SELECT ASSET FUND, SERIES 1, INC.
Statement of Assets and Liabilities
June 30, 1996
(Unaudited)
Assets
Investments, at value (@ cost $496,554,007) $740,401,245
Cash 3,408
Dividends receivable 1,014,533
Interest receivable 36,366
Prepaid expenses 97,274
Total Assets 741,552,826
Liabilities
AMPS dividends payable (note 4) 1,146,458
Accrued expenses 217,401
Notes payable (note 5) 96,900
Accrued interest expense 2,559
Total Liabilities 1,463,318
Net Assets $740,089,508
Net assets are represented by:
Series A Auction Market Preferred Stock, $.01 par value at liquidation
preference $100,000 per share, 1,000 shares authorized, issued and
outstanding 100,000,000
Series B Auction Market Preferred Stock, $.01 par value at liquidation
preference $100,000 per share, 1,000 shares authorized, issued and
outstanding 100,000,000
Series C Auction Market Preferred Stock, $.01 par value at liquidation
preference $100,000 per share, 1,000 shares authorized, issued and
outstanding 100,000,000
Common stock at par value, $.01 per share, 199,997,000 shares authorized,
48,873,302.47 shares issued and outs 488,733
Additional paid-in capital 193,418,440
Undistributed Net Investment Income 2,330,858
Undistributed Net Gains/(Losses) 4,239
Net unrealized appreciation of investments 243,847,238
Net Assets $740,089,508
Net asset value per common $9.00
See accompanying notes to the financial statements.
SELECT ASSET FUND, SERIES 1, INC.
Statement of Operations
For the period from January 1, 1996 to June 30, 1996
(Unaudited)
Investment income:
Dividend income $7,949,485
Interest income 197,718
Total investment income 8,147,203
Expenses:
Broker dealer fee 327,083
Legal fees 24,432
Rating agencies fees 64,345
Independent accountants 15,913
Auction agent fee 10,691
Custody / administration fees (note 2) 58,926
Directors fees and expenses 8,951
Interest expense 4,367
Insurance 7,796
Investment management fee (note 2) 33,317
Other expenses 1,166
Total expenses 556,987
Net investment income 7,590,216
Net realized and unrealized gains on investments:
Net realized gain on investments:
Proceeds from sales $9,614,608
Cost of securities (9,610,369)
4,239
Unrealized appreciation of investments:
Beginning of period 183,556,957
End of period 243,847,238
Increase in net unrealized appreciation of
investments 60,290,281
Net increase in net assets $67,884,736
See accompanying notes to the financial statements.
SELECT ASSET FUND, SERIES 1, INC.
Statement of Changes in Net Assets
For the period from January 1, 1996 to June 30, 1996
and for the year ended December 31, 1995
(Unaudited)
For the six For the
months ended year ended
June 30, 1996 December 31,
(UNAUDITED) 1995
From operations:
Net investment income $7,590,216 $14,442,618
Net realized gain on investments 4,239 183,681,892
Net change in unrealized appreciation
on investments 60,290,281 (5,433,385)
Increase in net assets resulting
from operations 67,884,736 192,691,125
Dividends to stockholders from net investment income:
Auction market preferred stock (5,259,358) (11,969,899)
Common stock 0 (2,472,719)
(5,259,358) (14,442,618)
Dividends to stockholders from net realized gains
Auction market preferred stock 0 0
Common stock 0 (15,952,016)
0 (15,952,016)
Decrease in net assets resulting from
dividends from stockholders (5,259,358) (30,394,634)
Increase (decrease) from capital share transactions:
Return of capital (265,875,952) (75,412,488)
Decrease in net assets from redemption
of preferred stock 0 (250,000,000)
Issuance of preferred stock 300,000,000 0
Issuance of common stock 0 250,400,000
34,124,048 (75,012,488)
Total increase in net asset 96,749,426 87,284,003
Net assets:
Beginning of period 643,340,082 556,056,079
End of period $740,089,508 $643,340,082
See accompanying notes to the financial statements.
SELECT ASSET FUND, SERIES 1, INC.
Financial Highlights
For the period from January 1, 1996 to June 30, 1996
and for the year ended December 31, 1995
(Unaudited)
For the six For the
months ended year ended
June 30, 1996 December 31,
(UNAUDITED) 1995
For a share of common stock outstanding throughout the period:
Net asset value, beginning of period $13.16 $10.07
Net investment income 0.16 0.45
Net gains on investments realized
and unrealized 1.23 5.58
Total from investment operations 1.39 6.03
Less distributions from net investment income and net realized gains:
Common share equivalent of dividends paid
to AMPS holders (0.11) (0.37)
Dividends paid to common shareholders 0.00 (0.51)
Less distributions from net paid-in capital:
Return of capital dividends paid to common (5.44) (2.06)
Total distributions (5.55) (2.94)
Net asset value, end of period $9.00 $13.16
Total investment return 10.55% 59.88%
Net assets at end of period (000s) $440,090 $643,340
Ratio of expenses to average net assets applicable to common
shares 0.08% 0.16%
Ratio of net investment income to average net assets applicable
to common shares + 0.50% 0.41%
Portfolio turnover 3.59% 16.36%
+Net investment income is adjusted for distributions paid to AMPS holders.
