O.R.I.
GROWTH
FUND
ANNUAL
REPORT
November 30, 1996
Shareholder Services
1 (800) 407-7298
OAK RIDGE INVESTMENTS, INC.
Investment Adviser
TABLE OF
CONTENTS
Page
Letter to Shareholders.......... 1
Schedule of Investments......... 3
Statement of Assets and Liabilities 6
Statement of Operations......... 7
Statement of Changes in Net Assets 8
Financial Highlights............ 9
Notes to the Financial Statements 10
Report of Independent Accountants 14
<PAGE>
O.R.I. GROWTH FUND
LETTER TO SHAREHOLDERS
DECEMBER 1996
Dear Shareholder:
I am pleased to report the third consecutive year of strong performance
for the O.R.I. Growth Fund. Your fund has kept pace during its existence with
the large-cap S&P 500 Index while significantly surpassing the returns of the
more appropriate Russell 2000 benchmark.
Low interest rates and steady if unspectacular growth in corporate
earnings have made the case for higher valuations plausible. Less favorable
conditions in most foreign markets have further swelled demand for domestic
equities. Nevertheless, nervous investors have concentrated on a select group
of the largest listed and OTC stocks. To illustrate this divergence, excluding
its four largest components, the NASDAQ composite of more than 5,000 companies
which gained 23% last year, would have advanced only 12%.
<TABLE>
<CAPTION>
Average Annual Total Return
For the period ended November 30, 1996
One Year Since Inception*
<S> <C> <C>
O.R.I. Growth Fund - no load 20.9% 20.9%
O.R.I. Growth Fund - load* 15.7% 19.1%
Russell 2000 Index 16.5% 13.1%
S&P 500 Stock Index 27.9% 21.1%
* January 3, 1994 inception
<CAPTION>
O.R.I. O.R.I. S&P RUSSELL
NO-LOAD LOAD 500 3000
<S> <C> <C> <C> <C>
Jan. 1994 10000 9575 10000 10000
Feb. 1994 10870 10169 10060 10270
May 1994 10160 9728 9904 9682
Aug. 1994 10620 10169 10387 10039
Nov. 1994 10480 10035 9984 9562
Feb. 1995 10609 10158 10799 10098
May 1995 11120 10648 11903 10318
Aug. 1995 13717 13134 12615 12127
Nov. 1995 14359 13749 13675 12287
Feb. 1996 15755 15085 14547 12991
May 1996 17483 16740 15287 14515
Aug. 1996 16122 15436 14976 13441
Nov. 1996 17365 16620 17485 14319
<FN>
*Reflects maximum sales load of 4.25%.
This chart assumes an initial gross investment of $10,000 made on 1/3/94
(commencement). Returns shown include the reinvestment of all dividends.
Effective January 1, 1996, the O.R.I. Growth Fund added a 4.25% maximum sales
load and a 0.25% distribution fee. The load performance for the Fund has been
restated to reflect the impact of the sales load as if the sales load had
been imposed since inception. Performance reflects expense reimbursements and
fee waivers in effect. Absent expense reimbursements and fee waivers, total
returns would be reduced. Past performance is not predictive of future
performance. Investment return and principal value will fluctuate, so that
your shares, when redeemed, may be worth more or less than the original cost.
Russell 2000 Index - A stock market index comprised of the 2,000 smallest
U.S. domiciled publicly traded common stocks that are included in the Russell
3000 Index. These common stocks represent approximately 11% of the U.S.
equity market. The Russell 3000 Index is comprised of the 3,000 largest U.S.
domiciled publicly-traded common stocks by market capitalization representing
approximately 98% of the U.S. publicly traded equity market.
S&P 500 Stock Index - An unmanaged capitalization-weighted index of 500
stocks designed to measure performance of the broad domestic economy through
changes in the aggregate market value of the 500 stocks which represent all
major industries.
