<PAGE> 1
VANGUARD
BALANCED
INDEX FUND
ANNUAL REPORT 1994
THE VANGUARD VOYAGE . . . STAYING THE COURSE
<PAGE> 2
THE VANGUARD VOYAGE . . . STAYING THE COURSE
WE ARE PRESENTLY OBSERVING TWO MILESTONES IN OUR HISTORY: (1) THE 20TH
ANNIVERSARY OF THE VANGUARD GROUP; AND (2) THE 65TH ANNIVERSARY YEAR OF
WELLINGTON FUND, THE OLDEST MUTUAL FUND ASSOCIATED WITH VANGUARD. WE CELEBRATE
THESE TWO EVENTS SINCE THEY HAVE INDELIBLY ALTERED THE MUTUAL FUND INDUSTRY--IN
OUR VIEW, FOR THE BETTER.
Wellington Fund--a pioneer in the mutual fund industry--began operations on
June 30, 1929. Its first fifteen years were a struggle for survival in an
industry that was shaken to its roots by the Great Crash of 1929-1933. From an
initial base of $100,000, Wellington's assets had grown to but $27 million by
the end of World War II. The Vanguard Group was founded on September 24, 1974.
Soon thereafter, we assumed responsibility for the management of Wellington
Fund and ten associated funds, with assets aggregating $1.4 billion.
The years that followed the founding of The Vanguard Group were marked by
exceptional growth. Today, Wellington Fund, with assets of nearly $9 billion,
remains one of the largest mutual funds in the nation. And Vanguard, now
managing 85 mutual fund portfolios, is entrusted with assets of $134 billion,
and ranks as the second largest fund complex in the world.
Our durability in an era of change--and our longevity in an era of
challenge--didn't "just happen." What brought us to where we are today is what
we were when we began. Put another way, we set our original investment course
based on sound principles, and our corporate course based on a single focus:
serving solely the interests of our Fund shareholders.
FOUNDING INVESTMENT PRINCIPLES
The founding investment principles of Wellington Fund were, above all,
conservative. The Fund provided a broadly diversified portfolio at a time when
holding individual securities was the conventional strategy. It incurred no
debt in an era of high leverage that would soon come back to haunt less
cautious investors. And it was a "balanced" fund--in fact, Wellington is
America's oldest balanced fund--with holdings from each of the three basic
financial asset classes: cash reserves, bonds, and common stocks. In short,
Wellington Fund was a staid investment in an era of stock speculation that was
to become, almost within moments, an era of conservatism.
For Vanguard, these investment principles endure. "Balance" is still our
watchword, because the three basic financial asset classes have different--and
usually countervailing--investment characteristics. When it began, Wellington
Fund provided a balanced program in a single investment; in 1994, such a
balance is often achieved by a combination of Vanguard money market, bond, and
stock funds.
"Conservatism," too, remains our standard. Over the years, we have tried
to maintain the discipline to eschew offering funds that lack sound financial
principles, often based on marketplace fads that could not--and did
not--endure. Our conservatism applies not only to the funds we offer, but to
the instruments in which they invest. For example, we have steered clear of
exotic derivative securities with unpredictable investment characteristics. Too
many fund managers have been taken in by these highly risky instruments, and
their shareholders have paid a heavy price--except in cases where the manager
has "made the fund whole," when to do otherwise would have shocked investors
and impaired their confidence in the fund complex.
Speculation, it seems, comes and goes, albeit in different guises. But the
investment principles to which we have adhered since Wellington Fund began in
1929 remain firm:
* We offer Funds with sound and durable investment objectives, designed for
long-term investors.
(please turn to inside back cover)
VANGUARD BALANCED INDEX FUND SEEKS TO PROVIDE CONSERVATION OF PRINCIPAL,
REASONABLE CURRENT INCOME, AND PROFITS WITHOUT UNDUE RISK. THE FUND FOLLOWS A
"BALANCED" INVESTMENT STRATEGY, WITH 60% OF ITS ASSETS SEEKING TO REPLICATE THE
PERFORMANCE OF THE UNMANAGED WILSHIRE 5000 INDEX, AND 40% OF ITS ASSETS SEEKING
TO REPLICATE THE PERFORMANCE OF THE UNMANAGED LEHMAN AGGREGATE BOND INDEX.
<PAGE> 3
CHAIRMAN'S LETTER
FELLOW SHAREHOLDER:
The year ended December 31, 1994--Vanguard Balanced Index Fund's second full
year of operations--was a challenging period for financial assets. The bond
market took something of a drubbing, and most broad stock market indicators
ended the year just about where they began.
Considering this environment, Vanguard Balanced Index Fund gave a
reasonably good account of itself, as we pretty much "held our own" during the
year, with a total return (capital change plus income) of -1.6%. Thus, we
outpaced the average balanced mutual fund, which provided a return of -2.5%.
Equally importantly, the Fund tracked the results of its target
benchmark--the composite balanced index--within -0.4%, a nice improvement over
the prior year. As you know, the composite balanced index is composed of two
unmanaged market indexes: the Wilshire 5000 Index (60% of the composite),
representing the entire U.S. stock market; and the Lehman Aggregate Bond Index
(40%), a good measure of the U.S. investment-grade bond market. This table
summarizes the results for the year:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
Total Return
------------------
Year Ended
December 31, 1994
- ---------------------------------------------------------------------
<S> <C>
VANGUARD BALANCED INDEX FUND -1.6%
- ---------------------------------------------------------------------
COMPOSITE BALANCED INDEX* -1.2%
- ---------------------------------------------------------------------
WILSHIRE 5000 STOCK INDEX -0.1%
LEHMAN AGGREGATE BOND INDEX -2.9
- ---------------------------------------------------------------------
</TABLE>
* 60% Wilshire Stock Index, 40% Lehman Aggregate Bond Index.
The total return for the Fund is based on the change in net asset value from
$10.91 per share on December 31, 1993, to $10.34 per share on December 31,
1994, with the latter figure adjusted to take into account the Fund's four
dividend distributions totaling $.40 per share from net investment income.
Based on the Fund's net asset value on December 31, 1994, its yield was 4.6%.
THE FINANCIAL MARKETS IN 1994
During the year, the stock market enjoyed four "ups" and endured four "downs."
A pattern of quarterly declines in the late weeks of March, June, and September
was broken when a November to mid-December decline was aborted by a solid
year-end rally, which recaptured most of the year's earlier lost ground. On
balance, the return of the Wilshire 5000 Index--a broad market indicator that
includes both small cap stocks and large cap stocks--just barely slipped into
negative territory (-0.1%). (The Standard & Poor's 500 Composite Stock Price
Index--which includes the more conservative large cap stocks--earned a positive
total return of +1.3%, as a modest price decline of -1.5% was more than offset
by dividend income.)
If the performance of the stock market was "so-so" during the year,
nothing that gentle could be said about the bond market. Yields on long-term
U.S. Treasury bonds rose sharply during the year, from 6.4% at the outset to
7.8% at the conclusion, and the Lehman Long-Term U.S. Treasury Bond Index
achieved a total return of -7.6% (-14.5% price decline, partially offset by
interest income of +6.9%). Yields on
[FIGURE 1]
1
<PAGE> 4
[FIGURE 2]
short-term and intermediate-term bonds also rose sharply; however, because of
their shorter maturities, price declines were smaller. For instance, the
Lehman Aggregate Bond Index, with an average maturity of about nine years,
turned in a total return of -2.9% (- 9.5% decline in price, partly offset by
interest income of +6.6%). This rising rate environment was surely a major
factor in dampening the returns on stocks of all stripes.
A primary cause of the interest rate rise was investor fears about a
resurgence of inflation. So far, at least, the U.S. Consumer Price Index gives
little evidence of it. The CPI has risen just 2.7% over the past twelve months,
although more sensitive indicators--such as commodity prices and producer
prices--have been rising at higher rates.
In an effort to quell inflationary fears, the Federal Reserve acted to
"tighten" the money supply in order to slow economic growth and rein in
potential future inflation. Fully six rate increases--in February, March,
April, May, August, and again in November--combined to raise the Federal funds
rate (at which banks borrow from one another) from 3.00% to 5.50%. Still, the
specter of inflation remains, and further rate increases may well lie in
prospect.
To add some perspective to the performance of the financial markets in
1994, the chart to the left compares the cumulative returns on stocks and bonds
during the past five years, using the results of the Wilshire 5000 Index and
the Lehman Aggregate Bond Index. It reflects the fact that during this
period--the first half of the decade of the 1990s--both investment classes
provided annual rates of return that were comparable (stocks +8.8%; bonds
+7.7%). As a result, balanced funds--which generally follow a policy of holding
about 60% of assets in stocks and 40% in bonds--gave a good account of
themselves during the period, all the while assuming a lower risk profile than
an all-stock portfolio.
THE FUND IN 1994
The Fund's -1.6% return during 1994 reflected the difficult conditions in the
financial markets. Indeed, in the light of the -1.2% return on the composite
balanced index, our negative result for the year can hardly be considered
surprising.
In last year's Annual Report, I noted that our ability to closely track
our target benchmark is impacted by several factors. All else being equal, we
would expect the Fund to exhibit an annual shortfall of about -0.2% to its
benchmark. This shortfall represents our operating expense ratio (expenses as a
percentage of average net assets) compared to an index, which operates in a
"paper world" and assumes that the normal costs of doing business do not exist.
The "real world," of course, is quite different, but we hold our operating
expenses to minimal levels, the better to limit the inevitable friction of
costs. Our 0.2% expense ratio is, as far as we know, the lowest of any balanced
fund offered to individual investors. It compares with an expense ratio of 1.2%
for the average balanced fund, resulting in an annual cost advantage for the
Fund of 1.0%.
Two other factors also affect our tracking ability. First, Vanguard
Balanced Index Fund incurs transaction costs. While we do our best to minimize
these costs, the continued strong cash flow into the Fund has resulted in
somewhat higher transaction
2
<PAGE> 5
costs than we would typically expect to incur. (I am pleased to note that such
costs are becoming less of a factor as the Fund's asset growth stabilizes.)
Second, there is always the possibility of "tracking error" resulting from
adjustments in the composition of our target indexes. Some tracking error also
arises because we hold a broad sample of the securities in both our stock and
bond indexes, "optimized" to reflect, as best we can, the characteristics of
each index. Our goal here is to mitigate the high transaction costs that would
occur were the Fund to hold all of the stocks that compose the Wilshire 5000
Index (or, for that matter, all of the 4,800 bonds that compose the Lehman
Aggregate Bond Index). This tracking error should not only be nominal, but
should be random in nature, sometimes marginally reducing our relative returns,
sometimes marginally enhancing them.
[FIGURE 3]
Average Annual Total Returns--Periods Ended December 31, 1994
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
1 Year Since Inception*
- -----------------------------------------------------------------------------------------
<S> <C> <C>
BALANCED INDEX FUND** -1.62% +4.57%
AVERAGE BALANCED FUND -2.50 +4.53
BALANCED INDEX -1.16 +5.27
WILSHIRE 5000 -0.06 +6.12
</TABLE>
* Inception: November 9, 1992. Performance begins November 30, 1992, to show
competitive data.
** Performance figures are adjusted for the $10 annual account maintenance fee.
Note: Past performance is not predictive of future performance.
The other basis for evaluating our record, of course, is how the Fund's
total return compared with the results of the average balanced fund with
investment policies similar to ours. The average balanced fund provided a
negative return of -2.5% in 1994, compared with the -1.6% return on our Fund.
So, I think it is fair to say that 1994 was a successful year relative to
competitors. While a margin of +0.9% may seem modest to a fault, our advantage
is more impressive when you consider that the Fund was--and always is--100%
invested in stocks and bonds during the year, while the managed balanced funds
held about 9% of their assets in cash reserves, which were the best-performing
major asset class in 1994.
A LONGER-TERM REVIEW
Considering that Vanguard Balanced Index Fund has been operating for just a
little more than two years, there is not much that can be said about our
"long-term" record. The chart to the left presents the Fund's lifetime results
compared to the unmanaged balanced index, the unmanaged Wilshire 5000 Index,
and the average balanced mutual fund. You can see that, during this brief
period, the Fund's average rate of return was just slightly ahead of the return
of the average competitor, but fell a bit short of the returns achieved by the
unmanaged indexes.
While the Fund itself has been operating for but two years, The Vanguard
Group has been managing index funds since 1976, when we introduced the first
index mutual fund--the 500 Portfolio of Vanguard Index Trust. Since that time,
we have added 17 additional Vanguard Index Portfolios, and, over the years,
have clearly demonstrated our ability to closely track the performance and risk
characteristics of an unmanaged index.
Given our proven success in the indexing arena, it seems appropriate to
look back and see how a balanced market-index fund might have fared over the
past decade relative to a comparable "real world" option: the average balanced
fund. The chart on the following page shows that the hypothetical record of the
balanced index fund over the past ten years would have been a superior one,
outpacing (after expenses) the average balanced fund by +0.8%
3
<PAGE> 6
[FIGURE 4]
annually. If this margin seems small, I assure you that, compounded over a
decade, it is anything but.
The table that follows compares the ten-year results assuming that an
investor had placed $10,000 in each investment on December 31, 1984, and
reinvested all dividend and capital gains distributions. On December 31, 1994,
the investor in the balanced index fund would have accumulated $32,130; the
investor in the average balanced fund, $29,850. This $2,280 of extra
performance is equivalent to 23% of the initial $10,000 investment.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Total Return
-----------------------------------
Ten Years Ended December 31, 1994
-----------------------------------
Final Value of
Annual Rate Initial Investment
of Return of $10,000
- ------------------------------------------------------------------------------------------
<S> <C> <C>
BALANCED INDEX FUND +12.4% $32,130
AVERAGE BALANCED FUND +11.6 29,850
- ------------------------------------------------------------------------------------------
INDEX FUND ADVANTAGE + 0.8% $ 2,280
- ------------------------------------------------------------------------------------------
</TABLE>
Note: Annual returns for the Balanced Index Fund have been adjusted to reflect
annual operating expenses of 0.20%.
