 16,935 394
Argonaut Group, Inc. 2,800 77
* Argosy Gaming Co. 3,400 50
</TABLE>
4
<PAGE> 5
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
* Armco, Inc. 17,500 $ 98
Armor All Products Corp. 4,500 96
Armstrong World Industries Inc. 2,500 117
* Arnold Industries, Inc. 3,600 70
* Arrhythmia Research Technology, Inc. 7,000 32
* Arrow Electronics, Inc. 3,500 130
* Artra Group Inc. 16,500 99
Arvin Industries, Inc. 2,800 67
Asarco, Inc. 4,500 127
Ashland Oil, Inc. 2,900 98
* Aspect Telecommunications 2,700 76
* Astoria Financial Corp. 2,300 73
* Athena Neurosciences, Inc. 5,900 41
Atlanta Gas Light Co. 2,500 85
Atlantic Richfield Co. 7,900 807
Atlantic Southeast Airlines Inc. 3,400 83
Atlantic Energy, Inc. 4,600 78
Autodesk, Inc. 700 35
Automatic Data Processing, Inc. 7,000 372
* Autozone, Inc. 7,600 185
* Avatar Holding, Inc. 2,000 72
Avery Dennison Corp. 2,900 84
Aviall Inc. 5,675 49
Avnet, Inc. 3,200 101
Avon Products, Inc. 3,600 212
* BHC Communications, Inc. Class A 1,200 92
* BMC Software, Inc. 1,200 52
* BSB Bancorp, Inc. 4,050 110
BW/IP INC. 3,000 52
* Babbages, Inc. 5,000 51
* Badger Paper Mills, Inc. 3,200 38
Baker Hughes, Inc. 7,100 146
J. Baker, Inc. 4,600 88
Ball Corp. 3,500 91
* Ballard Medical Products 3,500 35
Baltimore Gas & Electric Co. 7,100 151
* Banc One Corp. 18,486 633
Bancorp Hawaii, Inc. 1,050 33
Bandag, Inc. 2,600 134
* Bank of Boston Corp. 5,420 133
The Bank of New York Co., Inc. 9,600 277
BankAmerica Corp. 18,000 824
* BankAtlantic Federal Savings Bank 6,300 98
Bankers First Corp. 4,500 88
Bankers Life Holding Corp. 2,500 50
Bankers Trust New York Corp. 4,200 280
* Banner Aerospace 11,100 57
* Banyan Systems, Inc. 4,100 53
C.R. Bard, Inc. 2,500 60
* Barnes & Noble Inc. 3,600 86
Barnett Banks of Florida, Inc. 4,726 207
* Barr Labs Inc. 3,600 67
* Base Ten Systems Class A 10,000 69
* Battle Mountain Gold Co. Class A 12,200 125
Bausch & Lomb, Inc. 3,000 111
Baxter International, Inc. 13,700 360
Baybanks, Inc. 2,000 120
* BE Avionics Inc. 6,300 54
Bear Stearns Co., Inc. 5,465 93
Beckman Instruments 3,500 88
Becton, Dickinson & Co. 3,500 143
* Bed Bath and Beyond 3,800 109
* Bel Fuse Inc. 6,900 43
Bell Atlantic Corp. 21,800 1,221
* Bell Sports Corp. 2,200 51
BellSouth Corp. 25,200 1,556
A. H. Belo Corp. 2,500 108
Bemis Co., Inc. 5,200 116
Beneficial Corp. 2,400 88
Bergen Brunswig Corp. Class A 2,800 47
* Berkshire Hathaway 120 975
* Bethlehem Steel Corp. 4,700 88
Betz Laboratories, Inc. 1,500 64
BIC Corp. 3,000 86
* Biogen, Inc. 1,700 49
* Biomet, Inc. 5,800 61
Birmingham Steel Corp. 2,450 66
Black & Decker Corp. 3,800 66
Blair Corp. 1,600 65
Block Drug Co. Class A 318 10
H & R Block, Inc. 5,300 208
Blockbuster Entertainment Corp. 10,900 282
* Boatmen's Bancshares, Inc. 5,400 169
The Boeing Co. 16,800 777
* Bolt Beranek and Newman, Inc. 3,900 47
Borden, Inc. 7,200 89
Borg-Warner Automotive, Inc. 2,600 59
* Borland International, Inc. 3,000 31
Boston Edison Co. 2,200 58
* Boston Scientific Corp. 4,400 56
Bowne & Co., Inc. 3,100 64
Brandon Systems Corp. 6,200 95
* Brinker International, Inc. 3,600 76
Bristol-Myers Squibb Co. 26,300 1,410
* Broadcast International Inc. 15,200 46
* Broderbund Software 1,900 86
Brooklyn Union Gas Co. 5,050 123
Brown-Forman Corp. Class B 4,500 127
Browning-Ferris Industries, Inc. 9,700 295
Brunswick Corp. 4,800 106
* Buffets Inc. 3,800 70
Burlington Coat Factory Warehouse Corp. 3,900 67
* Burlington Industries 8,400 123
* Burlington Northern, Inc. 4,200 224
</TABLE>
5
<PAGE> 6
STATEMENT OF NET ASSETS (continued)
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Burlington Resources, Inc. 6,400 $ 265
CBI Industries, Inc. 1,100 31
CBS, Inc. 800 248
CCB Financial Corp. 2,100 83
CCP Insurance, Inc. 2,000 41
* C-Cube Microsystems, Inc. 3,000 47
* CFI Proservices, Inc. 7,600 113
CIGNA Corp. 3,500 256
CIPSCO, Inc. 2,600 66
CMAC Investment Corp. 3,800 96
CML Group, Inc. 2,700 32
CMS Energy Corp. 3,700 77
* CNA Financial Corp. 3,000 185
CPC International, Inc. 7,600 367
CSX Corp. 5,200 393
* CUC International, Inc. 5,150 138
* Cabletron Systems, Inc. 1,400 135
Cabot Oil & Gas Corp. 3,900 81
* Caesars World, Inc. 1,300 47
* Caldor Corp. 4,100 115
* California Culinary Academy Inc. 11,100 58
* Cambridge Biotech Corp. 4,000 2
Campbell Soup Co. 12,400 426
* Canandaigua Wine Co., Inc. Class A 3,000 75
Capital Cities/ABC, Inc. 8,000 569
Capital Re Corp. 3,600 76
Capitol Bancorp Ltd. 4,800 44
Caraustar Industries, Inc. 4,000 69
* Caremark International, Inc. 3,600 60
Carnival Corp. Class A 7,000 310
Carolina Power & Light Co. 7,600 176
Carr Realty Corp. 5,000 108
Carter-Wallace, Inc. 3,600 67
* Catalina Marketing Corp. 2,200 92
Caterpillar, Inc. 5,200 520
Centerior Energy Corp. 7,500 76
Centex Corp. 2,500 64
* Centocor, Inc. 4,900 55
Central & South West Corp. 9,500 202
Central Fidelity Banks, Inc. 3,100 101
Central Maine Power Co. 4,200 48
* Century Communications Corp. Class A 11,897 88
Century Telephone Enterprises, Inc. 2,450 63
* Ceridian Corp. 4,300 106
Champion International Corp. 4,700 155
Charming Shoppes, Inc. 9,100 84
* Charter Medical Corp. 3,000 68
The Chase Manhattan Corp. 9,100 348
* Checkers Drive-In Restaurant 5,400 31
Chemed Corp. 2,100 75
Chemical Banking Corp. 12,400 477
Chemical Finance 1,407 56
* Chemical Waste Management 9,300 81
Chevron Corp. 32,800 1,374
* Cheyenne Software, Inc. 4,050 34
* Chiron Corp. 1,500 82
* Chris-Craft Industries, Inc. 2,527 91
* Christiana Cos., Inc. 2,300 78
* Chromcraft Revington, Inc. 2,500 49
Chrysler Corp. 17,700 834
The Chubb Corp. 4,400 337
Church and Dwight, Inc. 2,500 57
Cilcorp, Inc. 2,100 61
Cincinnati Bell, Inc. 3,100 51
Cincinnati Financial Corp. 2,600 138
Cincinnati Gas & Electric Co. 4,500 98
Circuit City Stores, Inc. 5,100 105
* Cintas Corp. 2,400 78
* Circus Circus Enterprises Inc. 4,300 92
* Cisco Systems, Inc. 12,400 288
* Citicorp 19,400 774
Citizens Banking Corp. 2,300 65
* Citizens Utilities Co. Class A 7,725 107
* Citizens Utilities Co. Class B 2,281 31
City Holding Co. 2,100 69
* Clark Equipment Co. 500 30
* Clayton Homes Inc. 6,312 111
Clorox Co. 2,800 137
Coastal Corp. 5,300 143
Coca-Cola Bottling Co. 2,800 78
The Coca-Cola Co. 64,900 2,637
Coca-Cola Enterprises, Inc. 6,900 117
* Coleman Inc. 3,000 90
Collective Bancorporation Inc. 5,550 121
Colgate-Palmolive Co. 7,700 400
* Coltec Inc. 3,500 65
* Columbia Gas Systems, Inc. 3,600 97
Columbia/HCA Healthcare Corp. 16,905 634
* Comcast Corp. Class A 6,600 119
* Comcast Corp. Class A Special 5,100 91
Comdisco, Inc. 6,200 119
Comerica, Inc. 5,700 161
Commonwealth Edison Co. 10,500 239
Commonwealth Energy Systems 1,300 53
Community First Bankshares 4,000 54
* Compaq Computer Corp. 12,300 397
* Computer Associates International, Inc. 8,300 332
* CompUSA, Inc. 3,100 28
* Computer Sciences Corp. 2,700 112
* Computer Task Group, Inc. 9,000 77
Comsat Corp. 3,700 86
Conagra, Inc. 12,400 378
* Concord EFS Inc. 2,300 55
* Conmed Corp. 3,900 51
</TABLE>
6
<PAGE> 7
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Connecticut Natural Gas Corp. 3,400 $ 86
* Conner Peripherals, Inc. 7,700 93
Conrail, Inc. 3,900 214
Conseco, Inc. 1,400 65
Consolidated Edison Co. of New York, Inc. 11,600 307
Consolidated Natural Gas Co. 4,500 170
Consolidated Papers 2,400 104
* Contel Cellular, Inc. 4,400 73
Continental Bank Corp. 2,700 98
Continental Corp. 2,800 43
Continental Mortgage & Equity Trust 1,600 23
Cooper Industries, Inc. 5,800 209
Cooper Tire & Rubber Co. 4,500 104
Adolph Coors Co. Class B 1,500 26
* Coral Gables Federal Savings & Loan Assn. 5,800 121
CoreStates Financial Corp. 6,000 155
Corning, Inc. 10,000 326
Countrywide Credit Industries, Inc. 4,147 60
* Coventry Corp. 2,200 80
Cracker Barrel Old Country Stores, Inc. 2,700 64
* Cray Research, Inc. 3,200 72
* Creative Technology 13,400 59
Crestar Financial Corp. 1,800 82
Crompton & Knowles Corp. 2,600 45
* Crown Cork & Seal Co., Inc. 5,600 209
Crown Crafts, Inc. 5,500 104
* Cryomedical Sciences 17,500 39
Cummins Engine Co., Inc. 1,800 78
Cyprus Amax 4,650 138
Cytec Industries, Inc. 614 12
DPL, Inc. 4,900 97
DQE Inc. 2,300 68
* DSC Communications Corp. 5,000 98
Dana Corp. 4,800 137
Danaher Corp. 2,600 109
* Data General Corp. 9,400 73
Dayton-Hudson Corp. 3,700 300
Dean Foods Corp. 1,100 30
Dean Witter Discover & Co. 8,405 315
Deere & Co. 4,300 291
* Dell Computer 3,600 95
Delmarva Power & Light Co. 3,200 58
Delta & Pine Land Co. 4,300 75
Delta Air Lines, Inc. 2,600 118
Deluxe Corp. 4,200 111
