SEMI-ANNUAL REPORT
State Farm Growth Fund, Inc.
ONE STATE FARM PLAZA - BLOOMINGTON, ILLINOIS 61710
For Account Information and Shareowner
Services: (309) 766-2029
(800) 447-0740
May 31, 1997
This report is not to be distributed unless preceded or accompanied by a
prospectus.
<PAGE>
STATE FARM GROWTH FUND, INC.
Dear Shareowner:
The U.S. equity market continues to post very strong returns. The S&P 500
Index has produced total returns of 29.4% and 13.1% respectively for the
twelve and six months ended May 31, 1997, while the Growth Fund yielded 21.6%
and 9.4% for the same periods. Returns of this magnitude are somewhat
surprising since they follow extraordinary results in 1995 and 1996.
The S&P 500 Index has rebounded sharply since the middle of April. After
rising roughly 10% in January and February, the S&P 500 lost virtually all of
those gains in March and early April as investors worried about the
possibility of protracted monetary tightening by the Federal Reserve Board and
accompanying increases in market interest rates. Stock prices have bounced
back vigorously over the last 45 days or so. Investors are encouraged by good
earnings results which were reported by most companies for the first quarter
of 1997 and now seem to be less concerned about a significant rise in interest
rates anytime soon.
The strong advance in stock prices became very narrow over the past twelve
months. A few large- capitalization growth stocks have been leading the market
higher, while values of many other stocks have been moving upward at a slower
pace or declining. Newsweek published an analysis which illustrated how the
"two-tier" nature of the market played out in 1996. As illustrated below,
price gains experienced by the 500 stocks which are included in the S&P Index
vary greatly when broken down by market capitalization:
<TABLE>
<CAPTION>
<S> <C>
S&P 500 (all stocks) +20.3% for the year
S&P 500 (without the 25 biggest capitalization stocks) +12.2% for the year
S&P 500 (without the 50 biggest capitalization stocks) +9.1% for the year
S&P 500 (without the 100 biggest capitalization stocks) +5.4% for the year
</TABLE>
One can readily observe that portfolios which did not contain a full
weighting of the largest capitalization companies clearly were at a
disadvantage in 1996. Although the breadth of the market expanded somewhat in
May when small capitalization and economically sensitive stocks did quite
well, the same phenomenon continues to exist so far in 1997. A major brokerage
firm recently reported that they monitor the price performance of 7,764
stocks, and over the last 12 months 61.6% of those stocks showed price changes
which lagged the S&P 500 Index by 15 percentage points or more. In a narrow
market environment such as this, most portfolios, including that of the Fund,
do not keep up with results of the Index. Eventually the overwhelming
popularity of investing in large capitalization growth companies will
diminish. One can never know when, but most often the general preferences of
investors change when economic fundamentals dictate a different investment
course or valuations of a certain group of stocks reach levels which are very
high when compared to other stocks.
Present valuations of common stocks seem to leave little room for negative
surprises. When measured by virtually all general standards, common stocks,
viewed as an asset class, are selling at the high end of historical valuation
levels. Corporate earnings and interest rates probably need to remain
supportive if the market is to maintain present levels or move significantly
higher. In periods of relatively high valuations, we feel it becomes more
important than ever to invest in companies that are growing and displaying
operational progress. As is always the case, such an orientation is the focus
of our work.
2
<PAGE>
The directors have declared a semi-annual dividend of $.32 per Growth Fund
share which will be used to purchase additional shares of your account at the
net asset value at the close of business on June 30, 1997 unless you have
elected to receive payment directly by check.
Sincerely,
/s/ Kurt G. Moser /s/ Paul N. Eckley
Kurt G. Moser Paul N. Eckley
Vice President Vice President
June 20, 1997
3
<PAGE>
STATE FARM GROWTH FUND, INC.
