Annual Report
July 31, 1998
INVESCO
SPECIALTY
FUNDS, INC.
Asian Growth
European Small Company
Latin American Growth
Realty
Worldwide Capital Goods
Worldwide Communications
S&P 500 Index Fund
You should know
what INVESCO knows. (TM)
INVESCO FUNDS
<PAGE>
Market Overview September 1998
Many of the gains produced in the U.S. and European equity markets
earlier this year have been lost in August and September. As the global currency
crisis has intensified, all equity markets have suffered. Those markets that are
the largest and most liquid have survived the storm the best, while smaller and
emerging markets have suffered significant declines.
Europe: What once was a dream is now closer to reality, as the European
Union plans to launch its common currency next year. The first 11 nations that
have qualified for the EMU (European Monetary Union) are Austria, Belgium,
Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, and
Spain. This new economic zone has over 290 million inhabitants and accounts for
roughly 20% of the world's gross domestic product.
As the convergence of the European Union approaches, investors'
enthusiasm for the region has ignited. There are signs that, after 10 years of
stagnant growth, European economies are starting to accelerate. Even though much
of the region has double-digit unemployment rates, declining interest rates have
produced an equity culture, and Europeans are investing record amounts. In
addition, the constraints of the Maastricht Treaty, which sets the foundation
for the European Union, have forced rigid fiscal discipline on many of Europe's
free-spending governments. This jubilation over equities has produced staggering
returns for most markets in the last 12 months, and in some, appreciation of
greater than 50% during the last year. But, economic and social problems in
Russia continue to weigh on the minds of European investors and may increase the
day-to-day volatility in these markets throughout 1998.
Latin America: Like most of the world's emerging markets, Latin
American stocks experienced extreme volatility during the last 12 months.
Nervousness regarding the Asian financial crisis created a negative environment
for all emerging markets. Plus, many Latin American economies generate a
significant portion of their Gross Domestic Product from oil revenues. As the
Asian crisis decreased the demand for oil, a global oversupply occurred --
driving the real price of oil down to levels not seen since the early 1970s.
This glut negatively influenced the markets of Columbia, Mexico, Venezuela, and
Argentina.
Despite short-term volatility, the long-term outlook for Latin American
markets still appears bright. Foreign direct investment in 1997 reached its
highest level ever, and privatization of many state-owned companies is ahead of
schedule.
Asia/Pacific Rim: The Asian financial crisis is still wreaking havoc on
economies throughout the region, and the financial damage could take years to
repair. During the last 12 months, those countries willing to implement the
necessary economic and fiscal reforms have fared the best. Governments that have
dragged their feet in implementing necessary reforms, such as Indonesia, have
suffered contractions in their equity markets and a devaluation of their
currencies, leading to further social and political upheavals.
Even though they have elected a new Prime Minister, Keizo Obuchi, Japan
remains problematic. If Tokyo can find a way to stimulate its economy -- still
stagnant after seven years -- it would go a long way toward repairing many of
the emerging markets in the Asian/Pacific Rim region. However, even though the
government passed a 16.65 trillion yen economic-stimulus package (mostly
involving increased fiscal spending), the concern remains that, without an
income tax cut, it may do little to stimulate consumer spending.
<PAGE>
In addition, if the Chinese devalue their currency or abolish the
pegged rate between the Hong Kong dollar and the U.S. dollar, the region may
experience another round of currency devaluations -- increasing the chances for
additional market volatility. And, Malaysia has recently implemented currency
controls which has increased fears that many Asian nations may revert back to
less open economies.
INVESCO Specialty Funds, Inc.
Each of the funds is managed by a team of investment professionals. For
the international equity funds, a senior investment policy group determines the
country-by-country allocation of the fund's assets, overall stock selection
methodology, and risk control policies. Realty Fund's investments, however, are
selected by a team of portfolio managers who collectively determine investment
decisions, while Worldwide Capital Goods Fund and Worldwide Communications Fund
are each actively managed by a portfolio manager who makes security selection
and asset allocation decisions.
The line graphs on the following pages illustrate the value of a
$10,000 investment in each of the INVESCO Specialty Funds, plus reinvested
dividends and capital gain distributions, from inception through 7/31/98. The
charts and other total return figures cited reflect the funds' operating
expenses, but the indexes do not have expenses, which would, of course, have
lowered their performance.(1),(2)
Asian Growth Fund
Asian Growth Fund
Average Annual Total Return
as of 7/31/98 (2)
1 Year -62.16%
----------------------------------
Since Inception (3/96) -29.40%
----------------------------------
For the one-year period ended 7/31/98, INVESCO Asian Growth Fund posted
a loss of -62.16%, compared to a loss of -60.49% for the Morgan Stanley Capital
Index-Far East Ex-Japan. (Of course, past performance is not a guarantee of
future results.)(1),(2)
The last 12 months have been one of the most difficult periods ever for
emerging markets in the Asian/Pacific Rim region. Investors suffered severe
capital losses as declining currencies and slowing corporate earnings led to
economic and social tensions which amplified losses. Presently, corporate
earnings for many companies in the Asian/Pacific Rim are being hit hard by
foreign exchange losses, ballooning interest burdens, and uncollectable accounts
receivable. As the level of non-performing loans in this area increases, the
balance sheets of many Asian/Pacific Rim financial institutions may be impaired,
producing further negatives for regional equity markets. For these markets and
economies to make a significant recovery, the problems of insufficient banking
regulation and the absence of bankruptcy laws need to be addressed.
<PAGE>
During the last 12 months, we have kept the fund defensively positioned
as many Asian economies experienced severe economic recessions as a result of
the financial crisis. Given the widespread declines, our favorite markets in
this environment have been Australia, Hong Kong, Singapore, and India. These
economies appear the most open and should be strong enough to weather future
economic downturns. Until genuine reforms are implemented in most Asian/Pacific
Rim economies, our strategy will remain very conservative.
Graph
This line graph compares the value of a $10,000 investment in INVESCO
Asian Growth to the value of a $10,000 investment in the MSCI-Far East
Ex-Japan Index, assuming in each case reinvestment of all dividends and
capital gain distributions, for the period from inception (3/96)
through 7/31/98.
Looking Forward
The fund is designed to give investors exposure to the fastest-growing
markets in the Asian/Pacific Rim. Despite the current economic contraction, over
the longer-term, structural changes and economic reforms in the region should
enhance these countries' growth potential. However, significant changes must
occur to improve investors' confidence and attract foreign investment. In
addition, it is crucial for the Japanese government to stimulate consumer
spending.
Many Asian/Pacific Rim markets are selling at low valuation levels not
seen for two decades and may experience significant appreciation over the next
10 to 15 years. Although day-to-day volatility will likely remain high, and the
potential for loss of capital is still present within these markets, we are
starting to see improving economic conditions in selected countries. However,
investors should be prepared to accept that economic recovery will be a slow,
tedious process.
Fund Manager
Sam Lau serves as portfolio manager of INVESCO Asian Growth Fund. Sam
received his BS from the University of Illinois and MBA from the Chinese
University of Hong Kong. He began his investment career in 1988 and joined
INVESCO in 1994.
European Small Company Fund
For the one-year period ended 7/31/98, INVESCO European Small Company
Fund had a total return of 24.15%, compared to the James Capel Smaller European
Index, which had a total return of 28.09%. (Of course, past performance is not a
guarantee of future results.)(1),(2)
European Small Company Fund
Average Annual Total Return
as of 7/31/98 (2)
1 Year 24.15%
-------------------------------
Since Inception (23.75) 23.75%
-------------------------------
Lower interest rates, benign inflation, accelerating corporate
earnings, and expanding economies have helped European equity markets reach
record highs in the last 12 months. But, as with most raging bull markets during
this period, small-capitalization stocks have lagged the performance of
large-cap stocks, due to investors' focus on liquidity and visibility of
corporate earnings. Within this environment, we have kept the fund focused on
the fastest-growing sectors in Europe -- health care, technology, and services.
<PAGE>
Although individual security selection drives the performance of the
fund, we continue to have a geographical bias compared to the index towards
countries that will enjoy the strongest economic growth: Ireland, Italy, and
Spain. These nations are benefiting from the convergence of the EMU (European
Monetary Union), which is producing decreasing interest rates and an improved
equity culture.
In regard to individual securities, some of the strongest returns for
the fund during the last 12 months have come from Mobilcom, Real Software, and
MLP (Marschollek Lautenschlaeger and Partners AG) -- both Real Software and MLP
were recently sold for significant gains. Mobilcom, a German telecommunications
company, is benefiting from the increased use of both cellular and fixed-line
services. In addition, with the European telecommunications industry in the
process of deregulation, the potential for strong future earnings growth appears
bright.
Graph
This line graph compares the value of a $10,000 investment in INVESCO
European Small Company Fund to the value of a $10,000 investment in the
James Capel Smaller European Index, assuming in each case reinvestment
of all dividends and capital gain distributions, for the period from
inception (2/95) through 7/31/98.
Looking Forward
Europe is in the beginning of a tremendous process of transformation.
With the convergence of the EMU, companies are being forced to become more
competitive and focus on enhancing shareholder value. As this happens, earnings
should accelerate and the equity culture should improve across Europe. Although
market volatility might be severe on a day-to-day basis, the benefits from these
changes are beginning to become apparent and may propel European markets for the
next three to five years. However, instability in Russia continues to be
problematic for European markets and may constrain future growth.
Fund Managers
Claire Griffiths and Andy Crossley of our London sister company,
INVESCO Asset Management Limited, lead a group responsible for management of
INVESCO European Small Company Fund. Claire graduated from St. John's College,
Cambridge, and began her investment career in 1989. Andy began his investment
career in 1988 after graduating from Loughborough University.
Latin American Growth Fund
For the one-year period ended 7/31/98, INVESCO Latin American Growth
Fund posted a loss of -30.64%, compared to a loss of -25.49% for the MSCI-Latin
America Index. (Of course, past performance is not a guarantee of future
results.)(1),(2)
All emerging markets have been under intense pressure since Thailand
devalued its currency (the baht) on July 2, 1997 -- including Latin American
markets. As Asian countries devalued their currencies, Latin American currencies
in turn came under attack in international markets. In response, many Latin
American governments raised short-term interest rates, which constrained
economic growth and increased negative sentiment towards all emerging markets.
Although increased short-term interest rates caused many investors in emerging
markets severe pain, it was a necessary reaction given the severity of the
crisis and should improve the long-term fundamentals for all emerging markets,
especially Latin America.
Latin American Growth Fund
Average Annual Total Return
as of 7/31/98 (2)
1 Year -30.64%
-----------------------------
Since Inception (2/95) 9.78%
-----------------------------
<PAGE>
Within this difficult environment, we have avoided Columbia and
Venezuela in favor of those markets which are large and liquid, and where
genuine economic reforms are taking place, like Brazil and Mexico. In Brazil, we
have skewed the fund's investments toward industries and sectors which will
benefit from continued privatization -- electric, water, and the recently
privatized telecommunications sector. It is our opinion that President Cardoso
will be re-elected, and he will continue to implement economic reforms necessary
to transform Brazil's economy into the dominant free market in Latin America.
The Brazilian telecommunications company Telecomunicacoes Brasileiras SA remains
our largest holding.
Graph
This line graph compares the value of a $10,000 investment in INVESCO
Latin American Growth Fund to the value of a $10,000 investment in the
MSCI-Latin America Index, assuming in each case reinvestment of all
dividends and capital gain distributions, for the period from inception
(2/95) through 7/31/98.
Looking Forward
The last year has been a difficult and disappointing time for Latin
American investors. Although the underlying environment is starting to improve
in certain economies, continued market volatility will likely persist, as
sentiment remains negative towards all emerging markets. It may take a
substantial amount of time before investor psychology improves for this region.
When this happens, Latin American markets could enter a prolonged period of
economic expansion. Currently, the Latin American region is probably in the best
shape of all emerging markets as growth prospects appear decent, inflation
remains subdued, and many governments remain committed to more transparent and
efficient economies.
Fund Managers
Peter Jarvis and Jane Lyon of our London sister company, INVESCO Asset
Management Limited, lead a group responsible for management of INVESCO Latin
American Growth Fund. Peter graduated from St. John's College, Oxford, and
joined INVESCO in 1993 specializing in Latin American securities. Jane began her
investment career in 1986 after graduating from Oxford University.
Realty Fund
For the one-year period ended 7/31/98, the Realty Fund had a total
return of -6.49%, compared to a total return of -1.99% for the NAREIT Index for
the period ended 7/31/98. (Of course, past performance is not a guarantee of
future results.)(1),(2)
The last 12 months have been disappointing for REIT (Real Estate
Investment Trust) investors. In January, legislation was passed to address the
"paired-share" structure of certain REITs, creating negative sentiment towards
this sector. A paired-share REIT combines a conventional corporation with a
real-estate investment trust. Although there are only five paired-share REITs
operating in the U.S., the legislation created much uncertainty regarding this
sector, and many REIT investors left this market to pursue high-flying
large-capitalization stocks. Many REITs were also trying to sell additional
equity during early 1998 -- putting further downward pressure on prices.
<PAGE>
Within this difficult environment, we have favored the office and hotel
sub-sectors. Both continue to experience above-average earnings growth, as the
demand for new office space and hotels remains strong. In fact, one of our
favorite investments is Arden Realty, a self-administered, self-managed REIT,
which acquires, develops, and operates suburban office properties located in
Southern California. Arden owns a portfolio of more than 130 quality office
properties with more than 17 million square feet, and is benefiting from a
booming economy in California.
Realty Fund
Average Annual Total Return
as of 7/31/98 (2)
1 Year -6.49%
-----------------------------
Since Inception (1/97) 3.10%
-----------------------------
Graph
This line graph compares the value of a $10,000 investment in INVESCO
Realty Fund to the value of a $10,000 investment in the NAREIT Index,
assuming in each case reinvestment of all dividends and capital gain
distributions, for the period from inception (1/97) through 7/31/98.
Looking Forward
Although difficulties persisted over the last 12 months, it appears
that the environment for REITs is quite promising. We expect that earnings will
increase by approximately 13% this year and by 9% to 10% in 1999. With current
dividend yields between 6% to 7% and the potential for strong earnings growth,
REITs appear very attractive compared to domestic equities.
Fund Management
The fund's investments are selected by a team of INVESCO Realty
Advisors, Inc. (IRAI) portfolio managers who are collectively responsible for
the investment decisions relating to the fund.
Worldwide Capital Goods Fund
During the one-year period ended 7/31/98, INVESCO Worldwide Capital
Goods Fund had a total return of -2.06%, compared to a total return of 19.26%
for the domestic S&P 500 and 5.75% for the international Morgan Stanley Capital
Index-Europe/Australia/Far East. Keep in mind that these indexes measure broad
equity performance, while the fund invests in a targeted market sector. (Of
course, past performance is not a guarantee of future results.)(1),(2)
Worldwide Capital Goods Fund
Average Annual Total Return
as of 7/31/98
1 Year -2.06%
-----------------------------
Since Inception (8/94) 9.91%
-----------------------------
<PAGE>
Unfortunately for investors, the capital goods sector has been one of
the poorest performing industry groups during the last 12 months. The Asian
financial crisis continues to exert negative pressure, as many capital goods
companies were heavily dependent on strong Asian economic growth to spur future
demand. Although we positioned the portfolio in the fall of 1997 to avoid firms
that derive a significant portion of their revenue from those countries, the
underlying sub-sectors which make up the capital goods sector (machinery, farm
equipment, machine tools, truck manufacturing, diversified companies, and pump
and valves) experienced a difficult year as global demand for capital goods
decreased.
Graph
This line graph compares the value of a $10,000 investment in INVESCO
Worldwide Capital Goods Fund to the value of a $10,000 investment in
each of the MSCI-EAFE and S&P 500 Indexes, assuming in each case
reinvestment of all dividends and capital gain distributions, for the
period from inception (8/94) through 7/31/98.
Within this challenging environment, we have kept the fund concentrated
on market-leading capital goods companies that can benefit from strength in the
domestic and European economies. This conservative investment stance favors
consumer-oriented capital goods firms and has focused the portfolio on companies
like General Electric, Owens-Illinois Inc., Tyco International Ltd,
Federal-Mogul Corp., and Southdown Inc. Hopefully, our conservative approach
will benefit shareholders over the next six to 12 months, as the Asian financial
crisis will continue to produce volatility in the capital goods sector.
Looking Forward
Because this fund targets a narrow segment of the market, it should
only be part of a well-diversified portfolio. Asian/Pacific Rim nations
represent approximately 25% of the world's economic activity. With many of these
countries presently in a severe recession, the prospects for near-term growth in
the capital goods sector is somewhat limited. We will keep the fund focused on
liquid, market-leading capital goods companies while avoiding those firms with
significant exposure to Asia.
Fund Manager
Vice President John S. Segner assumed responsibilities of portfolio
manager in December 1997. He received a BS from the University of Alabama and an
MBA from the University of Texas at Austin. Before joining INVESCO in 1997, John
served as Managing Director and Principal for The Mitchell Group, and had
previous experience with Texaco Inc., Amerada Hess Corporation, and First
Tennessee National Corporation.
Worldwide Communications Fund
The Fund received the prestigious 5-star risk-adjusted rating from
Morningstar, both overall and for the three-year period ended 7/31/98, among
2,572 equity funds.(3)
For the one-year period ended 7/31/98, INVESCO Worldwide Communications
Fund achieved a total return of 36.79%, compared to a total return of 19.26% for
the domestic S&P 500 and 5.75% for the international Morgan Stanley Capital
Index-Europe/Australia/Far East. Keep in mind that these indexes measure broad
equity performance, while the fund invests in a targeted market sector. (Of
course, past performance is not a guarantee of future results.)(1),(2)
<PAGE>
Worldwide Communications Fund
Average Annual Total Return
as of 7/31/98 (2)
1 Year 36.79%
---------------------------------
Since Inception (8/94) 26.98%
---------------------------------
Telecommunications has been one of the most dynamic and exciting
sectors for investors over the last 12 months. During this time, merger and
acquisition activity intensified, demand for electronic transmission of
information and data (e.g. the Internet) increased, and the profitability of
many telecommunications companies improved -- enhancing equity prices. In
addition, deregulation in the U.S. and Europe has spawned the development of
many companies intent on exploiting the mandate that incumbent local exchange
carriers (ILECs) open their networks to competition. This has led to speculation
that these new carriers might be acquired by ILECs to expand their reach into
neighboring territory, or by long distance carriers to add local telecom service
to the package of services they could offer to their customers.
Graph
This line graph compares the value of a $10,000 investment in INVESCO
Worldwide Communications Fund to the value of a $10,000 investment in
each of the MSCI-EAFE and S&P 500 Indexes, assuming in each case
reinvestment of all dividends and capital gain distributions, for the
period from inception (8/94) through 7/31/98.
During the last 12 months, we have made only minor adjustments to the
portfolio, decreasing our weighting in CLECs (Competitive Local Exchange
Carriers) and increasing the fund's position in international long distance
carriers. Although CLECs remain a prominent investment theme in the portfolio,
we did reduce the fund's exposure to these firms in the spring of 1998 as merger
and acquisition activity reduced the number of desirable CLECs. However, one of
our favorite investments remains Colt Telecom Group PLC. Colt, the first
European CLEC, is successfully executing its business plan and expanding its
network in many European cities. Although the stock has produced astonishing
returns during the last 12 months, the company still appears poised for further
strong growth.