</FN>
</TABLE>
<PAGE>
As smaller stocks lag, their valuations have become inexpensive compared
with current market leaders. Historically, the greater growth prospects of
these companies have provided superior returns to the S&P 500. Despite their
limited participation in the past year's advance, small-cap equities have
greater downside risk due to reduced liquidity. The O.R.I. Growth Fund
attempts to minimize such risk through broad diversification in stocks with
strong earnings prospects.
Nearly every indicator suggests a slowdown in earnings growth in 1997.
Cost cutting and share buybacks can no longer buoy reported profits without a
contribution from expanding revenues. This should reward strong stock
selection. Our emphasis remains on the better stocks in expanding sectors such
as financial services, healthcare and innovative technology.
In order to enjoy another year of double digit returns on stocks, P/E
multiples must be maintained or expanded to higher levels. This requires
strong bond prices and subdued inflation outlook. Slow economic expansion
minimizes the likelihood of the Fed tinkering with interest rates, but the
violent reaction to cautionary comments by Chairman Greenspan reflects the
consequences of any surprises.
There is little evidence to expect a new Clinton administration to
impact the financial marketplace. Healthcare stocks have mostly languished,
discounting another attempt at reform. Capital gains legislation would have a
mixed effect on stock prices as those rushing to lock in long-term gains may
offset the positive attraction of greater after-tax returns.
Investing for long-term goals requires the discipline of an athlete
training for a marathon. Actively trading hot stocks and funds in a bull
market, the marathon equivalent of sprinting the first mile, has been
rewarding and highly exploited in the financial media. To be truly successful
there is no proven short cut that surpasses a strategy of buying profitable
stocks at reasonable valuations.
I remain committed to maintaining the O.R.I. Growth Fund as an
appropriate alternative for our shareholders true long-term objectives.
Sincerely,
/s/ David M. Klaskin
David M. Klaskin
President
<PAGE>
<TABLE>
<CAPTION>
O.R.I. GROWTH FUND
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1996
NUMBER OF
SHARES VALUE
<S> <C> <C>
COMMON STOCK 96.37%
AUTOMOTIVE & RELATED
PRODUCTS 0.30%
580 Borg-Warner Automotive, Inc. $ 23,200
--------
BANKING 5.83%
3,300 Bank of Boston Corporation 230,587
10,000 Greater New York Savings Bank 132,500
3,500 Kankakee Bancorp, Inc. 87,063
--------
450,150
--------
CHEMICALS 5.10%
4,500 Cambrex Corporation 142,875
10,000 Crompton & Knowles Corporation 183,750
10,000 Environmental Technologies
Corporation* 67,500
--------
394,125
--------
COMMUNICATIONS 10.29%
6,000 Comsat Corporation 157,500
7,000 Digital Systems International, Inc.* 107,625
6,000 Frontier Corporation 157,500
3,000 GST Telecommunications, Inc.* 28,500
6,500 IPC Information Systems, Inc.* 104,000
20,000 Interactive Multimedia Publishers,
Inc.* 8,200
10,000 Worldcom, Inc.* 231,250
--------
794,575
--------
COMPUTERS - NETWORKING 5.26%
10,000 Data Systems Network Corporation* 93,750
5,500 Microtouch Systems, Inc.* 137,500
3,000 Sun Microsystems, Inc.* 174,750
--------
406,000
--------
COMPUTERS - SOFTWARE 10.27%
3,200 BMC Software, Inc.* $139,200
7,000 Control Data Systems, Inc.* 139,125
10,000 Globalink, Inc.* 30,000
2,500 Hyperion Software Corporation* 54,062
4,777 Sterling Commerce, Inc.* 150,476
3,000 Sterling Software, Inc.* 99,375
9,000 TRO Learning, Inc.* 181,125
--------
793,363
--------
DEFENSE ELECTRONICS 1.42%
5,000 Tracor, Inc.* 110,000
--------
DISTRIBUTION 0.61%
1,100 Hughes Supply, Inc. 47,300
--------
DRUGS & MEDICAL 1.26%
2,500 Watson Pharmaceuticals, Inc.* 97,500
--------
ELECTRONICS 4.63%
7,500 BE Aerospace, Inc. 172,969
3,500 SCI Systems, Inc.* 184,625
--------
357,594
--------
ENTERTAINMENT & LEISURE 4.18%
4,000 Hasbro, Inc. 164,500
6,000 Scientific Games Holdings Corp.* 158,250
--------
322,750
--------
See Notes to the Financial Statements.