* Dentsply International 1,400 49
* Department 56 Inc. 4,700 150
* Designs, Inc. 5,750 51
Detroit Edison Co. 7,000 173
Devon Energy Corp. 5,200 117
Dexter Corp. 3,000 73
* Diagnostek, Inc. 3,600 78
Diagnostic Products Corp. 1,300 28
* Dial Page, Inc. 2,500 69
The Dial Corp. 2,500 107
* Diebold, Inc. 3,000 128
* Digital Equipment Corp. 7,000 136
Dillard Department Stores Class A 5,400 167
* Dime Bankcorp Inc. 14,000 138
* Dionex Corp. 1,500 50
The Walt Disney Co. 26,900 1,120
* Dr. Pepper/Seven Up Cos., Inc. 5,700 131
Dole Food Co. 2,500 68
Dollar General Corp. 5,351 134
Dominion Resources, Inc. 8,200 298
R.R. Donnelley & Sons Co. 7,700 214
* Doskocil Cos. 5,000 45
* Dovatron International Inc. 4,100 80
Dover Corp. 2,900 171
Dow Chemical Co. 13,900 909
Dow Jones & Co., Inc. 5,100 158
Dresser Industries, Inc. 10,700 219
Dreyfus Corp. 2,300 112
E.I. du Pont de Nemours & Co. 34,400 2,008
Duke Power Co. 10,100 361
The Dun & Bradstreet Corp. 8,800 488
Duracell International, Inc. 5,900 230
Duriron Co., Inc. 4,650 76
* Dynatech Corp. 3,300 70
EG & G, Inc. 7,100 107
* EMC Corp. 8,700 117
E-Systems, Inc. 1,800 67
Eastern Enterprises 2,900 66
Eastman Chemical 4,050 193
Eastman Kodak Co. 16,800 809
Eaton Corp. 3,500 182
Eaton Vance Corp. 1,000 27
Echlin, Inc. 2,700 81
* Echo Bay Mines Ltd. 5,600 60
* Ecogen Inc. 9,500 70
Ecolab, Inc. 3,400 75
* Edisto Resources Corp. 11,100 85
A.G. Edwards & Sons, Inc. 6,225 107
El Paso Natural Gas 1,600 52
Elco Industries Inc. 3,500 62
* Elcor Corp. 3,800 93
* Electronic Arts 2,200 31
Emerson Electric Co. 11,500 654
Energy West Inc. 5,200 45
* Englehard Corp. 5,000 126
Enquirer/Star Group Inc. Class A 3,400 60
Enron Corp. 11,700 383
Enron Oil & Gas Co. 7,800 179
</TABLE>
7
<PAGE> 8
STATEMENT OF NET ASSETS (continued)
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ENSERCH Corp. 6,200 $ 89
Entergy Corp. 11,554 286
* Enterra Corp. 5,000 105
* Epitope Inc. 2,800 45
Equifax, Inc. 3,700 105
The Equitable Cos. 6,700 119
Equitable of Iowa Co. 3,000 95
Equitable Resources, Inc. 1,800 62
* Ethyl Corp. 6,300 76
* Evergreen Healthcare, Inc. 4,000 40
* Exide Electronics Group, Inc. 4,900 99
* Express Scripts 4,400 108
Exxon Corp. 62,100 3,516
F & M Bancorp 1,365 34
FFY Financial Corp. 4,600 69
* FHP International Corp. 3,700 88
* FMC Corp. 1,800 97
FPL Group, Inc. 9,700 290
* Fairfield Communities, Inc. 9,200 56
Family Dollar Stores, Inc. 1,300 17
Farrel Corp. 10,800 72
* Federal Express Corp. 2,700 201
Federal Home Loan Mortgage Corp. 9,000 545
Federal-Mogul Corp. 4,100 119
Federal National Mortgage Assn. 13,800 1,152
Federal Paper Board Co., Inc. 1,200 27
Federal Realty Investment Trust 4,300 110
Federal Signal Corp. 5,733 97
* Federated Stores 6,400 128
Fifth Third Bancorp 2,900 152
* Financial Industries Corp. 1,000 38
Fingerhut Co. 2,400 58
Financial Trust Corp. 1,760 74
1st Bancorp (Indiana) 2,900 58
First American Corp. (Tennessee) 2,200 72
First American Bank Corp. 2,600 93
First Bank System, Inc. 5,525 202
First Brands Co. 1,900 70
First Chicago Corp. 4,100 197
First Colony Corp. 2,104 45
First Commercial Bank Shares Class A 1,000 17
First Commerce Bancshares Class B 4,000 53
* First Commerce Corp. 2,912 83
First Data Corp. 5,700 236
First Empire State Corp. 500 78
First Fidelity Bancorp. 4,200 195
* First Financial Management 3,000 167
First Interstate Bancorp. 4,200 323
* First Michigan Bank Corp. 4,486 102
First Midwest Bancorp 2,600 69
First National Bank of Gainsville 2,800 57
* First Pack Network 4,400 35
First Security Corp. 2,900 84
* First Source Corp. 3,465 88
First Union Corp. 8,600 397
* First USA Inc. 4,200 161
First Virginia Banks, Inc. 1,700 63
Firstar Corp. 3,400 120
Fisher Scientific International Inc. 2,000 65
Fleet Financial Group, Inc. 6,600 249
Fleet Mortgage Group 5,600 79
Fleming Cos., Inc. 4,600 128
Flightsafety International, Inc. 1,400 53
Florida Progress Corp. 4,300 111
* Florida Rock Industries, Inc. 2,100 50
Fluor Corp. 4,100 209
* Foamex International, Inc. 2,900 31
Food Lion Inc. Class A 23,700 145
Foote, Cone & Belding Communications, Inc. 1,800 81
Ford Motor Co. 25,300 1,493
Foremost Corp. of America 2,200 69
* Forest Laboratories, Inc. 2,100 91
Foster Wheeler Corp. 2,500 91
Fourth Financial Corp. 1,900 55
* Fourth Shift Corp. 12,600 78
Frankford Corp. 2,900 118
Franklin Resources Corp. 4,000 149
Freeport McMoRan Copper & Gold Inc. Class A 3,987 89
Freeport McMoRan, Inc. 7,000 114
* Fruit of the Loom, Inc. 4,000 105
H.B. Fuller Co. 1,500 55
* GBC Technologies, Inc. 7,000 67
* GC Cos. 2,630 68
GEICO Corp. 3,400 174
GP Financial Corp. 1,000 22
GTE Corp. 47,300 1,490
Arthur J. Gallagher & Co. 2,000 62
Gannett Co., Inc. 7,300 361
The Gap, Inc. 7,400 316
* Gardner Denver Machinery, Inc. 232 2
* Gateway 2000 Inc. 3,600 40
* Gaylord Entertainment Class A 4,400 108
Gencorp, Inc. 4,400 51
* Genentech Inc. 5,800 286
General Dynamics Corp. 2,800 114
General Electric Co. 85,400 3,982
General Growth Properties 2,700 61
* General Instrument 3,000 171
General Mills, Inc. 7,900 432
General Motors Corp. 36,000 1,809
General Motors Corp. Class E 11,700 408
General Motors Corp. Class H 4,500 161
General Physics Corp. 18,400 62
General Public Utilities Corp. 5,400 142
</TABLE>
8
<PAGE> 9
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
General Re Corp. 4,200 $ 458
General Signal Corp. 2,500 83
* Genesco, Inc. 19,500 63
* Gensia Inc. 4,400 41
Geon Co. 3,200 83
Genuine Parts Co. 6,500 235
Georgia-Pacific Corp. 4,500 269
Gerber Products Co. 3,500 179
Giant Food, Inc. Class A 3,100 61
* Gilead Sciences, Inc. 3,400 28
Gillette Co. 11,300 736
P.H. Glatfelter Co. 4,200 67
* Global Spill Management, Inc. 1,200 2
Golden West Financial Corp. 3,400 131
The BF Goodrich Co. 1,100 48
The Goodyear Tire & Rubber Co. 7,700 277
Goulds Pumps, Inc. 3,100 66
W.R. Grace & Co. 4,500 179
* Graco, Inc. 3,600 68
W.W. Grainger, Inc. 2,700 172
* Grand Casinos, Inc. 3,100 43
* Grand Valley Gas Co. 6,400 51
Great Atlantic & Pacific Tea Co., Inc. 5,000 108
Great Lakes Chemical Corp. 3,400 184
Great Western Financial Corp. 5,900 108
Green Tree Financial Corp. 2,600 146
* Greenman Brothers, Inc. 5,000 33
* Gtech Holdings Corp. 2,100 35
* Gymboree Inc. 1,700 67
HF Financial Corp. 3,200 82
HRE Properties 100 1
* HS Resources Inc. 2,800 61
* Haemonetics Corp. 4,500 82
Halliburton Co. 5,600 189
M.A. Hanna Co. 3,000 76
* Harcourt General, Inc. 4,000 141
* Harley-Davidson, Inc. 2,000 92
Harnischfeger Industries Inc. 1,000 20
Harris Corp. 2,000 88
* Harry's Farmers Market, Inc. 4,200 44
Hartford Steam Boiler Inspection & Insurance Co. 600 27
* Hartmarx Corp. 12,600 77
Hasbro, Inc. 4,400 130
* Hauser Chemical Research 8,800 59
Hawaiian Electric Industries Inc. 2,300 71
* HEALTHSOUTH Rehabilitation Corp. 2,800 73
* Healthcare Compare Corp. 5,400 96
* Health Management Associates Class A 7,650 157
* Health Systems 100 3
* Healthtrust Inc. 4,000 111
Healthwise of America Inc. 525 11
* Heartland Express, Inc. 3,100 93
Hechinger Co. Class A 7,300 101
Heilig-Meyers Co. 4,100 111
H.J. Heinz Co. 12,600 402
Helmerich & Payne, Inc. 4,000 106
Hercules, Inc. 2,100 225
Hershey Foods Corp. 4,300 187
Hewlett-Packard Co. 12,800 965
Hillenbrand Industries, Inc. 3,600 99
Hilton Hotels Corp. 2,400 127
Holly Corp. 1,600 46
Holly Residential Properties 1,300 20
Home Depot, Inc. 22,533 949
Home Savings Bank (FL) 5,940 86
* Home Shopping Network, Inc. 7,200 85
* Homedco Group Inc. 2,100 58
Homestake Mining Co. 6,800 128
Honeywell, Inc. 6,700 208
Horace Mann Educators Corp. 3,600 98
George A. Hormel & Co. 3,400 71
* Horsehead Resource Development Co., Inc. 7,900 25
* Hospitality Franchise Systems, Inc. 5,600 137
Host Marriott 10,600 103
* House of Fabrics, Inc. 10,800 36
Household International, Inc. 4,600 156
Houston Industries, Inc. 6,600 215
Hubbell Inc. Class B 1,500 83
Hughes Supply, Inc. 3,700 77
* Humana, Inc. 7,800 126
Hunt Manufacturing Co. 2,300 37
Huntington Bancshares Inc. 4,440 112
* ICN Pharmaceuticals, Inc. 6,600 54
* IMC Fertilizer Group, Inc. 2,400 83
* IMRS Inc. 4,500 96
ITT Corp. 6,000 490
Idaho Power Co. 4,900 111
* Identix, Inc. 14,000 50
Illinois Central Corp. 3,300 109
Illinois Tool Works, Inc. 5,400 211
Illinova Corp. 3,300 62
* Imclone Systems, Inc. 7,800 20
* Immune Response 7,200 72
* Immunomedics Inc. 7,900 27
* Inacom Corp. 6,300 51
* Industrial Scientific Corp. 2,700 70
* Information Resources, Inc. 2,600 38
* Informix Corp. 3,100 48
Ingersoll-Rand Co. 5,100 179
