<PAGE> 1
AMERICAN CAPITAL GLOBAL MANAGED ASSETS FUND, INC.
(Photo of 5 Globes)
Annual Report
December 31, 1994
For investors seeking total return through
an investment in global stocks and bonds.
[AMERICAN CAPITAL LOGO]
This brochure includes a prospectus which describes in detail the Fund's
objectives, investment policies, risks, sales charges, fees and
other matters of interest. Please read the prospectus
carefully before you invest or send money.
<PAGE> 2
SHAREHOLDERS' MESSAGE
February 14, 1995
[Photo of Don G. Powell]
Dear Shareholder,
For more than six decades, American Capital has helped investors achieve their
financial goals. As a shareholder, you know that American Capital's goal is to
provide you with consistent, competitive returns and outstanding customer
service. Those goals will remain unchanged as we embark on a new era as Van
Kampen American Capital.
In December, shareholders of American Capital funds approved new agreements
with the funds' manager that cleared the way for completion of the merger
between American Capital Management & Research, Inc., the company that owns
your Fund's manager, and The Van Kampen Merritt Companies, Inc. on December 20,
1994. While this merger will have no direct impact on your Fund shares, it will
create a stronger company that will be be able to provide shareholders with a
broader range of investment options and nearly 100 years of combined investment
experience.
The strength and experience of Van Kampen American Capital is enhanced further
by the international and emerging markets expertise of John Govett & Co.
Limited. Last fall, Van Kampen American Capital Distributors, Inc. (formerly
American Capital Marketing, Inc.) became the exclusive U.S. distributor of The
Govett Funds, Inc. This relationship will provide six additional fund options
for Van Kampen American Capital shareholders who want to add an international
or global component to their portfolios. Govett, which now serves as the
subadviser for American Capital global funds, including your Fund, has seven
decades of experience as an international money manager, and manages more than
$6 billion for investors in the U.K., Europe, Asia and the United States.
Although 1994 was a year of significant change for American Capital, one thing
has not changed: our belief in investing for the long term. The past year was
extremely challenging for stock and bond markets worldwide, but investing in a
stock mutual fund still is one of the best ways to achieve long-term capital
appreciation, and a global fund can provide additional diversification for your
portfolio.
Sincerely,
/s/ DON G. POWELL
Don G. Powell
PRESIDENT
Not a part of the Prospectus 1
<PAGE> 3
PORTFOLIO PERSPECTIVE
THE FOLLOWING IS AN INTERVIEW WITH THE MANAGEMENT TEAM OF AMERICAN CAPITAL
GLOBAL MANAGED ASSETS FUND. THE TEAM IS LED BY JEFF NEW, JOHN REYNOLDSON, ALAN
SACHTLEBEN AND ROBERT PECK FROM VAN KAMPEN AMERICAN CAPITAL, AND ALAN DOYLE AND
PETER KYSEL FROM JOHN GOVETT & CO. LIMITED.
Q. WHAT ECONOMIC CONDITIONS HAD THE GREATEST IMPACT ON THE PERFORMANCE OF
THE FUND FROM ITS INCEPTION ON MAY 16, 1994 THROUGH YEAR-END?
A. Investors perceived that the U.S. economy was growing too fast. The
U.S. Federal Reserve Board shared this perception and, as a result, raised
short-term interest rates three times during the reporting period. The higher
rates caused bond prices to fall; stock markets reacted by following the bond
markets and reversing gains achieved earlier in the year. Worries over U.S.
inflation and uncertainty about how much the Fed would tighten the money supply
to slow economic growth also resulted in a weaker U.S. dollar during the year.
However, the positive effects of rising corporate profits in the recovering
economies protected most stock markets from significant declines.
Q. HOW DID YOU RESPOND TO THESE CHANGING MARKET CONDITIONS?
A. The key to our investment strategy was to be cautious and spread our
investments across the global markets, with an emphasis on the companies that
were most likely to benefit from an economic recovery. Usually, these were
companies that were not exposed directly to rising rates and the weaker U.S.
dollar.
Given more positive conditions in the bond markets, the investor focus
is expected to gradually move toward growth and consumer oriented sectors in
the major stock markets. Individual stock selection, rather than investment
themes, should have principal influence on the market values.
The portfolio's diversification is illustrated by the list at right.
American Capital
Global Managed Assets Fund
TOP FIVE COUNTRIES REPRESENTED
As of 12/31/94
United States
Japan
United Kingdom
Germany
Netherlands
Q. HOW DID THE FUND PERFORM DURING THE REPORTING PERIOD?
A. Class A shares of the Fund achieved a total return at net asset value
(without a sales charge) of -1.57%, including reinvestment of dividends
totalling $.075 per share. Class B shares achieved a total return at net asset
value of -2.09%, including reinvestment of dividends totalling $.046 per share.
Class C shares achieved a total return at net asset value of -1.77%, including
reinvestment of dividends totalling $.046 per share. Each class of shares also
paid a distribution from net realized gains of $.0275 per share.
Not a part of the Prospectus 2
<PAGE> 4
Q. HOW DID THAT COMPARE TO THE GENERAL PERFORMANCE OF MAJOR WORLD STOCK
AND BOND MARKETS?
A. The Morgan Stanley Capital International World Index achieved a total
return of 0.6% during the period. The Index reflects the general performance of
world equity markets. The J.P. Morgan Global Traded Government Index, which
reflects the general performance of world bond markets, achieved a total return
of 2.84%. Neither index reflects any commissions or fees that would be paid by
an investor purchasing the securities it represents.
Q. WHAT'S THE OUTLOOK FOR THE NEXT SIX MONTHS?
A. It is uncertain how the continuing increase in short-term U.S.
interest rates and other steps being taken to tighten world money supplies will
impact the global economic recovery. It is possible that world economic growth
could continue at last year's rate, despite the expected slowdown in the U.S.
economy. However, continuing strong economic growth may only be achieved at the
cost of higher inflation.
Since most markets already have anticipated higher interest rates this
year, bond markets should be more stable in 1995 than they were last year.
Equity markets are expected to benefit from strong corporate earnings.
Regionally, the combination of rising corporate profits and a tighter money
supply is favorable in Europe. Indications of an economic recovery and expected
upturn in corporate profits in Japan should become more evident during the year
as well.
/s/ ALAN T. SACHTLEBEN /s/ ROBERT C. PECK, JR.
Alan T. Sachtleben Robert C. Peck, Jr.
EXECUTIVE VICE PRESIDENT EXECUTIVE VICE PRESIDENT
EQUITY INVESTMENTS TAXABLE FIXED-INCOME INVESTMENTS
VAN KAMPEN AMERICAN CAPITAL VAN KAMPEN AMERICAN CAPITAL
/s/ JEFF D. NEW /s/ JOHN R. REYNOLDSON
Jeff D. New John R. Reynoldson
PORTFOLIO MANAGER PORTFOLIO MANAGER
U.S. EQUITIES U.S. FIXED-INCOME
VAN KAMPEN AMERICAN CAPITAL VAN KAMPEN AMERICAN CAPITAL
/s/ PETER KYSEL /s/ ALAN DOYLE
Peter Kysel Alan Doyle
PORTFOLIO MANAGER PORTFOLIO MANAGER
INTERNATIONAL EQUITIES INTERNATIONAL FIXED-INCOME
JOHN GOVETT & CO. LIMITED JOHN GOVETT & CO. LIMITED
Not a part of the Prospectus 3
<PAGE> 5
AMERICAN CAPITAL GLOBAL MANAGED ASSETS FUND, INC.
THE AMERICAN CAPITAL
ADVANTAGE
As a shareholder in an American Capital fund you have the option of
automatically investing your dividends and capital gains into most other
American Capital funds without a sales charge. This fund-to-fund privilege,
which can help you create a diversified portfolio, is just one of the many
shareholder services available to you at no charge.
[5 Dalbar Quality Tested Service Seals dated 1990 to 1994]
Van Kampen American Capital is extremely proud of its shareholder services,
and is committed to continuing to provide outstanding service. For the fifth
consecutive year, American Capital received the Quality Tested Service Seal
awarded by DALBAR Surveys, Inc., a well-respected independent research firm in
the mutual fund industry. American Capital was one of only five mutual fund
groups in the nation in 1994 to receive this prestigious award for consistent,
quality service, and one of only two fund groups to receive the award every
year since its inception. In addition, our shareholder services agent, ACCESS,
won the 1993 Missouri Quality Award. TO EXPERIENCE OUR AWARD-WINNING CUSTOMER
SERVICE CALL 1-800-421-5666 BETWEEN 7A.M. AND 7P.M. CENTRAL TIME MONDAY THROUGH
FRIDAY.