PORTFOLIO OF INVESTMENTS
MAY 31, 1997
(UNAUDITED)
SHARES VALUE
<TABLE>
<CAPTION>
<S> <C> <C>
COMMON STOCKS (94.0%)
AGRICULTURE & FOOD (8.2%)
2,724,715 Archer-Daniels-Midland Company $ 54,494,300
92,000 Campbell Soup Company 4,232,000
320,000 The Coca-Cola Company 21,840,000
465,000 Kellogg Company 34,293,750
97,000 Pioneer Hi-Bred International, Inc. 6,765,750
104,000 Sara Lee Corporation 4,251,000
----------------
125,876,800
BANKS (10.9%)
170,000 ABN AMRO Holding N.V. 3,146,343
80,550 Amsouth Bancorporation 3,151,519
355,600 Banc One Corporation 15,379,700
145,100 First Chicago NBD Corporation 8,597,175
6,200 First Empire State Corporation 1,990,200
60,000 First Security Corporation 1,470,000
29,000 First Virginia Banks, Inc. 1,624,000
61,300 Golden West Financial Corporation 4,153,075
135,000 J.P. Morgan & Co. Incorporated 14,512,500
248,200 MBNA Corporation 8,407,775
404,900 National Commerce Bancorporation 9,616,375
72,000 Northern Trust Corporation 3,537,000
305,000 Norwest Corporation 16,317,500
320,037 Pacific Century Financial Corporation 14,721,702
415,158 Popular, Inc. 15,308,951
230,000 Southtrust Corporation 8,941,250
74,900 Suntrust Banks, Inc. 3,997,788
31,000 TCF Financial Corporation 1,317,500
30,000 U.S. Bancorp 1,841,250
238,900 Wachovia Corporation 14,543,037
58,300 Washington Federal, Inc. 1,537,662
48,200 Wells Fargo & Company 12,700,700
----------------
166,813,002
4
<PAGE>
STATE FARM GROWTH FUND, INC.
PORTFOLIO OF INVESTMENTS
MAY 31, 1997
(UNAUDITED)
SHARES VALUE
CHEMICALS (8.5%)
415,000 Air Products and Chemicals, Inc. $ 32,266,250
81,000 The Dow Chemical Company 6,753,375
63,700 E.I. du Pont de Nemours and Company 6,935,338
364,300 Great Lakes Chemical Corporation 17,805,162
561,000 International Flavors & Fragrances Inc. 24,894,375
45,800 Raychem Corporation 3,394,925
1,261,200 Sigma-Aldrich Corporation 38,624,250
----------------
130,673,675
COMPUTERS AND SOFTWARE (7.6%)
30,800 Electronic Data Systems Corporation 1,151,150
1,437,000 Hewlett-Packard Company 74,005,500
248,200 International Business Machines Corporation 21,469,300
157,100(a) Microsoft Corporation 19,480,400
25,000(a) NCR Corporation 812,500
----------------
116,918,850
CONSUMERS & MARKETING (6.6%)
250,000 The Gillette Company 22,218,750
719,600 Hon Industries Inc. 34,900,600
43,728 Jostens, Inc. 1,076,802
59,900 McDonald's Corporation 3,009,975
173,200 Minnesota Mining and Manufacturing Company 15,891,100
589,000 Rubbermaid Incorporated 16,418,375
57,600 The Proctor & Gamble Company 7,941,600
----------------
101,457,202
ELECTRONIC MANUFACTURING (3.1%)
109,400 Emerson Electric Co. 5,907,600
418,000 General Electric Company 25,236,750
111,000 Intel Corporatiom 16,816,500
----------------
47,960,850
5
<PAGE>
STATE FARM GROWTH FUND, INC.
PORTFOLIO OF INVESTMENTS
MAY 31, 1997
(UNAUDITED)
SHARES VALUE
HEALTH CARE (15.6%)
820,000 Ballard Medical Products $ 15,785,000
1,550,000 Biomet, Inc. 28,965,625
107,050 Covance Inc. 1,993,806
1,240,800 Johnson & Johnson 74,292,900
473,600 Eli Lilly and Company 44,044,800
20,000 Medtronic, Inc. 1,480,000
182,000 Merck & Co., Inc. 16,357,250
480,000 Pfizer Inc. 49,380,000
53,525 Quest Diagnostics Inc. 990,213
89,794 Rhone-Poulenc Rorer Inc. 6,756,998
----------------
240,046,592
MEDIA (5.8%)
873,180 The Walt Disney Company 71,491,613
153,500 Reuters Holdings PLC (ADR) 10,507,551
360,181(a) Scandinavian Broadcasting System SA 7,383,710
----------------
89,382,874
MINING AND METALS (1.7%)
195,000 Nucor Corporation 11,505,000
185,000 The RTZ Corporation PLC (ADR) 12,903,750
81,250 Steel Dynamics, Inc. 1,828,125
----------------
26,236,875
NON-ELECTRIC MANUFACTURING (1.4%)
185,000 Caterpillar Inc. 18,060,625
70,000 Illinois Tool Works Inc. 3,473,750
----------------
21,534,375
OIL AND GAS (8.3%)
122,000 Amoco Corporation 10,903,750
440,400(a) Barrett Resources Corporation 14,753,400
530,000 Chevron Corporation 37,100,000
580,000 Exxon Corporation 34,365,000
237,100 Pennzoil Company 13,129,412
83,600 Royal Dutch Petroleum Company (ADR) 16,322,900
----------------
126,574,462
RETAILING (0.3%)
169,000 Wal-Mart Stores, Inc. 5,027,750
6
<PAGE>
STATE FARM GROWTH FUND, INC.
