SELECT ASSET FUND, SERIES 1, INC.
Statement of Assets and Liabilities
June 30, 1998
(Unaudited)
Assets
Investments, at value (@ cost $173,902,923) $ 341,697,844
Dividends receivable 246,142
Interest receivable 13,542
Prepaid expenses 9,480
Receivable for securities sold - unsettled trades 187,545
Total Assets 342,154,553
Liabilities
Cash 315
Accrued expenses 90,299
Notes payable 94,900
Payable for securities purchased - unsettled trades 2,350,818
Accrued interest expense 2,096
Total Liabilities 2,538,428
Net Assets $ 339,616,125
Net assets are represented by:
Common stock at par value, $.01 per share, 199,991,500 shares
authorized, 50,169,191.77 shares issued and outstanding 501,692
Additional paid-in capital 171,319,512
Net unrealized appreciation of investments 167,794,921
Net Assets $ 339,616,125
Net asset value per common shares outstanding $ 6.77
See accompanying notes to the financial statements.
SELECT ASSET FUND, SERIES 1, INC.
Statement of Operations
For the period from January 1, 1998 to June 30, 1998
(Unaudited)
Investment income:
Dividend income $ 4,354,629
Interest income 92,362
Total investment income 4,446,991
Expenses:
Administration fees (Note 2) 55,000
Investment management fee (Note 2) 15,624
Independent auditors 20,339
Rating agencies fees 5,667
Insurance 5,248
Interest expense 3,904
Directors fees and expenses 3,570
Legal fees 2,170
Other expenses 625
Total expenses 112,147
Net investment income 4,334,844
Net realized and unrealized gains on investments:
Net realized gain on investments:
Proceeds from sales $ 709,334,325
Cost of securities sold (328,182,125)
381,152,200
Unrealized appreciation of investments:
Beginning of period 420,444,672
End of period 167,794,921
Increase in net unrealized appreciation of investments (252,649,751)
Net increase in net assets resulting
from operations $ 132,837,293
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, 1998 to June 30, 1998
and for the year ended December 31, 1997
(Unaudited)
For the six
months ended For the
June 30, 1998 year ended
(UNAUDITED) December 31, 1997
From operations:
Net investment income $ 4,334,844 16,686,552
Net realized gain on investments 381,152,200 142,877,298
Net change in unrealized appreciation
on investments (252,649,751) 105,149,064
Increase in net assets resulting from
operations 132,837,293 264,712,914
Dividends from net investment income:
Auction market preferred stock 0 (15,743,802)
Common stock (4,334,844) (942,750)
(4,334,844) (16,686,552)
Distributions from net realized gains:
Common stock (381,152,200) (144,682,320)
Decrease in net assets resulting from
distibutions to stockholders (385,487,044) (161,368,872)
Increase (decrease) from capital transactions:
Issuance of auction market preferred stock 0 100,000,000
Issuance of common stock 0 421,000,071
Capital contribution from common stockholder 144,895,322 0
Redemption of auction market preferred
stock 0 (400,000,000)
Distribution of capital to common
stockholder (307,970,579) (280,010,783)
(163,075,257) (159,010,712)
Total increase (decrease) in net assets (415,725,008) (55,666,670)
Net assets:
Beginning of period 755,341,133 811,007,803
End of period $ 339,616,125 755,341,133
See accompanying notes to the financial statements.
SELECT ASSET FUND, SERIES 1, INC.
Notes to the Financial Statements
June 30, 1998
(UNAUDITED)
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 Fund's investment
portfolio must conform to certain rating agency asset coverage
tests so long as the Fund has preferred stock outstanding.
The following is a summary of significant accounting policies
consistently followed by the Fund in preparation of its
financial statements.
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.
Security Transactions
Security transactions are accounted for on a trade date plus
one business day basis which does not differ materially from a
trade date basis. The cost of securities sold is determined
using the identified cost method. Dividend income is recorded
on ex-dividend date and interest income is recorded on the
accrual basis.
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.
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.
The character of income and gains to be distributed is
determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. Amounts
distributed in excess of taxable income and net realized
gains, if any, are considered a return of capital.
1. Organization and Significant Accounting Policies
(continued)
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.
In February 1997, the Fund issued 1,295,889.3 shares of common
stock for $421,000,071.
For the period ended June 30, 1998 and the year ended December
31, 1997, dividend and capital gain distributions to the
common stockholder were $385,487,044 and $145,625,070
respectively.
During the six months ended June 30, 1998 and the year ended
December 31, 1997, return of capital distributions to the
common stockholder amounted to approximately $308,000,000 and
approximately $281,000,000, respectively.
Comerica Bank serves as both custodian and administrator for
the Fund and receives a fee based on 0.06% of net assets
outstanding at the end of the fiscal year. 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 administration and management fees are
calculated and accrued on a monthly basis and generally paid
on a quarterly basis.
3. Investment Transactions
The aggregate cost of securities purchased and the aggregate
proceeds of securities sold excluding short-term securities,
for the six months ended June 30, 1998 were $25,669,991 and
$709,334,325, respectively.