Service When
You Want It
To help meet the needs of busy shareholders, American Capital offers 24-hour
account information through ACCESS PLUS, our automated telephone service.
Just call 1-800-847-2424 from a Touch-Tone phone
to check your account balance, obtain current fund prices, exchange between
funds and more.
Variety of
Distribution
Options
Dividends from net investment income for American Capital Global Managed
Assets Fund are paid quarterly and capital gains, if any, are distributed at
least annually. You may automatically reinvest these distributions into
additional shares to build your account value, take them in cash, or have
them automatically invested into any other American Capital fund.
Low Subsequent Investments
You can make additional investments in American Capital Global Managed Assets
Fund for as little as $25.
Automatic
Investment Plan
An automatic investment plan can help you carry out a disciplined financial
plan by allowing you to invest regularly into your mutual fund account
through automatic deductions from your personal bank account. With our Step
Up option, you also can increase your investment amount on a pre-established
schedule.
Not a part of the Prospectus 4
<PAGE> 6
INVESTMENT PORTFOLIO
DECEMBER 31, 1994
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock 50.3%
AUSTRALIA 0.7%
3,000 Broken Hill Proprietory . . . . . . . . . . . . . . . . . . $ 45,5497
21,000 BTR Nylex, Ltd. . . . . . . . . . . . . . . . . . . . . . . 39,082
46,000 QCT Resources . . . . . . . . . . . . . . . . . . . . . . . 49,938
134,569
------------
BELGIUM 0.4%
2,100 GIB . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,917
------------
CANADA 0.4%
*6,600 DY 4 Systems, Inc. . . . . . . . . . . . . . . . . . . . . . 49,989
1,300 Seagram Co., Ltd. . . . . . . . . . . . . . . . . . . . . . 38,575
------------
88,564
------------
FRANCE 1.6%
2,100 Cie De Suez . . . . . . . . . . . . . . . . . . . . . . . . 96,330
3,100 CSF (Thomson) . . . . . . . . . . . . . . . . . . . . . . . 92,751
1,444 Guilbert, SA . . . . . . . . . . . . . . . . . . . . . . . . 123,285
------------
312,366
------------
GERMANY 1.8%
400 Bayer, AG . . . . . . . . . . . . . . . . . . . . . . . . . 93,696
240 Duerr Beteiligungs . . . . . . . . . . . . . . . . . . . . . 90,598
480 Felten & Guilleaume Energietechnik . . . . . . . . . . . . . 106,859
300 KSB KL Schanz Beck . . . . . . . . . . . . . . . . . . . . . 62,916
------------
354,069
------------
HONG KONG 1.5%
124,000 ASM Pacific Technology . . . . . . . . . . . . . . . . . . . 73,719
*28,000 Citic Telecom, Ltd., Warrants (expiring 2/95) . . . . . . . 36,006
20,000 Hong Kong Electric . . . . . . . . . . . . . . . . . . . . . 54,669
11,000 Television Broadcasting . . . . . . . . . . . . . . . . . . 43,929
34,000 Varitronix International . . . . . . . . . . . . . . . . . . 48,336
174,000 Wai Kee Holdings . . . . . . . . . . . . . . . . . . . . . . 40,478
------------
297,137
------------
ITALY 1.1%
13,400 Burgo (Cartiere), SPA . . . . . . . . . . . . . . . . . . . 88,851
*14,250 Fiat, SPA . . . . . . . . . . . . . . . . . . . . . . . . . 52,913
34,200 Telecom Italia . . . . . . . . . . . . . . . . . . . . . . . 89,020
------------
230,784
------------
JAPAN 13.1%
*8,000 Dainippon Screen Manufacturing Co. . . . . . . . . . . . . . 61,767
15,000 Denki Kagaku Kogyo . . . . . . . . . . . . . . . . . . . . . 62,048
25 East Japan Railway Co. . . . . . . . . . . . . . . . . . . . 125,000
4,000 Heiwa Corp. . . . . . . . . . . . . . . . . . . . . . . . . 100,803
13,000 Hitachi . . . . . . . . . . . . . . . . . . . . . . . . . . 129,086
7,000 Isetan Co. . . . . . . . . . . . . . . . . . . . . . . . . . 126,506
*15,000 Japan Air Lines Co. . . . . . . . . . . . . . . . . . . . . 105,874
20,000 Kobe Steel . . . . . . . . . . . . . . . . . . . . . . . . . 62,450
20,000 Kumagai Gumi Co. . . . . . . . . . . . . . . . . . . . . . . 104,016
23,000 Marubeni Corp. . . . . . . . . . . . . . . . . . . . . . . . 127,008
5,000 Matsushita Electric Industrial Co. . . . . . . . . . . . . . 82,329
11,500 Mitsubishi Construction . . . . . . . . . . . . . . . . . . 77,359
7,000 Mitsubishi Heavy Industries . . . . . . . . . . . . . . . . 53,414
</TABLE>
Not a part of the Prospectus 5
<PAGE> 7
INVESTMENT PORTFOLIO, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
JAPAN-CONTINUED
10,000 NEC Corp. . . . . . . . . . . . . . . . . . . . . . . . . . $ 114,458
12,000 New Oji Paper Co. . . . . . . . . . . . . . . . . . . . . . 126,506
11,000 Nikkodo Co. . . . . . . . . . . . . . . . . . . . . . . . . 149,096
10 Nippon Telegraph & Telephone Corp. . . . . . . . . . . . . . 88,454
7,000 Omron Corp. . . . . . . . . . . . . . . . . . . . . . . . . 128,615
9,000 Onward Kashiyama Co. . . . . . . . . . . . . . . . . . . . . 124,699
23,000 Sanyo Electric Co. . . . . . . . . . . . . . . . . . . . . . 132,319
5,000 Sumitomo Corp. . . . . . . . . . . . . . . . . . . . . . . . 51,205
9,000 Tadano . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,765
10,000 Tonami Transportation Co. . . . . . . . . . . . . . . . . . 79,920
20,000 Topy Industries . . . . . . . . . . . . . . . . . . . . . . 102,410
12,000 Toshiba Corp. . . . . . . . . . . . . . . . . . . . . . . . 87,108
4,000 Toyota Motor Corp. . . . . . . . . . . . . . . . . . . . . . 84,337
*20,000 Ube Industries . . . . . . . . . . . . . . . . . . . . . . . 77,309
------------
2,647,861
------------
MALAYSIA 0.8%
26,000 Malaysian Pacific . . . . . . . . . . . . . . . . . . . . . 46,023
20,000 Resorts World, BHD . . . . . . . . . . . . . . . . . . . . . 117,486
------------
163,509
------------
NETHERLANDS 1.6%
*1,530 ABN Amro Holdings, NV . . . . . . . . . . . . . . . . . . . 53,148
6,000 Elsevier, NV . . . . . . . . . . . . . . . . . . . . . . . . 62,561
1,600 Kon PTT Nederland . . . . . . . . . . . . . . . . . . . . . 53,920
450 Royal Dutch Petroleum Co. . . . . . . . . . . . . . . . . . 48,995
3,900 Stork, NV . . . . . . . . . . . . . . . . . . . . . . . . . 101,100
------------
319,724
------------
NORWAY 0.4%
1,100 Orkla . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,178
2,000 Unitor ALS . . . . . . . . . . . . . . . . . . . . . . . . . 33,715
------------
73,893
------------
SINGAPORE 0.8%
23,000 Far East Livingston . . . . . . . . . . . . . . . . . . . . 106,518
6,000 Fraser & Neave . . . . . . . . . . . . . . . . . . . . . . . 62,161
------------
168,679
------------
SPAIN 0.7%
13,800 Iberdrola, SA . . . . . . . . . . . . . . . . . . . . . . . 85,133
1,900 Tabacalera, SA . . . . . . . . . . . . . . . . . . . . . . . 50,811
------------
135,944
------------
SWEDEN 0.9%
3,800 Celsius Industrial, AB, Series B . . . . . . . . . . . . . . 84,381
4,100 Svedala Industrial . . . . . . . . . . . . . . . . . . . . . 95,456
------------
179,837
------------
SWITZERLAND 1.3%
60 Ciba Geigy, AG . . . . . . . . . . . . . . . . . . . . . . . 35,798
175 CS Holdings . . . . . . . . . . . . . . . . . . . . . . . . 74,866
80 Nestle, SA . . . . . . . . . . . . . . . . . . . . . . . . . 76,211
17 Roche Holdings, AG . . . . . . . . . . . . . . . . . . . . . 82,273
------------
269,148
------------
</TABLE>
Not a part of the Prospectus 6
<PAGE> 8
INVESTMENT PORTFOLIO, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
THAILAND 1.1%
50,000 Bangkok Rubber, PLC . . . . . . . . . . . . . . . . . . . . $ 48,795
16,000 Hana Microelectronic . . . . . . . . . . . . . . . . . . . . 114,718
28,000 National Petrochemical . . . . . . . . . . . . . . . . . . . 66,362
------------
229,875
------------
UNITED KINGDOM 6.0%
17,000 BAA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125,818
18,000 Fairey Group . . . . . . . . . . . . . . . . . . . . . . . . 115,193
37,000 Granada Group . . . . . . . . . . . . . . . . . . . . . . . 296,417
30,000 Next, PLC . . . . . . . . . . . . . . . . . . . . . . . . . 121,108
40,000 Reuters Holdings, PLC, ADR . . . . . . . . . . . . . . . . . 292,912
75,000 Vodafone Group . . . . . . . . . . . . . . . . . . . . . . . 248,787
------------
1,200,235
------------
UNITED STATES 16.1%
