THIS DOCUMENT IS A COPY OF THE SEMI-ANNUAL REPORT TO SHAREHOLDERS FILED ON
JUNE 8, 1995 PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION.
VENTURE SERIES, INC.
P.O. Box 1688, 124 East Marcy Street
Santa Fe, New Mexico 87501
- ------------------------------------------------------------------------------
Dear Shareholder:
Following very strong performances of most foreign stock markets
in 1993 and the subsequent steep corrections of 1994, the end of January
1995 seems to have been a good time for the launching of a fund dedicated
to foreign investments. The total return for the two months ended March
31, 1995 for Class A shares of the Venture Series, Inc. - International
Total Return Fund was 5.50% on net asset value.
The countries of South East Asia continue to record growth rates at
least twice those of the average Organization of Economic Cooperation and
Development (OECD) countries, and such growth could well continue for
years to come. The bulk of initial investments has therefore been made in
South and East Asia (57% of total net assets). Another 21% is invested in
three European countries (the Netherlands, Switzerland and the United
Kingdom), 5% is invested in Latin America (Chile) and 21% is currently
placed in short term investments.
A nagging and recurring question has been the decline of the US
dollar which has accelerated rather than abated in recent months. The
dollar is now clearly undervalued vis-a-vis the Japanese yen and the
so-called Deutsche mark related currencies, i.e. the Deutsche mark, the
Dutch guilder, the Swiss franc and the Austrian schilling, but it would be
foolhardy to predict when a reversal -- even a temporary one -- of the
decline will take place. In the meantime, holders of many more billions of
dollars than the disposable reserves of central bankers, will have the
upper hand and continue to create havoc on foreign exchange markets.
Sincerely,
Martin H. Proyect
Chairman
May 25, 1995
<PAGE>
Venture Series, Inc.
International Total Return Fund
Schedule of Investments
At March 31, 1995 (Unaudited)
- ------------------------------------------------------------------------------
COMMON STOCKS - (83.39%)
<TABLE>
<CAPTION>
Value
Shares (Note 1)
- ------ --------
BANKS - (8.80%)
<S> <C> <C>
50,000 Hang Seng Bank Ltd. - Hong Kong................... $ 352,441
70,000 Standard Chartered Banking PLC - United Kingdom... 332,678
-----------
685,119
-----------
COMPUTER PRODUCTS & SERVICES - (4.12%)
15,000 Shinawatra Computer & Communications Co., Ltd. -
Thailand....................................... 321,233
-----------
CONSUMER PRODUCTS & MERCHANDISE - (5.05%)
3,000 Unilever N.V. - New York Shares - Netherlands..... 393,750
-----------
HOTELS & LODGING - (4.28%)
250,000 Mandarin Oriental International Ltd. - Hong Kong.. 333,040
-----------
MINERALS - (5.10%)
50,000 Lanna Lignite Public - Thailand................... 397,485
-----------
PHARMACEUTICALS - (4.12%)
500 Sandoz Ltd. - Switzerland......................... 320,457
-----------
REAL ESTATE - (8.58%)
300,000 Amoy Properties Ltd. - Hong Kong.................. 287,126
1,500,000 Filinvest Land Inc. - Philippines................. 380,769
-----------
667,895
-----------
TELECOMMUNICATIONS - (22.82%)
50,000 Cable & Wireless PLC - United Kingdom............. 312,081
70,000 Jasmine International - Thailand.................. 414,521
200,000 Shinawatra Satelite - Thailand................... 409,653
70,000 TelecomAsia Corporation Public Co. Ltd. -
Thailand....................................... 264,044
50,000 Thai Telephone & Telegraph - Thailand............. 377,205
-----------
1,777,504
-----------
UTILITIES - (13.48%)
2,000,000 Aboitiz Equity Ventures Inc. - Philippines........ 365,385
15,000 Chilgener S.A., Sponsored ADR - Chile............. 375,000
15,000 Korea Electric Power Corp., Sponsored ADR - Korea
(South)........................................ 309,375
-----------
1,049,760
-----------
<PAGE>
Venture Series, Inc.