PORTFOLIO OF INVESTMENTS
MAY 31, 1997
(UNAUDITED)
SHARES VALUE
TELECOMMUNICATIONS & EQUIPMENT (9.6%)
450,000(a) ADC Telecommunications, Inc. $ 15,412,500
400,000 AT & T Corp. 14,750,000
86,000(a) Airtouch Communications, Inc. 2,397,250
116,000 Ameritech Corporation 7,598,000
290,200 Deutsche Telekom (ADR) 6,602,050
246,000 LM Ericsson Telephone Company (ADR) 8,763,750
129,633 Lucent Technologies Inc. 8,247,900
823,000 MCI Communications Corporation 31,582,625
264,000 Motorola, Inc. 17,523,000
596,100 SBC Communications Inc. 34,871,850
----------------
147,748,925
UTILITIES - ELECTRIC (2.3%)
248,000 Central and South West Corporation 5,270,000
132,000 Duke Power Company 5,940,000
88,500 FPL Group, Inc. 4,115,250
305,000 Pacificorp 6,061,875
288,000 Southern Company 6,120,000
166,000 Teco Energy, Inc. 4,129,250
98,500 Texas Utilities Company 3,385,938
----------------
35,022,313
MISCELLANEOUS (4.1%)
428,200 Corning Incorporated 21,570,575
337,500(a) Osmonics, Inc. 5,526,563
425,000 Pall Corporation 10,040,625
346,400 Vulcan Materials Company 25,287,200
----------------
62,424,963
----------------
Total common stocks (cost: $676,883,985) 1,443,699,508
</TABLE>
7
<PAGE>
STATE FARM GROWTH FUND, INC.
PORTFOLIO OF INVESTMENTS
MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
SHORT-TERM INVESTMENTS (6.1%)
$30,000,000 U.S. Treasury bills, 5.02% to 5.14% effective yield, due June to
to August, 1997 $ 29,835,500
380,000 Ford Motor Credit Co., 5.36%, 6-3-1997 380,113
28,840,000 General Motors Acceptance Corp., 5.63%, 6-3-1997 28,889,699
600,000 General Motors Acceptance Corp., 5.53%, 6-3-1997 600,923
30,110,000 General Motors Acceptance Corp., 5.53%, 6-10-1997 30,123,899
3,225,000 General Motors Acceptance Corp., 5.56%, 6-17-1997 3,225,498
----------------
Total Short-term investments (cost: $93,030,746) 93,055,632
----------------
TOTAL INVESTMENTS (100.1%) (cost: $769,914,731) 1,536,755,140
CASH AND OTHER ASSETS,
LESS LIABILITIES (-.1%) (996,006)
----------------
NET ASSETS (100.0%) $ 1,535,759,134
================
</TABLE>
Notes: (a) Non-income producing security.
(b) At May 31, 1997, net unrealized appreciation of $766,840,409
consisted of gross unrealized appreciation of $771,921,034
and gross unrealized depreciation of $5,080,625 based on cost
of $769,914,731 for federal income tax purposes.
See accompanying notes to financial statements.