400 Abbott Laboratories . . . . . . . . . . . . . . . . . . . . 13,050
200 Adobe Systems, Inc. . . . . . . . . . . . . . . . . . . . . 5,950
500 AK Steel Holding Corp. . . . . . . . . . . . . . . . . . . . 15,375
300 ALC Communications Corp. . . . . . . . . . . . . . . . . . . 9,337
450 Allied-Signal, Inc. . . . . . . . . . . . . . . . . . . . . 15,300
50 Aluminum Co. of America . . . . . . . . . . . . . . . . . . 4,331
500 American Barrick Residential Corp. . . . . . . . . . . . . . 11,125
400 American Home Products Corp. . . . . . . . . . . . . . . . . 25,100
350 American International Group, Inc. . . . . . . . . . . . . . 34,300
500 American Stores Co. . . . . . . . . . . . . . . . . . . . . 13,437
*400 Amgen, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 23,600
400 Amoco Corp. . . . . . . . . . . . . . . . . . . . . . . . . 23,650
350 Anheuser-Busch Companies, Inc. . . . . . . . . . . . . . . . 17,806
400 Apache Corp. . . . . . . . . . . . . . . . . . . . . . . . . 10,000
500 Apple Computer, Inc. . . . . . . . . . . . . . . . . . . . . 19,500
*500 Applied Materials, Inc. . . . . . . . . . . . . . . . . . . 21,125
2,700 Archer Daniels Midland Co. . . . . . . . . . . . . . . . . . 55,687
300 Ashland Oil, Inc. . . . . . . . . . . . . . . . . . . . . . 10,350
200 Atlantic Richfield Co. . . . . . . . . . . . . . . . . . . . 20,350
*300 Atmel Corp. . . . . . . . . . . . . . . . . . . . . . . . . 10,050
500 Baker Hughes, Inc. . . . . . . . . . . . . . . . . . . . . . 9,125
200 Bankamerica Corp. . . . . . . . . . . . . . . . . . . . . . 7,900
800 Battle Mountain Gold Co. . . . . . . . . . . . . . . . . . . 8,800
500 Baxter International, Inc. . . . . . . . . . . . . . . . . . 14,125
200 Baybanks, Inc. . . . . . . . . . . . . . . . . . . . . . . . 10,550
300 Birmingham Steel Corp. . . . . . . . . . . . . . . . . . . . 6,000
800 BMCSoftware, Inc. . . . . . . . . . . . . . . . . . . . . . 45,500
300 Bowater, Inc. . . . . . . . . . . . . . . . . . . . . . . . 7,987
150 British Petroleum Co., PLC, ADR . . . . . . . . . . . . . . 11,981
1,050 Browning-Ferris Industries, Inc. . . . . . . . . . . . . . . 29,793
*300 Cabletron Systems, Inc. . . . . . . . . . . . . . . . . . . 13,950
700 Cadence Design Systems, Inc. . . . . . . . . . . . . . . . . 14,437
350 Callaway Golf Co. . . . . . . . . . . . . . . . . . . . . . 11,593
200 Campbell Soup Co. . . . . . . . . . . . . . . . . . . . . . 8,825
200 Capital Cities-ABC, Inc. . . . . . . . . . . . . . . . . . . 17,050
500 Caterpillar, Inc. . . . . . . . . . . . . . . . . . . . . . 27,562
*900 Cellular Communications, Inc. . . . . . . . . . . . . . . . 48,150
*300 Chipcom Corp. . . . . . . . . . . . . . . . . . . . . . . . 15,000
*700 Cisco Systems, Inc. . . . . . . . . . . . . . . . . . . . . 24,587
</TABLE>
Not a part of the Prospectus 7
<PAGE> 9
INVESTMENT PORTFOLIO, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
UNITED STATES-CONTINUED
500 Citicorp . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,687
200 Clorox Co. . . . . . . . . . . . . . . . . . . . . . . . . . 11,775
300 Colgate-Palmolive Co. . . . . . . . . . . . . . . . . . . . 19,012
550 Columbia/HCA Healthcare Corp. . . . . . . . . . . . . . . . 20,075
*1,400 Community Health Systems, Inc. . . . . . . . . . . . . . . . 38,150
*750 Compaq Computer Corp. . . . . . . . . . . . . . . . . . . . 29,625
400 Computer Associates International, Inc. . . . . . . . . . . 19,400
*500 Compuware Corp. . . . . . . . . . . . . . . . . . . . . . . 18,000
550 ConAgra, Inc. . . . . . . . . . . . . . . . . . . . . . . . 17,187
200 CPC International, Inc. . . . . . . . . . . . . . . . . . . 10,650
350 Crestar Financial Corp. . . . . . . . . . . . . . . . . . . 13,168
100 Dayton Hudson Corp. . . . . . . . . . . . . . . . . . . . . 7,075
400 Dillard Department Stores, Inc. . . . . . . . . . . . . . . 10,700
300 Disney (Walt) Co. . . . . . . . . . . . . . . . . . . . . . 13,837
950 Dollar General Corp. . . . . . . . . . . . . . . . . . . . . 28,500
*1,250 Dr Pepper/Seven Up Companies, Inc. . . . . . . . . . . . . . 32,031
*800 DSC Communications Corp. . . . . . . . . . . . . . . . . . . 28,700
200 DuPont (E.I.) de Nemours & Co., Inc. . . . . . . . . . . . . 11,250
*1,000 Eckerd Corp. . . . . . . . . . . . . . . . . . . . . . . . . 29,875
*500 Elan, PLC . . . . . . . . . . . . . . . . . . . . . . . . . 17,812
2,400 Empresas ICA Sociedad . . . . . . . . . . . . . . . . . . . 37,200
*800 Exabyte Corp. . . . . . . . . . . . . . . . . . . . . . . . 17,100
500 Exxon Corp. . . . . . . . . . . . . . . . . . . . . . . . . 30,375
200 Federal Express Corp. . . . . . . . . . . . . . . . . . . . 12,050
500 Federal Home Loan Mortgage Corp. . . . . . . . . . . . . . . 25,250
350 Federal National Mortgage Association . . . . . . . . . . . 25,506
*900 Federated Department Stores, Inc. . . . . . . . . . . . . . 17,325
*600 Filenet Corp. . . . . . . . . . . . . . . . . . . . . . . . 16,200
300 First Chicago Corp. . . . . . . . . . . . . . . . . . . . . 14,325
200 First Interstate Bancorp. . . . . . . . . . . . . . . . . . 13,525
500 Ford Motor Co. . . . . . . . . . . . . . . . . . . . . . . . 14,000
400 FPL Group, Inc. . . . . . . . . . . . . . . . . . . . . . . 14,050
*500 FTP Software, Inc. . . . . . . . . . . . . . . . . . . . . . 15,812
400 Gap, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 12,200
*300 Genentech, Inc. . . . . . . . . . . . . . . . . . . . . . . 13,612
300 General Electric Co. . . . . . . . . . . . . . . . . . . . . 15,300
*1,200 General Instrument Corp. . . . . . . . . . . . . . . . . . . 36,000
100 Georgia Pacific Corp. . . . . . . . . . . . . . . . . . . . 7,150
600 Greenfield Industries, Inc. . . . . . . . . . . . . . . . . 14,400
400 Green Tree Financial Corp. . . . . . . . . . . . . . . . . . 12,150
*2,000 Grupo Industrial, Inc. . . . . . . . . . . . . . . . . . . . 33,000
400 Halliburton Co. . . . . . . . . . . . . . . . . . . . . . . 13,250
600 Harley Davidson, Inc. . . . . . . . . . . . . . . . . . . . 16,800
400 Healthcare Compare Corp. . . . . . . . . . . . . . . . . . . 13,650
*625 Healthcare & Retirement Corp. . . . . . . . . . . . . . . . 18,828
*800 Health Management Associates, Inc. . . . . . . . . . . . . . 20,000
100 Hercules, Inc. . . . . . . . . . . . . . . . . . . . . . . . 11,538
100 Hewlett Packard Co. . . . . . . . . . . . . . . . . . . . . 9,988
*500 Horizon Healthcare Corp. . . . . . . . . . . . . . . . . . . 14,000
*700 Hospitality Franchise System, Inc. . . . . . . . . . . . . . 18,550
*1,100 Host Marriott Corp. . . . . . . . . . . . . . . . . . . . . 10,588
</TABLE>
Not a part of the Prospectus 8
<PAGE> 10
INVESTMENT PORTFOLIO, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
UNITED STATES-CONTINUED
300 IBP, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,075
400 Illinois Central Corp. . . . . . . . . . . . . . . . . . . . 12,300
400 Illinois Tool Works, Inc. . . . . . . . . . . . . . . . . . 17,500
*790 Integrated Device Technology, Inc. . . . . . . . . . . . . . 23,305
*500 Integrated Health Services, Inc. . . . . . . . . . . . . . . 19,750
200 Intel Corp. . . . . . . . . . . . . . . . . . . . . . . . . 12,775
500 International Business Machines Corp. . . . . . . . . . . . 36,750
200 International Paper Co. . . . . . . . . . . . . . . . . . . 15,075
250 Johnson & Johnson . . . . . . . . . . . . . . . . . . . . . 13,688
200 KLA Instruments Corp. . . . . . . . . . . . . . . . . . . . 9,800
*4,000 Korea Electric Power Corp. . . . . . . . . . . . . . . . . . 85,500
*600 Kroger Co. . . . . . . . . . . . . . . . . . . . . . . . . . 14,475
600 Lilly (Eli) & Co. . . . . . . . . . . . . . . . . . . . . . 39,375
500 Limited, Inc. . . . . . . . . . . . . . . . . . . . . . . . 9,063
*850 Lincare Holdings, Inc. . . . . . . . . . . . . . . . . . . . 24,650
200 Linear Technology Corp. . . . . . . . . . . . . . . . . . . 9,900
*650 LSI Logic Corp. . . . . . . . . . . . . . . . . . . . . . . . 26,244
100 Lyondell Petrochemical Co. . . . . . . . . . . . . . . . . . 2,588
750 Marriott International, Inc. . . . . . . . . . . . . . . . . 21,094