As of June 30, 1998, the aggregate gross unrealized
appreciation and depreciation of investments for Federal
income tax purposes, were $174,101,020 and $6,306,099,
respectively.
4. Auction Market Preferred Stock ("AMPS")
In February 1997 the Fund issued $100 million of AMPS.
During 1997, the Fund redeemed 1000 shares of Series A, 1000
shares of Series B, 1000 shares of Series C and 1000 shares of
Series D AMPS.
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. Dividends are cumulative
from the date of original issue and are paid every 49 days at
a rate set through Dutch Auction. 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, 1998, the Fund had $94,900 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, 1998, the Fund was paying interest at
7.90% per annum.
6. Year 2000 (Unaudited)
Like other mutual funds, financial and business organizations
and individuals around the world, the Fund could be adversely
affected if the computer systems used by the
advisor/administrator and other service providers do not
properly process and calculate date-related information and
data from and after January 1, 2000. This is commonly known
as the "Year 2000 Problem". The advisor/administrator is
taking steps that it believes are reasonably designed to
address the Year 2000 Problem with respect to computer systems
that it uses and to obtain reasonable assurances that
comparable steps are being taken by the Fund's other major
service providers. At this time, however, there can be no
assurance that these steps will be sufficient to avoid any
adverse impact to the Fund.
SELECT ASSET FUND, SERIES 1, INC.
Financial Highlights
For the six
months ended Year ended December 31,
June 30,1998 1997 1996 1995 1994
For a share of common stock outstanding
throughout the period:
Net asset value,
beginning of period 15.06 10.46 13.16 10.07 10.66
Net investment income 0.09 0.33 0.31 0.45 0.49
Net realized and unrealized gains
(losses) on investments 2.56 4.67 2.77 5.58 (0.36)
Total from investment
operations 2.65 5.00 3.08 6.03 0.13
Capital contribution 2.89 8.39 0.00 0.00 0.00
Less distributions from net investment income:
Common stock equivalent of dividends
paid to AMPS holders 0.00 (0.31) (0.21) (0.37) (0.25)
Dividends paid to common
shareholders (0.09) (0.02) (0.10) (0.08) (0.37)
Less distributions from net net realized gains:
Common stock equivalent of dividend 0.00 0.00 0.00 0.00 (0.05)
paid to AMPS holders
Dividends paid to common
sharesholders (7.60) (2.88) (0.03) (0.43) (0.05)
Less distributions from paid-in capital:
Return of capital to common
stockholders (6.14) (5.58) (5.44) (2.06) 0.00
Total distributions (13.83) (8.79) (5.78) (2.94) (0.72)
Net asset value, end of period $6.77 $15.06 $10.46 $13.16 $10.07
Total investment return 17.59% 32.64% 23.40% 59.88% 1.22%(1)
Ratios/supplemental data:
Net assets at end of period (000s) 339,616 755,341 811,008 643,340 556,056
Average net assets (000s) 543,676 1010,072 722,492 603,102 692,062
Ratio of expenses to average net assets
applicable to common stock (3) 0.02% 0.17% 0.21% 0.16% 0.15%(2)
Ratio of net investment income to
average net assets applicable
to common stock (3) 0.80% 1.65% 2.11% 2.39% 2.17%(2)
Portfolio turnover 4.72% 12.02% 3.34% 16.36% 9.83%
Average commissions paid on equity
securities transactions (4) $0.0023 $0.0431 $0.0050 0.00 0.00
Asset coverage per AMPS share
end of period 0 0 $270,336 0 $222,422
AMPS shares outstanding 0 0 3,000 0 2,500
Asset coverage for notes payable,
end of period 357867% 796034% 837053% 65740% 568084%
Notes payable, end of period $94,900 $94,900 $96,900 $97,900 $97,900
(1)Total investment return for the period; not annualized.
(2)Annualized.
(3)Ratios are calculated on the basis of income and expenses applicable to
both the common and preferred stock relative to the average net assets
of the common stockholder. Ratios do not reflect the effect of dividend
payments to the AMPS holders. Ratios from 1996 and years prior have
restated to exclude the effect of dividend payments to AMPS holders.
(4)For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commision rate per share for trades on
which commissions are charged.
See accompanying notes to financial statements.
SELECT ASSET FUND, SERIES 1, INC.