* Inland Steel Industries, Inc. 3,800 133
Integra Financial Corp. 1,700 79
Intel Corp. 20,800 1,219
* Interactive Network Inc. 7,000 51
</TABLE>
9
<PAGE> 10
STATEMENT OF NET ASSETS (continued)
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
* Intercargo Corp. 5,400 $ 55
* Interco Co. 5,600 83
* Intergraph Corp. 8,000 77
* Interleaf, Inc. 7,800 42
International Business Machines Corp. 29,400 1,727
* International Cabletel, Inc. 2,000 41
International Flavors & Fragrances, Inc. 5,700 223
International Game Technology 6,200 117
International Paper Co. 6,100 404
International Shipholding Corp. 2,700 54
* International Specialty Products, Inc. 3,200 22
* International Technology 25,100 69
* International Totalizer Systems, Inc. 6,900 31
Interpublic Group of Cos., Inc. 4,000 124
* Intersolv Inc. 4,800 50
* Invtro International 2,800 5
* Iomega Corp. 11,700 25
* Ionics, Inc. 1,500 66
Ipalco Enterprises, Inc. 2,100 61
Irvine Apartment Communities, Inc. 2,000 40
* Irwin Financial Corp. 3,900 88
* IVAX Corp. 4,500 74
Jackpot Enterprises, Inc. 5,500 44
James River Corp. 3,800 65
* Jan Bell Marketing Inc. 8,900 58
Jefferson Bancorp, Inc. 2,000 21
Jefferson-Pilot Corp. 2,700 132
* Jefferson Smurfit Corp. 1,900 30
Johnson & Johnson 32,300 1,385
Johnson Controls, Inc. 2,200 106
* Johnstown America Industries 3,800 78
* Jones Apparel Group, Inc. 3,400 96
Jostens Inc. 4,900 79
Kmart Corp. 20,300 315
KN Energy, Inc. 3,700 82
K U Energy Corp. 3,900 98
Kansas City Power & Light Co. 3,200 62
Kansas City Southern Industries, Inc. 1,800 73
Kellogg Co. 11,400 620
Kellwood Co. 3,100 66
Kelly Services, Inc. Class A 1,500 41
Kemper Corp. 2,200 133
* Kendall International Inc. 2,800 143
Kerr-McGee Corp. 2,700 127
Keycorp 11,484 366
Kimberly-Clark Corp. 8,000 423
Kinetic Concepts, Inc. 11,300 40
* King World Productions, Inc. 1,600 64
Kleer-Vu Industries Inc. 6,960 30
Knight-Ridder, Inc. 2,800 143
* Kohls Corp. 2,800 132
* The Kroger Co. 5,500 128
Kuhlman Corp. 4,700 69
LCI International, Inc. 2,100 68
LDDS Communications, Inc. 6,112 106
LG&E Energy Corp. 3,300 120
* LTV Corp. 4,100 63
* LTX Corp. 12,100 28
La-Z-Boy Chair Co. 900 24
Ladd Furniture, Inc. 4,400 30
Lafarge Corp. 3,000 58
Lancaster Colony Corp. 2,466 117
Landmark Bancshare, Inc. 4,900 58
* Lands' End, Inc. 4,000 70
* Laser Precision Corp. 8,200 33
Lawter International Inc. 5,300 62
* Layne, Inc. 12,900 88
* Lechters Corp. 4,700 65
* Legent Corp. 1,200 32
Leggett & Platt, Inc. 2,100 79
* Lehman Brothers Holdings, Inc. 8,159 123
Lennar Corp. 1,800 34
* Leslie Fay Co. 11,100 28
* Leucadia National Corp. 2,700 97
Leviathan Gas Pipeline Co. 1,700 49
Liberty Bankcorp Inc. 2,400 75
Liberty Corp. 1,100 30
* Liberty Media Corp. Class A 6,300 125
Life Partners Group, Inc. 4,900 86
Lillian Vernon Corp. 2,300 43
Eli Lilly & Co. 14,400 819
Lilly Industries Inc. Class A 4,200 59
The Limited, Inc. 17,900 309
* Lin Broadcasting Corp. 2,600 312
* Lincare Holdings Inc. 5,000 98
Lincoln National Corp. 4,400 186
Linear Technology Corp. 1,800 79
* Liposome Technology, Inc. 4,600 27
Litchfield Financial Corp. 7,140 90
* Litton Industries, Inc. 2,100 71
Liz Claiborne, Inc. 3,700 74
Lockheed Corp. 3,100 203
Loctite Corp. 2,000 84
Loews Corp. 3,300 281
* Lomas Financial Corp. 6,900 43
* Lone Star Steakhouse & Saloon 5,100 90
Long Island Lighting Co. 5,600 99
* Longhorn Steaks Inc. 4,600 44
Longview Fiber Co. 3,000 52
Loral Corp. 4,200 147
* Lotus Development Corp. 2,200 81
* Louis Dreyfus Natural Gas Corp. 3,600 50
Louisiana Land & Exploration Co. 2,100 89
</TABLE>
10
<PAGE> 11
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Louisiana-Pacific Corp. 5,200 $ 159
Lowes Cos., Inc. 7,400 253
Lubrizol Corp. 3,600 123
Lukens, Inc. 2,900 95
Lyondell Petrochemical Co. 3,500 86
* M/A-Com, Inc. 6,400 51
MBIA, Inc. 2,200 126
* MBNA Corp. 7,500 169
* MCI Communications Corp. 26,800 595
* MFS Communications Co., Inc. 2,800 69
* MGIC Investment Corp. 3,000 80
* MGM Grand Inc. 2,100 49
MK Gold Co. 10,700 56
Madison Gas & Electric Co. 2,600 86
* Magma Copper Co. Class B 8,100 123
Magna Group 5,700 109
Mallinckrodt Group, Inc. 3,400 110
Manitowoc Co., Inc. 2,200 55
Manor Care Inc. 3,200 80
* Manpower Inc. 6,900 145
Mapco Inc. 1,400 83
Marion Merrell Dow, Inc. 13,800 252
* Marquette Electronics Class A 4,600 74
Marsh & McLennan, Inc. 3,800 317
Marshall & Ilsley Corp. 7,344 148
Marriott International 8,200 218
Martin Marietta Corp. 4,700 207
* Martin Marietta Materials, Inc. 2,000 44
* Marvel Entertainment Group 4,740 87
Masco Corp. 7,700 212
Mascotech Inc. 4,900 65
Mattel, Inc. 8,375 213
* Maxtor Corp. 8,400 41
May Department Stores Co. 12,300 483
Maytag Corp. 4,700 87
* McAfee Associates 9,100 63
* McCaw Cellular Communications, Inc. 10,400 538
McCormick & Co., Inc. 4,100 83
McDermott International, Inc. 2,100 52
McDonald's Corp. 35,600 1,028
McDonnell Douglas Corp. 2,000 234
McGraw-Hill, Inc. 2,400 160
McKesson Corp. 1,800 130
* McMoRan Oil and Gas 700 3
The Mead Corp. 3,100 137
* Medco Research, Inc. 5,100 71
* Medical Care America 3,596 98
* Medical Graphics Corp. 9,700 58
Meditrust 2,000 68
Medtronic, Inc. 2,900 232
Mellon Bank Corp. 3,000 169
Melville Corp. 5,000 194
* Mentor Corp. 5,400 82
* Mentor Graphics Corp. 5,900 62
* Mercantile Bankshares Corp. 3,900 77
Mercantile Stores Co., Inc. 3,900 125
Merck & Co., Inc. 64,109 1,907
Mercury Finance Co. 5,332 88
Meredith Corp. 2,700 115
Meridian Bancorp, Inc. 3,539 107
* Merisel, Inc. 4,300 37
Merrill Lynch & Co., Inc. 10,600 371
* Merry-Go-Round Enterprises, Inc. 8,900 18
Methode Electronics Inc. Class A 7,800 131
Metropolitan Financial Corp. 2,000 31
Michael Foods, Inc. 7,900 86
Michigan National Corp. 1,500 108
* Microsoft Corp. 28,400 1,464
* Mid Am Inc. 5,300 78
Micron Technology Inc. 5,250 181
Mid-America Realty Investments 7,200 65
* Mid Atlantic Medical Services 2,000 89
Mid-Iowa Financial Corp. 3,000 50
* Midlantic Corp. 4,700 137
Midwest Resources Inc. 5,800 84
Millipore Corp. 2,600 137
* Milwaukee Land Co. 5,500 37
Minnesota Mining & Manufacturing Co. 21,400 1,059
Minnesota Power & Light Co. 2,500 65
* Mirage Resorts Inc. 6,650 125
Mitchell Energy & Development Corp. Class A 2,200 45
Mobil Corp. 20,000 1,632
* Mobley Environmental Services, Inc. Class A 6,600 12
Modine Manufacturing Co. 3,600 92
* Mohawk Industries, Inc. 3,700 66
* Molecular Biosystems, Inc. 3,200 35
Molex, Inc. 3,300 125
Monsanto Co. 5,900 446
Montana Power Co. 2,800 63
J.P. Morgan & Co., Inc. 9,500 588
Morgan Stanley Group, Inc. 3,800 216
Morrison-Knudsen Co., Inc. 3,700 80
* Morrison Restaurants 1,950 44
Morton International, Inc. 2,400 187
Motorola, Inc. 27,900 1,242
* Mueller Industries Inc. 2,700 79
* Multicare Cos., Inc. 1,400 24
* Multimedia, Inc. 2,700 78
Murphy Oil Corp. 2,000 85
Mylan Laboratories, Inc. 3,600 76
NBD Bancorp, Inc. 7,600 240
NFO Research, Inc. 6,000 92
</TABLE>
11
<PAGE> 12
STATEMENT OF NET ASSETS (continued)
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Northern Indiana Public Service Co. 3,500 $ 103
NUI Corp. 2,100 47
Nalco Chemical, Inc. 3,600 115
National City Corp. 7,500 205
* National Community Bancorp 2,850 63
* National Education Corp. 8,600 48
* National Gypsum Co. 2,500 77
National Health Laboratories Holdings 4,200 51
* National Intergroup, Inc. 5,400 94
* National Medical Enterprises, Inc. 8,600 134
* National Presto Industries, Inc. 2,200 89
National Re Holdings Corp. 2,600 67
* National Semiconductor Corp. 5,200 90
National Service Industries, Inc. 3,200 83
NationsBank, Inc. 13,460 692
* Navigators Group, Inc. 2,000 34
* Natural Wonders 4,300 18
Navistar International Corp. 4,000 53
Thomas Nelson, Inc. 2,200 45
* Neoprobe Corp. 15,200 71
* Network Systems Corp. 6,100 40
New England Electric System 3,400 111
New Plan Realty Trust 6,100 133
New York State Electric & Gas Corp. 3,700 88
New York Times Co. Class A 5,500 131
Newell Co. 4,000 185
Newmont Gold Co. 4,900 191
Newmont Mining Corp. 4,243 171
* Nextel Communications 4,300 130
Niagara Mohawk Power Corp. 7,100 107
NICOR, Inc. 3,000 79
Nike, Inc. Class B 3,700 221
Noble Affiliates, Inc. 4,300 130
Noram Energy Corp. 9,300 56
* Nord Resources Corp. 11,200 52
Nordson Corp. 1,700 93
Nordstrom, Inc. 4,100 175
Norfolk Southern Corp. 6,900 435
North American Mortgage 1,700 41
* North Side Savings Bank 2,205 52
Northeast Utilities 6,500 141
Northern States Power Co. of Minnesota 3,400 140
Northern Trust Corp. 2,450 100
Northrop Grumman Corp. 2,300 85
* Northwest Airlines Corp.