*Total investment return for the period; not annualized.
See accompanying notes to financial statements.
(1) Organization and Significant Accounting Policies
The Select Asset Fund, Series 1, Inc. (the "Fund") is registered as a
diversified, closed-end management investment company under the
Investment Company Act of 1940, as amended. The Fund commenced
investment operations on March 4, 1993.
The Fund's objective is long-term capital appreciation with income as
a secondary objective. The Fund's investments consist primarily of
common stocks of large and medium capitalization U.S. companies.
The following is a summary of significant accounting policies
consistently followed by the Fund in preparation of its financial
statements.
(a) Security Valuation
Investments in securities traded on a national securities
exchange (or reported on the Nasdaq national market) are valued
at the last reported sales price on the primary exchange.
Temporary investments are valued at amortized cost which
approximates fair value.
(b) Security Transactions
Security transactions are accounted for on a trade date basis.
The cost of securities sold is determined using the identified
cost method. Dividend income is recorded on ex-dividend date.
(c) Federal Income Taxes
It is the Fund's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment
companies and distribute its taxable income to shareholders.
Therefore, no provision for Federal income tax is required.
(d) Distribution of Income and Gains
The Fund distributes substantially all of its taxable income in
excess of the dividends paid to the preferred stockholders to
the common stockholder. Dividends to the common stockholder are
declared and paid at least annually. Net capital gains, if any,
are generally distributed annually.
(e) Reclassification Policy
It is the Fund's policy to reclassify certain amounts to
conform to the current year's presentation when necessary.
(f) Use of Estimates
Estimates and assumptions are required to be made regarding
assets, liabilities and changes in net assets resulting from
operations when financial statements are prepared. Changes in
the economic environment, financial markets and any other
parameters used in determining these estimates could cause
actual results to differ from these amounts.
(2) Related Party Transactions
A collective trust fund for employee benefit plans is the sole common
stockholder of the Fund. Certain officers and directors of the Fund
are affiliated with the common stockholder. No fees or expenses were
paid to the affiliated officers and directors.
During the six months ended June 30, 1996, and the year ended
December 31, 1995, dividends to the common stockholder amounted to $0
and $18,424,735, respectively.
During the six months ended June 30, 1996, the Fund made a return of
capital distribution to the common stockholders in the amount of
$265,875,952. During the year ended December 31, 1995, the Fund made
a return of capital distribution to the common stockholder in the
amount of $75,412,488, of which approximately $18,600,000 is
considered taxable for IRS purposes.
Comerica Bank serves as both custodian and administrator for the
Fund. An affiliate of Comerica Bank serves as investment advisor to
the Fund. The annual investment management fee is 0.01% of average
equity investments. The management fee is calculated and accrued on
a monthly basis.
(3) Investment Transactions
The aggregate cost of securities purchased and the aggregate proceeds
of securities sold, for the six months ended June 30, 1996 were
$24,837,963 and $9,614,608, respectively.
As of June 30, 1996 based on cost for Federal income tax purposes,
the aggregate gross unrealized appreciation and depreciation for all
securities were $250,356,046 and $6,508,808, respectively.
(4) Auction Market Preferred Stock
In January 1996, the Fund issued $300 million of Auction Market
Preferred Stock ("AMPS").
The Fund has outstanding at June 30, 1996, 1000 shares each of Series
A, Series B and Series C AMPS at a liquidation value of $100,000 per
share. Dividends are cumulative from the date of original issue and
are paid every 49 days at a rate set through a Dutch Auction. The
AMPS rates in effect on June 30, 1996 were 4.05%, 4.125% and 4.05%
for Series A, Series B and Series C, respectively.
Each series of AMPS is redeemable at the option of the Fund in whole,
but not in part, at a price of $100,000 per share plus accumulated
and unpaid dividends. The Fund is subject to certain asset coverage
tests, and the AMPS are subject to mandatory redemption if the tests
are not met.
In addition, the AMPS are subject to mandatory redemption if the Fund
ceases to qualify as a regulated investment company or if Merrill
Lynch, Pierce, Fenner & Smith Incorporated ceases to be the broker
dealer. The liquidation value under mandatory redemption of the AMPS
is $100,000 per share plus accumulated and unpaid dividends.
(5) Notes Payable
As of June 30, 1996, the Fund had $96,900 of principal notes
outstanding to investors. The notes due on March 4, 2018, bear
interest at a floating rate. The interest rate, which resets
annually, is set at the one-year U.S. Treasury bill rate plus 2.50%.
As of June 30, 1996, the Fund was paying interest at 7.50% per annum.
SELECT ASSET FUND, SERIES 1, INC.