Portfolio of Investments
June 30, 1998
(Unaudited)
No. of
Shares Market Value
COMMON STOCK
BUILDING AND CONSTRUCTION 2.34%
BUILDING MATERIALS
21,700 CHAMPION INTL CORP 1,067,368.75
1,400 GEORGIA PACIFIC CORP 82,512.50
24,300 HOME DEPOT 2,018,418.75
31,400 LOUISIANA PAC CORP 573,050.00
9,000 MASCO CORP 544,500.00
3,800 OWENS CORNING 155,087.50
PAINT AND FLAT GLASS
4,700 PPG INDUS INC 326,943.75
10,700 SHERWIN WILLIAMS CO 354,437.50
INDUSTRIAL CHEMICALS
20,400 GREAT LAKES CHEM CRP 804,525.00
8,900 ROHM & HAAS CO 925,043.75
MISCELLANEOUS
20,300 FLUOR CORP 1,035,300.00
2,500 FOSTER WHEELER CORP 53,593.75
1,700 KAUFMAN & BROAD HOME CORP 53,975.00
TOTAL BUILDING AND CONSTRUCTION $7,994,756.25
CHEMICALS AND DRUGS 10.73%
CHEMICALS
41,100 AIR PRODS & CHEMS INC 1,644,000.00
36,900 AMGEN INC 2,412,337.50
19,700 BOSTON SCIENTIFIC CORP 1,411,012.50
2,700 DOW CHEMICAL CO 261,056.25
2,900 DUPONT DENEMOURS & CO 216,412.50
1,950 EASTMAN CHEMICAL CO 121,387.50
9,200 ENGLEHARD CORP 186,300.00
1,700 FMC CORP-NEW 115,918.75
700 HERCULES INC 28,787.50
82,200 MONSANTO CO 4,592,925.00
5,900 MORTON INTERNATIONAL INC 147,500.00
3,300 NALCO CHEM CO 115,912.50
5,100 OCTEL CORP 101,362.50
8,900 PRAXIAIR INC 416,631.25
5,100 SIGMA-ALDRICH CORP 179,137.50
6,600 UNION CARBIDE CORP 352,275.00
6,400 WR GRACE & CO NEW 109,200.00
DRUGS
14,800 ABBOT LABS 604,950.00
9,000 ALZA CORP CL A 389,250.00
12,200 AMERICAN HOME PRODUCTS 631,350.00
9,800 BRISTOL MYERS SQUIBB CO 1,126,387.50
20,400 JOHNSON & JOHNSON 1,504,500.00
10,900 LILLY ELI & CO 720,081.25
18,600 MERCK & CO., INC 2,487,750.00
18,800 PFIZER INC 2,043,325.00
28,070 PHARMACIA & UPJOHN INC 1,294,728.75
7,300 SCHERING PLOUGH 668,862.50
73,100 WALGREEN CO 3,019,943.75
COSMETICS
8,700 ALBERTO CULVER CO CL B 252,300.00
1,100 AVON PRODUCTS INC 85,250.00
9,900 INTL FLAVORS & FRAGRANCES 430,031.25
HEALTH PRODUCTS/CARE
16,100 ALLERGAN INC 746,637.50
3,900 BARD CR INC 148,443.75
12,800 BAUSCH & LOMB 641,600.00
2,600 BAXTER INTL INC. 139,912.50
4,900 BECTON DICKINSON & CO 380,362.50
51,250 COLUMBIA/HCA HEALTHCARE 1,492,656.25
18,600 GUIDANT CORP 1,326,412.50
13,300 TENET HEALTHCARE CORP 415,625.00
6,000 U S SURGICAL 273,750.00
54,100 UTD HEALTHCARE CORP 3,435,350.00
TOTAL CHEMICALS AND DRUGS $36,671,616.25
CONSUMER PRODUCTS 13.10%
CONFECTIONS AND BEVERAGES
7,200 ANHEUSER-BUSCH COS 339,750.00
3,700 BROWN FORMAN INC CL B 237,725.00
81,800 COCA COLA CO 6,993,900.00
29,400 NEWELL CO. 1,464,487.50
6,300 PEPSICO INC 259,481.25
CONTAINERS
6,100 AVERY DENNISON CORP 327,875.00
2,100 BALL CORP 84,393.75
16,400 CROWN CORK & SEAL INC 779,000.00
2,100 OWENS - ILLINOIS INC 93,975.00
5,864 SEALED AIR CORP 215,494.65
11,400 STONE CONTAINER 178,125.00
2,600 TEMPLE INLAND INC 140,075.00
PACKAGED FOOD
99,223 ARCHER DANIELS MIDLAND CO 1,922,445.63
13,400 BESTFOODS 778,037.50
5,400 CAMPBELL SOUP CO 286,875.00
6,500 CONAGRA 205,968.75
1,700 COORS ADOLPH CO CL B 57,800.00
6,800 GENERAL MILLS INC 464,950.00
4,300 HEINZ H J CO 241,337.50
6,300 HERSHEY FOODS CORP 434,700.00
2,300 KELLOGG CO 86,393.75