8
<PAGE>
STATE FARM GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
<S> <C> <C>
Investments, at value (cost $769,914,731) $ 1,536,755,140
Cash 1,026,153
Receivable for:
Dividends and interest $ 3,432,711
Shares of the Fund sold 174,810
Sundry 8,859 3,616,380
------------
Prepaid expenses 41,780
---------------
Total assets 1,541,439,453
LIABILITIES AND NET ASSETS
Payable for:
Shares of the Fund redeemed 2,002,116
Securities purchased 3,225,000
Other accounts payable (including $396,925 to Manager) 453,203
------------
Total liabilities 5,680,319
---------------
Net assets applicable to 44,005,042 shares outstanding
of $.50 par value common stock (100,000,000
shares authorized $ 1,535,759,134
===============
Net asset value, offering price and redemption
price per share $ 34.90
===============
ANALYSIS OF NET ASSETS
Excess of amounts received from sales of shares
over amounts paid on redemptions of shares
on account of capital $ 706,101,786
Undistributed net realized gain on sales of investments 44,968,842
Net unrealized appreciation of investments 766,840,409
Undistributed net investment income 17,848,097
---------------
Net assets applicable to shares outstanding $ 1,535,759,134
===============
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
STATE FARM GROWTH FUND, INC.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED NOVEMBER 30,
MAY 31, 1997 1996
(UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of
$163,018 in 1997 and $83,607 in 1996) $ 11,587,320 18,232,750
Interest $ 2,241,414 5,377,917
-------------- --------------
Total investment income 13,828,734 23,610,667
EXPENSES:
Investment advisory and management fees 772,594 1,325,421
Professional fees 19,972 35,869
ICI dues 24,617 41,711
Registration fees 41,406 30,249
Fidelity bond expense 3,436 7,951
Directors' fees 3,600 9,000
Reports to shareowners 8,482 21,876
Franchise taxes 8,423 10,078
Custodian fees 14,305 32,062
Other 1,691 1,933
-------------- --------------
Total expenses 898,526 1,516,150
Less: custodian fees paid indirectly -- 31,713
-------------- --------------
Net expenses 898,526 1,484,437
-------------- --------------
Net investment income 12,930,208 22,126,230
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on sales of
investments 44,968,842 90,788,938
Change in net unrealized appreciation 73,087,728 111,162,700
-------------- --------------
Net realized and unrealized gain
on investments 118,056,570 201,951,638
-------------- --------------
Net change in net assets resulting
from operations $ 130,986,778 224,077,868
============== ==============
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
STATE FARM GROWTH FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED NOVEMBER 30,
MAY 31, 1997 1996 1995
(UNAUDITED)
<S> <C> <C> <C>
From operations:
Net investment income $ 12,930,208 $ 22,126,230 $ 17,876,882
Net realized gain on sales of
investments 44,968,842 90,788,938 6,015,663
Change in net unrealized appreciation 73,087,728 111,162,700 238,933,861
--------------- ---------------- ----------------
Net change in net assets resulting
from operations 130,986,778 224,077,868 262,826,406
Undistributed net investment
income included in price of
shares issued and redeemed 349,987 718,903 407,527
Distributions to shareowners from:
Net investment income (per share $.29
in 1997, $.53 in 1996 and $.52 in
1995) (11,484,603) (18,174,400) (18,125,076)
Net realized gain (per share $2.305
in 1997, $.12 in 1996 and $.175 in 1995) (90,788,938) (6,015,663) (5,860,346)
--------------- ---------------- ----------------
Total distributions to shareowners (102,273,541) (24,190,063) (23,985,422)
From Fund share transactions:
Proceeds from shares sold 120,945,140 177,516,771 110,543,974
Reinvestment of ordinary income dividends
and capital gain distributions 99,714,114 23,554,851 23,301,462
--------------- ---------------- ----------------
220,659,254 201,071,622 133,845,436
Less payments for shares redeemed 76,872,598 107,416,790 76,138,727
--------------- ---------------- ----------------
Net increase in net assets from Fund
share transactions 143,786,656 93,654,832 57,706,709
--------------- ---------------- ----------------
Total increase in net assets 172,849,880 294,261,540 296,955,220
Net assets:
Beginning of period 1,362,909,254 1,068,647,714 771,692,494
--------------- ---------------- ----------------
End of period (including undistributed
net investment income of $17,848,097
in 1997, $16,052,505 in 1996 and
$11,381,772 in 1995) $ 1,535,759,134 1,362,909,254 1,068,647,714
=============== ================ ================
</TABLE>
See accompanying notes to financial statements
11
<PAGE>
STATE FARM GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
SECURITY VALUATION - Investments are stated at value. Stocks traded on
securities exchanges, or in the over-the-counter market in which transaction
prices are reported, are valued at the last sales prices on the day of
valuation or, if there are no reported sales on that day, at the last reported
bid price for the day. Long-term debt securities and U.S. Treasury bills are
valued using quotations provided by an independent pricing service. Short-term
debt securities other than U.S. Treasury bills, are valued on an amortized
cost basis. Any securities not valued as described above are valued at fair
value as determined in good faith by the Board of Directors or its delegate.