In regard to the fund's increased weighting in international long
distance carriers, high tariffs on long distance calls in many foreign countries
created short-term opportunities for competitive international carriers. In
certain nations, if a competitive carrier installs call-routing switches within
that country, the competitive carrier would only have to pay the incumbent
carrier local phone rates to complete the call, avoiding the high international
settlement tariffs and increasing potential profits. As global tariffs on
international phone calls are reduced, this investment opportunity will
diminish, and consequently we will reduce the fund's weighting in these
carriers.
<PAGE>
Another area that has produced strong returns for the fund is the
telephone equipment industry, although returns for this area have been somewhat
mitigated by the Asian financial crisis. With the explosion of information and
data transmissions, as traffic on the Internet is doubling every 90 days, the
need for increased bandwidth has created enormous opportunities for certain
telephone equipment companies. Firms like Lucent Technologies, Tellabs Inc., and
Cisco Systems appear to have bright futures and remain core holdings in the
portfolio.
Looking Forward
The telecommunications sector is in the early stages of a long-term
growth cycle. To use a baseball analogy, this sector is in the second inning of
a nine-inning game. Although the sector may experience day-to-day volatility,
positive fundamental changes are occurring which should create enormous growth
opportunities in the future. Some of these key influences are:
o Deregulation throughout Europe, which began in 1998.
o Developing countries need improved communications systems
to compete in the global economy.
o More than half the people in the world have never used a phone.
o Internet and related services are growing exponentially.
o Demand for wireless services is increasing.
Fund Manager
Effective July 1, 1997, Brian B. Hayward assumed responsibilities of
portfolio manager of Worldwide Communications Fund. Previously, he was a senior
equity analyst for Mississippi Valley Advisors in St. Louis, Missouri and began
his investment career in 1985. Brian earned a BA in Mathematics and a MA in
Economics from the University of Missouri. He is a Chartered Financial Analyst.
S&P 500 Index Fund
S&P 500 Index Fund
Total Return Since Inception
as of 8/31/98 (2)
Class I Shares* Class II Shares*
Since Inception 12/97 20.93% 22.11%
-------------------------------------------------------------
*For Class I shares, the minimum initial investment is $250,000. For
Class II shares, the minimum initial investment is $5,000 for individual
accounts and $2,000 for Individual Retirement Accounts (IRAs). The minimum
initial investment for Class II shares is waived for systematic investment
plans.
INVESCO launched its first index fund in December 1997. The S&P 500
Index Fund seeks to provide price performance and income comparable to the
Standard & Poor's 500 Index, which is composed of 500 selected
large-capitalization stocks. In its brief performance history from inception
(12/97) to 7/31/98, the fund's returns of 20.93% for the Class I shares, and
22.11% for Class II shares beat the 18.48% return for the S&P 500 for the same
time period. The primary reason for the fund's outperformance compared to the
index is due to the fund's small asset base and the timing of cash flows. As
both classes increase their asset size, performance is likely to track the index
more closely. (Of course, past performance is not a guarantee of future
results.)(1),(2)
<PAGE>
Graph
This line graph compares the value of a $10,000 investment in INVESCO
S&P 500 Index Fund - Class I and Class II to the value of a $10,000
investment in the S&P 500 Index, assuming in each case reinvestment of
all dividends and capital gain distributions, for the period from
inception (8/94) through 7/31/98.
(1)The MSCI-EAFE, MSCI-Pacific Ex Japan, MSCI-Latin and James Capel Smaller
European Index are unmanaged indexes of common stocks considered to be
representative respectively of the equity markets of Europe/Australia/Far East;
Pacific Basin excluding Japan; Latin America; and European small-capitalization
stocks. The S&P 500 is an unmanaged index indicative of the broad U.S. stock
market. The NAREIT is an unmanaged index indicative of the U.S. real estate
investment-trust market.
(2)Total return assumes reinvestment of dividends and capital gain distributions
for the periods indicated. Past performance is not a guarantee of future
results. Investment return and principal value will fluctuate so that, when
redeemed, an investor's shares may be worth more or less than when purchased.
(3)Morningstar's proprietary rankings reflect historical risk-adjusted
performance and are subject to change every month. Ratings are calculated for
the fund's three-, five-, and 10-year average annual returns (based on available
track records) in excess of 90-day Treasury bill returns. The top 10% of funds
in an investment category receive 5 stars, and the next 22.5%, 4 stars. As of
7/31/98, Worldwide Communications Fund received 5 stars among 2,572 funds in the
domestic equity fund category for the three-year and overall period.
<PAGE>
Ten Largest Common Stock Holdings
July 31, 1998
Description Value
- ------------------------------------------------------
Asian Growth Fund
CLP Holdings Ltd $ 567,162
HSBC Holdings PLC 487,887
Hong Kong Telecommunications Ltd 452,263
Cheung Kong Holdings Ltd 433,677
Hutchison Whampoa Ltd 432,128
Singapore Telecommunications Ltd 302,346
Mahanagar Telephone Nigam Ltd
Regulation S Sponsored GDR
Representing 2 Ord Shrs 300,000
China Telecom Ltd 292,990
Development Bank of Singapore Ltd
Foreign Shrs 262,525
Australia & New Zealand Banking
Group Ltd 259,196
European Small Company Fund
Grand Hotel Krasnapolsky NV $ 1,688,211
MobilCom AG 1,537,609
TelePizza SA 1,219,876
Leon de Bruxelles SA 1,206,669
IONA Technologies PLC Sponsored
ADR Representing Ord Shrs 1,057,387
Semcon AB 1,041,000
EM.TV & Merchandising AG 1,035,359
Unique International NV 934,411
Prolion Holding NV 880,685
CBT Group PLC Sponsored ADR
Representing Ord Shrs 846,800
Latin American Growth Fund
Telecomunicacoes Brasileiras SA $ 1,720,292
Panamerican Beverages Class A 1,304,625
Cemex SA de CV Series B Shrs 1,147,004
Cia Paranaense de Energia-Copel 1,072,571
Grupo Financiero Banamex-Accival SA
de CV Series B Shrs 1,051,000
Grupo Carso SA de CV Series A-1 Shrs 1,041,081
<PAGE>
Description Value
- ------------------------------------------------------
Latin American Growth Fund -- (Continued)
Sociedad Quimica y Minera de Chile
SA Sponsored ADR Representing 10
Series B Shrs $ 1,015,000
Alfa SA de CV Participation Certificates
Series A Shrs 798,687
Telefonica de Argentina SA Sponsored
ADR Representing 10 Class B Shrs 796,125
Grupo Televisa SA de CV Participation
Certificates Representing Series A, D
& L Shrs 693,157
Realty Fund
Starwood Hotels & Resorts SBI $ 1,741,050
Arden Realty 1,549,800
Patriot American Hospitality 1,538,031
Mack-Cali Realty 1,230,075
CarrAmerica Realty 1,077,500
Highwoods Properties 1,076,625
American General Hospitality 1,035,094
SL Green Realty 990,000
Vornado Realty Trust SBI 863,388
First Industrial Realty Trust 831,512
S&P 500 Index Fund
General Electric $ 575,976
Microsoft Corp 537,961
Coca-Cola Co 397,305
Exxon Corp 337,932
Merck & Co 294,347
Intel Corp 284,892
Wal-Mart Stores 282,800
Pfizer Inc 280,390
International Business Machines 270,035
Bristol-Myers Squibb 245,307
<PAGE>
Description Value
- ------------------------------------------------------
Worldwide Capital Goods Fund
Camco International $ 745,500
Owens-Illinois Inc 608,925
General Electric 580,531
Tyco International Ltd 569,825
Volvo AB Sponsored ADR Representing
Class B Shrs 512,481
Global Industries Ltd 509,938
Dril-Quip Inc 490,462
Lockheed Martin 488,469
Dana Corp 467,650
Ingersoll-Rand Co 459,550
Worldwide Communications Fund
Global TeleSystems Group $ 7,222,500
America Online 7,137,000
CIENA Corp 6,250,875
WorldCom Inc 5,922,000
Intermedia Communications 5,905,200
Nokia Corp Sponsored ADR
Representing Class A Shrs 5,558,575
Cisco Systems 5,539,137
COLT Telecom Group PLC Sponsored
ADR Representing 4 Ord Shrs 5,452,000
MCI Communications 5,180,000
Lucent Technologies 4,991,625
Composition of holdings is subject to change.
--------------------------------
Statement of Investment Securities
July 31, 1998
- ----------------------------------------------------------------------
Shares or
Industry Principal
% Description Code Amount Value
- ----------------------------------------------------------------------
Asian Growth Fund
79.97 COMMON STOCKS & WARRANTS
5.15 AUSTRALIA
Australia & New
Zealand Banking
Group Ltd BK 40,000 $ 259,196
Rio Tinto Ltd GP 20,000 218,871
WMC Ltd GP 50,000 150,003
- ----------------------------------------------------------------------
628,070
- ----------------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ----------------------------------------------------------------------
31.61 HONG KONG
CLP Holdings Ltd EU 127,000 $ 567,162
Cheung Kong Holdings
Ltd RL 100,000 433,677
Cheung Kong
Infrastructure
Holdings Ltd EC 130,000 203,867
China Everbright
Ltd(a) RT 90,000 31,364
China Everbright Ltd
Warrants
(Exp 2000)(a) RT 30,000 2,594
China Resources
Enterprise Ltd RL 230,000 167,727
China Telecom Ltd(a) TL 200,000 292,990
Citic Pacific Ltd CG 138,000 222,647
Cosco Pacific Ltd SV 300,000 83,250
Hang Seng Bank Ltd BK 42,900 209,303
Hong Kong Telecom-
munications Ltd TL 240,000 452,263
Hutchison Whampoa
Ltd CG 90,000 432,128
New World
Development Ltd RL 110,000 146,237
Shanghai Industrial
Holdings Ltd MG 130,000 212,257
Sun Hung Kai
Properties Ltd RL 60,000 222,259
Tianjin Development
Holdings Ltd(a) DB 320,000 173,471
- ----------------------------------------------------------------------
3,853,196
- ----------------------------------------------------------------------
7.64 INDIA
BSES Ltd Regulation S
GDR Representing
3 Ord Shrs(a)(f) EU 13,000 143,000
Mahanagar Telephone
Nigam Ltd
Regulation S
Sponsored
GDR Representing
2 Ord Shrs(a)(f) TL 25,000 300,000
Ranbaxy Laboratories
Ltd GDR
Representing Ord
Shrs HD 7,500 123,750
State Bank of India
Regulation S GDR
Representing 2
Ord Shrs(a)(f) BK 16,000 172,000
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ---------------------------------------------------------------------
Videsh Sanchar Nigam
Ltd Regulation S
GDR Representing
1/2 Ord Shr(a)(f) TL 17,000 $ 192,950
- ---------------------------------------------------------------------
931,700
- ---------------------------------------------------------------------
3.94 INDONESIA
Gulf Indonesia Resources
Ltd(a) OG 20,000 192,500
PT Astra
International(a) AM 1,000,000 83,650
PT Bank Internasional
Indonesia Warrants
(Exp 2000)(a) BK 22,652 233
PT Dynaplast(a) CH 1,035,000 51,160
PT Indofood Sukses
Makmur(a) FD 842,500 152,163
- ---------------------------------------------------------------------
479,706
- ---------------------------------------------------------------------
1.47 LUXEMBOURG
Korea Asia Fund IDR
Representing 500
Shrs(a) FN 315 179,550
- ---------------------------------------------------------------------
5.30 MALAYSIA
Berjaya Sports Toto
Berhad GM 140,000 140,085
Malakoff Berhad AG 120,000 208,379
Metroplex Berhad RL 320,000 31,087
Tanjong PLC GM 90,000 109,290
Telekom Malaysia
Berhad TN 100,000 156,648
- ---------------------------------------------------------------------
645,489
- ---------------------------------------------------------------------
4.39 PHILIPPINES
Ayala Land RL 512,880 130,961
Benpres Holdings(a) BR 1,522,800 198,941
First Philippine Holdings
B Shrs CG 147,600 94,660
Philippine Long Distance
Telephone TL 5,000 109,857
- ---------------------------------------------------------------------
534,419
- ---------------------------------------------------------------------
10.48 SINGAPORE
City Developments Ltd RL 65,000 185,230
DBS Land Ltd RL 160,000 125,109
Development Bank of
Singapore Ltd
Foreign Shrs BK 49,000 262,525
Overseas Union Bank
Ltd Foreign Shrs BK 70,000 127,310
Parkway Holdings Ltd HC 110,000 186,041
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- --------------------------------------------------------------------
Singapore Technologies
Engineering Ltd EC 120,000 $ 88,966
Singapore
Telecommunications
Ltd TL 200,000 302,346
- --------------------------------------------------------------------
1,277,527
- --------------------------------------------------------------------
0.87 SOUTH KOREA
Pohang Iron & Steel
Ltd IS 2,610 100,964
Sungmi Telecom
Electronics CM 230 5,234
- --------------------------------------------------------------------
106,198
- --------------------------------------------------------------------
3.30 THAILAND
Bangkok Expressway
PLC Foreign
Shrs(a) TR 127,000 71,505
Bank of Asia PLC
Foreign Shrs(a) BK 500,000 118,727
Electricity Generating
PLC Foreign
Shrs(a) EU 45,000 77,111
PTT Exploration &
Production PLC
Foreign Shrs(a) OG 16,200 134,835
Thai Farmers Bank
PLC Warrants
(Exp 2002)(a) BK 1,875 115
- -------------------------------------------------------------------
402,293
- -------------------------------------------------------------------
5.82 UNITED KINGDOM
HSBC Holdings PLC BK 20,000 487,887
Larsen & Toubro Ltd
Sponsored GDR
Representing 2
Ord Shrs MY 25,000 221,250
- -------------------------------------------------------------------
709,137
- -------------------------------------------------------------------
TOTAL COMMON STOCKS & WARRANTS
(Cost $16,969,617) 9,747,285
- -------------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- -------------------------------------------------------------------
20.03 SHORT-TERM INVESTMENTS --
REPURCHASE AGREEMENTS
20.03 UNITED STATES
Repurchase Agreement
with State Street
dated 7/31/1998
due 8/3/1998 at
5.580%, repurchased
at $2,443,136
(Collateralized by US
Treasury Bonds due
8/15/2021 at 8.125%
value $2,502,586)
(Cost
$2,442,000) RA $ 2,442,000 $ 2,442,000
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $19,411,617)
(Cost for Income Tax Purposes
$19,602,333) $ 12,189,285
===================================================================
European Small Company Fund
96.89 COMMON STOCKS AND WARRANTS
1.62 BELGIUM
Creyf's NV SV 1,800 $ 628,307
Innogenetics
NV(a) BI 7,100 442,863
- ------------------------------------------------------------------
1,071,170
- ------------------------------------------------------------------
3.33 DENMARK
Coloplast A/S Registered
B Shrs HC 4,800 432,005
Falck A/S AF 12,000 761,320
NeuroSearch A/S(a) HD 5,500 412,234
William Demant
Holding A/S HC 12,000 594,892
- ------------------------------------------------------------------
2,200,451
- ------------------------------------------------------------------
1.69 FINLAND
Raisio Group PLC FD 26,500 436,202
Tieto Corp Series B
Shrs CO 18,400 680,612
- ------------------------------------------------------------------
1,116,814
- ------------------------------------------------------------------
13.77 FRANCE
Alliance et Gestion
Commerciale SV 5,200 558,389
Altran Technologies
SA EC 2,700 633,775
BVRP Software(a) CO 10,600 622,483
Cie des Signaux SA EL 7,900 743,607
Dassault Systemes
SA CO 13,300 725,029
Genset SA(a) BI 6,166 579,356
GrandVision SA PI 23,900 818,054
- ------------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ------------------------------------------------------------------
ILOG SA ADR
Representing
Ord Shrs(a) CO 2,549 $ 39,191
Ingenico SA SV 16,700 493,154
LVL Medical SA HC 22,850 440,898
LVL Medical SA
Warrants
(Exp 2000)(a) HC 380 6,376
Leon de Bruxelles
SA RS 11,150 1,206,669
Penauille
Polyservices SV 2,000 637,584
Sidergie SA SV 1,900 430,369
Stedim SA HC 4,500 377,517
UBI Soft Entertainment
SA(a) TY 5,300 795,889
- ------------------------------------------------------------------
9,108,340
- ------------------------------------------------------------------
9.52 GERMANY
Bertrandt AG SV 7,200 412,909
Boewe Systec AG MY 15,000 673,001
DIS Deutscher Industrie
Service AG SV 7,200 651,749
Data Modul AG EL 14,300 691,443
EM.TV & Merchandising
AG BR 1,659 1,035,359
LOESCH Umweltschutz
AG PC 4,665 99,931
MobilCom AG TC 4,094 1,537,609
Pfeiffer Vacuum
Technology AG
Bearer Shrs(a) MY 6,000 338,187
Refugium Holding AG HC 12,590 502,581
Sartorius AG EL 900 354,211
- ------------------------------------------------------------------
6,296,980
- ------------------------------------------------------------------
8.94 IRELAND
Adare Printing Group
PLC PB 30,000 397,548
CBT Group PLC
Sponsored ADR
Representing Ord
Shrs(a) CO 14,600 846,800
Heiton Holdings PLC BD 133,000 423,169
IONA Technologies
PLC Sponsored
ADR Representing
Ord Shrs(a) CO 35,100 1,057,387
Irish Continental Group
PLC AF 24,595 379,100
Kingspan Group PLC BD 180,000 738,160
Marlborough
International
PLC(a) SV 173,786 774,115
- ------------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ------------------------------------------------------------------
Ryanair Holdings
PLC(a) AR 105,000 $ 838,915
Saville Systems PLC
Sponsored ADR
Representing Ord
Shrs(a) CO 18,100 457,025
- ------------------------------------------------------------------
5,912,219
- ------------------------------------------------------------------
4.99 ITALY
Aeroporti di Roma
SpA AR 38,400 249,048
Banca Popolare
Commercio e
Industria BK 27,650 629,537
Bulgari SpA CJ 132,100 742,317
Gucci Group NV New
York Registered
Shrs RT 8,600 418,175
Industria Macchine
Automatiche MY 72,700 609,062
Simint SpA(a) TA 66,000 654,490
- ------------------------------------------------------------------
3,302,629
- ------------------------------------------------------------------
13.61 NETHERLANDS
Aalberts Industries
NV CG 24,900 707,810
Beter Bed Holding
NV HF 18,800 745,362
Computer Services
Solutions SV 12,700 437,647
Fugro NV EC 16,100 610,213
Grand Hotel
Krasnapolsky NV LH 18,600 1,688,211
Kempen & Co NV IV 6,942 560,498
Nederlandsche
Apparatenfabriek
NV SV 20,200 634,650
Polynorm NV MG 4,800 500,299
Prolion Holding
NV(a) MY 6,100 880,685
QIAGEN NV New
York Registered
Shrs(a) BI 11,800 761,100
Simac Techniek NV EL 3,000 543,836
Unique International
NV SV 21,100 934,411
- ------------------------------------------------------------------
9,004,722
- ------------------------------------------------------------------
2.74 NORWAY
Ekornes A/S A
Registered Shrs HF 59,000 730,624
Tandberg A/S A(a) CM 23,600 265,681
Tomra Systems A/S A MY 25,000 814,526
- ------------------------------------------------------------------
1,810,831
- ------------------------------------------------------------------
0.80 PORTUGAL
Ibersol SGPS SA RS 5,500 528,977
- ------------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ------------------------------------------------------------------
3.98 SPAIN
Banco de Valencia SA
Registered Shrs BK 20,300 $ 609,511
Superdiplo SA(a) RT 31,300 806,124
TelePizza SA(a) RS 134,000 1,219,876
- ------------------------------------------------------------------
2,635,511
- ------------------------------------------------------------------