40,200 PIONEER HI BRED INTL INC 1,663,275.00
2,200 QUAKER OATS CO 120,862.50
5,500 RALSTON-PURINA GROUP 642,468.75
2,300 SARA LEE CORP 128,656.25
15,200 SYSCO CORP 389,500.00
18,300 WRIGLEY WM JR CO 1,793,400.00
PAPER
4,000 AMERICAN GREETINGS CL A 203,750.00
2,400 BEMIS CO 98,100.00
6,900 BOISE CASCADE CORP 225,975.00
9,800 FORT JAMES CORPORATION 436,100.00
4,379 INTERNATIONAL PAPER CO 188,297.00
4,680 KIMBERLY CLARK CORP 214,695.00
20,000 MEAD CORP 635,000.00
1,100 POTLATCH CORP 46,200.00
3,600 UNION CAMP CORP 178,650.00
9,500 WEYERHAEUSER CO 438,781.25
PRINTING AND PUBLISHING
1,600 JOSTENS INC 38,600.00
14,300 KNIGHT-RIDDER INC 787,393.75
2,400 MCGRAW-HILL COMPANIES INC 195,750.00
9,300 MEREDITH CORP 436,518.75
17,800 NEW YORK TIMES CO CL A 1,410,650.00
26,400 TIME WARNER INC 2,255,550.00
16,200 TIMES MIRROR CO CL A NEW 1,018,575.00
20,100 TRIBUNE CO 1,383,131.25
4,850 WESTVACO CORP 137,012.50
RECREATIONAL EQUIPMENT
6,600 BRUNSWICK CORP 163,350.00
5,450 HARRAH'S ENTERTAINMENT 126,712.50
4,850 HASBRO INC 190,665.63
29,656 MATTEL INC 1,254,819.50
SOAPS
4,000 CLOROX CO 381,500.00
OTHER CONSUMER PRODUCTS
4,500 COLGATE PALMOLIVE CO 396,000.00
8,000 FORTUNE BRANDS INC 307,500.00
31,100 GILLETTE CO 1,762,981.25
24,000 PROCTER & GAMBLE CO 2,185,500.00
4,500 RUBBERMAID INC 149,343.75
1,700 SPRINGS INDUS INC 78,412.50
14,900 TUPPERWARE CORPORATION 419,062.50
4,800 UST INC 129,600.00
PHOTOGRAPHY
900 EASTMAN KODAK CO 65,756.25
2,100 POLAROID CORP 74,681.25
HOUSEHOLD FURN/APPLIANCES
3,200 ARMSTRONG WORLD IND 215,600.00
4,000 MAYTAG CO 197,500.00
RETAIL
5,100 FEDERATED DEPT STORES NEW 274,443.75
72,400 TJX COS INC (NEW) 1,746,650.00
APPAREL
915 ABERCROMBIE & FITCH CO A 40,273.73
40,043 LIMITED INC 1,326,424.38
14,500 LIZ CLAIBORNE INC 757,625.00
7,900 NIKE INC CL B 384,631.25
6,500 V F CORP 334,343.75
BROADCASTING
8,324 DISNEY WALT CO 874,540.25
2,800 KING WORLD INC 71,400.00
MISCELLANEOUS
9,900 PALL CORP 202,950.00
TOTAL CONSUMER PRODUCTS $44,771,949.52
DURABLE GOODS 28.19%
AEROSPACE-AIRCRAFT
18,168 BOEING CO 809,611.50
6,400 GENERAL DYNAMICS CORP 297,600.00
2,820 LOCKHEED MARTIN CORP 298,567.50
3,500 NORTHROP GRUMMAN CORP 360,937.50
1,600 TEXTRON INC 114,700.00
600 UNITED TECHNOLOGIES CORP 55,500.00
AGRICULTURAL MACHINERY
2,400 CATERPILLAR INC 126,900.00
4,600 DEERE & CO 243,225.00
AUTOMOBILE AND PARTS
13,000 AUTOZONE INC 415,187.50
26,500 COOPER TIRE & RUBBER 546,562.50
3,000 CUMMINS ENGINE INC 153,750.00
6,300 DANA CORP 337,050.00
200 EATON CORP 15,550.00
15,300 ECHLIN INC 750,656.25
26,100 FORD MTR CO 1,539,900.00
4,700 GENERAL MTRS CORP 314,018.75
2,950 GENUINE PARTS CO 101,959.38
10,160 NAVISTAR INTL CORP (NEW) 293,370.00
3,500 TENNECO INC (NEW) 133,218.75
600 TRW INC 32,775.00
ELECTRICAL
20 AMP INC 687.50
6,000 EMERSON ELEC CO 361,875.00
3,700 HONEYWELL INC 309,181.25
5,000 RAYCHEM CORP 147,812.50
ELECTRONICS
24,500 ADVANCED MICRO-DEVICES 418,031.25
24,100 APPLIED MATLS INC 710,950.00
139,650 CISCO SYS INC 12,856,528.13
10,600 E G & G INC 318,000.00
35,700 GENERAL ELECTRIC CO 3,248,700.00