International Total Return Fund
Schedule of Investments
At March 31, 1995 (Unaudited)
- ------------------------------------------------------------------------------
COMMON STOCKS - Continued
Value
Shares/Principal (Note 1)
- ---------------- --------
OTHER - (7.04%)
300 BBC Brown Boveri Ltd., Bearer Shares -
Switzerland.................................... $ 283,407
60,000 Hutchison Whampoa Ltd. - Hong Kong................ 264,621
-----------
548,028
-----------
TOTAL COMMON STOCKS (identified cost $6,110,521).............. 6,494,271
-----------
SHORT-TERM INVESTMENTS - (21.05%)
$1,640,000 Federal National Mortgage Corporation, Discount
Note, 5.99%, 04/05/95 (identified cost
$1,638,908).................................... 1,638,908
-----------
TOTAL INVESTMENTS (identified cost $7,749,429) -
(104.44%) <F1>............................................. 8,133,179
Liabilities less other assets - (4.44%)....................... (345,984)
-----------
NET ASSETS - 100%............................................. $ 7,787,195
-----------
-----------
<FN>
<F1>
Aggregate cost for Federal income tax purposes is $7,749,429.
</FN>
</TABLE>
At March 31, 1995, unrealized appreciation (depreciation) of securities
for Federal income tax purposes was as follows:
<TABLE>
<S> <C>
Unrealized appreciation......................... $ 458,284
Unrealized depreciation......................... ( 74,534)
---------
Net unrealized appreciation................ $ 383,750
---------
---------
</TABLE>
See Notes to Financial Statements
<PAGE>
VENTURE SERIES, INC.
STATEMENT OF ASSETS AND LIABILITIES - At March 31, 1995 (Unaudited)
INTERNATIONAL TOTAL RETURN FUND
- ------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost - $7,749,429) (Note 1)................ $ 8,133,179
Cash...................................................... 4,210
Receivables:
Capital stock sold..................................... 148,660
Investments sold....................................... 350,000
Prepaid expenses.......................................... 62,437
------------
Total assets........................................ 8,698,486
------------
LIABILITIES:
Payable for investments purchased......................... 891,082
Accrued expenses.......................................... 20,209
------------
Total liabilities................................... 911,291
------------
NET ASSETS................................................... $ 7,787,195
------------
------------
CLASS A SHARES
Net assets............................................. $ 7,540,308
Shares outstanding..................................... 714,616
Net asset value and redemption price per share
(net assets/shares outstanding)..................... $10.55
------
------
Maximum offering price per share (100/95.25 of $10.55). $11.08
------
------
CLASS B SHARES
Net assets............................................. $ 246,887
Shares outstanding..................................... 23,446
Net asset value, offering and redemption price
per share (net assets/shares outstanding)........... $10.53
------
------
Net assets consist of:
Undistributed net investment income....................... $ 11,208
Unrealized appreciation on investments and translation
of assets and liabilities in foreign currencies........ 381,621
Accumulated net realized gains from investments and
foreign currency transactions.......................... 37,344
Paid-in capital........................................... 7,357,022
------------
Net assets.......................................... $ 7,787,195
------------
------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
VENTURE SERIES, INC.