100 Mead Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 4,863
600 Merck & Co., Inc. . . . . . . . . . . . . . . . . . . . . . 22,875
*250 Michaels Stores, Inc. . . . . . . . . . . . . . . . . . . . 8,688
200 Micron Technology, Inc. . . . . . . . . . . . . . . . . . . 8,825
400 Midlantic Corp. . . . . . . . . . . . . . . . . . . . . . . 10,600
600 Mirage Resorts, Inc. . . . . . . . . . . . . . . . . . . . . 12,300
450 Mobil Corp. . . . . . . . . . . . . . . . . . . . . . . . . 37,913
200 Motorola, Inc. . . . . . . . . . . . . . . . . . . . . . . . 11,575
*20,000 MTC Electronics Technologies, Ltd. . . . . . . . . . . . . . 60,000
1,100 Mylan Labs, Inc. . . . . . . . . . . . . . . . . . . . . . . 29,700
*200 Nautica Enterprises, Inc. . . . . . . . . . . . . . . . . . 6,050
*400 Nellcor, Inc. . . . . . . . . . . . . . . . . . . . . . . . 13,200
300 Netmanage, Inc. . . . . . . . . . . . . . . . . . . . . . . 12,150
100 Newmont Gold Co. . . . . . . . . . . . . . . . . . . . . . . 3,563
*400 Nine West Group, Inc. . . . . . . . . . . . . . . . . . . . 11,350
500 Nipsco Industries, Inc. . . . . . . . . . . . . . . . . . . 14,875
200 Nordstrom, Inc. . . . . . . . . . . . . . . . . . . . . . . 8,400
*100 OfficeMax, Inc. . . . . . . . . . . . . . . . . . . . . . . 2,650
650 Omnicom Group, Inc. . . . . . . . . . . . . . . . . . . . . 33,638
300 PepsiCo, Inc. . . . . . . . . . . . . . . . . . . . . . . . 10,875
700 Pacificorp . . . . . . . . . . . . . . . . . . . . . . . . . 12,688
*300 Perusahaan Corp., ADR . . . . . . . . . . . . . . . . . . . 10,725
700 Philip Morris Companies, Inc. . . . . . . . . . . . . . . . 40,250
*1,000 Philips Electronics, Inc. . . . . . . . . . . . . . . . . . 29,375
300 Picturetel Corp. . . . . . . . . . . . . . . . . . . . . . . 7,200
400 Pittston Services Group . . . . . . . . . . . . . . . . . . 10,600
500 Placer Dome, Inc. . . . . . . . . . . . . . . . . . . . . . 10,875
1,500 Praxair, Inc. . . . . . . . . . . . . . . . . . . . . . . . 30,750
600 Premark International, Inc. . . . . . . . . . . . . . . . . 26,850
500 Procter & Gamble Co. . . . . . . . . . . . . . . . . . . . . 31,000
*300 Proffitts, Inc. . . . . . . . . . . . . . . . . . . . . . . 6,675
700 Public Service Co. of Colorado . . . . . . . . . . . . . . . 20,563
*1,000 Public Service Co. of New Mexico . . . . . . . . . . . . . . 13,000
</TABLE>
Not a part of the Prospectus 9
<PAGE> 11
INVESTMENT PORTFOLIO, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
UNITED STATES-CONTINUED
*600 Ralcorp Holdings, Inc. . . . . . . . . . . . . . . . . . . . $ 13,350
*800 Read-Rite Corp. . . . . . . . . . . . . . . . . . . . . . . 14,850
300 Reebok International, Ltd. . . . . . . . . . . . . . . . . . 11,850
2,700 RJR Nabisco Holdings Corp., Inc. . . . . . . . . . . . . . . 14,850
*800 Safeway, Inc. . . . . . . . . . . . . . . . . . . . . . . . 25,500
400 Sara Lee Corp. . . . . . . . . . . . . . . . . . . . . . . . 10,100
450 Schering-Plough Corp. . . . . . . . . . . . . . . . . . . . 33,300
200 Scott Paper Co. . . . . . . . . . . . . . . . . . . . . . . 13,825
*500 Seagate Technology . . . . . . . . . . . . . . . . . . . . . 12,000
*700 Sequent Computer Systems, Inc. . . . . . . . . . . . . . . . 13,825
1,900 Service Corp. International . . . . . . . . . . . . . . . . 52,725
450 Silicon Graphics, Inc. . . . . . . . . . . . . . . . . . . . 13,894
*700 Smith International, Inc. . . . . . . . . . . . . . . . . . 8,750
300 St. Paul Companies, Inc. . . . . . . . . . . . . . . . . . . 13,425
*400 Stratus Computer, Inc. . . . . . . . . . . . . . . . . . . . 15,200
*900 Sun Healthcare Group, Inc. . . . . . . . . . . . . . . . . . 22,838
*800 Sun Microsystems, Inc. . . . . . . . . . . . . . . . . . . . 28,400
*800 Symantec Corp. . . . . . . . . . . . . . . . . . . . . . . . 14,000
350 Talbots, Inc. . . . . . . . . . . . . . . . . . . . . . . . 10,938
*200 Tellabs, Inc. . . . . . . . . . . . . . . . . . . . . . . . 11,150
*500 Teradyne, Inc. . . . . . . . . . . . . . . . . . . . . . . . 16,938
200 Texas Instruments, Inc. . . . . . . . . . . . . . . . . . . 14,975
*500 Thermo Fibertek, Inc. . . . . . . . . . . . . . . . . . . . 7,938
400 Time Warner, Inc. . . . . . . . . . . . . . . . . . . . . . 14,050
*350 Varity Corp. . . . . . . . . . . . . . . . . . . . . . . . . 12,688
400 Walgreen Co. . . . . . . . . . . . . . . . . . . . . . . . . 17,500
*300 Wall Data, Inc. . . . . . . . . . . . . . . . . . . . . . . 11,925
1,900 Wal-Mart Stores, Inc. . . . . . . . . . . . . . . . . . . . 40,375
200 Warner Lambert Co. . . . . . . . . . . . . . . . . . . . . . 15,400
200 Watkins Johnson Co. . . . . . . . . . . . . . . . . . . . . 5,950
*500 Watson Pharmaceuticals, Inc. . . . . . . . . . . . . . . . . 13,125
75 Wells Fargo & Co. . . . . . . . . . . . . . . . . . . . . . 10,875
900 West One Bancorp . . . . . . . . . . . . . . . . . . . . . . 23,850
1,000 Whitman Corp. . . . . . . . . . . . . . . . . . . . . . . . 17,250
100 Willamette Industries, Inc. . . . . . . . . . . . . . . . . 4,750
1,150 WMX Technologies, Inc. . . . . . . . . . . . . . . . . . . . 30,188
*400 3Com Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 20,625
------------
3,244,289
------------
TOTAL COMMON STOCK (Cost $10,361,078) . . . . . . . . . . 10,133,400
------------
</TABLE>
Not a part of the Prospectus 10
<PAGE> 12
INVESTMENT PORTFOLIO, CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
United States Government Obligations 33.6%
**$ 970,000 United States Treasury Bond, 7.125%, 2/15/23 . . . . . . . $ 882,399
United States Treasury Notes
** 1,000,000 4.625%, 8/15/95 . . . . . . . . . . . . . . . . . . . . . 985,780
1,270,000 7.75%, 2/15/95 . . . . . . . . . . . . . . . . . . . . . . 1,272,972
2,000,000 8.50%, 8/15/95 . . . . . . . . . . . . . . . . . . . . . . 2,017,500
1,600,000 11.25%, 2/15/95 . . . . . . . . . . . . . . . . . . . . . 1,610,752
------------
TOTAL UNITED STATES GOVERNMENT OBLIGATIONS
(Cost $6,935,207) . . . . . . . . . . . . . . . . . . . 6,769,403
------------
Convertible Corporate Obligations 0.4%
90,000 Nan Ya Plastic, 1.75%, 7/19/01 (Cost $84,825) . . . . . . 84,150
------------
Repurchase Agreement 11.7%
** 2,360,000 Repurchase agreement with Swiss Bank Corp. Government
Securities, Inc., dated 12/30/94, 5.35%, due 1/3/95
(collateralized by U.S. Government obligations in a
pooled cash account) repurchase proceeds $2,361,403
(Cost $2,360,000) . . . . . . . . . . . . . . . . . . . 2,360,000
------------
TOTAL INVESTMENTS (Cost $19,741,110) 96.0% . . . . . . . . 19,346,953
Other assets and liabilities, net 4.0% . . . . . . . . . . 804,925
------------
NET ASSETS 100% . . . . . . . . . . . . . . . . . . . . . $ 20,151,878
============
</TABLE>
* NON-INCOME PRODUCING SECURITY.
** SECURITIES WERE PLACED AS COLLATERAL FOR FUTURES CONTRACTS AND FORWARD
PURCHASE COMMITMENTS (NOTE 2D).
See Notes to Financial Statements.
Not a part of the Prospectus 11
<PAGE> 13
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994
<TABLE>
<S> <C>
ASSETS
Investments, at market value (Cost $19,741,110)............................. $ 19,346,953
Foreign currency, at market value (Cost $502,043)........................... 499,143
Cash........................................................................ 4,216
Dividends and interest receivable........................................... 224,875
Receivable for Fund shares sold............................................. 137,627
Receivable for investments sold............................................. 115,945
Net unrealized appreciation of forward currency exchange contracts.......... 36,044
Other assets................................................................ 64,019
------------
TOTAL ASSETS................................................................ 20,428,822
------------
LIABILITIES
Payable for Fund shares purchased........................................... 67,927
Payable for investments purchased........................................... 60,830
Due to brokers-variation margin............................................. 35,305