20,600 GENERAL INSTRUMENT CORP 560,062.50
4,000 GENERAL SIGNAL CORP 144,000.00
4,500 HEWLETT PACKARD CO 269,437.50
500 KLA-TENCOR CORPORATION 13,843.75
3,300 LSI LOGIC CORP 76,106.25
15,000 MICRON TECH 372,187.50
11,400 NATIONAL SEMICONDUCTOR 150,337.50
5,600 NATIONAL SVC INDS 284,900.00
61,612 ORACLE CORPORATION 1,513,344.75
2,700 PERKIN ELMER CORP 167,906.25
1 RAYTHEON CO CL A 36.19
77,100 RAYTHEON CO CL B 4,558,537.50
80,200 SEAGATE TECHNOLOGY INC 1,909,762.50
1,450 TEKTRONIX INC 51,293.75
22,100 TEXAS INSTRUMENTS 1,288,706.25
6,900 THOMAS & BETTS CORP 339,825.00
INDUSTRIAL MACHINERY
3,900 AEROQUIP-VICKERS INC 227,662.50
1,000 BRIGGS & STRATTON CORP 37,437.50
4,400 CASE CORPORATION 212,300.00
2,000 CINCINNATI MILACRON INC 48,625.00
6,200 COOPER INDUS INC 340,612.50
9,600 DOVER CORP 328,800.00
12,700 HARNISCHFEGER INDUS INC 359,568.75
24,700 INGERSOLL RAND CO 1,088,343.75
300 NACCO INDUS INC CL A 38,775.00
22,600 ROCKWELL INTL CORP W/I 1,086,212.50
OFFICE EQUIPMENT AND SUPPLIES
13,400 DELUXE CORP 479,887.50
25,900 IKON OFFICE SOLUTIONS 377,168.75
2,900 XEROX CORP. 294,712.50
RUBBER
6,203 GOODRICH B F CO 307,804.03
4,500 GOODYEAR TIRE & RUBBER 289,968.75
OTHER DURABLE GOODS
5,300 CORNING INCORPORATED 184,175.00
2,100 CRANE CO 101,981.25
11,700 ILLINOIS TOOL WORKS 780,243.75
7,200 MILLIPORE CORP 196,200.00
7,000 MINNESOTA MNG & MFR 575,312.50
13,900 STANLEY WORKS 577,718.75
COMPUTERS AND SOFTWARE
32,500 APPLE COMPUTER INC 932,343.75
10,400 BAY NETWORKS INC 335,400.00
100 CABLETRON SYSTEMS INC 1,343.75
5,200 CERIDIAN CORP 305,500.00
37,070 COMPAQ COMPUTER CORP 1,051,847.06
21,862 COMPUTER ASSOC INTL INC 1,214,707.38
5,300 DATA GENL CORP 79,168.75
87,600 DELL COMPUTER CORP 8,130,375.00
3,000 GATEWAY 2000 151,875.00
1,100 HBO AND CO 38,775.00
135,000 MICROSOFT CORP 14,630,625.00
74,600 NOVELL INC 951,150.00
2,500 PARAMETRIC TECNOLOGY 67,812.50
18,300 SILICON GRAPHICS 221,887.50
23,200 SUN MICROSYSTEMS 1,007,750.00
8,500 UNISYS CORP 240,125.00
HOUSEHOLD FURN/APPLIANCES
4,500 WHIRLPOOL CORP 309,375.00
TELECOMMUNICATIONS
51,800 AIRTOUCH COMMUNICATIONS 3,027,062.50
10,487 ANDREW CORP 189,421.44
17,100 ASCEND COMMUNICATIONS 847,518.75
3,100 CLEAR CHANNEL COMMUNICATI 338,287.50
11,400 DSC COMMUNICATIONS 342,000.00
33,448 LUCENT TECHNOLOGIES INC 2,782,455.50
89,400 MEDIAONE GROUP INC (NEW) 3,928,012.50
142,700 WORLDCOM INC 6,912,031.25
MISCELLANEOUS
15,100 ALLIED-SIGNAL INC 670,062.50
13,600 BLACK & DECKER CORP 829,600.00
13,300 ITT INDUSTRIES INC 497,087.50
4,200 JOHNSON CTLS INC 239,662.50
5,775 PARKER HANNIFIN CORP 220,171.88
3,350 SNAP ON TOOLS CORP 121,437.50
22,700 THERMO ELECTRON CORP 776,056.25
TOTAL DURABLE GOODS $96,337,530.99
FINANCIAL 11.90%
BANKS
9,771 BANC ONE CORP 545,327.19
7,400 BANK NEW YORK INC 449,087.50
8,000 BANKAMERICA CORP 691,500.00
1,100 BB&T CORP 74,387.50
3,660 CHASE MANHATTAN CORP NEW 276,330.00
4,200 CITICORP 626,850.00
1,800 FIFTH THIRD BANCORP COM 113,400.00
18,588 FIRST UNION CORP 1,082,751.00
6,334 FLEET FINANCIAL GROUP INC 528,889.00
17,084 KEYCORP NEW 608,617.50