Portfolio of Investments
June 30, 1996
No. of Market
shares Value
Common BUILDING & CONSTRUCTION 1.89%
Stock
BUILDING MATERIALS
24,500 CHAMPION INTERNATIONAL CORP 1,022,875
5,000 GEORGIA PACIFIC CORP 355,000
56,500 HOME DEPOT 3,051,000
37,100 LOUISIANA PACIFIC CORP 820,838
53,300 MASCO CORP 1,612,325
2,400 OWENS CORNING 103,200
CONSTRUCTION EQUIPMENT
1,700 GIDDINGS & LEWIS 27,625
PAINT AND FLAT GLASS
55,000 PPG INDUSTRIES INC 2,681,250
3,900 SHERWIN WILLIAMS CO 181,350
INDUSTRIAL CHEMICALS
24,700 GREAT LAKES CHEMICAL CORP 1,537,575
18,400 ROHM & HAAS CO 1,154,600
MISCELLANEOUS
20,700 FLUOR CORP 1,353,263
1,600 FOSTER WHEELER CORP 71,800
1,800 KAUFMAN & BROAD HOME CORP 26,100
TOTAL BUILDING & CONSTRUCTION $13,998,801
CHEMICALS AND DRUGS 11.81%
CHEMICALS
30,800 AIR PRODUCTS & CHEMICALS INC 1,778,700
66,400 AMGEN INC 3,585,600
20,100 BOSTON SCIENTIFIC CORP 904,500
14,700 DOW CHEMICAL CO 1,117,200
31,000 DUPONT DENEMOURS & CO 2,452,875
22,050 EASTMAN CHEMICAL CO 1,342,294
8,000 ENGLEHARD CORP 184,000
1,700 FMC CORP-NEW 110,925
5,700 GRACE WR & CO 403,987
6,200 HERCULES INC 342,550
150,000 MONSANTO CO 4,875,000
8,300 MORTON INTERNATIONAL 309,175
3,800 NALCO CHEM CO 119,700
10,100 PRAXIAIR INC 426,725
2,700 SIGMA-ALDRICH CORP 144,450
7,700 UNION CARBIDE CORP 306,075
DRUGS
200,400 ABBOT LABS 8,717,400
24,500 ALZA CORP CLASS A 670,688
34,800 AMERICAN HOME PRODUCTS 2,092,350
28,300 BRISTOL MYERS SQUIBB CO 2,547,000
317,000 JOHNSON & JOHNSON 15,691,500
30,800 LILLY ELI & CO 2,002,000
98,400 MERCK & CO., INC 6,359,100
67,570 PHARMACIA & UPJOHN INC 2,998,419
35,400 PFIZER INC 2,526,675
100,600 SCHERING PLOUGH 6,312,650
67,400 WALGREEN CO 2,257,900
COSMETICS
6,700 ALBERTO CULVER CO CLASS B 310,712
6,400 AVON PRODUCTS INC 288,800
30,100 INTL FLAVORS & FRAGRANCES 1,433,512
HEALTH PRODUCTS/CARE
18,900 ALLERGAN INC 741,825
3,200 BARD CR INC 108,800
14,500 BAUSCH & LOMB 616,250
15,400 BAXTER INTL INC. 727,650
3,700 BECTON DICKINSON & CO 296,925
22,900 BEVERLY ENTERPRISES INC 274,800
78,700 COLUMBIA/HCA HEALTHCARE 4,200,613
1,800 COMMUNITY PSYCHIATRIC CENTERS 17,100
19,300 MALLINCKRODT GROUP INC 750,287
13,200 TENET HEALTHCARE CORP 282,150
60,700 UNITED HEALTHCARE CORP 3,065,350
66,400 U S HEALTH CARE INC 3,652,000
3,200 U S SURGICAL 99,200
TOTAL CHEMICALS AND DRUGS $87,445,412
CONSUMER PRODUCTS 19.32%
CONFECTIONS AND BEVERAGES
14,200 ANHEUSER-BUSCH COS 1,065,000
3,800 BROWN FORMAN INC CLASS B 152,000
677,200 COCA COLA CO 33,098,150
45,300 NEWELL CO. 1,387,312
403,600 PEPSICO INC 14,277,350
CONTAINERS
3,000 AVERY DENNISON CORP 164,625
1,600 BALL CORP 46,000
21,400 CROWN CORK & SEAL INC 963,000
10,900 STONE CONTAINER 149,875
2,900 TEMPLE INLAND INC 135,575
PACKAGED FOOD
142,939 ARCHER DANIELS MIDLAND CO 2,733,708
8,100 CPC INTL INC 583,200
65,200 CAMPBELL SOUP CO 4,596,600
68,800 CONAGRA 3,121,800
1,900 COORS ADOLPH CO CL B 33,963
41,800 GENERAL MILLS INC 2,278,100
92,100 HEINZ H J CO 2,797,538
4,300 HERSHEY FOODS CORP 315,512