<PAGE>
<CAPTION>
NUMBER OF
SHARES VALUE
<S> <C> <C>
ENVIRONMENTAL SERVICES/
POLLUTION CONTROL 10.65%
4,000 Culligan Water Technologies, Inc.* $149,000
9,000 ERD Waste Corp.* 24,750
1,500 Newpark Resources, Inc.* 52,500
5,000 United States Filter Corporation* 171,250
5,000 United Waste Systems, Inc.* 167,500
8,000 U.S.A. Waste Services, Inc.* 258,000
--------
823,000
--------
FINANCIAL SERVICES 3.59%
4,000 IMC Mortgage Company* 130,000
12,000 Jayhawk Acceptance Corporation* 147,000
--------
277,000
GOLD & PRECIOUS METALS 0.39%
10,000 First Dynasty Mines Ltd.* 30,000
--------
HEALTH CARE EQUIPMENT
& SUPPLIES 4.88%
4,000 Coherent, Inc.* 173,500
1,700 Maxxim Medical, Inc.* 21,675
8,000 Medpartners/Mullikin, Inc.* 182,000
--------
377,175
--------
HOSPITALS & HEALTH CARE 5.42%
3,420 Healthsouth Corporation* 128,677
5,000 The Multicare Companies, Inc.* 98,750
5,000 OrNda HealthCorp.* 145,625
2,400 Pediatric Services of America, Inc.* 45,600
--------
418,652
--------
HOUSEHOLD PRODUCTS 1.23%
4,350 Triangle Pacific Corp.* 94,884
--------
INSURANCE 2.46%
9,500 USF&G Corporation $ 190,000
--------
MISCELLANEOUS 4.33%
6,000 Personnel Group of America, Inc.* 135,750
6,600 Service Corporation International 198,825
--------
334,575
--------
OFFICE EQUIPMENT 0.52%
5,400 Cantel Industries, Inc.* 40,500
--------
OIL & GAS 5.17%
15,000 Magnum Petroleum, Inc.* 72,187
7,500 Oceaneering International, Inc.* 124,688
5,000 Seitel, Inc.* 202,500
--------
399,375
--------
RESTAURANTS 0.37%
6,000 Woodroast Systems, Inc.* 28,500
--------
RETAIL 1.54%
6,000 Zale Corporation* 119,250
--------
RETAIL - GROCERY 2.18%
8,000 Dominick's Supermarkets, Inc.* 168,000
--------
TRAVEL & RECREATION 2.56%
7,500 CUC International, Inc.* 197,813
--------
UTILITIES 1.93%
5,000 Calenergy Company, Inc.* 149,375
--------
Total Common Stock
(cost $5,899,531) 7,444,656
---------
See Notes to the Financial Statements.