7,962 MBNA CORP 262,746.00
9,800 MELLON BANK CORP 682,325.00
2,000 MORGAN J P & CO 234,250.00
9,800 NATIONAL CITY CORP 695,800.00
18,586 NATIONSBANK CORP 1,421,848.13
21,000 NORTHERN TRUST CO 1,601,250.00
7,130 NORWEST CORP 266,483.75
9,200 PNC FINANCIAL 495,075.00
15,300 SUMMIT BANCORP 726,750.00
2,700 SUNTRUST BANKS INC 219,543.75
11,131 U.S. BANCORP 478,633.00
6,901 WACHOVIA CORP 583,134.50
1,500 WELLS FARGO & CO 553,500.00
FINANCE COMPANIES
1,300 AMERICAN EXPRESS CO 148,200.00
11,254 ASSOCIATES 1ST CAPITAL A 865,151.25
2,700 BENEFICIAL CORP 413,606.25
2,600 COAST FEDERAL RTS 39,325.00
4,500 HOUSEHOLD INTL CORP 223,875.00
HOLDING COMPANY
1,000 EASTERN ENTERPRISES 42,875.00
28,466 MS, DW, DISCOVER & CO 2,601,080.75
FIRE AND CASUALTY INSURANCE
900 CHUBB CORP 72,337.50
2,000 SAFECO CORP 90,875.00
INSURANCE
16,113 AETNA INC 1,226,602.13
64 ALLSTATE CORPORATION 5,860.00
7,900 AMERICAN INTL GROUP 1,153,400.00
8,900 AON CORP 625,225.00
2,400 CIGNA CORP 165,600.00
17,700 CINCINNATI FINANCIAL CORP 679,237.50
23,700 CONSECO INC 1,107,975.00
800 HARTFORD FINANCIAL SVCS 91,500.00
16,200 MARSH & MCLENNAN CO. 979,087.50
12,210 MBIA INC 914,223.75
34,900 MGIC INVT CROP 1,991,481.25
13,136 ST PAUL COS INC 552,533.00
28,700 TORCHMARK CORP 1,313,025.00
9,300 TRANSAMERICA CORP 1,070,662.50
13,640 TRAVELERS GROUP INC 826,925.00
20,800 UNUM CORP. 1,154,400.00
LIFE INSURANCE
3,997 AMERICAN GENERAL CORP 284,536.44
3,975 JEFFERSON PILOT CORP 230,301.56
2,100 LINCOLN NATL CORP IND 191,887.50
19,300 PROVIDIAN FINL CORP W/I 1,516,256.25
REAL ESTATE
5,100 FEDERAL NATL MTGE ASSN 309,825.00
SAVINGS & LOANS
13,068 AHMANSON H F & CO 927,828.00
2,200 GOLDEN WEST FINL CORP 233,887.50
BROKERAGE
13,700 BEAR STEARNS COS INC 779,187.50
32,400 FRANKLIN RESOURCES 1,749,600.00
21,800 LEHMAN BROS HLDGS INC 1,690,862.50
2,700 MERRILL LYNCH & CO 249,075.00
MISCELLANEOUS
21,475 WASHINGTON MUTUAL 932,820.31
TOTAL FINANCIAL $40,669,609.76
METALS AND MINING 1.32%
ALUMINUM
1,500 ALUMINUM CO AMER 98,906.25
5,300 REYNOLDS METALS CO 296,468.75
MINING
20,500 HOMESTAKE MNG CO 212,687.50
1,800 PLACER DOME INC 21,150.00
STEEL
23,482 ALLEGHENY TELEDYNE 537,150.75
6,200 ARMCO, INC. 39,525.00
31,300 BETHLEHEM STEEL CORP 389,293.75
5,000 NUCOR CORP 230,000.00
3,100 TIMKEN CO 95,518.75
21,900 USX-US STEEL GROUP 722,700.00
22,500 WORTHINGTON INDS INC 338,906.25
OTHER METALS
2,400 ASARCO INC 53,400.00
88,400 BATTLE MOUNTAIN GOLD CL A 524,875.00
26,123 NEWMONT MNG CORP 617,155.88
2,400 PHELPS DODGE CORP 137,250.00
MINERALS
13,900 CYPRUS AMAX MINERALS CO 184,175.00
TOTAL METALS AND MINING $4,499,162.88
COLLECTIBLES & PRECIOUS MATERIALS 0.03%
GOLD-DIAMOND-GEMS
6,500 FREEPORT-MCMORAN COPPER-B 98,718.75
TOTAL COLLECTIBLES & PRECIOUS MATERIALS $98,718.75
OIL-ENERGY 3.94%
OIL & GAS PRODUCERS
15,100 AMERADA HESS CORP 820,118.75
9,200 AMOCO CORP 382,950.00
1,400 APACHE CORP 44,100.00
5,500 COASTAL CORP 383,968.75
2,000 HELMERICH & PAYNE INC. 44,500.00
800 MCDERMOTT INTL INC 27,550.00
7,300 OCCIDENTAL PETROLEUM 197,100.00
6,100 ROWAN COS INC 118,568.75