It should go without saying that the balanced index fund returns reflected in
the table and the chart are hypothetical, and are based solely on past
performance. Future returns of Vanguard Balanced Index Fund, the composite
balanced index, and the average balanced fund may be better or worse than those
illustrated.
I should note that the ten-year returns achieved by the average balanced
fund are significantly overstated in the chart. All major statistical services
calculate fund returns without taking sales charges into account. (We're not
sure why!) Such a practice suggests that all balanced funds are "no load"
funds, when in fact only a minority of balanced funds (including, of course,
Vanguard Balanced Index Fund) meet this definition. Thus, the balanced index
fund would have enjoyed an even larger margin of advantage over the competition
than the chart would suggest.
IN SUMMARY
In my letter to shareholders one year ago, following the Fund's highly
successful 1993, I warned both that
4
<PAGE> 7
"today the stock market is highly valued," and that "our bond position entails
some exposure to interest rate risk, although our portfolio mix of short-term,
intermediate-term, and long-term bonds should keep this exposure to tolerable
levels."
As it turned out, both warnings were timely, and the Fund's diversified
mix of maturities did in fact provide some cushion from the plummeting bond
market. But I hope that neither warning deterred shareholders from maintaining
their investments in Vanguard Balanced Index Fund. While stocks and bonds are
risky investments in the short term, in combination, their risk is "less than
the sum of its parts." For the long-term investor, we would suggest that the
best strategy--come what may in the financial markets--is to "stay the course."
For our part, we assure you that we, too, will stay the course with our
fundamental index strategy. Financial market theory has always said that
indexing would be successful; over the past 18 years, we have
pioneered--successfully, I believe--the translation of theory into practice. We
remain confident that, in the years ahead, these same indexing principles will
result in fully competitive returns for shareholders of Vanguard Balanced Index
Fund.
Sincerely,
/s/ JOHN C. BOGLE
- --------------------
John C. Bogle
Chairman of the Board
January 23, 1995
Note: Mutual fund data from Lipper Analytical Services, Inc.
5
<PAGE> 8
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
DECEMBER 31, 1994) ARE AS FOLLOWS:
<TABLE>
<CAPTION>
SINCE INCEPTION
------------------------------------
INCEPTION TOTAL INCOME CAPITAL
DATE 1 YEAR RETURN RETURN RETURN
--------- ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
VANGUARD BALANCED INDEX FUND 11/9/92 -1.62% +5.49% +3.95% +1.54%
</TABLE>
ALL OF THESE 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.
6
<PAGE> 9
FINANCIAL STATEMENTS
December 31, 1994
STATEMENT OF NET ASSETS
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (59.0%)(1)
- --------------------------------------------------------------------------------
AAR Corp. 5,200 $ 69
* AER Energy Resources Inc. 2,800 12
* AES Corp. 3,607 70
AFLAC, Inc. 5,025 161
* AK Steel Holding Corp. 3,100 95
* AMR Corp. 3,600 192
ARCO Chemical Co. 5,000 220
AT&T Corp. 79,100 3,975
Abbott Laboratories, Inc. 40,900 1,334
* Acclaim Entertainment Inc. 3,000 43
* Active Voice Corp. 2,500 52
ADAC Laboratories 4,800 37
* Adesa Corp. 7,500 104
Adobe Systems, Inc. 3,000 90
* Advanced Polymer Systems 8,200 36
* Advanced Technologies Laboratories, Inc. 3,700 67
* Advanced Micro Devices, Inc. 4,600 114
Advanta Corp. Class A 2,050 54
ADVO, Inc. 4,700 81
Aetna Life & Casualty Co. 5,500 259
H.F. Ahmanson & Co. 5,400 87
* Air and Water Technologies Corp. Class A 6,100 37
Air Express International Corp. 2,700 54
Air Products & Chemicals, Inc. 5,900 263
Airborne Freight Corp. 2,700 55
*AirSensors Inc. 2,500 21
* AirTouch Communications, Inc. 24,800 722
* Alantec Corp. 1,600 52
Albemarle Corp. 3,150 44
Alberto-Culver Co. Class A 1,400 34
Albertson's, Inc. 12,500 362
Alco Standard Corp. 2,800 176
Alexander & Alexander Services, Inc. 4,800 89
Alexander & Baldwin, Inc. 4,500 101
Alfa Corp. 5,200 55
* All American Semiconductor, Inc. 1,000 2
* Alleghany Corp. 714 109
Allegheny Ludlum Corp. 3,100 58
Allegheny Power System, Inc. 5,600 122
The Allen Group, Inc. 3,600 86
Allergan, Inc. 3,200 90
Allied Capital Commercial Corp. 3,800 63
* Allied Holdings, Inc. 5,400 63
Allied Signal, Inc. 14,600 496
Allmerica Property & Casualty Cos. 4,800 81
Allstate Corp. 4,600 109
ALLTEL Corp. 9,300 280
* Altera Corp. 3,500 146
* Alumax, Inc. 2,250 64
Aluminum Co. of America 4,400 381
* ALZA Corp. 4,200 76
* Amax Gold, Inc. 10,006 60
AMBAC, Inc. 1,800 67
* Amdahl Corp. 19,000 209
Amerada Hess Corp. 4,500 205
American Bancorp 400 6
American Bankers Insurance Group 3,900 93
American Brands, Inc. 10,000 375
* American Business Products 5,100 93
American Electric Power Co., Inc. 9,100 299
American Express Co. 25,684 758
* American Freightways 4,700 93
American General Corp. 10,800 305
American Greetings Corp. Class A 3,700 100
American Heritage Life Investment Corp. 2,400 46
American Home Products Corp. 15,600 979
American International Group, Inc. 16,000 1,568
* American Medical Holdings, Inc. 4,100 99
American National Insurance Co. 1,400 66
* American Power Conversion Corp. 4,000 65
American Premier Underwriters Inc. 1,900 49
American President Cos., Ltd. 2,800 71
* American Re Corp. 2,200 71
American Stores Co. 7,200 193
American Water Works Co., Inc. 3,100 84
Ameritech Corp. 27,800 1,122
Ameron, Inc. 2,200 64
* Ames Department Stores, Inc. 7,000 17
Amfed Financial, Inc. 3,900 87
* Amgen, Inc. 6,800 401
Amoco Corp. 24,900 1,472
AMP, Inc. 5,300 386
* Ampal-American Israel Corp. 5,600 37
* Amphenol Corp. 3,300 79
AmSouth Bancorp 3,100 80
Anadarko Petroleum Corp. 3,000 115
* Analog Devices, Inc. 2,600 91
* Analogic Corp. 3,900 73
* Anchor Bancorp Inc. 7,700 103
* Anchor Gaming 4,000 61
* Andrea Radio Corp. 1,200 29
* Andrew Corp. 2,300 121
Anheuser-Busch Co., Inc. 13,400 682
* Ann Taylor Stores Corp. 3,000 103
Anthony Industries, Inc. 4,564 73
Aon Corp. 4,800 154
Apache Corp. 3,300 82
Apple Computer, Inc. 5,600 218
* Applied Materials, Inc. 4,000 168
</TABLE>
7
<PAGE> 10
STATEMENT OF NET ASSETS (continued)
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Applied Power, Inc. 2,600 $ 66
Arbor Drugs, Inc. 4,800 98
Archer-Daniels-Midland Co. 26,671 550
Argonaut Group, Inc. 2,800 78
* Argosy Gaming Co. 3,400 39
* Armco, Inc. 17,500 116
Armor All Products Corp. 4,500 92
Armstrong World Industries Inc. 1,900 73
Arnold Industries, Inc. 3,600 74
* Arrhythmia Research Technology, Inc. 7,000 17
* Arrow Electronics, Inc. 4,137 148
* Artra Group Inc. 16,500 95
Arvin Industries, Inc. 2,800 65
Asarco, Inc. 2,100 60
Ashland Oil, Inc. 2,900 100
* Aspect Telecommunications 2,700 91
* Astoria Financial Corp. 2,300 60
* Athena Neurosciences, Inc. 5,900 34
Atlanta Gas Light Co. 2,500 75
Atlantic Energy, Inc. 4,600 81
Atlantic Richfield Co. 8,000 814
Atlantic Southeast Airlines Inc. 3,400 53
* Atmel Corp. 2,300 77
Autodesk, Inc. 2,500 99
Automatic Data Processing, Inc. 7,000 409
* AutoZone, Inc. 7,600 184
* Avatar Holding, Inc. 2,000 75
Avery Dennison Corp. 2,900 103
Aviall Inc. 5,675 43
Avnet, Inc. 2,100 78
Avon Products, Inc. 3,600 215
* BHC Communications, Inc. Class A 1,200 88
* BMC Software, Inc. 1,200 68
BSB Bancorp, Inc. 4,050 115
BW/IP Inc. 3,000 51
* Badger Paper Mills, Inc. 3,200 31
Baker Hughes, Inc. 7,100 129
J. Baker, Inc. 4,600 68
Ball Corp. 3,500 110
Ballard Medical Products 3,500 37
Baltimore Gas & Electric Co. 7,100 157
Banc One Corp. 20,686 525
Bancorp Hawaii, Inc. 2,250 57
Bandag, Inc. 1,400 85
BankAtlantic Bancorp 6,300 96
Bank of Boston Corp. 5,420 140
The Bank of New York Co., Inc. 9,600 278
BankAmerica Corp. 20,158 796
Bankers First Corp. 4,500 81
Bankers Life Holding Corp. 2,500 47
Bankers Trust New York Corp. 4,200 232
* Banner Aerospace 11,100 50
* Banyan Systems, Inc. 4,100 73
C.R. Bard, Inc. 2,500 67
* Barnes & Noble Inc. 3,600 112
Barnett Banks of Florida, Inc. 4,726 181
* Barr Labs Inc. 3,600 91
* Base Ten Systems Class A 10,000 66
Battle Mountain Gold Co. Class A 12,200 134
Bausch & Lomb, Inc. 3,000 102
Baxter International, Inc. 14,500 410
* Bay Networks 5,730 168
BayBanks, Inc. 1,000 52
BE Avionics Inc. 6,300 45
Bear Stearns Co., Inc. 5,465 84
Beckman Instruments 3,500 97
Becton, Dickinson & Co. 3,500 168
* Bed Bath and Beyond 3,800 114
* Bel Fuse Inc. 6,900 56
Bell Atlantic Corp. 21,800 1,085
* Bell Sports Corp. 3,100 43
BellSouth Corp. 25,000 1,353
A. H. Belo Corp. Class A 2,500 141
Bemis Co., Inc. 3,600 86
Beneficial Corp. 2,400 94
Bergen Brunswig Corp. Class A 2,800 58
Berkshire Hathaway 60 1,224
* Best Buy, Inc. 2,200 69
* Bethlehem Steel Corp. 5,900 106
Betz Laboratories, Inc. 1,500 66
BIC Corp. 3,000 88
* Biogen, Inc. 1,700 71
* Biomet, Inc. 5,800 80
Birmingham Steel Corp. 2,450 49
Black & Decker Corp. 3,800 90
Blair Corp. 1,600 64
Block Drug Co. Class A 327 12
H & R Block, Inc. 5,300 197
Boatmen's Bancshares, Inc. 5,400 147
The Boeing Co. 17,000 795
* Bolt Beranek and Newman, Inc. 5,200 77
Borg-Warner Automotive, Inc. 2,600 65
* Borland International, Inc. 3,000 19
Boston Edison Co. 2,200 53
* Boston Scientific Corp. 4,400 76
Bowne & Co., Inc. 3,100 54
Brandon Systems Corp. 6,200 111
* Brinker International, Inc. 3,600 65
Bristol-Myers Squibb Co. 25,900 1,499
* Broadcast International Inc. 15,200 82
* Broderbund Software 3,800 179
Brooklyn Union Gas Co. 2,450 55
Brown-Forman Corp. Class B 3,500 107
Browning-Ferris Industries, Inc. 9,700 275
Brunswick Corp. 4,800 91
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
* Buffets Inc. 3,800 $ 37
* Burlington Coat Factory Warehouse Corp. 3,900 46
* Burlington Industries 8,400 83
Burlington Northern, Inc. 4,700 226
Burlington Resources, Inc. 6,400 224
CBI Industries, Inc. 1,100 28
CBS, Inc. 2,900 161
CCB Financial Corp. 2,100 74
CCP Insurance, Inc. 2,000 41
* C-Cube Microsystems, Inc. 3,000 57
* CFI ProServices, Inc. 7,600 104
CIGNA Corp. 3,500 221
CIPSCO, Inc. 2,600 70
CMAC Investment Corp. 3,800 110
CML Group, Inc. 2,700 27
CMS Energy Corp. 4,600 105
* CNA Financial Corp. 3,000 195
