May 1995
Dear Shareholder:
We are pleased to report the investment results for your Capital Value Fund for
the year ending March 31, 1995. The year which this annual report addresses is
best understood as two very distinct periods. The initial period was marked by
a continuation of rising interest rates which began in the first quarter of 1994
and that resulted in significant bond market losses and a flat stock market. The
second period began in November 1994 as inflation fears started to subside,
resulting in lower long-term interest rates and a stellar market for stocks in
the first quarter of 1995.
This sort of significant shift in market direction poses special challenges for
asset managers. We are pleased that your Fund's Portfolio performed
competitively versus other mutual funds with similar investment objectives over
the past year. Nonetheless, we remain committed to outperforming the appropriate
market indices for each Portfolio over the long-term.
Thank you for investing in the Capital Value Fund, Inc. Our combined assets in
the Fund's five Portfolios now total $52,819,676. Please do not hesitate to call
at any time with questions about the Fund or its performance. We look forward to
a long and mutually profitable relationship.
Sincerely,
Robert G. Millen
Chairman, Capital Value Fund, Inc.
President, Capital Value Corporation
David W. Miles
President, Capital Value Fund, Inc.
Senior Managing Director
Investors Management Group
<PAGE>
CAPITAL VALUE EQUITY PORTFOLIO
For the 12-month period ended March 31, 1995, the Equity Portfolio increased in
value with Initial and Select shares up 9.78 percent and 10.31 percent,
respectively. These returns were below the S&P 500 Index which was up 15.57
percent for the period. However, the returns for the Equity Portfolio compared
favorably to the average return of 8.83 percent achieved by U.S. equity funds,
according to Lipper Analytical Services. Since the inception of the Equity
Portfolio on May 20, 1993, the average annualized returns for Initial and Select
shares are 7.15 percent and 7.88 percent, respectively, compared to an average
annualized return of 9.22 for the S&P 500 Index.
The last year was a strong one for the stock market. While most of 1994 was
lackluster for stocks, the market staged a very impressive rally during the
first quarter of 1995. During the first quarter, the S&P 500 advanced a very
strong 9.74 percent which allowed the S&P 500 to achieve a 15.57 percent return
for the year. The stock market has benefited so far in 1995 from a growing
belief that the economy will achieve a soft landing where economic growth slows
but not enough to hurt corporate earnings growth. The combination of lower
long-term interest rates and the belief that corporate earnings will continue to
be strong provided a very favorable environment for stocks during the first
quarter of 1995. In addition, fears of rising inflation have recently dissipated
which also has been a positive for the stock market.
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at the Fund's inception, with a similar investment
in the Standard & Poor's 500 Stock Index ("S&P 500"). The shares of the Fund are
divided into "Initial Shares" and "Select Shares". Generally, only Initial
Shares of the Portfolio may be purchased directly by certain persons and in
certain situations. (See "ADDITIONAL INVESTMENT INFORMATION" in the prospectus.)
Initial Shares of the Portfolio automatically convert to Select Shares of the
same Portfolio eight years after issuance of the Initial Shares. Initial Shares
of the Portfolio pay distribution fees based upon average daily net assets of
the Portfolio. Select Shares of the Portfolio do not pay distribution fees.
Results include the reinvestment of all dividends and capital gains
distributions. The S&P 500 is an unmanaged index of common stocks. Performance
data quoted represents past performance, which is no indication of future
performance. Investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. An additional fee of $10 will be charged for redemption from a retirement
plan account and redemptions payable by wire transfer. If investors redeem
shares, they may be subject to a maximum contingent deferred sales charge
("CDSC") of 4 percent, which has not been reflected in the above graph.
When we wrote this report one year ago, we had just begun to change our
investment outlook to reflect our view that the economy was poised for slower
growth and that long-term interest rates were most likely too high in relation
to the underlying rate of inflation. It was our belief at that time that
inflation would not rise dramatically and that fears of higher inflation on the
part of the Federal Reserve and investors were overdone. Based on these views,
we began to reposition the Equity Portfolio by significantly reducing the
portfolio's exposure to cyclical and economically sensitive stocks in favor of
emphasizing stocks which benefit in an environment of slower economic growth.
Subsequently, we began to purchase stocks with high yields which behave much
like bonds and appreciate in value when long-term interest rates fall and stocks
which exhibit consistent unit growth and can produce rising earnings even if the
pace of economic growth slows. In line with this strategy, during the last 12
months we significantly increased our exposure to utility, finance, consumer
nondurable, and drug stocks and significantly decreased our exposure to producer
manufacturing, capital goods, energy, and raw materials stocks.
Looking back over the last year, our change in strategy was on track as the
economy has begun to slow and long-term interest rates have declined to
approximately 7.4 percent from a high of almost 8.2 percent last November. Our
only frustration has been that utility and finance stocks, while generating
positive returns as long-term interest rates declined, did not keep pace with
the S&P 500. The best performing stocks in the stock market during the last year
were highly concentrated in the electronic technology (semiconductors, computer
systems, communications equipment) consumer nondurable (cosmetics, beverages,
household products, foods) and drug (pharmaceutical, medical products) sectors.
While the Equity Portfolio did significantly benefit from exposure in these
areas, the exposure to utility and finance stocks was enough to keep the Equity
Portfolio from outperforming the S&P 500 over the 12 month period. At this
point, we plan to keep our current investment strategy in place until the
consensus embraces an economic slowdown and it becomes fully priced into the
stock market. At that time, we will then most likely begin to shift towards
stocks that would benefit from the early part of the next expansion cycle in the
economy.
While we feel confident that long-term interest rates will continue to trend
downward, we are less certain about the direction of the stock market. The lack
of inflationary pressures and the downward trend of long-term interest rates has
been and will likely continue to be positive for stocks. However, the current
excitement in the stock market surrounding the evidence of slower economic
growth may well develop eventually into concerns about renewed profit weakness.
If the economy slows too much, then fears of recession could introduce some
volatility into the stock market.
In our view, the bond market will most likely outperform the stock market over
the next 12-months as long-term interest rates continue to decline. We believe
that the Equity Portfolio is postured correctly to take advantage of this trend
due to our overweighting in utility and finance stocks. We are hopeful that as
the economy continues to slow, utility and finance stocks will lead the stock
market which will allow the Equity Portfolio to outperform the S&P 500. If the
stock market does decline at some point due to fears of weak earnings growth, we
are confident the Equity Portfolio will perform better than the broad market due
to its defensive posture and above average yield.
James T. Richards James W. Paulsen, Ph.D.
Portfolio Manager Portfolio Manager
<PAGE>
CAPITAL VALUE TOTAL RETURN PORTFOLIO
The investment objective of the Total Return Portfolio is a high total return
from capital appreciation and current income, consistent with preservation of
capital. The Portfolio attempts to achieve its objective by investing in equity
securities and fixed income securities.
For the 12-month period ended March 31, 1995, the total return of Select Shares
was 6.69 percent. Initial Shares posted a total return of 6.16 percent. Both
Select and Initial Shares underperformed the Balanced Index's total return of
10.23 percent. The average return of balanced funds according to Lipper
Analytical Services was 6.08 percent.
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at the Fund's inception, with a similar investment
in the Standard & Poor's 500 Stock Index ("S&P 500") and in the Lehman Aggregate
Index. The shares of the Fund are divided into "Initial Shares" and "Select
Shares". Generally, only Initial Shares of the Portfolio may be purchased
directly by certain persons and in certain situations. (See "ADDITIONAL
INVESTMENT INFORMATION" in the prospectus.) Initial Shares of the Portfolio
automatically convert to Select Shares of the same Portfolio eight years after
issuance of the Initial Shares. Initial Shares of the Portfolio pay distribution
fees based upon average daily net assets of the Portfolio. Select Shares of the
Portfolio do not pay distribution fees. Results include the reinvestment of all
dividends and capital gains distributions. The S&P 500 is an unmanaged index of
common stocks. The Lehman Aggregate includes fixed rate debt issues rated
investment grade or higher by Moody's Investors Service, Standard and Poor's
Corporation, or Fitch Investor's Service. All issues have at least one year to
maturity and an outstanding par value of at least $100 million. The Lehman
Aggregate Index includes bonds with maturities of 1-30 years. Price, coupon, and
total return are reported for all sectors on a month-end to month-end basis.
Performance data quoted represents past performance, which is no indication of
future performance. Investment return and principal value will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. An additional fee of $10 will be charged for redemption from a
retirement plan account and redemptions payable by wire transfer. If investors
redeem shares, they may be subject to a maximum contingent deferred sales charge
("CDSC") of 4 percent, which has not been reflected in the above graph.
Beginning in April, 1994 we began shifting the asset allocation of the portfolio
toward bonds. Stocks had outperformed bonds by approximately 40 percent since
August, 1993. Historically this was a large outperformance over a short period
of time. In addition, we felt that rising interest rates, tightening Federal
Reserve policy, and the lack of fiscal stimulus would slow the economy.
Therefore, we shifted the asset allocation from 69 percent stocks, 31 percent
bonds to 44 percent stocks, 56 percent bonds over the course of the last twelve
months.
Stocks, however, continued to outperform bonds for much of the last year as
economic growth continued at a solid pace. Though the transition in the economy
and the financial markets has taken longer to materialize than we expected, it
is starting to happen. The housing and durable goods sectors which had been the
driving force of the economy have slowed significantly and inflation remains
moderate. Thus, we are more confident at this point that long-term interest
rates will continue to trend downward and bonds will outperform stocks over the
next year.