4.60 SWEDEN
Assa Abloy AB Series
B Shrs MG 15,000 650,447
Caran AB Series B
Shrs CO 35,300 429,402
ContextVision AB(a) CO 32,000 455,605
OXiGENE Europe AB(a)HD 7,700 82,503
Scandic Hotels AB LH 8,700 386,581
Semcon AB SV 84,700 1,041,000
- ------------------------------------------------------------------
3,045,538
- ------------------------------------------------------------------
4.42 SWITZERLAND
Belimo Holding AG
Registered Shrs BD 1,186 477,424
Disetronic Holding
AG HC 330 740,590
Kudelski SA Bearer
Shrs(a) EL 65 758,806
Sarna Kunststoff Holding
AG Registered Shrs BD 154 258,303
Valora Holding AG
Registered Shrs RS 2,200 690,037
- ------------------------------------------------------------------
2,925,160
- ------------------------------------------------------------------
22.33 UNITED KINGDOM
ABI Leisure Group
PLC(a)(e) LT 433,666 0
Antonov PLC(a) AP 237,816 301,527
Atlantic Telecom
Group PLC(a) CA 325,000 813,501
Biocompatibles
International
PLC(a) HC 200,000 343,560
British Biotech
PLC(a) HD 250,000 140,083
Claremont Garments
Holdings PLC TA 245,000 128,262
Cortecs PLC(a) HD 200,000 189,776
Denby Group PLC HW 150,000 316,566
Dialog Corp PLC(a) CO 200,000 660,944
Electronics Boutique
PLC(a) RT 300,000 350,922
Esat Telecom Group
PLC Sponsored
ADR Representing
2 Ord Shrs(a) TL 20,600 844,600
Filtronic PLC TL 64,000 455,201
- ------------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ------------------------------------------------------------------
GEI International
PLC MY 200,000 $ 314,112
Games Workshop Group
PLC LT 57,692 424,728
Greenway Holdings
PLC PC 163,749 103,139
Hambro Countrywide
PLC RE 256,450 448,921
Helical Bar PLC RE 55,769 508,652
Hozelock Group PLC HP 125,000 529,655
ICON PLC Sponsored
ADR Representing
Ord Shrs(a) SV 19,475 608,594
Ilion Group PLC CO 220,000 285,237
Infobank International
Holdings PLC(a) CO 115,454 335,267
Innovative Technologies
Group PLC(a) HD 236,434 406,146
McCarthy & Stone
PLC HB 175,000 409,409
Memory Corp PLC(a) CO 425,000 173,686
NSM PLC(a)(e) GP 575,000 0
Norbain PLC EL 60,000 253,253
Orbis PLC SV 600,000 559,512
Psion PLC CO 50,000 497,344
Regal Hotel Group
PLC LH 700,000 469,532
Robert Walters PLC SV 60,000 342,578
Rubicon Group PLC MG 146,667 443,902
Rutland Trust PLC FN 300,000 252,762
ScS Upholstery PLC TH 210,000 383,069
SEP Industrial Holdings
PLC MG 584,000 277,073
Savills PLC SV 300,000 687,120
Tracker Network PLC EL 40,000 467,896
Trafficmaster
PLC(a) SV 35,000 276,566
TransTec PLC MG 300,000 319,020
Vymura PLC BD 190,834 449,574
- ------------------------------------------------------------------
14,771,689
- ------------------------------------------------------------------
0.55 UNITED STATES
OXiGENE Inc(a) HD 35,300 361,825
- ------------------------------------------------------------------
TOTAL COMMON STOCK & WARRANTS
(Cost $57,465,476) 64,092,856
- ------------------------------------------------------------------
3.11 PREFERRED STOCKS
3.11 GERMANY
Fresenius AG
Non-Voting Pfd HC 2,500 441,358
Marschollek
Lautenschlaeger
und Partners AG
Non-Voting Pfd IN 1,530 1,015,068
- ------------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ------------------------------------------------------------------
Sander (Jil) AG
Non-Voting Pfd TA 1,460 $ 603,340
- ------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(Cost $2,074,964) 2,059,766
- ------------------------------------------------------------------
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $59,540,440)
(Cost for Income Tax Purposes
$59,660,722) $ 66,152,622
==================================================================
Latin American Growth Fund
51.28 COMMON STOCKS
9.08 ARGENTINA
Aluar Aluminio
Argentina SAIC Class
B Shrs AL 125,000 $ 481,491
Disco SA Sponsored
ADR Representing
3 Shrs(a) RT 20,000 692,500
Inversiones y
Representaciones
SA Sponsored
GDR Representing
10 Shrs RE 16,000 595,000
SA Importadora y
Exportadora de la
Patagonia Series
B Shrs RT 35,000 577,789
Telefonica de Argentina
SA Sponsored ADR
Representing 10
Class B Ord Shrs TN 22,000 796,125
- -----------------------------------------------------------------
3,142,905
- -----------------------------------------------------------------
8.67 BRAZIL
Cia Paranaense de
Energia-Copel EU 132,000,000 1,072,571
Rossi Residencial SA
GDR Regulation S
Representing 5 Ord
Shrs(f) HB 58,600 205,100
Telecomunicacoes
Brasileiras SA TL 19,000,000 1,720,292
- -----------------------------------------------------------------
2,997,963
- -----------------------------------------------------------------
2.93 CHILE
Sociedad Quimica y
Minera de Chile
SA Sponsored
ADR Representing
10 Series B Shrs CH 29,000 1,015,000
- -----------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- -----------------------------------------------------------------
27.73 MEXICO
Alfa SA de CV
Participation
Certificates
Series A Shrs CH 200,718 $ 798,687
Cemex SA de CV Series
B Shrs(a) BD 270,000 1,147,004
Consorcio ARA SA
de CV
Regulation S
Sponsored ADR
Representing 10
Shrs(a)(f) HB 1,400 43,940
Sponsored ADR
Representing 10
Shrs(a)(b) HB 17,600 552,387
Corporacion GEO SA
de CV Series B
Shrs(a) HB 100,000 543,631
Grupo Accion SA de
CV Regulation S
Sponsored ADR
Representing 10
Series B
Shrs(a)(f) EC 45,000 292,558
Grupo Carso SA de
CV Series A-1 Shrs CG 240,000 1,041,081
Grupo Financiero
Banamex-Accival
SA de CV Series
B Shrs(a) BK 525,000 1,051,000
Grupo Industrial Saltillo
SA de CV Series
B Shrs IS 150,000 469,932
Grupo Televisa SA de
CV Participation
Certificates
Representing Series
A, D & L Shrs(a) BR 40,000 693,157
Panamerican Beverages
Class A BV 42,000 1,304,625
Pepsi-Gemex SA
Sponsored GDR
Representing 6
Ord Participation
Certificates BV 45,000 570,937
Sanluis Corp SA de CV
Participation
Certificates
Representing Series
B, C & D Shrs MY 100,000 397,915
- -----------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- -----------------------------------------------------------------
Tubos de Acero de
Mexico SA
Sponsored ADR
Representing Cmn
Shrs IS 70,000 $ 686,875
- -----------------------------------------------------------------
9,593,729
- -----------------------------------------------------------------
1.67 NETHERLANDS
Melia Inversiones
Americanas NV
Sponsored
ADR (a)(b) LH 26,000 577,546
- -----------------------------------------------------------------
1.20 PERU
Cia de Minas
Buenaventura SA
Series T Shrs GP 80,000 415,503
- -----------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $22,856,636) 17,742,646
- -----------------------------------------------------------------
41.36 PREFERRED STOCKS
1.53 ARGENTINA
Nortel Inversora SA
ADR Representing
1/20th of a Pfd B
Shr TL 20,000 527,500
39.83 BRAZIL
Banco Itau SA
Non-Voting Pfd BK 2,000,000 1,329,321
Centrais Eletricas de
Santa Catarina SA
Series B Pfd EU 1,300,000 1,106,621
Cia Brasileira de
Distribuicao Grupo
Pao de Acucar
Sponsored ADR
Representing 1,000
Regulation S Pfd
Shrs(f) RT 40,067 906,516
Cia de Tecidos Norte de
Minas Coteminas
Pfd TA 5,800,000 887,704
Cia Energetica de Brasilia
Series A Pfd EU 2,080,000 73,328
Series B Pfd(a) EU 1,152,561 39,641
Cia Energetica de Minas
Gerais Pfd EU 31,711,876 1,104,326
Cia Energetica do
Ceara-Coelce Series
A Pfd EU 150,000,000 515,907
Eletropaulo
Metropolitana SA
Pfd EU 12,240,000 884,058
- ----------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ----------------------------------------------------------------
Empresa Bandeirante de
Energia SA Pfd(a) EU 12,240,000 $ 215,752
Lojas Renner SA Pfd RT 10,000,000 300,946
Petroleo Brasileiro SA
Pfd OG 9,000,000 1,981,083
Telecomunicacoes
Brasileiras SA
Sponsored ADR
Representing 1000
Pfd Shrs TN 22,000 2,663,375
Telecomunicacoes de
Sao Paulo SA Pfd TN 5,025,000 1,265,972
Telesp Celular SA
Series B Pfd(a) TC 4,800,000 507,653
- ----------------------------------------------------------------
13,782,203
- ----------------------------------------------------------------
TOTAL PREFERRED STOCKS
(Cost $17,696,365) 14,309,703
- ----------------------------------------------------------------
5.76 OTHER SECURITIES
5.76 MEXICO
Controladora Comercial
Mexicana SA de CV
GDR Representing
20 Linked BC Units
(Each unit consists of
3 Series B shrs and
one Series C shr) RT 45,000 753,750
Fomento Economico
Mexicano SA de CV
Sponsored ADR
Representing 10 Units
(Each unit consists
of 10 Series B shrs,
20 Series D-B shrs
and 20 Series D-L shrs)
(Cost $1,679,511) BV 40,000 1,240,000
- ----------------------------------------------------------------
1,993,750
- ----------------------------------------------------------------
1.60 SHORT-TERM INVESTMENTS --
REPURCHASE AGREEMENTS
1.60 UNITED STATES
Repurchase Agreement
with State Street dated
7/31/1998 due 8/3/1998 at
5.580%, repurchased at
$553,257 (Collateralized
by US Treasury Bonds due
8/15/2021 at 8.125% value
$570,703)
(Cost $553,000) RA $ 553,000 553,000
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ----------------------------------------------------------------
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $42,785,512)(d) $ 34,599,099
================================================================
Realty Fund
98.20 COMMON STOCKS
0.58 FINANCIAL
AMRESCO Inc(a) 4,500 $ 128,531
0.22 LEISURE TIME
American Skiing(a) 5,000 49,375
2.25 LODGING N HOTELS
CapStar Hotel(a) 20,000 501,250
93.07 REAL ESTATE INVESTMENT TRUST
American General Hospitality 54,300 1,035,094
Archstone Communities Trust 20,000 420,000
Arden Realty 65,600 1,549,800
Avalon Bay Communities 19,723 707,563
Brandywine Realty Trust SBI 15,000 299,062
Cabot Industrial Trust 5,000 94,687
CarrAmerica Realty 40,000 1,077,500
Catellus Development(a) 20,000 326,250
Cornerstone Properties 15,000 240,000
Corporate Office Properties
Trust SBI 20,000 158,750
Crescent Operating(a) 30,000 360,000
Equity Office Properties
Trust SBI 27,504 684,162
Equity Residential Properties
Trust SBI 5,000 210,000
Essex Property Trust 14,400 439,200
Federal Realty Investment Trust
SBI 25,000 584,375
First Industrial Realty
Trust 30,100 831,512
Highwoods Properties 34,800 1,076,625
Liberty Property Trust SBI 20,000 501,250
Mack-Cali Realty 39,600 1,230,075
Meridian Industrial Trust 15,000 300,000
Pacific Gulf Properties 10,000 208,125
Patriot American Hospitality 80,949 1,538,031
Philips International Realty 21,200 344,500
Prentiss Properties Trust 32,700 778,669
Public Storage 13,500 357,750
Rouse Co 6,300 183,881
SL Green Realty 45,000 990,000
Simon DeBartolo Group 10,000 311,250
Spieker Properties 15,000 539,063
Starwood Hotels & Resorts
SBI 42,400 1,741,050
- ----------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ----------------------------------------------------------------
Sun Hung Kai Properties Ltd
Sponsored ADR
Representing Ord Shrs 15,100 $ 55,936
Sunstone Hotel Investors 34,800 387,150
Vornado Realty Trust SBI 23,900 863,388
Weeks Corp 10,000 288,750
- ----------------------------------------------------------------
20,713,448
- ----------------------------------------------------------------
2.08 REAL ESTATE RELATED
Hankyu Realty Ltd 26,000 111,650
Reckson Service Industries(a) 4,800 10,200
Security Capital US Realty(a)28,500 342,000
- ----------------------------------------------------------------
463,850
- ----------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $25,924,022) 21,856,454
- ----------------------------------------------------------------
1.80 SHORT-TERM INVESTMENTS --
REPURCHASE AGREEMENTS
Repurchase Agreement
with State Street dated
7/31/1998 due 8/3/1998 at
5.580%, repurchased at
$400,186 (Collateralized
by US Treasury Bonds due
8/15/2021 at 8.125%, value
$411,566)
(Cost $400,000) $ 400,000 400,000
- ----------------------------------------------------------------
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost 26,324,022)
(Cost for Income Tax Purposes
$26,628,338) $ 22,256,454
================================================================
S&P 500 Index Fund
88.99 COMMON STOCKS
1.09 AEROSPACE & DEFENSE
Boeing Co 2,156 $ 83,680
General Dynamics 34 1,617
Lockheed Martin 428 42,666
Northrop Grumman 18 1,459
Raytheon Co Class B 447 24,725
TRW Inc 17 921
United Technologies 453 43,403
- ---------------------------------------------------------------
198,471
- ---------------------------------------------------------------
0.14 AIR FREIGHT
FDX Corp(a) 416 25,246
- ---------------------------------------------------------------
0.15 AIRLINES
AMR Corp(a) 120 8,573
- ---------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ---------------------------------------------------------------
Delta Air Lines 49 $ 6,002
Southwest Airlines 331 10,902
US Airways Group(a) 13 975
- ---------------------------------------------------------------
26,452
- ---------------------------------------------------------------
0.10 ALUMINUM
Aluminum Co of America 113 7,832
Reynolds Metals 200 10,500
- ---------------------------------------------------------------
18,332
- ---------------------------------------------------------------
0.17 AUTO PARTS
Cooper Tire & Rubber 11 208
Cummins Engine 100 5,569
Dana Corp 108 5,370
Genuine Parts 325 11,273
Goodyear Tire & Rubber 103 6,277
ITT Industries 17 593
Johnson Controls 12 628
Pep Boys-Manny Moe & Jack 100 1,725
- ---------------------------------------------------------------
31,643
- ---------------------------------------------------------------
1.72 AUTOMOBILES
Chrysler Corp 1,235 73,097
Ford Motor 2,388 135,967
General Motors 1,264 91,403
Navistar International(a) 100 2,669
PACCAR Inc 200 8,950
- ---------------------------------------------------------------
312,086
- ---------------------------------------------------------------
7.41 BANKS
BB&T Corp 90 6,322
Banc One 1,424 73,603
Bank of New York 547 35,008
BankAmerica Corp 1,355 121,611
BankBoston Corp 590 28,541
Bankers Trust New York 64 7,172
Chase Manhattan 1,854 140,209
Citicorp 700 119,000
Comerica Inc 103 6,940
Fifth Third Bancorp 333 20,729
First Chicago NBD 491 41,152
First Union 2,022 121,825
Fleet Financial Group 479 41,164
Huntington Bancshares 360 10,881
KeyCorp 988 33,592
Mellon Bank 467 31,464
Mercantile Bancorp 200 10,875
National City 440 29,425
NationsBank Corp 1,917 152,881
Norwest Corp 1,496 53,763
PNC Bank 500 26,969
Providian Financial 13 1,021
- ---------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ---------------------------------------------------------------
Republic New York 30 $ 1,779
State Street 106 7,347
Summit Bancorp 400 17,900
SunTrust Banks 438 31,974
Synovus Financial 486 10,753
US Bancorp 1,483 68,218
Wachovia Corp 434 37,161
Wells Fargo 157 55,872
- ---------------------------------------------------------------
1,345,151
- ---------------------------------------------------------------
3.31 BEVERAGES
Anheuser-Busch Cos 1,122 57,993
Brown-Forman Corp Class B 200 12,125
Coca-Cola Co 4,924 397,305
PepsiCo Inc 2,996 116,282
Seagram Co Ltd 450 16,538
- ---------------------------------------------------------------
600,243
- ---------------------------------------------------------------
0.14 BIOTECHNOLOGY
Amgen Inc(a) 337 24,748
- ---------------------------------------------------------------
0.47 BROADCASTING
CBS Corp 1,462 49,617
Clear Channel Communications
(a) 528 29,667
King World Productions 200 5,600
- ---------------------------------------------------------------
84,884
- ---------------------------------------------------------------
0.47 BUILDING MATERIALS
Armstrong World Industries 100 6,162
Centex Corp 100 4,100
Crane Co 100 4,950
LoweOs Cos 830 31,955
Masco Corp 816 23,307
Owens-Corning 100 4,125
Sherwin-Williams Co 324 10,328
- ---------------------------------------------------------------
84,927
- ---------------------------------------------------------------
0.71 CABLE
Comcast Corp Class A 849 38,550
MediaOne Group(a) 985 47,588
Tele-Communications Inc TCI
Group Series A(a) 1,033 43,128
- ---------------------------------------------------------------
129,266
- ---------------------------------------------------------------
1.30 CHEMICALS
Air Products & Chemicals 544 19,040
Dow Chemical 449 40,747
du Pont (E I) de Nemours 2,243 139,066
Eastman Chemical 11 624
Engelhard Corp 20 417
Goodrich (B F) Co 10 406
Grace (W R) & Co(a) 20 334
Great Lakes Chemical 100 3,944
- ---------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ---------------------------------------------------------------
Morton International 19 $ 460
PPG Industries 117 7,415
Praxair Inc 422 20,784
Rohm & Haas 16 1,558
Sigma-Aldrich Corp 14 404
Union Carbide 17 816
- ---------------------------------------------------------------
236,015
- ---------------------------------------------------------------
2.10 COMMUNICATIONS -- EQUIPMENT
& MANUFACTURING
Advanced Micro Devices(a) 20 345
Andrew Corp(a) 13 229
DSC Communications(a) 16 485
Harris Corp 11 436
Lucent Technologies 2,642 244,220
Motorola Inc 1,192 62,282
Northern Telecom Ltd 1,074 63,098
Scientific-Atlanta Inc 11 265
Tellabs Inc(a) 119 8,958
- ---------------------------------------------------------------
380,318
- ---------------------------------------------------------------
8.91 COMPUTER RELATED
Adobe Systems 10 323
Apple Computer(a) 18 623
Ascend Communications(a) 300 13,341
Bay Networks(a) 330 11,364
Cabletron Systems(a) 422 4,879
Cisco Systems(a) 2,061 197,341
Compaq Computer 3,285 107,994
Computer Associates
International 1,076 35,710
Dell Computer(a) 1,128 122,494
EMC Corp(a) 1,026 50,274
Gateway 2000(a) 200 10,800
Hewlett-Packard Co 2,083 115,606
International Business
Machines 2,038 270,035
Microsoft Corp(a) 4,885 537,961
Novell Inc(a) 849 9,657
Oracle Corp(a) 2,044 54,166
Parametric Technology(a) 336 4,578
Seagate Technology(a) 334 7,599
Silicon Graphics(a) 326 3,627
Sun Microsystems(a) 852 40,257
3Com Corp(a) 448 11,088
Unisys Corp(a) 325 8,958
- ---------------------------------------------------------------
1,618,675
- ---------------------------------------------------------------
0.09 CONGLOMERATES
National Service Industries 100 5,194
- ---------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ---------------------------------------------------------------
Tenneco Inc 324 $ 11,745
- ---------------------------------------------------------------
16,939
- ---------------------------------------------------------------
0.86 CONSUMER FINANCE
American Express 805 88,852
Countrywide Credit Industries 15 724
Household International 1,053 52,383
SLM Holding 300 13,875
- ---------------------------------------------------------------
155,834
- ---------------------------------------------------------------
0.32 CONTAINERS
Ball Corp 100 4,331
Bemis Co 100 3,862
Crown Cork & Seal 18 740
International Paper 498 22,223
Owens-Illinois Inc(a) 420 18,533
Sealed Air(a) 19 760
Stone Container(a) 14 183
Temple-Inland Inc 100 5,206
Tupperware Corp 100 2,525
- ---------------------------------------------------------------
58,363
- ---------------------------------------------------------------
0.03 DISTRIBUTION
Supervalu Inc 100 4,956
- ---------------------------------------------------------------
1.81 ELECTRIC UTILITIES
Ameren Corp 14 529
American Electric Power 125 5,383