<PAGE>
<CAPTION>
NUMBER OF
SHARES VALUE
<S> <C> <C>
SHORT-TERM INVESTMENTS 8.04%
VARIABLE RATE DEMAND NOTES 8.04%
$327,815 Johnson Controls, Inc. $ 327,815
293,487 American Family Financial
Services, Inc. 293,487
--------
Total Short-Term Investments
(cost $621,302) 621,302
--------
Total Investments 104.41%
(cost $6,520,833) 8,065,958
---------
Liabilities, less Other Assets
(4.41%) (340,886)
---------
NET ASSETS 100.00% $ 7,725,072
==========
* Non-income producing security
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
O.R.I. GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1996
<S> <C>
ASSETS:
Investments at market value (cost $6,520,833).............................................. $8,065,958
Receivable for investments sold............................................................ 116,535
Receivable from Adviser.................................................................... 25,907
Capital shares sold........................................................................ 4,549
Organizational expenses, net of accumulated amortization................................... 18,201
Prepaid expenses........................................................................... 153
Interest and dividends receivable.......................................................... 4,116
----------
Total Assets............................................................................... 8,235,419
----------
LIABILITIES:
Payable for securities purchased........................................................... 458,975
Accrued other expenses..................................................................... 51,372
----------
Total Liabilities.......................................................................... 510,347
----------
NET ASSETS................................................................................. $7,725,072
==========
NET ASSETS CONSIST OF:
Capital stock.............................................................................. $ 4,662
Paid-in-capital in excess of par........................................................... 5,665,659
Undistributed net realized gain on investments............................................. 509,626
Net unrealized appreciation on investments................................................. 1,545,125
----------
Net Assets................................................................................. $7,725,072
==========
CAPITAL STOCK, $.01 par value
Authorized................................................................................. 100,000,000
Issued and outstanding..................................................................... 466,202
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE............................................. $16.57
======
MAXIMUM OFFERING PRICE PER SHARE........................................................... $17.31
======
See Note to the Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
O.R.I. GROWTH FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 1996
<S> <C>
INVESTMENT INCOME:
Interest................................................................................... $ 23,097
Dividends.................................................................................. 25,633
--------
48,730
--------
EXPENSES:
Fund administration and accounting fees.................................................... 45,469
Investment advisory fees .................................................................. 62,131
Professional fees.......................................................................... 22,838
Shareholder servicing fees and expenses.................................................... 29,482
Reports to shareholders.................................................................... 11,280
Federal and state registration fees........................................................ 13,394
Amortization of organizational expenses.................................................... 8,824
Directors' fees............................................................................ 2,762
Custody fees............................................................................... 4,070
12b-1 fees................................................................................. 14,545
Other...................................................................................... 3,774
--------
Total expenses before waiver and reimbursement............................................. 218,569
Less: Waiver and reimbursement of expenses by Adviser...................................... (94,306)
--------
Net expenses............................................................................... 124,263
--------
NET INVESTMENT (LOSS)...................................................................... (75,533)
--------
REALIZED AND UNREALIZED GAIN:
Net realized gain on investment transactions............................................... 579,775
Change in unrealized appreciation on investments........................................... 615,635
---------
Net gain on investments.................................................................... 1,195,410
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....................................... $1,119,877
=========
See Notes to the Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
O.R.I. GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR YEAR
ENDED ENDED
NOVEMBER 30, 1996 NOVEMBER 30, 1995
<S> <C> <C>
OPERATIONS:
Net investment (loss)..................................... $ (75,533) $ (42,658)
Net realized gain on investments.......................... 579,775 204,643
Change in unrealized appreciation on investments.......... 615,635 939,317