39,806 UNION PACIFIC RESOURCES 699,092.88
NATURAL RESOURCES
29,800 DRESSER INDUS INC 1,313,062.50
2,500 KERR MCGEE CORP 144,687.50
5,100 ONEOK INC 203,362.50
8,600 WILLIAMS COS INC-DEL 290,250.00
OIL EQUIPMENT, WELLS & SVCS
5,400 ASHLAND, INC 278,775.00
31,000 BAKER HUGHES INC 1,071,437.50
21,300 HALLIBURTON CO 949,181.25
3,500 WESTERN ATLAS INC 297,062.50
OIL - DOMESTIC
34,177 BURLINGTON RESOURCES INC 1,471,747.06
8,800 PENNZOIL CO 445,500.00
4,100 PHILLIPS PETE CO 197,568.75
7,100 UNOCAL CORP 253,825.00
OIL - INTERNATIONAL
2,400 ATLANTIC RICHFIELD CO 187,500.00
9,300 CHEVRON CORP 772,481.25
22,200 EXXON CORP. 1,583,137.50
7,300 MOBIL CORP 559,362.50
6,200 ORYX ENERGY COMPANY 137,175.00
6,400 SUN CO INC 248,400.00
5,658 TEXACO INC 337,711.88
TOTAL OIL-ENERGY $13,460,176.82
RETAIL 6.29%
DEPARTMENT STORES
42,800 CVS CORP 1,666,525.00
10,800 DAYTON HUDSON CORP 523,800.00
1,800 DILLARDS INCORPORATED 74,587.50
3,100 HARCOURT GENERAL INC 184,450.00
13,800 K MART 265,650.00
7,500 MAY DEPT STORES CO 491,250.00
6,800 MERCANTILE STORES 536,775.00
7,000 PENNEY JC INC 506,187.50
11,800 SEARS ROEBUCK & CO 720,537.50
18,700 WAL MART STORES INC 1,136,025.00
22,200 WINN-DIXIE STORES INC 1,136,362.50
GROCERY
4,300 ALBERTSON'S INC 222,793.75
38,300 AMERICAN STORES CO 926,381.25
3,500 GIANT FOOD INC 150,718.75
1,600 GREAT ATLANTIC & PAC TEA 52,900.00
17,800 KROGER CO 763,175.00
11,800 SUPERVALUE INC 523,625.00
OTHER RETAIL
19,900 CIRCUIT CITY STORES 932,812.50
28,477 COSTCO COMPANIES INC 1,795,830.81
1,200 LONGS DRUG STORES CORP 34,650.00
24,400 LOWES COS INC 989,725.00
5,000 PEP BOYS-MAN, MO, JACK 94,687.50
30,300 RITE AID CORP 1,138,143.75
24,700 TANDY CORP 1,310,643.75
48,700 TOYS R US 1,147,493.75
SPORTING GOODS
11,900 REEBOK INTL LTD 329,481.25
1,800 RUSSELL CORP 54,337.50
APPAREL
14,250 GAP INC 878,156.25
3,100 NORDSTROM INC 239,475.00
MISCELLANEOUS
42,100 TYCO INTERNATIONAL LTD 2,652,300.00
TOTAL RETAIL $21,479,480.81
UTILITIES 6.58%
ELECTRIC
30,700 AMEREN CORP 1,220,325.00
4,700 AMERICAN ELEC PWR INC 213,262.50
2,400 BALTIMORE GAS & ELEC 74,550.00
13,900 CAROLINA PWR & LT CO 602,912.50
25,500 CENTRAL & SOUTH WEST CORP 685,312.50
6,585 CINERGY CORP 230,475.00
12,400 CONSOLIDATED EDISON INC 571,175.00
10,100 DOMINION RES INC-VA 411,575.00
3,377 DUKE POWER CO 200,087.25
16,800 ENTERGY CORP NEW 483,000.00
2,400 FPL GROUP INC 151,200.00
3,300 GPU INC 124,781.25
7,790 HOUSTON INDS INC 240,516.25
11,000 NIAGARA MOHAWK PWR 164,312.50
4,500 NORTHERN STS PWR CO 128,812.50
5,100 PACIFICORP 115,387.50
21,200 PECO ENERGY 618,775.00
14,100 PG&E CORP 445,031.25
2,500 PP&L RESOURCES INC 56,718.75
35,200 PUBLIC SVC ENTERPRISE GRP 1,212,200.00
33,974 SBC COMMUNICATIONS INC 1,358,960.00
17,900 SOUTHERN CO 495,606.25
5,600 UNICOM CORP 196,350.00
GAS
12,300 COLUMBIA GAS SYS INC 684,187.50
7,900 CONSOLIDATED NATL GAS 465,112.50
7,400 ENRON CORP 400,062.50
7,800 NICOR INC 312,975.00
6,200 PEOPLES ENERGY CORP 239,475.00
4,900 SONAT INC 189,262.50
1,832 TEXAS UTILITIES CO 76,257.00
TELEPHONE
27,900 A T & T 1,593,787.50