We have also changed both the stock and bond portions of the portfolio to
reflect our view that the economy was poised for slower growth and that
long-term interest rates were most likely too high in relation to the underlying
rate of inflation. Based on our investment outlook, we began to reposition the
equity portion of the portfolio by significantly reducing the portfolio's
exposure to cyclical and economically sensitive stocks in favor of emphasizing
stocks which benefit in an environment of slower economic growth. Subsequently,
we began to purchase stocks with high yields which behave much like bonds and
appreciate in value when long-term interest rates fall and stocks which exhibit
consistent unit growth and can produce rising earnings even if the pace of
economic growth slows. With these thoughts in mind, we increased our exposure to
utility, finance, consumer nondurable, and drug stocks and significantly
decreased our exposure to producer manufacturing, capital goods, energy, and raw
materials stocks.
In the bond portion of the portfolio we began lengthening the duration of the
portfolio, a measure of interest rate sensitivity, over the last twelve months.
Currently we are maintaining the duration of the portfolio at a level between 15
and 20 percent longer than the index. We also expect the yield curve to continue
to flatten as short-term interest rates stabilize or edge upward slightly and
long-term interest rates continue to decline. Therefore, we are maintaining a
barbell posture in the bond portion of the portfolio. The mortgage market in our
opinion is overvalued as yield spreads are extremely low relative to Treasuries,
and we believe they could widen substantially if long-term interest rates
continue to decline. Thus, we are significantly underweighting mortgages.
Corporate bond yield spreads are also narrow relative to Treasuries. If the
economy slows over the next 6 to 12 months concerns may mount regarding
corporate earnings, causing corporate bond yield spreads to widen. We have been
extremely selective in the corporate bond market over the last twelve months.
In conclusion, the portfolio is positioned for an environment in which the
economy slows and inflation remains moderate. In this environment long-term
interest rates should decline as inflation fears dissipate. Short-term interest
rates should stabilize if inflation becomes less of a concern. In this
environment bonds should outperform stocks and stocks that are more bond-like or
which exhibit consistent unit growth will outperform more cyclical stocks.
James T. Richards Kathryn D. Beyer, CFA
Portfolio Manager Portfolio Manager
Jeffrey D. Lorenzen, CFA James W. Paulsen, Ph.D.
Portfolio Manager Portfolio Manager
<PAGE>
CAPITAL VALUE FIXED INCOME PORTFOLIO
The Capital Value Fixed Income Portfolio's objective is to provide as high a
level of income as is consistent with preservation of capital. The portfolio
produced a 12-month total return for the Initial and Select Shares of 4.59
percent and 5.12 percent respectively, compared to the Lehman Aggregate Index of
5.00 percent.
During much of 1994, a strengthening U.S. economy created conditions favorable
to accelerating inflation. The fear of escalating inflation from robust growth
caused investors to flee the bond market. Interest rates rose across the
maturity curve, driving prices lower. This brought about one of the worst
periods for bond investors since the late 1920's. Interestingly, even though
economic growth increased during 1994, inflation remained tame providing now for
an appetizing environment for bond investors.
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at the Fund's inception with a similar investment
in the Lehman Aggregate Index. The shares of the Fund are divided into "Initial
Shares" and "Select Shares". Generally, only Initial Shares of the Portfolio may
be purchased directly by certain persons and in certain situations. (See
"ADDITIONAL INVESTMENT INFORMATION" in the prospectus.) Initial Shares of the
Portfolio automatically convert to Select Shares of the same Portfolio eight
years after issuance of the Initial Shares. Initial Shares of the Portfolio pay
distribution fees based upon average daily net assets of the Portfolio. Select
Shares of the Portfolio do not pay distribution fees. Results include the
reinvestment of all dividends and capital gains distributions. The Lehman
Aggregate Index includes fixed rate debt issues rated investment grade or higher
by Moody's Investors Service, Standard and Poor's Corporation, or Fitch
Investor's Service. All issues have at least one year to maturity and an
outstanding par value of at least $100 million. The Lehman Aggregate Index
includes bonds with maturities of 1-30 years. Price, coupon, and total return
are reported for all sectors on a month-end to month-end basis. All returns are
market value weighted inclusive of accrued interest. The inception date for the
Aggregate Index is 12/31/75. Performance data quoted represents past
performance, which is no indication of future performance. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. An additional fee of $10 will be
charged for redemption from a retirement plan account and redemptions payable by
wire transfer. If investors redeem shares, they may be subject to a maximum
contingent deferred sales charge ("CDSC") of 4 percent, which has not been
reflected in the above graph.
During the first quarter of 1995, a variety of events reversed the bond market
decline of 1994. In the first quarter, economic data suggested that growth was
moderating and inflation was staying calm. As a result, intermediate and long
term bonds appeared extremely under valued. When the Federal Reserve raised
short term interest rates yet again, this provided positive momentum for longer
term treasuries, which declined in yield and rose in price.
Although the bond market has finally received positive reinforcements, several
factors linger which provide a negative tone. First, is the weakness in the US
dollar. The dollar continued to decline through the quarter relative to other
major currencies, most noticeably the Japanese Yen. This decline in the dollar
reduces the number of non domestic purchasers of US investments, which could
hinder market performance. Second, are the actions by the Federal Reserve toward
interest rates. Recently, a renewed uncertainty regarding Fed action has
increased the volatility of long term interest rates.
Although the bond market is experiencing outside pressures, overall performance
has been quite strong since the beginning of 1995. We believe value still exists
in long term bonds even with the recent rally. We also believe there is still a
possibility for the Federal Reserve to raise short term interest rates again
which would result in a flatter yield curve. A Fed tightening would not only
fend off any inflation pressures, but would also support the weak dollar.
With this in mind, we are postured for a further flattening in the yield curve.
We still believe there is a strong possibility that short term rates will remain
stable or increase, while long rates decline. We are currently investing 29
percent of the portfolio in US government securities, 25 percent in corporate
bonds, 39 percent in mortgage backed securities, 2 percent in preferred stock
and 5 percent in cash or cash equivalents. The portfolio's average maturity
remains longer than the index which will provide for more price appreciation as
interest rates decline. We anticipate that the current sector weighting will not
change dramatically until there is an adjustment in sector values.
Kathryn D. Beyer, CFA Jeffrey D. Lorenzen, CFA James W. Paulsen, Ph.D.
Portfolio Manager Portfolio Manager Portfolio Manager
<PAGE>
CAPITAL VALUE SHORT-TERM GOVERNMENT PORTFOLIO
The investment objective of the Short-Term Government Portfolio is to provide as
high a level of current income as is consistent with minimum fluctuations in
principal value. Under normal circumstances, the Portfolio invests at least
75 percent of its total assets in U.S. government securities. The Portfolio
seeks to maintain a dollar-weighted average portfolio maturity between one and
three years.
For the last year, the total return of Select shares was 4.25 percent. This
compares to the return of the Lehman 1-3 Year Government Index of 4.35 percent
and the Lipper Analytical Services Short U.S. Government Fund Average of 2.90
percent. According to Lipper, the performance of Select shares was in the top 15
percent of all short-term U.S. government mutual funds. The total return of
Initial shares over the last year was 3.73 percent.
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at the Fund's inception with a similar investment
in the Lehman 1-3 Year Government Index. The shares of the Fund are divided into
"Initial Shares" and "Select Shares". Generally, only Initial Shares of the
Portfolio may be purchased directly by certain persons and in certain
situations. (See "ADDITIONAL INVESTMENT INFORMATION" in the prospectus.) Initial
Shares of the Portfolio automatically convert to Select Shares of the same
Portfolio eight years after issuance of the Initial Shares. Initial Shares of
the Portfolio pay distribution fees based upon average daily net assets of the
Portfolio. Select Shares of the Portfolio do not pay distribution fees. Results
include the reinvestment of all dividends and capital gains distributions. The
Lehman 1-3 Year Government Index includes fixed rate debt issues rated
investment grade or higher by Moody's Investors Services, Standard & Poor's
Corporation, or Fitch Investor's Service. All issues have maturities of one to
three years and an outstanding par value of at least $100 million. Price,
coupon, and total return are reported for all sectors on a month-end to
month-end basis. All returns are market value weighted inclusive of accrued
interest. The inception date for the 1-3 Year Government Index is 12/31/75.
Performance data quoted represents past performance, which is no indication of
future performance. Investment return and principal value will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. An additional fee of $10 will be charged for redemption from a
retirement plan account and redemptions payable by wire transfer. Inception date
of the Initial Shares of the Capital Value Fund Short-Term Government Portfolio
is 9/8/93. If investors redeem shares, they may be subject to a maximum
contingent deferred sales charge ("CDSC") of 4 percent, which has not been
reflected in the above graph.
As of March 31, 1995, the Portfolio's dollar-weighted average portfolio maturity
was 2.13 years. This allows the Portfolio to achieve a return that is higher
than a money market fund over time without taking a large amount of principal
risk.
Short-term interest rates have doubled over the last year. The Federal Reserve
raised the Federal Funds rate seven times since February, 1994 from 3.00 percent
to 6.00 percent.
Other short-term interest rates have increased, but by lesser amounts. The
one-year, two-year, and three-year Treasury note rates have risen by 1.25
percent to 2.05 percent since March 31, 1994. Long-term interest rates have
increased by even lesser amounts. The 10-year Treasury, for example, is now less
than 0.50 percent higher than a year ago. Thus, the differential between
short-term interest rates and long-term interest rates has declined and the
yield curve has flattened substantially.