STATEMENT OF OPERATIONS - For the two months ended March 31, 1995
(Unaudited)
INTERNATIONAL TOTAL RETURN FUND
- ------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment Income:
Income:
Interest............................................. $ 26,447
-------------
Expenses:
Management fees (Note 3).................. $ 9,024
Custodian fees............................ 7,355
Transfer agent fees....................... 762
Audit fees................................ 1,975
Legal fees................................ 1,085
Accounting fees (Note 3).................. 1,334
Reports to shareholders................... 1,000
Directors fees and expenses............... 4,831
Registration and filing fees.............. 4,721
Miscellaneous............................. 2,168
Distribution plan payments (Note 3)
Class A................................ 2,201
Class B................................ 220
---------
Total expenses................................. 36,676
Reimbursement of expenses by adviser (Note 3)........ (21,437)
-------------
Net expenses................................... 15,239
-------------
Net investment income....................... 11,208
-------------
Realized and Unrealized Gain on Investments and Foreign Currency:
Net realized gain from:
Investment transactions.............................. 30,249
Foreign currency transactions........................ 7,095
Net increase in unrealized appreciation on:
Investments.......................................... 379,491
Translation of assets and liabilities in foreign
currencies........................................ 2,130
-------------
Net realized and unrealized gain on investments and
foreign currency............................... 418,965
-------------
Net increase in net assets resulting from
operations.................................. $ 430,173
-------------
-------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
VENTURE SERIES, INC.
STATEMENT OF CHANGES IN NET ASSETS
INTERNATIONAL TOTAL RETURN FUND
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Two
Months Ended
March 31,
1995
(Unaudited)
------------
<S> <C>
OPERATIONS:
Net investment income............................. $ 11,208
Net realized gain from investments and foreign
currency transactions.......................... 37,344
Increase in unrealized appreciation on investments
and translation of assets and liabilities
in foreign currencies.......................... 381,621
-----------
Net increase in net assets resulting from
operations.................................. 430,173
CAPITAL SHARE TRANSACTIONS (NOTE 5).................. 7,357,022
-----------
Total increase in net assets................... 7,787,195
NET ASSETS:
Beginning of period............................... -
-----------
End of period..................................... $ 7,787,195
-----------
-----------
</TABLE>
See Notes to Financial Statements.
<PAGE>
VENTURE SERIES, INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 1995 (Unaudited)
- ------------------------------------------------------------------------------
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940,
as amended, as a diversified, open-end management investment company.
The Fund offers shares in two classes, Class A and Class B. The Class A
shares are sold with a front-end sales charge and the Class B shares are
sold at net asset value and may be subject to a contingent deferred sales
charge upon redemption. Both classes have identical rights with respect
to voting (exclusive of each Class's distribution arrangement), liquidation
and distributions. The following is a summary of significant accounting
policies followed by the Fund in the preparation of its financial
statements.
Security Valuation - Portfolio securities are normally valued using
current market valuations: either the last reported sales price, or in the
case of securities for which there is no reported last sale, the closing bid
price. Debt securities maturing in 60 days or less are usually valued at
amortized cost and longer term debt securities may be valued by an
independent pricing service. Securities for which market quotations are
not readily available and other assets are appraised at fair value as
determined in good faith in accordance with methods that are authorized
by the Board of Directors. Because of the difference in times of closing of
markets in which the Fund's securities are traded, events affecting
portfolio values that occur between the time their prices are determined
and the time the Fund's shares are priced will generally not be reflected
in the Fund's share price. Investments in short-term securities (maturing
in sixty days or less) are valued at amortized cost unless the Board of
Directors determines that such cost is not a fair value.
Foreign Currency - Amounts denominated in or expected to settle in
foreign currencies (FC) are translated into United States dollars (US$) at
rates computed by State Street Bank & Trust Company. Market value of
investment securities, other assets and liabilities are valued at the
closing rate of exchange at the balance sheet date. Purchases and sales of
investment securities, income and expenses are valued at the rate of
exchange prevailing on the respective dates of such transactions (or at an
average rate if significant rate fluctuations have not occurred). The Fund
does not isolate that portion of the results of operations resulting from
changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Reported net realized foreign exchange gains or losses arise from
sales and maturities of short-term securities, sales of FCs, currency
gains or losses realized between the trade and settlement dates on
securities transactions, the difference between the amounts of dividends,
interest, and foreign withholding taxes recorded on the Fund's books, and
the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities at
fiscal year end, resulting from changes in the exchange rate.