Baltimore Gas & Electric 421 12,735
Carolina Power & Light 421 17,129
Central & South West 330 8,394
CINergy Corp 422 13,319
Consolidated Edison 554 23,441
DTE Energy 20 802
Dominion Resources 326 13,284
Duke Energy 636 36,331
Edison International 553 15,346
Entergy Corp 334 9,143
FPL Group 119 7,237
FirstEnergy Corp 332 9,151
GPU Inc 17 608
Houston Industries 340 9,499
Niagara Mohawk Power(a) 520 7,898
Northern States Power 300 7,894
PECO Energy 331 9,909
PG&E Corp 561 17,075
PP&L Resources 423 9,808
PacifiCorp 441 9,454
Public Service Enterprise Group 332 10,852
Southern Co 1,396 35,598
Texas Utilities 662 26,521
- ---------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ---------------------------------------------------------------
Unicom Corp 330 $ 11,406
- ---------------------------------------------------------------
328,746
- ---------------------------------------------------------------
3.65 ELECTRICAL EQUIPMENT
AMP Inc 544 15,980
Emerson Electric 991 58,903
General Electric 6,449 575,976
Grainger (W W) Inc 26 1,147
Honeywell Inc 84 7,040
Thomas & Betts 100 4,100
- ---------------------------------------------------------------
663,146
- ---------------------------------------------------------------
0.07 ELECTRONICS
General Signal 100 3,987
Perkin-Elmer Corp 100 5,863
Tektronix Inc 100 2,738
- ---------------------------------------------------------------
12,588
- ---------------------------------------------------------------
2.03 ELECTRONICS -- SEMICONDUCTOR
Applied Materials(a) 851 28,508
Intel Corp 3,374 284,892
KLA-Tencor Corp(a) 12 359
LSI Logic(a) 20 414
Micron Technology(a) 330 11,014
National Semiconductor(a) 423 5,208
Rockwell International 137 5,574
Texas Instruments 556 32,978
- ---------------------------------------------------------------
368,947
- ---------------------------------------------------------------
0.02 ENGINEERING & CONSTRUCTION
Fluor Corp 12 505
McDermott International 100 2,594
- ---------------------------------------------------------------
3,099
- ---------------------------------------------------------------
1.57 ENTERTAINMENT
Disney (Walt) Co 4,329 149,080
Time Warner 1,168 105,193
Viacom Inc Class B(a) 449 30,757
- ---------------------------------------------------------------
285,030
- ---------------------------------------------------------------
1.85 FINANCIAL
Associates First Capital
Class A 816 63,393
Capital One Financial 100 11,606
Fannie Mae 2,097 130,014
Franklin Resources 300 13,069
Freddie Mac 1,356 64,071
MBIA Inc 12 809
MBNA Corp 1,029 34,472
MGIC Investment 75 4,022
Northern Trust 200 14,725
- ---------------------------------------------------------------
336,181
- ---------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ---------------------------------------------------------------
2.02 FOODS
Archer-Daniels-Midland Co 978 $ 16,748
Bestfoods Inc 488 27,145
Campbell Soup 1,000 54,000
ConAgra Inc 766 19,820
General Mills 104 6,442
Heinz (H J) Co 641 35,335
Hershey Foods 94 5,934
Kellogg Co 570 18,881
Pioneer Hi-Bred International 354 11,195
Quaker Oats 19 1,005
Ralston-Purina Group 710 22,853
Sara Lee 1,015 50,877
Sysco Corp 524 12,445
Unilever NV New York
Registered Shrs 1,120 77,840
Wrigley Jr 76 6,816
- ---------------------------------------------------------------
367,336
- ---------------------------------------------------------------
0.13 FOOTWEAR
NIKE Inc Class B 491 21,850
Reebok International(a) 100 2,144
Venator Group(a) 19 273
- ---------------------------------------------------------------
24,267
- ---------------------------------------------------------------
0.04 GAMING
Mirage Resorts(a) 325 6,988
- ---------------------------------------------------------------
0.24 GOLD & PRECIOUS METALS MINING
Barrick Gold 852 13,952
Battle Mountain Gold 332 1,556
Freeport McMoRan Copper &
Gold Class B 327 4,844
Hercules Inc 13 451
Homestake Mining 420 4,331
Nalco Chemical 200 6,863
Newmont Mining 422 7,965
Placer Dome 333 3,455
- ---------------------------------------------------------------
43,417
- ---------------------------------------------------------------
0.02 HARDWARE & TOOLS
Snap-On Inc 100 3,550
Stanley Works 12 524
- ---------------------------------------------------------------
4,074
- ---------------------------------------------------------------
10.01 HEALTH CARE DRUGS - PHARMACEUTICALS
Abbott Laboratories 3,104 129,010
Allergan Inc 100 5,225
ALZA Corp 12 466
American Home Products 2,754 141,831
Bristol-Myers Squibb 2,153 245,307
Cardinal Health 72 6,916
Johnson & Johnson 2,683 207,262
- ---------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ---------------------------------------------------------------
Lilly (Eli) & Co 2,228 $ 149,833
Merck & Co 2,387 294,347
Monsanto Co 1,189 67,327
Pfizer Inc 2,549 280,390
Pharmacia & Upjohn 1,033 48,938
Schering-Plough Corp 1,281 123,937
Warner-Lambert Co 1,537 116,140
- ---------------------------------------------------------------
1,816,929
- ---------------------------------------------------------------
1.48 HEALTH CARE RELATED
Bard (C R) Inc 100 4,050
Bausch & Lomb 100 5,112
Baxter International 484 28,919
Becton Dickinson 317 26,192
Biomet Inc 16 500
Boston Scientific(a) 128 9,808
Columbia/HCA Healthcare 1,290 36,765
Guidant Corp 97 7,208
HBO & Co 656 19,332
HEALTHSOUTH Corp(a) 555 13,944
Humana Inc(a) 423 11,500
Mallinckrodt Inc 10 277
Manor Care 100 3,731
Medtronic Inc 1,008 62,433
St Jude Medical(a) 13 397
Shared Medical Systems 100 6,788
Tenet Healthcare(a) 500 14,969
United Healthcare 124 7,006
US Surgical 200 9,213
- ---------------------------------------------------------------
268,144
- ---------------------------------------------------------------
0.15 HOUSEHOLD FURNITURE & APPLIANCES
Maytag Corp 13 572
Rubbermaid Inc 421 14,025
Whirlpool Corp 200 12,100
- ---------------------------------------------------------------
26,697
- ---------------------------------------------------------------
1.59 HOUSEHOLD PRODUCTS
Black & Decker 13 739
Clorox Co 68 6,970
Colgate-Palmolive Co 494 45,664
Newell Co 422 21,733
Procter & Gamble 2,682 212,884
- ---------------------------------------------------------------
287,990
- ---------------------------------------------------------------
3.52 INSURANCE
Aetna Inc 98 6,793
Allstate Corp 1,864 79,103
American General 460 31,424
American International Group 1,261 190,175
Aon Corp 110 7,480
Chubb Corp 112 8,218
- ---------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ---------------------------------------------------------------
CIGNA Corp 447 $ 29,530
Cincinnati Financial 445 15,909
Conseco Inc 741 31,139
General Re 51 12,087
Hartford Financial Services
Group 556 28,947
Jefferson-Pilot Corp 15 846
Lincoln National 67 6,415
Loews Corp 76 6,128
Progressive Corp 19 2,349
SAFECO Corp 20 901
St Paul Cos 532 19,252
SunAmerica Inc 128 7,864
Torchmark Corp 20 876
Transamerica Corp 17 2,008
Travelers Group 2,253 150,951
UNUM Corp 19 1,001
- ---------------------------------------------------------------
639,396
- ---------------------------------------------------------------
0.19 INSURANCE BROKERS
Marsh & McLennan 568 34,684
- ---------------------------------------------------------------
1.27 INVESTMENT BANK/BROKER FIRM
Bear Stearns 200 11,250
Lehman Brothers Holdings 100 7,200
Merrill Lynch 519 50,603
Morgan (J P) & Co 317 39,942
Morgan Stanley Dean Witter
& Co 1,189 103,517
Schwab (Charles) Corp 474 17,775
- ---------------------------------------------------------------
230,287
- ---------------------------------------------------------------
0.04 IRON & STEEL
Allegheny Teledyne 324 6,480
Armco Inc(a) 15 83
Bethlehem Steel(a) 16 173
Nucor Corp 12 522
USX-US Steel Group 12 323
Worthington Industries 14 202
- ---------------------------------------------------------------
7,783
- ---------------------------------------------------------------
0.00 LEISURE TIME
Brunswick Corp 14 272
- ---------------------------------------------------------------
0.13 LODGING -- HOTELS
Harrah's Entertainment(a) 14 296
Hilton Hotels 335 8,438
Marriott International Class A 468 15,210
- ---------------------------------------------------------------
23,944
- ---------------------------------------------------------------
0.61 MACHINERY
Aeroquip-Vickers Inc 100 5,006
Case Corp 20 679
Caterpillar Inc 644 31,234
Cooper Industries 17 891
Deere & Co 566 22,746
- ---------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ---------------------------------------------------------------
Dover Corp 546 $ 15,868
Harnischfeger Industries 100 2,487
Ingersoll-Rand Co 423 18,691
NACCO Industries Class A 100 11,531
Timken Co 100 2,356
- ---------------------------------------------------------------
111,489
- ---------------------------------------------------------------
1.28 MANUFACTURING
AlliedSignal Inc 1,279 55,636
Corning Inc 552 16,939
Eaton Corp 11 718
FMC Corp(a) 100 6,400
Illinois Tool Works 564 31,619
Minnesota Mining &
Manufacturing 568 42,529
Pall Corp 18 405
Parker-Hannifin Corp 16 549
Raychem Corp 12 374
Textron Inc 108 7,979
Thermo Electron(a) 421 9,683
Tyco International Ltd 974 60,327
- ---------------------------------------------------------------
233,158
- ---------------------------------------------------------------
0.10 METALS MINING
Alcan Aluminium Ltd 332 8,466
Cyprus Amax Minerals 13 162
Inco Ltd 423 4,627
Phelps Dodge 100 5,556
- ---------------------------------------------------------------
18,811
- ---------------------------------------------------------------
0.25 NATURAL GAS
Coastal Corp 530 17,357
Columbia Energy Group 150 7,978
Consolidated Natural Gas 13 672
Eastern Enterprises 100 3,994
NICOR Inc 100 3,850
Sempra Energy(a) 418 10,530
- ---------------------------------------------------------------
44,381
- ---------------------------------------------------------------
0.14 OFFICE EQUIPMENT & SUPPLIES
Avery Dennison 14 806
Ikon Office Solutions 19 204
Moore Corp Ltd 12 129
Pitney-Bowes Inc 490 24,745
- ---------------------------------------------------------------
25,884
- ---------------------------------------------------------------
6.57 OIL & GAS RELATED
Amerada Hess 13 659
Amoco Corp 1,740 72,645
Anadarko Petroleum 200 6,862
Apache Corp 13 344
Ashland Inc 200 10,375
Atlantic Richfield 511 34,620
Baker Hughes 324 7,918
- ---------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ---------------------------------------------------------------
Burlington Resources 325 $ 11,781
Chevron Corp 1,131 93,449
Dresser Industries 324 11,441
Enron Corp 509 26,945
Exxon Corp 4,819 337,932
Halliburton Co 472 17,139
Kerr-McGee Corp 100 5,131
Mobil Corp 1,315 91,721
Occidental Petroleum 847 18,846
Oryx Energy(a) 15 277
Pennzoil Co 100 4,500
Phillips Petroleum 473 20,901
Rowan Cos(a) 12 170
Royal Dutch Petroleum New York
Registry 1.25 Gldr Shrs 4,208 214,608
Schlumberger Ltd 925 56,020
Sonat Inc 12 351
Sun Co 200 7,488
Texaco Inc 1,077 65,495
USX-Marathon Group 489 16,687
Union Pacific Resources Group 335 4,690
Unocal Corp 562 18,406
Western Atlas(a) 100 6,544
Williams Cos 910 29,177
- ---------------------------------------------------------------
1,193,122
- ---------------------------------------------------------------
0.52 PAPER & FOREST PRODUCTS
Boise Cascade 100 2,800
Champion International 13 552
Fort James 537 18,124
Georgia-Pacific Corp 13 668
Kimberly-Clark Corp 1,276 57,340
Louisiana-Pacific Corp 15 299
Mead Corp 15 451
Union Camp 200 8,488
Westvaco Corp 14 351
Weyerhaeuser Co 131 5,502
Willamette Industries 16 453
- ---------------------------------------------------------------
95,028
- ---------------------------------------------------------------
0.70 PERSONAL CARE
Alberto-Culver Class B 100 2,544
Avon Products 87 7,525
Gillette Co 2,236 117,110
International Flavors &
Fragrances 15 630
- ---------------------------------------------------------------
127,809
- ---------------------------------------------------------------
0.02 PHOTOGRAPHY & IMAGING
Polaroid Corp 100 3,300
- ---------------------------------------------------------------
0.48 POLLUTION CONTROL
Browning-Ferris Industries 328 11,541
Laidlaw Inc 746 7,134
- ---------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ---------------------------------------------------------------
Waste Management(a) 1,254 $ 69,121
- ---------------------------------------------------------------
87,796
- ---------------------------------------------------------------
0.43 PUBLISHING
American Greetings Class A 10 462
Donnelley (R R) & Sons 20 850
Dow Jones 13 706
Gannett Co 486 31,074
Harcourt General 10 564
Knight-Ridder Inc 12 633
McGraw-Hill Cos 14 1,147
Meredith Corp 100 4,181
New York Times Class A 526 16,175
Times Mirror Series A 13 781
Tribune Co 317 21,318
- ---------------------------------------------------------------
77,891
- ---------------------------------------------------------------
0.45 RAILROADS
Burlington Northern Santa Fe 103 10,603
CSX Corp 543 21,958
Norfolk Southern 853 25,483
Union Pacific 562 23,604
- ---------------------------------------------------------------
81,648
- ---------------------------------------------------------------
0.58 RESTAURANTS
Darden Restaurants 21 364
McDonald's Corp 1,352 90,331
Tricon Global Restaurants(a) 421 14,893
Wendy's International 18 402
- ---------------------------------------------------------------
105,990
- ---------------------------------------------------------------
5.11 RETAIL
Albertson's Inc 561 26,963
American Stores 338 7,837
AutoZone Inc(a) 421 14,419
CVS Corp 826 33,866
Circuit City Stores-CarMax Group 14 724
Consolidated Stores(a) 29 975
Costco Cos(a) 540 30,645
Dayton Hudson 886 42,362
Dillard's Inc Class A 15 516
Dollar General 300 12,300
Federated Department Stores(a) 538 28,480
Gap Inc 564 33,629
Giant Food Class A 100 4,325
Home Depot 3,060 128,137
K mart Corp(a) 768 12,528
Kroger Co(a) 567 26,826
Limited Inc 479 12,843
May Department Stores 552 35,432
Mercantile Stores 100 7,931
- ---------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ---------------------------------------------------------------
Meyer (Fred) Inc(a) 300 $ 13,219
Nordstrom Inc 400 12,488
Penney (J C) Co 464 27,231
Rite Aid 334 13,193
Sears Roebuck 557 28,268
TJX Cos 846 19,881
Tandy Corp 14 795
Toys "R" Us(a) 340 7,735
Walgreen Co 1,023 44,181
Wal-Mart Stores 4,480 282,800
Winn-Dixie Stores 421 17,419
- ---------------------------------------------------------------
927,948
- ---------------------------------------------------------------
0.21 SAVINGS & LOAN
Ahmanson (H F) & Co 13 859
Golden West Financial 15 1,386
Washington Mutual 904 36,104
- ---------------------------------------------------------------
38,349
- ---------------------------------------------------------------
1.60 SERVICES
Automatic Data Processing 492 33,302
Block (H & R) Inc 15 637
Cendant Corp(a) 1,719 29,760
Ceridian Corp(a) 11 629
Computer Sciences(a) 102 6,528
Dun & Bradstreet(a) 324 8,890
Eastman Kodak 513 43,156
Ecolab Inc 300 9,412
Equifax Inc 421 17,208
First Data 960 27,780
IMS Health 106 6,658
Interpublic Group 18 1,084
Omnicom Group 443 23,258
R H Donnelley 324 891
Ryder System 200 5,800
Service Corp International 565 21,399
Xerox Corp 514 54,259
- ---------------------------------------------------------------
290,651
- ---------------------------------------------------------------
0.00 SPECIALTY PRINTING
Deluxe Corp 11 375
- ---------------------------------------------------------------
0.35 TELECOMMUNICATIONS -- CELLULAR
& WIRELESS
AirTouch Communications(a) 931 54,754
NEXTEL Communications Class
A(a) 300 8,034
- ---------------------------------------------------------------
62,788
- ---------------------------------------------------------------
2.65 TELECOMMUNICATIONS -- LONG DISTANCE
AT&T Corp 3,267 198,062
General Instrument(a) 421 11,420
MCI Communications 1,457 94,341
- ---------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ---------------------------------------------------------------
Sprint Corp 982 $ 68,740
WorldCom Inc(a) 2,065 109,187
- ---------------------------------------------------------------
481,750
- ---------------------------------------------------------------
4.17 TELEPHONE
ALLTEL Corp 670 28,098
Ameritech Corp 2,219 109,147
Bell Atlantic 3,320 150,645
BellSouth Corp 2,151 146,940
Frontier Corp 423 14,197
GTE Corp 1,929 104,889
SBC Communications 3,604 147,314
US WEST 1,043 55,670
- ---------------------------------------------------------------
756,900
- ---------------------------------------------------------------
0.05 TEXTILE -- APPAREL MANUFACTURING
Fruit of the Loom Class A(a) 10 312
Liz Claiborne 200 7,725
VF Corp 17 800
- ---------------------------------------------------------------
8,837
- ---------------------------------------------------------------
0.02 TEXTILE -- HOME FURNISHINGS
Springs Industries Class A 100 3,831
- ---------------------------------------------------------------
1.27 TOBACCO
Fortune Brands 324 11,968
Philip Morris 4,792 209,950
UST Inc 326 8,802
- ---------------------------------------------------------------
230,720
- ---------------------------------------------------------------
0.11 TOYS
Hasbro Inc 18 651
Mattel Inc 491 18,873
- ---------------------------------------------------------------
19,524
- ---------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $15,434,875) 16,160,474
- ---------------------------------------------------------------
11.01 SHORT-TERM INVESTMENTS
0.55 US GOVERNMENT OBLIGATIONS
US Treasury Bills
10/15/1998(c)
(Cost $98,923) $ 100,000 98,923
- ---------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- ---------------------------------------------------------------
10.46 REPURCHASE AGREEMENTS
Repurchase Agreement
with State Street dated
7/31/1998 due 8/3/1998 at
5.580%, repurchased
at $1,900,884 (Collateralized
by US Treasury Bonds
due 8/15/2019 at 8.125% value
$1,946,839)
(Cost $1,900,000) $ 1,900,000 $ 1,900,000
- ---------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $1,998,923) 1,998,923
- ---------------------------------------------------------------
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $17,433,798)
(Cost for Income Tax Purposes
$17,434,033) $ 18,159,397
===============================================================
Worldwide Capital Goods Fund
94.99 COMMON STOCKS
5.81 ITALY
ENI SpA Sponsored
ADR Representing
10 Ord Shrs OG 6,200 $ 400,675
Telecom Italia SpA TN 46,000 397,173
- --------------------------------------------------------------
797,848
- --------------------------------------------------------------
1.09 MEXICO
Cemex SA de CV
Participation
Certificates BD 30,000 111,136
Series A Shrs BD 10,000 38,334
- --------------------------------------------------------------
149,470
- --------------------------------------------------------------
2.38 SPAIN
Endesa SA Sponsored
ADR Representing
Shrs EU 15,000 327,188
- --------------------------------------------------------------
3.73 SWEDEN
Volvo AB Sponsored
ADR Representing
Class B Shrs AM 16,700 512,481
- --------------------------------------------------------------
2.44 UNITED KINGDOM
Denison International PLC