This large increase in interest rates has already started to slow the economy,
especially the housing and durable goods sectors. Inflation, meanwhile remains
moderate. If the economy continues to slow and inflation remains moderate, the
Federal Reserve may not need to raise short-term interest rates further. The
question at this point is if the economy will slow fast enough to keep the
Federal Reserve on hold. Bank loan demand continues to be robust and with
mortgage rates falling back to 8 percent, the housing market may perk up again
in the summer. In addition, continued weakness in the dollar could cause the
Federal Reserve concern.
Intermediate and long-term interest rates may actually decline, if inflation
remains moderate. The inflation buffer built into long-term interest rates is
currently in excess of 4.5 percent. Even if inflation rises slightly, long-term
interest rates could still fall below 7 percent again. Over time, if inflation
remains moderate, long-term interest rates could conceivably decline to 6
percent again. With this outlook in mind, we have increased the exposure of the
Portfolio to securities with 5 and 10-year maturities, while maintaining the
average maturity of the portfolio near two years.
In essence, the Portfolio is positioned for an environment in which short-term
interest rates remain stable or edge upward slightly and intermediate and
long-term interest rates fall. We will maintain the average maturity of the
portfolio slightly longer than two years. In addition, we continue to analyze
yield enhancement opportunities.
Kathryn D. Beyer, CFA Jeffrey D. Lorenzen, CFA James W. Paulsen, Ph.D.
Portfolio Manager Portfolio Manager Portfolio Manager
<PAGE>
CAPITAL VALUE PRIME MONEY MARKET PORTFOLIO
The Prime Money Market Portfolio is managed for high current income,
preservation of capital, and liquidity. The portfolio seeks to maintain a net
asset value of $1.00 per share for purchases and redemptions.
As of March 31, 1995, the Prime Money Market Portfolio 7-day yield was 5.43
percent compared to the Donoghue First Tier Money Fund Composite of 5.49
percent. The average maturity of the portfolio was 42 days.
The Prime Money Market Portfolio currently holds 51 percent in repurchase
agreements, 24 percent in high grade corporate bonds, 13 percent in government
and agency securities, and 12 percent in collateralized mortgage obligations.
Within these, 55 percent adjust within a one-week period and are very sensitive
to movements in short-term interest rates. The remaining 45 percent of our
holdings mature between 30 and 397 days.
During the past 12 months, 3-month Treasury bill rates have increased from 3.56
to 5.85 percent, while 1-year Treasury bill rates have increased from 4.42 to
6.48 percent. This dramatic increase in short-term interest rates was sparked by
a Federal Reserve tightening policy to slow growth and fend off inflation. We
believe we are currently near the end of the cycle and look for rates to
stabilize. The steepness in the short-term portion of the yield curve, prevalent
during much of last year, has diminished in the first quarter of 1995. Little
additional yield is achieved by extending the average maturity of the portfolio.
We have maintained an average days-to-maturity similar to the Donoghue First
Tier Money Fund Composite portfolio and will remain at this level until
conditions suggest otherwise.
Regardless of the economic environment, we are committed to providing quality
returns with the highest degree of safety and liquidity. We believe the
Portfolio is structured to perform well in the future and will continue to use
our best efforts.
Jeffrey D. Lorenzen, CFA Kathryn D. Beyer, CFA James W. Paulsen, Ph.D.
Portfolio Manager Portfolio Manager Portfolio Manager
<PAGE>
KATHRYN D. BEYER, CFA, MANAGING DIRECTOR. Ms. Beyer serves as a fixed
income strategist. Prior to joining IMG, she served as the director of
mortgage-backed securities and as a corporate bond fixed income analyst for
Central Life Assurance Company. She received her M.B.A. from Drake University
and her B.S. from Iowa State University.
JEFFREY D. LORENZEN, CFA, MANAGING DIRECTOR. Mr. Lorenzen serves as a fixed
income strategist. Prior to joining IMG, he served as a senior analyst for The
Statesman Group under both the corporate and mortgage-backed portfolios. He
received his M.B.A. from Drake University and his B.B.A. from the University of
Iowa.
JAMES W. PAULSEN, PH.D., SENIOR MANAGING DIRECTOR. Dr. Paulsen is the
advisor's chief portfolio strategist and chairs IMG's Investment Policy
Committee. Prior to joining IMG, he served as president of a Cedar Rapids, Iowa
investment firm. He received his Doctorate in economics and his B.S. from Iowa
State University.
JAMES T. RICHARDS, MANAGING DIRECTOR. Mr. Richards is IMG's equity
strategist. Prior to joining IMG, he served as managing director-equities for a
Cedar Rapids, Iowa investment firm. He received his M.B.A. from the University
of Iowa and his B.A. from Coe College.
<PAGE>
CAPITAL VALUE FUND, INC.
Equity Portfolio
Schedule of Investments
March 31, 1995
Share/
Par Value Description Value
COMMON STOCK (95.04%)
Utilities (19.27%)
8,300 Ameritech Corporation $ 342,375
12,900 Consolidated Edison of NY 351,525
12,400 Detroit Edison Co. 339,450
12,000 GTE Corp. 399,000
9,800 Nynex Corp. 388,325
18,800 San Diego Gas & Elec. 390,100
10,700 Santa Fe Pacific 393,225
10,000 U.S. West, Inc. 400,000
13,300 WPS Resources Corp. 385,700
______________
3,389,700
______________
Finance (20.28%)
9,300 Ambac Inc. 377,812
18,600 American Heritage Life 334,800
12,700 Banc One Corp. 361,950
4,500 Cigna Corp. 336,375
13,300 Comerica, Inc. 365,750
13,900 First Hawaiian 340,550
12,900 Key Corp. 364,425
15,100 PNC Bank Corp. 368,062
10,300 Providian 361,788
9,800 Regions Financial Corp. 357,700
______________
3,569,212
______________
Retail Trade (7.85%)
50,900 Charming Shoppes 286,312
18,500 Liz Claiborne, Inc. 328,375
13,100 Medicine Shoppe International Inc. 396,275
8,300 Mercantile Stores 370,388
______________
1,381,350
______________
Consumer Services (1.96%)
6,100 Knight-Ridder Inc. 344,650
______________
See notes to financial statements
<PAGE>
CAPITAL VALUE FUND, INC.
Equity Portfolio (cont.)
Schedule of Investments
March 31, 1995
Share/
Par Value Description Value
Consumer Non-Durables (11.66%)
12,200 American Greetings $ 364,475
5,800 General Mills Inc. 345,825
5,200 Kellogg Co. 303,550
6,000 Kimberly-Clark Corp. 312,000
9,500 Pepsico Inc. 370,500
10,800 Rubbermaid, Inc. 356,400
______________
2,052,750
______________
Consumer Durables (5.74%)
14,400 Centex 347,400
10,800 La-Z Boy Chair 301,050
6,600 Whirlpool 361,350
______________
1,009,800
______________
Health Technology (8.77%)
4,400 American Home Products 313,500
4,200 Bristol-Meyers Squibb Co. 264,600
7,800 Merck & Co., Inc. 332,475
4,000 Schering-Plough 297,500
9,400 Upjohn 336,050
______________
1,544,125
______________
Electronic Technology (3.99%)
4,200 IBM 343,875
17,400 MCI Communications 358,875
______________
702,750
______________
Commercial Services (3.68%)
5,500 Dun & Bradstreet Corporation 289,438
5,000 McGraw Hill 358,750
______________
648,188
______________
Process Industries (1.81%)
5,100 Great Lakes Chemical 318,113
______________
Producer Manufacturing (1.90%)
6,200 Boeing Company 334,025
______________
See notes to financial statements
<PAGE>
CAPITAL VALUE FUND, INC.
Equity Portfolio (cont.)
Schedule of Investments
March 31, 1995
Share/
Par Value Description Value
Industrial Services (6.04%)
8,100 Flightsafety International $ 370,575
10,400 Foster Wheeler Corp. 352,300
12,400 WMX Technologies, Incorporated 341,000
______________
1,063,875
______________
Energy (2.09%)
3,200 Atlantic Richfield Co. 368,000
______________
Total Common Stocks
(Cost $15,868,344) $ 16,726,538
______________
U.S. GOVERNMENT SECURITIES (3.49%)
U.S. Treasury Bonds (3.49%)
635,000 U.S. T-Bond, 7.25%, 05/15/16
(Cost $583,207) 614,559
______________
CASH EQUIVALENTS (1.91%)
336,289 Norwest Cash Investment Fund 5.74%
(cost $336,289) 336,289
______________
TOTAL INVESTMENTS IN SECURITIES (100.44%)
(Cost $16,787,840) 17,677,386
Other Assets and Liabilities (-0.44%) (77,310)
______________
NET ASSETS 100.0% $ 17,600,076
==============
Based on the cost of investments of $16,787,840 for federal income tax purposes
at March 31, 1995, the aggregate gross unrealized appreciation was $1,482,470,
the aggregate gross unrealized depreciation was $592,924 and the net unrealized
appreciation was $889,546.
See notes to financial statements.
<PAGE>
CAPITAL VALUE FUND, INC.