Forward Currency Contracts - The Company may enter into forward
purchases or sales of foreign currencies to hedge certain foreign currency
denominated assets and liabilities against declines in market value
relative to the U.S. dollar. Forward currency contracts are
marked-to-market daily and the change in market value is recorded by
realized gain or loss equal to the difference between the value of the
forward currency contract at the time it was opened and value at the time
it was closed. Investments in forward currency contracts may expose the
company to risks resulting from unanticipated movements in foreign
currency exchange rates or failure of the counterparty to the agreement to
perform in accordance with the terms of the contract.
Federal Income Taxes - It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its taxable
income to shareholders. Therefore, no provision for federal income tax is
required.
<PAGE>
VENTURE SERIES, INC.
NOTES TO FINANCIAL STATEMENTS - Continued
March 31, 1995 (Unaudited)
- ------------------------------------------------------------------------------
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (continued)
Securities Transactions and Related Investment Income - Securities
transactions are accounted for on the trade date (date the order to buy or
sell is executed) with gain or loss on the sale of securities being
determined based upon identified cost. Dividend income is recorded on the
ex-dividend date and interest income is recorded on the accrual basis.
Dividends and Distributions to Shareholders - Dividends and distributions
to shareholders are recorded on the ex-dividend date.
Note 2 - PURCHASES AND SALES OF SECURITIES
Purchases and sales of investment securities (excluding short-term
securities) during the two months ended March 31, 1995, were $6,430,270
and $350,000, respectively.
Note 3 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Advisory fees are paid monthly to the investment adviser at the
annual rate of 1.00% of the first $250 million, 0.90% on the next $250
million, and 0.80% in excess of $500 million. Pursuant to applicable state
Blue Sky requirements, the adviser will reimburse expenses (including
the advisory fee but excluding interest, taxes, brokerage fees and
maintenance fees paid under any Rule 12b-1 Distribution Plan) in excess
of the most restrictive applicable expense limitation prescribed by any
statute or regulatory authority of any jurisdiction in which the Fund's
shares are qualified for offer and sale. The Adviser believes that the
most restrictive expense limitations presently applicable are 2 1/2% for
the first $30 million of average net assets, 2% for the next $70 million of
average net assets and 1 1/2% for any additional average net assets. The
Adviser is paid for registering Fund shares for sale in various states. The
fee for the two months ended March 31, 1995 amounted to $2,000. The
Adviser is paid for certain transfer agent services. The fee for the two
months ended March 31, 1995 amounted to $157. The Adviser is also paid
for certain accounting services. The fee amounted to $1,334 for the two
months ended March 31, 1995. Two directors and the officers of the Fund
are also directors and officers of the general partner of the Adviser.
Atlantic Advisers Limited (the "Sub-Adviser") acts as the
Sub-Adviser of the Fund. The Sub-Adviser manages the day-to-day
investment operations for the Fund. The Fund pays no fees directly to the
Sub-Adviser. The Sub-Adviser receives from the Adviser 50% of the total
annual investment advisory fees paid by the Fund to the Adviser. The
Sub-Adviser's principal office is located at Charendon House, 2 Church
Street, Hamilton, HM 11, Bermuda.
Edouard F. Iselin, in addition to being the President and controlling
shareholder of the Sub-Adviser, serves as the Fund's portfolio manager.
Mr. Iselin is also associated with E.F. Iselin, S.A., an investment advisory
firm based in Geneva, Switzerland which specializes in investments in
foreign securities and provides investment advisory services to various
individual and institutional clients. Mr. Iselin was the Managing Director
of E.F. Iselin, S.A. from 1979 to 1991 and has been the firm's Chairman and
Chief Executive Officer since 1991.
<PAGE>
VENTURE SERIES, INC.
NOTES TO FINANCIAL STATEMENTS - Continued
March 31, 1995 (Unaudited)
- ------------------------------------------------------------------------------
NOTE 4 - DISTRIBUTION AND UNDERWRITING FEES
CLASS A SHARES
Class A shares of the Fund are sold at net asset value plus a sales
charge and are redeemed at net asset value (without a contingent deferred
sales charge).