ADR Representing
Ord Shrs(a) MY 18,400 335,800
- --------------------------------------------------------------
79.54 UNITED STATES
Alliant
Techsystems(a) AE 6,300 409,894
Boeing Co AE 3,400 131,962
CNF Transportation TK 9,800 423,850
- --------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- --------------------------------------------------------------
Camco International OG 10,500 $ 745,500
Dana Corp AP 9,400 467,650
Dril-Quip Inc(a) OG 31,900 490,462
du Pont (E I) de
Nemours CH 6,700 415,400
Dynamex Inc(a) AF 24,500 281,750
Federal-Mogul Corp AP 5,900 354,738
General Electric EE 6,500 580,531
Gleason Corp MY 9,500 237,500
Global Industries
Ltd(a) OG 41,000 509,938
Hawk Corp(a) AE 22,000 376,750
Howmet International AE 26,000 329,875
IRI International(a) OG 8,900 76,206
Ingersoll-Rand Co MY 10,400 459,550
Lockheed Martin AE 4,900 488,469
Lufkin Industries OG 6,000 177,375
Martin Marietta
Materials BD 7,800 386,100
Motorola Inc CM 8,200 428,450
Northern States
Power EU 13,800 363,113
Owens-Illinois
Inc(a) CT 13,800 608,925
Southdown Inc BD 6,700 419,169
Textron Inc MG 6,000 443,250
TransTechnology Corp MG 13,800 351,900
Tyco International
Ltd MG 9,200 569,825
USX-Marathon Group OG 11,800 402,675
- --------------------------------------------------------------
10,930,807
- --------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $12,531,110) 13,053,594
- --------------------------------------------------------------
5.01 SHORT-TERM INVESTMENTS --
REPURCHASE AGREEMENTS
5.01 UNITED STATES
Repurchase Agreement
with State Street dated
7/31/1998 due 8/3/1998 at
5.580%, repurchased at
$688,320 (Collaterized
by US Treasury Bonds due
8/15/2019 at 8.125% value
$703,756)
(Cost $688,000) RA $ 688,000 688,000
- --------------------------------------------------------------
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $13,219,110)
(Cost for Income Tax Purposes
$13,312,226) $ 13,741,594
==============================================================
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- --------------------------------------------------------------
Worldwide Communications Fund
88.84 COMMON STOCKS
0.90 ARGENTINA
Telecom Argentina
STET-France
Telecom SA
Sponsored ADR
Representing 5 Class
B Ord Shrs TN 40,600 $ 1,441,300
Telefonica de Argentina
SA Sponsored ADR
Representing 10
Class B Ord Shrs TN 32,000 1,158,000
- --------------------------------------------------------------
2,599,300
- --------------------------------------------------------------
0.71 BERMUDA
Iridium World
Communications
Ltd(a) TC 47,000 2,044,500
- --------------------------------------------------------------
5.32 CANADA
BCE Inc TN 54,000 2,176,875
Clearnet Communications
Non-Voting
Class A(a) TC 165,000 1,815,000
MetroNet
Communications
Non-Voting
Class B(a) TN 149,400 4,313,925
Northern Telecom Ltd CM 84,200 4,946,750
Teleglobe Inc TL 80,000 2,045,000
- --------------------------------------------------------------
15,297,550
- --------------------------------------------------------------
1.93 FINLAND
Nokia Corp Sponsored
ADR Representing
Class A Shrs CM 63,800 5,558,575
- --------------------------------------------------------------
1.36 FRANCE
Alcatel Alsthom CGE
Sponsored ADR
Representing 1/5
Ord Shrs CM 100,000 3,918,750
- --------------------------------------------------------------
1.33 GERMANY
Mannesmann AG MY 36,000 3,835,601
- --------------------------------------------------------------
0.70 IRELAND
Saville Systems PLC
Sponsored ADR
Representing Ord
Shrs(a) CO 80,200 2,025,050
- --------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- --------------------------------------------------------------
2.63 ITALY
Telecom Italia Mobile
SpA TC 562,700 $ 3,755,289
Telecom Italia SpA TN 442,000 3,816,317
- --------------------------------------------------------------
7,571,606
- --------------------------------------------------------------
1.04 LUXEMBOURG
Millicom International
Cellular SA(a) TC 64,000 2,992,000
- --------------------------------------------------------------
1.08 NETHERLANDS
Equant NV New
York Shrs(a) CO 74,000 3,108,000
- --------------------------------------------------------------
1.00 PORTUGAL
Portugal Telecom SA
Sponsored ADR
Representing Ord
Shrs TN 51,600 2,889,600
- --------------------------------------------------------------
1.79 SPAIN
Telefonica SA TN 29,454 1,437,209
Telefonica SA
Sponsored ADR
Representing 3 Shrs TN 25,563 3,719,417
- --------------------------------------------------------------
5,156,626
- --------------------------------------------------------------
1.22 SWEDEN
Ericsson (L M) Telephone
Sponsored ADR
Representing Series
B Shrs CM 127,000 3,516,313
- --------------------------------------------------------------
1.90 UNITED KINGDOM
COLT Telecom Group
PLC Sponsored
ADR Representing
4 Ord Shrs(a) TN 29,000 5,452,000
- --------------------------------------------------------------
65.93 UNITED STATES
AirTouch
Communications(a) TC 66,500 3,911,031
America Online(a) SV 61,000 7,137,000
Ameritech Corp TN 79,400 3,905,487
Ascend
Communications(a) CO 75,000 3,335,157
Bell Atlantic TN 77,910 3,535,166
BellSouth Corp TN 51,800 3,538,587
Brightpoint Inc(a) TC 146,500 2,087,625
CellStar Corp(a) TC 140,000 1,960,000
Century Telephone
Enterprises TN 71,350 3,549,662
CIENA Corp(a) CM 84,400 6,250,875
- --------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- --------------------------------------------------------------
Cisco Systems(a) CO 57,850 $ 5,539,137
Comverse
Technology(a) CM 59,000 3,012,687
DSC Communications(a)CM 160,000 4,855,002
e.spire
Communications(a) TN 220,000 4,400,000
EchoStar
Communications
Class A(a) BR 146,900 3,516,419
Evolving Systems(a) CO 173,000 929,875
Exodus
Communications(a) CM 67,400 2,249,475
GST
Tele-
communications(a) TC 273,500 3,726,437
GTE Corp TN 48,000 2,610,000
General Motors
Class H AM 78,900 3,363,112
Global TeleSystems
Group(a) TL 135,000 7,222,500
Hyperion
Telecommunications
Class A(a) TN 151,000 2,038,500
ICG Communications(a)TL 137,000 4,041,500
IDT Corp(a) TL 120,000 2,910,000
ITC DeltaCom(a) TL 95,000 4,536,250
IXC Communications(a)TL 60,700 2,746,675
Intermedia
Communications(a) TN 159,600 5,905,200
International
Telecommunication
Data Systems(a) SV 115,750 3,407,391
Level 3
Communications(a) TL 45,500 3,753,750
Loral Space &
Communications
Ltd(a) EL 134,000 3,710,125
Lucent Technologies CM 54,000 4,991,625
MCI Communications TL 80,000 5,180,000
MGC
Communications(a) TL 150,000 2,250,000
McLeodUSA Inc
Class A(a) TL 52,400 1,958,450
NTL Inc(a) CA 67,000 3,634,750
NEXTEL Communications
Class A(a) TC 139,600 3,738,666
NEXTLINK
Communications
Class A(a) TL 59,100 2,194,087
P-COM Inc(a) CM 345,000 2,005,313
- --------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- --------------------------------------------------------------
Pacific Gateway
Exchange(a) TL 73,000 $ 2,920,000
PairGain
Technologies(a) CM 204,300 2,758,050
Primus
Telecommunications
Group(a) TL 100,000 2,012,500
QUALCOMM Inc(a) CM 55,000 3,428,907
Qwest Communications
International(a) TL 100,000 4,037,500
SBC Communications TN 90,900 3,715,537
Sprint Corp TL 51,900 3,633,000
STAR
Tele-
communications(a) TL 124,800 2,293,200
Teligent Inc
Class A(a) TC 86,150 2,552,194
Tellabs Inc(a) CM 61,000 4,592,157
Uniphase Corp(a) EL 70,000 3,500,000
US WEST TN 74,300 3,965,763
Western Wireless
Class A(a) TC 100,000 2,081,250
WinStar
Communications(a) TC 78,200 2,580,600
WorldCom Inc(a) TL 112,000 5,922,000
- --------------------------------------------------------------
189,630,174
- --------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $213,309,785) 255,595,645
- --------------------------------------------------------------
1.09 PREFERRED STOCKS
1.09 BRAZIL
Telecomunicacoes
Brasileiras SA
Sponsored ADR
Representing 1,000
Pfd
(Cost $2,993,954) TN 25,800 3,123,413
- --------------------------------------------------------------
10.07 SHORT-TERM INVESTMENTS --
REPURCHASE AGREEMENTS
10.07 UNITED STATES
Repurchase Agreement
with State Street dated
7/31/1998 due 8/3/1998 at
5.580%, repurchased at
$28,970,465
(Collateralized by US
Treasury Bonds
due 8/15/2020 at 8.750%
value $29,566,363) (Cost
$28,957,000) RA $ 28,957,000 28,957,000
- --------------------------------------------------------------
<PAGE>
Shares or
Industry Principal
% Description Code Amount Value
- --------------------------------------------------------------
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $245,260,739)
(Cost for Income Tax Purposes
$245,429,674 $ 287,676,058
==============================================================
(a) Security is non-income producing.
(b) Securities acquired pursuant to Rule 144A. The Fund deems such securities
to be "liquid" because an institutional market exists.
(c) Security has been designated as collateral for future contracts.
(d) Also represents cost for income tax purposes.
(e) Security has no market value at July 31, 1998.
(f) The following are restricted securities at July 31, 1998:
Value as
Acquisition Acquisition % of
Description Date(s) Cost Net Assets
- ------------------------------------------------------
Asian Growth Fund
BSES Ltd
Regulation
S GDR
Representing
3 Ord Shrs 2/27/98 $ 273,000 1.17%
Mahanagar Tele-
phone Nigam
Ltd Regulation
S Sponsored
GDR Repre-
senting 2 12/3/97-
Ord Shrs 12/19/97 321,450 2.46
State Bank of
India Regulation
S GDR
Representing 2
Ord Shrs 7/22/97 408,000 1.41
Videsh Sanchar
Nigam Ltd
Regulation S
GDR Repre-
senting 1/2
Ord Shr 2/3/98 223,929 1.58
- -----------------------------------------------------
6.62%
<PAGE>
Value as
Acquisition Acquisition % of
Description Date(s) Cost Net Assets
- ------------------------------------------------------
Latin American Growth Fund
Cia Brasileira de
Distribuicao Grupo
Pao de Acucar
Sponsored ADR
Representing 1,000
Regulations S 5/28/97-
Pfd Shrs 7/9/97 $ 969,138 2.61%
Consorcio ARA SA
de CV Regulation
S Sponsored ADR
Representing 10 1/7/97-
Shrs 10/17/97 63,175 0.13
Grupo Accion SA
de CV Regulation
S Sponsored ADR
Representing 10
Series B Shrs 6/19/97 720,000 0.84
Rossi Residencial SA
GDR Regulation S
Representing 5
Ord Shrs 7/15/97 820,400 0.59
- ------------------------------------------------------
4.17%
======================================================
----------------------------
Futures Contracts
Open at July 31, 1998:
- ------------------------------------------------------------
Number of Face Market
Position Contracts Amount Value
- ------------------------------------------------------------
S & P 500 Index Fund
S&P 500 Index
(Expires September
1998) Long 6 $ 1,500 $ 1,684,500
---------------------------
Summary of Investments by Industry
% of
Industry Investment
Industry Code Securities Value
- --------------------------------------------------------------------
Asian Growth Fund
Agricultural Products AG 1.71% $ 208,379
Automobiles AM 0.69 83,650
Banks BK 13.43 1,637,296
Broadcasting BR 1.63 198,941
Chemicals CH 0.42 51,160
- --------------------------------------------------------------------
<PAGE>
% of
Industry Investment
Industry Code Securities Value
- --------------------------------------------------------------------
Asian Growth Fund (continued)
Communications -Equipment
& Manufacturing CM 0.04% $ 5,234
Conglomerates CG 6.15 749,435
Distribution DB 1.42 173,471
Electric Utilities EU 6.46 787,273
Engineering &
Construction EC 2.40 292,833
Financial FN 1.47 179,550
Foods FD 1.25 152,163
Gaming GM 2.05 249,375
Gold & Precious Metals
Mining GP 3.03 368,874
Health Care Drugs -
Pharmaceuticals HD 1.02 123,750
Health Care Related HC 1.53 186,041
Iron & Steel IS 0.83 100,964
Machinery MY 1.81 221,250
Manufacturing MG 1.74 212,257
Oil & Gas Related OG 2.69 327,335
Real Estate Related RL 11.83 1,442,287
Repurchase Agreements RA 20.03 2,442,000
Retail RT 0.28 33,958
Services SV 0.68 83,250
Telecommunications -
Long Distance TL 13.54 1,650,406
Telephone TN 1.28 156,648
Transportation TR 0.59 71,505
- ---------------------------------------------------------------------
100.00% $12,189,285
=====================================================================
European Small Company Fund
Air Freight AF 1.72% $ 1,140,420
Airlines AR 1.65 1,087,963
Auto Parts AP 0.46 301,527
Banks BK 1.87 1,239,048
Biotechnology BI 2.70 1,783,319
Broadcasting BR 1.57 1,035,359
Building Materials BD 3.55 2,346,630
Cable CA 1.23 813,501
Communications - Equipment
& Manufacturing CM 0.40 265,681
Computer Related CO 10.98 7,266,012
Conglomerates CG 1.07 707,810
Consumer - Jewelry,
Novelties & Gifts CJ 1.12 742,317
Electronics EL 5.76 3,813,052
Engineering &
Construction EC 1.88 1,243,988
Financial FN 0.38 252,762
Foods FD 0.66 436,202
Health Care Drugs -
Pharmaceuticals HD 2.41 1,592,567
<PAGE>
% of
Industry Investment
Industry Code Securities Value
- ---------------------------------------------------------------------
European Small Company Fund (continued)
Health Care Related HC 5.86% $3,879,777
Homebuilding HB 0.62 409,409
Household Furniture &
Appliances HF 2.23 1,475,986
Household Products HP 0.80 529,655
Housewares HW 0.48 316,566
Insurance IN 1.53 1,015,068
Investment Bank/Broker
Firm IV 0.85 560,498
Leisure Time LT 0.64 424,728
Lodging - Hotels LH 3.85 2,544,324
Machinery MY 5.49 3,629,573
Manufacturing MG 3.31 2,190,741
Photography & Imaging PI 1.24 818,054
Pollution Control PC 0.31 203,070
Publishing PB 0.60 397,548
Real Estate Investment
Trust RE 1.45 957,573
Restaurants RS 5.51 3,645,559
Retail RT 2.38 1,575,221
Services SV 15.28 10,108,654
Telecommunications -
Cellular & Wireless TC 2.32 1,537,609
Telecommunications -
Long Distance TL 1.96 1,299,801
Textile - Apparel
Manufacturing TA 2.10 1,386,092
Textile - Home
Furnishings TH 0.58 383,069
Toys TY 1.20 795,889
- ----------------------------------------------------------------------
100.00% $66,152,622
======================================================================
Latin American Growth Fund
Aluminum AL 1.39% $ 481,491
Banks BK 6.88 2,380,321
Beverages BV 9.00 3,115,562
Broadcasting BR 2.00 693,157
Building Materials BD 3.31 1,147,004
Chemicals CH 5.24 1,813,687
Conglomerates CG 3.01 1,041,081
Electric Utilities EU 14.49 5,012,204
Engineering &
Construction EC 0.84 292,558
Gold & Precious Metals
Mining GP 1.20 415,503
Homebuilding HB 3.89 1,345,058
Iron & Steel IS 3.34 1,156,807
Lodging - Hotels LH 1.67 577,546
Machinery MY 1.15 397,915
Oil & Gas Related OG 5.73 1,981,083
Real Estate Investment
Trust RE 1.72 595,000
Repurchase Agreements RA 1.60 553,000
Retail RT 9.34 3,231,501
<PAGE>
% of
Industry Investment
Industry Code Securities Value
- ---------------------------------------------------------------------
Latin American Growth Fund (continued)
Telecommunications - Cellular
& Wireless TC 1.47% $ 507,653
Telecommunications -
Long Distance TL 6.50 2,247,792
Telephone TN 13.66 4,725,472
Textile - Apparel
Manufacturing TA 2.57 887,704
- ---------------------------------------------------------------------
100.00% $ 34,599,099
=====================================================================
Worldwide Capital Goods Fund
Aerospace & Defense AE 12.64% $ 1,736,950
Air Freight AF 2.05 281,750
Auto Parts AP 5.99 822,388
Automobiles AM 3.73 512,481
Building Materials BD 6.95 954,739
Chemicals CH 3.02 415,400
Communications - Equipment
& Manufacturing CM 3.12 428,450
Containers CT 4.43 608,925
Electric Utilities EU 5.02 690,301
Electrical Equipment EE 4.22 580,531
Machinery MY 7.52 1,032,850
Manufacturing MG 9.93 1,364,975
Oil & Gas Related OG 20.40 2,802,831
Repurchase Agreements RA 5.01 688,000
Telephone TN 2.89 397,173
Truckers TK 3.08 423,850
- ---------------------------------------------------------------------
100.00% $13,741,594
=====================================================================
Worldwide Communications Fund
Automobiles AM 1.17% $ 3,363,112
Broadcasting BR 1.22 3,516,419
Cable CA 1.26 3,634,750
Communications - Equipment
& Manufacturing CM 18.10 52,084,479
Computer Related CO 5.19 14,937,219
Electronics EL 2.51 7,210,125
Machinery MY 1.33 3,835,601
Repurchase Agreements RA 10.07 28,957,000
Services SV 3.67 10,544,391
Telecommunications - Cellular
& Wireless TC 11.56 33,244,592
Telecommunications -
Long Distance TL 20.74 59,656,412
Telephone TN 23.18 66,691,958
- ---------------------------------------------------------------------
100.00% $287,676,058
=====================================================================
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
July 31, 1998
Asian European Small Latin American
Growth Fund Company Fund Growth Fund
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investment Securities:
At Cost(a) $ 19,411,617 $ 59,540,440 $ 42,785,512
===============================================================================================
At Value(a) $ 12,189,285 $ 66,152,622 $ 34,599,099
Cash 68,293 9,328,122 0
Foreign Currency (Cost $24,634, $0 and
$55,238, respectively) 22,778 0 55,224
Receivables:
Investment Securities Sold 0 3,228,698 14,858
Fund Shares Sold 3,205 1,087,203 28,862
Dividends and Interest 25,345 156,898 147,654
Appreciation on Forward Foreign Currency
Contracts 0 1,548 0
Prepaid Expenses and Other Assets 11,157 19,486 21,374
- ---------------------------------------------------------------------------------------------
TOTAL ASSETS 12,320,063 79,974,577 34,867,071
- ---------------------------------------------------------------------------------------------
LIABILITIES
Payables:
Custodian 0 0 4,690
Foreign Sub-Custodian (Cost $0,
$2,224,047 and $0, respectively) 0 2,223,420 0
Distributions to Shareholders 1,406 0 0
Fund Shares Repurchased 86,265 6,135,249 97,780
Accrued Distribution Expenses 2,769 16,122 7,703
Accrued Expenses and Other Payables 27,060 67,472 31,603
- ---------------------------------------------------------------------------------------------
TOTAL LIABILITIES 117,500 8,442,263 141,776
- ---------------------------------------------------------------------------------------------
Net Assets at Value $ 12,202,563 $ 71,532,314 $ 34,725,295
=============================================================================================
NET ASSETS
Paid-in Capital(b) $ 28,150,100 $ 56,560,365 $ 47,007,382
Accumulated Undistributed (Distributions in Excess of)
Net Investment Income 70,788 (13,865) (42,636)
Accumulated Undistributed Net Realized Gain (Loss) on
Investment Securities and Foreign
Currency Transactions (8,794,080) 8,375,102 (4,050,209)
Net Appreciation (Depreciation) of Investment
Securities and Foreign Currency
Transactions (7,224,245) 6,610,712 (8,189,242)
- ----------------------------------------------------------------------------------------------
Net Assets at Value $ 12,202,563 $ 71,532,314 $ 34,725,295
==============================================================================================
Shares Outstanding 3,622,146 4,567,442 3,105,195
Net Asset Value, Offering and
Redemption Price per Share $ 3.37 $ 15.66 $ 11.18
</TABLE>
(a)Investment securities at cost and value at July 31, 1998 include repurchase
agreements of $2,442,000 and $553,000 for Asian Growth and Latin American
Growth Funds, respectively.