Total Return Portfolio
Schedule of Investments
March 31, 1995
Share/
Par Value Description Value
COMMON STOCK (44.42%)
Utilities (9.06%)
4,300 Ameritech Corporation $ 177,375
7,500 Consolidated Edison of NY 204,375
7,300 Detroit Edison Co. 199,837
5,300 Nynex Corp. 210,013
10,800 San Diego Gas & Elec. 224,100
5,600 Santa Fe Pacific 205,800
4,800 U.S. West, Incorporated 192,000
6,600 WPS Resources Corp. 191,400
______________
1,604,900
______________
Finance (9.00%)
5,700 Ambac Inc. 231,562
7,400 Banc One Corp 210,900
3,100 Cigna Corporation 231,725
8,400 Key Corp. 237,300
8,600 PNC Bank Corp. 209,625
6,500 Providian 228,313
6,700 Regions Financial Corp. 244,550
______________
1,593,975
______________
Retail Trade (3.16%)
27,100 Charming Shoppes 152,437
9,600 Liz Claiborne, Inc. 170,400
7,800 Medicine Shoppe International Inc. 235,950
______________
558,787
______________
Consumer Services (1.28%)
4,000 Knight-Ridder Inc. 226,000
______________
Consumer Non-Durables (6.01%)
6,800 American Greetings 203,150
3,300 General Mills Inc. 196,762
3,800 Kellogg Co. 221,825
5,000 Pepsico Inc. 195,000
7,500 Rubbermaid, Inc. 247,500
______________
1,064,237
______________
See notes to financial statements.
<PAGE>
CAPITAL VALUE FUND, INC.
Total Return Portfolio (cont.)
Schedule of Investments
March 31, 1995
Share/
Par Value Description Value
Consumer Durables (3.40%)
7,700 Centex $ 185,762
7,500 La-Z Boy Chair 209,063
3,800 Whirlpool 208,050
______________
602,875
______________
Health Technology (5.47%)
3,575 American Home Products 254,718
3,600 Bristol-Meyers Squibb Co. 226,800
6,000 Merck & Co., Inc. 255,750
6,500 Upjohn 232,375
______________
969,643
______________
Electronic Technology (2.08%)
2,200 IBM 180,125
9,100 MCI Communications 187,688
______________
367,813
______________
Producer Manufacturing (1.37%)
4,500 Boeing Company 242,438
______________
Industrial Services (2.42%)
6,100 Foster Wheeler Corp. 206,638
8,100 WMX Technologies 222,750
______________
429,388
______________
Energy (1.17%)
1,800 Atlantic Richfield Co. 207,000
______________
Total Common Stocks
(Cost $7,557,920) 7,867,056
______________
See notes to financial statements.
<PAGE>
CAPITAL VALUE FUND, INC.
Total Return Portfolio (cont.)
Schedule of Investments
March 31, 1995
Share/
Par Value Description Value
PREFERRED STOCK (0.61%)
5,600 Citicorp Convertible Perferred Series 15 $ 108,500
______________
Total Preferred Stocks
(Cost $112,231) 108,500
______________
U.S. GOVERNMENT SECURITIES (18.06%)
U.S. Treasury Bonds (18.06%)
625,000 U.S. T-Bond, 7.125%, 2/15/23 595,894
1,250,000 U.S. T-Bond, 7.25%, 5/15/16 1,209,763
1,220,000 U.S. T-Bond, 8.875%, 2/15/19 1,392,166
______________
Total U.S. Government Securities 3,197,823
(Cost $3,194,164) ______________
CORPORATE BONDS (12.89%)
275,000 Chrysler Finl. Corp., 8.125%, 12/15/96 278,781
150,000 Ford Capital BV, 10.125%, 11/15/00 166,125
420,000 GMAC, 8.875%, 6/1/10 462,021
200,000 Hertz Corp., 9.125%, 8/1/96 204,500
250,000 Hydro-Quebec, 8.25%, 1/15/27 241,525
50,000 Iowa Electric Light & Power, 6.25%, 9/1/96 49,563
250,000 ITT Financial, 8.875%, 6/1/10 268,053
242,000 Manitoba, 7.75%, 7/17/16 243,848
200,000 North St., 9.375%, 6/1/20 214,500
150,000 Nova Scotia, 8.25%, 11/15/19 153,879
______________
Total Corporate Bonds
(Cost $2,375,568) 2,282,795
______________
MUNICIPAL BONDS (1.03%)
175,000 Texas St. G.O. Taxable, 8.70%, 12/1/09 182,502
______________
Total Municipal Bonds 182,502
(Cost $174,393) ______________
See notes to financial statements.
<PAGE>
______________
CAPITAL VALUE FUND, INC.
Total Return Portfolio (cont.)
Schedule of Investments
March 31, 1995
Share/
Par Value Description Value
MORTAGE-BACKED SECURITIES (20.13%)
Collateralized Mortgage Obligations (17.27%)
231,889 Chase Mtge. Finance Corp., 5.75%, 4/25/09 $ 223,401
170,866 Citicorp Mtge. Sec. 1987-13 A3, 9.35%, 6/1/10 170,555
130,101 Collateralized Mtge. Obig. Trust Series 19, 127,167
Class C, 6.0%, 5/20/17
200,000 FHLMC Ser 186 D, 8.0%, 12/15/19 201,524
80,380 FHLMC Series 1194 Class D, 7.0%, 11/15/03 80,218
250,000 FHLMC 1250F, 7.0%,4/15/19 243,975
214,382 FHLMC 91 Series 188 Class F, 7.5&, 5/15/20 213,218
162,000 FNMA 1990-130E, Zero Coupon, 8/25/19, 11.14%** 83,620
115,000 FNMA 1991-126B, 8.0%, 9/25/98 115,477
225,000 FNMA 1991-8 E, 7.50%, 6/25/17 223,432
254,744 Green Tree Acceptance 1987B Class A, 9.55%,5/15/07 260,716
235,592 Housing Securities Inc 1993-E E-14, Zero Coupon, 154,000
9/25/08, 10.33%**
221,668 Housing Securities, Inc., 1992-F F11, Zero Coupon, 149,314
11/25/07, 9.06%**
229,418 Kidder Peabody Mtg Asset Trust Class 5G, 8.45%, 5/20/18 225,206
142,599 Morgan Stanley Class E 3, 8%, 7/20/17 143,027
164,500 Prudential Home Mortgage Sec., 7.5%, 5/25/22 163,283
165,927 Residential Funding Mtg. Sec. I Series 1993-S7 164,195
Class A6, 7.15%, 2/25/08
115,750 Resolution Trust Corp. Series 1992-17 Class A1,
Variable Rate, 12/25/20* 116,184
_______________
3,058,512
_______________
FHLMC Mortgage-Backed Pools (0.35%)
61,333 FHLMC #A00851, 8.50%, 12/01/19 61,973
_______________
GNMA Mortgage-Backed Pools (2.51%)
215,602 GNMA #305975, 9.00%, 7/15/21 222,251
111,365 GNMA #318184, 8.50%, 11/15/21 112,824
113,020 GNMA #359600, 7.50%, 7/15/23 109,587
_______________
444,662
_______________
Total Mortgage-Backed Securities
(Cost $3,582,216) 3,565,147
_______________
*Denotes a floating rate investment with interest rate as of March 31, 1995.
**Interest rate discount for 0 coupong bond equates yield at date of purchase.
See notes to financial statements.
<PAGE>
CAPITAL VALUE FUND, INC.
Total Return Portfolio (cont.)
Schedule of Investments
March 31, 1995
Share/
Par Value Description Value
ASSET-BACKED SECURITIES (0.78%)
140,618 NARGT 1992-B A, 4.3%, 9/15/97 $ 138,532
_______________
Total Asset-Backed Securities
(Cost $138,465) 138,532
_______________
CASH EQUIVALENTS (3.30%)
585,014 Norwest Cash Investment Fund 5.74% (cost $585,014) 585,014
_______________
TOTAL INVESTMENTS IN SECURITIES (101.22%)
(Cost $17,719,971) 17,927,369
_______________
Other Assets & Liabilities (-1.22%) (216,235)
_______________
NET ASSETS 100.0% $ 17,711,134
===============
Based on the cost of investments of $17,719,971 for federal income tax purposes
at March 31, 1995, the aggregate gross unrealized appreciastion was $772,869,
the aggregate gross unrealized depreciation was $565,471 and the net unrealized
appreciation was $207,398.
See notes to financial statements.
<PAGE>
CAPITAL VALUE FUND, INC.
Fixed Income Portfolio
Schedule of Investments
March 31, 1995
Share/
Par Value Description Value
PREFERRED STOCK (1.79%)
7,400 Citicorp Convertible Perferred Series 15 $ 143,375
_______________
Total Preferred Stocks
(Cost $148,444) 143,375
_______________
U.S. GOVERNMENT SECURITIES (31.63%)
U.S. Treasury Bonds (26.52%)
500,000 U.S. T-Bond, 7.125%, 2/15/23 476,715
825,000 U.S. T-Bond, 7.25%, 5/15/16 798,443
740,000 U.S. T-Bond, 8.875%, 2/15/19 844,429
_______________
2,119,587
_______________
U.S. Treasury Notes (5.11%)
150,000 U.S. T-Note, 6.25%, 8/31/96 149,132
250,000 U.S. T-Note, 7.875%, 8/15/01 259,205
_______________
408,337
_______________
Total Government Securities
(Cost $2,600,074) 2,527,924
_______________
CORPORATE BONDS (24.31%)
250,000 Chrylser Finl. Corp., 8.125%, 12/15/96 253,437
425,000 General Electric, 8.625%, 6/15/08 457,491
350,000 GMAC, 8.875%, 6/1/10 385,017
250,000 ITT Financial, 8.875%, 6/1/10 268,053
315,000 Manitoba, 7.75%, 7/17/16 317,407
255,000 Nova Scotia, 8.25%, 11/15/19 261,594
_______________
Total Corporate Bonds
(Cost $2,043,926) 1,942,999
_______________
See notes to financials statements.
<PAGE>
CAPITAL VALUE FUND, INC.
Fixed Income Portfolio (cont.)