Class A 8,000 114
Northwest Illinois Bancorp., Inc. 3,300 57
Norwest Corp. 15,500 405
* NovaCare, Inc. 5,000 80
* Novell, Inc. 15,700 262
Nucor Corp. 4,300 295
NYNEX Corp. 20,300 769
* nVIEW Corp. 3,300 16
* OHM Corp. 3,800 40
* OIS Optical Imaging Systems, Inc. 3,000 17
Occidental Petroleum Corp. 15,200 287
* Octel Communications Corp. 4,100 69
* Office Depot, Inc. 7,125 142
* Offshore Logistics, Inc. 4,000 54
Ohio Casualty Corp. 1,600 45
Ohio Edison Co. 7,600 136
Oklahoma Gas & Electric Co. 2,200 67
* Old Dominion Freight Line, Inc. 4,000 78
Old Kent Financial Corp. 2,100 73
Old Republic International Corp. 6,200 138
Olin Corp. 1,500 81
Olsten Corp. 2,900 93
Omnicom Group Inc. 1,700 82
One Valley Bancorp of West Virginia Inc. 2,400 68
* Oracle Systems Corp. 14,300 535
Orange & Rockland Utilities, Inc. 2,500 78
* Orbitron Capital Corp. 1,000 3
* Organogenesis, Inc. 3,800 47
* Ornda Healthcorp 6,720 89
* Oryx Energy Co. 4,600 69
Otter Tail Power Co. 3,000 94
* Outback Steakhouse 4,200 101
* Owens-Corning Fiberglas Corp. 1,900 59
* Owens-Illinois, Inc. 6,100 67
PECO Energy Co. 10,900 287
PHH Corp. 1,400 50
* PHP Heathcare Corp. 3,000 26
PNC Bank Corp. 11,600 335
PPG Industries, Inc. 10,600 397
PSI Resources, Inc. 2,700 57
* Paccar, Inc. 1,725 79
* Pacific Enterprises 4,400 87
Pacific Gas & Electric Co. 21,300 506
Pacific Telecom, Inc. 4,700 101
Pacific Telesis Group 21,200 655
* Pacificare Health Systems Inc.
Class A 500 25
* Pacificare Health Systems Inc.
Class B 900 44
Pacificorp 13,800 233
Paco Pharmaceutical Services 6,200 52
* Paging Network Inc. 2,500 68
PaineWebber Group, Inc. 3,600 56
Pall Corp. 5,266 79
Panhandle Eastern Corp. 6,000 118
* Parametric Technology Corp. 2,600 59
* Paramount Communications, Inc. 2,847 132
* Parcplace Systems, Inc. 2,900 51
* Parker & Parsley Petroleum Co. 3,700 94
Parker Hannifin Corp. 2,400 102
</TABLE>
12
<PAGE> 13
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
* Parkervision, Inc. 900 $ 3
Parkway Co. 5,300 68
* Pec Israel Economic Corp. 2,800 65
* The Penn Traffic Co. 1,800 63
J.C. Penney Co., Inc. 11,600 629
Pennsylvania Power and Light Co. 7,100 139
Pennzoil Co. 2,200 113
* Peoples First 3,400 81
Pep Boys (Manny, Moe & Jack) 3,200 101
PepsiCo, Inc. 39,700 1,216
Perkin-Elmer Corp. 2,200 64
* Perrigo 3,400 46
Pet, Inc. 4,600 86
Petrie Stores Corp. 1,300 32
Petroleum Heat & Power Co. 9,600 68
Petrolite Corp. 1,900 59
* Petsmart, Inc. 4,100 117
Pfizer, Inc. 15,700 991
Phelps Dodge Corp. 3,500 200
Philip Morris Cos., Inc. 43,800 2,256
Phillips Petroleum Co. 12,900 403
Phillips-Van Heusen Corp. 2,900 73
* Phoenix Network, Inc. 5,000 16
Phoenix Resource Cos., Inc. 1,200 31
Piedmont Bankgroup, Inc. 1,500 32
Pier 1 Imports Inc. 8,100 62
Pinnacle West Capital Corp. 4,700 77
Pioneer Financial Corp. 2,300 52
Pioneer Hi Bred International 4,500 148
Pioneer Standard Electronics Inc. 3,200 81
Pitney Bowes, Inc. 7,800 298
* Pizza Inn, Inc. 9,200 30
Platinum Software Co. 3,750 24
Poe & Brown, Inc. 2,900 58
* Pogo Producing Co. 4,700 109
Polaroid Corp. 2,300 73
* Policy Management Systems Corp. 3,100 102
Portland General Electric Co. 6,700 114
Post Properties, Inc. 3,700 116
Potlatch Corp. 1,200 46
Potomac Electric Power Co. 5,800 111
* Powersoft Corp. 1,400 68
Praxair, Inc. 6,200 121
Premark International, Inc. 1,600 120
Premier Industrial Corp. 3,900 74
Price/Costco Inc. 10,186 152
Procter & Gamble Co. 34,100 1,820
Production Operators Corp. 2,900 76
Progressive Corp. of Ohio 3,500 116
* Promus Co. Inc. 4,800 142
Provident Life & Accident Insurance of America-Class A 2,400 61
Providian Corp. 4,900 148
Public Service Co. of Colorado 2,600 68
Public Service Enterprise Group Inc. 11,600 302
Public Storage Properties VIII, Inc. 300 6
Public Storage Properties IX,-Class A 500 9
Public Storage Properties XI,-Class A 1,200 19
Public Storage Properties XV,-Class A 800 13
Puerto Rican Cement Co., Inc. 3,300 94
Puget Sound Power & Light Co. 2,700 51
* Purepac Inc. 6,200 51
Puritan-Bennett Corp. 3,300 66
* Pyxis Corp. 3,800 73
* QVC Network, Inc. 2,100 80
Quaker Oats Co. 3,400 238
* Qualcomm, Inc. 4,200 68
Questar Corp. 1,700 55
The Quick & Reilly Group, Inc. 3,025 77
* RJR Nabisco, Inc. 56,000 343
R.L.I. Corp. 2,100 45
Railroad Financial Corp. 3,450 31
* Rainbow Technologies, Inc. 4,900 59
* Ralcorp Holdings Inc. 1,733 28
Ralston-Continental Baking 3,560 17
Ralston-Purina Group 5,200 180
Raychem Corp. 1,800 65
Rayonier Inc. 1,500 43
Raytheon Co. 6,700 434
Reader's Digest Assn., Inc. Class A 5,500 228
* Reading & Bates Corp. 10,500 76
* Reddi Brake Supply Corp. 7,700 35
Reebok International Ltd. 3,900 117
Regions Financial Corp. 990 34
Reinsurance Group of America, Inc. 1,700 45
* Reliance Electric Co. 6,500 118
Republic New York Corp. 2,700 125
* Research Industries Corp. 8,500 67
* Resound Corp. 5,200 34
* Retirement Care Associates, Inc. 7,500 57
* Revco D.S., Inc. 7,400 118
* Revco D.S., Inc. Rights Exp. 7/7/94 2,257 4
Reynolds & Reynolds Class A 5,400 125
Reynolds Metals Co. 3,100 149
Rhone-Poulenc Rorer, Inc. 6,900 210
Rite Aid Corp. 3,900 79
Riverwood International Corp. 5,600 93
Roadway Services, Inc. 2,000 125
* Robert Half International, Inc. 1,300 52
Rochester Telephone Corp. 3,400 77
Rockwell International Corp. 10,900 407
* Rogers Corp. 2,600 86
Rohm & Haas Co. 3,400 212
* Rohr, Inc. 6,600 69
Rollins Environmental Services, Inc. 2,800 13
Rollins, Inc. 3,600 88
</TABLE>
13
<PAGE> 14
STATEMENT OF NET ASSETS (continued)
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Rollins Truck Leasing 4,500 $ 75
* Roper Industries Inc. 4,600 117
* Rowan Cos., Inc. 15,900 139
Rubbermaid, Inc. 8,200 215
Russell Corp. 1,000 29
* Ryan's Family Steak Houses, Inc. 8,000 57
Ryder System, Inc. 3,500 88
SCE Corp. 22,100 285
SCOR U.S. Corp. 4,200 46
* SGI International 13,000 24
SPI Pharmaceuticals 4,111 65
Safeco Corp. 3,200 178
Safety-Kleen Corp. 2,100 36
* Safeway, Inc. 4,800 115
* Saga Communications, Inc. 4,400 54
St. Joe Paper Co. 1,600 80
St. Jude Medical, Inc. 2,200 71
* St. Paul Bancorp, Inc. 5,250 115
St. Paul Cos., Inc. 4,200 169
Salomon, Inc. 5,300 253
San Diego Gas & Electric Co. 5,800 107
* John B. Sanfilippo & Son, Inc. 5,600 55
* Santa Fe Pacific Corp. 8,900 186
Sara Lee Corp. 23,900 508
* Savannah Foods & Industries, Inc. 4,800 57
Scana Corp. 2,400 103
* R. P. Scherer Corp. 3,100 102
* Scherer Health 3,200 70
Schering-Plough Corp. 9,600 588
Schlumberger Ltd. 12,200 721
Schnitzer Steel Industries, Inc.