7,000 ALLTEL CORP 325,500.00
27,176 BELL ATLANTIC CORP 1,239,905.00
28,000 BELLSOUTH CORP 1,879,500.00
13,700 FRONTIER CORP 431,550.00
14,300 GTE CORP 795,437.50
8,000 SPRINT CORP 564,000.00
13,942 US WEST INC (NEW) 655,251.16
WASTE DESPOSAL
16,200 BROWNING FERRIS IND 562,950.00
16,900 WASTE MANAGEMENT INC 591,500.00
MISCELLANEOUS
52,973 SEMPRA ENERGY 1,470,005.75
TOTAL UTILITIES $22,478,044.91
MISCELLANEOUS 14.14%
BROADCAST/COMMUNICATIONS
24,900 CBS CORP 790,575.00
58,600 COMCAST CORP CL A SPL 2,378,793.75
1,200 GANNETT CO., INC 85,275.00
132,300 MCI COMMUNICATIONS 7,689,937.50
64,400 MOTOROLA INC 3,385,025.00
36,000 TELE COMM. INC CL A 1,383,750.00
17,600 VIACOM INC CL B NON VTG 1,025,200.00
BUSINESS SERVICES
3,700 AUTODESK INC 142,912.50
8,600 AUTOMATIC DATA PROC 626,725.00
5,500 BLOCK H&R INC 231,687.50
36,963 CENDANT CORP 771,602.63
16,300 COMPUTER SCIENCES CORP 1,043,200.00
6,700 DONNELLEY RR & SONS 306,525.00
4,100 DOW JONES & CO 228,575.00
12,700 DUN & BRADSTREET 458,787.50
37,600 E M C CORP 1,684,950.00
24,100 ECOLAB INC 747,100.00
10,000 FIRST DATA CORP 333,125.00
5,400 GRAINGER W W INC 268,987.50
6,900 INTERPUBLIC GROUP COS 418,743.75
18,300 OMNICOM GROUP INC 912,712.50
4,600 SCIENTIFIC-ATLANTA 116,725.00
18,900 SERVICE CORP INTL 810,337.50
9,100 THREE COM CORP 279,256.25
FOOD SERVICE
17,900 DARDEN RESTAURANTS INC 284,162.50
9,300 MCDONALDS CORP 641,700.00
23,800 PHILLIP MORRIS CO INC 937,125.00
24,360 TRICON GLOBAL RESTAURANTS 771,907.50
5,500 WENDYS INTL INC 129,250.00
HOTEL & MOTEL
18,500 HILTON HOTELS CORP 527,250.00
22,600 MARRIOTT INTL CL A 731,675.00
HOUSING
1,600 PULTE CORP 47,800.00
MED SERV & SUPPLIES
17,300 BIOMET INC 571,981.25
78,900 HEALTHSOUTH CORPORATION 2,105,643.75
2,400 HUMANA INC 74,850.00
4,400 MANOR CARE INC 169,125.00
60,400 MEDTRONIC INC 3,850,500.00
1,400 SHARED MEDICAL SYS CORP 102,812.50
6,750 ST. JUDE MED INC. 248,484.38
REAL ESTATE
3,500 CENTEX CORP 132,125.00
TRANSPORTATION
1,703 BURLINGTON NRTHN SANTA FE 167,213.31
1,600 CSX CORP 72,800.00
5,300 DELTA AIR LINES INC 685,025.00
11,540 FDX CORP 724,135.00
2,100 FLEETWOOD ENTERPRISES 84,000.00
5,600 NORFOLK SOUTHERN CORP 166,950.00
11,900 PACCAR INC 621,775.00
4,200 RYDER SYSTEMS INC 132,562.50
29,900 SOUTHWEST AIRLINES CO 885,787.50
19,100 U S AIR GROUP 1,513,675.00
7,800 UNION PACIFIC CORP 344,175.00
MISCELLANEOUS
35,700 COGNIZANT CORP 2,249,100.00
11,700 MALLINCKRODT (NEW) 347,343.75
600 SCHLUMBERGER 40,987.50
23,400 WARNER-LAMBERT 1,623,375.00
TELECOMMUNICATIONS
10,000 360 COMMUNICATIONS CO 320,000.00
16,600 AMERITECH CORP NEW 744,925.00
3,600 HARRIS CORP-DEL 160,875.00
TOTAL MISCELLANEOUS $48,331,605.32
0.22%
20,326 CONSOLIDATED STORES INC 736,817.50
TOTAL $736,817.50
UTILITIES 0.05%
ELECTRIC
4,200 DTE ENERGY COMPANY 169,575.00
TOTAL UTILITIES $169,575.00
TOTAL COMMON STOCK $337,699,044.76
OTHER
1.17%
CASH EQUIVALENTS
3,998,800 AIM SHORT TERM INV SER 2 3,998,799.50
TOTAL $3,998,799.50
TOTAL OTHER $3,998,799.50
TOTAL INVESTMENTS - 100.00% $341,697,844.26
(cost $173,902,923)
See accompanying notes