---------- ----------
Net increase in net assets resulting from operations...... 1,119,877 1,101,302
---------- ----------
DIVIDENDS PAID FROM:
Net realized gains........................................ (178,056) (7,454)
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................... 2,818,792 1,049,419
Shares issued to holders in reinvestment of dividends..... 164,945 6,813
Shares redeemed........................................... (382,732) (676,380)
---------- ----------
Net increase.............................................. 2,601,005 379,852
---------- ----------
TOTAL INCREASE IN NET ASSETS.............................. 3,542,826 1,473,700
NET ASSETS:
Beginning of year......................................... 4,182,246 2,708,546
---------- ----------
End of year............................................... $7,725,072 $4,182,246
========== ==========
See Notes to the Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
O.R.I. GROWTH FUND
FINANCIAL HIGHLIGHTS
YEAR YEAR JANUARY 3, 1994(1)
ENDED ENDED TO
NOVEMBER 30, 1996 NOVEMBER 30, 1995 NOVEMBER 30, 1994
<S> <C> <C> <C>
Net asset value, beginning of period.............. $14.32 $10.48 $10.00
Income from investment operations:
Net investment (loss)............................. (0.16)(2) (0.13) (0.07)
Net realized and unrealized gains on
investments..................................... 3.01 4.00 0.55
------ ------ ------
Total from investment operations.................. 2.85 3.87 0.48
------ ------ ------
Less distributions:
Dividends from capital gains...................... (0.60) (0.03) --
------ ------ ------
Net asset value, end of period.................... $16.57 $14.32 $10.48
====== ====== ======
Total return (3) (4).............................. 20.9% 37.0% 4.8%
Supplemental data and ratios:
Net assets, end of period......................... $7,725,072 $4,182,246 $2,708,546
Ratio of expenses to average net assets (5) (6)... 2.0% 2.0% 2.0%
Ratio of net investment (loss) to average
net assets (5) (6) ............................ (1.2)% (1.3)% (1.1)%
Portfolio turnover rate........................... 71% 109% 80%
Average commission rate paid...................... $0.0512
<FN>
(1) Commencement of operations.
(2) Net investment (loss) per share is calculated using the ending balance
prior to consideration of adjustments for permanent book and tax
differences.
(3) Not annualized for the period ended November 30, 1994.
(4) The total return calculation does not reflect the 4.25% front end sales
load.
(5) Net of reimbursements and waivers. Absent reimbursements and waivers of
expenses by Adviser, the ratios of expenses to average net assets would have
been 3.5%, 6.5% and 9.0%, for the periods ended November 30, 1996, November
30, 1995 and November 30, 1994, respectively and net investment (loss) to
average net assets would have been (2.7)%, (5.8)% and (8.1)%, for the periods
ended November 30, 1996, November 30, 1995 and November 30, 1994,
respectively. (6) Annualized for the period ended November 30, 1994.
</FN>
See Notes to the Financial Statements.
</TABLE>
<PAGE>
O.R.I. GROWTH FUND
NOTES TO THE FINANCIAL STATEMENTS
1. ORGANIZATION
The O.R.I. Growth Fund, Inc. (the "Fund") was incorporated on October 15, 1993
as a Maryland corporation and is registered as an open-end diversified
management investment company under the Investment Company Act of 1940
("1940 Act"). The Fund's investment objective is capital appreciation.
Oak Ridge Investments, Inc. (the "Adviser") is the Fund's investment adviser.
The Fund commenced operations on January 3, 1994.
Costs incurred in connection with the organization, initial registration and
public offering of shares aggregated $44,002. These costs are being amortized
over a period of not more than five years from the Fund's commencement of
operations. The proceeds of any redemption of the initial shares by the
original shareholders or any transferee will be reduced by a pro rata portion
of any then unamortized organizational expenses in the same proportion as the
number of initial shares being redeemed bears to the number of initial shares
outstanding at the time of such redemption.
Shares of the Fund are offered at net asset value per share plus a maximum
initial sales charge of 4.25% of the offering price or 4.44% of the net asset
value.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
a) Investment Valuation - Common stocks and other equity-type securities are
valued at the last sales price on a national securities exchange or Nasdaq on
which securities are primarily traded; provided, however, securities traded on
an exchange or Nasdaq for which there were no transactions on a given day, and
securities not listed on an exchange or Nasdaq, are valued at the most recent
bid price. Debt securities (other than short-term instruments) are valued at
prices furnished by a pricing service, subject to review by the Adviser and
determination of the appropriate price whenever a furnished price is
significantly different from the previous day's furnished price. Debt
securities having remaining maturities of 60 days or less when purchased are
valued by the amortized cost method. Any securities or other assets for which
market quotations are not readily available are valued at fair value as
determined in good faith by the Board of Directors.
b) Federal Income Taxes - It is the Fund's policy to meet the requirements of
the Internal Revenue Code applicable to regulated investment companies and the
Fund intends to distribute investment company net taxable income and net capital
gains to shareholders. Therefore, no federal income tax provision is required.