Class A 2,000 43
* Scholastic Corp. 2,800 105
A. Schulman Inc. 3,500 90
Charles Schwab Corp. 2,700 67
* Sciclone Pharmaceuticals 4,100 29
Scientific-Atlanta, Inc. 1,300 45
* Scientific Games Holdings Corp. 1,800 62
Scott Paper Co. 3,800 199
* Scotts Co. 5,200 85
E.W. Scripps Co. Class A 4,000 117
* Seagate Technology 3,500 69
Sears, Roebuck & Co. 17,300 830
* Security Capital Corp. 700 32
* Sensormatic Electronics Corp. 2,700 78
* Sepracor Inc. 7,500 41
Service Corp. International 3,700 95
* Service Merchandise Co., Inc. 4,100 26
Shared Medical Systems Corp. 4,300 104
* Shaw Industries, Inc. 7,000 115
Shawmut National Corp. 5,000 110
Sherwin-Williams Co. 4,400 139
Shoe Carnival, Inc. 5,550 54
* Shoney's Inc. 5,700 87
Showboat, Inc. 3,600 60
Sigma Aldrich Corp. 2,500 101
Signet Banking Corp. 2,500 101
* Silicon Graphics, Inc. 6,500 144
* Silver King Communications 7,120 80
Simon Property Group 3,000 80
Sizzlers Property Investors, Inc. 3,500 45
Sizzler International 5,600 33
Smith Corona 12,400 57
* Smithfield Foods, Inc. 4,000 112
Snap-On Inc. 2,100 78
* Snapple Beverage Corp. 5,800 119
* Sofamor/Danek Group Inc. 2,100 27
* Solectron Corp. 2,100 53
* Somerset Group, Inc. 3,300 40
Sonat, Inc. 4,600 141
Sonoco Products 4,000 82
Sotheby's Holdings Class A 6,300 78
* Southdown, Inc. 4,400 92
Southeastern Michigan Gas & Electric 2,651 49
Southern Co. 32,500 609
Southern New England Telecom Corp. 3,000 91
* Southern Pacific Rail Corp. 7,900 155
* Southern Union Co. 5,355 94
* Southland Corp. 18,400 114
Southtrust Corp. 3,950 81
Southwest Airlines Co. 7,050 184
Southwestern Bell Corp. 30,100 1,309
* Southwestern Life Corp. 11,700 61
Southwestern Public Service Co. 1,700 42
* Spartan Motors, Inc. 3,300 41
Spelling Entertainment 8,400 71
* Spiegel, Inc. Class A 9,200 177
Spieker Properties 3,000 66
* Sportmart Inc. 7,300 115
* Sports Town 6,300 22
Springs Industries Inc. Class A 2,200 66
Sprint Corp. 17,340 605
Standard Commercial Tobacco Co. 3,600 57
Standard Federal Bank 3,400 85
The Standard Register Co. 1,100 23
Stanhome, Inc. 2,300 76
The Stanley Works 2,000 80
* Staodynamics Inc. 8,300 21
Star Banc Corp. 1,700 64
* Starter Corp. 5,800 59
State Street Boston Corp. 3,500 136
* Station Casinos, Inc. 5,900 65
* Sterling Chemicals, Inc. 6,500 61
* Sterling Software, Inc. 800 24
</TABLE>
14
<PAGE> 15
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Stewart & Stevenson Services, Inc. 1,600 $ 67
* Stone Container Corp. 3,600 53
* Storage Technology Corp. 2,000 65
Stride Rite Corp. 6,600 86
* Stryker Corp. 2,600 69
Student Loan Marketing Assn. 4,300 155
Styles On Video, Inc. 5,850 58
Summit Bancorp 4,700 101
* Summit Care Corp. 4,100 74
Sun Co., Inc. 5,300 142
* Sun Microsystems, Inc. 5,300 109
Sunamerica Inc. 1,700 69
Sunbeam Oster 3,300 66
* Sunbelt Nursery Group, Inc. 5,000 9
Sundstrand Corp. 1,900 89
* Sunglass Hut International, Inc. 1,200 33
Suntrust Banks, Inc. 5,900 285
Superior Industries International, Inc. 1,900 61
Superior Surgical Manufacturing Co., Inc. 5,900 74
SuperValu, Inc. 3,700 112
* Supreme International Corp. 2,100 20
* Surgical Care Affiliates, Inc. 3,500 46
* Sybase, Inc. 2,400 117
* Sybron Corp. 4,100 123
* Synergen, Inc. 600 5
* Synopsys, Inc. 900 34
* SynOptics Communications, Inc. 2,800 38
Syntex Corp. 11,000 253
Sysco Corp. 8,800 199
* TBC Corp. 7,800 91
TECO Energy, Inc. 5,900 113
TIG Holdings, Inc. 2,800 56
TJX Cos., Inc. 3,600 79
* T.P.I. Enterprises, Inc. 7,500 45
TRW, Inc. 3,200 206
* T Squared Medical 2,100 22
Tab Products 9,100 89
Tambrands, Inc. 2,000 73
* Tandem Computers, Inc. 5,700 64
Tandy Corp. 3,300 114
* Tatham Offshore, Inc. 2,400 36
Taubman Co. 9,500 109
* Tech Data Corp. 7,200 121
* Techne 3,800 40
* Technology Solutions Co. 6,000 36
* Tecnol Medical Products Inc. 5,400 74
Tecumseh Products Co. Class A 1,000 46
Tecumseh Products Co. Class B 1,000 49
* Tejas Gas Corp. 1,500 72
* Tele-Communications, Inc. Class A 22,300 457
Teleflex Inc. 2,800 91
Telephone & Data Systems, Inc. 2,500 92
* Tellabs, Inc. 6,900 213
Temple-Inland Inc. 2,900 138
Tenneco, Inc. 8,500 394
Texaco, Inc. 12,800 773
Texas Instruments, Inc. 4,400 350
Texas Utilities Co. 11,193 351
Textron, Inc. 4,400 230
* Thermedics, Inc. 5,700 83
* Thermo Electron Corp. 2,250 84
* Thermo Instrument Systems, Inc. 3,000 85
Thomas & Betts Corp. 2,200 135
* The 3 DO Co. 4,200 62
* 3 Com Corp. 1,600 82
Tidewater, Inc. 6,400 149
Time Warner, Inc. 19,100 671
The Times Mirror Co. Class A 6,200 187
* Tokos Medical 12,400 51
* Toll Brothers, Inc. 7,200 92
The Topps Co., Inc. 7,800 56
Torchmark Corp. 3,700 144
The Toro Co. 3,100 74
Total System Services, Inc. 3,500 71
Town & Country Trust 3,000 55
* Toys R Us, Inc. 14,400 472
Transamerica Corp. 3,800 198
Transatlantic Holdings 2,400 125
Transco Energy Co. 6,400 104
Travelers Inc. 16,267 525
Tredgar Industries 4,600 67
* Triarc Cos. Inc. 2,000 33
The Tribune Co. 3,200 170
Trinity Industries, Inc. 2,850 100
* Triquint Semiconductor, Inc. 4,200 23
* Triton Energy Corp. 2,500 83
Turner Broadcasting Class B 9,300 162
20th Century Industries of Cal. 2,600 44
Tyco International Ltd. 2,500 114
Tyson Foods, Inc. 7,100 166
* UAL Corp. 1,300 164
* UNR Industries, Inc. 11,100 60
UNUM Corp. 3,800 170
* USA Waste Service 6,800 79
USF&G Corp. 4,000 49
* USG Corp. 2,200 40
USLICO Corp. 4,600 85
UST, Inc. 10,600 288
USX Delphi Group 3,200 46
USX-Marathon Group 13,500 226
USX-U.S. Steel Group 3,500 119
Unifi, Inc. 3,200 75
Union Bank of San Francisco 4,100 121
Union Camp Corp. 3,500 159
Union Carbide Corp. 7,500 201
</TABLE>
15
<PAGE> 16
STATEMENT OF NET ASSETS (continued)
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Union Electric Corp. 5,000 $ 159
Union Pacific Corp. 10,100 572
Union Texas Petroleum Holdings 3,700 66
* Unisys Corp. 8,700 80
* United Healthcare Corp. 9,276 426
United Illuminating Co. 2,300 76
United Jersey Bank Financial Corp. 2,500 69
U.S. Bancorp 4,700 122
* U.S. Bioscience 10,100 68
U.S. Healthcare, Inc. 8,100 301
U.S. West Corp. 22,100 925
* United States Can Co. 5,800 106
* United States Cellular 2,400 60
United States Surgical Corp. 2,800 62
United States Trust Corp. 1,500 76
United Technologies Corp. 6,100 392
* United Television, Inc. 1,987 96
Unitrin Inc. 2,500 100
* Unitrode Corp. 6,300 98
Universal Foods Corp. 2,300 73
Unocal Corp. 11,900 341
Upjohn Co. 8,200 239
USLIFE Corp. 2,800 99
Utilicorp United, Inc. 3,000 86
VF Corp. 3,300 157
* Valhi, Inc. 14,500 74
* Valence Technology 5,500 21
Valero Energy Corp. 5,800 101
* Value City Department Stores, Inc. 5,200 70
* Value Health, Inc. 3,080 118
Value Line, Inc. 2,600 86
* Varity Corp. 2,200 80
* Vencor, Inc. 2,200 76
* Ventritex Inc. 2,800 52
* Vertex Industries, Inc. 6,700 13
* Vestar, Inc. 12,400 74
* Viacom International Class B 5,700 180
Victoria Bank 2,200 59
* Video Lottery 5,100 55
Vigoro Corp. 1,600 45
* Vishay Intertechnology, Inc. 4,005 162
* Volt Information Sciences Inc. 700 12
* Vons Cos., Inc. 3,400 58
Vulcan Materials Co. 1,700 78
WD-40 Co. 1,300 52
WMX Technologies Inc. 23,800 631
* Waban, Inc. 6,000 100
Wabash National Corp. 1,700 76
Wachovia Corp. 8,600 285
* Wainwright Bank & Trust Co. 4,800 20
Wal-Mart Stores, Inc. 115,600 2,803
Walbro Corp. 2,400 54
Walgreen Co. 6,300 230
* Walker Interactive 7,200 60
* Wall Data Inc. 2,200 86
Warner-Lambert Co. 6,900 455
Washington Federal Savings & Loan Assn. 4,213 92
Washington Gas Light Corp. 2,800 106
Seattle (WA) Mutual Savings Bank 2,800 58
Washington National Corp. 2,100 45
Washington Post Co. Class B 600 139
Washington Real Estate Investment Trust 3,100 60
Wausau Paper Mills Co. 3,554 84
Waverly, Inc. 3,000 57
Weingarten Realty Investors 2,600 99
* Weirton Steel 6,600 55
Weis Markets, Inc. 1,600 40
* Wellfleet Communications 2,800 70
* Wellpoint Health Networks, Inc.