55,800 KELLOGG CO 4,087,350
28,800 PIONEER HI BRED INTL INC 1,522,800
33,000 QUAKER OATS CO 1,126,125
5,900 RALSTON-PURINA GROUP 378,338
84,800 SARA LEE CORP 2,745,400
10,200 SYSCO CORP 349,350
31,600 WRIGLEY WM JR CO 1,595,800
PAPER
4,400 AMERICAN GREETINGS CL A 120,450
2,700 BEMIS CO 94,500
6,500 BOISE CASCADE CORP 238,062
25,342 INTERNATIONAL PAPER CO 934,486
3,800 JAMES RIVER CORP 100,225
15,560 KIMBERLY CLARK CORP 1,202,010
16,300 MEAD CORP 845,563
1,300 POTLATCH CORP 50,863
3,500 UNION CAMP CORP 170,625
68,600 WEYERHAEUSER CO 2,915,500
PRINTING AND PUBLISHING
2,200 JOSTENS INC 43,450
15,300 KNIGHT-RIDDER INC 1,109,250
26,000 MCGRAW-HILL COMPANIES INC 1,189,500
7,900 MEREDITH CORP 329,825
28,100 NEW YORK TIMES CO CL A 916,762
20,800 TIME WARNER INC 816,400
36,300 TIMES MIRROR CO CL A NEW 1,579,050
16,800 TRIBUNE CO 1,220,100
4,950 WESTVACO CORP 147,881
RECREATIONAL EQUIPMENT
10,200 BALLY ENTRTAINMENT CORP 280,500
5,400 BRUNSWICK CORP 108,000
4,950 HARRAH'S ENTERTAINMENT 139,838
4,700 HASBRO INC 168,025
37,156 MATTEL INC 1,063,591
5,000 OUTBOARD MARINE CORP 90,625
SOAPS
2,600 CLOROX CO 230,425
OTHER CONSUMER PRODUCTS
9,200 AMERICAN BRANDS INC 417,450
36,800 COLGATE PALMOLIVE CO 3,118,800
4,600 DIAL CORP ARIZONA 131,675
24,800 GILLETTE CO 1,546,900
177,500 PROCTER & GAMBLE CO 16,085,937
8,400 RUBBERMAID INC 228,900
2,000 SPRINGS INDUSTRIES INC 101,000
15,400 TUPPERWARE CORPORATION 650,650
10,800 UST INC 369,900
5,300 WHITMAN CORP 127,863
PHOTOGRAPHY
86,100 EASTMAN KODAK CO 6,694,275
2,300 POLAROID CORP 104,937
HOUSEHOLD FURN/APPLIANCES
1,800 ARMSTRONG WORLD IND 103,725
6,000 MAYTAG CO 125,250
RETAIL
26,400 TJX COS INC (NEW) 891,000
APPAREL
4,900 BROWN GROUP INC 85,138
91,243 LIMITED INC 1,961,724
26,900 LIZ CLAIBORNE INC 931,413
37,600 NIKE INC CLASS B 3,863,400
2,200 STRIDE RITE CORP 18,150
3,700 V F CORP 220,612
BROADCASTING
147,324 DISNEY WALT CO 9,262,997
1,500 KING WORLD INC 54,562
MISCELLANEOUS
6,400 PALL CORP 154,400
TOTAL CONSUMER PRODUCTS 143,060,635
DURABLE GOODS 17.79%
AEROSPACE-AIRCRAFT
88,500 BOEING CO 7,710,562
3,200 GENERAL DYNAMICS CORP 198,400
10,920 LOCKHEED MARTIN CORP 917,280
12,600 MCDONNELL DOUGLAS CORP 611,100
2,900 NORTHROP GRUMMAN CORP 197,563
66,400 RAYTHEON CO 3,427,900
52,300 ROCKWELL INTERNATIONAL INTL 2,994,175
23,500 TEXTRON INC 1,877,062
31,400 UNITED TECHNOLOGIES CORP 3,611,000
AGRICULTURAL MACHINERY
11,000 CATERPILLAR INC 745,250
68,400 DEERE & CO 2,736,000
AUTOMOBILE AND PARTS
94,300 CHRYSLER CORP 5,846,600
30,400 COOPER TIRE & RUBBER 676,400
4,200 CUMMINS ENGINE INC 169,575
6,700 DANA CORP 207,700
4,700 EATON CORP 275,538
16,800 ECHLIN INC 636,300
69,900 FORD MOTOR COMPANY 2,263,012
41,700 GENERAL MOTOR COMPANY 2,184,038
6,000 GENUINE PARTS CO 274,500
19,960 NAVISTAR INTL CORP (NEW) 197,105
16,000 TRW INC 1,438,000
2,900 VARITY CORP. (NEW) 139,562
ELECTRICAL
48,720 AMP INC 1,954,890
12 EMCOR GROUP INC SER Z WTS 0
59,600 EMERSON ELECTRIC CO 5,386,350