CPC International, Inc. 7,600 405
CSX Corp. 5,200 362
* CUC International, Inc. 5,850 196
* Cabletron Systems, Inc. 3,500 163
Cabot Oil & Gas Corp. 3,900 57
* Cadence Design Systems, Inc. 4,600 95
* Caesars World, Inc. 2,600 174
* Caldor Corp. 4,100 91
Calgon Carbon Corp. 7,300 76
* California Culinary Academy Inc. 11,100 83
Callaway Golf Co. 1,800 60
Cambridge Biotech Corp. 4,000 1
Campbell Soup Co. 12,400 547
* Canandaigua Wine Co., Inc. Class A 3,000 115
Capital Cities/ABC, Inc. 7,700 656
Capital Re Corp. 3,600 99
Capitol Bancorp Ltd. 4,800 44
Caraustar Industries, Inc. 4,000 90
Cardinal Health, Inc. 2,100 97
Caremark International, Inc. 3,600 62
Carnival Corp. Class A 14,000 298
Carolina Power & Light Co. 8,400 224
Carr Realty Corp. 5,000 90
Carter-Wallace, Inc. 3,600 47
Case Corp. 3,600 77
* Catalina Marketing Corp. 2,200 122
* Catellus Development Corp. 6,000 35
Caterpillar, Inc. 10,400 573
Cato Corp. Class A 1,200 9
Centerior Energy Corp. 7,500 67
Centex Corp. 2,500 57
* Centocor, Inc. 4,900 80
Central & South West Corp. 9,500 215
Central Fidelity Banks, Inc. 2,000 49
Central Maine Power Co. 4,200 58
* Century Communications Corp. Class A 11,897 89
Century Telephone Enterprises, Inc. 2,450 72
* Ceridian Corp. 2,300 62
Champion International Corp. 4,700 172
Charming Shoppes, Inc. 9,100 60
* Charter Medical Corp. 3,000 65
The Chase Manhattan Corp. 9,100 313
* Checkers Drive-In Restaurant 5,400 12
Chemed Corp. 2,100 70
Chemical Banking Corp. 13,000 466
Chemical Finance 1,407 58
* Chemical Waste Management 10,800 101
Chevron Corp. 32,700 1,459
* Cheyenne Software, Inc. 6,050 80
* Chiron Corp. 1,500 120
* Chris-Craft Industries, Inc. 2,527 87
* Christiana Cos., Inc. 2,300 72
* Chromcraft Revington, Inc. 2,500 54
Chrysler Corp. 17,600 862
The Chubb Corp. 4,400 340
Church and Dwight, Inc. 2,500 45
Cilcorp, Inc. 2,100 67
Cincinnati Bell, Inc. 3,100 52
Cincinnati Financial Corp. 2,600 135
CINergy Corp. 7,262 170
Cintas Corp. 2,400 85
Circuit City Stores, Inc. 5,100 113
* Cisco Systems, Inc. 13,300 466
* Circus Circus Enterprises Inc. 4,300 100
Citicorp 19,900 823
Citizens Banking Corp. 2,300 62
* Citizens Utilities Co. Class A 7,935 99
Citizens Utilities Co. Class B 2,287 29
City Holding Co. 2,310 66
* Clark Equipment Co. 500 27
Clayton Homes Inc. 7,465 118
Clorox Co. 2,800 165
Coastal Corp. 5,300 136
The Coca-Cola Co. 65,000 3,348
Coca-Cola Bottling Co. 2,800 75
Coca-Cola Enterprises, Inc. 6,900 123
* Coleman Inc. 3,000 105
Collective Bancorp, Inc. 5,550 94
Colgate-Palmolive Co. 7,700 488
* Coltec Inc. 3,500 60
* Columbia Gas Systems, Inc. 2,600 61
Columbia/HCA Healthcare Corp. 18,437 673
Comcast Corp. Class A 6,600 102
Comcast Corp. Class A Special 5,100 80
Comdisco, Inc. 6,200 143
Comerica, Inc. 5,700 139
Commonwealth Energy Systems 1,300 47
</TABLE>
9
<PAGE> 12
STATEMENT OF NET ASSETS (continued)
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Community First Bankshares 4,000 $ 55
* Compaq Computer Corp. 13,000 514
Computer Associates International, Inc. 8,300 403
* CompUSA, Inc. 5,800 87
* Computer Sciences Corp. 2,700 138
Computer Task Group, Inc. 9,000 80
* Compuware Corp. 1,900 68
Comsat Corp. 3,400 63
ConAgra, Inc. 12,400 388
* Concord EFS Inc. 3,450 86
* Conmed Corp. 5,850 118
Connecticut Natural Gas Corp. 3,400 83
* Conner Peripherals, Inc. 7,700 73
Conrail, Inc. 3,900 197
Conseco, Inc. 1,400 60
Consolidated Edison Co. of New York, Inc. 11,600 299
Consolidated Natural Gas Co. 4,500 160
Consolidated Papers 2,400 108
* Contel Cellular, Inc. 5,300 133
Continental Corp. 5,400 103
* Continental Medical Systems, Inc. 7,000 44
Continental Mortgage & Equity Trust 1,600 24
* Converse Inc. 1,866 22
Cooper Industries, Inc. 5,800 198
Cooper Tire & Rubber Co. 4,500 106
Adolph Coors Co. Class B 1,500 25
* Coral Gables Federal Savings & Loan Assn. 5,800 124
* Coram Healthcare Corp. 1,323 22
CoreStates Financial Corp. 7,500 195
Corning, Inc. 11,400 341
Countrywide Credit Industries, Inc. 4,147 54
* Coventry Corp. 4,400 107
Cracker Barrel Old Country Stores, Inc. 2,700 50
* Cray Research, Inc. 3,200 50
* Creative Technology 13,400 64
* Credit Acceptance Corp. 5,000 88
Crestar Financial Corp. 1,800 68
Crompton & Knowles Corp. 2,600 43
Crown America Realty Trust 6,300 85
* Crown Cork & Seal Co., Inc. 4,500 170
Crown Crafts, Inc. 5,500 83
* Cryomedical Sciences 17,500 54
Cummins Engine Co., Inc. 2,300 104
* Cypros Pharmaceuticals Corp. 3,900 52
Cyprus Amax 4,650 121
* Cytec Industries, Inc. 614 24
DPL, Inc. 4,900 100
DQE Inc. 2,300 68
* DSC Communications Corp. 5,800 209
* DSP Group 1,400 27
Dana Corp. 4,800 112
Danaher Corp. 1,500 78
* Data General Corp. 9,400 94
Dayton-Hudson Corp. 3,700 262
Dean Foods Corp. 2,900 84
Dean Witter Discover & Co. 8,405 285
Deere & Co. 4,300 285
* Dell Computer 1,900 78
Delmarva Power & Light Co. 5,700 103
Delta & Pine Land Co. 4,300 76
Delta Air Lines, Inc. 2,600 131
Deluxe Corp. 4,200 111
Dentsply International 1,400 44
* Department 56 Inc. 4,700 187
* Designs, Inc. 5,750 41
Detroit Edison Co. 7,000 183
Devon Energy Corp. 5,200 95
Dexter Corp. 3,000 65
* Diagnostek, Inc. 3,600 57
Diagnostic Products Corp. 1,300 34
The Dial Corp. 5,000 106
* Dial Page, Inc. 2,500 34
Diebold, Inc. 1,600 66
* Digital Equipment Corp. 7,000 233
Dillard Department Stores Class A 5,400 144
* Dime Bancorp Inc. 14,000 109
* Dionex Corp. 1,500 56
The Walt Disney Co. 26,800 1,236
* Dr. Pepper/Seven Up Cos., Inc. 3,100 79
Dole Food Co. 3,300 76
Dollar General Corp. 2,651 79
Dominion Resources, Inc. 8,800 315
R.R. Donnelley & Sons Co. 7,700 227
* Doskocil Cos. 5,000 37
* Dovatron International Inc. 4,100 107
Dover Corp. 2,900 150
Dow Chemical Co. 13,900 935
Dow Jones & Co., Inc. 5,100 158
Dresser Industries, Inc. 8,700 164
E.I. du Pont de Nemours & Co. 34,300 1,929
Duke Power Co. 10,100 385
The Dun & Bradstreet Corp. 8,800 484
Duracell International, Inc. 5,900 256
Duriron Co., Inc. 4,650 82
* Dynatech Corp. 3,300 108
EG & G, Inc. 7,100 100
* EMC Corp. 9,700 210
E-Systems, Inc. 1,800 75
Eastern Enterprises 2,900 76
Eastman Chemical 4,050 205
Eastman Kodak Co. 17,300 826
Eaton Corp. 3,900 193
Eaton Vance Corp. 1,000 28
Echlin, Inc. 2,700 81
</TABLE>
10
<PAGE> 13
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Echo Bay Mines Ltd. 5,600 $ 60
* Ecogen Inc. 9,500 34
Ecolab, Inc. 3,400 71
* Edisto Resources Corp. 11,100 71
A.G. Edwards & Sons, Inc. 6,225 112
El Paso Natural Gas 1,600 49
Elco Industries Inc. 3,500 59
* Elcor Corp. 3,800 58
* Electronic Arts 2,200 42
Emerson Electric Co. 11,500 719
* Emulex 2,200 30
Energy West Inc. 5,200 43
Engelhard Corp. 5,000 111
Enquirer/Star Group Inc. Class A 3,400 55
Enron Corp. 13,000 397
Enron Oil & Gas Co. 7,800 146
ENSERCH Corp. 6,200 81
Entergy Corp. 11,554 253
* Enterra Corp. 5,000 95
* Epitope Inc. 2,800 60
* EquiCredit Corp. 1,300 41
Equifax, Inc. 3,700 98
The Equitable Cos. 6,700 121
Equitable of Iowa Co. 3,000 85
Equitable Resources, Inc. 1,800 49
Equity Residential Properties Trust 2,000 60
Ethyl Corp. 6,300 61
* Evergreen Healthcare, Inc. 4,000 39
* Exide Electronics Group, Inc. 4,900 95
* Express Scripts 4,400 160
Exxon Corp. 62,600 3,803
* Ezcorp, Inc. 4,000 43
F & M Bancorp 1,365 40
FFY Financial Corp. 4,600 88
* FHP International Corp. 3,700 94
* FLIR Systems, Inc. 1,800 23
* FMC Corp. 1,800 104
FPL Group, Inc. 9,700 341
* FTP Software, Inc. 3,000 95
* Fairfield Communities, Inc. 9,200 50
Family Dollar Stores, Inc. 1,300 16
Farrel Corp. 10,800 59
* Federal Express Corp. 2,700 163
Federal Home Loan Mortgage Corp. 9,000 455
Federal-Mogul Corp. 4,100 83
Federal National Mortgage Assn. 13,800 1,006
Federal Paper Board Co., Inc. 2,200 64
Federal Realty Investment Trust 4,300 89
Federal Signal Corp. 5,733 117
* Federated Stores 6,400 123
Fifth Third Bancorp 3,400 162
* Financial Industries Corp. 1,000 30
Financial Trust Corp. 2,346 67
Fingerhut Co. 2,400 37
* First Alert, Inc. 5,000 73
First American Corp. (Tenn.) 2,200 59
First American Bank Corp. 3,200 96
1st Bancorp (Indiana) 2,900 54
First Bank System, Inc. 5,525 184
First Brands Co. 1,900 67
First Chicago Corp. 4,700 224
First Colony Corp. 2,104 47
First Commerce Corp. 2,912 64
First Commerce Bancshares Class B 4,000 45
First Commercial Bank Shares Class A 1,000 16
First Data Corp. 5,700 270
First Empire State Corp. 500 68
First Fidelity Bancorp. 4,200 188
First Financial Management 3,000 185
First Interstate Bancorp. 4,200 284
First Michigan Bank Corp. 4,486 106
First Midwest Bancorp 2,600 62
First National Bank of Gainsville 2,800 53
* First Pack Network 4,400 17
First Security Corp. 2,900 66
First Source Corp. 3,465 91
* First Tennessee National Corp. 1,700 69
First Union Corp. 8,600 356
First USA Inc. 2,800 92
First Virginia Banks, Inc. 1,700 54
Firstar Corp. 3,400 91
Fisher Scientific International Inc. 2,000 50
Fleet Financial Group, Inc. 7,300 237
Fleet Mortgage Group 5,600 111
Fleming Cos., Inc. 4,600 107
FlightSafety International, Inc. 1,400 57
Florida Progress Corp. 5,000 150
Florida Rock Industries, Inc. 2,900 79
* Florsheim Shoe Co. 933 5
Fluor Corp. 4,100 177
* Foamex International, Inc. 2,900 28
Food Lion Inc. Class A 23,700 120
Ford Motor Co. 51,700 1,448
* Foreland Corp. 1,700 4
Foremost Corp. of America 2,200 78
* Forest Laboratories, Inc. 2,100 98
Foster Wheeler Corp. 2,500 74
Fourth Financial Corp. 1,900 58
* Fourth Shift Corp. 12,600 36
* Foxmeyer Health Corp. 5,400 80
Franklin Resources Corp. 4,000 143
Freeport McMoRan, Inc. 7,000 124
Freeport McMoRan Copper & Gold Inc. Class A 3,262 69
* Fruit of the Loom, Inc. 4,000 108
H.B. Fuller Co. 1,500 52
</TABLE>
11
<PAGE> 14
STATEMENT OF NET ASSETS (continued)
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
* GBC Technologies, Inc. 7,000 $ 45
* GC Cos. 2,630 69
GEICO Corp. 3,400 167
GP Financial Corp. 2,800 58
GTE Corp. 48,600 1,476
Arthur J. Gallagher & Co. 2,000 64
Gannett Co., Inc. 7,300 389
The Gap, Inc. 7,400 226
* Gardner Denver Machinery, Inc. 232 2
* Gateway 2000 Inc. 3,600 78
Gaylord Entertainment Class A 4,400 100
GenCorp, Inc. 6,100 72
* Genentech Inc. 5,800 263
General Dynamics Corp. 3,300 144
General Electric Co. 86,300 4,401
General Growth Properties 2,700 61
* General Instrument 6,000 180
General Mills, Inc. 7,900 450
General Motors Corp. 38,100 1,610