(b)The Fund has 800 million authorized shares of common stock, par value of
$0.01 per share. Of such shares, 100 million have been allocated to each
individual Fund and/or class.
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities (Continued)
July 31, 1998
Worldwide Worldwide
Capital Communications
Realty Fund Goods Fund Fund
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investment Securities:
At Cost(a) $ 26,324,022 $ 13,219,110 $ 245,260,739
==================================================================================================================
At Value(a) $ 22,256,454 $ 13,741,594 $ 287,676,058
Cash 468,476 564 22,180
Foreign Currency (Cost $0, $0, $784, respectively) 0 0 784
Receivables:
Investment Adviser 16,844 0 0
Investment Securities Sold 890,107 427,773 0
Fund Shares Sold 59,388 58,109 2,278,028
Dividends and Interest 21,645 1,319 143,661
Prepaid Expenses and Other Assets 444,018 27,866 56,640
- ------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 24,156,932 14,257,225 290,177,351
- ------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payables:
Distributions to Shareholders 16,682 0 0
Investment Securities Purchased 0 1,036,273 3,223,698
Fund Shares Repurchased 570,660 98,210 10,297,185
Accrued Distribution Expenses 6,349 3,024 57,894
Accrued Expenses and Other Payables 15,115 24,293 22,068
- ------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 608,806 1,161,800 13,600,845
- ------------------------------------------------------------------------------------------------------------------
Net Assets at Value $ 23,548,126 $ 13,095,425 $ 276,576,506
==================================================================================================================
NET ASSETS
Paid-in Capital(b) $ 26,236,566 $ 12,375,244 $ 229,125,358
Accumulated Undistributed (Distributions in Excess of) Net
Investment Income 10,184 1,853 (3,205)
Accumulated Undistributed Net Realized Gain on Investment
Securities and Foreign Currency Transactions 1,368,952 195,844 5,039,151
Net Appreciation (Depreciation) of Investment
Securities and Foreign Currency Transactions (4,067,576) 522,484 42,415,202
- ------------------------------------------------------------------------------------------------------------------
Net Assets at Value $ 23,548,126 $ 13,095,425 $ 276,576,506
==================================================================================================================
Shares Outstanding 2,573,024 1,172,201 14,114,148
Net Asset Value, Offering and Redemption Price per Share $ 9.15 $ 11.17 $ 19.60
==================================================================================================================
(a)Investment securities at cost and value at July 31, 1998 include repurchase
agreements of $400,000, $688,000 and $28,957,000 for Realty, Worldwide
Capital Goods and Worldwide Communications Funds, respectively.
(b)The Fund has 800 million authorized shares of common stock, par value of
$0.01 per share. Of such shares, 100 million have been allocated to each
individual Fund and/or class.
See Notes to Financial Statements
<PAGE>
Statement of Assets and Liabilities (Continued)
July 31, 1998
S & P 500
Index Fund
- --------------------------------------------------------------------------------
ASSETS
Investment Securities:
At Cost(a) $ 17,433,798
================================================================================
At Value(a) $ 18,159,397
Cash 27,094
Receivables:
Investment Securities Sold 721
Fund Shares Sold 282,458
Dividends and Interest 14,995
Prepaid Expenses and Other Assets 24,301
- --------------------------------------------------------------------------------
TOTAL ASSETS 18,508,966
- --------------------------------------------------------------------------------
LIABILITIES
Payables:
Distributions to Shareholders 794
Fund Shares Repurchased 131,288
Variation Margin on Futures Contracts 35,675
Accrued Distribution Expenses - Class II 3,071
Accrued Expenses and Other Payables 14,743
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 185,571
- --------------------------------------------------------------------------------
Net Assets at Value $ 18,323,395
================================================================================
NET ASSETS
Paid-in Capital(b) $ 17,480,384
Accumulated Undistributed Net Investment Income 2,494
Accumulated Undistributed Net Realized Gain on Investment Securities,
Foreign Currency Transactions and Futures Contracts 132,722
Net Appreciation of Investment Securities, Foreign Currency Transactions
and Futures Contracts 707,795
- --------------------------------------------------------------------------------
Net Assets at Value, Applicable to Shares Outstanding $ 18,323,395
================================================================================
Net Assets At Value:
Class I $ 3,258,594
================================================================================
Class II $ 15,064,801
================================================================================
Shares Outstanding
Class I 271,329
Class II 1,241,163
Net Asset Value, Offering and Redemption Price per Share
Class I $ 12.01
================================================================================
Class II $ 12.14
================================================================================
(a) Investment securities at cost and value at July 31, 1998 include a
repurchase agreement of $1,900,000.
(b) The Fund has 800 million authorized shares of common stock, par value of
$0.01 per share. Of such shares, 100 million have been allocated to each
individual Fund and/or class.
See Notes to Financial Statements
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
Year Ended July 31, 1998
<S> <C> <C> <C>
Asian European Small Latin American
Growth Fund Company Fund Growth Fund
- -------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
INCOME
Dividends $ 319,966 $ 1,017,494 $ 1,428,006
Interest 126,351 139,692 47,708
Foreign Taxes Withheld (20,851) (145,737) (90,610)
- -------------------------------------------------------------------------------------------------------------------
TOTAL INCOME 425,466 1,011,449 1,385,104
- -------------------------------------------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees 130,604 499,912 552,409
Distribution Expenses 43,535 166,637 184,136
Transfer Agent Fees 156,273 382,417 338,846
Administrative Fees 12,612 19,998 21,048
Custodian Fees and Expenses 55,720 101,083 199,454
Directors' Fees and Expenses 10,103 13,236 14,033
Professional Fees and Expenses 24,801 27,270 28,621
Registration Fees and Expenses 37,997 71,354 59,452
Reports to Shareholders 17,617 35,601 43,519
Other Expenses 6,413 53,973 16,706
- -------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 495,675 1,371,481 1,458,224
Fees and Expenses Absorbed by Investment Adviser (130,660) (14,543) 0
Fees and Expenses Paid Indirectly (17,651) (26,798) (70,249)
- -------------------------------------------------------------------------------------------------------------------
NET EXPENSES 347,364 1,330,140 1,387,975
- -------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 78,102 (318,691) (2,871)
- -------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES
Net Realized Gain (Loss) on:
Investment Securities (5,065,337) 13,934,318 1,435,168
Foreign Currency Transactions (3,540,674) (2,398,318) (2,568,818)
- -------------------------------------------------------------------------------------------------------------------
Total Net Realized Gain (Loss) (8,606,011) 11,536,000 (1,133,650)
- -------------------------------------------------------------------------------------------------------------------
Change in Net Appreciation (Depreciation) of:
Investment Securities (7,816,310) (1,409,851) (27,777,908)
Foreign Currency Transactions (293,483) 3,092,668 (1,217,864)
- -------------------------------------------------------------------------------------------------------------------
Total Net Appreciation (Depreciation) (8,109,793) 1,682,817 (28,995,772)
- -------------------------------------------------------------------------------------------------------------------
NET GAIN (LOSS) ON INVESTMENT SECURITIES AND
FOREIGN CURRENCY TRANSACTIONS (16,715,804) 13,218,817 (30,129,442)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Operations $ (16,637,702) $ 12,900,126 $ (30,132,293)
===================================================================================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
Statement of Operations (Continued)
Year Ended July 31, 1998
<S> <C> <C> <C>
Worldwide Worldwide
Capital Communications
Realty Fund Goods Fund Fund
- -------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
INCOME
Dividends $ 1,608,753 $ 234,827 $ 905,027
Interest 131,189 79,688 782,213
Foreign Taxes Withheld (5,257) (6,313) (53,802)
- -------------------------------------------------------------------------------------------------------------------
TOTAL INCOME 1,734,685 308,202 1,633,438
- -------------------------------------------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees 275,574 117,345 917,111
Distribution Expenses 91,858 45,133 353,045
Transfer Agent Fees 215,561 86,976 405,886
Administrative Fees 15,511 12,708 31,164
Custodian Fees and Expenses 16,964 12,759 30,679
Directors' Fees and Expenses 11,037 10,060 13,809
Professional Fees and Expenses 8,544 24,468 28,966
Registration Fees and Expenses 55,228 29,215 41,809
Reports to Shareholders 31,421 13,404 44,978
Other Expenses 1,873 3,038 9,806
- ------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 723,571 355,106 1,877,253
Fees and Expenses Absorbed by Investment Adviser (275,415) 0 0
Fees and Expenses Paid Indirectly (7,376) (4,931) (13,601)
- -------------------------------------------------------------------------------------------------------------------
NET EXPENSES 440,780 350,175 1,863,652
- -------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 1,293,905 (41,973) (230,214)
- -------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES
Net Realized Gain (Loss) on:
Investment Securities 4,297,291 1,164,694 6,149,500
Foreign Currency Transactions (92,060) (11,762) (62,002)
- -------------------------------------------------------------------------------------------------------------------
Total Net Realized Gain 4,205,231 1,152,932 6,087,498
- -------------------------------------------------------------------------------------------------------------------
Change in Net Appreciation (Depreciation) of:
Investment Securities (6,239,702) (1,863,495) 30,126,785
Foreign Currency Transactions (27,641) (15,442) 194,991
- -------------------------------------------------------------------------------------------------------------------
Total Net Appreciation (Depreciation) (6,267,343) (1,878,937) 30,321,776
- -------------------------------------------------------------------------------------------------------------------
NET GAIN (LOSS) ON INVESTMENT SECURITIES AND
FOREIGN CURRENCY TRANSACTIONS (2,062,112) (726,005) 36,409,274
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Operations $ (768,207) $ (767,978) $ 36,179,060
===================================================================================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
Statement of Operations (Continued)
Period Ended July 31, 1998 (Note 1)
S & P 500
Index Fund
- --------------------------------------------------------------------------------
INVESTMENT INCOME
INCOME
Dividends $ 65,357
Interest 53,728
Foreign Taxes Withheld (605)
- --------------------------------------------------------------------------------
TOTAL INCOME 118,480
- --------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees 13,759
Distribution Expenses - Class II 10,013
Transfer Agent Fees 7,897
Administrative Fees 6,874
Custodian Fees and Expenses 10,320
Directors' Fees and Expenses 790
Professional Fees and Expenses 14,958
Registration Fees and Expenses
Class I 21,326
Class II 21,139
Reports to Shareholders 885
Other Expenses 287
- --------------------------------------------------------------------------------
TOTAL EXPENSES 108,248
Fees and Expenses Absorbed by Investment Adviser (76,062)
Fees and Expenses Paid Indirectly (5,510)
- --------------------------------------------------------------------------------
NET EXPENSES 26,676
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 91,804
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT SECURITIES Net Realized Gain
on:
Investment Securities and Foreign Currency Transactions 347
Futures Contracts 132,382
- --------------------------------------------------------------------------------
Total Net Realized Gain 132,729
- --------------------------------------------------------------------------------
Change in Net Appreciation (Depreciation) of:
Investment Securities and Foreign Currency Transactions 725,599
Futures Contracts (17,804)
- --------------------------------------------------------------------------------
Total Net Appreciation 707,795
- --------------------------------------------------------------------------------
NET GAIN ON INVESTMENT SECURITIES, FOREIGN CURRENCY
TRANSACTIONS AND FUTURES CONTRACTS 840,524
- --------------------------------------------------------------------------------
Net Increase in Net Assets from Operations $ 932,328
- --------------------------------------------------------------------------------
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
Year Ended July 31
<S> <C> <C> <C> <C>
Asian European Small
Growth Fund Company Fund
- -------------------------------------------------------------------------------------------------------------------
1998 1997 1998 1997
OPERATIONS
Net Investment Income (Loss) $ 78,102 $ (57,271) $ (318,691) $ (219,471)
Net Realized Gain (Loss) on Investment
Securities and Foreign Currency
Transactions (8,606,011) 2,717,229 11,536,000 8,995,970
Change in Net Appreciation (Depreciation)
of Investment Securities and Foreign
Currency Transactions (8,109,793) 2,533,318 1,682,817 5,896,544
- -------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS (16,637,702) 5,193,276 12,900,126 14,673,043
- -------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income (76,039) 0 0 0
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 0 0 (11,445,624) (3,874,335)
In Excess of Net Realized Gain on Investment
Securities and Foreign Security
Transactins (2,740,227) 0 0 0
- -------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (2,816,266) 0 (11,445,624) (3,874,335)
- -------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 39,750,220 58,289,655 300,560,139 390,188,113
Reinvestment of Distributions 2,758,516 0 10,350,638 3,693,369
- -------------------------------------------------------------------------------------------------------------------
42,508,736 58,289,655 310,910,777 393,881,482
Amounts Paid for Repurchases of Shares (43,821,535) (44,828,305) (315,889,901) (423,884,261)
- -------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM FUND SHARE
TRANSACTIONS (1,312,799) 13,461,350 (4,979,124) (30,002,779)
- -------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets (20,766,767) 18,654,626 (3,524,622) (19,204,071)
NET ASSETS
Beginning of Period 32,969,330 14,314,704 75,056,936 94,261,007
- -------------------------------------------------------------------------------------------------------------------
End of Period $ 12,202,563 $ 32,969,330 $ 71,532,314 $ 75,056,936
===================================================================================================================
Accumulated Undistributed (Distributions
in Excess of) Net Investment Income
Included in Net Assets at End of
Period $ 70,788 $ (138) $ (13,865) $ (6,316)
------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 7,741,648 5,695,778 19,832,249 24,262,011
Shares Issued from Reinvestment of
Distributions 567,644 0 872,000 240,298
- -------------------------------------------------------------------------------------------------------------------
8,309,292 5,695,778 20,704,249 24,502,309
Shares Repurchased (7,590,758) (4,391,861) (20,745,409) (26,142,644)
- --------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Fund Shares 718,534 1,303,917 (41,160) (1,640,335)
====================================================================================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets (Continued)
<S> <C> <C> <C> <C>
Latin American
Growth Fund Realty Fund
Year Ended July 31 Year Ended July 31 Year Ended July 31 Period Ended July 31
- ---------------------------------------------------------------------------------------------------------------------
1998 1997 1998 1997
(Note 1)
OPERATIONS
Net Investment Income (Loss) $ (2,871) $ 874,338 $ 1,293,905 $ 660,426
Net Realized Gain (Loss) on Investment
Securities and Foreign Currency
Transactions (1,133,650) 6,819,951 4,205,231 (81,769)
Change in Net Appreciation (Depreciation)
of Investment Securities and Foreign
Currency Transactions (28,995,772) 19,631,044 (6,267,343) 2,199,767
- ---------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS (30,132,293) 27,325,333 (768,207) 2,778,424
- ---------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income 0 (898,745) (1,231,251) (658,935)
In Excess of Net Investment Income (1,644) 0 0 0
Net Realized Gain on Investment Securities and
Foreign Currency Transactions (5,377,132) (763,367) (2,808,471) 0
In Excess of Net Realized Gain on Investment
Securities and Foreign Currency
Transactions (3,968,378) 0 0 0
- ---------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (9,347,154) (1,662,112) (4,039,722) (658,935)
- ---------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 41,383,944 147,554,103 125,593,955 87,811,086
Reinvestment of Distributions 9,253,953 1,643,078 3,806,928 633,951
- ---------------------------------------------------------------------------------------------------------------------
50,637,897 149,197,181 129,400,883 88,445,037
Amounts Paid for Repurchases of Shares (106,705,315) (76,652,142) (137,702,363) (53,906,991)
- ---------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM FUND SHARE
TRANSACTIONS (56,067,418) 72,545,039 (8,301,480) 34,538,046
- ---------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets (95,546,865) 98,208,260 (13,109,409) 36,657,535
NET ASSETS
Beginning of Period 130,272,160 32,063,900 36,657,535 0
- ---------------------------------------------------------------------------------------------------------------------
End of Period $ 34,725,295 $ 130,272,160 $ 23,548,126 $ 36,657,535
=====================================================================================================================
Accumulated Undistributed (Distributions
in Excess of) Net Investment Income
Included in Net Assets at End of
Period $ (42,636) $ (119,953) $ 10,184 $ 34,791
----------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 2,743,691 9,413,898 11,521,060 8,503,849
Shares Issued from Reinvestment of
Distributions 725,787 108,476 366,311 62,289
- ---------------------------------------------------------------------------------------------------------------------
3,469,478 9,522,374 11,887,371 8,566,138
Shares Repurchased (7,456,925) (4,922,997) (12,649,335) (5,231,150)
- ---------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Fund Shares (3,987,447) 4,599,377 (761,964) 3,334,988
=====================================================================================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets (Continued)
Year Ended July 31
<S> <C> <C> <C> <C>
Worldwide Worldwide
Capital Communications
Goods Fund Fund
- -------------------------------------------------------------------------------------------------------------------
1998 1997 1998 1997
OPERATIONS
Net Investment Income (Loss) $ (41,973) $ 37,893 $ (230,214) $ 309,209
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 1,152,932 1,139,730 6,087,498 4,688,859
Change in Net Appreciation (Depreciation)
of Investment Securities and Foreign
Currency Transactions (1,878,937) 2,381,692 30,321,776 11,765,158
- -------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS (767,978) 3,559,315 36,179,060 16,763,226
- -------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income 0 (40,745) 0 (307,162)
Net Realized Gain on Investment Securities
and Foreign Currency Transactions (1,745,282) (487,207) (5,103,352) (3,964,664)
- -------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (1,745,282) (527,952) (5,103,352) (4,271,826)
- -------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 44,082,756 36,882,095 521,582,449 105,661,260
Reinvestment of Distributions 1,655,829 523,895 4,810,525 4,049,521
- -------------------------------------------------------------------------------------------------------------------
45,738,585 37,405,990 526,392,974 109,710,781
Amounts Paid for Repurchases of Shares (52,383,436) (25,914,782) (353,350,473) (100,260,270)