17,500 GENERAL INSTRUMENTS CORP 505,313
23,600 HONEYWELL INC 1,286,200
2,800 RAYCHEM CORP 201,250
23,900 WESTINGHOUSE ELECTRIC CORP 448,125
ELECTRONICS
27,400 ADVANCED MICRO-DEVICES 373,325
11,000 APPLIED MATERIALS INC 335,500
166,400 CISCO SYSTEMS INC 9,422,400
17,700 E G & G INC 378,337
93,200 GENERAL ELECTRIC CO 8,061,800
4,600 GENERAL SIGNAL CORP 174,225
61,500 HEWLETT PACKARD CO 6,126,938
182,800 INTEL CORP 13,424,375
11,600 MICRON TECH 300,150
7,500 NATIONAL SEMICONDUCTOR 116,250
12,400 NATIONAL SERVICE INDUSTRIES 485,150
36,075 ORACLE CORPORATION 1,422,708
2,000 PERKIN ELMER CORP 96,500
1,300 TEKTRONIX INC 58,175
2,900 TELEDYNE INC 104,762
12,200 TEXAS INSTRUMENTS 608,475
1,800 THOMAS & BETTS CORP 67,500
INDUSTRIAL MACHINERY
1,500 BRIGGS & STRATTON CORP 61,687
6,000 CASE CORPORATION 288,000
1,800 CINCINNATI MILACRON INC 43,200
31,200 COOPER INDUSTRIES INC 1,294,800
5,400 DOVER CORP 249,075
13,700 HARNISCHFEGER INDUS INC 455,525
25,900 INGERSOLL RAND CO 1,133,125
400 NACCO INDUSTRIES INC CLASS A 22,150
6,600 TRINOVA CORP 220,275
OFFICE EQUIPMENT AND SUPPLIE
33,100 ALCO STANDARD CORP 1,497,775
22,100 DELUXE CORP 784,550
1,700 HARLAND JOHN H CO 41,862
40,900 PITNEY BOWES INC 1,952,975
22,500 XEROX CORP. 1,203,750
RUBBER
2,400 GOODRICH B F CO 89,700
40,100 GOODYEAR TIRE & RUBBER 1,934,825
0 PREMARK INTERNATL INC 0
OTHER DURABLE GOODS
16,100 CORNING INCORPORATED 617,838
1,200 CRANE CO 49,200
6,600 ILLINOIS TOOL WORKS 446,325
11,800 MILLIPORE CORP 494,125
40,800 MINNESOTA MINING & MANUFACTURING 2,815,200
24,200 STANLEY WORKS 719,950
COMPUTERS AND SOFTWARE
32,800 APPLE COMPUTER INC 688,800
1,500 BAY NETWORKS INC 38,625
2,500 CERIDIAN CORP 126,250
62,900 COMPAQ COMPUTER CORP 3,097,825
13,450 COMPUTER ASSOC INTL INC 958,313
9,100 DATA GENERAL CORPORATION 118,300
8,400 DIGITAL EQUIPMENT CORP 378,000
2,600 INTERGRAPH CORP 31,525
31,700 IBM COMMON 3,138,300
33,000 MICROSOFT CORP 3,964,125
93,500 NOVELL INC 1,297,312
10,100 SILICON GRAPHICS 242,400
10,600 SUN MICROSYSTEMS 624,075
7,600 TANDEM COMPUTERS INC 94,050
9,600 UNISYS CORP 68,400
HOUSEHOLD FURN/APPLIANCES
5,100 WHIRLPOOL CORP 253,088
TELECOMMUNICATIONS
50,900 AIRTOUCH COMMUNICATIONS 1,437,925
12,825 ANDREW CORP 689,344
9,400 DSC COMMUNICATIONS 283,175
MISCELLANEOUS
75,300 ALLIED-SIGNAL INC 4,301,513
21,800 BLACK & DECKER CORP 842,025
22,900 ITT INDUSTRIES INC 575,362
1,800 JOHNSON CTLS INC 125,100
4,150 PARKER HANNIFIN CORP 175,856
2,100 SNAP ON TOOLS CORP 99,488
23,600 TYCO LABS INC 961,700
TOTAL DURABLE GOODS 131,700,108
FINANCIAL 14.71%
BANKS
111,237 BANC ONE CORP 3,782,058
10,200 BANK OF BOSTON CORP 504,900
29,800 BANK NEW YORK INC 1,527,250
93,300 BANKAMERICA CORP 7,067,475
20,300 BANKERS TR NY CORP 1,499,662
5,400 BARNETT BANKS INC 329,400
8,000 BOATMEN'S BANCSHARES 321,000
75,580 CHASE MANHATTAN CORP NEW 5,337,838
97,100 CITICORP 8,022,887
12,700 CORESTATES FINANCIAL CORP 488,950
43,543 DEAN WITTER DISCOVER & CO 2,492,837
2,500 FIFTH THIRD BANCORP COM 135,000