General Motors Corp. Class E 13,400 516
General Motors Corp. Class H 4,500 157
General Physics Corp. 18,400 48
General Public Utilities Corp. 5,400 142
General Re Corp. 4,200 520
General Signal Corp. 2,500 80
* Genesco, Inc. 19,500 44
* Geneva Steel Class A 3,000 41
* Gensia Inc. 4,400 19
Genuine Parts Co. 6,500 234
Geon Co. 3,200 88
* Georgia Gulf Corp. 2,200 86
Georgia-Pacific Corp. 4,500 322
Giant Food, Inc. Class A 3,100 67
* Gilead Sciences, Inc. 3,400 32
Gillette Co. 11,300 845
P.H. Glatfelter Co. 4,200 65
* Global Spill Management, Inc. 1,200 2
Golden West Financial Corp. 3,400 120
The BF Goodrich Co. 1,100 48
The Goodyear Tire & Rubber Co. 7,700 259
Goulds Pumps, Inc. 3,100 67
W.R. Grace & Co. 4,500 174
Graco, Inc. 3,600 78
W.W. Grainger, Inc. 2,700 156
* Grand Casinos, Inc. 3,100 43
Great Atlantic & Pacific Tea Co., Inc. 5,000 91
Great Lakes Bancorp, Fsb 2,200 59
Great Lakes Chemical Corp. 3,400 194
Great Western Financial Corp. 5,900 94
Green Tree Financial Corp. 3,500 106
* Greenman Brothers, Inc. 5,000 27
* Gtech Holdings Corp. 2,100 43
* Gymboree Inc. 3,400 98
HF Financial Corp. 3,200 80
HRE Properties 200 3
* HS Resources Inc. 2,800 49
* Haemonetics Corp. 4,500 78
Halliburton Co. 5,600 186
M.A. Hanna Co. 3,000 71
Harcourt General, Inc. 4,000 141
Harley-Davidson, Inc. 4,000 112
Harnischfeger Industries Inc. 1,000 28
Harris Corp. 2,000 85
* Harris Computer Systems 100 1
* Harry's Farmers Market, Inc. 4,200 40
Hartford Steam Boiler Inspection &
Insurance Co. 600 24
* Hartmarx Corp. 12,600 74
Hasbro, Inc. 4,400 129
* Hauser Chemical Research 8,800 42
Hawaiian Electric Industries Inc. 2,300 74
Hayes Wheels International 3,600 77
* Health Systems 2,600 79
* HealthCare Compare Corp. 5,400 184
* Health Management Associates Class A 7,650 191
* HEALTHSOUTH Rehabilitation Corp. 2,800 104
Health and Retirement Properties Trust 6,400 86
* Healthtrust Inc. 4,700 149
* Healthwise of America Inc. 525 17
* Heartland Express, Inc. 3,100 92
Hechinger Co. Class A 7,300 85
Heilig-Meyers Co. 2,500 63
H.J. Heinz Co. 12,600 463
Helmerich & Payne, Inc. 4,000 103
Hercules, Inc. 2,100 242
Hershey Foods Corp. 4,300 208
Hewlett-Packard Co. 13,100 1,308
Highwood Properties, Inc. 600 13
Hillenbrand Industries, Inc. 3,600 100
* Hills Stores Co. 3,000 62
Hilton Hotels Corp. 2,400 162
Holly Corp. 1,600 42
Home Depot, Inc. 22,933 1,055
Home Federal Financial Corp. 1,600 22
Home Financial Corp. 14,702 161
* Home Shopping Network, Inc. 7,200 72
* Homedco Group Inc. 2,100 79
Homestake Mining Co. 6,800 116
Honeywell, Inc. 6,700 211
Horace Mann Educators Corp. 3,600 77
George A. Hormel & Co. 3,400 84
Horsehead Resource Development Co., Inc. 7,900 45
</TABLE>
12
<PAGE> 15
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
* Hospitality Franchise Systems, Inc. 2,600 $ 69
* Host Marriott 7,600 73
* House of Fabrics, Inc. 10,800 12
Household International, Inc. 4,600 171
Houston Industries, Inc. 6,600 235
Hubbell Inc. Class B 1,500 80
Hughes Supply, Inc. 3,700 68
* Humana, Inc. 7,800 176
Hunt Manufacturing Co. 2,300 31
Huntington Bancshares Inc. 6,750 116
* Hutchinson Technology, Inc. 2,000 50
IBP, Inc. 2,500 76
ICN Pharmaceuticals 7,645 132
IES Industries, Inc. 3,300 83
* IGI, Inc. 6,000 71
IMC Global Inc. 1,500 65
* IMRS Inc. 4,500 177
ITT Corp. 6,000 532
Idaho Power Co. 4,900 115
* Identix, Inc. 14,000 45
* IDEXX Laboratories 2,400 86
Illinois Central Corp. 2,200 68
Illinois Tool Works, Inc. 5,400 236
Illinova Corp. 3,300 72
* Imclone Systems, Inc. 7,800 7
* Immune Response 7,200 42
* Immunomedics Inc. 7,900 27
* Inacom Corp. 6,300 45
* Industrial Scientific Corp. 2,700 50
* Information Resources, Inc. 2,600 36
* Informix Corp. 3,100 99
Ingersoll-Rand Co. 5,100 161
* Inland Steel Industries, Inc. 2,500 88
* Insignia Financial Group 1,800 36
* Insilco Corp. 2,600 65
Integra Financial Corp. 1,700 70
Integrated Health Services, Inc. 1,900 75
Intel Corp. 21,000 1,339
* Interactive Network Inc. 7,000 11
Intercargo Corp. 5,400 47
* Interco Co. 5,600 37
* Intergraph Corp. 8,000 66
* Interleaf, Inc. 7,800 26
International Business Machines Corp. 29,700 2,183
* International Cabletel, Inc. 2,000 55
International Flavors & Fragrances, Inc. 5,700 264
International Game Technology 6,200 96
International Paper Co. 6,400 482
* International Rectifier Corp. 1,300 32
International Shipholding Corp. 2,700 53
International Specialty Products, Inc. 3,200 22
* International Technology 25,100 75
* International Totalizer Systems, Inc. 8,800 23
Interpublic Group of Cos., Inc. 4,000 129
* Intersolv 4,800 87
* Invtro International 2,800 4
* Iomega Corp. 14,625 48
* Ionics, Inc. 1,500 94
Ipalco Enterprises, Inc. 2,100 63
Irvine Apartment Communities, Inc. 2,000 33
Irwin Financial Corp. 3,900 106
IVAX Corp. 4,500 86
Jackpot Enterprises, Inc. 5,500 42
James River Corp. 3,800 77
* Jan Bell Marketing Inc. 8,900 36
Jefferson Bancorp, Inc. 2,060 22
Jefferson-Pilot Corp. 2,700 140
* Jefferson Smurfit Corp. 5,800 98
Johnson & Johnson 32,300 1,768
Johnson Controls, Inc. 2,200 108
* Johnstown America Industries 3,800 62
* Jones Apparel Group, Inc. 3,400 88
Jostens Inc. 4,900 91
* KLA Instruments Corp. 1,800 88
Kmart Corp. 23,100 300
KN Energy, Inc. 5,507 131
K U Energy Corp. 3,900 105
* K-V Pharmaceutical Co. Class A 6,900 40
Kansas City Power & Light Co. 3,200 75
Kansas City Southern Industries, Inc. 1,800 56
Kellogg Co. 11,400 663
Kellwood Co. 3,100 65
Kelly Services, Inc. Class A 1,500 41
Kemper Corp. 1,700 64
* Kennedy-Wilson, Inc. 2,800 4
* Kent Electronics Corp. 1,800 71
Kerr-McGee Corp. 2,700 124
KeyCorp 12,584 315
* Keystone Consolidated Industries, Inc. 3,600 50
Keystone Financial, Inc. 3,865 116
Kimberly-Clark Corp. 8,000 404
* Kinder Care Learning Centers Inc. 4,000 49
Kinetic Concepts, Inc. 11,300 79
* King World Productions, Inc. 1,600 55
* Kleer-Vu Industries Inc. 6,960 66
Knight-Ridder, Inc. 2,800 141
* Kohls Corp. 1,900 76
* The Kroger Co. 5,500 133
Kuhlman Corp. 4,700 57
* LCI International, Inc. 4,200 110
* LDDS Communications, Inc. 6,112 119
LG&E Energy Corp. 1,700 63
* LSI Logic Corp. 2,600 105
* LTV Corp. 5,400 88
</TABLE>
13
<PAGE> 16
STATEMENT OF NET ASSETS (continued)
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
* LTX Corp. 12,100 $ 50
La-Z-Boy Chair Co. 900 29
Ladd Furniture, Inc. 4,400 28
Lafarge Corp. 3,000 53
Lancaster Colony Corp. 3,288 97
Landmark Bancshare, Inc. 4,900 51
* Lands' End, Inc. 4,000 55
Lawter International Inc. 5,300 64
* Layne, Inc. 12,900 95
* Lear Seating Corp. 4,700 93
* Lechters Corp. 4,700 80
* Legent Corp. 1,200 35
Leggett & Platt, Inc. 2,100 74
Lehman Brothers Holdings, Inc. 5,360 79
Lennar Corp. 1,800 28
* Leslie Fay Co. 11,100 8
Leucadia National Corp. 2,700 120
Leviathan Gas Pipeline Co. 2,500 56
Liberty Corp. 2,800 71
Liberty Bancorp Inc. 2,400 69
Life Partners Group, Inc. 4,900 107
Lillian Vernon Corp. 2,300 35
Eli Lilly & Co. 14,600 958
Lilly Industries Inc. Class A 4,200 57
The Limited, Inc. 17,900 324
* Lin Broadcasting Corp. 2,600 347
* Lin Television 1,300 29
* Lincare Holdings Inc. 5,000 146
Lincoln National Corp. 4,400 154
Linear Technology Corp. 1,800 89
* Liposome Technology, Inc. 4,600 30
Litchfield Financial Corp. 7,140 77
* Litton Industries, Inc. 2,100 78
Liz Claiborne, Inc. 3,700 62
Lockheed Corp. 3,100 225
Loctite Corp. 2,000 93
Loews Corp. 3,000 261
* Lomas Financial Corp. 6,900 28
* Lone Star Steakhouse & Saloon 5,100 100
Long Island Lighting Co. 5,600 86
* Longhorn Steaks Inc. 4,600 40
Longview Fiber Co. 3,000 47
Loral Corp. 4,200 159
* Lotus Development Corp. 2,200 90
* Louis Dreyfus Natural Gas Corp. 3,600 46
Louisiana Land & Exploration Co. 2,100 76
Louisiana-Pacific Corp. 5,200 142
Lowes Cos., Inc. 8,100 281
Lubrizol Corp. 3,600 122
Lukens, Inc. 2,900 84
Lyondell Petrochemical Co. 3,500 91
* M/A-Com, Inc. 6,400 46
MBIA, Inc. 2,200 123
* MFB Corp. 2,000 27
MBNA Corp. 7,500 175
MCI Communications Corp. 33,700 621
* MFS Communications Co., Inc. 2,800 92
MGIC Investment Corp. 3,000 99
* MGM Grand Inc. 2,100 51
* MK Gold Co. 10,700 48
Madison Gas & Electric Co. 2,600 84
* Magma Copper Co. Class B 8,100 136
Magna Group 5,700 99
Mallinckrodt Group, Inc. 3,400 102
Manitowoc Co., Inc. 2,200 48
Manor Care Inc. 3,200 88
Manpower Inc. 3,900 110
Mapco Inc. 1,400 72
Marion Merrell Dow, Inc. 13,800 281
* Marquette Electronics Class A 4,600 106
Marsh & McLennan, Inc. 3,800 301
Marshall & Ilsley Corp. 5,544 106
Marriott International 6,400 180
Martin Marietta Corp. 4,700 209
Martin Marietta Materials, Inc. 2,000 36
* Marvel Entertainment Group 4,740 68
Masco Corp. 7,700 174
MascoTech Inc. 4,900 63
Mattel, Inc. 9,175 231
* Maxtor Corp. 8,400 47
May Department Stores Co. 12,300 415
Maytag Corp. 4,700 71
* McAfee Associates, Inc. 9,100 182
McCormick & Co., Inc. 4,100 75
McDermott International, Inc. 2,100 52
McDonald's Corp. 35,300 1,033
McDonnell Douglas Corp. 2,000 284
McGraw-Hill, Inc. 2,400 161
McKesson Corp. 1,800 59
* McMoRan Oil and Gas 700 2
The Mead Corp. 3,100 151
* Medco Research, Inc. 5,100 58
* Medical Graphics Corp. 9,700 56
Meditrust 2,700 82
Medtronic, Inc. 5,800 323
Mellon Bank Corp. 7,536 231
Melville Corp. 5,000 154
Mentor Corp. 5,400 94
* Mentor Graphics Corp. 5,900 90
Mercantile Bancorp, Inc. 2,200 69
Mercantile Bankshares Corp. 3,900 77
Mercantile Stores Co., Inc. 2,100 83
Merck & Co., Inc. 64,209 2,448
Mercury Finance Co. 5,333 69
Meredith Corp. 2,700 126
Meridian Bancorp, Inc. 3,539 94
</TABLE>
14
<PAGE> 17
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
* Merisel, Inc. 4,300 $ 35
Merrill Lynch & Co., Inc. 9,700 347
* Merry-Go-Round Enterprises, Inc. 8,900 9
Methode Electronics Inc. Class A 7,800 131
Metropolitan Financial Corp. 2,000 46
Michael Foods, Inc. 7,900 78
Michigan National Corp. 800 60
Micron Technology Inc. 5,250 232
* Microsoft Corp. 29,800 1,825
Mid Am Inc. 5,830 87
Mid-America Realty Investments 7,200 52
* Mid Atlantic Medical Services 4,000 92
Mid-Iowa Financial Corp. 3,000 47
Midlantic Corp. 2,700 72
* Midwest Resources Inc. 5,800 80
Millipore Corp. 1,500 73
Milwaukee Land Co. 5,500 44
Minnesota Mining & Manufacturing Co. 21,400 1,142
Minnesota Power & Light Co. 2,500 63
* Mirage Resorts, Inc. 4,550 93
Mitchell Energy & Development Corp. Class A 2,200 36
Mobil Corp. 20,100 1,693