- -------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM FUND SHARE
TRANSACTIONS (6,644,851) 11,491,208 173,042,501 9,450,511
- -------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets (9,158,111) 14,522,571 204,118,209 21,941,911
NET ASSETS
Beginning of Period 22,253,536 7,730,965 72,458,297 50,516,386
- -------------------------------------------------------------------------------------------------------------------
End of Period $ 13,095,425 $ 22,253,536 $ 276,576,506 $ 72,458,297
===================================================================================================================
Accumulated Undistributed (Distributions
in Excess of) Net Investment Income
Included in Net Assets at End of
Period $ 1,853 $ 838 $ (3,205) $ (61,753)
--------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 3,535,109 3,284,566 28,810,576 7,791,340
Shares Issued from Reinvestment of
Distributions 155,040 55,141 319,200 324,919
- ------------------------------------------------------------------------------------------------------------------
3,690,149 3,339,707 29,129,776 8,116,259
Shares Repurchased (4,269,548) (2,392,625) (19,749,078) (7,446,966)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Fund Shares (579,399) 947,082 9,380,698 669,293
===================================================================================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets (Continued)
<S> <C>
S&P 500 Index Fund
Period Ended July 31
- -------------------------------------------------------------------------------------------------------------------
1998
(Note 1)
OPERATIONS
Net Investment Income $ 91,804
Net Realized Gain on Investment Securities, Foreign Currency Transactions and Futures Contracts 132,729
Change in Net Appreciation of Investment Securities, Foreign Currency Transactions and Futures Contracts 707,795
- -------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS 932,328
- -------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME
Class I (21,188)
Class II (68,129)
- -------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares
Class I 14,330,953
Class II 17,781,602
Reinvestment of Distributions
Class I 21,188
Class II 66,331
- -------------------------------------------------------------------------------------------------------------------
32,200,074
- -------------------------------------------------------------------------------------------------------------------
Amounts Paid for Repurchases of Shares
Class I (12,386,716)
Class II (3,332,974)
- -------------------------------------------------------------------------------------------------------------------
(15,719,690)
- -------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM FUND SHARE TRANSACTIONS 16,480,384
- -------------------------------------------------------------------------------------------------------------------
Total Increase in Net Assets 17,323,395
NET ASSETS
Initial Subscription (Note 1) 1,000,000
- -------------------------------------------------------------------------------------------------------------------
End of Period $ 18,323,395
===================================================================================================================
Accumulated Undistributed Net Investment Income Included in Net Assets at End of Period $ 2,494
--------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS Initial Subscription (Note 1)
Class I 90,000
Class II 10,000
Shares Sold
Class I 1,263,674
Class II 1,509,441
Shares Issued from Reinvestment of Distributions
Class I 1,782
Class II 5,493
- -------------------------------------------------------------------------------------------------------------------
2,880,390
- -------------------------------------------------------------------------------------------------------------------
Shares Repurchased
Class I (1,084,127)
Class II (283,771)
- -------------------------------------------------------------------------------------------------------------------
(1,367,898)
- -------------------------------------------------------------------------------------------------------------------
Net Increase in Fund Shares 1,512,492
===================================================================================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
Notes to Financial Statements
NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO Specialty
Funds, Inc. (the "Fund") is incorporated in Maryland and presently consists of
seven separate Funds: Asian Growth Fund, European Small Company Fund, Latin
American Growth Fund, Realty Fund, Worldwide Capital Goods Fund, Worldwide
Communications Fund and S & P 500 Index Fund. The investment objectives are: to
achieve capital appreciation for Asian Growth, European Small Company, Latin
American Growth and Worldwide Capital Goods Funds; to achieve current income for
Realty Fund; to achieve a high total return on investments through capital
appreciation and current income for Worldwide Communications Fund and to provide
both price performance and income comparable to the Standard and Poor's 500
composite stock index for the S & P 500 Index Fund. Realty and S & P 500 Index
Funds commenced investment operations on January 1, 1997 and December 23, 1997,
respectively. The Fund is registered under the Investment Company Act of 1940
(the "Act") as a diversified, open-end management investment company.
The S & P 500 Index Fund offers two classes of shares, referred to as Class
I shares and Class II shares. Class I shares are not subject to any distribution
fees, while Class II shares are subject to an annual distribution fee of 0.25%
of the Fund's average net assets attributable to Class II shares. Income,
expenses (other than those attributable to a specific class) and gains and
losses are allocated daily to each class of shares based on the relative
proportion of net assets represented by such class. Operating expenses directly
attributable to a specific class are charged against operations of that class.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. 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 income and expenses during the reporting period. Actual
results could differ from those estimates.
A. SECURITY VALUATION - Equity securities traded on national securities
exchanges or in the over-the-counter market are valued at the last sales
price in the market where such securities are primarily traded. If last
sales prices are not available, securities are valued at the highest
closing bid price obtained from one or more dealers making a market for
such securities or by a pricing service approved by the Fund's board of
directors.
Foreign securities are valued at the closing price on the principal
stock exchange on which they are traded. In the event that closing prices
are not available for foreign securities, prices will be obtained from the
principal stock exchange at or prior to the close of the New York Stock
Exchange. Foreign currency exchange rates are determined daily prior to the
close of the New York Stock Exchange.
If market quotations or pricing service valuations are not readily
available, securities are valued at fair value as determined in good faith
under procedures established by the Fund's board of directors. Restricted
securities are valued in accordance with procedures established by the
Fund's board of directors.
Short-term securities are stated at amortized cost (which approximates
market value) if maturity is 60 days or less at the time of purchase, or
market value if maturity is greater than 60 days.
Assets and liabilities initially expressed in terms of foreign
currencies are translated into U.S. dollars at the prevailing market rates
as quoted by one or more banks or dealers on the date of valuation. The
cost of securities is translated into U.S. dollars at the rates of exchange
prevailing when such securities are acquired. Income and expenses are
translated into U.S. dollars at the rates of exchange prevailing when
accrued.
<PAGE>
B. FUTURES CONTRACTS - S & P 500 Index Fund may enter into futures contracts
for non-speculative purposes. Upon entering into a contract, S & P 500
Index Fund deposits and maintains as collateral such initial margin as may
be required by the exchanges on which the transaction is affected. Pursuant
to the contracts, S & P 500 Index Fund agrees to receive from or pay to the
broker an amount of cash equal to the daily fluctuation in the value of the
contract. Such receipts or payments are known as "variation margin" and are
recorded by S & P 500 Index Fund as variation margin receivable or payable
on futures contracts. During the period the futures contracts are open,
changes in the value of the contracts are recognized on a daily basis to
reflect the market value of the contracts at the end of each day's trading
and are recorded as unrealized gain or loss. When the contract is closed, S
& P 500 Index Fund records a realized gain or loss equal to the difference
between the value of the contract at the time it was opened and the value
at the time it was closed. S & P 500 Index Fund's use of futures contracts
may subject it to certain risks as a result of unanticipated movements in
the market. In addition, there can be no assurance that a liquid secondary
market will exist for any contract purchased or sold.
C. REPURCHASE AGREEMENTS - Repurchase agreements held by the Fund are fully
collateralized by U.S. Government securities and such collateral is in the
possession of the FundOs custodian. The collateral is evaluated daily to
ensure its market value exceeds the current market value of the repurchase
agreements including accrued interest. In the event of default on the
obligation to repurchase, the Fund has the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. In the
event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral or proceeds may be subject
to legal proceedings.
D. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions
are accounted for on the trade date and dividend income is recorded on the
ex dividend date. Certain dividends from foreign securities will be
recorded as soon as the Fund is informed of the dividend if such
information is obtained subsequent to the ex dividend date. Interest
income, which may be comprised of stated coupon rate, market discount,
original issue discount and amortized premium, is recorded on the accrual
basis. Discounts and premiums on debt securities purchased are amortized
over the life of the respective security as adjustments to interest income.
Cost is determined on the specific identification basis.
The Fund may have elements of risk due to concentrated investments in
specific industries or foreign issuers located in a specific country. Such
concentrations may subject the Fund to additional risks resulting from
future political or economic conditions and/or possible impositions of
adverse foreign governmental laws or currency exchange restrictions. Net
realized and unrealized gain or loss from investment securities includes
fluctuations from currency exchange rates and fluctuations in market value.
On September 1, 1998, the Malaysian government introduced capital
controls and imposed a fixed exchange rate for the Malaysian ringgit. The
controls require that all Malaysian securities and currency be repatriated
to Malyasia and impose significant restrictions on the movement of
Malaysian securities and currency out of the country. These actions may
pose significant liquidity issues and risks and may significantly affect
the valuation of Malaysian securituies and currency held by the Fund.
The Fund's use of short-term forward foreign currency contracts may
subject it to certain risks as a result of unanticipated movements in
foreign exchange rates. The Fund does not hold short-term forward foreign
currency contracts for trading purposes. The Fund may hold foreign currency
in anticipation of settling foreign security transactions and not for
investment purposes.
<PAGE>
Restricted securities held by the Fund may not be sold except in exempt
transactions or in a public offering registered under the Securities Act of
1933. The risk of investing in such securities is generally greater than
the risk of investing in the securities of widely held, publicly traded
companies. Lack of a secondary market and resale restrictions may result in
the inability of each Fund to sell a security at a fair price and may
substantially delay the sale of the security which each Fund seeks to sell.
In addition, these securities may exhibit greater price volatility than
securities for which secondary markets exist.
E. FEDERAL AND STATE TAXES - The Fund has complied, and continues to comply,
with the provisions of the Internal Revenue Code applicable to regulated
investment companies and, accordingly, has made or intends to make
sufficient distributions of net investment income and net realized capital
gains, if any, to relieve it from all federal and state income taxes and
federal excise taxes. At July 31, 1998, Asian Growth Fund had $2,533,039 in
net capital loss carryovers which expire in the year 2006.
Asian Growth, Latin American Growth and Realty Funds incurred and
elected to defer post-October 31 net capital losses of $6,070,023,
$4,376,077 and $9,564, respectively, to the year ended July 31, 1999. Asian
Growth, European Small Company, Latin American Growth, Worldwide Capital
Goods and Worldwide Communications Funds incurred and elected to defer
post-October 31 net currency losses of $15,043, $9,802, $40,867, $636 and
$2,991, respectively, to the year ended July 31, 1999. To the extent future
capital gains and income are offset by capital loss carryovers and deferred
post-October 31 losses, such gains and income will not be distributed to
shareholders.
Dividends paid by the Fund from net investment income and distributions
of net realized short-term capital gains are, for federal income tax
purposes, taxable as ordinary income to shareholders. Of the ordinary
income distributions declared for the year ended July 31, 1998 0.18% for
Worldwide Capital Goods Fund, 0.05% for Worldwide Communications Fund and
62.78% for S & P 500 Index Fund qualified for the dividends received
deduction available to the FundOs corporate shareholders.
Investment income received from foreign sources may be subject to
foreign withholding taxes. Dividend and interest income is shown gross of
foreign withholding taxes in the accompanying financial statements.
F. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions
to shareholders are recorded by the Fund on the ex dividend/distribution
date. The Fund distributes net realized capital gains, if any, to its
shareholders at least annually, if not offset by capital loss carryovers.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments for foreign currency transactions, nontaxable
dividends, net operating losses and expired capital loss carryforwards.
<PAGE>
For the period ended July 31, 1998, the effects of such differences
were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Accumulated
Accumulated Undistributed
Undistributed Net Realized
Net Gain on
Investment Investment Paid-in
Fund Income Securities Capital
-----------------------------------------------------------------------------------------------------------
Asian Growth Fund $ 68,863 $ (68,863) $ 0
European Small Company Fund 311,142 (311,142) 0
Latin American Growth Fund 81,832 (81,832) 0
Realty Fund (87,261) 87,261 0
Worldwide Capital Goods Fund 42,988 (42,719) (269)
Worldwide Communications Fund 288,762 (288,762) 0
S & P 500 Index Fund 7 (7) 0
</TABLE>
G. FORWARD FOREIGN CURRENCY CONTRACTS - The Fund enters into short-term
forward foreign currency contracts in connection with planned purchases or
sales of securities as a hedge against fluctuations in foreign exchange
rates pending the settlement of transactions in foreign securities. A
forward foreign currency contract is an agreement between contracting
parties to exchange an amount of currency at some future time at an agreed
upon rate. These contracts are marked-to-market daily and the related
appreciation or depreciation of the contracts is presented in the Statement
of Assets and Liabilities.
H. EXPENSES - Each of the Funds bears expenses incurred specifically on its
behalf and, in addition, each Fund bears a portion of general expenses,
based on the relative net assets of each Fund.
Under an agreement between each Fund and the FundOs Custodian, agreed
upon Custodian Fees and Expenses are reduced by credits granted by the
Custodian from any temporarily uninvested cash. Similarly, Distribution
Expenses and Transfer Agent Fees are reduced by credits earned by each Fund
from security brokerage transactions under certain broker/service
arrangements with third parties. Such credits are included in Fees and
Expenses Paid Indirectly in the Statement of Operations.
For the period ended July 31, 1998, Fees and Expenses Paid Indirectly
consisted of the following:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Custodian Fees Distribution Transfer
Fund and Expenses Expenses Agent Fees
-----------------------------------------------------------------------------------------------------------
Asian Growth Fund $ 17,651 $ 0 $ 0
European Small Company Fund 26,482 0 316
Latin American Growth Fund 70,249 0 0
Realty Fund 7,376 0 0
Worldwide Capital Goods Fund 4,895 0 36
Worldwide Communications Fund 13,199 310 92
S & P 500 Index Fund 5,510 0 0
</TABLE>
<PAGE>
NOTE 2 - INVESTMENT ADVISORY AND OTHER AGREEMENTS. INVESCO Funds Group, Inc.
(OIFGO) serves as the Fund's investment adviser. As compensation for its
services to the Fund, IFG receives an investment advisory fee which is accrued
daily at the applicable rate and paid monthly. The fee is based on the annual
rate of each Fund's average net assets as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AVERAGE NET ASSETS
- ----------------------------------------------------------------------------------------------------------------
$0 to $500 Million Over
$500 to $1 $1
Fund Million Billion Billion
- ----------------------------------------------------------------------------------------------------------------
Asian Growth Fund 0.75% 0.65% 0.55%
European Small Company Fund 0.75% 0.65% 0.55%
Latin American Growth Fund 0.75% 0.65% 0.55%
Worldwide Capital Goods Fund 0.65% 0.55% 0.45%
Worldwide Communications Fund 0.65% 0.55% 0.45%
</TABLE>
Realty and S & P 500 Index Funds' investment advisory fee is based on the
annual rate of 0.75% and 0.25%, respectively, of average net assets.
In accordance with a Sub-Advisory Agreement between IFG and INVESCO Trust
Company ("ITC"), a wholly owned subsidiary of IFG, investment decisions of
Worldwide Capital Goods and Worldwide Communications Funds were made by ITC.
Effective February 4, 1998, such responsibilities were transferred to IFG. A
separate Sub-Advisory Agreement between IFG and INVESCO Asia Limited ("INVESCO
Asia"), an affiliate of IFG, provides that investment decisions of Asian Growth
Fund are made by INVESCO Asia. A separate Sub-Advisory Agreement between IFG and
INVESCO Asset Management, Ltd ("IAM"), an affiliate of IFG, provides that
investment decisions of European Small Company and Latin American Growth Funds
are made by IAM. A separate Sub-Advisory Agreement between IFG and INVESCO
Realty Advisors ("IRAI"), an affiliate of IFG, provides that investment
decisions of Realty Fund are made by IRAI. A separate Sub-Advisory agreement
between IFG and World Asset Management ("World"), unaffiliated with any IFG
entity, provides that investment decisions of S & P 500 Index Fund are made by
World. Fees for such sub-advisory services were paid by IFG.
A plan of distribution pursuant to Rule 12b-1 of the Act provided for
compensation of marketing and advertising expenditures to IFG (the
"Distributor") to a maximum of 0.25% of annual average net assets. For the year
ended, July 31, 1998, Asian Growth, European Small Company, Latin American
Growth, Realty, Worldwide Capital Goods, Worldwide Communications and S & P 500
Index - Class II Funds paid the Distributor $47,724, $169,748, $204,643,
$92,862, $46,220, $309,783 and $6,942, respectively, under the plan of
distribution. Effective September 29, 1997, INVESCO Distributors, Inc. ("IDI"),
a wholly owned subsidiary of IFG, replaced IFG as Distributor.
IFG receives a transfer agent fee at an annual rate of $20.00 per
shareholder account, or, where applicable, per participant in an omnibus
account, per year. IFG may pay such fee for participants in omnibus accounts to
affiliates or third parties. The fee is paid monthly at one-twelfth of the
annual fee and is based upon the actual number of accounts in existence during
each month.
In accordance with an Administrative Agreement, each Fund pays IFG an
annual fee of $10,000, plus an additional amount computed at an annual rate of
0.015% of average net assets to provide administrative, accounting and clerical
services. The fee is accrued daily and paid monthly.