During the two months ended March 31, 1995, the Fund's
Underwriter, Selected/Venture Advisers, L.P., received $62,095 from
commissions earned on sales of Class A shares of the Fund, all of which
was reallowed to investment dealers. Selected/Venture Advisers, L.P.
paid the costs of prospectuses in excess of those required to be filed as
part of the Fund's registration statement, sales literature and other
expenses assumed or incurred by it in connection with such sales.
The Underwriter is reimbursed for amounts paid to dealers as a
maintenance fee with respect to Class A shares sold by dealers and
remaining outstanding during the period. The maintenance fee is paid at
the annual rate of 1/4 of 1% of the average net assets maintained by the
responsible dealers. The Underwriter is not reimbursed for accounts in
which the Underwriter pays no service fees to other firms. The
maintenance fee for Class A shares of the Fund for the two months ended
March 31, 1995 was $2,201.
CLASS B SHARES
Class B shares of the Fund are sold at net asset value and are
redeemed at net asset value less a contingent deferred sales charge if
redeemed within six years of purchase.
The Fund pays the Distributor a 4% commission on the proceeds from
the sale of the Fund's Class B shares and the Distributor reallows 4% to
the qualified dealer responsible for the sale of the shares. A rule
implemented by the National Association of Securities Dealers, Inc.,
("NASD") limits the percentage of the Fund's annual average net assets
attributable to Class B shares which may be used to reimburse the
Distributor. The limit is 1%, of which 0.75% may be used to pay
distribution expenses and 0.25% may be used to pay shareholder service
fees. The NASD rule also limits the aggregate amount the Fund may pay
for distribution to 6.25% of gross Fund sales since inception of the Rule
12b-1 plan plus interest at 1% over the prime rate on unpaid amounts. The
Distributor intends to seek full payment (plus interest at prime plus 1%)
of distribution charges that exceed the 1% annual limit in some future
period or periods when the plan limits have not been reached.
During the two months ended March 31, 1995, Class B shares of the
Fund made distribution plan payments which included commissions of
$165 and maintenance fees of $55.
Commissions earned by the Distributor during the two months ended
March 31, 1995 on the sale of Class B shares of the Fund amounted to
$9,406 of which $7,465 was reallowed to qualified selling dealers.
The Distributor intends to seek payment from Class B shares of the
Fund in the amount of $9,340, representing the cumulative commissions
earned by the Distributor on the sale of the Fund's Class B shares reduced
by cumulative commissions paid by the Fund and cumulative contingent
deferred sales charge paid by redeeming shareholders. The Fund has no
contractual obligation to pay any such distribution charges and the
amount, if any, timing and condition of such payment are solely within the
discretion of the Directors who are not interested persons of the Fund or
the Distributor.
<PAGE>
VENTURE SERIES, INC.
NOTES TO FINANCIAL STATEMENTS - Continued
March 31, 1995 (Unaudited)
NOTE 4 - DISTRIBUTION AND UNDERWRITING FEES - (Continued)
CLASS B SHARES - (Continued)
A contingent deferred sales charge is imposed upon redemption of
certain Class B shares of the Fund within six years of the original
purchase. The charge is a declining percentage starting at 4% of the
lesser of net asset value of the shares redeemed or the total cost of such
shares. During the two months ended March 31, 1995 the Distributor
received no contingent deferred sales charges from Class B shares of the
Fund.
Note 5 - CAPITAL STOCK
At March 31, 1995, there were 5 billion shares of capital stock
($0.001 par value per share) authorized.