Class A 5,000 147
Wells Fargo & Co. 2,800 421
Wendys International, Inc. 5,200 81
Werner Enterprises, Inc. 3,700 104
West One Bancorp 4,500 129
* Western Atlas Inc. 2,100 100
* Western Co. of North America 5,700 72
Western Resources, Inc. 3,100 83
* Westinghouse Electric Corp. 17,800 207
Westvaco Corp. 3,500 108
* Wet Seal, Inc., Class A 9,800 29
Weyerhaeuser Co. 10,100 404
* Wheelabrator Technologies 9,300 173
* Wheeling Pittsburgh Corp. 6,000 105
Whirlpool Corp. 3,400 178
Whitman Corp. 5,000 77
* Whitney Holdings 4,575 120
Willamette Industries, Inc. 2,600 112
Williams Cos., Inc. 4,900 140
* Clayton Williams Energy, Inc. 5,700 39
Wilmington Trust Corp. 2,900 78
Winn Dixie Stores, Inc. 3,700 159
* Winston Furniture Co. Inc. 6,700 58
Winter Sports Inc. 3,224 60
Wisconsin Energy Corp. 5,100 122
Wisconsin Public Service Corp. 3,600 102
Wiser Oil Co. 1,500 24
* Witco Chemical Corp. 2,600 77
Woolworth Corp. 6,500 103
* Worthington Industries, Inc. 4,050 75
Wm. Wrigley, Jr. Co. 6,000 285
Wyle Laboratories 4,500 75
Xerox Corp. 5,300 518
* York International Corp. 1,900 70
</TABLE>
16
<PAGE> 17
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
York Research Corp. 14,100 $ 51
* Zilog Inc. 2,400 78
- - ------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS (Cost $228,418) 225,955
- - ------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS (27.0%)
- - ------------------------------------------------------------------------------------------------------------
<CAPTION>
Face
Amount
(000)
<S> <C> <C>
U.S. GOVERNMENT SECURITIES (13.8%)
U.S. Treasury Bonds
8.125%, 8/15/19-5/15/21 $ 8,355 8,686
8.50%, 2/15/20 3,080 3,330
8.875%, 8/15/17-2/15/19 3,950 4,419
10.375%, 11/15/12 475 581
13.875%, 5/15/11 200 298
14.00%, 11/15/11 3,965 5,996
U.S. Treasury Notes
6.25%, 2/15/03 3,015 2,811
6.375%, 1/15/99-8/15/02 2,025 1,951
7.00%, 4/15/99 3,055 3,063
7.375%, 5/15/96 1,500 1,533
7.50%, 1/31/96-5/15/02 2,250 2,289
7.75%, 2/15/01 1,200 1,237
7.875%, 2/15/96-8/15/01 4,680 4,842
8.00%, 8/15/99-5/15/01 460 480
8.375%, 4/15/95 550 562
8.50%, 8/15/95-5/15/97 950 986
8.625%, 10/15/95-8/15/97 1,950 2,040
8.75%, 8/15/00 1,000 1,082
8.875%, 7/15/95-2/15/99 4,375 4,622
9.00%, 5/15/98 575 618
9.25%, 1/15/96-8/15/98 1,130 1,196
--------
GROUP TOTAL 52,622
--------
- - ------------------------------------------------------------------------------------------------------------
MORTGAGE OBLIGATIONS (13.2%)
Federal Home Loan Mortgage Corp.
5.50%, 9/1/98-1/1/09 398 374
6.00%, 7/1/98-1/1/24 1,579 1,464
6.50%, 1/1/98-5/1/24 3,544 3,299
7.00%, 2/1/97-6/1/24 3,606 3,431
7.50%, 9/1/97-3/1/24 2,366 2,307
8.00%, 7/1/97-6/1/23 1,780 1,773
8.50%, 3/1/96-11/1/23 823 834
9.00%, 1/1/05-8/1/22 951 981
9.50%, 8/1/03-12/1/22 653 685
10.00%, 3/1/17-4/1/20 321 341
Federal National Mortgage Association
4.95%, 9/30/98 1,250 1,155
5.30%, 3/11/98 1,000 946
5.35%, 8/12/98 1,250 1,173
5.50%, 1/1/01-11/1/08 200 183
6.00%, 12/1/00-1/1/24 1,418 1,301
6.50%, 3/1/00-5/1/24 3,370 3,111
7.00%, 5/1/00-5/1/24 5,395 5,120
7.50%, 4/1/99-12/1/23 2,510 2,443
8.00%, 5/1/99-4/1/23 2,226 2,212
8.50%, 6/1/06-12/1/22 1,055 1,066
8.625%, 10/18/21 100 108
9.00%, 4/1/98-2/1/23 848 876
9.50%, 4/1/05-5/1/22 804 845
10.00%, 7/1/05-8/1/21 367 391
10.50%, 8/1/20 81 88
Government National Mortgage Association
6.00%, 3/15/09-1/15/24 304 267
6.50%, 9/15/08-5/15/24 1,240 1,113
7.00%, 5/15/08-3/15/24 2,863 2,663
7.50%, 5/15/08-6/15/24 2,332 2,235
8.00%, 4/15/02-7/15/23 2,175 2,151
8.50%, 7/15/01-6/15/23 1,063 1,075
9.00%, 2/15/04-7/15/22 1,844 1,906
9.50%, 9/15/18-8/15/21 1,043 1,097
10.00%, 10/15/17-12/15/20 830 888
10.50%, 9/15/15 81 88
11.00%, 7/15/13-12/15/15 190 209
12.00%, 2/15/14 138 153
--------
GROUP TOTAL 50,352
--------
- - ------------------------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS (Cost $ 108,382) 102,974
- - ------------------------------------------------------------------------------------------------------------
CORPORATE BONDS (12.1%)
- - ------------------------------------------------------------------------------------------------------------
ASSET-BACKED (2.0%)
Chase Manhattan Credit Card Trust
7.40%, 5/15/00 550 557
8.75%, 8/15/99 550 570
First Chicago Master Trust
6.25%, 8/15/97 850 833
8.40%, 6/15/98 850 876
MBNA Master Credit Card Trust
6.20%, 8/31/97 850 832
7.75%, 10/15/98 550 558
Sears Credit Account Master Trust
5.90%, 11/15/98 550 548
7.75%, 9/15/98 550 558
Standard Credit Card Trust
8.00%, 10/7/97 850 872
8.50%, 8/7/97 850 878
9.375%, 8/10/96 550 566
--------
GROUP TOTAL 7,648
--------
- - ------------------------------------------------------------------------------------------------------------
FINANCE (5.5%)
American Express Credit Corp.
8.50%, 6/15/99 175 182
American General Finance Corp.
7.45%, 7/1/02 175 170
9.25%, 7/1/94 400 400
</TABLE>
17
<PAGE> 18
STATEMENT OF NET ASSETS (continued)
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Associates Corp.
5.875%, 8/15/97 $ 500 $ 483
6.875%, 1/15/97 300 300
8.75%, 9/4/96 400 415
9.70%, 5/1/97 250 267
AVCO Financial Services
5.50%, 5/1/98 500 471
7.50%, 11/15/96 300 305
8.85%, 2/1/96 500 518
BankAmerica Corp.
6.00%, 7/15/97 500 486
10.00%, 2/1/03 200 222
Bankers Trust New York Corp.
4.70%, 7/1/96 500 483
8.25%, 7/2/96 600 618
Bear Stearns Cos., Inc.
6.625%, 1/15/04 400 350
Beneficial Corp.
9.125%, 2/15/98 400 424
CIT Group Holdings
5.65%, 11/15/95 525 522
8.60%, 12/1/94 400 405
Chase Manhattan Corp.
7.875%, 1/15/97 300 305
8.50%, 3/1/96 850 875
Chemical Bank Corp.
6.625%, 1/15/98 350 343
7.375%, 6/15/97 500 505
Chrysler Finance Corp.
5.375%, 10/15/98 500 466
Commercial Credit Corp.
6.75%, 1/15/97 650 649
7.375%, 11/15/96 500 506
Countrywide Funding
7.31%, 8/28/00 400 388
Dean Witter Discover & Co.
6.00%, 3/1/98 1,250 1,198
Ford Motor Credit Corp.
6.25%, 2/26/98 500 483
7.875%, 1/15/97 600 613
8.25%, 7/15/96 400 411
Household Finance Corp.
9.25%, 2/15/95 550 562
International Lease Finance
7.90%, 10/1/96 1,150 1,175
Mellon Financial Corp.
6.125%, 11/15/95 600 599
6.50%, 12/1/97 200 196
7.625%, 11/15/99 350 350
Merrill Lynch & Co., Inc.
7.25%, 5/15/97 500 502
8.30%, 11/1/02 125 127
9.00%, 5/1/98 250 263
Morgan Stanley Group, Inc.
7.32%, 1/15/97 750 755
9.25%, 3/1/98 225 239
NCNB Corp.
9.50%, 6/1/04 275 300
NationsBank
5.375%, 12/1/95 500 494
Norwest Financial Inc.