* Mobley Environmental Services, Inc. Class A 6,600 9
Modine Manufacturing Co. 3,600 103
* Mohawk Industries, Inc. 3,700 46
* Molecular Biosystems, Inc. 3,200 34
Molex, Inc. 4,125 143
Monsanto Co. 5,900 416
Montana Power Co. 2,800 64
J.P. Morgan & Co., Inc. 9,600 538
Morgan Stanley Group, Inc. 3,800 224
Morrison-Knudsen Co., Inc. 3,700 47
Morrison Restaurants 1,950 48
Morton International, Inc. 7,200 205
Motorola, Inc. 29,700 1,719
* Mueller Industries Inc. 2,700 81
* Multicare Cos., Inc. 1,400 27
Murphy Oil Corp. 2,000 85
Mylan Laboratories, Inc. 3,600 97
NBD Bancorp, Inc. 7,600 208
* NFO Research, Inc. 6,000 84
NUI Corp. 2,100 30
Nalco Chemical Co. 3,600 121
National City Corp. 7,500 194
National Community Bancorp 2,850 66
* National Education Corp. 8,600 35
* National Gaming Corp. 260 3
* National Gypsum Co. 2,500 103
National Health Laboratories Holdings 4,200 56
* National Medical Enterprises, Inc. 8,600 121
National Presto Industries, Inc. 2,200 91
National Re Holdings Corp. 2,600 68
* National Semiconductor Corp. 6,400 125
National Service Industries, Inc. 3,200 82
NationsBank, Inc. 13,722 619
* Natural Wonders 4,300 18
* Navigators Group, Inc. 2,000 29
* Navistar International Corp. 4,000 61
Thomas Nelson, Inc. 2,200 52
* Neoprobe Corp. 15,200 22
* Neostar Retail Group 6,500 67
* Network Systems Corp. 6,100 43
New England Electric System 3,400 109
New Plan Realty Trust 3,100 60
New York State Electric & Gas Corp. 3,700 70
New York Times Co. Class A 5,500 122
Newell Co. 8,000 168
Newmont Gold Co. 4,900 175
Newmont Mining Corp. 4,243 153
* Nextel Communications 4,300 62
Niagara Mohawk Power Corp. 7,100 101
NICOR, Inc. 3,000 68
Nike, Inc. Class B 3,700 276
Noble Affiliates, Inc. 2,500 62
NorAm Energy Corp. 9,300 50
* Nord Resources Corp. 11,200 71
Nordson Corp. 1,700 103
Nordstrom, Inc. 4,100 173
Norfolk Southern Corp. 6,900 418
North American Mortgage 2,700 40
North Side Savings Bank 2,205 41
Northeast Utilities 6,500 141
Northern Indiana Public Service Co. 3,500 104
Northern States Power Co. of Minnesota 3,400 150
Northern Trust Corp. 2,450 86
Northrop Grumman Corp. 2,300 97
* Northwest Airlines Corp. Class A 4,000 63
Northwest Illinois Bancorp., Inc. 3,300 56
Norwest Corp. 16,400 383
* NovaCare, Inc. 5,000 36
* Novell, Inc. 18,200 311
Nucor Corp. 4,300 239
* nVIEW Corp. 3,300 29
NYNEX Corp. 21,600 794
* OHM Corp. 5,700 48
* OIS Optical Imaging Systems, Inc. 3,000 17
Occidental Petroleum Corp. 15,200 293
* Octel Communications Corp. 4,100 86
* Office Depot, Inc. 7,125 171
* Offshore Logistics, Inc. 4,000 52
Ohio Casualty Corp. 1,600 46
Ohio Edison Co. 7,600 141
</TABLE>
15
<PAGE> 18
STATEMENT OF NET ASSETS (continued)
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Oklahoma Gas & Electric Co. 2,200 $ 73
* Old Dominion Freight Line, Inc. 4,000 64
Old Kent Financial Corp. 2,100 64
Old Republic International Corp. 2,700 57
Olin Corp. 1,500 77
Olsten Corp. 2,100 67
Omnicom Group Inc. 1,700 88
One Valley Bancorp of West Virginia Inc. 2,400 68
* Oracle Systems Corp. 14,300 633
Orange & Rockland Utilities, Inc. 2,500 81
* Organogenesis, Inc. 3,800 74
* OrNda Healthcorp 6,720 83
* Oryx Energy Co. 4,600 55
Otter Tail Power Co. 3,000 98
* Outback Steakhouse 4,200 98
* Owens-Corning Fiberglas Corp. 1,900 61
* Owens-Illinois, Inc. 6,100 67
* Oxford Health Plan 1,700 135
PECO Energy Corp. 10,900 267
PHH Corp. 1,400 49
* PHP Heathcare Corp. 3,000 35
PNC Bank Corp. 11,600 245
PPG Industries, Inc. 10,600 394
Paccar, Inc. 1,725 76
Pacific Enterprises 4,400 94
Pacific Gas & Electric Co. 21,300 519
Pacific Telecom, Inc. 4,700 142
Pacific Telesis Group 21,200 604
* Pacificare Health Systems Inc. Class A 500 33
* Pacificare Health Systems Inc. Class B 900 59
PacifiCorp 13,800 250
Paco Pharmaceutical Services 6,200 55
* Paging Network Inc. 2,500 84
PaineWebber Group, Inc. 3,600 54
Pall Corp. 5,266 99
Panhandle Eastern Corp. 9,000 178
* Parametric Technology Corp. 2,600 89
* ParcPlace Systems, Inc. 2,900 65
Parker & Parsley Petroleum Co. 3,700 76
Parker Hannifin Corp. 2,400 109
* Parkervision, Inc. 3,700 13
Parkway Co. 5,300 71
* Pec Israel Economic Corp. 2,800 80
* The Penn Traffic Co. 1,800 68
J.C. Penney Co., Inc. 12,100 540
Pennsylvania Power and Light Co. 7,100 135
Pennzoil Co. 2,200 97
Peoples First 3,400 65
Pep Boys (Manny, Moe & Jack) 3,200 99
PepsiCo, Inc. 40,500 1,468
Perkin-Elmer Corp. 2,200 56
* Perrigo 3,400 42
* Perseptive Biosystems 2,400 12
Pet, Inc. 4,600 91
Petrie Stores Corp. 2,400 54
Petroleum Heat & Power Co. 9,600 86
Petrolite Corp. 1,900 51
* Petsmart, Inc. 4,100 141
Pfizer, Inc. 16,000 1,236
Phelps Dodge Corp. 3,500 217
Philip Morris Cos., Inc. 43,300 2,490
Phillips Petroleum Co. 12,900 422
Phillips-Van Heusen Corp. 2,900 44
* Phoenix Network, Inc. 5,000 12
Phoenix Resource Cos., Inc. 1,200 57
* PictureTel Corp. 200 5
Piedmont Bankgroup, Inc. 1,500 29
Pier 1 Imports Inc. 8,100 76
* Pinnacle Micro 2,500 24
Pinnacle West Capital Corp. 4,700 93
Pioneer Hi Bred International 4,500 154
Pioneer Standard Electronics Inc. 4,800 77
Pitney Bowes, Inc. 7,800 248
* Pizza Inn, Inc. 9,200 25
* Platinum Software Co. 3,750 49
Poe & Brown, Inc. 2,900 62
Pogo Producing Co. 4,700 83
Polaroid Corp. 2,300 75
* Policy Management Systems Corp. 3,100 130
Portland General Electric Co. 6,700 129
Post Properties, Inc. 3,700 117
Potlatch Corp. 1,200 45
Potomac Electric Power Co. 5,800 107
* Powersoft Corp. 1,400 116
Praxair, Inc. 6,200 127
Premark International, Inc. 3,200 140
Premier Industrial Corp. 3,900 92
* Price/Costco Inc. 11,486 149
Procter & Gamble Co. 35,000 2,170
Production Operators Corp. 2,900 70
Progressive Corp. of Ohio 3,500 123
* Promus Co. Inc. 4,800 149
Provident Life & Accident Insurance Co.
of America 2,400 52
Providian Corp. 4,900 151
Public Service Co. of Colorado 3,300 97
Public Service Enterprise Group Inc. 12,600 334
Public Storage Properties IX, Class A 500 8
Public Storage Properties XI, Class A 1,200 18
Public Storage Properties XV, Class A 800 13
Puerto Rican Cement Co., Inc. 3,300 93
Puget Sound Power & Light Co. 2,700 54
Puritan-Bennett Corp. 3,300 69
* Purepac Inc. 6,200 64
* Pyxis Corp. 3,800 72
</TABLE>
16
<PAGE> 19
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
* QVC Inc. 2,100 $ 89
Quaker Oats Co. 6,800 209
* Qualcomm, Inc. 2,600 62
Questar Corp. 1,700 47
The Quick & Reilly Group, Inc. 3,025 86
* Quiksilver, Inc. 4,100 62
* RJR Nabisco Holdings Corp. 72,498 399
R.L.I. Corp. 2,100 43
* Racotek, Inc. 2,300 7
* Railroad Financial Corp. 3,450 33
* Rainbow Technologies, Inc. 4,900 69
* Ralcorp Holdings Inc. 1,733 39
* Ralston-Continental Baking 3,560 13
Ralston-Purina Group 5,200 232
Raychem Corp. 1,800 64
Rayonier Inc. 3,100 95
Raytheon Co. 6,700 428
Reader's Digest Assn., Inc. Class A 5,500 270
* Reading & Bates Corp. 10,500 63
Real Estate Investment Trust of California 1,700 27
* Reddi Brake Supply Corp. 7,700 39
Reebok International Ltd. 3,900 154
Regions Financial Corp. 2,190 68
Reinsurance Group of America, Inc. 1,700 42
Republic New York Corp. 2,700 122
* Research Industries Corp. 8,500 119
* Resound Corp. 5,200 50
* Retirement Care Associates, Inc. 7,500 55
* Revco Drug Stores, Inc. 5,300 125
Reynolds & Reynolds Class A 5,400 135
Reynolds Metals Co. 3,100 152
Rhone-Poulenc Rorer, Inc. 6,900 252
Rite Aid Corp. 3,900 91
Riverwood International Corp. 5,600 88
Roadway Services, Inc. 2,000 113
* Robert Half International, Inc. 2,600 62
Rochester Telephone Corp. 3,400 72
Rockwell International Corp. 10,900 390
* Rogers Corp. 2,600 129
Rohm & Haas Co. 3,400 194
* Rohr, Inc. 6,600 68
* Rollins Environmental Services, Inc. 2,800 14
Rollins, Inc. 3,600 82
Rollins Truck Leasing 6,750 80
Roper Industries Inc. 4,600 115
* Rowan Cos., Inc. 15,900 97
Rubbermaid, Inc. 8,200 236
Russell Corp. 2,200 69
* Rust International, Inc. 3,800 42
* Ryan's Family Steak Houses, Inc. 8,000 60
Ryder System, Inc. 3,500 77
SCE Corp. 22,100 323
SCOR U.S. Corp. 4,900 41
* SGI International 13,000 9
Safeco Corp. 3,200 167
Safety-Kleen Corp. 7,700 114
* Safeway, Inc. 4,800 153
* Saga Communications, Inc. 4,400 63
St. Joe Paper Co. 1,600 87
St. Jude Medical, Inc. 2,200 87
St. Paul Cos., Inc. 4,200 188
St. Paul Bancorp, Inc. 5,250 91
Salomon, Inc. 5,300 199
San Diego Gas & Electric Co. 5,800 112
John B. Sanfilippo & Son, Inc. 5,600 29
Santa Fe Pacific Corp. 8,900 156
* Santa Fe Pacific Gold Corp. 6,840 88
Sara Lee Corp. 23,900 603
Savannah Foods & Industries, Inc. 4,800 71
Scana Corp. 2,400 101
* R. P. Scherer Corp. 3,100 141
* Scherer Health 3,200 64
Schering-Plough Corp. 9,600 710
Schlumberger Ltd. 12,200 615
Schnitzer Steel Industries, Inc. Class A 2,000 43
* Scholastic Corp. 2,800 143
A. Schulman Inc. 3,500 95
Charles Schwab Corp. 2,700 94
* Sciclone Pharmaceuticals 4,100 27
Scientific-Atlanta, Inc. 4,000 84
* Scientific Games Holdings Corp. 1,800 89
* The Score Board, Inc. 16,500 51
Scott Paper Co. 3,800 263
* Scotts Co. 5,200 82
E.W. Scripps Co. Class A 4,000 121
Seacoast Banking Corp. of Florida Class A 3,200 54
* Seagate Technology 3,500 84
Sears, Roebuck & Co. 17,500 805
* Security Capital Corp. 700 30
Security Capital Industrial Trust 2,200 37
Sensormatic Electronics Corp. 3,500 126
* Sepracor Inc. 7,500 31
* Sequent Computer Systems, Inc. 4,100 81
Service Corp. International 4,500 125
* Service Merchandise Co., Inc. 4,100 19
Shared Medical Systems Corp. 4,300 142
Shaw Industries, Inc. 7,000 104
Shawmut National Corp. 6,100 100
Sherwin-Williams Co. 4,400 146
* Shoe Carnival, Inc. 5,550 27
* Shoney's Inc. 5,700 73
Showboat, Inc. 3,600 52
</TABLE>
17
<PAGE> 20
STATEMENT OF NET ASSETS (continued)
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Sigma Aldrich Corp. 2,500 $ 82
Signet Banking Corp. 2,933 84
* Silicon Graphics, Inc. 7,200 223
* Silver King Communications 7,120 75
Simon Property Group 3,000 73
Sizzler International 5,600 34
Sizzlers Property Investors, Inc. 4,100 43
Smith Corona 12,400 31
* Smith International, Inc. 5,200 65
* Smithfield Foods, Inc. 4,000 128
Smiths Food & Drug Centers, Inc. Class B 3,500 88
Snap-On Inc. 2,100 70
* Sofamor/Danek Group Inc. 2,100 27
* Solectron Corp. 2,100 58
Somerset Group, Inc. 3,300 43
Sonat, Inc. 4,600 129
Sonoco Products 4,000 87
Sotheby's Holdings Class A 6,300 72