Transactions in capital stock were as follows (exclusive of amount
allocated to income included in price of capital stock repurchased and
sold):
<TABLE>
Class A
Two Months Ended
March 31, 1995
(Unaudited)
------------------
<CAPTION>
Shares Amount
------ ------
<S> <C> <C>
Shares subscribed................................ 714,872 $7,123,676
Shares issued in reinvestment of distributions... - -
------- ----------
714,872 7,123,676
Shares reacquired................................ (256) (2,600)
------- ----------
Net increase.................................. 714,616 $7,121,076
------- ----------
------- ----------
</TABLE>
<TABLE>
Class B
Two Months Ended
March 31, 1995
(Unaudited)
------------------
<CAPTION>
Shares Amount
------ ------
<S> <C> <C>
Shares subscribed................................ 23,446 $ 235,946
Shares issued in reinvestment of distributions... - -
------ ----------
23,446 235,946
Shares reacquired................................ - -
------ ----------
Net increase.................................. 23,446 $ 235,946
------ ----------
------ ----------
</TABLE>
<PAGE>
VENTURE SERIES, INC.
FINANCIAL HIGHLIGHTS
INTERNATIONAL TOTAL RETURN FUND
- ------------------------------------------------------------------------------
The following represents financial highlights for a share of capital stock
outstanding throughout each period.
<TABLE>
<CAPTION>
CLASS A CLASS B
Two Months Two Months
ended ended
3/31/95 3/31/95
(Unaudited) (Unaudited)
----------- -----------
<S> <C> <C>
Net Asset Value,
Beginning of Period.................... $10.00 $10.00
Income From Investment Operations
Net Investment Income................. .02 -
Net Gains on Securities
(both realized and unrealized)...... .53 .53
------ ------
Total From Investment Operations.... .55 .53
Less Distributions
Dividends (from net
investment income).................. - -
Distributions From
Realized Capital Gains............. - -
Distributions From
Paid In Capital..................... - -
------ ------
Total Distributions................ - -
------ ------
Net Asset Value,
End of Period......................... $10.55 $10.53
------ ------
------ ------
Total Return <F1>......................... 5.50% 5.30%
Ratios/Supplemental Data
Net Assets, End of
Period (000 omitted)................ 7,540 247
Ratio of Expenses
to Average Net Assets............. 1.66%<F2> 2.40%<F2>
Ratio of Net Income
to Average Net Assets.............. 1.29%<F2> 0.55%<F2>
Portfolio Turnover Rate................ 8.08% 8.08%
<FN>
<F1>
Sales charges are not reflected in calculation.
<F2>
Annualized.
</FN>
</TABLE>
<PAGE>
VENTURE SERIES, INC.
INTERNATIONAL TOTAL
RETURN FUND
124 East Marcy Street Santa Fe, New Mexico 87501
- ------------------------------------------------------------------------------
Directors Officers
Martin H. Proyect Martin H. Proyect
Shelby M.C. Davis Chairman &
Jeremy H. Biggs President
The Very Reverend Carl R. Luff
James R. Leo Vice President, Treasurer,
Richard M. Murray & Assistant Secretary
Theodore B. Smith Jr. Raymond O. Padilla
Keith R. Kroeger Vice President, Secretary,
& Assistant Treasurer
Carolyn H. Spolidoro
Vice President
Louis R. Proyect
Vice President
B. Clark Stamper
Vice President
Andrew A. Davis
Vice President
Eileen R. Street
Assistant Treasurer
& Assistant Secretary
Investment Adviser & Distributor
Selected/Venture Advisers, L.P.
124 East Marcy Street
Santa Fe, New Mexico 87501
Transfer Agent & Custodian
State Street Bank and Trust Company
c/o The Venture Funds
P.O. Box 8406
Boston, Massachusetts 02266-8406
Counsel
D'Ancona & Pflaum
30 North LaSalle Street
Chicago, Illinois 60602
- ------------------------------------------------------------------------------
For more information about Venture Series, Inc. International Total Return
Fund including management fee, charges and expenses, see the current
prospectus which must precede or accompany this report.
- ------------------------------------------------------------------------------
9505-05 VSI70