SECURITY TRANSACTIONS AND INVESTMENT INCOME Security transactions are
accounted for on the trade date (date the order to buy or sell is executed)
and dividend income is recorded on the ex-dividend date. Interest income is
recorded on the accrual basis. Realized gains and losses from security
transactions are reported on an identified cost basis.
FUND SHARE VALUATION - Fund shares are sold and redeemed on a continuous
basis at net asset value. Net asset value per share is determined daily as of
3:00 p.m. Bloomington, Illinois time on each business day other than weekend
and holiday closings, except that the Fund need not compute a net asset value
on any day when no purchase or redemption order has been received by the Fund.
The net asset value per share is computed by dividing the total value of the
Fund's investments and other assets, less liabilities, by the number of Fund
shares outstanding.
FEDERAL INCOME TAXES, DIVIDENDS AND DISTRIBUTIONS TO SHAREOWNERS - It is
the Fund's policy to comply with the special provisions of the Internal
Revenue Code available to investment companies and, in the manner provided
therein, to distribute all of its taxable income, as well as any net realized
gain on sales of investments reportable for federal income tax purposes. The
Fund has complied with this policy and, accordingly, no provision for federal
income taxes is required.
On June 13, 1997, an ordinary income dividend of $.32 per share was
declared, payable June 30, 1997 (reinvestment date June 30, 1997) to
shareowners of record on June 13, 1997.
Dividends and distributions payable to its shareowners are recorded by the
Fund on the ex-dividend date.
EQUALIZATION ACCOUNTING - A portion of proceeds from sales and payments on
redemptions of Fund shares is credited or charged to undistributed net
investment income. As a result, undistributed net investment income per share
is unaffected by sales or redemptions of shares.
CUSTODIAN FEES - For the period ended May 31, 1997, the Fund no longer
receives fee reductions for balances maintained with the custodian, as
interest on cash balances is reflected as income rather than an offset to
custodian fees. Custodian fees for the year ended November 30, 1996 were
reduced based on the Fund's cash balances maintained with the custodian.
2. TRANSACTIONS WITH AFFILIATES
The Fund has an investment advisory and management services agreement with
State Farm Investment Management Corp. (Manager) pursuant to which the Fund
pays the Manager an annual fee (computed on a daily basis and paid quarterly)
of .20% of the first $100 million of average net assets, .15% of the next $100
million of average net assets and .10% of the average net assets in excess of
$200 million. The Manager guarantees that all expenses of the Fund, including
the compensation of the Manager but excluding taxes, interest, extraordinary
litigation expenses, brokerage commissions and other portfolio transaction
costs, shall not exceed .40% of average net assets annually.
12
<PAGE>
STATE FARM GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Under the terms of this agreement, the Fund incurred fees of $772,594, for
the six months ended May 31, 1997 and $1,325,421 for the year ended November
30, 1996. The Fund does not pay any discount, commission or other compensation
for transfer agent or underwriting services provided by the Manager.
Certain officers and/or directors of the Fund are also officers and/or
directors of the Manager. The Fund made no payments to its officers or
directors during the six months ended May 31, 1997 or the year ended November
30, 1996, except for directors' fees of $3,600 for the six months ended May
31, 1997 and $9,000 for the year ended November 30, 1996 paid to the Fund's
independent directors.
3. INVESTMENT TRANSACTIONS
Investment transactions (exclusive of short-term instruments) are as
follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED NOVEMBER 30,
MAY 31, 1997 1996 1995
(UNAUDITED)
<S> <C> <C> <C>
Purchases $ 128,905,187 255,225,023 46,164,857
Proceeds from sales 79,255,130 172,902,528 22,290,487
=============== ============== =============
</TABLE>
4. FUND SHARE TRANSACTIONS
Proceeds and payments on Fund shares as shown in the statement of changes
in net assets are in respect of the following number of shares:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED NOVEMBER 30,
MAY 31, 1997 1996 1995
(UNAUDITED)
<S> <C> <C> <C>
Shares sold 3,744,318 5,839,467 4,289,306
Shares issued in reinvestment of ordinary
income dividends and capital gain
distributions 3,179,659 788,486 966,452
---------- ---------- ----------
6,923,977 6,627,953 5,255,758
Less shares redeemed 2,370,870 3,526,507 3,008,177
---------- ---------- ----------
Net increase in shares
outstanding 4,553,107 3,101,446 2,247,581
========== ========== ==========
</TABLE>
13
<PAGE>
STATE FARM GROWTH FUND, INC.