54,731 FIRST CHICAGO NBD CORP 2,141,350
19,750 FIRST UNION CORP 1,202,281
42,366 FLEET FINANCIAL GROUP INC 1,842,921
78,242 KEYCORP NEW 3,031,878
40,650 MBNA CORP 1,158,525
31,800 MELLON BANK CORP 1,812,600
57,600 MORGAN J P & CO 4,874,400
9,200 NATIONAL CITY CORP 323,150
21,200 NATIONSBANK CORP 1,751,650
20,200 NORWEST CORP 704,475
80,400 PNC FINANCIAL 2,391,900
12,800 SUNTRUST BANKS INC 473,600
4,600 U S BANCORP ORE 166,175
46,100 WACHOVIA CORP 2,016,875
17,500 WELLS FARGO & CO 4,180,313
FINANCE COMPANIES
134,700 AMERICAN EXPRESS CO 6,010,987
2,400 BENEFICIAL CORP 134,700
44,700 FEDERAL HOME LAND MTG CORP 3,821,850
1,800 GREEN TREE FINANCIAL 56,250
5,400 HOUSEHOLD INTL CORP 410,400
HOLDING COMPANY
900 EASTERN ENTERPRISES 29,925
FIRE AND CASUALTY INSURANCE
46,400 CHUBB CORP 2,314,200
23,500 GENERAL RE CORP 3,577,875
33,000 SAFECO CORP 1,167,375
INSURANCE
6,000 AETNA LIFE & CAS CO 429,000
11,900 ALEXANDER & ALEXANDER SVC 235,025
103,464 ALLSTATE CORPORATION 4,720,545
26,500 AMERICAN INTL GROUP 2,613,563
9,500 AON CORP 482,125
20,100 CIGNA CORP 2,369,287
22,900 ITT HARTFORD 1,219,425
25,100 MARSH & MCLENNAN CO. 2,422,150
24,000 ST PAUL COS INC 1,284,000
25,400 TORCHMARK CORP 1,111,250
19,000 TRANSAMERICA CORP 1,553,250
48,844 TRAVELERS GROUP INC 2,228,508
18,200 UNUM CORPORATIOM 1,132,950
28,800 USF & G CORP 471,600
LIFE INSURANCE
11,400 AMERICAN GENERAL CORP 414,675
3,450 JEFFERSON PILOT CORP 178,106
5,100 LINCOLN NATL CORP IND 235,875
33,500 PROVIDIAN CORP 1,436,313
1,650 USLIFE CORP 54,243
REAL ESTATE
60,900 FEDERAL NATL MTGE ASSN 2,040,150
SAVINGS & LOANS
27,000 AHMANSON H F & CO 729,000
2,600 GOLDEN WEST FINANCIAL 145,600
7,600 GREAT WESTERN FINANCIAL 181,450
BROKERAGE
44,000 MERRILL LYNCH & CO 2,865,500
28,500 SALOMON INC 1,254,000
TOTAL FINANCIAL 108,912,502
METALS AND MINING 0.91%
ALUMINUM
45,800 ALUMINUM CO AMER 2,627,775
2,800 REYNOLDS METALS CO 145,950
MINING
9,800 HOMESTAKE MINING CO 167,825
STEEL
5,100 ARMCO, INC. 25,500
33,900 BETHLEHEM STEEL CORP 402,562
3,900 INLAND STEEL INDUSTRIES INC 76,538
4,800 NUCOR CORP 243,000
1,400 TIMKEN CO 54,250
23,400 USX-US STEEL GROUP 663,975
25,700 WORTHINGTON INDUSTRIES INC 536,487
OTHER METALS
2,000 ASARCO INC 55,250
23,410 NEWMONT MINING CORP 1,155,869
3,500 PHELPS DODGE CORP 218,313
MINERALS
14,600 CYPRUS AMAX MINERALS CO 330,325
TOTAL METALS AND MINING 6,703,619
COLLECTIBLES & PRECIOUS MATER 0.04%
GOLD-DIAMONDS-GEMS
10,000 FREEPORT-MCMORAN COPPER-B 318,750
TOTAL COLLECTIBLES & PRECIOUS MATE $318,750
OIL-ENERGY 5.76%
OIL & GAS PRODUCERS
24,200 AMERADA HESS CORP 1,297,725
27,700 AMOCO CORP 2,004,787
5,900 COASTAL CORP 246,325
3,800 ENSERCH CORP 82,650
1,000 HELMERICH & PAYNE INC. 36,625
17,800 OCCIDENTAL PETROLEUM 440,550
6,700 ROWAN COS INC 98,825
4,400 SANTA FE ENERGY RES INC 52,250
17,400 TENNECO INC 889,575
69,900 USX-MARTHON GROUP COM NEW 1,406,738
NATURAL RESOURCES
48,300 DRESSER INDUSTRIES INC 1,424,850
3,300 KERR MCGEE CORP 200,887