* Southdown, Inc. 4,400 64
Southeastern Michigan Gas & Electric 2,651 48
Southern Co. 32,500 650
Southern New England Telecom Corp. 3,000 96
* Southern Pacific Rail Corp. 7,900 143
* Southern Union Co. 5,355 88
* Southland Corp. 18,400 82
SouthTrust Corp. 3,950 71
Southwest Airlines Co. 7,050 118
Southwestern Bell Corp. 30,600 1,235
* Southwestern Life Corp. 11,700 30
Southwestern Public Service Co. 1,700 45
Sovereign Bancorp, Inc. 2,200 17
* Spartan Motors, Inc. 3,300 44
Spelling Entertainment 8,400 90
Spiegel, Inc. Class A 7,500 75
Spieker Properties 3,000 61
* Sportmart Inc. 3,650 41
* Sportmart Inc. Class A 3,650 37
* Sports Town 6,300 8
Springs Industries Inc. Class A 2,200 81
Sprint Corp. 17,340 479
Standard Commercial Tobacco Co. 3,636 44
Standard Federal Bank 3,400 81
The Standard Register Co. 1,100 19
Stanhome, Inc. 2,300 73
The Stanley Works 2,000 72
* Staodynamics Inc. 8,300 12
* Staples, Inc. 1,000 25
Star Banc Corp. 1,700 62
* StarSight Telecast, Inc. 2,500 20
* Starter Corp. 8,200 56
State Street Boston Corp. 3,500 100
* Station Casinos, Inc. 5,900 76
* Sterling Chemicals, Inc. 6,500 85
* Sterling Software, Inc. 2,300 85
Stewart & Stevenson Services, Inc. 1,600 55
* Stone Container Corp. 4,900 85
* Stop & Shop Cos. Inc. 2,600 66
Storage Equities, Inc. 429 6
* Storage Technology Corp. 2,000 58
Stride Rite Corp. 6,600 73
Stryker Corp. 2,600 95
Student Loan Marketing Assn. 4,300 140
* Styles on Video, Inc. 5,850 16
Summit Bancorp 5,170 100
* Summit Care Corp. 4,100 78
Sun Co., Inc. 5,300 152
* Sun Microsystems, Inc. 5,300 188
SunAmerica Inc. 1,700 62
* Sunbelt Nursery Group, Inc. 5,000 10
Sunbeam Oster 4,200 108
Sundstrand Corp. 1,900 86
* Sunglass Hut International, Inc. 2,400 56
SunTrust Banks, Inc. 6,400 306
Superior Industries International, Inc. 1,900 50
Superior Surgical Manufacturing Co., Inc. 5,900 74
SuperValu, Inc. 3,700 91
* Supreme International Corp. 2,100 21
Surgical Care Affiliates, Inc. 3,500 71
* Swift Transportation Co., Inc. 1,800 37
* Sybase, Inc. 2,400 125
* Sybron Corp. 4,100 141
* Synopsys, Inc. 900 39
Synovus Financial Corp. 3,500 63
Sysco Corp. 8,800 227
* TBC Corp. 7,800 71
TECO Energy, Inc. 5,900 119
TIG Holdings, Inc. 2,800 53
TJX Cos., Inc. 3,600 56
* T.P.I. Enterprises, Inc. 7,500 29
TRW, Inc. 3,200 211
Tab Products 9,100 63
Tambrands, Inc. 2,000 77
* Tandem Computers, Inc. 5,700 98
Tandy Corp. 3,300 165
* Target Therapeutics, Inc. 3,300 93
* Tatham Offshore, Inc. 6,300 81
Taubman Co. 9,500 93
* Tech Data Corp. 7,200 122
* Techne 3,800 38
* Technology Solutions Co. 7,000 56
* Tecnol Medical Products Inc. 5,400 78
Tecumseh Products Co. Class A 1,000 45
Tecumseh Products Co. Class B 1,000 45
</TABLE>
18
<PAGE> 21
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
* Tejas Gas Corp. 1,500 $ 71
* Telco Systems, Inc. 2,300 39
* Tele-Communications, Inc. Class A 28,442 620
Teleflex Inc. 2,800 99
Telephone & Data Systems, Inc. 2,500 115
* Tellabs, Inc. 2,200 122
* Telular Corp. 6,400 42
Temple-Inland Inc. 2,900 131
Tenneco, Inc. 8,500 361
Terra Nitrogen Co. LP 4,200 102
Texaco, Inc. 12,900 772
Texas Instruments, Inc. 4,700 352
Texas Utilities Co. 11,193 358
Textron, Inc. 4,400 222
* Thermedics, Inc. 5,700 73
* Thermo Electron Corp. 2,250 101
* Thermo Instrument Systems, Inc. 3,000 95
* Thermo Voltek 6,100 50
Thomas & Betts Corp. 1,000 67
Thornburg Mortgage Asset Corp. 5,900 44
* The 3 DO Co. 4,200 41
* 3 Com Corp. 3,200 165
Tidewater, Inc. 2,700 50
Time Warner, Inc. 19,100 671
The Times Mirror Co. Class A 6,200 195
* Tokos Medical 12,400 79
* Toll Brothers, Inc. 7,200 71
The Topps Co., Inc. 7,800 41
Torchmark Corp. 3,700 129
The Toro Co. 3,100 89
Tosco Corp. 1,500 44
* Total Containment 2,100 19
Total System Services, Inc. 7,000 120
Town & Country Trust 3,000 43
* Toys R Us, Inc. 14,400 439
Transamerica Corp. 3,800 189
Transatlantic Holdings 1,200 67
Transco Energy Co. 6,400 106
* TransTexas Gas Corp. 7,800 89
Travelers Inc. 16,268 529
Tredgar Industries 4,600 80
* Tremont Corp. 435 5
* Triangle Pacific Corp. 2,500 30
* Triarc Cos. Inc. 2,000 24
The Tribune Co. 3,200 175
Trinity Industries, Inc. 2,050 65
* Triquint Semiconductor, Inc. 4,200 27
* Triton Energy Corp. 2,500 85
True North Communications 1,800 77
Turner Broadcasting Class B 10,400 170
20th Century Industries 2,600 27
Tyco International Ltd. 6,125 291
Tyson Foods, Inc. 7,100 150
* UAL Corp. 1,450 127
UNR Industries, Inc. 11,100 71
UNUM Corp. 3,800 143
* USA Waste Service 6,800 77
USF&G Corp. 4,000 55
* USG Corp. 2,200 43
USLICO Corp. 4,600 93
UST, Inc. 10,600 294
USX Delphi Group 4,800 48
USX-Marathon Group 14,700 241
USX-U.S. Steel Group 3,500 124
Unicom Corp. 10,500 252
Unifi, Inc. 3,200 82
Uniforce Temp Personnel 2,500 25
Union Bank of San Francisco 4,100 111
Union Camp Corp. 3,500 165
Union Carbide Corp. 7,500 220
Union Electric Corp. 5,000 177
Union Pacific Corp. 10,100 461
Union Texas Petroleum Holdings 4,700 98
* Unisys Corp. 8,700 75
* Unit Corp. 17,900 54
United Healthcare Corp. 8,776 396
United Illuminating Co. 2,300 68
* United International Holdings, Inc. Class A 4,400 75
United Jersey Bank Financial Corp. 2,500 60
U.S. Bancorp 4,700 106
* U.S. Bioscience 10,100 36
U.S. Healthcare, Inc. 8,100 333
U.S. West Corp. 23,200 827
* United States Can Co. 5,800 111
* United States Cellular 4,000 131
United States Surgical Corp. 2,800 53
United States Trust Corp. 1,500 95
United Technologies Corp. 6,500 409
* United Television, Inc. 1,987 107
Unitrin Inc. 2,500 108
* Unitrode Corp. 6,300 117
Universal Foods Corp. 2,300 63
Unocal Corp. 11,900 324
Upjohn Co. 8,900 274
USLIFE Corp. 2,800 98
UtiliCorp United, Inc. 2,200 58
VF Corp. 3,300 160
* Valassis Communication 4,300 65
* Valence Technology 5,500 13
Valero Energy Corp. 5,800 98
Valhi, Inc. 14,500 117
* Value City Department Stores, Inc. 5,200 46
* Value Health, Inc. 1,980 74
Value Line, Inc. 2,600 78
Varian Associates, Inc. 1,200 42
</TABLE>
19
<PAGE> 22
STATEMENT OF NET ASSETS (continued)
<TABLE>
<CAPTION>
Market
Value
Shares (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
* Varity Corp. 2,200 $ 80
Vastar Resources, Inc. 4,900 122
* Vencor, Inc. 3,300 92
* Ventritex Inc. 2,800 75
* Vertex Industries, Inc. 6,700 13
* Vestar, Inc. 12,400 62
* Viacom International Class A 1,040 43
* Viacom International Class B 17,028 692
* Viacom Variable Rate Rights Exp. 9/26/95 13,000 15
* Vicor Corp. 2,400 61
Victoria Bank 2,200 49
* Video Lottery 5,100 48
Vigoro Corp. 1,600 48
* Vishay Intertechnology, Inc. 4,005 196
* Volt Information Sciences Inc. 700 20
* Vons Cos., Inc. 3,400 61
Vulcan Materials Co. 1,700 86
* WCI Steel, Inc. 6,400 60
WD-40 Co. 1,800 79
* WHX Corp. 6,000 80
WMX Technologies Inc. 24,000 630
WPS Resources Corp. 3,600 96
* Waban, Inc. 6,000 107
Wabash National Corp. 2,550 99
Wachovia Corp. 8,600 277
* Wainwright Bank & Trust Co. 4,800 23
Wal-Mart Stores, Inc. 115,900 2,463
Walbro Corp. 2,400 45
Walgreen Co. 6,300 276
* Walker Interactive Systems, Inc. 7,200 49
* Wall Data Inc. 2,200 88
Wallace Computer Services, Inc. 1,000 29
Warner-Lambert Co. 6,900 531
Washington Federal Savings & Loan Assn. 4,213 73
Washington Gas Light Corp. 2,800 94
Washington Mutual, Inc. 2,800 47
Washington National Corp. 2,100 40
Washington Post Co. Class B 600 146
Washington Real Estate Investment Trust 4,500 73
Wausau Paper Mills Co. 3,909 89
Waverly, Inc. 3,000 80
Weingarten Realty Investors 2,600 98
* Weirton Steel 6,600 59
Weis Markets, Inc. 1,600 39
* Wellpoint Health Networks, Inc. Class A 5,000 146
Wells Fargo & Co. 2,800 406
Wellsford Residential Property Trust 2,850 60
Wendy's International, Inc. 5,200 75
Werner Enterprises, Inc. 3,700 87
West One Bancorp 4,500 120
* Western Atlas Inc. 2,700 102
* Western Co. of North America 5,700 96
Western Investment Real Estate Trust 5,200 67
Western Resources, Inc. 3,100 89
Westinghouse Electric Corp. 17,800 218
Westvaco Corp. 3,500 137
* Wet Seal, Inc. Class A 9,800 44
Weyerhaeuser Co. 10,100 379
Wheelabrator Technologies 9,300 137
Whirlpool Corp. 3,800 193
Whitman Corp. 5,000 86
Whitney Holdings 4,575 101
* Whole Foods Market, Inc. 3,100 31
Willamette Industries, Inc. 2,600 123
Williams Cos., Inc. 4,900 123
* Clayton Williams Energy, Inc. 5,700 34
Wilmington Trust Corp. 2,900 66
Winn Dixie Stores, Inc. 3,700 190
* Winslow Furniture Co. 6,700 41
* Winter Sports Inc. 3,352 59
Wisconsin Energy Corp. 5,100 132
Wiser Oil Co. 1,500 21
Witco Chemical Corp. 2,600 64
Woolworth Corp. 6,500 98
Worthington Foods 600 5
Worthington Industries, Inc. 4,050 80
Wm. Wrigley, Jr. Co. 6,000 296
Wyle Laboratories 4,500 88
Xerox Corp. 5,300 525
York International Corp. 1,900 70
* York Research Corp. 14,100 58
* Zilog Inc. 2,400 71
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $233,947) 237,820
- --------------------------------------------------------------------------------
</TABLE>
20
<PAGE> 23
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT & AGENCY
OBLIGATIONS (26.3%)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES (12.0%)
U.S. Treasury Bonds
7.875%, 2/15/21 $ 350 $ 346
8.125%, 8/15/19-5/15/21 8,765 8,882
8.50%, 2/15/20 3,080 3,246
8.875%, 8/15/17-2/15/19 4,950 5,394
10.375%, 11/15/12 475 565
13.875%, 5/15/11 200 287
14.00%, 11/15/11 3,965 5,772
U.S. Treasury Notes
6.25%, 2/15/03 910 823
6.375%, 1/15/99-8/15/02 1,475 1,387
6.75%, 2/28/97-6/30/99 4,050 3,897
6.875%, 7/31/99 900 866
7.00%, 4/15/99 1,605 1,555
7.25%, 11/15/96-5/15/04 1,150 1,117
7.50%, 1/31/96-5/15/02 3,175 3,146
7.75%, 11/30/99-2/15/01 1,400 1,395
7.875%, 2/15/96-4/15/98 3,045 3,049
8.00%, 8/15/99-5/15/01 460 463
8.50%, 5/15/97 300 304
8.625%, 8/15/97 1,100 1,121
8.75%, 10/15/97 1,000 1,023
8.875%, 2/15/99 2,275 2,355
9.00%, 5/15/98 575 594
9.25%, 1/15/96 830 846
----------
GROUP TOTAL 48,433
----------
- --------------------------------------------------------------------------------
AGENCY BONDS AND NOTES (2.0%)
Federal National Mortgage Association
4.95%, 9/30/98 1,250 1,123
5.30%, 3/11/98 1,000 921
5.35%, 8/12/98 1,250 1,141
5.80%, 12/10/03 1,200 1,023
7.00%, 8/12/02 1,700 1,598
8.625%, 9/10/96-10/18/21 2,100 2,121
----------
GROUP TOTAL 7,927
----------
- --------------------------------------------------------------------------------
MORTGAGE OBLIGATIONS (12.3%)
Federal Home Loan Mortgage Corp.