7.10%, 11/15/96 600 605
PaineWebber Group Inc.
7.00%, 3/1/00 550 522
Transamerica Financial Corp.
8.375%, 2/15/98 425 439
--------
GROUP TOTAL 20,891
--------
- - ------------------------------------------------------------------------------------------------------------
INDUSTRIAL(2.7%)
American Brands, Inc.
7.875%, 1/15/23 100 93
Anheuser-Busch Co., Inc.
7.375%, 7/1/23 125 111
8.625%, 12/1/16 200 212
Archer-Daniels-Midland Co.
8.875%, 4/15/11 295 316
Auburn Hills Trust
12.375%, 5/1/20 175 235
BP America, Inc.
7.875%, 5/15/02 250 252
The Boeing Co.
8.375%, 3/1/96 550 567
CSX Corp.
8.25%, 11/1/96 450 463
8.40%, 8/1/96 525 541
8.625%, 5/15/22 100 102
Conrail Corp.
9.75%, 6/15/20 120 136
Deere & Co.
8.50%, 1/9/22 175 177
Eastman Chemical
7.25%, 1/15/24 325 277
Ford Capital BV
9.00%, 6/1/96 276 286
9.00%, 8/15/98 600 631
9.50%, 6/1/10 100 110
Ford Motor Corp.
9.95%, 2/15/32 100 115
Grand Metropolitan Investment Corp.
9.00%, 8/15/11 250 265
ITT Corp.
7.25%, 11/15/96 600 604
8.875%, 2/1/08 100 105
International Paper Co.
7.625%, 1/15/07 100 96
</TABLE>
18
<PAGE> 19
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
May Department Stores Co.
9.75%, 5/15/06 $ 120 $ 133
McDonald's Corp.
6.75%, 2/15/03 300 280
Mobil Corp.
7.625%, 2/23/33 325 297
J.C. Penney Co., Inc.
7.125%, 11/15/23 150 130
9.05%, 3/1/01 300 321
PepsiCo, Inc.
5.00%, 2/24/97 1,000 958
6.125%, 1/15/98 250 242
Philip Morris Co.
8.25%, 10/15/03 200 197
Texaco Capital Corp.
7.50%, 3/1/43 150 134
8.875%, 9/1/21 100 106
Union Carbide Corp.
7.875%, 4/1/23 150 136
Union Oil of California
9.125%, 2/15/06 160 170
9.25%, 2/1/03 175 187
Union Pacific Corp.
8.625%, 5/15/22 225 229
Wal-Mart Stores, Inc.
8.00%, 5/1/96 275 282
Waste Management Inc.
7.875%, 8/15/96 300 307
Whirlpool Corp.
9.00%, 3/1/03 200 210
Xerox Corp.
9.625%, 10/15/00 350 363
--------
GROUP TOTAL 10,376
--------
- - ------------------------------------------------------------------------------------------------------------
UTILITIES (1.9%)
Alabama Power Co.
8.75%, 12/1/21 168 167
Arizona Public Service Co.
8.00%, 2/1/25 225 209
Carolina Power & Light Co.
6.875%, 8/15/23 275 230
Connecticut Power and Light Co.
7.625%, 4/1/97 500 503
Consolidated Edison Co. of New York, Inc.
6.625%, 2/1/02 1,000 938
Enron Corp.
9.65%, 5/15/01 400 440
Georgia Power Co.
9.23%, 12/1/19 175 178
Houston Lighting and Power Co.
8.75%, 3/1/22 150 152
MCI Communications Corp.
7.50%, 8/20/04 450 437
Michigan Bell Telephone Co.
7.50%, 2/15/23 275 253
New York Telephone Co.
7.00%, 8/15/25 200 167
Pacific Bell Corp.
7.25%, 7/1/02 275 269
Southern Bell Corp.
7.625%, 3/15/13 550 514
Southwestern Bell Corp.
7.625%, 10/1/13 175 161
7.625%, 3/1/23 475 442
Texas Utilities Electric Co.
7.125%, 6/1/97 400 400
7.875%, 3/1/23 325 298
8.125%, 2/1/02 400 403
Union Electric Corp.
7.65%, 7/15/03 250 247
U.S. West Financial
8.85%, 9/20/99 500 526
Virginia Electric Power Co.
6.625%, 4/1/03 250 232
--------
GROUP TOTAL 7,166
--------
- - ------------------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS (Cost $48,374) 46,081
- - ------------------------------------------------------------------------------------------------------------
FOREIGN AND INTERNATIONAL AGENCY BONDS (1.0%)
- - ------------------------------------------------------------------------------------------------------------
Province of Alberta
9.25%, 4/1/00 475 514
Province of British Columbia
7.00%, 1/15/03 230 220
British Columbia Hydro
12.50%, 9/1/13 500 606
European Investment Bank
8.875%, 3/1/01 275 296
Inter American Development Bank
8.50%, 3/15/11 175 186
International Bank for Reconstruction & Development
12.375%, 10/15/02 225 290
Province of Manitoba
7.75%, 2/1/02 625 628
9.25%, 4/1/20 130 138
9.50%, 10/1/00 160 175
New Zealand Government
9.875%, 1/15/11 275 316
</TABLE>
19
<PAGE> 20
STATEMENT OF NET ASSETS (continued)
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- - -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Province of Ontario-Global
7.375%, 1/27/03 $ 175 $ 169
7.75%, 6/4/02 275 274
- - -----------------------------------------------------------------------------------------------------------
TOTAL FOREIGN AND INTERNATIONAL AGENCY BONDS (Cost $4,079) 3,812
- - -----------------------------------------------------------------------------------------------------------
TEMPORARY CASH INVESTMENTS (.3%)
- - -----------------------------------------------------------------------------------------------------------
U.S. TREASURY BILL--Note D
4.26%, 9/22/94 200 198
REPURCHASE AGREEMENT
Collateralized by U.S. Government
Obligations in a Pooled Cash
Account 4.26%, 7/1/94 1,135 1,135
- - -----------------------------------------------------------------------------------------------------------
TOTAL TEMPORARY CASH INVESTMENTS (Cost $1,333) 1,333
- - -----------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (99.6%) (Cost $390,586) 380,155
- - -----------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (.4%)
Other Assets--Note B 6,840
Liabilities (5,429)
--------
1,411
- - -----------------------------------------------------------------------------------------------------------
NET ASSETS (100%)
- - ------------------------------------------------------------------------------------------------------------
Applicable to 37,153,463 outstanding
$.001 par value shares (authorized 1,000,000,000 shares) $381,566
- - -----------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $10.27
===========================================================================================================
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security.
<TABLE>
- - -----------------------------------------------------------------------------------------------------------
AT JUNE 30, 1994, NET ASSETS CONSISTED OF:
- - -----------------------------------------------------------------------------------------------------------
<CAPTION>
Amount Per
(000) Share
-------- ------
<S> <C> <C>
Paid in Capital $391,124 $10.53
Undistributed Net Investment Income 1,323 .03
Unrealized Depreciation of Investments--Note D (10,487) (.28)
- - -----------------------------------------------------------------------------------------------------------
NET ASSETS $381,566 $10.27
- - -----------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE> 21
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1994
(000)
- - --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
INCOME
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,819
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,633
- - --------------------------------------------------------------------------------------------------------------------------------
Total Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,452
- - --------------------------------------------------------------------------------------------------------------------------------
EXPENSES
The Vanguard Group--Note B
Investment Advisory Services . . . . . . . . . . . . . . . . . . . . . . . . . . $ 53
Management and Administrative . . . . . . . . . . . . . . . . . . . . . . . . . . 177
Marketing and Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 280
-----
Taxes (other than income taxes)--Note A . . . . . . . . . . . . . . . . . . . . . . . 15
Custodian's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Auditing Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Shareholders' Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Annual Meeting and Proxy Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Directors' Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
- - --------------------------------------------------------------------------------------------------------------------------------
Total Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385
- - --------------------------------------------------------------------------------------------------------------------------------
Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,067
- - --------------------------------------------------------------------------------------------------------------------------------
REALIZED NET GAIN (LOSS)
Investment Securities Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (451)
Futures Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
- - --------------------------------------------------------------------------------------------------------------------------------
Realized Net Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (411)
- - --------------------------------------------------------------------------------------------------------------------------------
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)
Investment Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (24,204)
Futures Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (79)
- - --------------------------------------------------------------------------------------------------------------------------------
Change in Unrealized Appreciation (Depreciation) . . . . . . . . . . . . . . . (24,283)
- - --------------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Operations . . . . . . . . . . . . . $(17,627)
================================================================================================================================
</TABLE>
21
<PAGE> 22
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED Year Ended
JUNE 30, 1994 December 31, 1993
(000) (000)
- - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS
Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,067 $ 9,034
Realized Net Gain (Loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (411) 978
Change in Unrealized Appreciation (Depreciation) . . . . . . . . . . . . . . . . . . . . (24,283) 11,527
- - ---------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . . . . . (17,627) 21,539
- - ---------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS (1)
Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,875) (10,617)
Realized Net Gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (984)
- - ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,875) (11,601)
- - ---------------------------------------------------------------------------------------------------------------------------------
NET EQUALIZATION CREDITS--Note A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 1,565
- - ---------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (2)
Issued -- Regular . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,208 218,784
-- In Lieu of Cash Distributions . . . . . . . . . . . . . . . . . . . . . . . 5,455 10,685
-- Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,456 79,255
Redeemed -- Regular . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (24,045) (17,540)
-- Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28,174) (44,153)
- - ---------------------------------------------------------------------------------------------------------------------------------
Net Increase from Capital Share Transactions . . . . . . . . . . . . . . . . . . . . . 37,900 247,031
- - ---------------------------------------------------------------------------------------------------------------------------------
Total Increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,509 258,534
- - ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367,057 108,523
- - ---------------------------------------------------------------------------------------------------------------------------------
End of Period (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $381,566 $367,057
=================================================================================================================================
(1) Distributions Per Share
Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .16 $ .39
Realized Net Gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- $ .03
- - ---------------------------------------------------------------------------------------------------------------------------------
(2) Shares Issued and Redeemed
Issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,879 27,900
Issued in Lieu of Cash Distributions . . . . . . . . . . . . . . . . . . . . . . 515 991
Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,899) (5,762)
- - ---------------------------------------------------------------------------------------------------------------------------------
3,495 23,129
- - ---------------------------------------------------------------------------------------------------------------------------------
(3) Undistributed Net Investment Income $ 1,323 $ 20
- - ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE> 23
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS ENDED Year Ended September 28-
For a Share Outstanding Throughout Each Period JUNE 30, 1994 December 31, 1993 December 31, 1992
- - ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD . . . . . . . . . . . . $10.91 $10.31 $10.00
------ ------ ------
INVESTMENT OPERATIONS
Net Investment Income . . . . . . . . . . . . . . . . . . .19 .39 .08
Net Realized and Unrealized Gain (Loss) on Investments . . (.67) .63 .31
------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . . . . (.48) 1.02 .39
- - ----------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income . . . . . . . . . . . (.16) (.39) (.08)
Distributions from Realized Capital Gains . . . . . . . . . -- (.03) --
------ ------ ------
TOTAL DISTRIBUTIONS . . . . . . . . . . . . . . . (.16) (.42) (.08)
- - ----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD . . . . . . . . . . . . . . . $10.27 $10.91 $10.31
============================================================================================================================
TOTAL RETURN** . . . . . . . . . . . . . . . . . . . . . . . -4.44% +10.00% +3.69%
- - ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- - ------------------------
Net Assets, End of Period (Millions) . . . . . . . . . . . . $382 $367 $109
Ratio of Expenses to Average Net Assets . . . . . . . . . . . .20%* .20% .22%*
Ratio of Net Investment Income to Average Net Assets . . . . 3.67%* 3.53% 3.76%*
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . 18%* 25% 17%
- - ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
** Total return figures do not reflect the annual account maintenance fee
of $10. Subscription period for portfolio was from September 28, 1992, to
November 8, 1992, during which time all assests were held in money market
instruments. Performance measurement begins on November 9, 1992.