IFG has voluntarily agreed, in some instances, to absorb certain fees and
expenses incurred by Realty, Worldwide Capital Goods and S & P 500 Index Funds.
IFG and IAM have voluntarily agreed, in some instances, to absorb certain fees
and expenses incurred by European Small Company and Latin American Growth Funds.
IFG and INVESCO Asia have voluntarily agreed, in some instances, to absorb
certain fees and expenses incurred by Asian Growth Fund.
<PAGE>
A 1% redemption fee is retained by Asian Growth, Latin American Growth and
S & P 500 Index Funds to offset transaction costs and other expenses associated
with short-term redemptions and exchanges. The fee is imposed on redemptions or
exchanges of shares held less than three months. The redemption fee is accounted
for as an addition to Paid-in Capital. Total redemption fees received by Asian
Growth, Latin American Growth and S & P 500 Index Funds for the period ended
July 31, 1998 were $161,974, $216,104 and $12,498, respectively.
NOTE 3 - PURCHASES AND SALES OF INVESTMENT SECURITIES. For the period ended July
31, 1998, the aggregate cost of purchases and proceeds from sales of investment
securities (excluding all U.S. Government securities and short-term securities)
were as follows:
Fund Purchases Sales
- --------------------------------------------------------------------------------
Asian Growth Fund $ 22,314,954 $ 26,245,247
European Small Company Fund 63,139,613 80,427,235
Latin American Growth Fund 23,285,579 81,903,795
Realty Fund 87,630,209 101,904,086
Worldwide Capital Goods Fund 36,286,320 42,434,947
Worldwide Communications Fund 228,871,003 70,907,810
S & P 500 Index Fund 15,442,388 7,853
There were no purchases or sales of U.S. Government securities.
<PAGE>
NOTE 4 - APPRECIATION AND DEPRECIATION. At July 31, 1998, the gross appreciation
of securities in which there was an excess of value over tax cost, the gross
depreciation of securities in which there was an excess of tax cost over value
and the resulting net appreciation (depreciation) by Fund were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net
Gross Gross Appreciation
Fund Appreciation Depreciation (Depreciation)
- ----------------------------------------------------------------------------------------------------------------
Asian Growth Fund $ 59,803 $ 7,472,851 $ (7,413,048)
European Small Company Fund 13,905,344 7,413,444 6,491,900
Latin American Growth Fund 1,772,253 9,958,666 (8,186,413)
Realty Fund 3,161 4,375,045 (4,371,884)
Worldwide Capital Goods Fund 1,224,152 794,784 429,368
Worldwide Communications Fund 55,129,304 12,882,920 42,246,384
S & P 500 Index Fund 1,277,515 552,151 725,364
</TABLE>
NOTE 5 - TRANSACTIONS WITH AFFILIATES AND AFFILIATED COMPANIES. Certain of the
Fund's officers and directors are also officers and directors of IFG, IDI, IAM,
INVESCO Asia or IRAI.
The Fund has adopted an unfunded deferred compensation plan covering all
independent directors of the Fund who will have served as an independent
director for at least five years at the time of retirement. Benefits under this
plan were based on an annual rate equal to 40% of the retainer fee at the time
of retirement. As of July 1, 1998, benefits are based on an annual rate of 50%
of the sum of the retainer fee at the time of retirement plus the annual meeting
fee.
<PAGE>
Pension expenses for the period ended July 31, 1998, included in Directors'
Fees and Expenses in the Statement of Operations, and unfunded accrued pension
costs and pension liability included in Prepaid Expenses and Accrued Expenses,
respectively, in the Statement of Assets and Liabilities were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Unfunded
Pension Accrued Pension
Fund Expenses Pension Costs Liability
- ----------------------------------------------------------------------------------------------------------------
Asian Growth Fund $ 319 $ 400 $ 858
European Small Company Fund 1,589 2,249 4,797
Latin American Growth Fund 1,495 1,535 3,331
Realty Fund 533 444 977
Worldwide Capital Goods Fund 321 237 708
Worldwide Communications Fund 1,187 1,175 3,222
</TABLE>
Pension expenses, unfunded accrued pension costs and pension liability were
insignificant for S & P 500 Index Fund.
NOTE 6 - LINE OF CREDIT. The Fund has available a Redemption Line of Credit
Facility ("LOC"), from a consortium of national banks, to be used for temporary
or emergency purposes to fund redemptions of investor shares. The LOC permits
borrowings to a maximum of 10% of the Net Assets at Value of each respective
Fund. Each Fund agrees to pay annual fees and interest on the unpaid principal
balance based on prevailing market rates as defined in the agreement. At July
31, 1998, there were no such borrowings.
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholders of INVESCO Specialty Funds, Inc.
In our opinion, the accompanying statements of assets and liabilities, including
the statements of investment securities, 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 INVESCO Asian Growth
Fund, INVESCO European Small Company Fund, INVESCO Latin American Growth Fund,
INVESCO Realty Fund, INVESCO Worldwide Capital Goods Fund, INVESCO Worldwide
Communications Fund and INVESCO S&P 500 Index Fund (constituting INVESCO
Specialty Funds, Inc., hereafter referred to as the "Fund") at July 31, 1998,
the results of each of their operations for each of the periods indicated, the
changes in each of their net assets for each of the periods indicated and the
financial highlights for each of the 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 July 31, 1998 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
Denver, Colorado
September 9, 1998
<PAGE>
Financial Highlights - Asian Growth Fund
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Period
Ended
Year Ended July 31 July 31
- ----------------------------------------------------------------------------------------------------------
1998 1997 1996(a)
PER SHARE DATA
Net Asset Value - Beginning of Period $11.35 $ 8.95 $10.00
- ----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.04 (0.02) 0.02
Net Gains or (Losses) on Securities (Both Realized and Unrealized) (6.68) 2.42 (1.05)
- ----------------------------------------------------------------------------------------------------------
Total from Investment Operations (6.64) 2.40 (1.03)
- ----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.02 0.00 0.02
Distributions from Capital Gains 0.00 0.00 0.00
In Excess of Capital Gains 1.32 0.00 0.00
- ----------------------------------------------------------------------------------------------------------
Total Distributions 1.34 0.00 0.02
- ----------------------------------------------------------------------------------------------------------
Net Asset Value - End of Period $ 3.37 $11.35 $ 8.95
==========================================================================================================
TOTAL RETURN(b) (62.16%) 27.04% (10.31%)(c)
RATIOS
Net Assets - End of Period ($000 Omitted) $12,203 $32,969 $14,315
Ratio of Expenses to Average Net Assets(d)(e) 2.10% 2.05% 2.19%(f)
Ratio of Net Investment Income (Loss) to Average Net Assets(d) 0.45% (0.20%) 0.94%(f)
Portfolio Turnover Rate 141% 161% 2%(c)
</TABLE>
(a) From March 1, 1996, commencement of investment operations, to July 31,
1996.
(b) The applicable redemption fees are not included in the Total Return
calculation.
(c) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(d) Various expenses of the Fund were voluntarily absorbed by IFG and INVESCO
Asia for the years ended July 31, 1998 and 1997 and the period ended July
31, 1996. If such expenses had not been voluntarily absorbed, ratio of
expenses to average net assets would have been 2.85%, 2.10% and 2.79%
(annualized), respectively, and ratio of net investment income (loss) to
average net assets would have been (0.30%), (0.25%) and 0.34% (annualized),
respectively.
(e) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
(f) Annualized
<PAGE>
Financial Highlights (Continued) -- European Small Company Fund
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Period
Ended
Year Ended July 31 July 31
- ---------------------------------------------------------------------------------------------------------
1998 1997 1996 1995(a)
PER SHARE DATA
Net Asset Value - Beginning of Period $16.29 $15.08 $11.56 $10.00
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)(b) 0.00 (0.05) 0.07 0.04
Net Gains on Securities (Both Realized and Unrealized) 2.82 1.79 3.52 1.56
- ---------------------------------------------------------------------------------------------------------
Total from Investment Operations 2.82 1.74 3.59 1.60
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.00 0.00 0.07 0.04
Distributions from Capital Gains 3.45 0.53 0.00 0.00
- ---------------------------------------------------------------------------------------------------------
Total Distributions 3.45 0.53 0.07 0.04
- ---------------------------------------------------------------------------------------------------------
Net Asset Value - End of Period $15.66 $16.29 $15.08 $11.56
=========================================================================================================
TOTAL RETURN 24.15% 11.71% 31.07% 15.98%(c)
RATIOS
Net Assets - End of Period ($000 Omitted) $71,532 $75,057 $94,261 $3,801
Ratio of Expenses to Average Net Assets(d) 2.04%(e) 1.62%(e) 1.68%(e) 2.00%(f)
Ratio of Net Investment Income (Loss) to
Average Net Assets(d) (0.48%) (0.18%) 1.23% 2.37%(f)
Portfolio Turnover Rate 98% 87% 141% 0%(c)
</TABLE>
(a) From February 15, 1995, commencement of investment operations, to July 31,
1995.
(b) Net Investment Income (Loss) aggregated less than $0.01 on a per share
basis for the year ended July 31, 1998.
(c) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(d) Various expenses of the Fund were voluntarily absorbed by IFG and IAM for
the year ended July 31, 1998 and the period ended July 31, 1995. If such
expenses had not been voluntarily absorbed, ratio of expenses to average
net assets would have been 2.06% and 10.17% (annualized), respectively, and
ratio of net investment income (loss) to average net assets would have been
(0.50%) and (5.80%) (annualized), respectively.
(e) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
(f) Annualized
<PAGE>
Financial Highlights (Continued) -- Latin American Growth Fund
For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Period
Ended
Year Ended July 31 July 31
- ---------------------------------------------------------------------------------------------------------
1998 1997 1996 1995(a)
PER SHARE DATA
Net Asset Value - Beginning of Period $18.37 $12.86 $11.69 $10.00
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)(b) 0.00 0.13 0.08 0.02
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) (5.41) 5.88 1.62 1.69
- ---------------------------------------------------------------------------------------------------------
Total from Investment Operations (5.41) 6.01 1.70 1.71
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income(c) 0.00 0.14 0.09 0.02
Distributions from Capital Gains 1.02 0.36 0.44 0.00
In Excess of Capital Gains 0.76 0.00 0.00 0.00
- ---------------------------------------------------------------------------------------------------------
Total Distributions 1.78 0.50 0.53 0.02
- ---------------------------------------------------------------------------------------------------------
Net Asset Value - End of Period $11.18 $18.37 $12.86 $11.69
=========================================================================================================
TOTAL RETURN(d) (30.64%) 48.06% 15.27% 17.09%(e)
RATIOS
Net Assets - End of Period ($000 Omitted) $34,725 $130,272 $32,064 $7,423
Ratio of Expenses to Average Net Assets(f) 1.99%(g) 1.76%(g) 2.14%(g) 2.00%(h)
Ratio of Net Investment Income (Loss) to
Average Net Assets(f) 0.00% 1.35% 1.26% 0.79%(h)
Portfolio Turnover Rate 33% 72% 29% 30%(e)
</TABLE>
(a) From February 15, 1995, commencement of investment operations, to July 31,
1995.
(b) Net Investment Income (Loss) aggregated less than $0.01 on a per share
basis for the year ended July 31, 1998.
(c) Distributions in excess of net investment income for the year ended July
31, 1998, aggregated less than $0.01 on a per share basis.
(d) The applicable redemption fees are not included in the Total Return
calculation.
(e) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(f) Various expenses of the Fund were voluntarily absorbed by IFG and IAM for
the period ended July 31, 1995. If such expenses had not been voluntarily
absorbed, ratio of expenses to average net assets would have been 4.49%
(annualized) and ratio of net investment income to average net assets would
have been (1.70%) (annualized).
(g) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
(h) Annualized
<PAGE>
Financial Highlights (Continued) -- Realty Fund
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
<S> <C> <C>
Year Period
Ended Ended
July 31 July 31
- ---------------------------------------------------------------------------------------------------------
1998 1997(a)
PER SHARE DATA
Net Asset Value - Beginning of Period $10.99 $10.00
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.38 0.22
Net Gains or (Losses) on Securities (Both Realized and Unrealized) (0.96) 0.99
- ---------------------------------------------------------------------------------------------------------
Total from Investment Operations (0.58) 1.21
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.39 0.22
Distributions from Capital Gains 0.87 0.00
- ---------------------------------------------------------------------------------------------------------
Total Distributions 1.26 0.22
- ---------------------------------------------------------------------------------------------------------
Net Asset Value - End of Period $ 9.15 $10.99
=========================================================================================================
TOTAL RETURN (6.49%) 12.24%(b)
RATIOS
Net Assets - End of Period ($000 Omitted) $23,548 $36,658
Ratio of Expenses to Average Net Assets(c)(d) 1.22% 1.20%(e)
Ratio of Net Investment Income to Average Net Assets(c) 3.53% 4.08%(e)
Portfolio Turnover Rate 258% 70%(b)
</TABLE>
(a) From January 1, 1997, commencement of investment operations, to July 31,
1997.
(b) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(c) Various expenses of the Fund were voluntarily absorbed by IFG and IRAI for
the year ended July 31, 1998 and the period ended July 31, 1997. If such
expenses had not been voluntarily absorbed, ratio of expenses to average
net assets would have been 1.97% and 1.83% (annualized), respectively, and
ratio of net investment income to average net assets would have been 2.78%
and 3.45% (annualized), respectively.
(d) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
(e) Annualized
<PAGE>
Financial Highlights (Continued) -- Worldwide Capital Goods Fund
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Year Ended July 31
- ---------------------------------------------------------------------------------------------------------
1998 1997 1996 1995(a)
PER SHARE DATA
Net Asset Value - Beginning of Period $12.70 $ 9.61 $ 9.84 $10.00
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)(b) 0.00 0.05 0.01 0.01
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) (0.32) 4.37 0.01 (0.16)
- ---------------------------------------------------------------------------------------------------------
Total from Investment Operations (0.32) 4.42 0.02 (0.15)
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.00 0.06 0.00 0.01
Distributions from Capital Gains 1.21 1.27 0.25 0.00
- ---------------------------------------------------------------------------------------------------------
Total Distributions 1.21 1.33 0.25 0.01
- ---------------------------------------------------------------------------------------------------------
Net Asset Value - End of Period $11.17 $12.70 $ 9.61 $ 9.84
=========================================================================================================
TOTAL RETURN (2.06%) 50.86% 0.27% (1.49%)
RATIOS
Net Assets - End of Period ($000 Omitted) $13,095 $22,254 $7,731 $10,364
Ratio of Expenses to Average Net Assets(c) 1.97%(d) 1.98%(d) 2.11%(d) 2.00%
Ratio of Net Investment Income (Loss) to
Average Net Assets(c) (0.23%) 0.51% 0.05% 0.25%
Portfolio Turnover Rate 219% 192% 247% 193%
</TABLE>
(a) Commencement of investment operations was August 1, 1994.
(b) Net Investment Income (Loss) aggregated less than $0.01 on a per share
basis for the year ended July 31, 1998.
(c) Various expenses of the Fund were voluntarily absorbed by IFG for the years
ended July 31, 1997, 1996 and 1995. If such expenses had not been
voluntarily absorbed, ratio of expenses to average net assets would have
been 2.58%, 2.49% and 2.96%, respectively, and ratio of net investment
income (loss) to average net assets would have been (0.09%), (0.33%) and
(0.71%), respectively.
(d) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, if applicable, which is before any expense offset
arrangements.
<PAGE>
Financial Highlights (Continued) -- Worldwide Communications Fund
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Year Ended July 31
- ---------------------------------------------------------------------------------------------------------
1998 1997 1996 1995(a)
PER SHARE DATA
Net Asset Value - Beginning of Period $15.31 $12.43 $12.30 $10.00
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.01 0.06 0.22 0.11
Net Gains on Securities
(Both Realized and Unrealized) 5.32 3.90 1.38 2.35
- ---------------------------------------------------------------------------------------------------------
Total from Investment Operations 5.33 3.96 1.60 2.46
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.00 0.06 0.22 0.11
Distributions from Capital Gains 1.04 1.02 1.25 0.05
- ---------------------------------------------------------------------------------------------------------
Total Distributions 1.04 1.08 1.47 0.16
- ---------------------------------------------------------------------------------------------------------
Net Asset Value - End of Period $19.60 $15.31 $12.43 $12.30
=========================================================================================================
TOTAL RETURN 36.79% 33.93% 13.67% 24.83%
RATIOS
Net Assets - End of Period ($000 Omitted) $276,577 $72,458 $50,516 $27,254
Ratio of Expenses to Average Net Assets 1.32%(b) 1.69%(b) 1.66%(b) 1.95%
Ratio of Net Investment Income (Loss) to
Average Net Assets (0.16%) 0.56% 1.78% 1.43%
Portfolio Turnover Rate 55% 96% 157% 215%
</TABLE>
(a) Commencement of investment operations was August 1, 1994.
(b) Ratio is based on Total Expenses of the Fund, which is before any expense
offset arrangements.
<PAGE>
Financial Highlights (Continued) -- S & P 500 Index Fund
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
<S> <C> <C>
Period Period
Ended Ended
July 31 July 31
- ---------------------------------------------------------------------------------------------------------
1998(a) 1998(a)
Class I Class II
PER SHARE DATA
Net Asset Value - Beginning of Period $10.00 $10.00
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.11 0.07
Net Gains on Securities (Both Realized and Unrealized) 1.98 2.14
- ---------------------------------------------------------------------------------------------------------
Total from Investment Operations 2.09 2.21
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM NET INVESTMENT INCOME 0.08 0.07
- ---------------------------------------------------------------------------------------------------------
Net Asset Value - End of Period $12.01 $12.14
=========================================================================================================
TOTAL RETURN (b) 20.93%(c) 22.11%(c)
RATIOS
Net Assets - End of Period ($000 Omitted) $3,259 $15,065
Ratio of Expenses to Average Net Assets(d)(e) 0.46%(f) 0.62%(f)
Ratio of Net Investment Income to Average Net Assets(e) 1.96%(f) 1.52%(f)
Portfolio Turnover Rate 0%(g) 0%(g)
</TABLE>
(a) From December 23, 1997, commencement of investment operations, to July 31,
1998.
(b) The applicable redemption fees are not included in the Total Return
calculation.
(c) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(d) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, if applicable, which is before any offset arrangements.
(e) Various expenses of the Fund were voluntarily absorbed by IFG for the
period ended July 31, 1998. If such expenses had not been voluntarily
absorbed, ratio of expenses to average net assets would have been 2.51%
(annualized) for Class I and 1.71% (annualized) for Class II and ratio of
net investment income (loss) to average net assets would have been (0.09%)
(annualized) for Class I and 0.42% (annualized) for Class II.
(f) Annualized
(g) Portfolio Turnover Rate calculated to less than 0.10% for the period ended
July 31, 1998.
<PAGE>
INVESCO FUNDS
INVESCO Distributors, Inc.,(SM)
Distributor
Post Office Box 173706
Denver, CO 80217-3706
1-800-525-8085
PAL(R): 1-800-424-8085
http://www.invesco.com
In Denver, visit one of our
convenient Investor Centers:
Cherry Creek,
155-B Fillmore Street
Denver Tech Center,
7800 East Union Avenue,
Lobby Level
This information must be
preceded or accompanied
by a current prospectus.