5.50%, 9/1/98-1/1/09 381 348
6.00%, 7/1/98-1/1/24 1,765 1,600
6.50%, 1/1/98-5/1/24 3,843 3,491
7.00%, 1/1/98-6/1/24 4,048 3,762
7.50%, 9/1/97-9/1/24 2,486 2,364
8.00%, 7/1/97-11/1/24 2,218 2,157
8.50%, 3/1/96-11/1/24 1,154 1,143
9.00%, 1/1/05-8/1/22 885 892
9.50%, 8/1/03-12/1/22 566 581
10.00%, 3/1/17-4/1/20 283 296
Federal National Mortgage Association
5.50%, 1/1/01-11/1/08 190 170
6.00%, 8/1/00-1/1/24 1,465 1,314
6.50%, 3/1/00-7/1/24 3,730 3,361
7.00%, 5/1/00-9/1/24 4,187 3,861
7.50%, 4/1/99-8/1/24 3,115 2,953
8.00%, 5/1/99-11/1/24 2,608 2,530
8.50%, 4/1/99-10/1/24 1,385 1,370
9.00%, 9/1/04-9/1/24 974 981
9.50%, 4/1/05-5/1/22 723 743
10.00%, 7/1/05-8/1/21 323 338
10.50%, 8/1/20 70 74
Government National Mortgage Association
6.00%, 3/15/09-1/15/24 298 255
6.50%, 9/15/08-5/15/24 1,303 1,150
7.00%, 5/15/08-6/15/24 3,079 2,791
7.50%, 5/15/08-7/15/24 2,688 2,513
8.00%, 4/15/02-10/15/24 2,958 2,858
8.50%, 7/15/01-10/15/24 1,429 1,411
9.00%, 2/15/04-8/15/24 1,862 1,881
9.50%, 9/15/18-8/15/21 1,020 1,051
10.00%, 10/15/17-12/15/20 703 737
10.50%, 9/15/15-9/15/19 207 220
11.00%, 7/15/13-12/15/15 162 175
12.00%, 2/15/14 112 123
----------
GROUP TOTAL 49,494
----------
- --------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT & AGENCY
OBLIGATIONS (Cost $113,458) 105,854
- --------------------------------------------------------------------------------
CORPORATE BONDS (11.7%)
- --------------------------------------------------------------------------------
ASSET-BACKED (1.9%)
Chase Manhattan Credit Card Trust
7.40%, 5/15/00 550 541
8.75%, 8/15/99 550 555
First Chicago Master Trust
6.25%, 8/15/97 850 811
8.40%, 6/15/98 850 853
MBNA Master Credit Card Trust
6.20%, 8/31/97 850 810
7.75%, 10/15/98 550 546
Sears Credit Account Master Trust
5.90%, 11/15/98 527 520
7.75%, 9/15/98 550 547
Standard Credit Card Trust
8.00%, 10/7/97 850 849
8.50%, 8/7/97 850 857
9.375%, 8/10/96 550 554
----------
GROUP TOTAL 7,443
----------
- --------------------------------------------------------------------------------
</TABLE>
21
<PAGE> 24
STATEMENT OF NET ASSETS (continued)
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
FINANCE (5.4%)
American Express Credit Corp.
8.50%, 6/15/99 $ 175 $ 176
American General Finance Corp.
5.875%, 7/1/00 450 401
7.45%, 7/1/02 175 165
Associates Corp.
5.875%, 8/15/97 500 471
6.875%, 1/15/97 300 292
8.75%, 9/4/96 400 405
9.70%, 5/1/97 250 257
AVCO Financial Services
5.50%, 5/1/98 500 460
7.50%, 11/15/96 300 297
8.85%, 2/1/96 500 505
BankAmerica Corp.
6.00%, 7/15/97 500 474
7.50%, 10/15/02 200 187
10.00%, 2/1/03 200 213
Bankers Trust New York Corp.
4.70%, 7/1/96 500 477
8.25%, 7/2/96 600 602
Bear Stearns Cos., Inc.
6.625%, 1/15/04 400 346
Beneficial Corp.
9.125%, 2/15/98 400 407
CIT Group Holdings
5.65%, 11/15/95 525 517
The Chase Manhattan Corp.
7.875%, 1/15/97 300 298
8.50%, 3/1/96 850 854
Chemical Banking Corp.
6.625%, 1/15/98 350 334
7.375%, 6/15/97 500 491
Chrysler Finance Corp.
5.375%, 10/15/98 500 449
5.625%, 1/15/99 425 382
Commercial Credit Corp.
6.75%, 1/15/97 650 633
7.375%, 11/15/96 500 493
Countrywide Funding
7.31%, 8/28/00 400 376
Dean Witter Discover & Co.
6.00%, 3/1/98 1,250 1,167
First Chicago Corp.
7.625%, 1/15/03 350 329
First Union
8.125%, 6/24/02 500 486
Ford Motor Credit Corp.
6.25%, 2/26/98 500 471
7.875%, 1/15/97 600 596
8.25%, 7/15/96 400 401
Household Finance Corp.
9.25%, 2/15/95 550 552
International Lease Finance
7.90%, 10/1/96 1,150 1,144
Mellon Financial Corp.
6.125%, 11/15/95 600 593
6.50%, 12/1/97 200 191
7.625%, 11/15/99 350 340
Merrill Lynch & Co., Inc.
7.25%, 5/15/97 500 489
8.30%, 11/1/02 125 122
9.00%, 5/1/98 250 253
Morgan Stanley Group, Inc.
7.32%, 1/15/97 750 737
9.25%, 3/1/98 225 230
NCNB Corp.
9.50%, 6/1/04 275 290
NationsBank
5.375%, 12/1/95 500 490
Norwest Financial Inc.
7.10%, 11/15/96 600 590
PaineWebber Group Inc.
7.00%, 3/1/00 550 504
Republic Bank of New York
7.75%, 5/15/02 500 478
Transamerica Financial Corp.
8.375%, 2/15/98 425 425
----------
GROUP TOTAL 21,840
----------
- --------------------------------------------------------------------------------
INDUSTRIAL (2.7%)
American Brands, Inc.
7.875%, 1/15/23 100 90
Anheuser-Busch Co., Inc.
7.375%, 7/1/23 125 109
8.625%, 12/1/16 200 197
Applied Materials
8.00%, 9/1/04 125 120
Archer-Daniels-Midland Co.
8.875%, 4/15/11 295 307
Auburn Hills Trust
12.375%, 5/1/20 175 236
BP America, Inc.
7.875%, 5/15/02 250 244
The Boeing Co.
8.375%, 3/1/96 550 553
CSX Corp.
8.25%, 11/1/96 450 451
8.40%, 8/1/96 525 527
8.625%, 5/15/22 100 99
Conrail Corp.
9.75%, 6/15/20 120 133
Deere & Co.
8.50%, 1/9/22 175 173
</TABLE>
22
<PAGE> 25
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Eastman Chemical
7.25%, 1/15/24 $ 325 $ 270
Ford Capital BV
9.00%, 6/1/96 275 278
9.00%, 8/15/98 600 609
9.50%, 6/1/10 100 106
Ford Motor Corp.
9.95%, 2/15/32 100 111
General Motors
9.625%, 12/1/00 700 726
Grand Metropolitan Investment Corp.
9.00%, 8/15/11 250 259
ITT Corp.
7.25%, 11/15/96 600 591
8.875%, 2/1/08 100 105
International Paper Co.
7.625%, 1/15/07 100 93
May Department Stores Co.
9.75%, 5/15/06 120 128
McDonald's Corp.
6.75%, 2/15/03 300 272
Mobil Corp.
7.625%, 2/23/33 325 290
J.C. Penney Co., Inc.
7.125%, 11/15/23 150 127
9.05%, 3/1/01 300 309
PepsiCo, Inc.
5.00%, 2/24/97 1,000 940
6.125%, 1/15/98 250 236
Philip Morris Co.
8.25%, 10/15/03 200 195
Texaco Capital Corp.
7.50%, 3/1/43 150 128
8.875%, 9/1/21 100 103
Union Carbide Corp.
7.875%, 4/1/23 150 131
Union Oil of California
9.125%, 2/15/06 160 166
9.25%, 2/1/03 175 182
Union Pacific Corp.
8.625%, 5/15/22 225 216
Wal-Mart Stores, Inc.
8.00%, 5/1/96 275 276
Waste Management Inc.
7.875%, 8/15/96 300 299
Whirlpool Corp.
9.00%, 3/1/03 200 206
Xerox Corp.
9.625%, 10/15/00 350 354
----------
GROUP TOTAL 10,945
----------
- --------------------------------------------------------------------------------
UTILITIES (1.7%)
Alabama Power Co.
8.75%, 12/1/21 168 164
Arizona Public Service Co.
8.00%, 2/1/25 225 196
Carolina Power & Light Co.
6.875%, 8/15/23 275 220
Connecticut Power and Light Co.
7.625%, 4/1/97 500 490
Consolidated Edison Co. of New York, Inc.
6.625%, 2/1/02 1,000 900
Enron Corp.
9.65%, 5/15/01 400 423
Georgia Power Co.
9.23%, 12/1/19 64 64
Houston Lighting and Power Co.
8.75%, 3/1/22 150 148
MCI Communications Corp.
7.50%, 8/20/04 450 426
Michigan Bell Telephone Co.
7.50%, 2/15/23 275 248
New York Telephone Co.
7.00%, 8/15/25 200 162
Pacific Bell Corp.
7.25%, 7/1/02 275 259
Southern Bell Corp.
7.625%, 3/15/13 550 502
Southwestern Bell Corp.
7.625%, 10/1/13 175 159
7.625%, 3/1/23 475 422
Texas Utilities Co.
7.125%, 6/1/97 400 388
7.875%, 3/1/23 325 283
8.125%, 2/1/02 400 391
Union Electric Corp.
7.65%, 7/15/03 250 240
U.S. West Financial
8.85%, 9/20/99 500 507
Virginia Electric Power Co.
6.625%, 4/1/03 250 224
----------
GROUP TOTAL 6,816
----------
- --------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(Cost $50,408) 47,044
- --------------------------------------------------------------------------------
FOREIGN AND INTERNATIONAL
AGENCY BONDS (1.2%)
- --------------------------------------------------------------------------------
Asian Development Bank
9.125%, 6/1/00 500 522
Province of British Columbia
7.00%, 1/15/03 230 214
British Columbia Hydro
12.50%, 9/1/13 500 580
</TABLE>
23
<PAGE> 26
STATEMENT OF NET ASSETS (continued)
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
European Investment Bank
8.875%, 3/1/01 $ 275 $ 283
Export Import Bank of Japan
9.00%, 4/15/98 500 510
Inter American Development Bank
8.50%, 3/15/11 175 181
International Bank for Reconstruction
& Development
12.375%, 10/15/02 225 277
KFW International Finance, Inc.
8.85%, 6/15/99 550 564
Province of Manitoba
7.75%, 2/1/02 625 612
9.25%, 4/1/20 130 137
9.50%, 10/1/00 160 167
New Zealand Government
8.75%, 12/15/06 200 205
9.875%, 1/15/11 275 310
Province of Ontario-Global
7.375%, 1/27/03 175 165
7.75%, 6/4/02 275 266
- --------------------------------------------------------------------------------
TOTAL FOREIGN AND INTERNATIONAL
AGENCY BONDS (Cost $5,362) 4,993
- --------------------------------------------------------------------------------
TEMPORARY CASH INVESTMENTS (1.9%)
- --------------------------------------------------------------------------------
U.S. TREASURY BILL--Note D
5.395%, 3/23/95 200 197
REPURCHASE AGREEMENT
Collateralized by U.S. Government
Obligations in a Pooled
Cash Account
5.90%, 1/3/95 7,297 7,297
- --------------------------------------------------------------------------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $7,494) 7,494
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS (100.1%)
(Cost $410,669) 403,205
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-.1%)
- --------------------------------------------------------------------------------
Other Assets--Notes B and E 12,529
Liabilities--Note E (12,883)
----------
(354)
- --------------------------------------------------------------------------------
NET ASSETS (100%)
- --------------------------------------------------------------------------------
Applicable to 38,956,167 outstanding
$.001 par value shares
(authorized 1,000,000,000 shares) $402,851
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $10.34
================================================================================
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security.