Net unrealized depreciation of forward commitments.......................... 24,443
Due to Adviser.............................................................. 15,513
Due to Distributor.......................................................... 10,585
Accrued expenses and other liabilities...................................... 62,341
------------
TOTAL LIABILITIES........................................................... 276,944
------------
NET ASSETS, equivalent to $9.19 per share for Class A shares, $9.17 per
share for Class B shares and $9.20 per share for Class C shares............. $ 20,151,878
============
NET ASSETS WERE COMPRISED OF:
Capital stock, at par; 1,256,163 Class A, 802,688 Class B and
135,669 Class C shares outstanding.......................................... $ 21,945
Capital surplus............................................................. 20,676,840
Accumulated net realized loss on securities................................. (127,359)
Unrealized appreciation (depreciation) of securities
Investments................................................................. (394,157)
Forward commitments......................................................... (24,443)
Foreign currency............................................................ (2,900)
Forward currency exchange contracts......................................... 36,044
Futures contracts........................................................... (36,930)
Other foreign denominated assets and liabilities............................ (88)
Undistributed net investment income......................................... 2,926
------------
NET ASSETS at December 31, 1994............................................. $ 20,151,878
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
Not a part of the Prospectus 12
<PAGE> 14
STATEMENT OF OPERATIONS
May 16, 1994* through December 31, 1994
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest..................................................................... $ 363,975
Dividends (net of $7,797 of foreign taxes withheld at source)................ 68,567
-----------
Investment income.......................................................... 432,542
-----------
EXPENSES
Management fees (net of expense reimbursement of $1,401) .................... 101,680
Custodian fees............................................................... 88,572
Registration and filing fees................................................. 46,463
Service fees - Class A....................................................... 2,368
Distribution and service fees - Class B ..................................... 27,118
Distribution and service fees - Class C...................................... 3,128
Audit fees................................................................... 18,000
Reports to shareholders...................................................... 17,006
Shareholder service agent's expenses......................................... 7,777
Legal fees................................................................... 3,000
Directors' fees and expenses................................................. 2,761
Organization expenses ....................................................... 2,171
Miscellaneous................................................................ 966
-----------
Total expenses............................................................. 321,010
-----------
Net investment income...................................................... 111,532
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES
Net realized gain (loss) on securities
Investments and forward commitments........................................ (136,248)
Futures contracts.......................................................... (16,885)
Foreign currency........................................................... (14,553)
Forward currency exchange contracts........................................ 97,691
Net unrealized appreciation (depreciation) of securities
Investments................................................................ (394,157)
Forward commitments........................................................ (24,443)
Foreign currency........................................................... (2,900)
Forward currency exchange contracts........................................ 36,044
Futures contracts.......................................................... (36,930)
Other foreign denominated assets and liabilities........................... (88)
-----------
Net realized and unrealized loss on securities............................... (492,469)
-----------
Decrease in net assets resulting from operations............................. $ (380,937)
===========
</TABLE>
*COMMENCEMENT OF OPERATIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
Not a part of the Prospectus 13
<PAGE> 15
STATEMENT OF CHANGES IN NET ASSETS
May 16, 1994* through December 31, 1994
<TABLE>
<S> <C>
NET ASSETS, beginning of period............................................. $ 101,000
-----------
OPERATIONS
Net investment income...................................................... 111,532
Net realized loss on securities............................................ (69,995)
Net unrealized depreciation of securities ................................. (422,474)
-----------
Decrease in net assets resulting from operations.......................... (380,937)
-----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
From net investment income
Class A................................................................... (83,040)
Class B................................................................... (18,953)
Class C................................................................... (4,131)
-----------
(106,124)
-----------
In excess of book-basis net realized gain on securities (Note 2I)
Class A................................................................... (34,466)
Class B................................................................... (21,661)
Class C................................................................... (3,719)
-----------
(59,846)
-----------
Total dividends and distributions....................................... (165,970)
-----------
FUND SHARE TRANSACTIONS
Proceeds from shares sold
Class A................................................................... 11,810,850
Class B................................................................... 8,030,788
Class C................................................................... 1,340,315
-----------
21,181,953
-----------
Proceeds from shares issued for dividends and distributions reinvested
Class A................................................................... 116,609
Class B................................................................... 35,987
Class C................................................................... 7,489
-----------
160,085
-----------
Cost of shares redeemed
Class A................................................................... (174,627)
Class B................................................................... (501,046)
Class C................................................................... (68,580)
-----------
(744,253)
-----------
Increase in net assets resulting from Fund share transactions............. 20,597,785
-----------
INCREASE IN NET ASSETS...................................................... 20,050,878
-----------
NET ASSETS, end of period................................................... $20,151,878
===========
</TABLE>
*COMMENCEMENT OF OPERATIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
Not a part of the Prospectus 14
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS
Note 1-Organization
American Capital Global Managed Assets Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940, as amended and was organized as an
open-end, diversified management investment company in Maryland on November 24,
1993. The Fund's investment manager, Van Kampen American Capital Asset
Management, Inc., (the "Adviser") contributed the initial capital of $101,000
on May 4, 1994. The Fund began offering shares on May 16, 1994.