3,000 LOUISIANA LD & EXPL CO 172,875
22,900 WILLIAMS COS INC-DEL 1,133,550
OIL EQUIPMENT, WELLS & SVCS
2,800 ASHLAND, INC 110,950
45,500 BAKER HUGHES INC 1,495,813
6,400 HALLIBURTON CO 355,200
3,700 WESTERN ATLAS INC 215,525
OIL - DOMESTIC
39,400 BURLINGTON RESOURCES INC 1,694,200
12,600 PENNZOIL CO 582,750
14,600 PHILLIPS PETE CO 611,375
65,200 UNOCAL CORP 2,200,500
OIL - INTERNATIONAL
47,500 ATLANTIC RICHFIELD CO 5,628,750
174,800 CHEVRON CORP 10,313,200
69,300 EXXON CORP. 6,020,437
22,100 MOBIL CORP 2,477,963
5,800 ORYX ENERGY COMPANY 94,250
5,000 SUN CO INC 151,875
14,700 TEXACO INC 1,232,963
TOTAL OIL-ENERGY $42,673,963
RETAIL 3.71%
DEPARTMENT STORES
3,900 DAYTON HUDSON CORP 402,187
4,100 HARCOURT GENERAL INC 205,000
25,600 K MART 316,800
84,400 MAY DEPT STORES CO 3,692,500
29,400 MELVILLE CORP 1,190,700
10,000 MERCANTILE STORES 586,250
12,100 PENNEY JC INC 635,250
101,900 SEARS ROEBUCK & CO 4,954,888
40,600 WINN-DIXIE STORES INC 1,436,225
GROCERY
69,800 ALBERTSON'S INC 2,887,975
40,100 AMERICAN STORES CO 1,654,125
1,700 FLEMING COS 24,437
2,500 GIANT FOOD INC 89,688
1,600 GREAT ATLANTIC & PACIFIC TEA 52,600
6,600 KROGER CO 260,700
24,600 SUPERVALUE INC 774,900
OTHER RETAIL
32,800 CIRCUIT CITY STORES 1,184,900
1,000 LONGS DRUG STORES CORP 44,625
10,100 LOWES COS INC 364,862
3,900 PEP BOYS-MAN, MO, JACK 132,600
32,377 PRICE/COSTCO INC 700,153
23,900 RITE AID CORP 711,025
23,900 TANDY CORP 1,132,262
84,500 TOYS R US 2,408,250
SPORTING GOODS
25,100 REEBOK INTL LTD 843,988
2,200 RUSSELL CORP 60,775
APPAREL
5,700 CHARMING SHOPPES INC 40,256
15,800 GAP INC 507,575
4,100 NORDSTROM INC 182,450
TOTAL RETAIL $27,477,946
UTILITIES 12.11%
ELECTRIC
48,200 AMERICAN ELECTRIC POWER INC 2,054,525
7,700 BALTIMORE GAS & ELECTRIC 218,487
54,700 CAROLINA POWER & LIGHT COMPANY 2,078,600
67,000 CENTRAL & SOUTH WEST CORP 1,943,000
20,885 CINERGY CORP 668,320
80,700 CON. EDISON NY INC 2,360,475
46,100 DOMINION RES INC-VA 1,844,000
11,400 DUKE POWER CO 584,250
24,800 EDISON INTERNATIONAL 437,100
73,600 ENTERGY CORP NEW 2,088,400
10,700 FPL GROUP INC 492,200
8,700 GENERAL PUB UTILS CORP 306,675
68,800 HOUSTON INDS INC 1,694,200
37,800 NIAGARA MOHAWK POWER 292,950
17,800 NORTHERN STS POWER CO 878,875
40,800 OHIO EDISON CO 892,500
57,500 PECO ENERGY 1,495,000
23,700 PACIFIC GAS & ELECTRIC 551,025
19,900 PACIFICORP 442,775
82,600 PUBLIC SERVICE ENTERPRISE GROUP 2,261,175
155,400 SBC COMMUNICATIONS INC 7,653,450
173,100 SOUTHERN CO 4,262,588
63,500 UNICOM CORP 1,770,062
35,200 UNION ELECTRIC CO 1,416,800
GAS
13,100 COLUMBIA GAS SYS INC 682,838
31,900 CONSOLIDATED NATL GAS 1,666,775
14,400 ENRON CORP 588,600
14,000 NICOR INC 397,250
38,900 NORAM ENERGY CORP 423,037
7,100 ONEOK INC 177,500
7,000 PACIFIC ENTERPRISES 207,375
10,800 PANENERGY CORPORATION 355,050
9,200 PEOPLES ENERGY CORP 308,200
4,400 SONAT INC 198,000
400 TEXAS UTILITIES CO 17,100
TELEPHONE
88,800 A T & T 5,505,600
16,300 ALLTEL CORP 501,225
115,300 BELL ATLANTIC CORP 7,350,375