(1) The combined market value of common stocks, Standard & Poor's 500 Index
Futures Contracts, and Standard & Poor's Midcap 400 Index Futures Contracts
represents 60.2% of net assets.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AT DECEMBER 31, 1994, NET ASSETS
CONSISTED OF:
- --------------------------------------------------------------------------------
Amount Per
(000) Share
-------- ------
<S> <C> <C>
Paid in Capital $409,820 $10.52
Undistributed Net Investment Income 319 .01
Accumulated Net Realized Gains 146 --
Unrealized Depreciation
of Investments--Note D (7,434) (.19)
- --------------------------------------------------------------------------------
NET ASSETS $402,851 $10.34
- --------------------------------------------------------------------------------
</TABLE>
24
<PAGE> 27
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended
December 31, 1994
(000)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
INCOME
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,792
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 10,123
- ------------------------------------------------------------------------------------------------------------
Total Income . . . . . . . . . . . . . . . . . . . . . . . 15,915
- ------------------------------------------------------------------------------------------------------------
EXPENSES
The Vanguard Group--Note B
Investment Advisory Services . . . . . . . . . . . . . . . . . . $ 90
Management and Administrative . . . . . . . . . . . . . . . . . 344
Marketing and Distribution . . . . . . . . . . . . . . . . . . . 102 536
Taxes (other than income taxes) . . . . . . . . . . . . . . . . . . ------ 31
Custodian's Fees . . . . . . . . . . . . . . . . . . . . . . . . . 114
Auditing Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Shareholders' Reports . . . . . . . . . . . . . . . . . . . . . . . 88
Annual Meeting and Proxy Costs . . . . . . . . . . . . . . . . . . 11
Directors' Fees and Expenses . . . . . . . . . . . . . . . . . . . 2
- ------------------------------------------------------------------------------------------------------------
Total Expenses . . . . . . . . . . . . . . . . . . . . . . 790
- ------------------------------------------------------------------------------------------------------------
Net Investment Income . . . . . . . . . . . . . . . . . 15,125
- ------------------------------------------------------------------------------------------------------------
REALIZED NET GAIN
Investment Securities Sold . . . . . . . . . . . . . . . . . . . . 101
Futures Contracts . . . . . . . . . . . . . . . . . . . . . . . . . 28
- ------------------------------------------------------------------------------------------------------------
Realized Net Gain . . . . . . . . . . . . . . . . . . . 129
- ------------------------------------------------------------------------------------------------------------
CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION)
Investment Securities . . . . . . . . . . . . . . . . . . . . . . . (21,237)
Futures Contracts . . . . . . . . . . . . . . . . . . . . . . . . . 7
- ------------------------------------------------------------------------------------------------------------
Change in Unrealized Appreciation (Depreciation) . . . . (21,230)
- ------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Operations . . $ (5,976)
- ------------------------------------------------------------------------------------------------------------
</TABLE>
25
<PAGE> 28
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED Year Ended
DECEMBER 31, 1994 December 31, 1993
(000) (000)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS
Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . $ 15,125 $ 9,034
Realized Net Gain . . . . . . . . . . . . . . . . . . . . . . . . . . 129 978
Change in Unrealized Appreciation
(Depreciation) . . . . . . . . . . . . . . . . . . . . . . . . . . (21,230) 11,527
- -----------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations . . . . . . . . . . . . . . . . . (5,976) 21,539
- -----------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS (1)
Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . (14,998) (10,617)
Realized Net Gain . . . . . . . . . . . . . . . . . . . . . . . . . . -- (984)
- -----------------------------------------------------------------------------------------------------------------------------
Total Distributions . . . . . . . . . . . . . . . . . . . . . . . . (14,998) (11,601)
- -----------------------------------------------------------------------------------------------------------------------------
NET EQUALIZATION CREDITS--Note A . . . . . . . . . . . . . . . . . . . . 172 1,565
- -----------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (2)
Issue -- Regular . . . . . . . . . . . . . . . . . . . . . . . . . 103,724 218,784
-- In Lieu of Cash Distributions . . . . . . . . . . . . . . 13,990 10,685
-- Exchange . . . . . . . . . . . . . . . . . . . . . . . . 41,672 79,255
Redeemed -- Regular . . . . . . . . . . . . . . . . . . . . . . . . . (46,359) (17,540)
-- Exchange . . . . . . . . . . . . . . . . . . . . . . . . (56,431) (44,153)
- -----------------------------------------------------------------------------------------------------------------------------
Net Increase from
Capital Share Transactions . . . . . . . . . . . . . . . . . 56,596 247,031
- -----------------------------------------------------------------------------------------------------------------------------
Total Increase . . . . . . . . . . . . . . . . . . . . . . . . . . 35,794 258,534
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of Year . . . . . . . . . . . . . . . . . . . . . . . . . . 367,057 108,523
- -----------------------------------------------------------------------------------------------------------------------------
End of Year (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . $402,851 $367,057
=============================================================================================================================
(1) Distributions Per Share
Net Investment Income . . . . . . . . . . . . . . . . . . . . $.40 $.39
Realized Net Gain . . . . . . . . . . . . . . . . . . . . . . -- $.03
- -----------------------------------------------------------------------------------------------------------------------------
(2) Shares Issued and Redeemed
Issued . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,701 27,900
Issued in Lieu of Cash Distributions . . . . . . . . . . . . 1,340 991
Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . (9,743) (5,762)
- -----------------------------------------------------------------------------------------------------------------------------
5,298 23,129
- -----------------------------------------------------------------------------------------------------------------------------
(3) Undistributed Net Investment Income . . . . . . . . . . . . $ 319 $ 20
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
26
<PAGE> 29
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------- September 28-
For a Share Outstanding Throughout Each Period 1994 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 . . . . . . . . . . . . . . . . . . . . . . .41 .39 .08
Net Realized and Unrealized Gain (Loss)
on Investments . . . . . . . . . . . . . . . . . . . . . . . . (.58) .63 .31
------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . . . . . . . (.17) 1.02 .39
- --------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income . . . . . . . . . . . . . . . (.40) (.39) (.08)
Distributions from Realized Capital Gains . . . . . . . . . . . . . --- (.03) ---
------- ------- -------
TOTAL DISTRIBUTIONS . . . . . . . . . . . . . . . . . . (.40) (.42) (.08)
- --------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD . . . . . . . . . . . . . . . . . . . $10.34 $10.91 $10.31
==========================================================================================================================
TOTAL RETURN** . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.56% +10.00% +3.69%
- --------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (Millions) . . . . . . . . . . . . . . . . . $403 $367 $109
Ratio of Expenses to Average Net Assets . . . . . . . . . . . . . . . . .20% .20% .22%*
Ratio of Net Investment Income to Average Net Assets . . . . . . . . . 3.86% 3.53% 3.76%*
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . . . . . 16% 25% 17%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized
** Total return figures do not reflect the annual account maintenance fee of
$10. Subscription period for the Fund was from September 28, 1992, to
November 8, 1992, during which time all assets were held in money market
instruments. Performance measurement begins on November 9, 1992.
27
<PAGE> 30
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 the close of the New York Stock Exchange
(generally 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 Standard & Poor's 500 Index futures contracts
and Standard & Poor's Midcap 400 Index futures contracts to a limited
extent, with the objectives of maintaining full exposure to the stock
market, enhancing returns, maintaining liquidity and minimizing transaction
costs. The Fund may purchase futures contracts to immediately position
incoming cash in the market, thereby simulating a fully invested position
in the underlying index while maintaining a cash balance for liquidity. In
the event of redemptions, the Fund may pay departing shareholders from its
cash balance and reduce its futures position accordingly. Returns may be
enhanced by using futures contracts instead of the underlying securities
when futures are believed to be priced more attractively than the
underlying securities.
The primary risks associated with the use of futures contracts are imperfect
correlation between the change in market value of the securities contained
in the underlying indexes 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.
28
<PAGE> 31
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.
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 December 31, 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 year ended December 31, 1994, the Fund made purchases of
$56,990,000 and sales of $15,818,000 of investment securities other than U.S.
Government securities and temporary cash investments. Purchases and sales of
U.S. Government securities were $69,400,000 and $45,011,000, respectively.
D. At December 31, 1994, unrealized depreciation of investment securities for
financial reporting and Federal income tax purposes was $7,464,000, of which
$24,381,000 related to appreciated securities and $31,845,000 related to
depreciated securities.
At December 31, 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 March 1995, the related unrealized appreciation, and the
market value of securities deposited as initial margin for those contracts were
$4,801,000, $30,000, and $197,000, respectively.
E. The market value of securities on loan to broker/dealers at December 31,
1994, was $5,397,000, for which the Fund had received cash collateral of
$5,628,000.
29
<PAGE> 32
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
Vanguard Balanced Index Fund
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Vanguard Balanced Index Fund (the "Fund") at December 31, 1994, the results of
its operations, the changes in its net assets and the financial highlights for
each of the respective periods presented, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities by correspondence with the custodian and brokers and
the application of alternative auditing procedures where confirmations from
brokers were not received, provide a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE LLP
Thirty South Seventeenth Street
Philadelphia, Pennsylvania 19103
February 10, 1995
30
<PAGE> 33
SPECIAL TAX INFORMATION
SPECIAL 1994 TAX INFORMATION (UNAUDITED)
FOR VANGUARD BALANCED INDEX FUND
Corporate shareholders should note for the year ended December 31, 1994, 38.3%
of the Fund's investment income (i.e. dividend income plus short-term capital
gains, if any) qualifies for the intercorporate dividends received deduction.
31
<PAGE> 34
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 of Rhone-Poulenc Rorer Inc.; Director of Sun
Company, Inc.
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 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., The Jeffrey Co., and Southern New England
Communications Company.
ALFRED M. RANKIN, JR., Chairman, President, and Chief Executive Officer of
NACCO Industries, Inc.; Director of NACCO Industries, The BFGoodrich Company,
Reliance Electric 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.
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 VINCENT S. MCCORMACK
Senior Vice President Senior Vice President
Planning & Development Operations
JAMES H. GATELY RALPH K. PACKARD
Senior Vice President Senior Vice President
Institutional Chief Financial Officer
IAN A. MACKINNON
Senior Vice President
Fixed Income Group
32
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THE VANGUARD VOYAGE . . . STAYING THE COURSE
(continued from inside front cover)
* We set specific standards for each Fund's investment policies and principles.
* We adhere to the highest standards of investment quality, consistent with
each Fund's objectives.
* We offer candor in our Fund descriptions (including full disclosure of risk)
to prospective investors, and in our description to shareholders of each
Fund's success (or, sometimes, lack of the same).
These principles make at least as much sense today as they did in 1929, perhaps
even more. For we live in an era when many fund organizations have become
asset-gathering machines, capitalizing on past performance that is unrepeatable
and investment fads that today, as yesterday, will come and go. The new
marketing policy is too often "if investors want it, we'll sell it to them."
But our principle remains "if it makes sound investment sense, we'll offer it,
even if it takes years to attract substantial assets."
FOUNDING CORPORATE VALUES
With the founding of The Vanguard Group in 1974, a new concept of values was
brought to bear on mutual fund management. Unlike other fund organizations,
Vanguard alone is structured to serve only its Funds' shareholders. Vanguard's
corporate structure places not the fund management company, but the fund
shareholders, "at the top" of the organizational chart. Vanguard Fund
shareholders are literally the owners of the firm and are entitled to all of
the benefits that, at other fund firms, accrue to the owners of the management
company.
Because of this unique structure, Vanguard has become best known for its
low costs, which we believe are just as essential a consideration in investing
in mutual funds as risk potential and total return. We call this relationship
between risk, return, and cost the "eternal triangle" of mutual fund investing.
We take special pride in our position as (by far) the lowest-cost provider
of financial services in the world. Under our "no-load" offering structure,
shareholders begin their Vanguard investment program with $1,000 of assets
(not, say, $950) for each $1,000 investment. Then, under our "at-cost"
operating structure, each $1,000 is managed for only about $3 per year; our
competitors may charge three, four, or even five times that amount.
In all, Vanguard has distinguished itself by providing Funds with sound
and durable goals to investors with long-term time horizons, and doing so at
the fairest financial terms available. We believe that the unique Vanguard
structure "promotes a healthy and viable mutual fund complex within which each
Fund can better prosper; enables the Funds to realize substantial savings from
advisory fee reductions; promotes savings from economies of scale; and provides
the Funds with direct and conflict-free control over distribution functions."
We are not alone in this belief. Indeed, the quotation is taken verbatim from
the unanimous decision of the U.S. Securities and Exchange Commission when, in
1981, it approved our application for the structure under which we operate
today.
A CLOSING THOUGHT
We are proud of what Wellington Fund, the other Vanguard Funds, and The
Vanguard Group have come to represent, and we are grateful for the success and
growth with which we have been blessed. We are an industry leader, and, as a
competitor observed a few years ago, we are "the standard by which all fund
organizations are judged."
In battle terms, "the vanguard" is the first wave of troops or ships, and
Vanguard surely is in the first wave of the battle for investment survival. As
we look behind us, however, the "second wave" is not in sight. No fund
organization has followed our lead, leaving ours a lonely course. No matter. We
have an organization that places the interests of our Fund shareholders first.
We have Funds that shall endure the vicissitudes of the future. Come what may,
we intend to "stay the course," and we shall do our very best to continue to
deserve your confidence and loyalty. We hope that you will stay the course with
us.
<PAGE> 36
THE VANGUARD FAMILY OF FUNDS
FIXED INCOME FUNDS
MONEY MARKET FUNDS
Vanguard Admiral Funds
U.S. Treasury Money Market Portfolio
Vanguard Money Market Reserves
TAX-EXEMPT MONEY MARKET FUNDS
Vanguard Municipal Bond Fund
Money Market Portfolio
Vanguard State Tax-Free Funds
Money Market Portfolios (CA, NJ, OH, PA)
TAX-EXEMPT INCOME FUNDS
Vanguard Municipal Bond Fund
Vanguard State Tax-Free Funds
Insured Longer-Term Portfolios
(CA, FL, NJ, NY, OH, PA)
INCOME FUNDS
Vanguard Admiral Funds
Vanguard Fixed Income Securities Fund
Vanguard Preferred Stock Fund
EQUITY AND BALANCED FUNDS
GROWTH AND INCOME FUNDS
Vanguard Convertible Securities Fund
Vanguard Equity Income Fund
Vanguard Quantitative Portfolios
Vanguard/Trustees' Equity Fund
U.S. Portfolio
Vanguard/Windsor Fund
Vanguard/Windsor II
BALANCED FUNDS
Vanguard Asset Allocation Fund
Vanguard STAR Fund
Vanguard/Wellesley Income Fund
Vanguard/Wellington Fund
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 Growth Portfolio
Vanguard/Trustees' Equity Fund
International Portfolio
INDEX FUNDS
Vanguard Index Trust
Total Stock Market Portfolio
500 Portfolio
Extended Market Portfolio
Growth Portfolio
Value Portfolio
Small Capitalization Stock Portfolio
Vanguard International Equity Index Fund
European Portfolio
Pacific Portfolio
Emerging Markets Portfolio
Vanguard Bond Index Fund
Vanguard Tax-Managed Fund
Vanguard Balanced Index Fund
[LOGO]
<TABLE>
<S> <C>
Vanguard Financial Center Valley Forge, Pennsylvania 19482
New Account Information: 1-(800) 662-7447 Shareholder Account Services: 1-(800) 662-2739
</TABLE>
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.
Q020-12/94
<PAGE> 37
EDGAR APPENDIX
This appendix describes the components of the printed version of this
report that do not translate into a format acceptable to the EDGAR system.
The front cover of the printed version of this report features the
Vanguard ship in the crashing sea.
A small picture of a rear view of the Vanguard ship crashing through
the sea appears at the top of the inside covers of the report.
A running head featuring a sextant appears on pages one through five.
A photograph of John C. Bogle appears at the lower-right of page one.
A line chart depicting Cumulative Performance Stock Market and Bond
Market for the period of 1990-1994 appears at the top left of page two.
A line chart depicting Cumulative Performance for Wilshire 5000,
Balanced Index, Vanguard Balanced Index Fund and Average Balanced Fund, for the
period of November 30, 1992 to December 31, 1994 appears at the bottom right of
page three.
A line chart depicting Cumulative Performance of the Balanced Index
Fund and the Average Balanced Fund, for the period of December 31, 1984 to
December 31, 1994 appears at the top of page four.
A running head featuring a coiled rope appears on page six.
A running head featuring a log book and pen appears on page seven
through thirty one.
A running head featuring a compass appears on page thirty two.
At the bottom of the inside back cover appears a triangle with the
sides labeled "Risk," "Cost," and "Return."
A seagull in flight is featured at the top of the outside back cover of
the report.