Note 2-Significant Accounting Policies
The investment objective of the Fund is to seek total return through a managed
balance of foreign and domestic equity and debt securites. Investments in
foreign securities involve certain risks not ordinarily associated with
investments in securities of domestic issuers, including fluctuations in
foreign exchange rates, future political and economical developments, and the
possible imposition of exchange controls or other foreign governmental laws or
restrictions. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements.
A. Investment Valuations
Securities listed or traded on a national securities exchange are
valued at the last sale price. Unlisted securities and listed
securities for which the last sale price is not available are valued
at the most recent bid price. Futures contracts are valued at the last
sale price, or if no sales are reported, at the mean between the bid
and asked prices. United States government obligations are valued at
the mean between the last reported bid and ask prices. Securities for
which market quotations are not readily available are valued at fair
value under a method approved by the Board of Directors.
Short-term investments with a maturity of 60 days or less when
purchased are valued at amortized cost, which approximates market
value. Short-term investments with a maturity of more than 60 days
when purchased are valued based on market quotations until the
remaining days to maturity becomes less than 61 days. From such time,
until maturity, the investments are valued at amortized cost.
B. Foreign Currency Translation
The market values of foreign securities, forward currency exchange
contracts and other assets and liabilities stated in foreign currency
are translated into U.S. dollars based on quoted exchange rates as of
3:30 p.m. Eastern Standard Time. The cost of securities is determined
using historical exchange rates. Income and expenses are translated at
prevailing exchange rates when accrued or incurred. Gains and losses
on the sale of securities are not segregated for financial reporting
purposes between amounts arising from changes in exchange rates and
amounts arising from changes in the market prices of securities.
Realized gain and loss on foreign currency includes the net realized
amount from the sale of currency and the amount realized between trade
date and settlement date on security transactions.
C. Forward Currency Exchange Contracts
The Fund enters into forward currency exchange contracts in order to
hedge its exposure to changes in foreign currency exchange rates on
its foreign portfolio holdings or settle transactions. A forward
currency exchange contract is a commitment to buy or sell a foreign
security at a set price on a future date. Changes in the value of the
contract are recognized by marking the contract to market on a daily
basis to reflect current currency translation rates. The Fund realizes
gains or losses at the time the forward currency exchange contract is
closed. Risks may arise as a result of the potential inability of the
counterparties to meet the terms of their contracts, and from
unanticipated movements in the value of a foreign currency relative to
the U.S. dollar.
D. Futures Contracts and Forward Commitments
General-Transactions in futures contracts and forward commitments are
utilized in strategies to manage the market risk of the Fund's
investments. The purchase of a futures contract or forward commitments
increases the impact of changes in the market price of investments on
net asset value. Forward commitments have a risk of loss due to
nonperformance of counterparties. There is also a risk that the market
movement of such instruments may not be in the direction forecasted.
Not a part of the Prospectus 15
<PAGE> 17
Futures Contracts-Upon entering into futures contracts, the Fund
maintains securities with a value equal to its obligation under the
futures contracts in a segregated account with its custodian. A
portion of these funds is held as collateral in an account in the name
of the broker, the Fund's agent in acquiring the futures position.
During the period the futures contract is open, changes in the value
of the contract ("variation margin") are recognized by marking the
contract to market on a daily basis. As unrealized gains or losses are
incurred, variation margin payments are received from or made to the
broker. Upon the closing or cash settlement of a contract, gains or
losses are realized. The cost of securities acquired through delivery
under a contract is adjusted by the unrealized gain or loss on the
contract.
Foward Commitments-The Fund trades certain securities under the terms
of forward commitments, whereby the settlement for payment and
delivery occurs at a specified future date. Forward commitments are
privately negotiated transactions between the Fund and dealers. Upon
executing a forward commitment and during the period of obligation,
the Fund maintains collateral of cash or securities in a segregated
account with its custodian in an amount sufficient to relieve the
obligation. If the intent of the Fund is to accept delivery of a
security traded under a forward purchase commitment, the commitment is
recorded as a long-term purchase. For forward purchase commitments and
forward sale commitments which security settlement is not intended by
the Fund, changes in the value of the commitment are recognized by
marking the commitment to market on a daily basis. During the
commitment, the Fund may either resell or repurchase the forward
commitment and enter into a new forward commitment, the effect of
which is to extend the settlement date. In addtion, the Fund may
occasionally close such forward commitments prior to delivery. Gains
and losses are realized upon the ultimate closing or cash settlement
of forward commitments.
E. Repurchase Agreements
A repurchase agreement is a short-term investment in which the Fund
acquires ownership of a debt security and the seller agrees to
repurchase the security at a future time and specified price. The Fund
may invest independently in repurchase agreements, or transfer
uninvested cash balances into a pooled cash account along with other
investment companies advised or sub-advised by the Adviser, the daily
aggregate of which is invested in repurchase agreements. Repurchase
agreements are collateralized by the underlying debt security. The
Fund will make payment for such securities only upon physical delivery
or evidence of book entry transfer to the account of the custodian
bank. The seller is required to maintain the value of the underlying
security at not less than the repurchase proceeds due the Fund.
F. Federal Income Taxes
No provision for federal income taxes is required because the Fund
intends to elect to be taxed as a "regulated investment company" under
the Internal Revenue Code and intends to maintain this qualification
by annually distributing all of its taxable net investment income and
taxable net realized gains on investments to its shareholders.
G. Investment Transactions and Related Investment Income
Investment transactions are accounted for on the trade date. Realized
gains and losses on investments are determined on the basis of
identified cost. Dividend income is recorded on the ex-dividend date.
Interest income is accrued daily.
Under the applicable foreign tax laws, a tax may be imposed on
interest, dividends and realized gains generated from foreign
investments. Such taxes are generally reflected on the Statement of
Operations as a reduction of the related income or gains.
H. Debt Discount and Premium
The Fund accounts for discounts and premiums on long-term debt
securities on the same basis for financial reporting as for federal
income tax reporting. Accordingly, original issues discounts on debt
securities purchased are amortized over the life of the security.
Premiums on debt securities are not amortized. Market discounts are
recognized at the time of sale as realized gains for book purposes and
ordinary income for tax purposes.
Not a part of the Prospectus 16
<PAGE> 18
I. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the record
date. The Fund distributes tax basis earnings in accordance with the
minimum distribution requirements of the Internal Revenue Code, which
may differ from generally accepted accounting principles. Such
dividends or distributions may exceed financial statement earnings.
J. Organization Costs
Organization expenses of approximately $15,000 were deferred and are
being amortized over a five year period ending May, 1999.
Note 3-Management Fees and Other Transactions with Affiliates
The Adviser serves as investment manager to the Fund. The Adviser has entered
into a subadvisory agreement with John Govett & Co., Ltd. (the "Subadviser"),
who provides advisory services to the Fund and the Adviser with respect to the
Fund's investments in foreign securities. Prior to December 21, 1994, Lombard
Odier International Portfolio Management Ltd. served as the Fund's subadviser.
Management fees are calculated monthly, based on the average daily net assets
of the Fund at the annual rate of 1.00%. The Adviser pays 50% of its management
fee to the Subadviser.