Schedule of Investments
March 31, 1995
Share/
Par Value Description Value
MUNICIPAL BONDS (1.30%)
100,000 Texas St. G.O. Taxable, 8.70%, 12/1/09 $ 104,288
_______________
Total Municipal Bonds
(Cost $99,653) 104,288
MORTAGE-BACKED SECURITIES (39.90%)
Collateralized Mortgage Obligations (25.29%)
159,082 Citicorp Mortgage Securities 1987-13 A3, 9.35% 6/1/10 158,793
240,712 Countrywide Funding Corp., 1994-9 A1, 6.50% 5/25/24 232,145
215,000 FHLMC Series 1561 Class TA, Zero Coupon, 8/15/08, 9.24%* 90,973
32,243 FHLMC 1156F, 7.5%, 11/15/17 32,169
98,667 FHLMC 1201C, 6.5%, 12/15/19 97,607
237,701 FHLMC 91 Series 188 Class F, 7.50%, 5/15/20 236,410
126,403 FNMA Series 1991 Class E, 8.50%, 4/25/05 127,668
155,000 FNMA 1991 - 75L CMO, 9.00%, 6/25/01 157,795
221,229 GE Cap Mtge. Serv. 1994-1 A1, 5.70%, 1/25/24 211,161
222,257 Housing Securities, Inc 1993-E E-14, Zero Coupon, 145,283
9/25/08, 10.33%*
187,755 Housing Securities, Inc., 1993-C C3, Zero Coupon, 126,588
5/25/08, 9.24%*
142,599 Morgan Stanley Class E 3, 8.00%, 7/20/17 143,027
100,000 Prudential Home Mort Securities, 1992-6 Class A3, 98,270
7.0%, 4/25/99
164,500 Prudential Home Mortgage Securities, 7.50%, 5/25/22 163,283
_______________
2,021,172
_______________
FHLMC Mortgage-Backed Pools (1.65%)
129,982 FHLMC #C00126, 8.5%, 6/1/22 131,350
_______________
GNMA Mortgage-Backed Pools (12.96%)
322,402 GNMA #315929, 9.0%, 6/15/22 332,479
341,861 GNMA #341681, 8.5%, 1/15/23 346,483
368,856 GNMA #354189, 7.5%, 5/1/23 357,248
_______________
1,036,210
_______________
Total Mortgage-Backed Securities
(Cost $3,214,070) 3,188,732
_______________
*Interest rate discount for 0 coupon bond equates yield at date of purchase.
See notes to financial statements.
<PAGE>
CAPITAL VALUE FUND, INC.
Fixed Income Portfolio (cont.)
Schedule of Investments
March 31, 1995
Share/
Par Value Description Value
CASH EQUIVALENTS (0.35%)
28,126 Norwest Cash Investment Fund 5.74% (cost $28,126) $ 28,126
_______________
TOTAL INVESTMENTS IN SECURITIES (99.28%)
(Cost $8,134,293) 7,935,444
Other Assets & Liabilities (0.72%) 57,311
_______________
NET ASSETS 100.0% $ 7,992,755
===============
Based on the cost of investments of $8,134,293 for federal income tax purposes
at March 31, 1995, the aggregate gross unrealized appreciation was $67,233, the
aggregate gross unrealized depreciation was $266,082 and the net unrealized
depreciation was $198,849.
See notes to financial statements.
<PAGE>
CAPITAL VALUE FUND, INC.
Short-Term Government Portfolio
Schedule of Investments
March 31, 1995
Share/
Par Value Description Value
U.S. GOVERNMENT SECURITIES (51.21%)
Government Agencies (48.72%)
200,000 FHLB, 4.53%, 4/5/96 $ 195,392
600,000 FHLMC, 6.19%, 3/23/99 575,970
250,000 FHLMC, 7.685%, 3/2/00 250,317
450,000 FNMA, 8.15%, 5/11/98 462,533
200,000 FNMA, 8.20%, 3/10/98 205,776
105,000 SLMA Floater, 6.17%, 3/20/96 * 105,336
100,000 SLMA Floater, 6.22%, 1/23/97 * 100,397
50,000 SLMA Floater, 6.00%, 5/14/96 * 49,999
_______________
1,945,720
_______________
U.S. Treasury Notes (1.25%)
50,000 U.S. T-Note, 7.25%, 5/15/04 50,029
_______________
U..S. Treasury Bills (1.24%)
50,000 FFCB DN, 5/22/95 49,570
_______________
Total U.S. Government Securities
(Cost $2,075,210) 2,045,319
_______________
CORPORATE BONDS (9.74%)
75,000 Chrysler Finl. Corp., 8.125%, 12/15/96 76,031
100,000 CWE, 9.125%, 1/15/14 105,003
100,000 Metro Finl., 8.25%, 10/1/99 100,708
100,000 North St, 9.375%, 6/1/20 107,250
_______________
Total Corporate Bonds
(Cost $387,853) 388,992
_______________
*Denotes a floating rate investment with interest rate as of March 31, 1995.
See notes to financial statements.
<PAGE>
CAPITAL VALUE FUND, INC.
Short-Term Government Portfolio (cont.)
Schedule of Investments
March 31, 1995
Share/
Par Value Description Value
COLLATERALIZED MORTGAGE OBLIGATIONS (32.94%)
175,000 FHLMC 1250F, 7.0%, 4/15/19 170,783
36,047 FHLMC 1334-C, 6.50%, 8/15/02 35,966
89,692 FNMA G-20 E CMO, 8.90%, 6/25/19 89,480
150,000 FNMA 1990-104 G CMO, 9.0%, 5/25/03 152,786
325,000 FNMA 1991-126 B, 8.00%, 9/25/98 326,349
150,000 FNMA 1991-137 G, 8.30%, 6/25/20 150,720
166,779 Housing Securities 1992-EA A6, Zero Coupon, 112,477
10/25/07, 9.13%
280,293 Housing Securities 92-EB B1A, 6.75%, 05/25/20 276,944
_______________
Total Collateralized Mortgage Obligations
(Cost $1,340,634) 1,315,505
_______________
ASSET-BACKED SECURITIES (4.63%)
187,491 NARGT 1992-B A, 4.3%, 9/15/97 184,708
_______________
Total Asset-Backed Securities
(Cost $184,562) 184,708
_______________
CASH EQUIVALENTS (1.05%)
41,727 Norwest U.S. Government Fund, 5.62% 41,739
_______________
Total Cash Equivalents
(Cost $41,739) 41,739
_______________
TOTAL INVESTMENTS IN SECURITIES (99.57%)
(Cost $4,029,998) 3,976,263
Other Assets & Liabilities (0.43%) 17,080
_______________
NET ASSETS 100.0% $ 3,993,343
===============
Based on the cost of investment of $4,029,998 for federal income tax purposes at
March 31, 1995, the aggregate gross unrealized appreciation was $6,654, the
aggregate gross unrealized depreciation was $60,389 and the net unrealized
depreciation was $53,735.
*Interest rate discount for 0 coupon bond equates yield at date of purchase.
See notes to financial statements.
<PAGE>
CAPITAL VALUE FUND, INC.
Prime Money Market Portfolio
Schedule of Investments
March 31, 1995
Share/
Par Value Description Value
U.S. GOVERNMENT SECURITIES (12.65%)
Government Agencies (8.16%)
200,000 Federal Home Loan Bank, 6.04%, 4/25/95 $ 200,080
250,000 SLMA Floater, 6.42%, 4/17/95* 250,049
_______________
450,129
_______________
U.S. Treasury Bills (4.49%)
250,000 FNMA Discount, 5/12/95 248,220
_______________
Total Government Securities
(Cost $698,349) 698,349
_______________
CORPORATE BONDS (19.85%)
250,000 Assoc. Corp. of N. America, 6.375%, 4/15/95 250,053
100,000 International Lease Fin., 8.20%, 4/15/95 100,069
175,000 Pepsico Inc., 5.625%, 7/1/95 174,827
200,000 Transamerica Fin, 8.30%, 5/1/95 200,452
170,000 Waste Management, 4.875%, 7/1/95 169,736
200,000 Xerox Corporation, 8.75%, 11/1/95 201,121
_______________
Total Corporate Bonds
(Cost $1,096,258) 1,096,258
_______________
MUNICIPAL BONDS (4.47%)
245,000 Moore, OK Pub Works Auth., 9.20%, 8/1/95 247,079
_______________
Total Municipal Bonds
(Cost $247,079) 247,079
_______________
*Denotes a floating rate investment with interest rate as of March 31, 1995,
based on 3-Month T-Bill.
See notes to financial statements.
<PAGE>
CAPITAL VALUE FUND, INC.
Prime Money Market Portfolio (cont.)
Schedule of Investments
March 31, 1995
Share/
Par Value Description Value
MORTGAGE-BACKED SECURITIES (12.08%)
Collateralized Mortgage Obligations (12.08%)
671,154 FHR 1507 J, 4.0%, 8/15/95 $ 666,998
_______________
Total Mortgage-Backed Securities
(Cost $666,998) 666,998
_______________
CASH EQUIVALENTS (50.71%)
2,800,538 Cantor Fitzgerald Repo, 7.05%, 04/03/95**
(Cost $2,800,538) 2,800,538
_______________
TOTAL INVESTMENTS IN SECURITIES (99.76%)
(Cost $5,509,222) 5,509,222
Other Assets and Liabilities (0.24%) 13,146
_______________
NET ASSETS 100.0% $ 5,522,368
===============
** The market value of the security collateralizing this repurchase agreement
(including accrued interest) is in excess of 102% of the resale price, and will
not be less than 100% of the resale price over the term of the agreement. At
March 31, 1995, the repurchase agreement was collateralized by a mortgage-backed
security with a market value 04 $2,925,533.