23
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS
Vanguard Balanced Index Fund is registered under the Investment Company Act of
1940 as a diversified open-end investment company. Certain of the Fund's
investments are in long-term corporate debt instruments. The issuers' abilities
to meet these obligations may be affected by economic developments in their
respective industries.
* A. The following significant accounting policies are in
conformity with generally accepted accounting principles for investment
companies. Such policies are consistently followed by the Fund in the
preparation of financial statements.
1. SECURITY VALUATION: Securities listed on an exchange are valued at the
latest quoted sales prices as of 4:00 PM on the valuation date;
securities not traded on the valuation date and securities not listed
are valued at the mean of the latest quoted bid and asked prices.
Bonds are valued utilizing the latest bid prices and on the basis of
a matrix system (which considers such factors as security prices,
yields, maturities and ratings), both as furnished by independent
pricing services. Temporary cash investments are valued at amortized
cost which approximates market value.
2. FEDERAL INCOME TAXES: The Fund intends to continue to qualify as a
regulated investment company and distribute all of its taxable income.
Accordingly, no provision for Federal income taxes is required in the
financial statements.
3. EQUALIZATION: The Fund follows the accounting practice known as
"equalization," under which a portion of the price of capital shares
issued and redeemed, equivalent to undistributed net investment income
per share on the date of the transaction, is credited or charged to
undistributed income. As a result, undistributed income per share is
unaffected by Fund share sales or redemptions.
4. REPURCHASE AGREEMENTS: The Fund, along with other members of the
Vanguard Group of Investment Companies, transfers uninvested cash
balances into a Pooled Cash Account, the daily aggregate of which is
invested in repurchase agreements secured by U.S. Government
obligations. Securities pledged as collateral for repurchase
agreements are held by the Fund's custodian bank until maturity of
each repurchase agreement. Provisions of the agreement ensure that the
market value of this collateral is sufficient in the event of default;
however, in the event of default or bankruptcy by the other party to
the agreement, realization and/or retention of the collateral may be
subject to legal proceedings.
5. FUTURES: The Fund utilizes futures contracts to a limited extent. The
primary risks associated with the use of futures contracts are
imperfect correlation between the change in market value of the
securities held by the Fund and the prices of futures contracts, and
the possibility of an illiquid market. Futures contracts are valued
based upon their quoted daily settlement prices. Fluctuations in the
value of futures contracts are recorded as unrealized appreciation
(depreciation) until terminated, at which time realized gains (losses)
are recognized. Unrealized appreciation (depreciation) related to open
futures contracts is required to be treated as realized gain (loss) for
tax purposes.
6. OTHER: Security transactions are accounted for on the date the
securities are purchased or sold. Costs used in determining realized
gains and losses on the sale of investment securities are those of
specific securities sold. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Discounts and
premiums on debt securities purchased are amortized to interest income
over the lives of the respective securities.
24
<PAGE> 25
* B. The Vanguard Group, Inc. furnishes at cost investment
advisory, corporate management, administrative, marketing and distribution
services. The costs of such services are allocated to the Fund under methods
approved by the Board of Directors. At June 30, 1994, the Fund had contributed
capital of $61,000 to Vanguard (included in Other Assets), representing .3% of
Vanguard's capitalization. The Fund's directors and officers are also directors
and officers of Vanguard.
* C. During the six months ended June 30, 1994, the Fund made
purchases of $38,187,000 and sales of $5,549,000 of investment securities other
than U.S. Government securities and temporary cash investments. Purchases and
sales of U.S. Government securities were $44,152,000 and $28,044,000,
respectively.
* D. At June 30, 1994, unrealized depreciation of investment
securities for financial reporting and Federal income tax purposes was
$10,431,000 of which $17,614,000 related to appreciated securities and
$28,045,000 related to depreciated securities.
At June 30, 1994, the aggregate settlement value of open Standard & Poor's 500
Index futures contracts and Standard & Poor's Midcap 400 Index futures
contracts expiring in September 1994, the related unrealized depreciation, and
the market value of securities deposited as initial margin for those contracts
were $1,303,000, $56,000, and $198,000, respectively.
25
<PAGE> 26
DIRECTORS AND OFFICERS
JOHN C. BOGLE, Chairman and Chief Executive Officer
Chairman and Director of The Vanguard Group, Inc., and of each of the
investment companies in The Vanguard Group.
JOHN J. BRENNAN, President
President and Director of The Vanguard Group, Inc.,
and of each of the investment companies in The Vanguard Group.
ROBERT E. CAWTHORN, Chairman and Chief Executive Officer of Rhone-Poulenc Rorer
Inc.; Director of Sun Company, Inc. and Immune Response Corporation; Trustee of
the Universal Health Realty Income Trust.
BARBARA BARNES HAUPTFUHRER, Director of The Great Atlantic and Pacific Tea
Company, Alco Standard Corp., Raytheon Company, Knight-Ridder, Inc., and
Massachusetts Mutual Life Insurance Co.
BRUCE K. MACLAURY, President of The Brookings Institution; Director of Dayton
Hudson Corporation, American Express Bank Ltd., The St. Paul Companies, Inc.,
and Scott Paper Company.
BURTON G. MALKIEL, Chemical Bank Chairman's Professor of Economics, Princeton
University; Director of Prudential Insurance Co. of America, Amdahl
Corporation, Baker Fentress & Co., and The Southern New England Telephone
Company.
ALFRED M. RANKIN, JR., President and Chief Executive Officer of NACCO
Industries, Inc.; Director of NACCO Industries, The BFGoodrich Company, and The
Standard Products Company.
JOHN C. SAWHILL, President and Chief Executive Officer of The Nature
Conservancy; formerly, Director and Senior Partner of McKinsey & Co. and
President of New York University; Director of Pacific Gas and Electric Company
and NACCO Industries.
JAMES O. WELCH, JR., Retired Chairman of Nabisco Brands, Inc.; retired Vice
Chairman and Director of RJR Nabisco; Director of TECO Energy, Inc.
J. LAWRENCE WILSON, Chairman and Chief Executive Officer of Rohm & Haas
Company; Director of Cummins Engine Company; Trustee of Vanderbilt University
and the Culver Educational Foundation.
26
<PAGE> 27
OTHER FUND OFFICERS
RICHARD F. HYLAND, Treasurer; Treasurer of The Vanguard Group, Inc., and of
each of the investment companies in The Vanguard Group.
RAYMOND J. KLAPINSKY, Secretary; Senior Vice President and Secretary of The
Vanguard Group, Inc.; Secretary of each of the investment companies in The
Vanguard Group.
KAREN E. WEST, Controller; Vice President of The Vanguard Group, Inc.;
Controller of each of the investment companies in The Vanguard Group.
OTHER VANGUARD GROUP OFFICERS
JEREMY G. DUFFIELD
Senior Vice President
Planning & Development
JAMES H. GATELY
Senior Vice President
Institutional
IAN A. MACKINNON
Senior Vice President
Fixed Income Group
VINCENT S. MCCORMACK
Senior Vice President
Operations
RALPH K. PACKARD
Senior Vice President
Chief Financial Officer
27
<PAGE> 28
THE VANGUARD FAMILY OF FUNDS
MONEY MARKET FUNDS
Vanguard Money Market Reserves
TAX-EXEMPT MONEY MARKET FUNDS
Vanguard Municipal Bond Fund-Money Market Portfolio
Vanguard State Tax-Free Funds (CA, NJ, OH, PA)
TAX-EXEMPT INCOME FUNDS
Vanguard Municipal Bond Fund
Vanguard State Tax-Free Funds (CA, FL, NJ, NY, OH, PA)
FIXED INCOME FUNDS
Vanguard Admiral Funds
Vanguard Bond Index Fund
Vanguard Fixed Income Securities Fund
Vanguard Preferred Stock Fund
BALANCED FUNDS
Vanguard Asset Allocation Fund
Vanguard Balanced Index Fund
Vanguard STAR Fund
Vanguard/Wellesley Income Fund
Vanguard/Wellington Fund
EQUITY FUNDS
GROWTH AND INCOME FUNDS
Vanguard Convertible Securities Fund
Vanguard Equity Income Fund
Vanguard Index Trust
Vanguard Quantitative Portfolios
Vanguard/Trustees' Equity Fund-U.S. Portfolio
Vanguard/Windsor Fund
Vanguard/Windsor II
GROWTH FUNDS
Vanguard/Morgan Growth Fund
Vanguard/PRIMECAP Fund
Vanguard U.S. Growth Portfolio
AGGRESSIVE GROWTH FUNDS
Vanguard Explorer Fund
Vanguard Specialized Portfolios
INTERNATIONAL FUNDS
Vanguard International Equity Index Fund
Vanguard International Growth Portfolio
Vanguard/Trustees' Equity Fund-International Portfolio
The Vanguard Group * Vanguard Financial Center
Valley Forge, PA 19482
New Account Information: 1-(800) 662-7447
Shareholder Account Services: 1-(800) 662-2739
This Report has been prepared for shareholders and
may be distributed to others only if preceded or
accompanied by a current prospectus. All Funds in the
Vanguard Family are offered by prospectus only.
Q022-06/94
VANGUARD
BALANCED INDEX
FUND
[PHOTO -- SEE EDGAR APPENDIX]
Semi-Annual Report
June 30, 1994
<PAGE> 29
EDGAR APPENDIX
The back cover of the printed version of this report features the
flags of the United States of America and Vanguard flying from a halyard.
|
|