Van Kampen American Capital Shareholder Services, Inc., an affiliate of the
Adviser, serves as share-holder service agent of the Fund. These services are
provided at cost plus a profit. For the period ended December 31, 1994, there
were no fees, other than out of pocket expenses.
The Fund was advised that Van Kampen American Capital Distributors, Inc. (the
"Distributor"), and Advantage Capital Corporation (the "Retail Dealer"), both
affiliates of the Adviser, received $6,209 and $5,860, respectively, as their
portion of the commissions charged on sales of Fund shares during the period.
Under the Distribution Plans, each class of shares pays up to .25% per annum of
its average net assets to the Distributor for expenses and services fees
incurred. Class B shares and Class C shares pay an additional fee of up to .75%
per annum of their average daily net assets to reimburse the Distributor for
its distribution expenses. Actual distribution expenses incurred by the
Distributor for Class B shares and Class C shares may exceed the amounts
reimbursed to the Distributor by the Fund.
At December 31, 1994, the unreimbursed expenses incurred by the Distributor
under the Class B plan and Class C plan aggregated approximately $274,000 and
$24,000, respectively, and may be carried forward and reimbursed through either
the collection of the contingent deferred sales charges from share redemptions
or, subject to the annual renewal of the plans, future Fund reimbursements of
distribution fees.
Legal fees were for services rendered by O'Melveny & Myers, counsel for the
Fund. Lawrence J. Sheehan, of counsel to that firm, is a director of the Fund.
At December 31, 1994, the Adviser owned approximately 77% of Class A, 7% of
Class B and 39% of Class C outstanding shares.
Certain officers and directors of the Fund are officers and directors of the
Adviser, the Distributor, the Retail Dealer and the shareholder service agent.
Note 4-Investment Activity
During the year, the cost of purchases and proceeds from sales of investments,
excluding short-term investments and forward commitments, were $23,680,327 and
$6,273,950, respectively.
Not a part of the Prospectus 17
<PAGE> 19
For federal income tax purposes, the identified cost of investments and foreign
currency at December 31, 1994 was $20,253,816. Net unrealized depreciation
aggregated $407,720, gross unrealized appreciation aggregated $222,370 and
gross unrealized depreciation aggregated $630,090. Additionally, approximately
$118,000 in realized losses are being deferred for tax purposes to the 1995
fiscal year.
At December 31, 1994, the Fund held the following long futures contracts,
forward purchase commitments and forward currency exchange contracts:
<TABLE>
<CAPTION>
FUTURES CONTRACTS U.S. DOLLAR
----------------- VALUE AT
DECEMBER UNREALIZED
CONTRACTS SECURITY 31, 1994 DEPRECIATION
--------- -------- ----------- ------------
<S> <C> <C> <C>
Great Britain (Government of)
29 expiring March 1995 . . . . . . . . . . . . . . . . $ 2,285,123 $ 36,930
=========== ========
</TABLE>
<TABLE>
<CAPTION>
FORWARD PURCHASE COMMITMENTS
---------------------------- UNREALIZED
DEPRECIATION
------------
<S> <C> <C>
France (Government of)
FF 1,850,000 6.75%, 10/25/04, settlement 3/95 . . . . . . . . . . . . . . . . . . . . $ 9,359
2,000,000 8.50%, 3/12/97, settlement 3/95 . . . . . . . . . . . . . . . . . . . . . 3,199
L 600,000,000 Italy (Republic of)
8.50%, 4/1/99, settlement 3/95 . . . . . . . . . . . . . . . . . . . . . 3,208
SP 50,000,000 Spain (Government of)
9.00%, 2/28/97, settlement 2/95 . . . . . . . . . . . . . . . . . . . . . 3,323
DM 1,000,000 Treuhandanstalt (Germany)
6.75%, 5/13/04, settlement 3/95 . . . . . . . . . . . . . . . . . . . . . 5,354
--------
TOTAL FORWARD PURCHASE COMMITMENTS
(Net obligation $2,019,138) . . . . . . . . . . . . . . . . . . . . . . $ 24,443
========
</TABLE>
<TABLE>
<CAPTION>
FORWARD CURRENCY EXCHANGE CONTRACTS
-----------------------------------
U.S. DOLLAR
VALUE AT
SETTLEMENT DECEMBER UNREALIZED
CURRENCY DATE 31, 1994 APPRECIATION
-------- ---------- ----------- ------------
<S> <C> <C> <C>
German Deutsche Mark
1,004,770 (receivable) . . . . . . . . . . . 1/25/95 $ 648,733 $ 4,989
2,469,600 (payable) . . . . . . . . . . . . . 3/9/95 1,596,948 26,954
Japanese Yen
60,162,500 (receivable) . . . . . . . . . . . 1/25/95 605,750 1,829
27,800,000 (payable) . . . . . . . . . . . . 3/9/95 281,260 1,863
Spanish Peseta
1,679,700 (receivable) . . . . . . . . . . . 1/25/95 12,740 409
----------- --------
$ 3,145,431 $ 36,044
=========== ========
</TABLE>
Note 5-Director Compensation
Fund directors who are not affiliated with the Adviser are compensated by the
Fund at the annual rate of $720 plus a fee of $20 per day for Board and
Committee meetings attended. The Chairman receives additional fees from the
Fund at an annual rate of $270. During the period, such fees aggregated $2,590.
The directors may participate in a voluntary Deferred Compensation Plan (the
"Plan"). The Plan is not funded, and obligations under the Plan will be paid
solely out of the Fund's general accounts. The Fund will not reserve or set
aside funds for the payment of its obligations under the Plan by any form of
trust or escrow. At December 31, 1994, the liability for the Plan aggregated
$780. Each director covered by the Plan elects to be credited with an earnings
component on amounts deferred equal to the income earned by the Fund on its
short-term investments or equal to the total return of the Fund.
Not a part of the Prospectus 18
<PAGE> 20
Note 6-Capital
The Fund offers three classes of shares at their respective net asset values
per share, plus a sales charge which is imposed either at the time of purchase
(the Class A shares) or at the time of redemption on a contingent deferred
basis (the Class B shares and Class C shares). All classes of shares have the
same rights, except that Class B and Class C shares bear the cost of
distribution fees and certain other class specific expenses. Class B shares and
Class C shares automatically convert to Class A shares six years and ten years
after purchase, respectively, subject to certain conditions. Realized and
unrealized gains or losses, investment income and expenses (other than class
specific expenses) are allocated daily to each class of shares based upon the
relative proportion of net assets of each class.
The Fund has 200 million of each class of shares of $.01 par value capital
stock authorized. Transactions in shares of capital stock for the period ended
December 31, 1994 were as follows:
<TABLE>
<S> <C>
Shares sold
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,262,355
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 852,544
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142,266
----------
2,257,165
----------
Shares issued for dividends and distributions reinvested
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,547
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,886
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 807
----------
17,240
----------
Shares redeemed
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18,739)
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (53,742)
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,404)
----------
(79,885)
----------
Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,194,520
==========
</TABLE>
Not a part of the Prospectus 19
<PAGE> 21
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout the
period indicated.
May 16, 1994(1) through December 31, 1994
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------- ------- -------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE (4)
Net asset value, beginning of period........... $9.44 $9.44 $9.44
------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Investment income.............................. .28 .26 .27
Expenses....................................... (.18) (.25) (.22)
------- ------- -------
Net investment income.......................... .10 .01 .05
Net realized and unrealized loss on securities. (.2475) (.2065) (.2165)
------- ------- -------
Total from investment operations............... (.1475) (.1965) (.1665)
------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment income........... (.075) (.046) (.046)
Distributions in excess of book-basis net
realized gains on securities (Note 2I)....... (.0275) (.0275) (.0275)
------- ------- -------
Total distributions............................ (.1025) (.0735) (.0735)
------- ------- -------
Net asset value, end of period................. $9.19 $9.17 $9.20
======= ======= =======
TOTAL RETURN (2)............................... (1.57%) (2.09%) (1.77%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions)........... $11.5 $7.4 $1.3
Average net assets (millions).................. $10.1 $4.6 $1.0
Ratios to average net assets(3)
Expenses...................................... 2.75% 3.92% 3.36%
Expenses, without expense reimbursement....... 2.76% 3.93% 3.38%
Net investment income......................... 1.54% .13% .80%
Net investment income, without expense
reimbursement ............................... 1.53% .12% .78%
Portfolio turnover rate........................ 50% 50% 50%
</TABLE>
(1) COMMENCEMENT OF OPERATIONS.