See notes to financial statements.
<PAGE>
<TABLE>
CAPITAL VALUE FUND, INC.
Statements of Assets and Liabilities
March 31, 1995
<CAPTION>
Total Fixed Short-Term Prime Money
Equity Return Income Government Market
Portfolio Portfolio Portfolio Portfolio Portfolio
<S> <C> <C> <C> <C> <C>
Assets:
Investment in Securities
at Value (Cost $16,787,840;
$17,719,971; $8,134,293;
$4,029,998 and $5,509,222
respectively) ......................... $ 17,677,386 $ 17,927,369 $ 7,935,444 $ 3,976,263 $ 5,509,222
Dividends & Interest Receivable ........... 68,018 168,332 114,346 41,523 44,950
--------------------------------------------------------------------------------
Total Assets .............................. 17,745,404 18,095,701 8,049,790 4,017,786 5,554,172
--------------------------------------------------------------------------------
Liabilities:
Income Distribution Payable ............... 120,738 221,195 47,024 19,942 24,789
Investment Securities Purchased ........... -- 138,465 -- -- --
Accrued Operating Expenses
and Other Liabilities .................. 24,590 24,907 10,011 4,501 7,015
--------------------------------------------------------------------------------
Total Liabilities ......................... 145,328 384,567 57,035 24,443 31,804
--------------------------------------------------------------------------------
Net Assets ................................ $ 17,600,076 $ 17,711,134 $ 7,992,755 $ 3,993,343 $ 5,522,368
================================================================================
Analysis of Net Assets
Excess of amounts received from
issuance of shares over
amounts paid on
redemptions of shares .................. 16,856,477 17,768,332 8,262,920 4,075,394 5,522,368
Undistributed net realized loss ........... (147,703) (268,976) (71,773) (28,741) --
Unrealized appreciation
(depreciation) ......................... 889,546 207,398 (198,849) (53,735) --
Undistributed net investment
income ................................. 1,756 4,380 457 425 --
--------------------------------------------------------------------------------
Net assets applicable to shares
outstanding ............................ $ 17,600,076 $ 17,711,134 $ 7,992,755 $ 3,993,343 $ 5,522,368
================================================================================
Pricing of Initial Shares
Net assets applicable to
Initial Shares outstanding ............. $ 4,393,338 $ 3,727,846 $ 1,289,091 $ 212,334
================================================================================
Shares outstanding,
$ .001 par value* ...................... 413,891 368,631 133,536 22,005
================================================================================
Net asset value, offering price
and redemption price
(subject to contingent
deferred sales charge) per
Initial Shares ......................... $ 10.615 $ 10.113 $ 9.654 $ 9.649
================================================================================
Pricing of Select Shares
Net assets applicable to
Select Shares outstanding ............ $ 13,206,738 $ 13,983,288 $ 6,703,664 $ 3,781,009 $ 5,522,368
================================================================================
Shares outstanding,
$ .001 par value* .................... 1,245,571 1,407,889 700,806 386,775 5,522,368
================================================================================
Net asset value, offering price
and redemption price
per Select Shares ............... $ 10.603 $ 9.932 $ 9.566 $ 9.776 $ 1.000
=================================================================================
<FN>
*Shares outstanding reflect rounding to the nearest whole share.
See notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
CAPITAL VALUE FUND, INC.
Statements of Operations
For the Year Ended March 31, 1995
<CAPTION>
Total Fixed Short-Term Prime Money
Equity Return Income Government Market
Portfolio Portfolio Portfolio Portfolio Portfolio
<S> <C> <C> <C> <C> <C>
Income:
Interest Income ...................... $ 36,525 $ 542,272 $ 495,680 $ 238,801 $ 277,532
Dividend Income ...................... 504,744 299,011 11,170 916 --
-------------------------------------------------------------------------------
Total Income .............................. 541,269 841,283 506,850 239,717 277,532
Expenses:
Advisory Fees-CVC .................... 14,323 15,552 7,030 16,528 2,757
Sub-Advisory Fees-IMG ................ 61,588 66,873 30,232 3,843 12,679
Administration Fee ................... 35,807 38,880 17,577 9,610 13,780
Distribution Fee ..................... 13,190 11,830 3,286 1,072 --
Fund Accounting/Custody Fee .......... 21,483 23,328 7,030 3,844 5,512
Transfer Agent Fee ................... 7,161 7,776 3,515 1,922 2,756
Other Expenses ....................... 12,785 13,693 6,170 3,356 4,825
--------------------------------------------------------------------------------
Total Expenses ............................ 166,337 177,932 74,840 40,175 42,309
--------------------------------------------------------------------------------
Net Investment Income ..................... 374,932 663,351 432,010 199,542 235,223
--------------------------------------------------------------------------------
Net Realized and Unrealized Gain
(Loss) on Investments
Net Realized Gain (Loss) on
Investments ........................ 218,270 (41,836) (71,440) (28,828) (289)
Net Change in Unrealized
Depreciation ....................... 923,101 480,336 28,322 (8,202) --
--------------------------------------------------------------------------------
Net Gain (Loss) on Investments ............ 1,141,371 438,500 (43,118) (37,030) (289)
--------------------------------------------------------------------------------
Net Increase in Net Assets
from Operations .................. $ 1,516,303 $ 1,101,851 $ 388,892 $ 162,512 $ 234,934
================================================================================
<FN>
See notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
Capital Value Fund, Inc.
Statements of Changes in Net Assets
For the Periods Ended March 31, 1995 and 1994
<CAPTION>
Total
Equity Return
Portfolio Portfolio
1995 1994* 1995 1994*
<S> <C> <C> <C> <C>
Operations:
Net Investment Income $ 374,932 $ 137,584 $ 663,351 $ 269,118
Net Realized Gain (Loss) on Investments 218,270 217,946 (41,836) 208,606
Net Change in Unrealized Depreciation 923,101 (33,554) 480,336 (272,938)
--------------------------------------------------------------------------------
Increase in Net Assets from Operations 1,516,303 321,976 1,101,851 204,786
--------------------------------------------------------------------------------
Distributions:
Dividend Distributions Paid
Initial Shares 63,948 2,146 95,506 6,355
Select Shares 309,894 134,772 565,168 261,060
Capital Gain Distribution Paid
Initial Shares 106,426 454 66,102 144
Select Shares 451,896 25,143 335,698 33,802
--------------------------------------------------------------------------------
Total Distributions 932,164 162,515 1,062,474 301,361
--------------------------------------------------------------------------------
Capital Share Transactions
Sales- Initial Shares 4,288,941 409,566 1,818,665 1,331,211
Select Shares 2,630,529 10,403,486 2,905,801 12,436,696
Reinvestments- Initial Shares 145,431 1,469 125,084 629
Select Shares 714,632 112,410 803,554 209,853
Net Exchanges- Initial Shares 844,253 1,362 1,322,062 6,611
Select Shares (797,490) 10,626 (1,595,405) (598)
Redemptions- Initial Shares (1,417,420) (14,940) (683,287) (210,491)
Select Shares (382,736) (113,643) (564,823) (157,230)
--------------------------------------------------------------------------------
Increase in Net Assets from
Capital Shares Transactions 6,026,140 10,810,336 4,131,651 13,616,681
--------------------------------------------------------------------------------
Total Increase in Net Assets 6,610,279 10,969,797 4,171,028 13,520,106
Net Assets:
Beginning of Period 10,989,797 20,000 13,540,106 20,000
--------------------------------------------------------------------------------
End of Period $ 17,600,076 $ 10,989,797 $ 17,711,134 $ 13,540,106
================================================================================
Undistributed net investment
income at end of period $ 1,756 $ 666 $ 4,380 $ 1,703
================================================================================
<FN>
* From inception of the Fund May 20, 1993.
See notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
Capital Value Fund, Inc.
Statements of Changes in Net Assets (cont.)
For the Periods Ended March 31, 1995 and 1994
<CAPTION>
Fixed Short-Term
Income Government
Portfolio Portfolio
1995 1994* 1995 1994*
<S> <C> <C> <C> <C>
Operations:
Net Investment Income $ 432,010 $ 259,617 $ 199,542 $ 105,485
Net Realized Gain (Loss) on Investments (71,440) 38,589 (28,828) 7,655
Net Change in Unrealized Depreciation 28,322 (227,172) (8,202) (45,532)
--------------------------------------------------------------------------------
Increase in Net Assets from Operations 388,892 71,034 162,512 67,608
--------------------------------------------------------------------------------
Distributions:
Dividend Distributions Paid
Initial Shares 42,033 2,270 10,616 803
Select Shares 390,180 256,687 188,842 104,341
Capital Gain Distribution Paid
Initial Shares 871 264 329 61
Select Shares 6,814 30,973 3,755 3,429
--------------------------------------------------------------------------------
Total Distributions 439,898 290,194 203,542 108,634
--------------------------------------------------------------------------------
Capital Share Transactions
Sales- Initial Shares 1,165,760 183,792 27,962 104,141
Select Shares 338,704 6,194,298 175,604 3,674,195
Reinvestments- Initial Shares 36,456 1,917 10,154 698
Select Shares 383,560 261,135 180,692 94,563
Net Exchanges- Initial Shares 255,292 9,425 186,715 (17,398)
Select Shares (178,506) 22 (53) 0
Redemptions- Initial Shares (367,262) (6,612) (72,366) (23,918)
Select Shares (32,308) (2,752) (66,826) (218,764)
--------------------------------------------------------------------------------
Increase in Net Assets from
Capital Shares Transactions 1,601,696 6,641,225 441,882 3,613,517
--------------------------------------------------------------------------------
Total Increase in Net Assets 1,550,690 6,422,065 400,852 3,572,491
Net Assets:
Beginning of Period 6,442,065 20,000 3,592,491 20,000
--------------------------------------------------------------------------------
End of Period $ 7,992,755 $ 6,442,065 $ 3,993,343 $ 3,592,491
================================================================================
Undistributed net investment
income at end of period $ 458 $ 660 $ 425 $ 341
================================================================================
<FN>
* From inception of the Fund May 20, 1993.