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
c) Distribution to Shareholders - The Fund pays dividends of net investment
income annually. Distributions of net realized capital gains, if any, will be
declared at least annually. Distributions to shareholders are recorded on the
ex-dividend date.
d) Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
e) Other - Investment and shareholder transactions are recorded no later than
the first business day after the trade date. The Fund determines the gain or
loss realized from investment transactions by comparing the original cost of
the security lot sold with the net sale proceeds. The Fund's basis in
investments is the same for income tax and financial reporting purposes.
Dividend income is recognized on the ex-dividend date and interest income is
recognized on an accrual basis. Generally accepted accounting principles
require that permanent financial reporting and tax differences be reclassified
to capital stock.
3. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Fund were as follows:
<TABLE>
<CAPTION>
Year Year
Ended Ended
November 30, 1996 November 30, 1995
<S> <C> <C>
Shares sold 186,455 90,685
Shares issued to holders in
reinvestment of dividends 12,356 662
Shares redeemed (24,753) (57,549)
Net increase 174,058 33,798
======= =======
</TABLE>
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
4. INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Fund has entered into an agreement with the Adviser, with whom certain
officers and directors of the Fund are affiliated, to furnish investment
advisory services to the Fund. Under the terms of this agreement, the Fund
will pay the Adviser a monthly fee at the annual rate of 1.00% on average
daily net assets.
The Adviser agrees to reimburse its management fee and other expenses to the
extent that total operating expenses (exclusive of interest, taxes, brokerage
commissions and other costs incurred in connection with the purchase or sale
of portfolio securities, and extraordinary items) exceed the annual rate of
2.00% of the net assets of the Fund, computed on a daily basis.
For the year ended November 30, 1996, the Fund paid the Adviser $6,352 of
brokerage commissions.
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments for the Fund for the year ended November 30, 1996 were $6,561,665
and $4,098,759, respectively. There were no purchases or sales of long-term
U.S. government securities.
At November 30, 1996, gross unrealized appreciation and depreciation of
investments were as follows:
Appreciation..................................... $1,846,495
Depreciation..................................... (301,370)
----------
Net appreciation on investments.................. $1,545,125
==========
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
6. DISTRIBUTION PLAN
Effective January 1, 1996, the Fund adopted a plan pursuant to Rule 12b-1
under the 1940 Act (the "Plan"), which requires it to pay Oak Ridge
Investments, Inc. (the "Distributor") a distribution fee of up to 0.25% of its
average daily net assets computed on an annual basis. Under the terms of the
Plan, the Distributor is authorized to, in turn, pay all or a portion of this
fee to any securities dealer, financial institution or any other person (the
"Recipient") who renders assistance in distributing or promoting the sale of
Fund shares pursuant to a written agreement (the "Rule 12b-1 Related
Agreement"). To the extent such fee is not paid to such persons, the
Distributor may use the fee for its own distribution expenses incurred in
connection with the sale of the Fund's shares. The Fund incurred fees of
$14,545 for the year ended November 30, 1996, pursuant to the Plan.
7. DISTRIBUTION
On December 31, 1996 a distribution of $1.08714 per share (including $0.56762
taxable to shareholders as ordinary income dividends and $0.51952 applicable
to long-term capital gains), aggregating $509,740, was paid to the
shareholders of record on December 30, 1996.
<PAGE>
O.R.I. GROWTH FUND
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
O.R.I. Growth Fund
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of O.R.I. Growth Fund
(the "Fund") at November 30, 1996, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for the year then ended, and
for each of the other periods indicated, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of
the Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at November 30, 1996 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
Price Waterhouse LLP
December 16, 1996