(2) TOTAL RETURNS HAVE NOT BEEN ANNUALIZED. TOTAL RETURN DOES NOT CONSIDER
THE EFFECT OF SALES CHARGES. DURING THE PERIOD THERE WAS A CHANGE IN
SUBADVISER. SEE NOTE 3.
(3) ANNUALIZED
(4) BASED ON AVERAGE MONTH-END SHARES OUTSTANDING
SEE NOTES TO FINANCIAL STATEMENTS.
Not a part of the Prospectus 20
<PAGE> 22
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of
American Capital Global Managed Assets Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, 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 American Capital Global Managed
Assets Fund, Inc. (the "Fund") at December 31, 1994, the results of its
operations, the changes in its net assets and the financial highlights for the
period May 16, 1994 (commencement of operations) through December 31, 1994, 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 audit. We conducted our audit 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 audit, which included confirmation of
securities at December 31, 1994 by correspondence with the custodian and
brokers, provides a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Houston, Texas
February 17, 1995
Not a part of the Prospectus 21
<PAGE> 23
FUND PERFORMANCE DATA
Management Discussion
American Capital Global Managed Assets Fund seeks total return through a
managed balance of foreign and domestic equity and debt securities. From the
Fund's inception on May 16, 1994 through December 31, 1994, the Fund's
performance was negatively impacted by repeated increases in short-term U.S.
interest rates. Those increases were prompted by concerns about the rate of
inflation in the United States, which impacted stock and bond markets
worldwide.
For more information on market conditions and the Fund's performance, see pages
2-3 of this report.
Change in Value of a $10,000 Investment in
American Capital Global Managed Assets Fund, Inc. vs.
Morgan Stanley Capital International World Index
and J.P. Morgan Global Traded Government Index
5/16/94-12/31/94
(Chart)
Past performance is not indicative of future performance. The Morgan Stanley
Capital International World Index and the J.P. Morgan Global Traded Government
Index are broad-based, unmanaged indexes that reflect the general performance
of major stock and bond markets worldwide, respectively. Neither index reflects
any commissions or fees that would be paid by an investor purchasing the
securities it represents. All sales charges and all other expenses are
reflected in the performance shown for American Capital Global Managed Assets
Fund Class A shares with ending value of $9,376. In addition, since investor
purchase shares of the Fund with varying sales charges depending primarily on
volume purchased, the Fund's performance at net asset value also is shown.
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------------------
AGGREGATE TOTAL RETURN - CLASS A (AS OF 12/31/94) SINCE INCEPTION (5/16/94)
- ----------------------------------------------------------------------------------------------------
At Net Asset Value -1.57%
- ----------------------------------------------------------------------------------------------------
With Maximum 5.75% Sales Charge -6.24%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
AGGREGATE TOTAL RETURN - CLASS B (AS OF 12/31/94) SINCE INCEPTION (5/16/94)
- ----------------------------------------------------------------------------------------------------
At Net Asset Value -2.09%
- ----------------------------------------------------------------------------------------------------
With Applicable Contingent Deferred Sales Charge
Upon Redemption (Maximum 5%) -5.97%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
AGGREGATE TOTAL RETURN - CLASS C (AS OF 12/31/94) SINCE INCEPTION (5/16/94)
- ----------------------------------------------------------------------------------------------------
At Net Asset Value -1.77%
- ----------------------------------------------------------------------------------------------------
With Applicable Contingent Deferred Sales Charge
Upon Redemption (Maximum 1%) -2.74%
- ----------------------------------------------------------------------------------------------------
</TABLE>
Not a part of the Prospectus 22
<PAGE> 24
AMERICAN CAPITAL GLOBAL MANAGED ASSETS FUND, INC.
Tax Notice to Corporate
Shareholders
For 1994, 18.82% of the dividends taxable as ordinary income qualified for the
70% dividends received deduction for corporations.
Board of Directors
J. Miles Branagan
Richard E. Caruso
Roger Hilsman
Don G. Powell
David Rees
Lawrence J. Sheehan
Fernando Sisto*
William S. Woodside
*CHAIRMAN OF THE BOARD
Officers
Don G. Powell
PRESIDENT
Curtis W. Morell
VICE PRESIDENT AND
TREASURER
Jeff D. New
Robert C. Peck, Jr.
John R. Reynoldson
Alan T. Sachtleben
Paul R. Wolkenberg
VICE PRESIDENTS
Tanya M. Loden
VICE PRESIDENT AND
CONTROLLER
Nori L. Gabert
VICE PRESIDENT AND
SECRETARY
J. David Wise
VICE PRESIDENT AND
ASSISTANT SECRETARY
Perry F. Farrell
M. Robert Sullivan
ASSISTANT TREASURERS
Huey P. Falgout, Jr.
ASSISTANT SECRETARY
Investment Adviser
Van Kampen American Capital Asset Management, Inc.
2800 Post Oak Blvd., Houston,Texas 77056
Investment Subadviser
John Govett & Co. Limited
Shackleton House
4 Battle Bridge Lane
London, SE1 2HR England
Distributor
Van Kampen American Capital Distributors, Inc.
2800 Post Oak Blvd., Houston, Texas 77056
Shareholder Service Agent
Van Kampen American Capital Shareholder Services, Inc.
P.O. Box 418256, Kansas City, Missouri 64141-9256
Custodian
State Street Bank and Trust Co.
225 Franklin Street, Boston, Massachusetts 02110
Counsel
O'Melveny & Myers
400 South Hope Street, Los Angeles,California 90071
Independent Accountants
Price Waterhouse LLP
1201 Louisiana, Houston, Texas 77002
This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors unless it
has been preceded or is accompanied by an effective prospectus of the Fund
which contains additional information on how to purchase shares, the sales
charge, and other pertinent data. If used for distribution to prospective
investors after 3/31/95, this annual report must be accompanied by an American
Capital Global Managed Assets Fund performance data update for the most recent
calendar quarter.
Not a part of the Prospectus
<PAGE> 25
AMERICAN CAPITAL FAMILY OF FUNDS
Emerging Growth Fund
American Capital Emerging Growth Fund, Inc. Midcap Fund
Midcap Fund
American Capital Enterprise Fund, Inc.
Core Growth Funds
American Capital Pace Fund, Inc.
American Capital Global Equity Fund
Real Estate Fund
American Capital Real Estate Securities Fund, Inc.
Growth-Income Funds
American Capital Comstock Fund, Inc.
American Capital Growth and Income Fund, Inc.
American Capital Equity Income Fund, Inc.
American Capital Global Managed Assets Fund, Inc.
American Capital Harbor Fund, Inc.
Income-Growth Fund
American Capital Utilities Income Fund, Inc.
Corporate Bond Funds
Capital High Yield Investments, Inc.
American Capital Corporate Bond Fund, Inc.
Government Securities Funds
American Capital Global Government Securities Fund
American Capital U.S. Government Trust for Income
American Capital Government Securities, Inc.
American Capital Federal Mortgage Trust
Tax-Free Funds
American Capital Tax-Exempt Trust
High Yield Municipal Portfolio
American Capital Texas Municipal Securities, Inc.
American Capital Municipal Bond Fund, Inc.
American Capital Tax-Exempt Trust
Insured Municipal Portfolio
Money Market Fund
American Capital Reserve Fund, Inc.1
THE GOVETT FUNDS, INC.
NATIONALLY DISTRIBUTED BY VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC.
(FORMERLY AMERICAN CAPITAL MARKETING, INC.)
Govett Latin America Fund
Govett Pacific Strategy Fund
Govett Emerging Markets Fund
Govett Smaller Companies Fund
Govett International Equity Fund
Govett Global Government Income Fund
FOR MORE COMPLETE INFORMATION ABOUT ANY AMERICAN CAPITAL OR GOVETT FUND,
INCLUDING CHARGES AND EXPENSES, OBTAIN A PROSPECTUS FROM YOUR INVESTMENT
PROFESSIONAL OR WRITE VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC., P.O. BOX
1411, HOUSTON, TX 77251-1411. READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST
OR SEND MONEY.
AMERICAN CAPITAL
GLOBAL MANAGED ASSETS FUNDS, INC
C/O ACCESS
P.O. Box 418256
Kansas City, MO 64141-92561
PRINTED MATTER
Printed in U.S.A./024RPT-001