See notes to financial statements.
</FN>
</TABLE>
<PAGE>
Capital Value Fund, Inc.
Statements of Changes in Net Assets (cont.)
For the Periods Ended March 31, 1995 and 1994
Prime Money
Market
Portfolio
1995 1994*
Operations
Net Investment Income $ 235,223 $ 109,797
Net Realized Gain (Loss) on Investments (289) 888
Net Change in Unrealized Depreciation -- --
------------------------------
Increase in Net Assets from Operations 234,934 110,685
------------------------------
Distributions:
Dividend Distributions Paid
Initial Shares -- --
Select Shares 234,934 109,797
Capital Gain Distribution Paid
Initial Shares -- --
Select Shares -- 888
------------------------------
Total Distributions 234,934 110,685
------------------------------
Capital Share Transactions
Sales- Initial Shares -- --
Select Shares 3,758,731 5,017,807
Reinvestments- Initial Shares -- --
Select Shares 222,482 98,348
Net Exchanges- Initial Shares -- --
Select Shares (36,869) (10,051)
Redemptions- Initial Shares -- --
Select Shares (3,543,249) (4,831)
------------------------------
Increase in Net Assets from
Capital Shares Transactions 401,095 5,101,273
------------------------------
Total Increase in Net Assets 401,095 5,101,273
Net Assets:
Beginning of Period 5,121,273 20,000
------------------------------
End of Period $ 5,522,368 $ 5,121,273
==============================
<PAGE>
CAPITAL VALUE FUND, INC.
Notes to Financial Statements
March 31, 1995
1. Organization and Significant Accounting Policies
Capital Value Fund, Inc. (the Fund) was incorporated on October 7, 1992 and
capitalized on May 6, 1993. The Fund is registered under the Investment
Company Act of 1940 (the 1940 Act) as a diversified open-end management
investment company issuing its shares in five series, each series
representing a diversified portfolio with distinct investment objectives
and policies. The shares of each portfolio, except Prime Money Market
Portfolio, are divided into Initial Shares and Select Shares. The Initial
Shares of a portfolio may be purchased directly and may be subject to a
CDSC charge if redeemed with in six years. Select Shares are only available
through conversion of Initial Shares after eight years, except for limited
direct sales as defined in the prospectus. Each class of shares has equal
rights as to earnings, assets and voting privileges except that each class
bears different distribution expenses. Each class of shares has exclusive
voting rights with respect to matters that effect just that class. Income,
expenses (other than expenses attributable to a specific class) and
realized and unrealized gains or losses on investments are allocated to
each class of shares based upon its relative net assets.
Security Valuation
Equity securities are valued at the last sales price on the national
securities exchange. Fixed Income securities are valued on the basis of
valuations furnished by a pricing service that utilizes electronic data
processing techniques to determine valuations for normal institutional
sized trading units of Fixed Income securities without regard to sale or
bid prices when such valuations are believed to more accurately reflect the
fair market value of such institutional securities. Otherwise sale or bid
prices are used. Any securities or other assets for which market quotations
are not readily available are valued at fair value as determined by the
Portfolio Manager. Fixed Income securities in a portfolio having maturities
of 60 days or less are valued by the amortized cost method.
The Fund seeks to maintain a $1.00 per share net asset value for the Prime
Money Market Portfolio and has adopted certain investment portfolio
valuation and dividend and distribution policies to enable it to do so.
Security Transactions
Security transactions are recorded on a trade date basis. Realized gains
and losses are determined on an identified cost basis.
Investment Income
Interest income is recorded on an accrual basis and dividend income is
recorded on the ex-dividend date. Original issue discounts and premiums on
securities purchased are amortized over the expected life of the respective
securities.
Distribution of Income and Gains
Any dividends from the net income of the Fixed Income and Short-Term
Government Portfolios will be distributed monthly, and any dividend from
the net income of the Equity and Total Return Portfolios will be
distributed quarterly. The Prime Money Market Portfolio declares daily and
pays monthly dividends from net investment income. Any net realized capital
gains will be distributed annually, after using any available capital loss
carry-over.
Federal Taxes
The Fund's policy is to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
its income to shareholders in amounts that will avoid or minimize federal
income or excise taxes for the funds. Net investment income and net
realized gains (losses) for the funds may differ for financial statement
and tax purposes. The character of distributions made during the year from
net investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing
of dividend distributions, the fiscal year in which amounts are distributed
may differ from the year that the income or realized gains (losses) were
recorded by the funds. For federal income tax purposes, the Total Return,
Fixed Income and Short-Term Government Portfolios have a capital loss
carryover at March 31, 1995 of $41,836, $71,440 and $28,828 respectively
all expiring in 2003 and 2004 if not offset by subsequent capital gains. It
is unlikely the Board of Directors will authorize a distribution of any net
realized capital gains until the available capital loss carryover has been
offset or expires.
2. Transactions with Affiliates
Fees and Expenses
The Fund has entered into an investment advisory agreement with Capital
Value Corporation, (the Advisor), which, in turn, has entered into a
sub-advisory agreement with Investors Management Group, (the Sub-Advisor),
for management of each portfolio's assets. The annual fees for such
services are 0.53 percent of the average daily net assets of the Equity,
Total Return, Fixed Income, and Short-Term Government Portfolios and 0.28
percent of the average daily net assets of the Prime Money Market
Portfolio.
The Fund will also pay the Sub-Advisor annually the lesser of $24,000 or
0.15 percent of the average daily net assets of each of the Equity and
Total Return Portfolios or 0.10 percent of the average daily net assets of
each of the Fixed Income and Short-Term Government Portfolios for fund
accounting services. The annual fee for the Prime Money Market Portfolio is
the lesser of $18,000 or 0.10 percent of the daily net assets of the
portfolio. This fee is for fund accounting and custodial services. The
Sub-Advisor will also be paid annually 0.05 percent of the average daily
net assets of each portfolio for services of Transfer and Dividend
Disbursing Agent.
The Fund has also entered into an administrative services agreement with
the Advisor to provide certain information and administrative services to
the Fund. The annual fees for such services are not to exceed 0.25 percent
of average daily net assets of the portfolios of the Fund.
In addition, the Fund is responsible for paying most other operating
expenses including outside directors' fees and expenses; registration fees;
printing and shareholder reports; legal, auditing, and accounting services;
insurance; interest; and other miscellaneous expenses.
Distribution Plan
The Fund has entered into a distribution agreement, pursuant to Rule 12b-1
under the 1940 Act, with IMG Financial Services, Inc., (the Distributor),
for the marketing and distribution of the Initial Shares of the Fund. The
fees for such services are 0.50 percent of the average daily net assets of
the Initial Shares class of each portfolio, except the Prime Money Market
Portfolio for which the Distributor receives no fees.
Related Shareholders
IASD Health Services Corp., IASD Health Services Savings and Investment
Plan and Investors Management Group 401K/ESOP and Money Purchase Plan are
all shareholders of the Fund as of March 31, 1995. A breakdown of each of
their holdings is listed below.
Shares
IASD Health Services Corp.
Equity Portfolio 653,774
Total Return Portfolio 1,102,814
Fixed Income Portfolio 670,481
Short-Term Government 328,900
Prime Money Market Portfolio 5,352,205
IASD Health Services Savings and Investment Plan
Equity Portfolio 509,364
Total Return Portfolio 287,795
Fixed Income Portfolio 19,086
Short-Term Government Portfolio 45,885
IMG 401(k)/ESOP and Money Purchase Plan
Equity Portfolio 59,677
Total Return Portfolio 9,328
Fixed Income Portfolio 3,328
3. Investment Transactions
Investment transactions, excluding short-term transactions (except for
Prime Money Market Portfolio), for the year ended March 31, 1995, are as
follows (in thousands):
Fixed Short-Term Prime
Equity Total Return Income Government Money Market
Portfolio Portfolio Portfolio Portfolio Portfolio
Purchases $15,782,057 14,677,800 5,787,060 3,997,431 590,992,462
Proceeds from sales $7,698,480 10,234,800 3,749,557 3,255,723 590,574,564
4. Capital Transactions
Contingent Deferred Sales Charge
The Fund may impose a contingent deferred sales charge against the original
purchase price of all Initial Shares except those acquired by reinvestment
of dividends. There is no charge upon redemption of any share appreciation
or reinvested dividends on Initial Shares, or redemption of any Select
Shares. The charge is computed at the following rates and is applied to the
value of the shares redeemed excluding amounts not subject to the charge:
For Equity, Total Return, Fixed Income, and Short-Term Government,
contingent deferred sales charges of $5,854, $3,002, $1,253 and $2,284
respectfully, were collected by the distributor for the year ended March
31, 1995. During the period May 20, 1993 (Date of Inception) to March 31,
1994, no contingent deferred sales charges were collected.