FINANCIAL HIGHLIGHTS
Per Share Income and Capital Changes (For a share outstanding throughout the
period)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED NOVEMBER 30,
MAY 31, 1997 1996 1995 1994 1993 1992
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 34.55 29.40 22.63 22.21 23.05 20.33
Income from Investment
Operations
Net Investment Income .29 .63 .50 .44 .45 .43
Net Gains or Losses on
Securities (both realized
and unrealized) 2.66 5.17 6.97 .43 (.60) 2.70
--------------------------------------------------------------------
Total from Investment
Operations 2.95 5.80 7.47 .87 (.15) 3.13
Less Distributions
Net investment income (.29) (.53) (.52) (.45) (.45) (.41)
Capital gains (2.31) (.12) (.18) - (.24) -
--------------------------------------------------------------------
Total Distributions (2.60) (.65) (.70) (.45) (.69) (.41)
Net Asset Value, End of Period $ 34.90 34.55 29.40 22.63 22.21 23.05
====================================================================
Total Return 9.38% 20.09% 33.67% 4.02% (.65%) 15.42%
Ratios/Supplemental Data
Net assets, end of period
(millions) $ 1,535.8 1,362.9 1,068.6 771.7 725.1 696.1
Ratio of expenses to average
net assets .13% .13% .14% .14% .14% .16%
Ratio of net investment income
to average net assets 1.85%(a) 1.88% 1.95% 2.00% 2.05% 1.99%
Portfolio turnover rate 6%(a) 16% 3% 3% 2% 2%
Number of shares outstanding
at end of period
(millions) 44.0 39.5 36.4 34.1 32.7 30.2
Average commission rate paid (c) $ .0439 .0599 - - - -
</TABLE>
(a) Determined on an annualized basis.
(b) The ratio based on net custodian expenses would have been .13% in 1995.
(c) For fiscal years beginning 1996, a fund is required to disclose its
average commission rate per share for trades in which a commission is
charged.
14
<PAGE>
(This page intentionally left blank)
15
<PAGE>
SEMI-ANNUAL
REPORT
MAY 31, 1997
State
Farm
Growth
Fund, Inc.
ONE STATE FARM PLAZA
BLOOMINGTON, ILLINOIS 61710
TELEPHONE (309) 766-2029
(800) 447-0740
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000093715
<NAME> STATE FARM GROWTH FUND, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> MAY-31-1997
<INVESTMENTS-AT-COST> 769914731
<INVESTMENTS-AT-VALUE> 1536755140
<RECEIVABLES> 3616380
<ASSETS-OTHER> 1067933
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1541439453
<PAYABLE-FOR-SECURITIES> 3225000
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2455319
<TOTAL-LIABILITIES> 5680319
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 706101786
<SHARES-COMMON-STOCK> 44005042
<SHARES-COMMON-PRIOR> 39451935
<ACCUMULATED-NII-CURRENT> 17848097
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 44968842
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 766840409
<NET-ASSETS> 1535759134
<DIVIDEND-INCOME> 11587320<F1>
<INTEREST-INCOME> 2241414
<OTHER-INCOME> 0
<EXPENSES-NET> 898526
<NET-INVESTMENT-INCOME> 12930208
<REALIZED-GAINS-CURRENT> 44968842
<APPREC-INCREASE-CURRENT> 73087728
<NET-CHANGE-FROM-OPS> 130986778
<EQUALIZATION> 349987
<DISTRIBUTIONS-OF-INCOME> 11484603<F2>
<DISTRIBUTIONS-OF-GAINS> 90788938<F3>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3744318
<NUMBER-OF-SHARES-REDEEMED> 2370870
<SHARES-REINVESTED> 3179659
<NET-CHANGE-IN-ASSETS> 172849880
<ACCUMULATED-NII-PRIOR> 16052505
<ACCUMULATED-GAINS-PRIOR> 90788938
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 772594
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 898526
<AVERAGE-NET-ASSETS> 1420338323
<PER-SHARE-NAV-BEGIN> 34.55
<PER-SHARE-NII> .29
<PER-SHARE-GAIN-APPREC> 2.66
<PER-SHARE-DIVIDEND> .29
<PER-SHARE-DISTRIBUTIONS> 2.31
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 34.90
<EXPENSE-RATIO> .13
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Net of foreign withholding taxes of $163,018
<F2>Per share $.29
<F3>Per share $2.305
</FN>
</TABLE>