260,400 BELLSOUTH CORP 11,034,450
54,000 GTE CORP 2,416,500
140,300 NYNEX CORP 6,664,250
25,100 PACIFIC TELESIS GROUP 847,125
32,000 SPRINT CORP 1,344,000
146,500 U S WEST INC 4,669,688
146,500 U S WEST MEDIA GROUP 2,673,625
WASTE DISPOSAL
54,700 BROWNING FERRIS IND 1,586,300
43,000 LAIDLAW TRANS CL B NVTG 435,375
27,100 WMX TECHNOLOGIES INC 887,525
TOTAL UTILITIES $89,625,195
MISCELLANEOUS 10.61%
BROADCAST/COMMUNICATIONS
78,100 COMCAST CORP CL A SPL 1,444,850
38,000 GANNETT CO., INC 2,688,500
203,000 MCI COMMUNICATIONS 5,201,875
169,500 MOTOROLA INC 10,657,312
43,800 TELE COMM. INC CL A 793,875
2,000 TELLABS INC 133,750
24,600 VIACOM INC CL B NON VTG 956,325
BUSINESS SERVICES
30,400 AMDAHL CORP 326,800
2,700 AUTODESK INC 80,663
76,200 AUTOMATIC DATA PROCESSING 2,943,225
4,900 BLOCK H&R INC 159,862
14,800 COMPUTER SCIENCES CORP 1,106,300
7,800 DONNELLEY RR & SONS 272,025
4,700 DOW JONES & CO 196,225
61,300 DUN & BRADSTREET 3,831,250
15,000 E M C CORP 279,375
19,200 ECOLAB INC 633,600
6,900 FIRST DATA CORP 549,413
2,000 GRAINGER W W INC 155,000
3,600 INTERPUBLIC GROUP COS 168,750
12,900 OGDEN CORP 233,812
2,900 SAFETY KLEEN CORP 50,750
3,900 SCIENTIFIC-ATLANTA 60,450
6,300 SERVICE CORP INTL 362,250
FOOD SERVICE
41,800 DARDEN RESTAURANTS INC 449,350
900 LUBYS CAFETERIAS INC 21,150
187,400 MCDONALDS CORP 8,760,950
46,900 PHILLIP MORRIS CO INC 4,877,600
2,500 RYANS FAMILY STEAK HOUSE 23,125
11,500 SHONEY'S INC 125,063
6,100 WENDYS INTL INC 113,612
HOTEL & MOTEL
2,400 HILTON HOTELS CORP 270,000
22,900 ITT CORP NEW 1,517,125
14,000 MARRIOTT INTERNATIONAL CORP 752,500
HOUSING
1,400 PULTE CORP 37,450
MED SERV & SUPPLIES
29,900 BIOMET INC 429,813
4,600 MANOR CARE INC 181,125
56,000 MEDTRONIC INC 3,136,000
3,950 ST. JUDE MEDICAL INC. 132,325
1,100 SHARED MEDICAL SYS CORP 70,675
REAL ESTATE
1,800 CENTEX CORP 56,025
TRANSPORTATION
3,600 AMR CORP 327,600
10,003 BURLINGTON NORTHERN SANTA FE 808,993
55,800 CSX CORP 2,692,350
10,500 CALIBER SYSTEMS INC 357,000
3,900 CONRAIL INC 258,862
14,600 CONSOLIDATED FREIGHTWAYS 308,425
2,500 DELTA AIRLINES INC 207,500
3,100 FEDERAL EXPRESS CORP 254,200
2,200 FLEETWOOD ENTERPRISES 68,200
7,200 NORFOLK SOUTHERN CORP 610,200
9,650 PACCAR INC 472,850
4,600 RYDER SYSTEMS INC 129,375
7,320 SANTA FE PACIFIC GOLD 103,395
38,000 SOUTHWEST AIRLINES CO 1,106,750
56,800 UNION PACIFIC CORP 3,968,900
18,400 U S AIR GROUP 331,200
6,700 YELLOW CORP 88,775
MISCELLANEOUS
70,600 WARNER-LAMBERT 3,883,000
TELECOMMUNICATIONS
138,600 AMERITECH CORP NEW 8,229,375
2,000 HARRIS GROUP-DEL 122,000
TOTAL MISCELLANEOUS $78,569,075
UTILITIES 0.16%
ELECTRIC
38,100 DTE ENERGY COMPANY 1,176,338
TOTAL UTILITIES $1,176,338
TOTAL COMMON STOCK 731,662,344
OTHER
PREFERRED STOCKS 0.00%
NON-CONVERTIBLES
146 TELEDYNE PFD SER E 2,244
$2,244
CASH EQUIVALENTS 1.18%
STIFS/MONEY MARKETS
8,736,657 AMERICAN AADVANTAGE MM 8,736,657
$8,736,657
TOTAL OTHER $8,738,901
TOTAL INVESTMENTS -
(cost $496,554,007) 100.00% $740,401,245