4. Capital Transactions, con't
Share Activity
The following tables summarize the activity in each class of capital shares
of the Portfolios:
<TABLE>
<CAPTION>
Short-Term
Equity Total Return Fixed Income Government
Portfolio Portfolio Portfolio Portfolio
Initial Shares
- --------------
For the period ended
March 31, 1995 and 1994 1995 1994 1995 1994 1995 1994 1995 1994
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 417,064 38,888 185,100 126,501 123,030 18,121 2,891 10,488
Shares issued in reinvestment
of dividends 14,429 48 12,726 26 3,793 154 1,051 64
Shares exchanged 81,956 163 131,778 638 26,548 921 19,262 (1,746)
Shares redeemed (137,271) (1,386) (67,692) (20,444) (38,373) (658) (7,594) (2,411)
Net increase from -----------------------------------------------------------------------------------------------
capital share transactions 376,178 37,713 261,912 106,721 114,998 18,538 15,610 6,395
===============================================================================================
<CAPTION>
Short-Term Prime
Equity Total Return Fixed Income Government Money Market
Portfolio Portfolio Portfolio Portfolio Portfolio
Select Shares
- -------------
For the period ended
March 31, 1995 and 1994 1995 1994 1995 1994 1995 1994 1995 1994 1995 1994
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 256,010 1,029,488 294,364 1,242,805 35,704 619,200 18,016 367,388 3,758,731 5,017,807
Shares issued in reinvestment
of dividends 71,158 10,883 82,943 20,707 40,567 25,706 18,551 9,418 222,482 98,348
Shares exchanged (77,664) 993 (161,076) (58) (18,690) 2 (5) 0 (36,869) (10,051)
Shares redeemed (36,651) (10,645) (58,472) (15,322) (3,404) (279) (6,852) (21,741) (3,543,249) (4,831)
----------------------------------------------------------------------------------------------------
Net increase (decrease) from
capital share transactions 212,853 1,030,719 157,758 1,248,132 54,177 644,629 29,710 355,065 401,095 5,101,273
====================================================================================================
</TABLE>
<TABLE>
Capital Value Fund, Inc.
Financial Highlights
For the Period April 1, 1994 to March 31, 1995
The following presents information relating to an Initial Share of Capital Stock of the Fund outstanding for the entire period.
<CAPTION>
Total Fixed Short-Term
Equity Return Income Government
Portfolio Portfolio Portfolio Portfolio
1995 1994* 1995 1994* 1995 1994* 1995 1994*
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 10.280 $ 0.000 $ 10.131 $ 0.000 $ 9.769 $ 0.000 $ 9.765 $ 0.000
Shares Issued** 0.000 10.000 0.000 10.000 0.000 10.000 0.000 10.000
----------------------------------------------------------------------------------------------
10.280 10.000 10.131 10.000 9.769 10.000 9.765 10.000
----------------------------------------------------------------------------------------------
Net Investment Income 0.227 0.067 0.364 0.129 0.534 0.323 0.452 0.211
Net Realized and Unrealized
Gains on Investments 0.758 0.353 0.233 0.223 (0.092) (0.131) (0.098) (0.248)
----------------------------------------------------------------------------------------------
Total from Investment Operations 0.985 0.420 0.597 0.352 0.442 0.192 0.354 (0.307)
----------------------------------------------------------------------------------------------
Less:
Distributions from
Net Investment Income 0.234 0.113 0.364 0.192 0.547 0.373 0.460 0.188
Distributions from
Net Realized Gains 0.416 0.027 0.251 0.029 0.010 0.050 0.010 0.010
----------------------------------------------------------------------------------------------
Total Distributions 0.650 0.140 0.615 0.221 0.557 0.423 0.470 0.198
----------------------------------------------------------------------------------------------
Net Asset Value,
End of Period $ 10.615 $ 10.280 $ 10.113 $ 10.131 $ 9.654 $ 9.769 $ 9.649 $ 9.765
==============================================================================================
Total Return 9.78% 3.59% 6.16% 2.72% 4.59% 1.23% 3.73% -0.10%
Net Assets, End of Period $4,393,338 $ 387,682 $3,727,846 $1,081,193 $1,289,091 $ 181,094 $ 212,334 $ 62,450
Ratio of Expenses to
Average Net Assets 1.57% 1.52% 1.57% 1.52% 1.52% 1.47% 1.52% 1.48%
Ratio of Net Investment Income
to Average Net Assets 2.31% 1.28% 4.04% 2.25% 6.10% 4.21% 4.87% 3.50%
Portfolio Turnover Rate 55.19% 12.52% 67.00% 38.74% 60.36% 70.83% 79.19% 69.79%
<FN>
*From inception of the Fund May 20, 1993.
**First purchases of initial shares occurred subsequent to May 20, 1993.
Note for all Portfolios: Ratios have been determined on an annualized basis. Total return is not annualized for periods
less than a full year and does not reflect the effect of any deferred sales charges.
See notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
Capital Value Fund, Inc.
Financial Highlights (cont.)
For the Period April 1, 1994 to March 31, 1995
The following presents information relating to a Select Share of Capital Stock of the Fund outstanding for the entire period.
<CAPTION>
Total Fixed
Equity Return Income
Portfolio Portfolio Portfolio
1995 1994* 1995 1994* 1995 1994*
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.266 $ 10.000 $ 9.966 $ 10.000 $ 9.682 $ 10.000
-----------------------------------------------------------------------------
Net Investment Income 0.271 0.146 0.418 0.225 0.580 0.414
Net Realized and Unrealized
Gains on Investments 0.750 0.291 0.215 (0.007) (0.109) (0.269)
-----------------------------------------------------------------------------
Total from Investment Operations 1.021 0.437 0.633 0.218 0.471 0.145
-----------------------------------------------------------------------------
Less
Distributions from Net Investment Income 0.268 0.144 0.416 0.223 0.577 0.413
Distributions from Net Realized Gains 0.416 0.027 0.251 0.029 0.010 0.050
-----------------------------------------------------------------------------
Total Distributions 0.684 0.171 0.667 0.252 0.587 0.463
-----------------------------------------------------------------------------
Net Asset Value, End of Period $ 10.603 $ 10.266 $ 9.932 $ 9.966 $ 9.566 $ 9.682
=============================================================================
Total Return 10.31% 4.38% 6.69% 2.18% 5.12% 1.20%
Net Assets, End of Period $13,206,738 $10,602,115 $13,983,288 $12,458,913 $ 6,703,664 $ 6,260,971
Ratio of Expenses to Average Net Assets 1.07% 1.03% 1.07% 1.03% 1.02% 0.98%
Ratio of Net Investment Income
to Average Net Assets 2.68% 1.76% 4.30% 2.63% 6.14% 4.73%
Portfolio Turnover Rate 55.19% 12.52% 67.00% 38.74% 60.36% 70.83%
<FN>
* From inception of the Fund May 20, 1993.
Note for all Portfolios: Ratios have been determined on an annualized basis. Total return is not annualized for periods less than
a full year and does not reflect the effect of any deferred sales charges.
See notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
Capital Value Fund, Inc.
Financial Highlights (cont.)
For the Period April 1, 1994 to March 31, 1995
The following presents information relating to a Select Share of Capital Stock of the Fund outstanding for the entire period.
<CAPTION>
Short-Term Prime Money
Government Market
Portfolio Portfolio
1995 1994* 1995 1994*
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.886 $ 10.000 $ 1.000 $ 1.000
------------------------------------------------------------
Net Investment Income 0.507 0.309 0.042 0.022
Net Realized and Unrealized
Gains on Investments (0.101) (0.105) 0.000 0.000
------------------------------------------------------------
Total from Investment Operations 0.406 0.204 0.042 0.022
------------------------------------------------------------
Less
Distributions from Net Investment Income 0.506 0.308 0.042 0.022
Distributions from Net Realized Gains 0.010 0.010 0.000 0.000
------------------------------------------------------------
Total Distributions 0.516 0.318 0.042 0.022
------------------------------------------------------------
Net Asset Value, End of Period $ 9.776 $ 9.886 $ 1.000 $ 1.000
============================================================
Total Return 4.25% 2.05% 4.20% 2.18%
Net Assets, End of Period $ 3,781,009 $ 3,530,041 $ 5,522,368 $ 5,121,273
Ratio of Expenses to Average Net Assets 1.02% 0.98% 0.77% 0.74%
Ratio of Net Investment Income
to Average Net Assets 5.21% 3.62% 4.27% 2.53%
Portfolio Turnover Rate 79.19% 69.79%
<FN>
* From inception of the Fund May 20, 1993.
Note for all Portfolios: Ratios have been determined on an annualized basis. Total return is not annualized for periods less than
a full year and does not reflect the effect of any deferred sales charges.
See notes to financial statements.
</FN>
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Directors
Capital Value Fund, Inc.:
We have audited the statements for the year ended March 31, 1995 and the year
ended March 31, 1994 of assets and liabilities, including the schedules of
investments of the Equity Portfolio, Total Return Portfolio, Fixed Income
Portfolio, Short-Term Government Portfolio, and the Prime Money Market Portfolio
as of March 31, 1995 and the related statements of operations for the year then
ended, and the statements of changes in net assets, and financial highlights for
the year ended March 31, 1995 and the period May 6, 1993 (date of inception)
through March 31, 1994. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
Investment securities held in custody were confirmed to us by the custodian. As
to securities purchased and sold but not received or delivered, we request
confirmations from brokers, and where replies are not received, we carry out
other appropriate auditing procedures. An audit includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Equity Portfolio, Total Return Portfolio, Fixed Income Portfolio, Short-Term
Government Portfolio, and the Prime Money Market Portfolio as of March 31, 1995,
and the results of their operations for the year then ended, and the changes in
their net assets, and the financial highlights for the periods stated in the
first paragraph above, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Des Moines, Iowa
April 28, 1995
